Emerging South-South Trade & Engagement: The Rise of Chimea

Several interesting articles on the rapid emergence of South-South trade and the sudden influx of Chinese and Indian technologies representing the “browning” of African technology, which has long been the domain of “white” Americans and Europeans who want to apply their saving hand to African problems. In a way, you can see this as the reconstruction of a set of trade networks– trade in resources, ideas, and people– that connected east Africa, the Middle East, and south Asia for centuries. These networks were disrupted by Dutch, Portuguese, Spanish, and eventually British merchants starting in the 1500s. Now, with the end of colonialism and the rise of India and China as countries seen as offering technical expertise equivalent to the West, those networks are reasserting themselves. As Gregg Zachary’s article notes:

“…It is a tectonic shift to the East with shattering implications,” says Calestous Juma, a Kenyan professor at Harvard University who advises the African Union on technology policy….

…The “browning” of technology in Africa is only in its infancy, but the shift is likely to accelerate. Chinese and Indian engineers hail from places that have much more in common with nitty-gritty Africa than comfortable Silicon Valley or Cambridge. Africa also offers a testing ground for Asian-designed technologies that are not yet ready for US or European markets….

…Of course, technology transfer from China and India could be a mere smokescreen for a new “brown imperialism” aimed at exploiting African oil, food, and minerals. In recent years, China’s government alone has invested billions of dollars in African infrastructure and resource extraction, raising suspicions that a new scramble for Africa is underway.
But Africans genuinely need foreign technology, and the Chinese, in particular, are pushing hard – even flamboyantly – to fill the gap. This year, Nigeria’s government bought a Chinese-made satellite, and even paid the Chinese to launch it into space in May. China was so eager to provide space technology to Africa’s most populous country that it beat out 21 other bidders for a contract worth $300 million….

…Likewise, Chinese mastery over ultra-small, cheap “micro-hydro” dams, which can generate tiny amounts of electricity from mere trickles of water, appeals to power-short, river-rich Africans. Tens of thousands of micro-hydro systems operate in China, and nearly none in Africa….”

And, from The Wall Street Journal, a second interesting look at this trend towards emerging south-south trade and engagement:

“…But the past couple of decades have seen the rise of trade and investment not only between the rich countries of the North and developing economies of the South, but between South and South.

Turned away by the U.S., Dubai Ports World is expanding in China, India, Peru and Vietnam. Saudi Arabia’s state-owned oil company is investing in refineries in China’s Fujian and Shandong provinces. Industrial & Commercial Bank of China last year bought a 20% stake in South Africa’s Standard Bank. India’s sprawling Tata Group has African investments ranging from the Taj Pamodzi hotel in Zambia, to a railroad-car and steel-fabrication plant in Mozambique.

A.T. Kearney says flows of money, investment and trade are creating a multicontinental market spanning the Indian Ocean. Showing a consultant’s affection for catchphrases, it has dubbed this market Chimea — Chinese and Indian know-how, money and thirst for resources (“chi”), plus Middle Eastern money and oil (“me”), plus African raw materials and opportunity (“a”).

…Economists Cigdem Akin and M. Ayhan Kose, in a new analysis published by the International Monetary Fund, detail ways in which the “the globalization era” that began in 1986 is different from earlier decades. One big one: The two dozen countries they call “the emerging South” (from Brazil to China to India to South Africa) have diversified, grown and become more dependent on one another’s growth and less on the North.

By contrast, countries of “the developing South” (from Bolivia to Bangladesh to Botswana) are just as tethered as ever to demand from the North.

…But the importance of the explosion of South-South trade and investment goes far beyond this year’s outlook. It could be the opening of a new epoch of globalization — one in which the global economic might of big U.S. and European companies is challenged like never before, one in which the remarkable success of China and other Asian economies in lifting their people out of poverty is spread — finally — to other poor continents.

This entry was posted on Friday, January 4th, 2008 at 1:38 pm and is filed under China, Dubai, India.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

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