The Impact of China’s Rise on Developing World: The Relationship between Trade Openness with China and Growth in Africa

Sammanfattning: This research tries to prescribe Chinese trade impact on Africa by analyzing the underlying link between trade openness and growth. We invoke trade openness theoretical and methodological tools to instrument our explanatory variable and control for causation, allowing us to measure the relationship between geographical component of trade and the level of income. We find no significant relationship between total trade shares and income, but find positive effects, yet limited, associated with countries other than top importers from China. We conclude that with a highest probability, Chinese impact on Africa is limited, although likely not negative.