Will China's reforms impact FOCAC?

Abstract

The year of 2014 could be viewed as China's year of reforms. In 2015, the country's top leaders stressed their determination to remodel China's development from a development model that values quantity and speed to one that prizes quality and efficiency. China is experiencing a slowing economy, recording its lowest growth rate in nearly 25 years. The government has now rolled out several reforms introducing fiscal and monetary measures to steady economic growth. These include boosting investment in railways and social housing, and cutting the reserve requirement ratio (RRR) for banks that lend to the agricultural sector. The reforms are also administrative in nature, cutting down bureaucracy and increasing the focus on the country’s anti-corruption campaign. As Beijing carries out a delicate rebalancing act to wean the economy off its heavy reliance on investment and exports, on the one hand, and promote the rule of law, on the other, this paper examines what the reforms mean for the Forum on China-Africa Co-operation (FOCAC). Strong growth in trade between China and Africa has promoted economic interdependence and greatly benefited the two regions. This paper argues that while Africa's economic growth could be strongly impacted by China's reform measures, they may be the required push for the continent to diversify and decrease its dependence on natural resources.