_“Africa’s growing relations with China are often explained by the country’s demand for its natural resources. While this is true, a large part of the shift is because China serves as an economic role model for the continent. China is a startling example of how a region can rise from poverty within a generation and become a dominant player on the global scene.” (Calestous Juma, 2007)_

# **Introduction**

In China’s relations with Africa—as in most areas of China’s policy making—ideology has given way to the pragmatic pursuit of economic advancement.<sup>1</sup> Instead of “exporting revolution” to the subcontinent (as in the 1950s and early 1960s), China has been importing oil— and building roads, ports, schools and hospitals.<sup>2</sup> China’s new role as a major investor and aid donor in Africa has attracted much attention in the region and elsewhere, not least among the European countries that have been prominent in Africa since colonial times. Some observers are keenly watching this new “south-south” relationship for signs of how China’s foreign policy will evolve in the future.<sup>3</sup> From an African perspective, it may be the implications for domestic policy in fighting poverty that matter more. Among the ways that China differs from Western Europe, one surely stands out: China is a developing country, which (unlike Africa) has made great progress against absolute poverty in the last 25 years. The best data currently available indicate that in 1981 two out of three mainland Chinese lived below about $1 a day (at 1993 international prices).<sup>4</sup> At the same time, that was only true of around 40% of the population of Sub-Saharan Africa (SSA). By 2004, less than one in ten people in China lived in poverty by the same (real) standard; yet the proportion in SSA was still around 40%. Figure 1 gives the poverty rates for China and SSA (and the developing world as a whole outside China). The trend rate of poverty reduction in China

> 1 For an overview of the history of China’s relations with Africa since 1949 see Anshan (2007).

> 2 The “China-Africa Development Fund” was endowed in 2007 with $5 billion for aid to Africa and at a meeting of the African Development Bank in Shanghai 2007, the Chinese government announced its intention to provide $20 billion in infrastructure and trade financing over the next three years (Gill et al., 2007; Anderlini, 2007).

> 3 For further discussion see Alden (2005), Gill et al. (2007) and Anshan (2007).

> 4 The poverty counts by the “$1 a day” standard are those of Chen and Ravallion (2007). The poverty line is $32.74 per person per month at 1993 international prices, using the World Bank’s purchasing power parity exchange rate for consumption. This is converted to local currency in 1993 and then adjusted to a constant value over time using each country’s Consumer Price Index. The China PPP is based on price data for 1986 (the latest available at the time of writing).  Preliminary results using new price data for 2005 suggest a higher poverty rate relative to other countries, although the same decline is observed over time. Note also that the analysis reported later in this paper uses a slightly lower national poverty line for China, as documented in Ravallion and Chen (2007), that are unaffected by the PPP rate. However, the main lessons from this analysis are likely to be robust to this choice.

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