Africa’s Trade with China: Good for Growth

Trade between China and African countries has dramatically increased in recent years, at an unprecedented rate. At the same time, robust economic growth in Sub-Saharan African countries has accompanied this trade boom. The question remains however, whether or not trade with China has actually induced this growth. Furthermore, recent media reports have suggested that Africa’s trade with China may instead be detrimental to Africa’s development. This study examines the impact of Chinese trade alone on African growth. Controlling for endogeneity issues and institutional effects, it finds that evidence to suggest that Chinese trade has had a positive impact on African growth. 1 I would like to sincerely thank the following individuals, without whom this thesis would not be possible. To my thesis advisor, Aprajit Mahajan, who allowed me to take risks and learn from my own mistakes: Thank you for your patient guidance, from my first attempt to my final work. To Chonira Aturapane, who inspired me to work on this topic: Thank you for being there to help me address every challenge, every step of the way to a new thesis. To my advisor Timothy Bresnahan, who first encouraged me to try research: Thank you for everything. I would not have achieved so much at Stanford without your guidance and support. To Geoffrey Rothwell, who is always unafraid of incorporating humor into teaching: Thank you for having those conversations with me that wander everywhere and nowhere, but always mean something. To Joanne Yoong, the best TA there ever was in the Economics department: You have been a great mentor and role model. I am also grateful to Mark Tendall for an enjoyable summer’s honors college, and to Sean Chu for his taking the time to help me work out criticisms. Finally, I would like to say thanks to Rushabh Doshi and Ben Backes, my Econ-homies, who successfully peer-pressured me into doing a thesis without realizing it; to my drawmates and fellow South African travelers, who always encouraged when I felt discouraged, and with whom I share many memorable study breaks; to Nick Fram, for his help with the gravity model; and last but not least, to Matthew McLean, for his unconditional love and constant support, for taking the time to carefully read this paper over and over and offer comments and suggestions, so that I could be proud of my work.