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Citation Information

Type Working Paper
Title An Analysis of South-South Relations: Exploring the Influence of China on the Ghanaian Economy
Author(s)
Publication (Day/Month/Year) 2017
URL http://trace.tennessee.edu/cgi/viewcontent.cgi?article=3151&context=utk_chanhonoproj
Abstract
This paper examines South-South trade relations; specifically exploring Ghana and its
relations with China. Trade agreements between Global South countries formerly comprised very
little of all trade agreements, consisting of around 20% in 1970, but as of 2010 South-South
agreements encompass around 65% of all preferential trade agreements, a sign of a shift in global
commerce (WTO 2011, 55-56). South-South agreements in Africa are viewed as an effective
way to promote business and create infrastructure in order to overcome some of the major
impediments for effective business. China especially has seen a sizeable surge in trade exports to
Africa, but China is not only involved with Africa through trade. The country is also increasing
its FDI (Financial Direct Investment)* to the continent and is offering loans through their exportimport
bank. Many African leaders see the relationship as beneficial, but some question the
intentions of the Chinese government and the effects that Chinese goods are having on African
economies. As of 2013 China composed a major percentage of countries’ imports including 22%
in Nigeria, 11% in Cote d'ivoire, 11%, in Togo, 14% in Democratic Republic of the Congo, and
15% in South Africa as of 2013 (OEC). Because of this rise, there have been objections to
China’s involvement in Africa, such as the idea that China is flooding the African continent with
cheap goods thus destroying African industry. The argument is prevalent in Ghana where
Chinese exports have increased more than 10 fold since 2000. Ghana is one of the leaders of
West Africa politically and economically, and it is becoming involved with China in multiple
ways. Ghana is not only entangled with the Chinese through trade and FDI, but Ghana also
recently received an infrastructure for resource right loans from the Chinese valued at $1.5
billion. Ghana has been framing the relationship as win-win, but many are concerned that China
is establishing a neocolonial* relationship. The relationship is concerning considering the geo-
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political significance of Ghana as the first Sub-Saharan African nation to gain its independence
and as an economic leader of the region. Because of Ghana’s involvement with China in a
myriad of ways and its significance it can serve as a barometer for the region as a whole in order
to ascertain important questions about the influence of China on West Africa

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