China recently announced a series of fiscal initiatives designed to promote growth and sustain development momentum, allowing China to achieve its GDP growth target.
These new measures aim to stabilize China’s economy while also creating opportunities for Africa and the Global South to enhance their economic prospects through increased trade, investment, and cooperation. By capitalizing on these developments, countries in the Global South can align their growth and development initiatives with their economic goals.
China’s economy is currently showing resilient and stable growth, progressing despite a rapidly evolving domestic and international environment. The country has made significant strides in developing high-quality productive forces, ensuring citizen welfare, and proactively managing potential risks in key sectors.
The National Development and Reform Commission (NDRC) reports that these efforts have contributed to high-quality development and sustained overall social stability. Data from the Commission indicates that, in the first eight months of the year, the added value of large-scale industrial enterprises grew by 5.8 percent, with notable increases in the output of new energy vehicles and integrated circuits. The service industry also experienced stable growth, with a production index increase of 4.9 percent.
Furthermore, investments and consumption continued to rise, particularly with a marked increase in manufacturing investments. During the first eight months, exports grew by 6.9 percent, and the employment situation remained stable, with 9.44 million new urban jobs created.
According to the NDRC, “Consumer prices rose by 0.2 percent from a year earlier. Progress is evident in structural optimization. In the first eight months of this year, high-tech manufacturing and equipment manufacturing saw added value increases of 8.9 percent and 7.6 percent, respectively. The demand structure for the three major industries is improving, and breakthroughs are being made in key areas.”
Amid these achievements, China acknowledges the difficulties and challenges present, particularly in the external environment. The latest forecasts from the International Monetary Fund (IMF) project global economic growth at 3.2 percent this year, a decline from last year.
This context informed the decision by the CPC Central Committee and the State Council to introduce a new package of policies. In these latest measures, President Xi Jinping’s administration will prioritize improving the quality of economic development, supporting the healthy growth of the real economy and business entities, and aligning high-quality development with high-level security.
Implications for Africa and the Global South
The recent fiscal measures aimed at stimulating the Chinese economy have significant implications for Africa and the Global South. For instance, the introduction of a fiscal stimulus package exceeding 5 trillion yuan (approximately $702 billion) is intended to bolster domestic demand, stabilize financial markets, and support growth through various targeted initiatives. These measures are likely to benefit countries in Africa and the Global South in several ways.
A key component of China’s stimulus is its focus on infrastructure projects, aligning with the Belt and Road Initiative (BRI), which seeks to enhance connectivity and trade across Asia, Africa, and beyond. Improved infrastructure in China can lead to increased demand for materials and services from African countries, potentially boosting their economies.
As China seeks to revitalize its economy, it is expected to boost imports from countries in the Global South. This shift may provide African nations with greater access to the Chinese market for their exports, especially in commodities like minerals, agricultural products, and textiles.
The issuance of special government bonds to support state-owned banks can enhance their lending capacity, potentially increasing financing for development projects in Africa. This is particularly relevant in sectors such as renewable energy and agriculture, where Chinese firms are already heavily involved.
In addition to these, China’s economic recovery efforts are likely to enhance bilateral relations with African nations. Increased economic engagement can result in more collaborative projects, facilitate technology transfers, and promote knowledge sharing, all of which are vital for sustainable development in many African countries.
