Beijing gussies up for South-South trade

All eyes are on China today as dozens of African heads of state descend on Beijing for the China-Africa summit. As always, the BBC has excellent coverage, including a photo spread of Beijing rolling out the red carpet. Podcast fans will enjoy NPR's Morning Report on the conference.

It's clear that China wins from Africa's substantial natural resource exports. The big question, of course, is how much this trade pattern helps Africa. For a deeper look at Chinese businesses in Africa, see Africa's Silk Road. This recent World Bank book takes an in-depth look at Chinese and Indian companies operating in Africa. From a summary:

While growing Asian trade and investment is cause for optimism, [the study’s author Harry Broadman] cautions that there are major asymmetries in the economic relations between the two regions. China and India's comparatively high tariffs on Africa's leading—and highest value—exports prevent Africa from fully tapping into these markets. Africa's exports account for only 1.6 percent of what Asia receives from the rest of the world…

But the study indicates that the conventional remedy of reduced trade barriers will not be enough. More important are "behind-the-border" reforms to encourage competition, strengthen market institutions and improve governance in African nations, and "between-the-border" reforms in both regions, to reduce international transactions costs.

Hopefully the dozens of deals likely to be signed over the weekend will lead to badly needed upgrading of African infrastructure. In turn, infrastructure will enable tourism and other economic diversification strategies to finally take off across the continent. (What can I say, I'm an optimist.)