China’s 5-year plans set out the nation’s strategic orientation with respect to social and economic development. These plans have played an important part in enabling China to become one of the world’s largest economies in a relatively short space of time and continue to serve as a developmental blueprint for the country. 2021 marked the beginning of 14th 5-year plan that will run until 2025. While these plans serve as guidelines for domestic development, these developments very much affect international markets, including those on the African continent.
The introduction of the dual circulation economy, placing more emphasis on growth driven by domestic consumption (internal circulation) than export-driven growth (external circulation), is reflected in the plan and set to see consumption spending within China reach new peaks. This is consistent with China’s GDP per capita increase, reaching around 11,000 USD in 2020, up from 10,260 in 2019. In the 14th plan, China sets out strategic interventions that would help it become a ‘moderately developed economy’ with a GDP per capita of USD 30,000. An increase in consumer spending, as well as consumer spending power on this scale, holds many opportunities for international markets, particularly through the trade opportunity presented by increasing demand for foreign products, as well as outbound tourism.
While China seeks to decrease its reliance on foreign markets for certain products and resources, strategic relationships will continue to flourish under this new plan. For example, mineral ores and agri-processing commodities remain in high demand, a trend that countries in Africa should leverage as China seeks to further grow its already booming economy. China’s growing investment footprint in sub-Saharan Africa’s mining and agricultural sectors will be of aid to countries beset with economic decline due to the Covid-19 pandemic.
Once international travel can resume, Africa also stands to benefit from a stronger Chinese economy through tourism. In 2018, 149 million travelers from China spent USD 277bn during the holidays. The number of travelers were expected to reach over 200 million by 2020, however global travel restrictions prevented this. This will be easily achieved in a post pandemic world once effective vaccine and prevention measures are rolled out, creating a growing inbound tourism market for Africa to leverage.
While the rest of the world, including Africa, have some ways to go to overcome the economic turmoil that the pandemic has caused, China will continue to lead global economic development during the period of its next 5-year plan, and Africa should continue to leverage the strategic relationship is has with its eastern partners to ensure it reaps benefits from the growth momentum in that region.
“This article is produced by Axis Group and is published in The Econometer section of ChinAfrica magazine (May 2021), an English and French language monthly publication that provides news, views and analysis on all things China, Africa and China-Africa relations.”
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