China-Malawi relations: an analysis of trade patterns and development implications

Abstract

As China is emerging as a force to reckon with in the 21st century it has formedeconomic and political partnerships with a number of countries especially in Africa,including Malawi. There are contending views on China’s role in Africa with someviewing it as a neo - colonial power and others as Africa’s development partner.This paper investigates how China - Malawi relationship has contributed to economicdevelopment in Malawi. This limits the scope of the study to Chinese Governmentinvestments directly dealing with the Malawi Government. The article analyses Chi-na - Malawi trade patterns, the number of jobs created by Chinese investments andother contributions by China.Exploratory research design, aspects of descriptive research and mixed methods ofanalysis is employed to uncover the nature of China - Malawi relations between 2007and 2012. Using secondary data sources and interviews with principal trade officers,the study found both positive and negative trends. The level of Malawian exports toChina is low compared to Chinese exports to Malawi. This entails trade losses forMalawi which in turn has implications for development and also for the society that Malawi is evolving into. Results also suggest that trade gains and losses are affect-ed by the fact that China and Malawi are at different levels of economic develop-ment.

Time series analysis shows considerable amount of China’s investments to Malawicreating some level of employment for Malawians. Bivariate regression analysisalso reveals no relationship between investment levels and employment created.This suggests the importation of Chinese labour into Malawi which leads to eco-nomic losses for the Malawian workforce. China is also found to play a positiverole in other areas such as: health, education, agriculture and low cost infrastruc-ture.

Overall China has a modest impact on Malawi. China comes out as both a neo - colonialist in some areas and as a development actor in other areas. The study sug-gests various options that could boast Malawi trade and development gains such asaddressing standards, supply and demand constraints and also aligning Malawi’seducational system to its current trade and development needs.