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

Abstract

As China is emerging as a force to reckon with in the 21st century it has formed economic and political partnerships with a number of countries especially in Africa, including Malawi. There are contending views on China’s role in Africa with some viewing it as a neo-colonial power and others as Africa’s development partner.This paper investigates how China-Malawi relationship has contributed to economic development in Malawi. This limits the scope of the study to Chinese Government investments directly dealing with the Malawi Government. The article analyses Chi-na-Malawi trade patterns, the number of jobs created by Chinese investments and other contributions by China.Exploratory research design, aspects of descriptive research and mixed methods of analysis is employed to uncover the nature of China-Malawi relations between 2007 and 2012. Using secondary data sources and interviews with principal trade officers, the study found both positive and negative trends. The level of Malawian exports to China is low compared to Chinese exports to Malawi. This entails trade losses for Malawi 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 Malawi creating some level of employment for Malawians. Bivariate regression analysis also 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 positive role 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 as addressing standards, supply and demand constraints and also aligning Malawi’s educational system to its current trade and development needs.