Tuesday, August 18, 2015

What does China's Shock Yuan Devaluation mean for Africa?

This morning, CNN published my op-ed, "What does China's shock yuan devaluation mean for Africa?"

China's development decisions are critically important for Africa. In Lagos, Addis and Johannesburg, China's surprise yuan devaluation has African analysts scratching their heads.

Obviously Chinese goods will be cheaper in Africa, and African exports more expensive in China. So far, this decision is just a tremor, not a quake. Yet why did China devalue, and what is this likely to mean for Africa?

To understand China's devaluation, we need to take a step back. Beijing has been trying to manage China's enormous structural transformation ever since Chinese leaders made their historic decision to move out of poverty by turning to the market in the late 1970s. Their supercharged development model depended on low wages, high levels of foreign and public investment, and rapidly expanding, cheap exports. 

Continued here.

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