China's impact on Intra-African Trade

The role of China as a trading partner of sub-saharan africa is assessed using data on bilateral trade from the International Monetary Fund (1999-2007) and a gravity model. trade with China is found to affect the intra-african market in different ways at different levels of China-africa exports. Interaction variables are used to disentangle two opposite patterns: sub-saharan africa's exports to China have a negative effect on intra-african trade at higher levels of the trade between China and sub-saharan africa and a positive effect at lower levels. Oil-exporting countries, China's biggest african trading partners, tend to isolate themselves from the internal african market as their exports to China increase. Conversely, a rise in exports to China from non-oil-exporting countries increases intra-african trade, probably due to a wealth effect. Intra-african market performance is briefly analyzed as a robustness check on the data. the results are interesting, especially those concerning the differences in trade determinants between oil-exporting and non-oil-exporting sub-saharan countries. © 2011 M.E. Sharpe, Inc. All rights reserved.