African nations brace for China slowdown

Three countries could be especially hit by a "triple whammy".

One under-explored aspect of the prospect of a slow-down in Chinese growth — a so-called "hard landing", which some have inferred from the declining returns on infrastructure spending in the country — is that it will hit hard for the poorer countries which have chosen to rely on China.

China has been outsourcing its own outsourced work for some time. The BBC reports from "China Town" outside Addis Ababa, which is very different from the Chinatowns of the west:

Two production lines make 2,000 pairs of shoes every day for global brands, including Guess and Tommy Hilfiger.

There are perks - the factory has its own canteen and tennis courts, the workers receive training and are supplied with their own uniforms. However, sometimes workers receive a wage which can be lower than what a worker in an indigenous factory might receive.

China has also been gearing up to take part in resource extraction on the continent, investing heavily in oil wells in Sudan and South Sudan.

That leaves many countries suddenly exposed to a slowdown. New analysis from the Overseas Development Institute suggests that three in particular (Ethiopia, Senegal and Tanzania) would suffer from being exposed not only to a Chinese or Indian slowdown, but also from slowdown in the EU and energy price shocks.

ODI research fellow Isabella Massa said:

Generally speaking most countries we looked at are doing fairly well in quite a volatile environment but the most vulnerable African countries are especially exposed to the growth slowdown in China and India.

The evidence points to significant downside risks for the global economy in 2013, which is why it is vital that countries take a close look at how they can raise their own productivity and target sustained growth at the kind of rates we continue to see across much of Africa.

If China does pass on its growth shocks to those nations, will it follow Europe down the road from imperialism to charity? How much responsibility does the Chinese government feel to the countries it is now operating in?

South Sudan President Salva Kid shakes hands with Chinese Vice Premier Li Keqiang. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: Getty
Show Hide image

Who will win in Stoke-on-Trent?

Labour are the favourites, but they could fall victim to a shock in the Midlands constituency.  

The resignation of Tristram Hunt as MP for Stoke-on-Central has triggered a by-election in the safe Labour seat of Stoke on Trent Central. That had Westminster speculating about the possibility of a victory for Ukip, which only intensified once Paul Nuttall, the party’s leader, was installed as the candidate.

If Nuttall’s message that the Labour Party has lost touch with its small-town and post-industrial heartlands is going to pay dividends at the ballot box, there can hardly be a better set of circumstances than this: the sitting MP has quit to take up a well-paid job in London, and although  the overwhelming majority of Labour MPs voted to block Brexit, the well-advertised divisions in that party over the vote should help Ukip.

But Labour started with a solid lead – it is always more useful to talk about percentages, not raw vote totals – of 16 points in 2015, with the two parties of the right effectively tied in second and third place. Just 33 votes separated Ukip in second from the third-placed Conservatives.

There was a possible – but narrow – path to victory for Ukip that involved swallowing up the Conservative vote, while Labour shed votes in three directions: to the Liberal Democrats, to Ukip, and to abstention.

But as I wrote at the start of the contest, Ukip were, in my view, overwritten in their chances of winning the seat. We talk a lot about Labour’s problem appealing to “aspirational” voters in Westminster, but less covered, and equally important, is Ukip’s aspiration problem.

For some people, a vote for Ukip is effectively a declaration that you live in a dump. You can have an interesting debate about whether it was particularly sympathetic of Ken Clarke to brand that party’s voters as “elderly male people who have had disappointing lives”, but that view is not just confined to pro-European Conservatives. A great number of people, in Stoke and elsewhere, who are sympathetic to Ukip’s positions on immigration, international development and the European Union also think that voting Ukip is for losers.

That always made making inroads into the Conservative vote harder than it looks. At the risk of looking very, very foolish in six days time, I found it difficult to imagine why Tory voters in Hanley would take the risk of voting Ukip. As I wrote when Nuttall announced his candidacy, the Conservatives were, in my view, a bigger threat to Labour than Ukip.

Under Theresa May, almost every move the party has made has been designed around making inroads into the Ukip vote and that part of the Labour vote that is sympathetic to Ukip. If the polls are to be believed, she’s succeeding nationally, though even on current polling, the Conservatives wouldn’t have enough to take Stoke on Trent Central.

Now Theresa May has made a visit to the constituency. Well, seeing as the government has a comfortable majority in the House of Commons, it’s not as if the Prime Minister needs to find time to visit the seat, particularly when there is another, easier battle down the road in the shape of the West Midlands mayoral election.

But one thing is certain: the Conservatives wouldn’t be sending May down if they thought that they were going to do worse than they did in 2015.

Parties can be wrong of course. The Conservatives knew that they had found a vulnerable spot in the last election as far as a Labour deal with the SNP was concerned. They thought that vulnerable spot was worth 15 to 20 seats. They gained 27 from the Liberal Democrats and a further eight from Labour.  Labour knew they would underperform public expectations and thought they’d end up with around 260 to 280 seats. They ended up with 232.

Nevertheless, Theresa May wouldn’t be coming down to Stoke if CCHQ thought that four days later, her party was going to finish fourth. And if the Conservatives don’t collapse, anyone betting on Ukip is liable to lose their shirt. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.