The fact that China has overtaken the United States to become the world’s largest economy might not be anything new to many by now, since this was confirmed last month.
The International Monetary Fund uses the more reliable and now widely accepted yardstick called the purchasing power parity to determine the economic output of a country in the ranking.
This time around, it found that China’s economy is at US$24,2 trillion compared to the US at US$20,8 trillion.
Well, to some of us who have been following developments in China for some time, this did not come as a surprise.
China might actually have overtaken the US as a leading economic powerhouse some years back, judging by the progress it has made in its journey towards economic development.
Since 1978 when China started making a turnaround under its reform and opening up policy, the Asian economic giant has registered massive growth in all sectors.
Now that the phenomenal growth has been confirmed by the Asian country moving to the first spot in economic growth, it is important that African countries start asking questions on how they can reap the benefits.
In my view, Africa stands to benefit exceedingly from this development, considering that relations between the Asian country and many countries on the continent has been cordial.
China’s new status confirms a country dripping with capital and this means the appetite to invest elsewhere is set to increase in the near future.
And the first destination for such investment is going to be Africa, where China has already invested billions in various sectors.
What will spur this new approach to development in Africa is the fact that China already offers the nearest example to the continent on how a country can turn its fortunes within a short period.
China was ranked one of the poorest countries on the planet nearly 40 years ago, but it has grown in leaps and bounds to claim the top spot in economic growth.
What this means is that the Asian country has done something right to be able to move almost all of its citizens out of poverty, with the remaining 5,5 million no longer living below the poverty datum line by the end of this year.
This is a massive movement considering that around 1978, China had more than 800 million people living in poverty.
The magic wand which China waved in getting its fundamentals right is the same that African countries desperately need today to start their journey to prosperity.
But there is no doubt that the structural changes that are taking place in China’s economy will impact positively on African countries’ developmental ambitions. A number of African countries are already linked to China’s Belt and Road Initiative, a colossal development programme registering massive results in countries that are benefiting.
BRI aims at improving infrastructure development along corridors that used to host the ancient Silk Road, covering various countries in Asia, Europe and Africa. With China now being the biggest economy, more investment is expected to be poured into this initiative, resulting in growth in the affected countries.
The Belt and Road Initiative was launched by Chinese President Xi Jinping in 2013 and immediately opened up investment opportunities in many countries.
Already, various countries on the African continent have completed a number of infrastructural projects under Belt and Road, while the unfinished ones are expected to get a new impetus.
The Chinese government’s vision under the Belt and Road Initiative is to build railway networks, energy pipelines and highways that will increase international trade.
More Chinese companies are expected to take advantage of the initiative to venture into Africa where the continent provides vast opportunities.
By overtaking the US in economic progress, China has proved its mettle, especially considering the tight competition and unfair practice from some Western countries.
The conferring on China with the status of the largest economy in the world comes at a time African countries are leaning more towards the Asian country for their development.
The Forum for China Africa Cooperation (FOCAC) is one platform expected to be strengthened as China flexes its economic muscles.
China must use the opportunity to lead the world in pursuing win-win cooperation, mutual cooperation and mutual respect. The maintenance of the upward trend in the Chinese economy will be of great interest, especially to Zimbabwe, which is implementing multi-billion deals signed with the global economic giant.
The deals are in various sectors, which include infrastructure, energy, power, trade and agriculture, with some Chinese partners already on site for some of the projects.
It should be always remembered that the implementation of the cooperation deals will always hinge on the continued stability and growth of the Chinese economy, which is expected to maintain its new found status.
With China leading the world in economic progress, it is expected to consolidate its rise as the major investment partner for African countries.
The investment is already extensive, and will help African countries gain technologies that will enable value addition and beneficiation of natural resources to bring more financial benefits for the continent.
Chinese financial institutions like the Export-Import Bank of China and the China-Africa Development Fund are expected to play a major role in financing the envisaged interest of the Asian country’s private sector in Africa.
The Export-Import Bank of China stands out as one of the major drivers of cooperation between the Asian economic giant and African countries.
The bank, also known as China Eximbank, has been providing funds to support China’s partnership with Africa, backing many of the big projects being undertaken in African countries.
The projects are in various sectors — power transmission and transformation stations, railway and road networks, bridges, Special Economic Zones, hospitals, ports, Government office buildings, telecommunication facilities and schools.
China Eximbank has been playing a major role in funding, not only these projects, but many others, especially in countries along the Belt and Road Initiative in various continents across the world.
On the other hand, the China-Africa Development Fund is another institution which China, as the leading economic powerhouse in the world, can exploit to ensure that Africa benefits.
The equity fund has already been instrumental in supporting the trade and cooperation that has brought a clear developmental path for many African countries.
Established by the China Development Bank, the fund is capacitated to the tune of US$5 billion, but at the Focac summit in South Africa in 2015, President Xi Jinping proposed an additional US$5 billion.
What is now needed is for African countries to up their game, especially coming up with clear rules and regulations that govern investments.
There will be need for countries on the continent to adopt a pro-growth initiative that ensures reforms in various sector so that they are able to attract more capital.
With the historical links African countries have with China, it is possible that they can turn the cordial political relations into economic benefits.
Time to lay the foundation for industrialisation and modernisation is now, and China as the leading economic powerhouse in the world has already shown willingness to participate in this endeavour.