An Expanding Trade Deficit among African Countries Vis-à-Vis China: Do Population and Governance Policies Matter?

Over the last two decades, Sino–African trade flows have substantially increased. However, there is no empirical evidence to inform policymakers on the factors behind such considerable trade flows to help them develop effective trade policies to be prepared for any effects that may result in any shock in China’s production system. This policy brief examines whether population and governance play vital roles in shaping Sino–African trade flows. More generally, this policy brief shows that a concurrent increase in Africa’s population density and governance increases the volume of China’s exports to Africa. At the same time, it reduces the volume of China’s imports from Africa. This policy brief suggests that the effectiveness of international trade policy reforms to ensure sustainable growth in Africa is conditional on implementing efficient mechanisms to balance population growth with improvement in good governance.