A new coupling of Africa and China’s economies was beginning to materialise, Frontier Advisory CEO Dr Martyn Davies suggested on Thursday.

Addressing delegates at the Mining Indaba in Cape Town, Davies explained that, in 1996, an economic growth correlation emerged between the African and Chinese economies.

“For about a decade and a half, African economic growth has almost identically followed the trajectory of the Chinese economy,” explained Davies.

This correlation was primarily the result of China’s demand for resources and Africa’s ability to supply such commodities.

While Africa was dependent on China’s tremendous demand for natural resources to largely sustain its economic growth, Davies argued that Chinese economic growth was equally dependent on Africa’s ability to supply such resources.

Currently, China was Africa’s second largest trading partner, behind the US, with 80% of African exports comprising natural resource commodities.

Owing to this reliance on African commodities, Davies insisted that Beijing still expressed high-level political intent to continue investing in Africa, despite the high investment risk associated with many countries on the continent.

This was evidenced by the fact that China planned to spend $1-billion in Africa on commodity and industrial projects by October this year.

Davies elaborated that one of the fundamental reasons that China was investing in, and trading with, Africa was because the continent was the only commodity-rich region that was strategically open for business.

“Ultimately, investing into Africa is believing in long-term China,” Davies told delegates.

In terms of the Chinese economy, Davies estimated that economic growth would slow to an average of 7,5% to 8,5%.

The slowdown in the economy, which was largely engineered by the Chinese government itself, argued Davies, would bottom-out in the third quarter of this year.

“Economic growth will pick up quite dramatically from the current levels of 6%, but will not reach double-digit figures of 13% that we have seen recently,” Davies stated.