China, one of Malawi’s biggest export destinations, is facing slow economic growth rate as it battles a slumping real estate market, weak domestic demand and industrial production. At 6.9% growth rate (official), this is the lowest rate at which the economy has grown since 2010. For this year, the government was targeting a growth rate of 7% but indicators with regards to the state of fundamentals in the 3rd quarter already show that the intended progress is going to be a slow process if it can be achieved at all.

Further, some economists are being even skeptical about the correctness of the figures. What is creating room for doubt is how key drivers (e.g. the construction sector) have remained stagnant and in contraction following the transformation from investment to consumption to demand-led growth which the government spear-headed. Thus, according to Quest Means Business (19 October, 2015), skeptics believe that the economy might be growing between 3-4% and that the official figures are just result of a deliberate move by the government to mis-inform investors as a way of rebuilding confidence in the economy.

Nonetheless, regardless of who is right or wrong, the economic effects of the developments in China are already being experienced in Africa. As an example, according to TradeMap (20 October, 2015), Malawi’s exports to China have been growing on an annual average of 15% for the past four years, however, growth rate for the year 2013 to 2014 has slowed to 2% due to the reduced Chinese import demand.

MITC, 20 October 2015