Trade-OffsIs China the key to Africa's development?

Young men sell a variety of products on the streets of ArushaARUSHA, Tanzania—Inside a dark shop opposite a frenetic bus station, transistor radios are stacked beneath newfangled LED flashlights and belts hang like snakes from the ceiling, their buckles emblazoned with the decidedly un-African word Guangzhou. Outside, in the equatorial sunshine, men who crowded inside the store become mobile versions of it, strapping to their backs 4-foot-wide square racks interlaced with watches, wallets, belts, and other items.

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A lanky young vendor whom I'll call Charles walks miles to the city's outskirts shouldering a weighty rack of trinkets, hoping to unload it along the way. Charles, who asked that his real name not be used because it's illegal to vend in the city center, hawks plastic watches for 40 cents and leather belts for $1.80, but his sales are consistent, and on a good day he takes home $45 in earnings. What is impressive about Charles' operation is not only the low, low prices of the Chinese goods he sells but that he brings them to people in the slums who've never bought these things before.

"These new Chinese products help low-income people because they can't afford the European or American stuff," says Mr. Abasi, who owns the store that supplies Charles and other vendors. "People know these products are not good quality, but they buy them because they look expensive."

While the United States and Europe still loom large here as cultural and economic icons, China is making inroads into Africa in rivulets. In this city, Tanzania's second largest, the rivulets take the form of manufactured goods, construction projects like roads and cell-phone towers, and a smattering of Chinese restaurants. For a desperately poor country like Tanzania, this "South-South" trade with China has created massive new opportunities for accelerating economic development.

In recent years, the increase in trade flows between sub-Saharan Africa and Asia has been dramatic—exports from Asia to Africa have grown at an annual rate of 18 percent since 2002. Part of the equation is that low-cost goods from China fit economies like Tanzania's well. Goods like those sold by Charles are low-quality and sometimes fake, but they are creating new microenterprise opportunities for entrepreneurial Africans. Charles told me he, like many other Arusha vendors who had regular jobs before going independent, worked in a shoe shop until he was laid off.

The new opportunities to trade with China are so tantalizing for Africans that some are returning from abroad to invest in their homelands. Georgine Spake is an elegant, tall Congolese woman who speaks English with a thick French accent and lives in the leafy suburbs of Washington, D.C., with her American husband and four children. Upon visiting her birthplace of Kinshasa last June, after a nine-year hiatus, Spake told me she was dumbfounded to discover that most of her friends and family were traveling to and from China to do business. Lured by the promise of turning her own respectable profit, Spake flew to the bustling manufacturing hub of Guangzhou, China, to investigate import opportunities with a cousin who was already importing security cameras and telephones. She stayed for a month, paying a Congolese man who lived there $150 to be her translator and fixer throughout her stay. By the end, she arranged for the shipment of 30 tons of garlic to be sold at wholesale in Kinshasa. She chose garlic, she said, because there has been great demand for it since the eastern Democratic Republic of Congo, which traditionally cultivated garlic and onions, fell prey to conflict.

According to Spake, Guangzhou was swarming with Africans. Each night, many of them congregated at a bar called the Elephant, where African musicians and dancers performed. There she exchanged business tips in hushed tones with Senegalese, Cameroonians, and Zimbabweans, as their local handlers hovered nearby to prevent their clients from being poached by other handlers.

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