Working Paper 19 & Policy Brief 27 - Work, Employment, and Training through Africa-China Cooperation Zones: Evidence from the Eastern Industrial Zone in Ethiopia
These papers by Ding Fei investigate the developmental impacts of Ethiopia’s Eastern Industrial Zone (EIZ) through a cross-company and cross-sector analysis of local worker experiences of working for, training with, and learning from resident companies. They highlight both similarities and differences in Chinese companies’ management strategies and training provisions, which are contingent upon industry sector, scale of production, and market conditions. While sixty percent of the surveyed local workers did receive training of varying quality and length, they were not satisfied with the training provision and promotion opportunities in current companies. The papers argue for concrete and targeted policy implementation by the Ethiopian government to enforce skills transfer by foreign investors, building of linkages between companies and local training institutions, and organizing zone-wide skills sessions.
Briefing Paper 1 – The Path Ahead: The 7th Forum on China-Africa Cooperation
The 7th Forum on China-Africa Cooperation (FOCAC) will be held in Beijing from September 3 to 4, 2018. Since 2000, the FOCAC has been held every three years. It serves as the official summit between the Chinese president and African heads of state, and results in major policy and financing announcements. This CARI briefing paper analyzes progress on commitments made during the 2015 FOCAC, and the trends we expect to emerge from the 2018 FOCAC. These will shape the China-Africa relationship in coming years. This paper makes four points:
We find that Chinese loans are not currently a major contributor to debt distress in Africa. Yet many countries have borrowed heavily from China and others. Any new FOCAC loan pledges will likely take Africa’s growing debt burden into account.
The 2018 FOCAC will likely pledge additional loans for infrastructure and investment for manufacturing. But the outlook on Chinese trade with Africa, which has slowed, is uncertain.
Capacity building as well as peace and security are emerging as more prominent parts of the China-Africa relationship, and serves to diversify engagement on both sides.
New areas of cooperation at the 2018 FOCAC may include renewable energy and the Belt and Road Initiative. It may also be influenced by US-China trade tensions and the creation of a national development agency in China.
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Policy Brief 26 – The East Africa Shift in Textile and Apparel Manufacturing: China-Africa Strategies and AGOA’s Influence
With rapidly rising labor costs and tightening environmental policy, the global textile and apparel industry is expected to shift its center away from China. In fact, Chinese entrepreneurs have long started looking for opportunities in the African continent in the face of fierce domestic competition. What are the opportunities and challenges facing Chinese investment in the textile and apparel sectors in Africa? How can Africa capitalize on the preferential trade provisions of AGOA to boost these sectors? Drawing from field research and literature review, this policy brief by Weiyi Wang, Jinghao Lu, and Wilmot Allen examines the strategies of leading textile and apparel firms and makes recommendations for supporting more of the value chain shift into East Africa.
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Working Paper 18 and Policy Brief 25 – Chinese manufacturing moves to Rwanda: A study of training at C&H Garments
As a small, landlocked country with few natural resources, Rwanda has focused on becoming a knowledge-intensive business and technology hub rather than a labor-intensive manufacturing base. But in 2015, a Chinese garment manufacturing firm, C&H Garments, began operations in Kigali. This paper by Janet Eom finds that the Rwandan government’s shift towards creating jobs in the manufacturing sector, and implementation of requirements for training and hiring local workers, have been key to negotiating an agreement with C&H Garments that supports technology transfer to Rwandans. In the process, this case demonstrates how African governments can require foreign investors to implement skills transfer programs to facilitate structural transformation. However, the C&H factory has also faced obstacles, including cultural and linguistic differences; this paper suggests the exchange of African managers between countries may help. Finally, this study holds significance given that the Rwandan government’s desire to boost local manufacturing capacity has been at the center of recent trade tensions between Rwanda and the United States under the African Growth and Opportunity Act (AGOA).
Working Paper 17 and Policy Brief 24 – What kinds of Chinese "Geese" are flying to Africa? Evidence from Chinese manufacturing firms
In a thoroughly researched piece, Brautigam, Tang, and Xia offer a preliminary analysis of the nature of Chinese manufacturing investments in Africa, focusing predominantly on four countries -- Ethiopia, Ghana, Nigeria, and Tanzania. Drawing on fieldwork conducted between 2014 and 2016, they explore the varieties of existing Chinese manufacturing investment and the sectors into which Chinese companies are investing. Chinese manufacturing investment in Africa is indeed expanding rapidly, yet the official data on investment approvals, both in China and in African countries, significantly overstates the actual number of investments in operation. While several investors fit the model of Akamatsu’s “flying geese” (large firms seeking new locations for production as part of global networks and value chains), they also identified three other kinds of “geese”: large, strategic, local market-seeking geese; raw material-seeking geese; and small geese traveling together in flocks. The different kinds of firms offer different kinds of development opportunities and challenges for structural transformation in Africa.
Monday, September 3, 2018
We finally have the long-awaited 2018 Chinese financial pledges in support of FOCAC (Forum on China-Africa cooperation). Although Chinese president Xi Jinping spun the numbers to come to $60 billion (the same as the 2015 pledges in Johannesburg), the Chinese state only seems to be putting $50 billion of its own money at stake, while encouraging Chinese companies to contribute the rest through their own investment projects.
US$20 billion in new credit lines
US$15 billion in foreign aid: grants, interest-free loans and concessional loans.
US$10 billion for a special fund for development financing
US$5 billion for a special fund for financing imports from Africa.
(These two latter funds are unlikely to be loan-based but details have yet to be released.)
Here is a quick analysis in "four facts".