China’s Light Manufacturing and Africa’s Industrialization

Abstract

This chapter aims to explore whether and how China’s light manufacturing transfer can help to drive Africa’s industrialization. First, it examines the opportunities and challenges presented by the transfer of light manufacturing from contemporary China to low-wage developing countries from the historical perspective of the ‘flying geese’ pattern. Second, it uses first-hand survey data to explore how Chinese light manufacturing firms have coped with rising labour costs, what types of firms are more likely to relocate their manufacturing capacity to low-wage destinations, and where firms tend to relocate their production line. Third, it examines how ‘pilot’ Chinese light manufacturing firms have overcome first-mover challenges. Finally, it employs the analytical framework of New Structural Economics to make policy recommendations on how to mitigate binding constraints to help African countries seize the window of opportunity of industrial transfer from China to achieve economic structural transformation.