When Was "Made In China" Settled In Africa?

There is a distinct lack of China's story in Africa.

The World Bank (World Bank) has expressed its willingness to cooperate with China in changing this situation and opening up the process of industrialization in Africa.

But in a brief analysis, two scholars from the Vale Columbia Center on Sustainable International Investment, Columbia University, have presented reasons for why this is a tough battle.

In Africa, they stressed the well-known difficulties associated with the so-called bad system conditions, namely, "unreliable water and electricity supply, pportation, communication, bad governance, unfriendly regulatory environment and professional ethics".

All these factors make most sub Saharan Africa, except South Africa, a costly choice for manufacturing, not only for Chinese companies, but also for multinational companies.

But in this report from Columbia University, the most interesting thing is the discussion of China's factors to curb investment in manufacturing industry.

In order to explain these factors, the author will promote China's growth in Africa.

To a certain extent, the above process is related to the labor force: some of the fastest growing economies in Asia have relatively limited reserves of cheap rural labor.

Therefore, as costs rise, they will soon be looking for workers from overseas.

On the contrary, at the present time, China, as a new place of production, has more advantages over the vast inland areas than other distant countries.

The Columbia University report explains:

China has a huge army of rural labor that has not yet been utilized.

China's rural areas still live in 750 million people, whose average income is only 1/3 of the urban population.

There are already signs that the recent labor conflicts caused by wage in China's coastal provinces are pushing factories to move inland.

Even if Chinese companies really set up factories overseas, they are also near Vietnam, Kampuchea and other places closer to home.

Another important factor in post-war Asia's development is currency appreciation: Japan and larger Asian economies allow the appreciation of local currencies, which is actually a tax on exports and subsidies to foreign direct investment.

However, the pace of RMB exchange rate liberalization in China is as slow as that of snail.

How did the authors of the Columbia University report explain this phenomenon?

This is largely because China is not ready to give up labor-intensive industries that are still providing urgently needed domestic jobs.

This gradual currency appreciation will give exporters more time to increase productivity or move inland production to a longer period of time.

Because of this, China's activities in Africa are still more related to oil and mineral acquisition, and some basic processing (which has caused controversy in the Democratic Republic of Congo) and construction (which is expected to fill more or less the shortage of infrastructure in Africa).

Jeremy Stevens, an economist at Brics Bank Standard Bank in Africa, told this column that Africa needs to develop its regional market to enhance its attractiveness to Chinese manufacturers. Nigeria, which owns a large domestic market, has demonstrated this possibility.

Nigeria imported more than US $8 billion worth of goods from China in 2008 and 2009.

This attracted many Chinese: it is estimated that 100 thousand of the Chinese living in Nigeria now engage in trade in light manufacturing products, textiles and electronic products.

It also attracts Chinese companies, which are often supported by the government, which have invested in infrastructure, retail and manufacturing in Nigeria.

But for now, China may leave its biggest factory in China.