The world's next great manufacturing center: how Chinese investment is reshaping Africa

Abstract

Rising costs in China have prompted Chinese manufacturing entrepreneurs to look to Africa for higher-margin investments. It is possible that Africa might become the next big worldwide manufacturing center, supplanting China itself. This industrial revolution in Africa could create 100 million jobs, a fresh group of internationally competitive manufacturing firms, and the eradication of extreme poverty. Chinese firms overwhelmingly hire locals, giving them experience that will enable them to become managers and executives in turn. Economic theory demonstrates that the path to higher living standards is productivity, rather than services. And manufacturing investment produces large multiplier effects, creating 1.6 service jobs for each manufacturing job.