Will the World Bank's Vision Materialize? Relocating China's Factories to Sub-Saharan Africa, Flying-Geese Style

Abstract

China has emerged as the most proactive partner for Africa’s growth by offering economic aid, investing in development projects in resource extraction and infrastructure building, and expanding trade. In this regard, a number of studies have recently explored China’s growing—yet still nascent—manufacturing investments in sub-Saharan Africa, which the World Bank hopes to see further expanded so as to ignite local industrialization. These studies look mainly at the Africa-side (host) conditions. In contrast, this paper stresses China-side (home) factors and examines the institutional issues involved in this hoped-for scheme of industrial transplantation. The central question addressed is whether the World Bank’s wish will actually come true. China’s potential in this scenario is assessed in terms of the “flying-geese” growth model that explains how comparatively disadvantaged industries in such a rapidly catching-up economy as China’s may be transplanted overseas. This article concludes that at the moment, China’s capacity to transform the sub-Saharan region into a vibrant manufacturing base via foreign direct investment (FDI) is still underdeveloped and quite limited.