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Africa’s industrialization and China’s OFDI in the manufacturing sector: rationales and practices

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  • Feng Lu
  • Xiaoguang Liu

Abstract

The article examines the rationales and practices for three types of manufacturing outward foreign direct investment (OFDI) into Africa in the context of the cooperation between Africa’s industrialization and China’s OFDI on manufacturing. African economies have achieved impressive growth in the new century, but sustainable economic growth in this vast continent is still constrained by lagging industrialization and weak manufacturing sector. While China’s economy has made great achievements in Gross Domestic Product growth and poverty reduction, it witnessed hikes of factor price such as wage, land and exchange rate at varying degrees in the recent decade, imposing pressure on economic restructuring. Against the background, the new trend of Chinese manufacturing OFDI provides new opportunities for Africa to solve structural problems of weak manufacturing. Policy implications of this study on China–Africa industrial capacity cooperation are briefly discussed.

Suggested Citation

  • Feng Lu & Xiaoguang Liu, 2018. "Africa’s industrialization and China’s OFDI in the manufacturing sector: rationales and practices," China Economic Journal, Taylor & Francis Journals, vol. 11(2), pages 126-150, May.
    • Handle: RePEc:taf:rcejxx:v:11:y:2018:i:2:p:126-150
    DOI: 10.1080/17538963.2018.1469319
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