IDEAS home Printed from https://ideas.repec.org/a/bla/worlde/v41y2018i6p1508-1528.html

Can Africa compete with China in manufacturing? The role of relative unit labour costs

Author

Listed:
  • Stephen S. Golub
  • Janet Ceglowski
  • Ahmadou Aly Mbaye
  • Varun Prasad

Abstract

This paper examines sub†Saharan Africa's (SSA) bilateral trade and cost competitiveness with China. We document an extraordinary imbalance in the structure of bilateral trade in that China overwhelmingly exports manufactured products to SSA and almost exclusively imports primary products in return. Our principal means of assessing the competitiveness of SSA's manufacturing sector vis†à †vis China are measures of relative unit labour costs (RULC). We find that African RULCs declined over the 2000s as China's wages rose faster than Chinese productivity while the reverse was true for the SSA countries in our sample. Nevertheless, RULCs vis†à †vis China remain very high for many SSA countries. High RULCs along with weaknesses in the business climate suggest that most SSA countries are unlikely to be competitive in labour†intensive manufacturing any time soon.

Suggested Citation

  • Stephen S. Golub & Janet Ceglowski & Ahmadou Aly Mbaye & Varun Prasad, 2018. "Can Africa compete with China in manufacturing? The role of relative unit labour costs," The World Economy, Wiley Blackwell, vol. 41(6), pages 1508-1528, June.
    • Handle: RePEc:bla:worlde:v:41:y:2018:i:6:p:1508-1528
    DOI: 10.1111/twec.12603
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/twec.12603
    Download Restriction: no
    File URL: https://libkey.io/10.1111/twec.12603?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Amélie Barbier-Gauchard & Meixing Dai & Claire Mainguy & Jamel Saadaoui & Moïse Sidiropoulos & Isabelle Terraz & Jamel Trabelsi, 2021. "Towards a more resilient European Union after the COVID-19 crisis," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 11(2), pages 321-348, June.
    2. Rainer Thiele & Tomke Necker & Cara Spitzer, 2025. "Diversifying European Supply Chains: Can Africa Play a Role?," Vierteljahreshefte zur Arbeits- und Wirtschaftsforschung, Duncker & Humblot, Berlin, vol. 2(1), pages 79-88.
    3. Altenburg, Tilman & Chen, Xiao & Lütkenhorst, Wilfried & Staritz, Cornelia & Whitfield, Lindsay, 2020. "Exporting out of China or out of Africa? Automation versus relocation in the global clothing industry," IDOS Discussion Papers 1/2020, German Institute of Development and Sustainability (IDOS).
    4. Alice Nicole Sindzingre, 2021. "Economic Relationships Between Sub-Saharan Africa and China: An Alternative Theoretical and Policy Paradigm?," Post-Print halshs-03625159, HAL.
    5. Joseph Mawejje & Ibrahim Mike Okumu, 2018. "Wages and Labour Productivity in African Manufacturing," African Development Review, African Development Bank, vol. 30(4), pages 386-398, December.
    6. Jiang Wang, 2025. "Bilateral Influence Capacity, Geopolitical Competition, and Chinese Expatriate Workers in Africa," Management International Review, Springer, vol. 65(5), pages 949-979, October.
    7. Amélie Barbier-Gauchard & Meixing Dai & Claire Mainguy & Jamel Saadaoui & Moïse Sidiropoulos & Isabelle Terraz & Jamel Trabelsi, 2020. "Towards a more resilient European Union after the COVID-19 crisis," Working Papers hal-03008144, HAL.
    8. Stephen Golub & Aly Mbaye & Hanyu Chwe, 2015. "Labor Market Regulations in Sub-Saharan Africa, With a Focus on Senegal," Working Papers 201505, University of Cape Town, Development Policy Research Unit.
    9. Wegenast, Tim & Krauser, Mario & Strüver, Georg & Giesen, Juliane, 2019. "At Africa’s expense? Disaggregating the employment effects of Chinese mining operations in sub-Saharan Africa," World Development, Elsevier, vol. 118(C), pages 39-51.
    10. Evans, Olaniyi, 2022. "The criticality of institutions and the macroeconomy for education outcomes in Africa," MPRA Paper 118197, University Library of Munich, Germany.
    11. Bingqiang Li & Jing Yu & Lei Huang & Jinzhi Li & Changhan Luo, 2021. "Coupling Development of Manufacturing Promotion and Innovation in China," SAGE Open, , vol. 11(4), pages 21582440211, October.
    12. Mbaye Ahmadou Aly & Gueye Fatou, 2018. "Working Paper 297 - Labor Markets and Jobs in West Africa," Working Paper Series 2424, African Development Bank.
    13. Sylviane Guillaumont Jeanneney and Ping Hua, 2020. "When and How African Real Exchange Rates Relative to China Affect its Manufacturing?," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 45(4), pages 1-34, December.
    14. Sylviane Guillaumont Jeanneney & Ping Hua, 2020. "When and how African real exchange rates relative to China affect its manufacturing?," Post-Print hal-03060589, HAL.
    15. Ahmadou Aly Mbaye & Stephen Golub & Anastasia Vasilyeva, 2019. "Senegal’s International Competitiveness and Employment Creation for Women and Youth. The Product Space Analysis and Fieldwork Findings," Working Papers idrcdprusenegal, University of Cape Town, Development Policy Research Unit.
    16. Alan Gelb & Vijaya Ramachandran & Christian J. Meyer & Divyanshi Wadhwa & Kyle Navis, 2020. "Can Sub-Saharan Africa Be a Manufacturing Destination? Labor Costs, Price Levels, and the Role of Industrial Policy," Journal of Industry, Competition and Trade, Springer, vol. 20(2), pages 335-357, June.
    17. Christian Hubert Ebeke, 2023. "Surges in participation in global value chains: Drivers and macroeconomic impacts in sub‐Saharan Africa," The World Economy, Wiley Blackwell, vol. 46(11), pages 3282-3300, November.
    18. Yang, Yujeong, 2022. "Bring Your Own Workers: Chinese OFDI, Chinese overseas workers, and collective labor rights in Africa," World Development, Elsevier, vol. 152(C).
    19. Karmen Naidoo & Léonce Ndikumana, 2023. "The role of unit labor costs in African manufacturing investment and export performance," Review of Development Economics, Wiley Blackwell, vol. 27(3), pages 1874-1909, August.
    20. Valentin Grimoux, 2018. "China’s Energy Policy & Investments and their Impact on the Sub-Saharan African Region," Working Papers 2018.27, Fondazione Eni Enrico Mattei.
    21. Grimoux, Valentin, "undated". "China’s Energy Policy & Investments and their Impact on the Sub-Saharan African Region," ESP: Energy Scenarios and Policy 276177, Fondazione Eni Enrico Mattei (FEEM).

    More about this item

    JEL classification:

    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:worlde:v:41:y:2018:i:6:p:1508-1528. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0378-5920 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.