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Will China Relocate its Labor-Intensive Factories to Africa, Flying-Geese Style?

Author

Listed:
  • Terutomo Ozawa

    () (Economics, Colorado State University)

  • Christian Bellak

    () (Vienna University of Economics and Business, Austria)

Abstract

In its quest for oil and minerals, China has developed increasingly close economic relations with Africa through investment and aid. The World Bank recently called upon China to transplant labor-intensive factories onto the continent. This raises the question of whether such an industrial relocation will be done so as to jumpstart local economic development ¡ª as previously seen across East Asia and as described in the flying-geese (FG) paradigm of FDI. Judging from Asia's FG model, there are three crucial inducements for FDI in low-end manufacturing: (i) labor costs, (ii) exchange rates, and (iii) institutions.

Suggested Citation

  • Terutomo Ozawa & Christian Bellak, 2010. "Will China Relocate its Labor-Intensive Factories to Africa, Flying-Geese Style?," Transnational Corporations Review, Ottawa United Learning Academy, vol. 2(3), pages 6-9, September.
  • Handle: RePEc:oul:tncr09:v:2:y:2010:i:3:p:6-9
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    Keywords

    China; labor intensive; exchange rates; institutions;

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