Authors: Terutomo Ozawa, CSU and Colombia University and Christian Bellak, WU Vienna

China has developed increasingly close economic relations with Africa in its quest for oil and minerals through investment and aid. The World Bank recently called upon China to transplant labour-intensive factories onto the continent. A question arises as to whether such an industrial relocation will be done in such a fashion to jump start local economic development — as previously seen across East Asia and as described in the flying-geese (FG) paradigm of FDI.

Many studies have examined China’s and other countries’ investments in Africa’s light industries (notably leather goods and textiles) and pointed out a host of difficulties they face because of poor local institutional conditions. Read more…