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Wednesday, 03 September 2014

‘Made in China’ now being Made in Africa

The cost of labor in China is going up, so Chinese manufacturers are moving to Africa, and they’re playing all the angles.

Sun Qiaoming is a trader from Jiangsu. He operates his import-export business on the Eastern coast of China, where there is plenty of space for a man with his drive and skills to prosper. Already fairly successful, he recently set his sights beyond his country’s borders. “There’s been much talk about the Chinese Dream in the past few years, but I have an African Dream.” he said. “African gold will fill my next bucket of gold.”

He wasn’t referring to the natural resources that President Obama recently hinted as the reason for China’s presence on the African continent. After all, Sun is a private entrepreneur, and receives no direct support from the government in his business endeavors. His “gold” is the labor in Africa – cheap, trainable, abundant, and ready to work. They may not have the decades of know-how that the Chinese developed during their meteoric rise in global production, but Sun is confident that with time and proper training, they will be able to match the efficiency and productivity of workers in China.

With rising labor and energy costs, as well as tightening environmental restrictions, it is becoming increasing difficult for Chinese industrialists to churn out cheap goods at a massive scale in their own country. Even as fresh university graduates suffer a high unemployment rate, few want to take jobs on factory floors. “The post-90s generation wants office jobs, not blue collar work,” Sun explains. “It’s understandable. Life is much easier now. Factory work is stable but I want my children to have other options.”

The result is an exodus of Chinese manufacturing to places where labor is cheaper and financial incentives like capital subsidies are offered to foreign-owned factories.

Source: tralac.org