China's Shifting Labour-Intensive Manufacturing Firms to Africa

Abstract

The paper aims to bring attention to the vital phenomenon of China’s factory relocation to Africa, with a special focus on Ethiopia and Rwanda. As such, the paper asks: can the surge in wages in China decisively lead to the relocation of labor-intensive manufacturing firms from China to Ethiopia and Rwanda on a scale substantially sufficient to kick-start their industrialization? In attempting to answer the question, the paper also attempts to find out if there can be any possible shift from Asian to African Geese formation within the context of flying geese (FG) theory of comparative advantage, a framework that is useful in understanding the concept of “catching-up economy”, relaying as the paper general analytical framework. The paper finds out that China’s factory relocation are still limited and constrained, owing to both African nations and China’s side factors.