Why ‘Made in Ethiopia’ Could Be The ‘Next Made in China’

By TOM GARA
WSJ

BN-
Workers at a factory in Hangzhou, China, making national flags for the 2014 FIFA World Cup. Agence France-Presse/Getty Image

China’s was once known as cheapest factory floor on the planet, but in the last two decades its economy has transitioned to become one of the world’s most advanced industrial powers. That means someone else needs to start making all those shoes and sweatshirts, hence all those apparel companies in recent years moving their factories to Vietnam and other cheap spots throughout Asia.

And it’s not just Asia. China’s Huajian Group plans to invest up to $2 billion in Ethiopia in the next decade, turning the country into a shoe manufacturing base for exports to the U.S. and Europe. As the WSJ’s Peter Wonacott reports:

Mounting labor costs in China are part of what makes Africa so attractive. The average monthly wage for a low-skilled Ethiopian factory worker, for example, is about 25% of the pay for a comparable Chinese worker, according to the World Bank. As the wage gap widens between unskilled Chinese workers and their counterparts elsewhere in Asia and in Africa, as many as 85 million factory jobs could leave China in the coming years, according to former World Bank chief economist Justin Yifu Lin.
In addition to its pool of low-cost labor, Africa represents an enticing market for Chinese products manufactured on the continent. Africa is now home to six of the world’s 10 fastest-growing economies, according to the International Monetary Fund, and many African countries are reducing their dependence on extracting resources, such as oil, metals and gems.
Africa’s poor infrastructure and uneven distribution of skills erode its cost advantages, however. The World Bank study estimated that a Chinese worker making shirts, for example, could produce about twice as many per shift as an Ethiopian worker.

Chinese factory wages have been rising an average of 20% a year for the last decade, pushing low-cost manufacturers toward places where salaries are stagnant. Here’s a chart the WSJ put together last year:

MK-CC85And as China steps more prominently into Africa, what do its officials say in response to suggestions the country could act as a new form of colonial power? In an interview with the WSJ, Chinese ambassador to South Africa Tian Xuejun had little time for such claims:

Some media say China assists Africa only for the market and resources, and they talk about “neocolonialism,” but I say these kinds of criticisms are absurd. One reason is that they don’t know much about China-Africa cooperation. Another reason is maybe that they have other agendas.
China has assisted in the building of infrastructure, roads, bridges and railway stations. This has greatly improved the investment environment in many African countries. China has invested in manufacturing and sent agricultural experts to other countries. China also has helped to build many hospitals, schools and stadiums.
People are talking about neocolonialism but what is neocolonialism? People in Africa know very well about colonialism—this is about using gunfire to open the door to Africa to grab their resources. It is China who buys resources with a fair price under internationally recognized rules.

See also:
China Inc. Moves Factory Floor to Africa – WSJ

0 Comments

  1. This is good news. I want to see that joint turned upside down industrially full steam ahead. I would like to see women of my cattle herding tribe by bus and bus loads going to factories to run machinery instead of being kept at homes as child incubators. I would like to see men of my own pastoralists/cattle herding tribe going to factories and make a living instead of counting on what the sky might bring or not. Bus’em all into factories. Deprive them all the slack time they are wasting chewing Khat all afternoon and everyday. This goes for all regions in the rest of the country.
    Let tens of thousands of factories flourish! Let millions of subsistence farmers be converted into factory workers!!! Load’em all up onto buses and to factories.
    After all this becomes a reality economically, you will then see its political dividends. Enough with agrarian way of making a living!!! Enough with backwardness!!!! Enough!!! Enough!!!! Enough!!!!!

  2. What is development without freedom, you may argue that in China there is no freedom but the Country is deveoping and the Standard of living of the People is improved but in Ethnic Ethiopia the Situation is different there is no national governmnt who cares for Ethiopia and Ethiopian. The home grown fascists are looting and terrorizing while at the same time promoting their “GREATER TIGRAI” Agenda. Ethiopia will be like Syria or Rwanda unless the Ethiopian oppositon dismantel ethnic woyane and replace it with a free and democratic government.

Leave a Reply

Your email address will not be published.