“The Next Factory of the World: How Chinese Investment is Reshaping Africa” by Irene Yuan Sun

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Africa is, as far as development is concerned, the next frontier. China is leading the charge in setting up factories and businesses across the continent. McKinsey’s Irene Yuan Sun writes in The Next Factory of the World that this will help Africa become a “global manufacturing powerhouse” as it follows China’s path to industrialization. However optimistic this may sound, Sun argues that not only did China do this itself during the 1990s and 2000s, but that it is already working in Africa.

Sun looks at Chinese businesses in four countries: Nigeria, Lesotho, Kenya, and Ethiopia. The result is a compelling, if not altogether convincing, book that focuses on the stories of several successful Chinese entrepreneurs rather than rely on overwhelming amounts of data and statistics. There are interesting accounts of Chinese textile giants in Nigeria, Africa’s most populous country, and gritty factory owners in Lesotho, a small mountainous country nestled inside South Africa.

This Chinese industrial presence has not been without complaint, ranging from labor abuses to corruption about which even Africans are shocked. “The Chinese? They taught us Nigerians something about corruption!,” exclaims a Nigerian businessman, whose country Sun points out is one of the most corrupt in the world. But the author takes a positive view, arguing that corrupt Chinese businessmen are amoral, not immoral, and that industrial accidents and abuses were common in the UK and US in the 19th century.

It is not only Chinese that dominate local manufacturing sectors: in Kenya, African-Indians dominate manufacturing while Lebanese do the same in some West African countries. The book also features a few successful African businessmen, such as Lesotho factory owners and an Ethiopian gel capsule maker. However, these local entrepreneur success stories seem to be rare: the Ethiopian capsule maker accounts for “almost all” of her country’s pharmaceutical exports.

 

The Next Factory of the World: How Chinese Investment Is Reshaping Africa, Irene Yuan Sun (Harvard Business Review Press, November 2017)
The Next Factory of the World: How Chinese Investment Is Reshaping Africa, Irene Yuan Sun (Harvard Business Review Press, November 2017)

Sun does a good job in detailing the problems of doing business in Africa, including bad governance, corruption and the sometimes adverse results of Western development plans. For example, Western focus on cheap medication to tackle diseases in Africa like malaria had the huge drawback of creating dependency on foreign medicine and preventing local pharmaceutical industries from developing. Often what works in the West cannot in Africa because conditions are vastly different. As such, sometimes good outcomes in Africa don’t depend on consistently good systems, because of things like bootstrapping development—when institutions and actors adapt to changes in conditions rapidly. This is one advantage Chinese firms and businessmen may have in Africa as they are more willing to bear with setbacks and chaos.

While the book is useful and informative, it does not back up its title. In just 177 pages, perhaps it could not. Sun is very optimistic, perhaps overly so, on the state of African manufacturing and the impact of China’s role. Regardless of Africa’s potential, it will take much more than a handful of success stories, most of whom are not even African, to prove that Africa will be the world’s next factory.


Hilton Yip is a writer currently based in Hong Kong and former book editor of Taiwan’s The China Post.