The impact of Chinese competition on Africa’s manufacturing

Abstract : In this paper, the impact of Chinese competition on Africa’s manufacturing value added is analyzed through a model of manufacturing. Using panel data on 44 African countries covering the period 2000 to 2013, and controlling for the usual determinants of industrialization – such as the size of the domestic market, the quality of infrastructure and governance – we find that exports of manufactured goods by China and other countries to African countries mainly exert a negative effect on African manufacturing, while a moderate real appreciation of African currencies vis-à-vis the renminbi positively influences manufacturing value added, probably due to the reduced cost of imported machine and transport equipment from China (which accounted for 36% of total African imports from China in 2013) and to the reduced price of imported consumption goods increasing the remuneration of poor workers and therefore improving their productivity. However, a strong real appreciation (of more than 33%) instead exerts a negative effect on African’s manufacturing, as traditional theory predicts.
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Sylviane Guillaumont Jeanneney, Ping Hua. The impact of Chinese competition on Africa’s manufacturing. 2015. ⟨halshs-01179283⟩

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