1.1 Industrialization in Africa: Why, How, Where, and When?

There are various arguments promoting Africa’s structural transformation, with the point of contention generally around which path to take and whether industrialization is a necessary component. Here, one initial question to ask is: Why industrialize? Desirability does not necessarily imply viability, however – structural transformation needs to be built, often over extended periods of time and in the face of various obstacles, which leads to a second question: How best to industrialize? These interrelated questions have spawned an extensive literature, summarized next. In doing so, the Element draws on the work of selected political economists working on structural change and industrialization in low- and middle-income countries (LMICs), including Hirschman, Amsden, Chang, and, more recently, Cramer et al. (Reference Cramer, Sender and Oqubay2020), Hauge (Reference Hauge2023), and Whittaker et al. (2020). These authors defend the ‘art of the possible’, arguing that even lowest-income countries can aspire to industrialize based on the previous experiences of early and late developers, the opportunities they seized, and the panoply of industrial policy tools they deployed. While lessons from the past are critical, important shifts (e.g. climate change, new geopolitical shocks, technological change) that may have created context-specific opportunities to leapfrog stages of structural transformation must also be taken into account.

There are two relevant sets of classic arguments arising from a heterodox development economics tradition. First are the ‘Kaldor laws’, which refer to the symbiotic relationship between manufacturing growth and scaling up on the one hand, and economy-wide productivity growth on the other. This is driven by increasing returns to scale in manufacturing, as well as the sector’s particular properties, which make it a hub for technological change (in terms of both innovation and diffusion). These ‘laws’ have been repeatedly tested by empirical work applied to different country samples and time periods, demonstrating there is indeed a symbiotic relationship between manufacturing development and sustained economic and productivity growth (Thirlwall Reference Thirlwall2013; Hauge Reference Hauge2023; Cramer et al. Reference Cramer, Sender and Oqubay2020).

Second, Hirschman’s work expands on manufacturing’s strong growth and transformative properties by stressing the strong productive linkages – both backward and forward – generated in other sectors, such as cotton for textiles, business services and logistics, and multiple intra-industrial linkages that contribute to the expansion of industrial eco-systems (Hirschman Reference Hirschman1958). In short, the development of manufacturing capabilities generates demand, new markets and technological opportunities for various other economic activities, from agriculture to transport to trade to other modern services.

Employment matters too, especially for countries experiencing population growth and a youth bulge, as is the case across much of Africa. Thus, if the Kaldor laws and Hirschman’s productive linkages hold, industrialization can also be an engine for the mass creation of direct, indirect and induced jobs. As argued by Amsden (Reference Amsden2012), only the emergence of larger-scale, more technologically capable employers able to make long-term investments supportive of mass job creation can help African workers escape the trap of risky, low-return self-employment. Here, the employment multiplier effect of manufacturing is very high, as every new job in the sector holds the potential for 3–4 additional jobs being created elsewhere in the economy as an indirect outcome (Cramer et al. Reference Cramer, Sender and Oqubay2020, 101).

Another relevant argument is that more diversified, industrial-led export growth – buttressed by inter-sector linkages – can contribute to a relaxing of balance-of-payments constraints, which for many low-income countries (LICs) are a key impediment to growth (Thirlwall Reference Thirlwall2013). More foreign exchange availability can in turn facilitate further structural transformation into other higher-value added sectors (Cramer et al. Reference Cramer, Sender and Oqubay2020).

Despite growing doubts over the viability of industrial-led transformation, and despite consideration being given to services acting as a ‘substitute’ (Rodrik and Sandhu Reference Rodrik and Sandhu2024), the available evidence for the current era of so-called ‘premature deindustrialization’ (Rodrik Reference Rodrik2016) suggests that manufacturing production and employment have actually continued to expand globally. Here, it should be noted that although the manufacturing’s global employment share has not significantly changed (Haraguchi et al. Reference Haraguchi, Cheng and Smeets2017), the sector continues to attract a large and growing share of greenfield FDI (UNCTAD 2024). Moreover, even labour-intensive manufacturing exports have experienced rapid growth since 2000 (Figure 1; Kruse et al. Reference Kruse, Mensah, Sen and De Vries2023). This is even considering the fact that sector classifications fail to fully recognize the significance of manufacturing, given how much of what counts as ‘services’ is deeply connected to industrial production worldwide (Hauge Reference Hauge2023; Cramer et al. Reference Cramer, Sender and Oqubay2020). Thus, despite the rapid growth of services across different country income categories, manufacturing is far from a stagnant or declining sector. It is also clear – hence some of the pessimism in both high-income countries (HICs) and LICs – that there has been a reconfiguration of global manufacturing output, with China growing its share continuously, together with several other fast-industrializing Asian countries (Hauge Reference Hauge2023; UNIDO 2024).

Figure 1 World manufactured exports 2005–2023

Source: Own elaboration from UNCTAD datasets

A report by the World Bank (2021) argues that African countries currently enjoy favourable conditions to participate through manufacturing global value chains (GVCs), potentially giving them a window to industrialize faster. Hauge (Reference Hauge2023) corroborates this with evidence of a growing number of countries entering manufacturing GVCs despite pressures for reshoring, mostly in Asia but also gradually in Africa. Thus, the fact that China is expected to increase its share of global manufacturing output (UNIDO 2024) does not preclude the possibility of African countries expanding their industrial output, especially in sectors deemed obsolete or no longer viable in Asian countries – China included – which are rapidly upgrading to high-tech manufacturing exports. Moreover, African countries, especially those with large markets, can potentially expand their industrial production through import substitution, a strategy many other economies have pursued in the past and are still trying now.

Any structural transformation strategy can and should learn from past successes and failures (Oqubay Reference Oqubay, Oqubay, Cramer, Chang and Kozul-Wright2020). Historically, three stylized categories of industrializers can be identified. First, the experience of early industrializers such as Britain, which involved at least three interacting dominant factors (Allen Reference Allen2011): (a) the availability of a new form of cheap energy (coal) making energy-intensive production units viable; (b) processes of social change driven by enclosures driving the formation of a proletariat available to work in new factories at subsistence wages; and (c) the availability of cheap raw materials, primarily cotton for the textile industry, facilitated by British imperialism and slavery in the cotton-growing American South (Inikori Reference Inikori2020).

Second, the experience of late industrializers in Asia in the post–World War II period, where another recipe with distinct ingredients arose: (a) the rise of a developmental state, driven by the imperatives of regime survival in the context of the Cold War; (b) the absence of a powerful landlord class, which allowed emerging developmental states to drive the industrial transformation process through state-owned enterprises (SOEs) and the promotion of an incipient industrial bourgeoisie; (c) the external support provided by the US government in its fight against communism, opening policy space for countries such as Japan, Korea and Taiwan to experiment with combined import substitution industrialization (ISI) and export-oriented industrialization (EOI) in different sequences (Amsden Reference Amsden2001; Whittaker et al. 2020);Footnote ³ (d) the role of carefully managed FDI in bringing technology transfer and capital; and (e) a relatively educated, trainable workforce, which contributed to the rise of labour-intensive manufacturing, especially when labour disciplining and repression was exercised.

Third is the case of ‘compressed development’ industrializers (Whittaker et al. 2020), of which China is a leading example, involving: (a) the global rise of an organizational and technological network paradigm, which in turn facilitated the fragmentation, interconnections and complex organization of global production networks (GPNs); (b) global production fragmentation, with high-value activities located in HICs and transnational corporation HQs (R&D, design, innovation, branding, retail), and manufacturing assembly outsourced en masse to LMICs; and (c) technological change and innovation in logistics, alongside declining international trade costs, which together facilitated the dynamic of flexible specialization and trading in tasks (Page Reference Page2012), resulting in more widespread ‘thin industrialization’ (e.g. low-end basic assembly operations such as cut-make-trim in the apparel industry).

In all these structural transformation experiences, innovation, technological catching up, learning and emulation have been key, driving a transition from ‘easy’ light low-technology manufacturing to machine production and innovation-led industrial upgrading (Amsden Reference Amsden2001; Chang and Andreoni Reference Chang and Andreoni2021). Successful industrializers have upgraded to higher productivity and more technologically intensive manufacturing using learning rents, often supported by developmental states, to help build production and organizational capabilities at both the individual and collective level (Chang and Andreoni Reference Chang and Andreoni2021; Khan Reference Khan2019). China is perhaps the most striking example of a rapid transition from mass labour-intensive industrialization – predicated on low labour costs, combined with a skilled workforce and expanding infrastructure – to an innovation-centred industrial model that has put the country at the frontier of new technologies such as robotics, AI, and green products like electric vehicles (EVs) and batteries (Atkinson Reference Atkinson2024).Footnote ⁴

There is a consensus that Africa is the least industrialized region in the world, and that most of its countries are still in their infancy when it comes to manufacturing capabilities. However, this consensus masks significant variation across countries and over time periods. Postcolonial industrialization experience in Africa occurred in three main phases (Chitonge and Lawrence Reference Chitonge, Lawrence, Oqubay, Cramer, Chang and Kozul-Wright2020; Whitfield and Zalk Reference Whitfield, Zalk, Oqubay, Cramer, Chang and Kozul-Wright2020): first, an initial post-independence ‘art of the possible’, when several African governments used the state and state-created companies to pursue a broad-based industrialization agenda, mostly built on an ISI approach; second, the post-crisis liberalization and structural adjustment phase (1980–2010), when industrial policy was largely abandoned (with the notable exception of Mauritius) and trade liberalization and SAPs dominated the policy landscape, negatively affecting the limited industrial base of most countries; and third, an emerging revival on the back of some African leaders showing a willingness to emulate Asia’s industrialization success, partly driven by participation in GVCs/GPNs as offshoring extends beyond Asia.

This inconsistent trajectory has led to two contrasting narratives: one that emphasizes ‘premature deindustrialization’ (Rodrik Reference Rodrik2016), and another that suggests many African countries have suffered from ‘premature industrialization’, especially in the early post-independence phase (Robertson Reference Robertson2022). Although there is some evidence to support both arguments, it is mainly limited to specific country examples rather than applying continent-wide. Some countries did suffer from deindustrialization dynamics at the height of SAPs and trade liberalization in the 1980s and 1990s (Page Reference Page2012). Many countries that had started to industrialize, however, did not seem to have met the basic conditions proposed by Robertson (Reference Robertson2022) for industrial take-off in their initial phases, namely high adult literacy rates (70 per cent or more); high energy production and consumption per capita (over 300 kWh); and lower fertility rates. Even so, some countries – notably Ethiopia and Ghana – have recently managed to speed up manufacturing growth despite failing to fulfil these criteria (Balchin et al. Reference Balchin, Booth and te Velde2019). This conundrum also points to the debate on whether countries should follow or defy comparative advantage, and the resultant implications for whether African industrialization strategies should be bolder or more cautious (Lin and Chang Reference Lin and Chang2009; Lin Reference Lin2018; Chang and Hauge Reference Chang, Hauge, Cheru, Cramer and Oqubay2019).

Whether Africa has experienced ‘premature’ industrialization or deindustrialization largely depends on how one interprets these historical trajectories and ‘moments’ of capitalist development (Page Reference Page2012; Rodrik Reference Rodrik2016, Lee Reference Lee2017; Ggombe and Newfarmer 2018, Cramer et al. Reference Cramer, Sender and Oqubay2020; Robertson Reference Robertson2022). Thus, the recent ‘renaissance’ of industrial growth reflects patterns contingent on specific configurations of global, national and local forces, encompassing government policies and investment opportunities seized on by domestic, diaspora and foreign industrial capitalists. This ‘contingent’ industrialization includes both export-oriented ventures (e.g. Ethiopian, Ghanaian, Mauritian and Malgache industrial parks), and inward-looking ISI-like industrialization processes driven by domestic market dynamics, particularly linkages between construction and industrial development, as in Nigeria, Ethiopia and Angola (Itaman and Wolf Reference Itaman and Wolf2021; Wolf Reference Wolf2024). These are real industrial growth episodes, despite an aggregate decline in African manufacturing sector’s GDP share that has been driven by the effects of the commodity price boom and South Africa’s sluggish manufacturing performance.

Overall, the main story of African manufacturing growth since 2000, when China’s engagement in the continent accelerated, is one of dramatic variation. While some countries have – admittedly from a very low base – grown rapidly and steadily since 2000, others have stagnated or even slightly regressed. Ethiopia is the leading example of the former, and South Africa an example of the latter. The unevenness of these processes is illustrated by Figure 2, which shows how Ethiopia has since 2000 almost mimicked in relative terms the incredible industrial growth experienced by Bangladesh and Vietnam since 1990, whereas growth in South Africa – Africa’s industrial powerhouse – has been remarkably sluggish over the past twenty years.

Figure 2 Manufacturing growth in selected economies (1990–2023)

Source: Own elaboration from UNIDO datasets

1.2 The Argument

The main thesis of this Element is that a number of opportunities for economic transformation have been generated by the rapid expansion of ties between China and many African countries, reviving the prospects for industrialization and associated job creation in some of these countries. The economic transformations affecting China’s economic trajectory over the last two decades, especially the saturation of its low-technology labour-intensive manufacturing, and overcapacity in construction activities, underpin some of these opportunities (Lin and Xu Reference Lin, Xu, Oqubay and Lin2019; Tang Reference Tang2020). However, outcomes vary considerably across Africa, and these are still early days for recent industrialization processes. While structural and policy obstacles mean few countries have fully exploited these opportunities yet, the relative strength and vision of national institutions, particularly the state’s ability to discipline (foreign and domestic) capital, appear to be critical determinants of the success, failure or sustainability of current economic transformation experiences fuelled by Chinese official finance and state or private capital.

Furthermore, multiple barriers and contradictions stand in the way of building an industrial workforce in countries that lack industrialization experience. As such, despite industrialization offering the promise of large numbers of decent jobs, progress is likely to be slower and more uneven than expected. The kinds of investment and employment dynamics associated with Chinese-driven FDI and infrastructure development are therefore very different between, say, Angola and Ethiopia, where Chinese engagement since the early 2000s has been particularly intense. Even within Ethiopia, the fragile political settlement has put the current industrialization model’s viability in doubt, regardless of China’s engagement. In sum, there is enough evidence to suggest the last two decades of engagement of China in Africa have helped lay the foundations for industrialization efforts in those countries attempting to make them. However, the impact would be much greater if African elites and their governments were more committed to and embraced the idea of ‘modernizing structural change’, exploring with an open mind the lessons from China’s structural transformation (Opalo Reference Opalo2024).

This Element is not just about China’s engagements in Africa. It is also about Africa’s legitimate right to development and structural transformation, and the realities and prospects arising from this. As such, this Element is not just about Chinese finance and firms in Africa, but also their African workers, and how China’s engagements remind us of the often contradictory, complicated, and contested process of building an industrial workforce. It is not just about drivers of Chinese engagement in Africa and their contributions to industrialization, but about how African agency shapes variations in experiences, and how the interplay between politics and economic forces is key to explaining such variation. In sum, it is as much or more about African countries (e.g. Ethiopia, Angola, Nigeria) as it is about ‘Global China’.

Building on the aforementioned, this Element rejects methodological nationalism, ‘which has artificially sealed Chinese phenomena within China’s geographical borders’ (Lee Reference Lee2017, 166). By contrast, fine-grained, grounded empirical and comparative research helps transcend the trap of ‘grandiose generalization in terms of hegemony, empire, and neocolonialism’ (Lee Reference Lee2017, 161).

The Element is based on two main sources of evidence. First, it draws on the excellent fieldwork-based scholarship exploring the extent to which China’s engagement in Africa promotes industrialization, and the variegated development dynamics this has brought about (Sun Reference Sun2017; Brautigam et al. Reference Brautigam, Tang and Xia2018; Oqubay and Lin Reference Oqubay and Lin2019; Chen Reference Chen2021; Calabrese and Tang Reference Calabrese and Tang2023; Tang Reference Tang2023; Zhou Reference Zhou2023; Mamo Reference Mamo2024; ), along with a large set of secondary sources (data and literature).Footnote ⁵ Second, it employs primary comparative evidence collected by the IDCEA project (Industrial Development Construction and Employment in Africa) on employment dynamics in manufacturing and infrastructure construction, conducted over three years of fieldwork (2016–2019) in Angola and Ethiopia.Footnote ⁶ The latter research includes one of the largest quantitative surveys yet conducted of African workers employed by Chinese and other firms in these two sectors, garnering responses from over 1,500 workers in almost 80 firms, of which 31 were Chinese (Oya and Schaefer Reference Oya and Schaefer2019). The project also conducted over 270 qualitative interviews with company managers, government officials, workers (several life-employment histories), international agencies, industry experts, and other key informants in different phases.

The implications of this analysis for broader debates on development in Africa are significant. At a time when post-development and new decolonial narratives abound, it is important to recentre Africa’s plight in the challenges, opportunities, and contradictions of real development. This includes taking account of the legitimate aspirations held by most Africans to achieve structural change, material improvements, and socio-economic progress, while not ignoring the violence and tensions in the processes of capitalist transformations. The term ‘modernization’ is often used in ‘Global China’ discourses, and has increasingly been appropriated by African elites and intellectuals. Ordinary Africans deserve better roads, transport connectivity, access to electricity, health facilities, more and better jobs – precisely the outcomes we associate with ‘development’. The quest for African ‘modernity’ is no longer simply a colonial project, but reflects the desires of millions of ordinary Africans and their elites (Mkandawire Reference Mkandawire and Mkandawire2005; Opalo Reference Opalo2024). Opalo and Taiwo, two renowned African intellectuals, have echoed the words of the late Mkandawire (Reference Mkandawire and Mkandawire2005, 14) in issuing a call to embrace ‘African modernity’, arguing that, despite some imposed undesirable ‘development models’, ‘the objective of development in the broad sense of structural change, equity and growth [is] popular and internally anchored’.

2.1 Framing ‘Global China’ Contributions to Africa’s Industrialization

Having established the desirability of structural transformation through industrialization in Africa, this section offers an overview of the extent to which China has contributed to emerging industrialization efforts since the early 2000s, and the main mechanisms used.

In particular, two major mechanisms are examined in this section. First, facilitation of a substantial expansion in economic infrastructure from a very weak base, especially the kinds of infrastructure most likely to enable manufacturing development – namely, energy, transport, and industrial parks. The funding and building of such infrastructure may be regarded as central contributions, and indeed the basic foundations, of industrial development. Thus, while the relevant infrastructure does not guarantee industrial development, it does constitute a necessary precondition. Second, in the absence of an experienced, developed indigenous industrial capitalist class, the arrival of manufacturing investors in the form of FDI plays a central role. FDI-driven industrialization has been a key characteristic of ‘compressed development’ era (Whittaker et al. 2020). The section summarizes and evaluates evidence at continental and country level (for selected country cases) about the volume and trends of official finance, infrastructure building, and FDI, with a particular focus on what is relevant for processes of industrialization.

Variation in outcomes also depends on the scale and nature of the ‘varieties of capital’ entering African countries. Three key types dominate the landscape of Africa–China encounters: (a) state finance capital (policy banks like Eximbank); (b) SOEs in construction services; and (c) private manufacturing firms. Here, the ‘varieties of capital’ concept allows for more fluid theorization, and encourages awareness of adaptations to different political, economic and social contexts (Lee Reference Lee2017). Compared to more seasoned Western firms, Chinese varieties of capital often lack overseas experience and may therefore be more vulnerable to unexpected shocks and events (Lee Reference Lee2017, 160). In addition, Chinese state capital may differ from global private capital in applying the logic of ‘encompassing accumulation’ rather than being solely driven by shareholder value maximization. Thus, some Chinese companies may be driven by pure profit maximizing while others combine profits and market expansion, with more complex combinations potentially occurring involving profit, political patronage, and influence (diplomacy), as well as access to commodities at source.

Overall, the increasing flows of Chinese development finance, construction services, and FDI over the past two decades have taken place in the context of China’s intertwined challenges of overaccumulation and overcapacity in certain productive sectors, and the governance and legitimacy of the country’s development model (Hung Reference Hung2008; Lee Reference Lee2022; Strange Reference Strange2023). These logics of accumulation and ‘going out’ are determined by the combined effects of ‘variety of capital’, sector, host country factors, and connections with other actors in China and host countries. In turn, their developmental impacts hinge on the extent of linkages with other sectors, technology transfer, spillovers to other domestic firms, generation (or saving) of foreign exchange, job creation, skill development, and the contribution to easing binding constraints on structural transformation.

Combining these perspectives, it is possible to depict a set of essential vectors that can potentially (and actually) contribute to Africa’s industrialization efforts, as demonstrated by Figure 3. Two vectors dominate: first, the funding and building of key economic infrastructure conducive to industrial investment, notably energy, transport, and industrial hubs; and, second, direct investments in the manufacturing sector, typically by private firms – especially those that have GVC experience and contribute to Africa’s manufacturing exports – and represented by FDI flows.

Figure 3 Key channels of China’s contributions to Africa’s industrialization

Source: Own elaboration

These two vectors are intimately linked to three other important mechanisms. First, contractors and manufacturing investors create new jobs for local workers in manufacturing production or construction, providing not just livelihoods to thousands of Africans, but new skillsets that are often acquired on the job and over time provide an effective basis for industrial development. The transfer of organizational capabilities (as in factory management and work) is a long-standing enabler of sustained industrialization, evidenced by the work of Amsden and Hirschman. As Amsden (Reference Amsden2012) insists, the mass creation of jobs in viable enterprises and higher productivity sectors contributes to ‘manufacturing’ experience by creating an emerging industrial workforce with skills deployable across different sectors as other investment opportunities arise.

Second, manufacturing and construction investors often come with technology and capital equipment potentially suitable to the conditions of African markets. When this technology is affordable, there is potential for spillover effects onto domestically owned firms, which may contribute to industrial eco-systems clustered around specific sub-sectors, eventually inducing new activities and investments (Best Reference Best2018). The imported technology’s suitability and affordability is critical in this case, with the establishment of direct linkages between foreign investors and local suppliers a necessary step in the process (Tang Reference Tang2023). These are not automatic but can be incentivized by industrial policy interventions.

Third, industrial development in low-income country contexts is inherently risky – certainly more so than other activities that have tended to attract the attention of domestic capitalist classes, namely finance, trade and real estate (Goodfellow Reference Goodfellow2020). Thus, the availability of patient finance – not just for large economic infrastructure projects but for manufacturing investments, especially industrial hubs – may be crucial to unlocking profitable investments that might otherwise go unfunded, especially in contexts where capital markets perceive a high-risk business environment. Indeed, lack of access to finance is typically a major constraint for local African manufacturers and an impediment to further growth (McMillan and Zeufack Reference McMillan and Zeufack2022). As such, long-term finance on terms that are favourable to the development of industrial eco-systems is likely to contribute to more sustained industrialization, regardless of whether it is driven by FDI. When patient finance for local entrepreneurs is missing, FDI becomes one of the few realistic vehicles for industrial development and technological catching up.

The following two subsections unpack the dynamics of expansion of Chinese-funded and -built infrastructure and Chinese FDI into the manufacturing sector. For both phenomena the main implications for Africa’s industrialization are teased out, given the evidence to date.

2.2 Financing and Building Infrastructure for Structural Transformation

2.2.2 Chinese Development Finance in Africa

How has China contributed to Africa’s recent infrastructure drive? One leading mechanism is dedicated infrastructure finance, mostly concentrated in the first two of the aforementioned three areas. While industrial hubs (or special economic zones, SEZs) have also received some backing, these have received lower Chinese official funding volumes and attracted a wider range of players, including private companies and provincial government agencies, as in the Eastern Industrial Zone (EIZ) of Ethiopia, one of the two largest industrial hubs in Africa (Brautigam Reference Brautigam, Oqubay and Lin2019; Oqubay Reference Oqubay2022; Chen Reference Chen2024).

Figure 4 indicates the overall trend between 2000 and 2023. During the period 2011–2019, Chinese loans from policy banks – mostly going to infrastructure – hovered around the $10bn–15bn mark annually, two-thirds of which went to power and transport alone. This compares with a total annual infrastructure finance average of $77bn in 2012–2017, of which $20bn came mostly from OECD countries, making China the single largest financing source, bilateral or multilateral (Gu and Carney Reference Gu, Carey, Oqubay and Lin2019, 154; ICA 2018). This volume of Chinese funding is also relevant to the estimated infrastructure gap of between $70bn and $108bn per year, as estimated in 2015 and 2018 (Dethier Reference Dethier, Monga and Lin2015; African Development Bank 2018). This is not a negligible proportion, considering there are multiple lenders operating in the continent, with the World Bank as the leading development finance source in most African countries.

Figure 4 Chinese loans to Africa (US$ bn)

Source: Boston University Global Development Policy Center. 2024. Chinese Loans to Africa Database. Retrieved from http://bu.edu/gdp/chinese-loans-to-africa-database

Recent trends in Chinese development finance point to shifts in mood and modalities. Although the volume of policy bank development finance for infrastructure seemed to dry up in 2020–2022, it rebounded to some extent in 2023 (Figure 4; Engel et al. Reference Engel, Hwang, Morro and Bien-Aime2024), directed at several familiar suspects among borrowers (Angola, Egypt, Nigeria) and project types (power generation, transport). At the same time, it revealed some inclination towards smaller, leaner, ‘greener’ infrastructure projects. Meanwhile, and especially since 2015, state-owned commercial banks increased their share of financing, up to 40 per cent of total lending to Africa in the most recent estimates (Wu and Chen 2024). This diversification in credit sources reduces the risks faced by Chinese financial institutions, especially the exposure of policy banks such as Eximbank, but makes some of the new debt more commercially oriented and therefore similar to what African governments get from Western commercial creditors. The main difference in 2023 was a significant Chinese commitment towards the financial sector, notably African multilateral banks (Afreximbank, Africa Finance Corporation) and some national banks, with a portion of this funding potentially dedicated to infrastructure. This new trend perhaps signals ‘a risk mitigation strategy that avoids exposure to African countries’ debt challenges’ (Engel et al. Reference Engel, Hwang, Morro and Bien-Aime2024, 2).

The top five recipients of official loans accounted for practically 50 per cent of China’s whole policy bank loan portfolio to Africa during the period 2000–2023, with Ethiopia and Angola alone accounting for a third of loans (Table 1). Although most African countries received some official finance during this period, the concentration of loans is significant. This is despite the figure for Angola skewing the results, especially given the massive refinancing package the country received in 2016, which did not bring fresh finance and included recapitalization of the leading national oil company Sonangol (Acker et al. Reference Acker, Brautigam and Huang2020). More generally, the concentration of infrastructure finance is a driving factor behind the variation of outcomes in China’s contribution to industrialization across the continent.

Table 1Distribution of Chinese loans to African countries by top recipients

Rank	Country	Total Chinese loans (2000−2023) (US$ mn)	% of total
1	Angola	46,047	25%
2	Ethiopia	14,529	8%
3	Egypt	9,748	5%
4	Nigeria	9,591	5%
5	Kenya	9,589	5%

Source: Calculated from Boston University Global Development Policy Center. 2024. Chinese Loans to Africa Database. Retrieved from http://bu.edu/gdp/chinese-loans-to-africa-database.

There are two distinct advantages to the development finance provided by Chinese state institutions, especially policy banks. First, they overwhelmingly focus on much-needed hard economic infrastructure (roads, ports, power generation) and productive sectors, which is particularly critical following decades of underinvestment in these areas (Figure 5; Brautigam Reference Brautigam, Oqubay and Lin2019).Footnote ⁷ By contrast, the World Bank – the key development bank for Africa – currently devotes only about 30 per cent to infrastructure, including about 25 per cent for transport, energy and mining combined, which is well below the figures for Chinese finance.Footnote ⁸ In the SAPs era of the 1980s and 1990s, the share was even lower.

Figure 5 Distribution of Chinese loans to Africa by sector by % (2000–2023)

Source: Calculated from Boston University Global Development Policy Center. 2024. Chinese Loans to Africa Database. Retrieved from http://bu.edu/gdp/chinese-loans-to-africa-database.

Given the World Bank’s core remit, at least until the 1970s, has been to finance hard infrastructure, this appears paradoxical. Over the past three decades, African countries have persistently made use of World Bank funding, but deindustrialization or reverse structural change has nevertheless occurred in many of them (McMillan et al. Reference McMillan, Rodrik and Verduzco-Gallo2014), especially in the 1980s and 1990s. Why? In answering this question, it is important to focus on the sector allocation of loans and associated donor imperatives in Africa during this period. For too long, this development finance has been reoriented towards priorities aligned with the new ‘consensus’, whether liberalization, structural adjustment reforms or the ‘good governance’ agenda – in short, policy reforms. By contrast, the funding of basic economic infrastructure did not feature prominently in such imperatives. When Chinese funding started to grow to substantial levels around 2010, the economic infrastructure situation facing African LICs was abysmal. Not only were road/railroad density and relative electricity-generating capacity much lower than in other developing regions (respectively, a third and 40 per cent of South Asia’s levels), but these indicators either worsened or barely improved between 1990 and 2012 (Calderon et al. Reference Calderon, Cantu and Chuhan-Pole2018). This a serious indictment of the paltry efforts African governments and their main infrastructure finance backers (notably the World Bank and the European Union) made before Chinese lenders emerged.

A second advantage of Chinese development finance in Africa (and the Americas for that matter) is its inclination to act as ‘patient capital’, especially when policy banks are the source (Eximbank and CDB – China Development Bank). Kaplan (2021) argues that China’s overseas development finance is a distinct form of patient capital involving long-term risk tolerance (hence ‘patient’) and absence of policy conditionality, contrary to the traditional practice of Western lenders. This is particularly the case for policy banks such as Eximbank, which follow the logic of ‘building ahead of time’, rather than the more narrow-minded, cost-benefit approach favoured by traditional financiers, who base their lending on shorter-term estimated rates of return, when demand for infrastructure is already latent (Lin and Wang Reference Lin and Wang2017; Gu and Carney Reference Gu, Carey, Oqubay and Lin2019). This also reflects a public investment-led approach, in contrast to the tendency of other development banks to promote private sector solutions (Gu and Carney Reference Gu, Carey, Oqubay and Lin2019, 158). An important advantage of ‘buying ahead of time’ is that infrastructure is built when construction costs are lower compared to when the need becomes urgent (Lin and Wang Reference Lin and Wang2017). As Hirschman (Reference Hirschman1967) argued in Development Projects Observed, the long-term (positive) unintended effects of large, risky infrastructure projects (principle of the ‘hiding hand’) are essential for learning when it comes to economic transformation processes. Such projects, however, require long-term commitments on favourable terms. This has largely been the case for Chinese finance, which often comes from institutions such as Eximbank or CDB. Although not always concessional, there has consistently been long negotiable maturity and significant debt relief, flexible debt management, and adjustments in loan conditions (Acker et al. Reference Acker, Brautigam and Huang2020).

The rapid, large increases in finance towards long-term maturity infrastructure projects in high-risk African countries (Angola, Nigeria, Ethiopia) attests to the degree of ‘patience’ in Chinese development finance. Unconventional approaches to risk management have also helped, as the ‘Angola model’ shows, whereby Eximbank negotiated further security by linking its loan to future oil stream income that would involve a Chinese oil firm importing the fuel (Brautigam Reference Brautigam, Oqubay and Lin2019; Large Reference Large2021).Footnote ⁹ This meant Eximbank was able to extend large credit lines with relatively limited risk, as disbursements would be linked to repayments in a China-based escrow account.

Finally, the degree of ‘patience’ in development finance facilitates a drive to leapfrog technology and business model changes, particularly in the case of digital technologies, where both Chinese lending institutions and major ICT firms like Huawei have established an important footprint in many African countries (Gu and Carney Reference Gu, Carey, Oqubay and Lin2019). These higher-risk ventures can potentially accelerate structural transformation in the coming decades if such commitments are sustained.

Of course, patience is not limitless, and not all Chinese banks offer the same terms and conditions. Some are more commercially and short-term oriented, and less focused on the green infrastructures of the future (Wu Reference Wu2024; Wu and Chen 2024). Recent trends suggest Chinese development finance institutions are running out of patience and since 2019 have become more risk averse, especially given evidence of debt distress and repayment difficulties among some high African borrowers (Angola, Zambia, Ethiopia), indicating that some rebalancing in Chinese loan commitments is needed (Wu and Chen 2024). Responses have ranged from debt relief or cancellation to rebalancing towards smaller, less risky projects (Acker et al. Reference Acker, Brautigam and Huang2020; Wu Reference Wu2024). The decline in funding volume since 2018 represents a worrying trend, as the need for patient capital to fill Africa’s infrastructure gap is far from over. On the contrary, as more African countries seek to industrialize, infrastructure needs are only likely to grow faster. Sustaining ‘patient capital’ flows therefore remains a priority, even taking into consideration debt stress situations. The trade-off between potential debt distress and lack of sufficient long-term finance is real, and needs addressing through a coherent, carefully managed structural transformation plan.Footnote ¹⁰

Overall, despite the recent decline in Chinese loans, the rapid growth in infrastructure finance and Chinese infrastructure contractors (more next) may have laid the foundations for further structural transformation in a number of countries. It has certainly contributed to reversing the trend of ever-growing infrastructure funding gaps in Africa. As the next subsection will document, aside from the broader role of infrastructure in structural change, the flood of new projects and contractors also creates demand for local construction material manufacturing, inducing further investments in these sectors. In this respect, the strong direct and indirect linkages between basic economic infrastructure and industrial development are well established.

2.2.3 Chinese Contractors and Infrastructure Development

The second key mechanism supporting African economic infrastructure is the direct participation of Chinese contractors in infrastructure design and building, usually through engineering, procurement and construction (EPC) projects. This is perhaps even more remarkable than the increase in loans. Figure 6 shows a surge in the gross annual revenues of Chinese companies’ construction projects in Africa from less than $2bn before 2003 to a peak of over $50bn in 2015, with a slowing down thereafter. This dramatic rise closely followed patterns in Chinese official finance, though the ratio of Chinese finance to contractor revenues ranges from 40 per cent in the Democratic Republic of Congo to less than 20 per cent in half the sample of African countries, suggesting a greater reliance on other sources of finance (Zhang Reference Zhang2021, 7). As a result of this rapid expansion, Chinese contractors accounted for over 60 per cent of Africa’s construction and infrastructure market by 2019, up from only 10 per cent in 2003 (Zhang Reference Zhang2021). In Ethiopia, Chinese companies participated in about 60 per cent of all road works between 2000 and 2019. For both road and railway projects, most of the funding actually came from the Ethiopian government through their multiple partners (African Development Bank, World Bank and Arab development finance institutions) (Cheru and Oqubay Reference Cheru, Oqubay, Oqubay and Lin2019, 294).The Africa market also substantially grew in importance as a share of Chinese construction companies’ gross annual revenues, from 13 per cent in 2001 to a peak of 37 per cent in 2014 (based on data from China Statistical Yearbook).

Figure 6 Gross annual revenues of Chinese companies’ construction projects in Africa (US$ bn)

Source: Calculated from CARI database www.sais-cari.org/data-chinese-contracts-in-africa

The main reason for this success is that, despite obvious finance-tying (Chinese firms being the sole eligible contractors for Chinese-funded projects), these firms are highly competitive when it comes to both technical and financial specifications (Zhao and Shen Reference Zhao and Shen2008; Zhang Reference Zhang2021), with their vast experience in China’s infrastructure market compensating for lack of overseas experience (Zhou 2022). In the very segmented Angolan market, some Chinese contractors operated at lower margins to expand their market shares (Wanda et al. Reference Wanda, Oya and Monreal2023) and not at the expense of quality, as a recent comprehensive study has demonstrated (Kenny et al. Reference Kenny, Duan and Gehan2025).

Most Chinese contractors are SOEs, from both central and provincial levels, and operate on EPC terms. This means they often organize the subcontracting schemes in the projects they execute under the agreed arrangements with the local client (usually an African government), and can accommodate tight margins. These firms constitute a particular variety of Chinese state capital distinct from other forms of state capital engaged in mining, in the sense that ‘instead of resource scarcity, the impetus for the construction sector to go global was overcapacity’, driven by China’s own incentive systems to promote and subsidize growth at local and macro levels (Lee Reference Lee2017, 24). Thus, overcapacity in China and infrastructure deficits in African countries have made for a powerful combination.

Not all infrastructure built by Chinese contractors has directly contributed to the ‘economic hardware’ that industrialization requires. The logic of ‘encompassing accumulation’ means these players have also sought to accommodate whatever their African counterparts have requested, whether for political, ideological, electoral, or legitimacy reasons, including symbolic projects (public buildings, stadiums), real estate development linked to local elites, and transport connections of dubious value (Soares de Oliveira Reference Soares De Oliveira2015; Taylor Reference Taylor, Oqubay and Lin2019). After all, the model does not require Chinese funders and contractors to dictate the choice of infrastructure. Despite these ‘distractions’ from the bottom line, the fact remains that key power and transport projects have dominated the Chinese building landscape in Africa.

Indeed, it is undeniable that both development finance and Chinese contractors have made substantial contributions to the kind of infrastructure that facilitates industrial investment. For example, Ethiopia’s installed electricity generation capacity increased from 814 MW to over 4,200 MW between 2005 and 2021, while in Ghana it more than doubled to reach a capacity of 5,449 MW.Footnote ¹¹ In Ethiopia, all this expansion was through renewables, mainly hydropower. During the same period, both countries became net exporters of electricity. Chinese lenders, contractors, and input suppliers were involved in nearly all of Ethiopia’s power generation projects (Cheru and Oqubay Reference Cheru, Oqubay, Oqubay and Lin2019, 294).

It is hard to find an accurate time series for direct contributions to basic economic infrastructure by Chinese actors. Instead, the most relevant figures are provided by a report from China’s National Development and Reform Commission (NDRC), which gives an aggregate estimate for an unspecified time period, linked to the Belt and Road Initiative. More specifically, the report estimates that, until 2022, ‘Chinese companies have participated in building and upgrading more than 10,000 kilometres of railways, nearly 100,000 km of highways, nearly 1,000 bridges and 100 ports, and 66,000 km of power transmission and distribution lines in African countries. They have also helped build a backbone communications network of 150,000 km in Africa’.Footnote ¹² Another source refers to more than 80 large-scale power stations, more than 130 medical facilities, and dozens of sports venues and schools.Footnote ¹³ These impressive results are nonetheless unevenly spread, as contractor revenues, like development finance, remain highly concentrated in a group of countries including Angola, Algeria, Nigeria, and Ethiopia, with around 40 per cent of the accumulated total in 2000–2022 (estimates calculated from data extracted from www.sais-cari.org/data-chinese-contracts-in-africa).

The establishment of industrial parks, funding for which has been much more diversified (i.e. not dependent on classic loans from policy banks), are a highlight of the linkages between infrastructure development and the building of industrial capabilities. Latest estimates suggest that 25 Chinese-funded parks have been built and entered operation in Africa as of 2023, attracting more than 620 enterprises with cumulative investments of $7.35bn, especially towards domestic market sub-sectors (CABC 2024, 29).

There are four main reasons why the rise of Chinese contractors may be good news for Africa’s industrialization aspirations. First, their capacity to swiftly execute complex infrastructure projects at relatively low cost facilitates the expansion of critical infrastructure necessary to accelerate industrialization investments. In most cases, the contractors follow an EPC approach, whereby they are directly funded by the creditor agency, bypassing potential capacity constraints on the client side (say, the national road authority) and so speeding up project completion (Gu and Carney Reference Gu, Carey, Oqubay and Lin2019, 157).

Second, as will be discussed in Section 3, these projects create numerous jobs for African workers, despite dubious claims that most workers are Chinese. Beneficiaries of infrastructure-related jobs are often low-skilled workers from rural origins, meaning they may have the opportunity to gain transferable skills that can be applied to factory settings, as the connections between infrastructure construction and factory work in Angola suggested.

Third, insofar as economic infrastructure contributes to the development of industrial sector export capabilities by reducing the costs associated with connectivity and logistics, infrastructure improvements may ease foreign exchange constraints. There is, however, no reliable evidence on the net effect. Here, one key example is the construction of SEZs and industrial parks, which may lead to reduced foreign exchange constraints either through manufactured export promotion or import substitution, which reduces forex leakages.

Fourth, there is growing evidence that infrastructure contractors generate an ‘induced demand’ effect arising from building material imports linked to large-scale infrastructure development (Wolf Reference Wolf2024). Angola and Ethiopia are good examples, even if the scale of these linkages differs between the two countries. The sequence is as follows. A rapid infrastructure drive necessitates large quantities of building materials, especially cement and steel. In Angola, during the early days of the post-war boom, most of these materials were imported, thereby contributing to forex leakages. The rapidly expanding market stoked the interest of local and foreign investors, who sought to invest in processing facilities capable of producing cement, steel, and their associated inputs, as well as other building materials. Thus, a manufacturing sector emerged in response to these developments. In short, the demand-inducing effect of rapid infrastructure construction led to the growth of a typically domestic market-oriented manufacturing activity, an effect anticipated by Hirschman’s work and highlighted by Wanda et al. (Reference Wanda, Oya and Monreal2023) and Wolf (Reference Wolf2024) in the case of Angola. In fact, it represents a classic example of effective ISI, supported by governmental trade protection measures. Wolf (Reference Wolf2017 and Reference Wolf2024) has documented this sequence using the examples of Angola, Ghana, and Nigeria, where infrastructure construction became a ‘springboard for industrialization’, resulting in a variegated pool of small, medium, and large manufacturing enterprises producing high-demand building materials.

On balance, a majority of studies reviewed for this Element and our own primary research suggest that Chinese-funded and -built infrastructure projects – especially in power generation, transport (trade facilitation) and industrial parks – have contributed to more greenfield investments in manufacturing production, or at the very least created favourable conditions for these to happen in future (Darko and Xu Reference Darko and Xu2024; Qobo and Le Pere 2017; Lu and Liu Reference Lu and Liu2018; Alden and Lu Reference Alden and Lu2019; Brautigam Reference Brautigam, Oqubay and Lin2019; Megbowon et al. Reference Megbowon, Mlambo and Adekunle2019; Li and Lu Reference Li and Lu2024) Wolf Reference Wolf2024). A key role in this regard is reducing risk for future investors, thereby laying the foundations for private capital to find profitable opportunities in manufacturing, and becoming effective ‘brokers’ for first movers so that industrial ‘flying geese’ can follow (Lin and Xu Reference Lin, Xu, Oqubay and Lin2019, 279). Of course, infrastructure must be targeted to facilitate such investments, with – as will be argued in both the remainder of this section and in Section 4 – a conducive, bold industrial policy framework needed to support this on a sustained basis.

2.3 Chinese Foreign Direct Investment: Varieties of Capital in Manufacturing

2.3.1 Chinese FDI Trends in Africa

As argued in Section 1, several industrialization stories feature foreign capital as a driving force. FDI-led industrialization has also become more common in the era of ‘compressed development’ (Whittaker et al. 2020), with an increasing number of countries attempting to industrialize through participating in expanded GVCs/GPNs. FDI to Africa has historically been dominated by investments in the resource extractive sectors, sometimes including mineral processing, where linkages and spillovers into local firms are limited (Morrissey Reference Morrissey2012). Much of the limited recorded manufacturing FDI from Western sources has been directed at mineral processing in countries such as South Africa or Botswana (diamonds); some basic oil processing in oil-producing countries; or large aluminium smelters, as in Mozambique since 1999. FDI to services, especially banking, construction, and ICTs, also expanded after the waves of liberalization seen across the continent in the 1990s (Morrissey Reference Morrissey2012).Footnote ¹⁴ McMillan (2017) notes the growing diversification of FDI sources into Africa, driven by Chinese investments, which has also led to sector diversification away from mining and resource extraction in general. This suggests that Chinese FDI may be different from its Western equivalents, especially in those countries where the focus is on non-resource related manufacturing.

It is important to note that official data of Chinese FDI as published by MOFCOM and UNCTAD are known to underestimate true figures, as large numbers of Chinese-owned enterprises (including greenfield investments in most cases) are not registered through MOFCOM channels, particularly for lower investment volumes, therefore especially affecting estimates of Chinese FDI into manufacturing and services (McKinsey 2017; Sun Reference Sun2017; Brautigam et al. Reference Brautigam, Diao, McMillan and Silver2019; Chen Reference Chen2024). The aggregate official numbers for Chinese FDI in African countries presented in Figure 7 reveal a mixed picture, characterized by a number of trends. First, the speed of growth has been remarkable, especially during the period 2010–2018, when overall trends for FDI stocks in SSA were not so rosy. Over the course of this period, the overall inward FDI stock in SSA grew by 40 per cent, compared to an almost quadrupling of Chinese FDI stock.Footnote ¹⁵ In aggregate terms (all sources of FDI included), large African recipients of Western FDI (e.g. South Africa, Angola, Nigeria) experienced stock fluctuations over a flat line, or increasing and then fast declining FDI stocks after 2015, driven by the vagaries of the oil and other mineral extraction sectors. Ethiopia bucked that trend, partly thanks to fast-growing Chinese FDI into its manufacturing and construction sector – the country’s overall inward FDI stock swelled from $4.2bn in 2010 to over $38bn in 2023, with Chinese firms leading the way (Cheru and Oqubay Reference Cheru, Oqubay, Oqubay and Lin2019, 290). The rise of Ethiopia and other African countries as FDI recipients meant the combined share of FDI received by Angola, Nigeria, and South Africa dropped from 67 per cent in 2010 to only 30 per cent in 2023. In aggregate terms, China has jumped from not registering in statistics on FDI origin towards Africa up to fourth place, closely behind France, the USA, and the UK.Footnote ¹⁶

Figure 7 Chinese FDI stock in African countries (US$ bn)

Source: Own calculations from Statistical Bulletin of China’s Outward Foreign Direct Investment, published by China’s MOFCOM, crosschecked with database from the Center for Global Development at Boston University. Note: ‘Africa’ includes North Africa in this case

Second, the percentage of Chinese FDI stock in manufacturing is far from negligible but also largely underestimated in official records. This partly reflects the fact that the distribution of Chinese FDI tends to be more diversified than competing sources of FDI, which is generally more concentrated in energy-related industries (oil/gas extraction and infrastructure/supply services, and petrochemicals).Footnote ¹⁷ Although the aggregate percentage of Chinese FDI going into manufacturing (in terms of value rather than number of investment projects) has declined slightly, especially since 2019, in absolute terms it has continued to grow – from $3.5bn in 2013 to around $6bn in 2021.

Here, the reason for the percentage decline is the faster growth of FDI in construction (Figure 8), which is a logical trend given the progressive consolidation of Chinese infrastructure contractors in a larger number of countries in the years since the growth spurt began in the early 2000s. Once construction companies complete a number of projects in the same country, their next step is to establish a branch for further bidding, which is counted as FDI (Zhang Reference Zhang2023). In terms of number of greenfield projects, however, the proportion of investments directed at manufacturing is far higher – closer to a third (Shen Reference Shen2015). One of the most comprehensive surveys of Chinese firms in Africa, which counted around 10,000 companies, many of which outside MOFCOM records, estimated the share of manufacturing at 31 per cent (McKinsey 2017). This divergence from the shares based on value reflect the labour-intensive, smaller-scale nature of the manufacturing sector compared to capital-intensive sectors like mining and construction, as well as the significant number of unrecorded investment flows into manufacturing.

Figure 8 Distribution of Chinese FDI stock in Africa by value (%)

Source: Own calculations from Statistical Bulletin of China’s Outward Foreign Direct Investment, published by China’s MOFCOM as above. Note: ‘Africa’ includes North Africa in this case.

Third, China’s officially recorded FDI volumes remain too low to spur a dramatic industrial transformation in the medium run, even if a greater focus on manufacturing and construction may generate some level of industrial revival. Variation is important. While there have been visible effects on some countries (e.g. Ethiopia, Kenya, Ghana), the picture is less impressive when looking at Africa as a whole. Africa receives only a small proportion of total Chinese FDI, of which around 13–14 per cent goes to manufacturing, meaning the FDI’s aggregate-level contribution is still only moderate. Many African countries have received barely any Chinese investments in manufacturing, although most of these lack the basic conditions necessary to make manufacturing investments minimally profitable at an acceptable risk. By contrast, Ethiopia during the period 2010–2020 demonstrates the potential impacts of a much larger volume and proportion of FDI going to manufacturing. According to the EIC (Ethiopian Investment Commission) data, the share of manufacturing in terms of Chinese FDI value was close to 80 per cent for the period 1998–2018, a proportion replicated in terms of number of projects (Chen Reference Chen2024). This is a recent phenomenon, as even in Ethiopia – a leading recipient of Chinese industrial FDI – the flows only started surging after 2012 (Mamo Reference Mamo2024).

Overall, while there is a long way to go, the remarkable levels of foreign manufacturing investments directed at SSA in recent years demonstrate the potential of African countries when it comes to attracting substantial volumes of Chinese industrial investment (Sun Reference Sun2017).

2.4 Narratives of Industrial Cooperation: From Realities to Discourse

While Chinese manufacturing investments have been modest in terms of aggregate official FDI levels, they are nevertheless qualitatively significant in light of the dearth of capital and knowhow devoted to industrialization in Africa over the past four decades. This subsection briefly addresses whether official industrial cooperation discourses and narratives have caught up with the realities of Africa–China engagements. Has a bolder public discourse been articulated in favour of industrial cooperation on the back of actions on the ground? If so, what narratives have been forged?

The ‘Global China’ framework includes both a ‘soft power’ element, which is central to the bundle of power mechanisms (economic statecraft, patron–clientelism, symbolic domination), and a policy-strategy element, which features official discourses and documents outlining the key strategic directions guiding China’s economic and political relations with African countries (Lee Reference Lee2022). Cutting across the boundaries between policy and power, official narratives of ‘win–win’ and ‘shared prosperity’ – common throughout the period of enhanced relations – have permeated multiple encounters, official documents and public speeches, defining the evolution of these relations and the benefits for the African continent.

This evolution has manifested in two main ways over the past twenty years or so; roughly since the Forum on China–Africa Cooperation (FOCAC) summits began and the ‘Go Out’ policy was articulated in the early 2000s. First, the ‘packaging’ of previous engagements by Chinese state and private capital – focused on power and transport infrastructure, building of industrial parks, and manufacturing FDI – has afforded Chinese actors opportunities to highlight on-the-ground facts supportive of an ‘industrial cooperation’ reality. It has been relatively easy to frame these multiple engagements, often reflective of diverse bureaucratic, corporate, ministerial and private interests (Lee Reference Lee2022), as coming together to form a comprehensive approach in support of Africa’s industrialization (or ‘modernization’), rather than a series of isolated projects and white elephants.

One example is the showcasing of ‘industrial cooperation’ experiences related to the design, building, and management of industrial hubs, considered particularly conducive to accelerated catching up (Wang and Zhang Reference Wang and Zhang2024; Zhou Reference Zhou2023). This has been further strengthened by Chinese provincial-level initiatives, in particular the Hunan Cooperation Framework (CAETE), which, alongside Guangdong, Zhejiang, and Jiangsu (Lin and Xu Reference Lin, Xu, Oqubay and Lin2019; Tang Reference Tang2023; CABC 2024), directly tackles industrial cooperation in the form of state–business interactions, business-to-business encounters, and bringing entrepreneurs and policymakers together to explore ‘mutual benefit’ projects around specialized clusters.Footnote ²⁸ A key turning point in the evolution of a more explicit pro-industrialization narrative was FOCAC 2015 in Johannesburg, when structural transformation and industrial cooperation were laid out as a priority in ‘shared prosperity’. Tangible outcomes of this new drive include the $10bn establishment of the China–Africa Industrial Capacity Cooperation Investment Fund and proactive lobbying of the G20 to commit to promoting Africa’s industrialization (Large Reference Large2021, 90).Footnote ²⁹

Second, discourse strategies and on-the-ground facts have been used by China to promote development models/narratives that offer an alternative to the prevailing post–Washington Consensus. Although the Chinese authorities initially avoided presenting China as a ‘model’ for African countries, based on the assumption that China’s experience is unique, a narrative has since emerged suggesting African countries could draw valid lessons from China’s industrialization and ‘modernization’ strategy while seeking their own path (Tang Reference Tang2020). This is consistent both with China’s principle of non-interference in African countries’ internal affairs and with the idea that China has a ‘comparative advantage’ in financing and building economic infrastructure necessary for industrialization and trade facilitation. An emphasis on the role played by the state is also a feature of public pronouncements and agreements in China and many African countries, as governments remain the chief partners in these engagements. In this case, the narrative is that China understands the needs of developing countries better than Western partners, and so prefers to deliver concrete results rather than give lectures on the need for policy and institutional reforms. This official narrative does not hold, however, unless facts on the ground support it. Hence, China’s apparent urge to complete highly visible projects with direct connections to Africa’s industrial aspirations, such as ports, railways, dams, or industrial zones.

The aforementioned two manifestations of discourse and power contribute to an increasingly compelling narrative of China’s role in Africa’s industrial development, one that not only resonates with African aspirations for economic transformation but also offers a distinct alternative to traditional development paradigms (Soulé et al. Reference Soulé, Benabdallah, Staden, Chen and Wu2024).Footnote ³⁰

To an extent, the discourse on industrial cooperation and the emerging narrative around supporting Africa to modernize on its own terms reflects China’s tendency to promote a ‘do-as-I-do’ paradigm, whereby partners are supposed to follow China’s example rather than the normative and somewhat ahistorical lines ‘enshrined in the Western-led liberal international order’ (Garlick and Qin Reference Garlick and Qin2024). While doing so does not necessitate African countries following a ‘China development model’, it does imply two important things: first, an appreciation that China’s partner countries have a right to develop and industrialize using any means at their disposal, unconstrained by the normative constraints imposed by other partners (i.e. the ‘right to development’);Footnote ³¹ and second, China’s successful industrialization experience holds useful lessons for other LMICs with similar aims, not least the need for policy experimentation and policy learning to ‘feel the river by touching the stones’. The conclusion to be drawn from this is that although it is important to acknowledge that no universally valid blueprint exists, African governments should be allowed to try different strategies to achieve industrialization, many of which have already been successfully tested in a Chinese context. Section 4 offers a more detailed analysis of these policy options and challenges, and why they do not always necessarily work.

3.1 The Centrality of Labour in Industrialization

There is no industry without an industrial labour force. With this in mind, Section 3 focuses on the labour dynamics present in Africa–China encounters. More specifically, it examines how different varieties of Chinese capital encounter African workers, and whether industrialization-related engagements differ from other enterprises or sectors. The following subsection starts by asking if these engagements bring with them new job opportunities, or whether Chinese firms bring their own workers. This is followed by consideration of the nature of the jobs created and the associated labour regimes, including the extent to which labour relations in factories and construction sites are characteristic of broader industrial labour regimes, or whether they display any ‘Chinese characteristics’. Empirically, the section analyses the importance of the organizational capabilities and skills development brought by Chinese industrial investors, their adaptation to different sub-sectors – some export oriented, some trying to exploit African markets – and how these lead to new types of labour regimes (Sun Reference Sun2017; Chen Reference Chen2024).

3.2 Job Creation and Employment Challenges in African Economies

There have been heated debates about the employment implications of China’s engagement in Africa, with contribution via jobs a key aspect in judging the degree of China’s contribution to SSA’s industrialization (i.e. employment effects in terms of quantity, quality and sector focus). By 2050, approximately 25 per cent of the world’s population will be in Africa. According to International Labour Organization (ILO) estimates, 579 million jobs will be needed in Africa by 2030, an increase of over 300 million compared to 2018 (ILO 2019).Footnote ³² More jobs in industry or sectors where the acquired skills are transferable and relevant to structural transformation can improve the conditions for future industrialization. Of particular relevance in this regard is the construction sector, with our work life histories in Angola indicating that many current manufacturing workers had prior experience as construction labourers.

A foundational manufacturing experience is a necessary precondition for accelerated structural change. Once an industrial workforce has begun to form, the prospects improve for a further expansion in industrial or related employment. China is indeed a good example of this. Industrial working-class formation preceded the period of post-1978 opening to global markets, with a sizeable industrial workforce on the back of decades of heavy and rural industrialization, albeit concentrated in SOEs and sectors oriented towards the domestic market (Lee Reference Lee1999; Frazier Reference Frazier2002; Lüthje et al. Reference Lüthje, Luo and Zhang2013). By the 1980s, a large disciplined industrial workforce was well established. The same cannot be said about most African countries, although there are some exceptions where industrial development contributed to a significant industrial workforce (e.g. South Africa or Mauritius) (Chitonge and Lawrence Reference Chitonge, Lawrence, Oqubay, Cramer, Chang and Kozul-Wright2020).

Determining whether Chinese firms have generated much employment through their engagements in the manufacturing and construction sectors requires reliable statistics on employment by employer origin, as well as accurate estimates of workforce localization. This is not generally possible with African labour statistics, with claims about employment in Chinese firms often hard to verify and derived from anecdotal evidence. Here, we have attempted to circumvent the lack of systematic official data by combining evidence sources and proposing a job creation range in absolute terms (which is what matters for the growth of an industrial workforce). Thus, by triangulating three different sources of FDI data from MOFCOM (Chinese outward FDI on a global scale; registered Chinese firms overseas per sector; share of sectors in total Chinese outward FDI in Africa)Footnote ³³ and average numbers of employees per firm from independent firm surveys (our IDCEA survey, McKinsey 2017, and other surveys of Chinese industrial companies),Footnote ³⁴ we estimate a range between a very conservative minimum of 185,000 and a maximum of 2 million manufacturing jobs in Chinese firms across SSA in the period 2013–2022. The real number is likely to lie between these two extremes, with a more plausible estimate on the lower half of the range (although it almost certainly exceeds 185,000 by a considerable degree). In the context of employment needs across Africa, these numbers may appear unexceptional, but given that most Chinese industrial firms only have a relatively recent footprint on the continent, the additional employment contribution should not be dismissed as negligible, especially after decades of neglect.

Given the larger number of construction firms and higher level of employment per firm, job creation within the construction sector will have been much greater in absolute terms than in manufacturing for the equivalent period, even allowing for lower workforce localization rates in the former sector. In our study of Angola, we found that Chinese firms had contributed to a large share of the increase in construction jobs between 2013 and 2018, ranging from 10,000 to almost 35,000 new jobs in any given year, accounting for over 65 per cent of total new public infrastructure construction jobs for 4 of the period’s 6 years (Oya and Wanda Reference Oya and Wanda2019). Indeed, during the post-2015 oil price crisis, Chinese contractors were the main source of new infrastructure-related construction jobs.

These numbers, coupled with a systematic decline in the number of Chinese workers employed by Chinese firms across Africa,Footnote ³⁵ suggest workforce localization levels are not as low as suggested by some popular reporting. There is some truth to the assertion that Chinese firms in Africa lean towards employing Chinese workers, even in non-managerial positions, and especially in the construction sector. Even so, this is perfectly compatible with creating large numbers of jobs for African workers.

Overall, desk reviews, alongside own survey findings in Angola and Ethiopia, point to the following findings on workforce localization involving Chinese firms. First, localization rates (the proportion of the local workforce constituted by African employees in the total workforce employed by Chinese firms in African countries) are much higher than normally assumed: the figure of 85 per cent of local employees being African yielded by analysis of nearly sixty datasets, studies, and cases across the whole continent (Sautman and Yan Reference Sautman and Yan2015; Oya and Schaefer Reference Oya and Schaefer2019) is consistent with the finding of one of the largest surveys of Chinese firms in Africa, which estimates an average rate of 89 per cent, rising to nearly 95 per cent in manufacturing (McKinsey 2017, 41). There is plenty of variation underlying these figures, however, with some countries (Angola, Equatorial Guinea) experiencing much lower rates than others (Ethiopia, Ghana).Footnote ³⁶ In our surveys of road contractors and manufacturing plants, localization rates were on average 74 per cent in Angola (78 per cent in manufacturing), significantly lower than the average of nearly 95 per cent in Ethiopia (Oya and Schaefer Reference Oya and Schaefer2019). More significantly, and contrary to popular wisdom, there were no Chinese workers employed in low-skilled jobs in either country.

Second, localization rates have systematically increased across sectors and countries, especially since 2010. This is reflective of the fact that, as admitted by virtually all Chinese firm managers we interviewed, there are higher costs associated with bringing over Chinese workers. The main reason given for relying on Chinese workers for some higher-skill tasks is the pressure contractors initially faced regarding expected completion times, coupled – in the case of road projects in Angola – with a lack of available time to train large numbers of local workers. As the firms settled into the new country and stabilized a local workforce with upgraded skills, the need for Chinese workers fell over time. While some studies (Corkin Reference Corkin2012; Tang Reference Ang2016) have mentioned language and work culture barriers, our research suggests these are temporary obstacles arising from most Chinese firms being relatively new to African settings.

One area where most foreign firms – not only Chinese – have failed to demonstrate sufficient localization efforts concerns managerial workers (Ellis et al. Reference Ellis, McMillan and Sovani2021). Although interviewees cited a scarcity of globally competitive managerial candidates (in the case of apparel exporters in Ethiopia) or a lack of experience with Chinese construction standards as reasons for this, a lack of trust in local management and reluctance to localize positions close to senior financial and production management decisions also represent important barriers (Oya et al. Reference Oya, Schaefer and Chen2022).

3.3 Chinese Firms, Varieties of Capital and Labour Outcomes: Race to the Bottom or Upgrading?

As the aforementioned shows, Chinese firms have indeed created substantial numbers of industrial and construction jobs across Africa. This in turn prompts questions concerning the nature and quality of these jobs. This subsection therefore provides an overview of the kinds of jobs Chinese investors bring, and the variations seen across sectors and firms. New manufacturing and construction jobs are arguably a manifestation of structural change in the labour market. Many of the workers surveyed as part of our research in Angola and Ethiopia were in their first non-agricultural job. This particularly applied to young women in Ethiopia’s apparel industry, but was also evident among young Angolan men migrating to Luanda from the Central and Southern regions. The conditions attached to these new jobs – which tend to be more stable, paid monthly, and involve large groups of workers – differ from those typically found in agriculture and petty informal service work. They also come with different kinds of discipline and labour control mechanisms. Thus, factory and construction work represents a substantial jump in the employment histories of newly arrived workers from rural areas. That does not mean all such jobs are similar or offer comparable conditions. There is considerable variation in labour regimes, even among Chinese firms, as elaborated on next.

Do Chinese firms ‘export’ their labour practices, operating labour regimes that are fundamentally more exploitative than local or other foreign comparators? The idea of China ‘exporting’ its labour practices has proven quite popular in, especially, studies of construction work (Gambino and Bagwandeen Reference Gambino, Bagwandeen, Hönke, Cezne and Yang2024), as well as other studies concerned with working conditions in Chinese-run workplaces in Africa (Baah and Jauch Reference Baah and Jauch2009; Gadzala Reference Gadzala2010; HRW 2011). A fundamental flaw in such questions is the implied notion that there is some kind of Chinese ‘exceptionalism’ in labour practices – a false premise that can be undermined both conceptually and empirically.

Conceptually, it rests on the notion of a particular kind of labour process linked to a firm’s national origin. While the literature on ‘varieties of capitalism’ acknowledges that some institutional traits and social organization modes may bear national characteristics, the reality is that labour processes are fundamentally determined by capitalist labour relations – in other words, a combination of the nature of the production process; the bargaining mechanisms in place; the relative structural power of workers and employers; and the prevailing technology used (Burawoy Reference Burawoy1985; Oya and Schaefer Reference Oya and Schaefer2023). Empirically, an abundance of literature and evidence has documented the variety of labour regimes found in China’s economy, and how these have shifted over time, particularly in light of the fast-rising wages seen since the early 2000s (Lüthje et al. Reference Lüthje, Luo and Zhang2013; Qi and Pringle Reference Qi and Pringle2019).Footnote ³⁷ Careful comparative research has exposed the fallacy of ‘Chinese exceptionalism’ in labour relations (Chan Reference Chan and Chan2015; Lerche et al. Reference Lerche, Mezzadri and Chang2017). Put another way, the idea of ‘exporting labour practices’ is inconsistent with the variegated reality of labour regimes in China itself and similarities with sector practices elsewhere.

What, then, characterizes labour regimes in Chinese-run workplaces across Africa? Empirically, the claim that poor or ‘worse’ working conditions prevail in Africa-based Chinese firms has been challenged by a growing body of evidence, which essentially shows mixed results regarding wages and non-wage conditions – all very context-specific and reflecting ‘variegated labour regimes’ across different kinds of Chinese firms (Akorsu and Cooke Reference Akorsu and Cooke2011; Bashir Reference Bashir2015, 8; Giese and Thiel Reference Giese and Thiel2015; Tang Reference Ang2016; Lee Reference Lee2017; Fei Reference Fei2020b; Chu and Fafchamps Reference Chu and Fafchamps2022, 4). Our IDCEA research tackled this question by adopting a rigorous comparative analysis of job quality and characteristics in Chinese-owned workplaces, with a multi-scalar framework encompassing three levels of analysis – firm, sector, country (Oya and Schaefer Reference Oya and Schaefer2019 and Reference Oya and Schaefer2023).

Sector matters. Construction jobs are project-oriented, not stable and potentially more hazardous, with workers equipped with a diversity of relevant skills and greater experience able to demand a wage premium. As such, there may be significant wage variation within the same firm. Manufacturing jobs, by contrast, tend to be more stable and standardized, although with some key differences between low- and semi-skilled labour. In general, there is less variation in wages and working conditions within the same firm, and sometimes across firms within a similar cluster. However, whereas Angolan building materials firms have tended to use experienced male workers with a long tenure history in the sector, Chinese-owned firms have been compelled to rely on rural migrant workers with no factory experience. Meanwhile, Ethiopia’s textile and apparel sector was dominated by a young female workforce, typically in their first industrial job, employed by mostly foreign-owned (including Chinese) firms that export to demanding global markets. The significant variation in labour outcomes between sectors and firms (wages, working hours, productivity targets, rhythm, benefits, job security, union presence) should therefore come as little surprise.

The evidence we collected, which mostly derives from our own fieldwork in Ethiopia and Angola (both survey evidence and qualitative interviews), can be summarized as follows (Oya and Shaefer Reference Oya and Schaefer2023). First, systematic wage comparisons suggest that for the most part factors other than a firm’s origin account for any variations found, with the Chinese origin of firms bearing no statistically significant correlation with wages. Differences in wages and working conditions are reflective of a workforce’s marked segmentation across sub-sectors and firm types, and generally relate to local contextual circumstances. In Ethiopia, wage differences were primarily driven by individual worker characteristics; a task’s required skill level; specific location effects; employment sector; and whether employers in the apparel sector were newly established foreign firms located in industrial parks (lower wages). For example, we found wages in Ethiopia’s construction sector were substantially higher than those paid in the light manufacturing sector, partly due to the skills premium demanded by many of the relevant jobs. Overall, there are greater wage variations between different Chinese firms operating in these two sectors than there are between firms of different nationalities.

GPN-linked jobs in the apparel industry face somewhat tougher conditions and slightly lower wages compared to domestic firms not exposed to global competitive pressures. Here, the concentration of apparel exporters in Ethiopia’s newly established industrial parks, coupled with misguided guidance on acceptable wage levels in some of them, resulted in lower average wages among firms located in such parks. In some industrial parks, our research revealed a striking convergence of relatively low starting wages among companies, indicating quasi-cartel wage-setting conditions. In fact, there are striking similarities between the labour regime prevalent across export apparel factories in Ethiopia’s industrial parks and those found in many Asian countries. This reflects the transnational nature of these regimes and how host country policy priorities influence the ways in which they adapt to local contexts at the margins (Chang Reference Chang2022). The Ethiopian government initially insisted on attracting ‘high-quality’ suppliers and avoiding ‘sweatshop’ conditions, hence its control over industrial park development and demands regarding basic standards of health and safety, coupled with a rejection of subcontracting schemes that could circumvent these conditions. Once most of the new investors had arrived at the government-owned industrial parks in 2015–2017, however, no minimum benchmark wages were proposed, meaning a ‘low-wage’ regime was inevitable from the start. Indeed, the absence of a national or sector minimum wage in Ethiopia has also contributed to this pattern, leading to a key player in the global apparel industry, Inditex, refusing to take orders from Ethiopia-based suppliers in 2017 on the basis that doing so would be contrary to its Global Framework Agreement.Footnote ³⁸

Second, there are some important differences cutting across company nationalities, even within the same sector. In Ethiopia, we found some unexpected variation among industrial parks and Chinese firms within the same sector, caused by higher wages in a cluster of Chinese firms located in the EIZ, the first such zone in Ethiopia. This variation arose in part due to differences in management ethos, the length of the firm’s experience in Ethiopia (greater for Chinese firms in EIZ), patterns of employer paternalism, addressing the challenge of ‘poaching’ of workers among firms within the EIZ (leading to more wage competition among firms), and different labour control mechanisms – all quite firm- and location-specific. In a recent evaluation of a large ILO programme in Ethiopia’s apparel industry (Oya and Schaefer Reference Oya and Schaefer2024) – six years after we conducted our IDCEA surveys – we found that wages were actually higher in large export firms based in industrial parks than local firms outside IPs once we controlled for individual worker characteristics (experienced male workers were more prevalent in the workforces of local firms compared to foreign-owned firms), suggesting a more rapid upward wage adjustment than in comparator firms.

Third, other working conditions vary a lot, primarily between sub-sectors – with practices often sector specific – but also between countries, that is, Angola and Ethiopia. For example, while our research revealed clear incidences of dormitory labour regimes in Chinese-owned firms in Angola (both construction and manufacturing), this was not the case in Ethiopia, a difference that sometimes applied despite the same Chinese SOE operating in both countries. This situation owed much to domestic conditions, specifically the fact that: (a) Chinese firms in Angola faced bigger constraints in mobilizing, retaining and disciplining labour than in Ethiopia, hence their decision to mobilize organized migrant workforces and house them; and (b) the Ethiopian government took a strong stance against company dormitories, especially in industrial parks, regardless of the fact that lack of adequate, affordable housing represented a major challenge for internal migrant workers employed in factories (both those owned by Chinese investors and others). In fact, in Angola the presence of recent internal migrants in Chinese firms stood at around 70 per cent in both construction and manufacturing samples, compared to only 29 per cent for construction employees in Angolan companies, and around 15–20 per cent for factory workers in both Angolan and other foreign firms (Oya and Wanda Reference Oya and Wanda2019). Of course, Chinese firms had arrived more recently than other firms in Angola. Moreover, in contrast to the construction sector in Ethiopia, where the authorities had pushed strongly for Chinese firms to hire locally in road projects, contractors in Angola were free to ‘travel’ with their own workforces and house them temporarily.Footnote ³⁹

The Chinese and other foreign firms investing in these countries do not operate in a labour market vacuum. In most African countries, the labour market context is not a Fordist ideal of standard employment, consisting of stable jobs, decent real wages, and some basic welfare provision. Non-standard employment, especially informal labour relations, has tended to dominate in most LMICs, with India a prominent example (Meagher Reference Meagher2016; Lerche et al. Reference Lerche, Mezzadri and Chang2017). African labour markets are particularly informalized, liberalized, and exploitative, especially after decades of neoliberal interventions, and despite dated narratives about ‘labour aristocracies’ in formal sector pockets of certain countries (Meagher Reference Meagher2016). In such contexts, the provision of more stable, monthly paid manufacturing jobs with embedded training could be considered a form of labour upgrading compared to the average informal job.

Of course, as Lee (Reference Lee2017, 29) argues in the case of Zambia, all foreign – not just Chinese – investors can take advantage of a labour law regime already liberalized following decades of advice from international financial institutions and donors prior to their arrival, ‘bringing, for example, a global industrial trend of subcontracting and job informalization’. Labour legislation and its enforcement tend to be relatively weak, hence the importance of collective worker mobilization, whether organized through unions or not. In Ethiopia, strikes became common during a turbulent period of labour relations (2016–2019), with unions seizing the opportunity for a resurgence (Oya and Schaefer Reference Oya and Schaefer2021; Admasie Reference Admasie2022). Now, just six years after unions were discouraged or de facto banned from some industrial parks, most firms based in industrial parks have a union presence and established grievance and dispute-resolution mechanisms (Oya and Schaefer Reference Oya and Schaefer2024; Gebrechristos Reference Gebrechristos2025). During our research, these forms of labour conflict, while uneven across countries and locations, appeared to be fairly common, especially among foreign-owned firms. Chinese firms specifically did not seem affected by greater labour conflict: in Angola, they were actually less affected than comparable firms; while in Ethiopia, all firms, regardless of origin, faced some form of strike action (Oya and Schaefer Reference Oya and Schaefer2019, 60).

Skill development and upgrading is often considered to be as important as wages and working conditions, especially in contexts where factory or infrastructure-building skills are scarce. Given the projected number of estimated jobs in the previous section, the scope for skills development is significant. According to a recent study, most Chinese firms in Ethiopia, Angola, Nigeria, and Ghana rely mainly on ‘on-the-job’ training for their African employees (Park and Tang Reference Park and Tang2021; Ackah et al. Reference Ackah, Geda, Görg and Merchan2024). This is consistent with our own research in Ethiopia and Angola. Although some form of induction was common to all firms, most of the learning happened once workers started the job and was typically provided by Chinese supervisors or sometimes through ‘shadowing’ experienced local workers. Such practices were especially common in factories and generally well organized in the apparel export industry. Virtually all new production workers in the apparel industry, regardless of a firm’s origin, were exposed to a basic induction, followed by continuous on-the-job training for specific tasks, as well as more generic ‘soft skills’. In some (especially foreign-owned) factories in Ethiopia, the ‘continuous improvement’ approach using Kaizen methods has become standard. Some Chinese firms also opted for extended training visits to their benchmarking factories in China and Southeast Asia, particularly for local Ethiopian managers and production line supervisors. One cannot overstate the importance of this kind of practical, ongoing training in manufacturing, which constitutes a basic ingredient in the transfer of organizational capabilities conducive to the gradual building of industrial eco-systems (Best Reference Best2018; Khan Reference Khan2019). Despite complaining about low pay and lack of career advancement, a worker with experience in at least three different factories in Ethiopian industrial parks admitted that his main reason for staying in the job was the continuous acquisition of a wide range of skills, both soft and hard, social and technical. As such, he regarded the factory ‘as a school for continuous learning’.Footnote ⁴⁰ This encapsulates the core idea of ‘on-the-job learning’ and industrial capabilities as an organic process, with learning-by-doing and emulation becoming over time the dominant driver of catching up.

While the skills upgrading of production workers is widespread and a key source of knowledge transfer, there remains a serious gap when it comes to incorporating more local managerial workers into key positions. Facilitating learning at this level is crucial, especially in production management and marketing/sales. Our study and many others highlight the implications of this gap in terms of more limited spillovers on domestic industry (Tang Reference Tang2018; Ellis et al. Reference Ellis, McMillan and Sovani2021; Oya et al Reference Oya, Schaefer and Chen2022; Ackah et al. Reference Ackah, Geda, Görg and Merchan2024). Although this is a common problem across foreign-owned firms, particularly those involved in export-oriented manufacturing, Chinese firms – family businesses especially – appear particularly reluctant to employ local managers in more senior positions (Oya et al. Reference Oya, Schaefer and Chen2022). Most studies on knowledge transfers in manufacturing FDI conclude that this poses a critical barrier to sustained industrial development in most African countries, and should therefore be treated as a policy priority.

3.4 The Contemporary African Realities of Building an Industrial Workforce: Resistance and Contestation

Despite some early studies reporting a high incidence of labour conflict and fractious labour relations in Chinese-owned workplaces in Africa (Baah and Jauch Reference Baah and Jauch2009; Gadzala Reference Gadzala2010), the evidence for such workplaces being more conflictive than others is inconclusive. In our own research, as reported earlier, we uncovered numerous instances of labour conflict and labour resistance, but these were common across both Chinese and non-Chinese manufacturing firms. Many Chinese managers report that the labour conflicts they are involved in reflect initial tensions commonly found in countries embarking on the path to industrialization, especially those arising from workers with no factory experience encountering Asian industrial work cultures (Tang and Eom Reference Tang and Eom2019). Indeed, as this subsection shows, labour resistance is far more common than usually recognized in early stages of industrialization, both in early industrializer and in late industrializer experiences.

A common concern following the arrival of new investors to industrial parks such as Hawassa in Ethiopia has been the high labour turnover experienced by most factories employing young rural women taking on their first stable job. Absenteeism has also been widely reported as a serious problem, especially in the early stages of operations and for new workers lacking factory work experience (Gebrechristos Reference Gebrechristos2025). High labour turnover and absenteeism are expressions of labour resistance, driven by workers’ struggles to adapt to a new work culture, an industrial capitalist culture, especially in contrast to the different rhythms of agricultural work. Such struggles and forms of resistance are well established in the long history of industrial capitalism. A cursory look at the literature on both early and late industrialization, along with classic works about the building of an industrial workforce, yields myriad examples, with labour turnover just one of many forms of resistance, albeit a prevalent one (Thompson Reference Thompson1967; Ong Reference Ong1987; Oya Reference Oya, Oqubay and Lin2019; Mokyr and Voth Reference Mokyr, Voth, Broadberry and O’Rourke2010).Footnote ⁴¹ Other well-known forms on non-organized resistance also include individual acts of defiance, like slowing down the pace of work, or sabotage, theft, and improvised (‘wildcat) strikes, instances of which we also found in our surveys in Angola and Ethiopia.

Economic historians of Africa have also documented the difficulties capitalist employers have faced in recruiting, retaining, and disciplining workers, whether in plantations, mines, or construction projects (Cooper Reference Cooper and Dirks1992). In contemporary Ethiopia, as well as other African countries playing host to new, globally integrated factories, what many (managers, workers, observers) perceive as a clash of ‘cultures’ – hardworking Chinese ‘eating bitterness’ vs inefficient African workers resistant to long hours and strenuous factory rhythms – is in fact a vivid expression of the clash between the modern industrial capitalist work culture and that of low-productivity small-scale agriculture (Sun Reference Sun2017; Oya Reference Oya, Oqubay and Lin2019; Tang and Eom Reference Tang and Eom2019).Footnote ⁴² This clash has played out since the origin of capitalism over 200 years ago and has often been resolved through the establishment of new labour control mechanisms, such as worker dormitories (Tsurumi Reference Tsurumi1990; Pun and Smith Reference Pun and Smith2007).

Hardy and Hauge (Reference Hauge2019) point to low wages, hazardous conditions, and lack of agency as key drivers of labour turnover and mismatched expectations in Ethiopia’s foreign-owned factories. The same study also shows that companies have been prepared to make some concessions and improve working conditions, although wages tend to be the lowest placed item on the agenda. The current reluctance to stay in factory employment expressed by many women in Ethiopia’s garment factories is, however, also a reflection of the fact that factory jobs have to compete with alternative livelihoods in the form of international migration, self-employment (micro-business), returning to the village of origin, wage work in informal services, or even temporary reliance on relatives (World Bank 2016). Although these might not represent better alternatives in terms of returns on labour and earning stability, they nevertheless offer escape routes from the disappointment and frustration provoked by mismatched expectations. Such obstacles can be seen to have slowed down the scaling up of manufacturing in earlier historical examples – for example, India when compared to Japan in the same period (Otsuka et al. Reference Otsuka, Ranis and Saxonhouse1988). The documentary Made in Africa lays bare these contradictions among contemporary women factory workers in Ethiopia, even if the main character Beti eventually opts to remain in factory work due to the alternatives being insufficient for survival.Footnote ⁴³ Beti’s predicament also points to the potentially emancipatory nature of stable salaried industrial employment for women seeking to escape patriarchy and systemic vulnerability (Kabeer Reference Kabeer2024).

Once in the job, resistance to factory discipline is common among workers in early industrialization, especially concerning changes in work regimes or technological advances that might weaken workers’ structural bargaining power. Bargaining over wages, effort at a given wage, and how many machines workers have to operate are critical for productivity growth, scaling up, employment dynamics, and work condition outcomes over time (Broadberry et al. Reference Broadberry, Fukao and Zammit2015). In this respect, conflicts over effort, time, and wages have been at the heart of the textile and apparel industry ever since cotton mills became the engine driving the emergence of industrial capitalism (Freeman Reference Freeman2018), and through successive waves of expansion into late developers such as Japan, India, Korea, China, Bangladesh, and now Ethiopia. As far back as nineteenth-century Britain, many rural workers struggled to adapt to the precision and discipline required in textile mills, leading to workplace tensions over efficiency imperatives and the adoption of new working methods or technology (Thompson Reference Thompson1967; Mokyr and Voth Reference Mokyr, Voth, Broadberry and O’Rourke2010).

Virtually all countries seeking to industrialize and build an industrial workforce go through the textile and apparel stage and the labour process dynamics specific to this industry, inevitably characterized by a particularly tough work environment (Brooks Reference Brooks2019). This does not mean the factories of the present are necessarily as bad as the sweatshops of the past (Mezzadri Reference Mezzadri2016). Conditions also change over time. The Ethiopian government has been particularly adamant about industrial parks having high-quality conditions in terms of space, ventilation, clean water, health and safety, environmental standards, and other basic amenities (Oqubay Reference Oqubay, Oqubay, Cramer, Chang and Kozul-Wright2020). As previously mentioned, there has also been resistance to the idea of work dormitories, which some have seen as a marker of China’s industrial relations in export-oriented regions, where such institutional mechanisms are used to enhance labour control over migrant workers (Pun and Smith Reference Pun and Smith2007). Thus, conditions and social upgrading are ultimately the outcome of contestation on the part of workers and their organizations, and governments aiming for a particular ‘model’.

Even the process of unionization on the factory floor is highly contested. In Ethiopia’s industrial parks, unions were initially discouraged and replaced by largely ineffective ‘workers councils’. This approach was reversed a few years later in response to a wave of wildcat strikes and significant worker mobilization, which had political connotations (Oya and Schaefer Reference Oya and Schaefer2021; Gebrechristos Reference Gebrechristos2025). Thus, exit – in the form of labour turnover – is not the only source of labour resistance or contestation. Lauria (2023), writing on road workers in Chinese projects, found that Ethiopian workers quickly discovered ways of peacefully but robustly confronting their Chinese managers arguing for wage increases, improvements in working conditions and financial rewards with often positive outcomes.

The frequency of factory strikes also shifts over time. In Ethiopia they increased substantially during the period 2016–2018, coinciding with the setting up of new industrial parks, the arrival of a wave of foreign investors, and a turbulent political period. Our 2017 worker survey indicated 38 per cent of factory workers had witnessed a strike in the previous 12 months, while a 2016 ILO survey reported 20 per cent of textile and garment firms had experienced one or more strikes over the preceding 12 months (Oya and Schaefer Reference Oya and Schaefer2021). Wildcat strikes grew rapidly between the mid-2010s and the end of the decade across different sectors in Ethiopia, especially in industrial parks (Admasie Reference Admasie2022). Other studies report a continuous, although declining, incidence of strikes in industrial parks during 2019–2022, a period when grievances and disputes reported to park labour units increased, suggesting more institutionalized and progressively better managed labour conflict (Gebrechristos Reference Gebrechristos2025, 206). A key lesson from these experiences is that – as demonstrated by the history of capitalism – factories, whether owned by Chinese or other employers, are excellent breeding grounds for labour mobilization and association.

Overall, what we observed in Ethiopia’s textile and apparel industry is remarkably reminiscent of early industrialization experiences in multiple contexts, from Britain to India, Japan, and Mexico (Otsuka et al. Reference Otsuka, Ranis and Saxonhouse1988; Tsurumi Reference Tsurumi1990; Galvarriato Reference Galvarriato2017). Four remarkable parallels stand out: (a) labour resistance in the form of lower work effort (non-acceptance of overtime work) and high turnover; (b) labour conflict in the form of unorganized strikes; (c) late arrival of unions to stabilize the situation after initial resistance to unionization; and (d) new labour control mechanisms and labour repression to address these problems. Obstacles stemming from the labour market, as well as the extent to which the nature of the labour force hinders or accelerates industrial transformation, are central aspects of the economic development process – hence the need to centre the analysis in labour dynamics. The other key aspect is policy and politics, to which we now turn.

4.1 Agency, Policy, and Politics

Through contrasting Ethiopia and Angola as illustrative examples of variation in African experiences, this section examines the degree to which critical national institutions have emerged to pursue industrialization efforts and the political settlements associated with them. Here, a focus on critical infrastructure and FDI management provides a useful lens with which to make sense of their variegated outcomes found in the two countries. The shifting nature of state–business relations involving African states and Chinese capital, especially at times of significant disruption (economic crisis, pandemic, conflict) will also be discussed, taking into consideration the particularities of sectors, varieties of capital, and national/local political economy factors.

‘Agency’ is increasingly evoked in contemporary debates about China in Africa (Mohan and Lampert Reference Mohan and Lampert2013), but does not constitute a particularly useful term if used vaguely. Large (Reference Large2021) provides a compelling assessment of the pros and cons of the concept and its uses. It is often framed in terms of the ‘plan’ (or lack of) for engagement with China being pursued by African countries – in other words, whether there is a vision for what they want to get out of this relationship, and what might be done to maximize its benefits (Soulé Reference Soulé2022). This is a normative use of the term, which may have a political rendering when framed in the context of African emancipation (Large Reference Large2021, 34). Agency can mean many different things, however, depending on its empirical manifestations and which player we choose to focus our attention on. Corkin (Reference Corkin2013), for example, presents an empirically grounded account of the agency of Angolan political elites in shaping relations with China, especially when it comes to leveraging the enormous volume of finance as part of their state (re)building project. African state agency is also reflected in construction contracts and how they evolve. For example, in Zambia, a single-source requirement eventually gave way to institutionalized bidding among Chinese contractors in Zambia (Lee Reference Lee2017, 56), while in Angola, a stipulation was made that at least 30 per cent of subcontracting go to local companies in projects financed by the country’s 2016 credit line (Wanda et al. Reference Wanda, Oya and Monreal2023).

While it is unsurprising that African governments and elites tend to be the focus of ‘African agency’ analyses, firms and entrepreneurs, civil society organizations (CSOs), trade unions, workers, and other constituencies also represent significant sources of cooperation and bargaining, or alternatively resistance and friction. Agency encompasses contestation, which often happens from below, when workers confront employers or CSOs challenge the state and its allies by seizing ‘moments’ for mobilization and resistance (Lee Reference Lee2017; Oya and Schaefer Reference Oya and Schaefer2021). The manner in which diverse sources of agency are arranged at different levels – from the workplace to the ministry to the international forum – ultimately shapes how interests are manifested, and in turn bargaining outcomes over finance, infrastructure projects, investment decisions, production processes, and workplace encounters. Broadly speaking, this Element touches on two manifestations of agency: bargaining and contestation, involving both state and non-state actors (especially workers, as illustrated in the previous section). More specifically, this section focuses primarily on state actors, domestic elites and varieties of capital, arguing that a clearer understanding of how diverse forms of agency are configured can help explain the ‘politics of production’ underpinning variations in China’s encounters with different African countries.

Politics is indeed at the heart of ‘agency’. Lee (Reference Lee2017, 158) concludes her book with the observation that ‘it is politics – and more precisely, the political synergy between state and society – not bureaucracy or technocracy, that is the key to leveraging Chinese state capital for development’. Grasping the ‘politics of production’ in terms of its macro political and economic context, national institutions, policy drivers and balance of power is critical to uncovering variations in structural transformation trajectories, including the obstacles countries find along the way (Burawoy Reference Burawoy1985). The costs of transitioning to political settlements more conducive to industrialization and dynamic structural transformation rest on the existing balance of power, how it evolves, and the capabilities of those organizations that are in a position to hinder or promote such a transition (Khan Reference Khan2018). Large (Reference Large2021, 107) concludes that, despite China’s potential contributions to economic transformation processes, ‘Politics continued to represent a fundamental challenge to Africa’s structural transformation’. Ethiopia’s tumultuous period of 2020–2024 is a good example in this regard, as explained next. Chinese managers and officials interviewed during our fieldwork frequently highlighted political obstacles, such as unresponsive bureaucracies or cumbersome, unclear regulations. Of particular concern, however, was the lack of political stability and policy continuity, either due to internal conflicts or simply a change in the ruling party following elections, a point also stressed by Large (Reference Large2021).

Thus, analysing whether ‘effective’ (industrial) policies have been designed and implemented is not enough. Also needed is knowledge of the underlying political dynamics, and the extent to which they have enabled or hindered processes and outcomes. Development policy in many African countries is driven by a combination of internal politics – including complex relations between elite factions, as well as instances of state–society synergy or contestation – and structural extraversion, which often reduces the policy space for long-term industrialization planning. This may partially explain the paucity of Asian-style industrial strategies in evidence across SSA. Put another way, the local, national, and global political configurations affecting Africa means the industrialization path taken by the continent’s countries may differ from that taken by other latecomers, China included (Sun Reference Sun2017). Equally, some expressions of structural determinism in world systems or dependency theory fail to acknowledge shifting domestic politics and balances of power, which may challenge extraversion logics and push countries towards a more coherent long-term vision that does not require ‘delinking’ from the world system (Amsden Reference Amsden1979 and Reference Amsden2001).

With regards to agency, a key question is agency for what and through which mechanisms. Ethiopia offers one of the best examples of agency deployed in the service of an effective industrialization strategy. Starting in the early 2000s, securing policy space for alternative development strategies and learning from a wider set of experiences became key priorities for late Ethiopian prime minister Meles Zenawi, with these principles eventually applied to Ethiopia’s 2010–2020 pursuit of a long-term industrial strategy (de Waal Reference de Waal2013; Cheru and Oqubay Reference Cheru, Oqubay, Oqubay and Lin2019). Loss of policy space, especially for homegrown industrial development, was indeed one of the most pernicious effects of aid dependence and Washington/post–Washington Consensus policies since the 1980s (Chang Reference Chang2008). Against this backdrop, Zenawi’s ambition, optimism, and aspiration to become a developmental state (de Waal Reference de Waal20132; Chang and Hauge Reference Chang, Hauge, Cheru, Cramer and Oqubay2019) bear echoes of Hirschman’s ‘possibilism’ (Cramer et al. Reference Cramer, Sender and Oqubay2020).

China offers contemporary examples of such bold aspirations. For instance, the ambitious Made in China 2025 project – designed to place the country at the forefront of new green transition sectors, as well as achieve more presence in strategic semiconductor production – has achieved its core targets ahead of time, raising the prospect of China further expanding its share of global manufacturing by 2030 (UNIDO 2024). Such programmes require what Mazzucato (Reference Mazzucato2021) calls ‘mission’, which translates into a vision of economic transformation supported by a set of key operational goals, policy mechanisms, institutions, and actors ready to contribute to it. History backs this up, demonstrating that the drive shown by a powerful, resource-equipped state to shift towards new strategic sectors is a critical ingredient. Needless to say, agency can also be used to pursue undesirable aims, such as the enrichment of a narrow elite faction, or to pursue a political agenda with no defined development objective (Soares de Oliveira Reference Soares De Oliveira2015; Taylor Reference Taylor, Oqubay and Lin2019; Large Reference Large2021).

Before moving on to the differing industrial policy approaches of Ethiopia and Angola, it is worth noting a particularity of these and other recent African policy experiences, namely that Chinese actors – whether government organizations, lenders, SOE or other business – have refrained from providing African governments with policy blueprints, recommendations, technical advice or policy conditions. This is in contrast to the approach taken by many Western donors over the past three decades and despite the growing narrative of ‘industrial cooperation’ discussed in Section 2. Chinese authorities often stress the need for African countries to find their own path, and will only advance ‘advice’ in the form of its own historical example or direct forms of support to existing industrial strategies – for example, building critical economic infrastructure or encouraging the setting up of SEZs (i.e. concrete actions rather than documents).

4.2 Two Tales of Industrial Policy

Throughout, this Element has emphasized the importance of variations in experiences and outcomes, together with the need to transcend both methodological nationalism and Africa essentialism. Here, we briefly contrast the industrial policy experiences of Angola and Ethiopia – where Chinese engagement has been particularly strong – in order to illustrate how differences in policy agendas and actions are key to understanding, first, the variation found in recent industrialization experiences, and, second, the variegated effects of China’s contributions to Africa’s industrialization.

4.3 Leveraging ‘Global China’ for Industrialization: Policy Imperatives or the Art of the Possible

The apparent revival of industrial policy across Africa over the past two decades has coincided with China’s growing engagements with the continent. The preceding history of half-hearted industrialization attempts by African governments, lack of continuity, coordination failures, political obstacles, external hindrance, and weak capacities also offers important lessons for current efforts to industrialize (Chitonge and Lawrence Reference Chitonge, Lawrence, Oqubay, Cramer, Chang and Kozul-Wright2020).

Understanding whether African governments are serious in their pursuit of credible, ambitious industrialization strategies necessitates close inspection of industrial policy politics and the gap between rhetoric and reality (Whitfield and Zalk Reference Whitfield, Zalk, Oqubay, Cramer, Chang and Kozul-Wright2020). The task of industrialization requires a favourable political settlement and balance of power conducive to dynamic accumulation and investment directed towards manufacturing, sometimes at the expense of other sectors and interests – hence a deeply political problem (Amsden Reference Amsden2001; Khan Reference Khan2018; Chang and Hauge Reference Chang, Hauge, Cheru, Cramer and Oqubay2019; Opalo Reference Opalo2024). These conditions cannot be externally imposed or engineered, or copied from an existing ‘ideal’ model. Rather, what is needed is an organic co-evolution of states and markets, different institutions, global and local varieties of capital, and a clear articulation of the responsibilities held by different levels of governance (Ang Reference Ang2016; Tang Reference Tang2020). Ideas also matter, with the effective reality of policymaking influenced by whether policymakers have access to and adopt particular sets of ideas; whether individuals in powerful positions exercise agency to put in practice a given apparatus of ideas and aspirations; or whether a powerful organization embraces an ideological project (e.g. for or against neoliberalism) (Mukand and Rodrik Reference Mukand and Rodrik2018; Chang and Hauge Reference Hauge2019; Opalo Reference Opalo2024).

The contrast between Ethiopia and Angola underscores the aforementioned, while highlighting three other important stylized facts. First, ambition and ‘possibilism’ matter. To some extent, Ethiopia defied expectations given that its structural conditions at the time were not conducive to industrialization. Despite this, the government decided to bet on the possible advantages, persistently pursuing accelerated routes (primarily through FDI and dedicated infrastructure for industrial parks) as a means of fostering industrial development. Without the ‘art of the possible’, much of the industrial growth achieved by Ethiopia over the course of a single decade (2010–2020) would have been impossible. Second, the importance of policy learning and coordination – two critical ingredients emphasized by Amsden (Reference Amsden2001), Hirschman (Reference Hirschman1967) and Chang (Reference Chang2008) – is demonstrated by their presence in Ethiopia’s industrialization experience and absence in Angola’s. Third, the management of FDI, whether in terms of attracting and selecting the right kind of investors or being able to discipline them into aligning their interests with national goals, is key. Although the case of Ethiopia highlights some of the difficulties that can arise in pursuing these goals, it also points to several mechanisms and institutions that can be of help. The case of Angola, meanwhile, shows that effective FDI management can only happen if the internal political settlement accedes to a developmental bargain with foreign capital, as opposed to the perpetuation of rentier politics, whereby foreign capital becomes a conduit for wealth accumulation among a narrow elite. Even in Angola’s context, however, it is possible for domestic capital accumulation interests to exert a limited form of FDI management to ‘pick winners’, as in the cement industry.

Several policy implications can be drawn from these contrasting policy stories, as well as successes and failures elsewhere in Africa. In this respect, the absence of relevant policy imperatives in several African countries may go some way to explaining their limited industrialization achievements to date, despite potentially beneficial Chinese engagements.

First, several basic preconditions are required for any sustained industrial development. While there is no consensus on what the full list might look like, opinion has at least converged around two sets of factors: (a) good education and skills levels, whether high literacy rates (greater than 70 per cent) or a pool of potentially trainable workers with some relevant skills and experience (i.e. prior manufacturing experience); and (b) basic economic infrastructure, especially cheap, reliable electricity and logistics. Any industrial strategy should ensure these basic conditions are met and targeted towards the needs of sustained structural transformation.

Second, sources of capital matter, whether in the form of development finance to support infrastructure development and start-ups, or industrial capital (FDI) in contexts where the domestic industrial class is small or weak. Attracting long-term patient finance for structural transformation, alongside reliable foreign capital with embedded technology and suitable organizational capabilities, therefore constitutes another piece of the puzzle.

Third, state capabilities to reward learning while disciplining industrial capital to meet growth and innovation objectives – what Amsden (Reference Amsden2001) calls ‘reciprocal control mechanisms’ – are needed to ensure adequate volumes of investment are directed at activities/uses conducive to sustained structural transformation. Different countries may have to experiment with different kinds of mechanisms, depending on the local context.

Fourth, measures should be put in place to facilitate and accelerate the building of an industrial workforce, whether by supporting mobility through more and better affordable housing and transport, or ensuring factory employers dedicate resources to continuous training and progressive career paths. In addition, history suggests that keeping unit labour costs competitive through productivity growth is more likely to achieve rapid economic and social upgrading than exercising wage restraint. As such, relying mostly on low wages to provide a competitive edge is unlikely to lead to sustainable outcomes.

Fifth, a stable macroeconomic environment is important, especially in terms of two basic indicators: (a) currency risk, with a competitive, stable exchange rate desirable; and (b) inflation, especially in terms of the prices for key wage goods such as food and accommodation, which are critical for a smooth transition of the emerging industrial labour force.

To be fully effective, many of the policy elements outlined earlier would need to be addressed as part of a comprehensive, coherent industrial policy package, which would provide strategic direction in terms of sectors to grow, investors to attract, and supporting mechanisms to be put in place (Cramer et al. Reference Cramer, Sender and Oqubay2020; Oqubay Reference Oqubay, Oqubay, Cramer, Chang and Kozul-Wright2020; Tregenna Reference Tregenna2023).

We therefore conclude the Element with a brief reflection on how agency and policy can translate China’s multiple engagements in Africa into meaningful, sustained advances towards an industrial-led structural transformation. Throughout, this Element has argued that taking this path is imperative for most African countries seeking to exercise their ‘right to development’ and achieve meaningful progress when it comes to the welfare of their growing populations. The employment challenge is at the core of this imperative. As such, only a long-term, coherent, realistic strategy for mass job creation, alongside economic and social upgrading, can lead African countries to deserved prosperity. This is an aspiration that cannot be simply outsourced (Moore Reference Moore2025).

At the same time, politics matters, complicating policymaking in ways that cannot always be easily predicted. Not all good things go together, and obstacles will inevitably appear on the road. Whether Chinese state or private investment – in all its manifestations – will enable African countries to achieve industrialization, thereby leaving behind the colonial legacy of primary commodity dependence, ‘will depend on many factors beyond the volition of the Chinese state or African governments’ (Lee Reference Lee2017, 165).

China’s dual image of being on the one hand a ‘developing country’ or ‘country of the Global South’,Footnote ⁵¹ and on the other an emerging global power challenging American hegemony, has implications for how ‘African agency’ is interpreted. Should agency be understood in terms of standing up to this emerging global power? Or is it about striking the best deal within a ‘partnership of equals’? Regardless of rhetoric, it is clear that current power relations between China and African countries are shaping the likelihood of agency and nature of bargaining, with possible variations between African settings. The contrast between Angola and Ethiopia detailed in this section is illustrative of this divergence in relations and outcomes. The following oft-cited quote (Cramer et al. Reference Cramer, Sender and Oqubay2020, 143) from Hirschman (Reference Hirschman1967, 5) encapsulates the Element’s proposed approach, which ‘stresses the importance for development of what a country does and of what it becomes as a result of what it does, and thereby contests the primacy of what it is, that is, of its geography- and history-determined endowment with natural resources, values, institutions, social and political structure’.