IDEAS home Printed from https://ideas.repec.org/p/cdi/wpaper/1721.html
   My bibliography  Save this paper

The impact of Chinese competition on Africa’s manufacturing

Author

Listed:
  • Sylviane GUILLAUMONT JEANNENEY

    (Centre d'Etudes et de Recherches sur le Développement International(CERDI))

  • Ping HUA

    (Centre National de la Recherche Scientifique(CNRS))

Abstract

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

Suggested Citation

  • Sylviane GUILLAUMONT JEANNENEY & Ping HUA, 2015. "The impact of Chinese competition on Africa’s manufacturing," Working Papers 201521, CERDI.
    • Handle: RePEc:cdi:wpaper:1721
    as

    Download full text from publisher

    File URL: http://publi.cerdi.org/ed/2015/2015.21.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Tetsushi Sonobe & John E. Akoten & Keijiro Otsuka, 2009. "An Exploration into the Successful Development of the Leather‐Shoe Industry in Ethiopia," Review of Development Economics, Wiley Blackwell, vol. 13(4), pages 719-736, November.
    2. Sylviane Guillaumont Jeanneney & Ping Hua, 2011. "How does real exchange rate influence labour productivity in China?," Post-Print halshs-00666806, HAL.
    3. Guillaumont Jeanneney, Sylviane & Hua, Ping, 2011. "How does real exchange rate influence labour productivity in China?," China Economic Review, Elsevier, vol. 22(4), pages 628-645.
    4. Hausman, Jerry A & Taylor, William E, 1981. "Panel Data and Unobservable Individual Effects," Econometrica, Econometric Society, vol. 49(6), pages 1377-1398, November.
    5. Sylviane Guillaumont Jeanneney & Ping Hua, 2015. "China’s African Financial Engagement, Real Exchange Rates and Trade between China and Africa," Post-Print halshs-01150612, HAL.
    6. Dani Rodrik, 2008. "The Real Exchange Rate and Economic Growth," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(2 (Fall)), pages 365-439.
    7. Gaulier, Guillaume & Zignago, Soledad, 2004. "Notes on BACI (analytical database of international trade). 1989-2002 version," MPRA Paper 32401, University Library of Munich, Germany.
    8. Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003. "Testing for unit roots in heterogeneous panels," Journal of Econometrics, Elsevier, vol. 115(1), pages 53-74, July.
    9. Tegegne Gebre‐Egziabher, 2009. "The Developmental Impact of Asian Drivers on Ethiopia with Emphasis on Small‐scale Footwear Producers," The World Economy, Wiley Blackwell, vol. 32(11), pages 1613-1637, November.
    10. Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mawussé K. N. Okey, 2017. "Does migration promote industrial development in Africa?," Economics Bulletin, AccessEcon, vol. 37(1), pages 228-247.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sylviane Guillaumont Jeanneney & Ping Hua, 2020. "When and how African real exchange rates relative to China affect its manufacturing?," Post-Print hal-03060589, HAL.
    2. Sylviane Guillaumont Jeanneney & Ping Hua, 2015. "The impact of Chinese competition on Africa’s manufacturing," CERDI Working papers halshs-01179283, HAL.
    3. repec:fdi:wpaper:1785 is not listed on IDEAS
    4. Sylviane Guillaumont Jeanneney & Ping Hua, 2015. "China’s African Financial Engagement, Real Exchange Rates and Trade between China and Africa," Post-Print halshs-01150612, HAL.
    5. Sylviane Guillaumont Jeanneney and Ping Hua, 2020. "When and How African Real Exchange Rates Relative to China Affect its Manufacturing?," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 45(4), pages 1-34, December.
    6. repec:fdi:wpaper:1786 is not listed on IDEAS
    7. Diao, Xinshen & McMillan, Margaret, 2018. "Toward an Understanding of Economic Growth in Africa: A Reinterpretation of the Lewis Model," World Development, Elsevier, vol. 109(C), pages 511-522.
    8. Mamun, Md. Al & Sohag, Kazi & Uddin, Gazi Salah & Shahbaz, Muhammad, 2015. "Remittance and domestic labor productivity: Evidence from remittance recipient countries," Economic Modelling, Elsevier, vol. 47(C), pages 207-218.
    9. Ping Hua, 2020. "Real Exchange Rates and Manufacturing Industry in China," Post-Print hal-03041506, HAL.
    10. Ronald MacDonald & Flávio Vieira, "undated". "A panel data investigation of real exchange rate misalignment and growth," Working Papers 2010_13, Business School - Economics, University of Glasgow.
    11. Aynur Pala, 2014. "The Effect of Valuation Ratios, Gold Price, and Petroleum Price on Equity Returns: A Comparison of Static Panel and Quantile Regressions," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 4(1), pages 80-89, January.
    12. Ansgar Belke & Ulrich Volz, 2020. "The Yen Exchange Rate and the Hollowing Out of the Japanese Industry," Open Economies Review, Springer, vol. 31(2), pages 371-406, April.
    13. Nouira, Ridha & Sekkat, Khalid, 2012. "Desperately seeking the positive impact of undervaluation on growth," Journal of Macroeconomics, Elsevier, vol. 34(2), pages 537-552.
    14. Katsushi S. Imai & Nidhi Kaicker & Raghav Gaiha, 2021. "Severity of the COVID‐19 pandemic in India," Review of Development Economics, Wiley Blackwell, vol. 25(2), pages 517-546, May.
    15. Bernard Njindan Iyke, 2018. "The real effect of currency misalignment on productivity growth: evidence from middle-income economies," Empirical Economics, Springer, vol. 55(4), pages 1637-1659, December.
    16. Zhang, Pengfeng & Gu, Haiying, 2023. "Potential policy coordination: Can energy intensity targets affect energy poverty?," Energy Economics, Elsevier, vol. 126(C).
    17. Luca Antonio Ricci & Gian Maria Milesi-Ferretti & Jaewoo Lee, 2013. "Real Exchange Rates and Fundamentals: A Cross-Country Perspective," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 45(5), pages 845-865, August.
    18. Atilla Çifter, 2015. "Bank concentration and non-performing loans in Central and Eastern European countries," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 16(1), pages 117-137, February.
    19. Katsushi S. Imai & Nidhi Kaicker & Raghav Gaiha, 2020. "The Covid-19 Impact on Agricultural Prices in India," Discussion Paper Series DP2020-25, Research Institute for Economics & Business Administration, Kobe University, revised Dec 2020.
    20. Nouira, Ridha & Plane, Patrick & Sekkat, Khalid, 2011. "Exchange rate undervaluation and manufactured exports: A deliberate strategy?," Journal of Comparative Economics, Elsevier, vol. 39(4), pages 584-601.
    21. Njindan Iyke, Bernard, 2016. "The Penn Effect Revisited: New Evidence from Latin America," MPRA Paper 70593, University Library of Munich, Germany.
    22. Rodrigo Caputo & Miguel Fuentes, 2012. "Government Spending and the Real Exchange Rate: a Cross - Country Perspective," Working Papers Central Bank of Chile 655, Central Bank of Chile.

    More about this item

    Keywords

    Manufacturing; China; Africa; Real exchange rates.;
    All these keywords.

    JEL classification:

    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • F6 - International Economics - - Economic Impacts of Globalization
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cdi:wpaper:1721. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Vincent Mazenod (email available below). General contact details of provider: https://edirc.repec.org/data/ceauvfr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.