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The impact of Chinese competition on Africa’s manufacturing

Author

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  • Sylviane Guillaumont Jeanneney

    (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)

  • Ping Hua

    (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)

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 halshs-01179283, HAL.
    • Handle: RePEc:hal:wpaper:halshs-01179283
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01179283
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    References listed on IDEAS

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    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.
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    8. 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.
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    Cited by:

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

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    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

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