Ideas & Debate

China calls the shots in Africa’s manufacturing

President Kenyatta (back row, second left) witnesses an agreement between Huawei Technologies and Kenya in Beijing. FILE PHOTO | NMG
President Kenyatta (back row, second left) witnesses an agreement between Huawei Technologies and Kenya in Beijing. FILE PHOTO | NMG 

Earlier this year, McKinsey and Company released a report on Sino-African relations that assessed the activities of Chinese businesses as well as Sino-African economic partnerships. There are about 10,000 Chinese-owned firms operating in Africa today and about 90 per cent of these are privately owned, debunking the myth that Chinese business activity in Africa is dominated by state-owned enterprises and overly influenced by statecraft.

Of particular interest is understanding how the Chinese presence is informing industrial development, a chronically underdeveloped sector on the continent.

Some 31 per cent of Chinese firms are in manufacturing and already handle about 12 per cent of industrial production in Africa with annual revenues of about $60 billion; revenue in manufacturing outstrips that of any other sector listed. Chinese factories are focused on Africa’s domestic markets; 93 per cent of revenues come from local or regional sales.