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Chinese Imports May Be Undermining African Manufacturing – New Report

The influx of Chinese products has become a big worry for African countries’ industrialisation, since Beijing’s low-cost goods are harming Africa’s tiny enterprises.

China is currently Africa’s greatest trading partner as well as its major raw material supplier. In 2018, China supplied 16% of Africa’s total.

China’s low-cost products are well ahead of the competition for African native manufacturers, forcing many to abandon the market. They will not create any new jobs. Because industrialization is largely regarded as important to raising living standards, there are major ramifications for the continent’s economic progress. Concerns have also been raised concerning the impact of Chinese produced exports on salaries in importing countries.

According to reports the imports of Chinese products will impact wages, which is differed on the basis of gender, and products, especially, in Ethiopia. Employment levels declined overall for male and female manufacturing workers. But women bore a disproportionate burden. Manufacturing firms exposed to increased Chinese competition employed fewer female production workers than men.

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It has been witnessed that under competitive pressure, Ethiopian companies lay off female workers rather than males. Also, in labour-intensive jobs, firms have a preference for men because of their physical strength. Total male employment hasn’t been adversely affected by the Chinese import competition. But men’s wages in firms facing greater import competition from China have decreased. This implies that Ethiopian manufacturing firms cope with competition by cutting down on female employment and reducing male wages, Asia Times reported. As low-wage competition from China has increased, Ethiopian manufacturing firms have reduced female production workers. This is most pronounced in firms that rely heavily on labour-intensive methods of production.

The publication suggested that African countries make their industrial policies more strong and they must ensure that Chinese manufacturing investment diffuses technology to local manufacturing firms, as per Asia Times report. It is especially important for African leaders to prevent the use of Chinese investment as a conduit to flood the market with cheap Chinese manufacturing imports that undermine local manufacturing.

 

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