The Next Factory of the World: How Chinese Investment Is Reshaping Africa by Irene Yuan Sun

AN INTERESTING INSIGHT INTO CHINESE FACTORIES IN AFRICA

This is my first NetGalley review and I’m really excited about it! This website gives you the chance to apply for reading ebooks for free before they are published so that publishers and authors can receive early feedbacks. I applied for The Next Factory of the World: How Chinese Investment Is Reshaping Africa by Irene Yuan Sun and I was really delighted to find out that my request had been accepted!

I chose this book because I had already heard about Chinese investments in Africa and I wanted to know more about this challenging topic.

Irene Yuan Sun was born in China and raised in the United States. She studied at Harvard and spent some time working in Africa.

The Next Factory of the World deals with the stories of several private Chinese entrepreneurs in Africa, industrialization in that continent and the role played by China.

The author was born in China and lived there until she was six. At that time, cars were not so common in her country as in America. She was more familiar with buses and bicycles. In the early 1990s, almost nobody had a car in China. The author’s hometown is Changchun, near the frontier with eastern Russia. In 1991 she sat in a car for the first time. It belonged to a family friend who was a government official. Chinese streets were full of bicycles in the early 1990s, but now are full of cars (and pollution). The author proudly announces that 750 million people were lifted out of poverty.

Irene Yuan Sun grew up in the United States and after college she went to teach in Namibia, in southwestern Africa. She was a volunteer teacher and her subjects were math and English. Her pupils were the children of subsistence farmers. In Namibia she met a self-made Chinese man who was looking for a wife, but most Chinese women didn’t want to live in Africa. He tried to impress the author, but she realized that, despite being rich, he was illiterate. Why didn’t he want to marry an African woman? Why do Chinese people usually marry within their own community? Why don’t they want to mix with the locals?

The author visited more than fifty Chinese factories in Africa. She thinks that Chinese factories in Africa will create prosperity for Africans. Seriously? Chinese factories in Italy only use Chinese workforce and in Chinese stores here you can see mostly Chinese employees with sometimes the addition of Romanian women and Bangladeshi men. No jobs for the locals. No jobs for Italians. My husband, who is Mexican, thinks that this happens because only immigrants are willing to accept the low wages offered by Chinese employers, but I don’t know if they even tried to hire Italian workers. It looks like “foreigners united against the natives”.

According to Irene Yuan Sun, China is the current factory of the world while Africa will be the next one. Chinese factories in Africa produce either for the local markets or to export their goods, taking advantage of African low labor costs.

The author believes that factories bring prosperity, as it happened with the Industrial Revolution in Great Britain in the eighteenth century, in America in the nineteenth century, in Japan and other Asian countries in the twentieth century. At least she admits that many factory bosses in Africa are racist, pay bribes, drink to excess and frequent prostitutes. Moreover their factories pollute air and water, like we can see in nowadays China. However, in the previous examples of industrialization, the factory owners belonged to the same country they were contributing to develop. Are we sure that the same development will follow in Africa, if the factory bosses are Chinese and not Africans?

The book focuses on four African countries: Nigeria, Lesotho, Kenya, and Ethiopia. Nigeria has the largest population and the largest economy of the continent. Lesotho is instead completely surrounded by South Africa. Kenya is the principal economy of East Africa and Ethiopia… It isn’t true that Ethiopia was never colonized by a European power! Even if for a short period (1936-1941), it was an Italian colony! A shameful past for Italy, but history can’t be hidden.

According to Irene Yuan Sun, donors and global aid organizations won’t solve the poverty problem in Africa, but factories with their employment opportunities can do it. First example: Mr. Sun owns a factory that produces ceramic tiles in Nigeria. He’s only an elementary school graduate and he started working when he was just 13 years old. Chinese factories owners accumulated their know-how working for Taiwanese factory owners, who in turn had learned from Japanese ones.

Mr. Sun comes from Wenzhou, a midsize city in southeastern China. He dropped out of school when he was thirteen and started working in factories. He worked long hours, saved money and finally opened his own factory. Nice story, but not everybody can become a factory boss, otherwise who’s going to do all the menial jobs? The sad reality is that rich individuals can exist only if there are many poor people. Mr. Sun manufactured leather goods in China, but in the late 2000s costs were rising. He needed to move his factory abroad. He considered Bangladesh and Uzbekistan, then a friend told him about Nigeria.

When Mr. Sun visited Nigeria for the first time, he immediately saw a lot of beggars asking for money, but he then realized that there were also a lot of rich people. He found out that ceramics were the heaviest products that China exported in large quantities to Nigeria, so he decided to open a ceramic tile factory in the country. He invested almost 40 million dollars and he employed nearly 1,100 workers, a thousand of whom are locals. I liked this point: employing the locals. Everybody should follow this example.

The author then attends a lunch in Maseru, the capital of Lesotho. Location: a Chinese restaurant. There she meets some Chinese businessmen. They started their career working for Taiwanese firms with businesses in Lesotho. At that time, in the late 1980s and 1990s, it was common for Taiwanese firms in need of cheap labor to use labor agencies to find young Chinese workers. They spoke neither English nor Sesotho, the local language. In the 1990s there were no cell phones and no internet. They could call home just once a year, because they didn’t have enough money. After years of hard work, some of them started factories while others ran small shops.

A wave of Japanese entrepreneurs generated a wave of Taiwanese entrepreneurs that generated a wave of Chinese ones. This is why the author thinks that the next wave can be African.

The author was born in Changchun, a provincial capital of two million people in Manchuria, between Russia and North Korea. In the late 1980s her father spent a year in Japan for a postdoctoral fellowship. The author, who was just two years old, stayed in China with her mother. At that time nobody owned a refrigerator and very few people had a television. As for industrialization in Asia, Japan was the first country, then followed by Hong Kong, Singapore, South Korea and Taiwan. In the early 1980s, China was poorer than Ethiopia and Mali.

It was interesting to find out that the first Chinese entrepreneurs arrived in Nigeria in the 1960s and 1970s. After its independence, the country had a thriving textile sector, but it collapsed when Nigeria started to export oil. Another engaging story is that of the flip-flop factory owned by the Lees in Nigeria: they produce huge quantities of cheap flip-flops whose retail price is just about a dollar a pair. This is possible because the models are very few. These products are destined to poor consumers who can’t afford to pay more and are sold in Nigeria and other West African countries. Their price is so low that nobody tries to import smuggled flip-flops.

The author’s mother is from Shanghai and her surname is Shen like that of the next factory owner we meet. The author’s father is instead a northerner. In Lesotho, a Chinese-owned factory produces Reebok T-shirts for American consumers. The workers are locals. Incredible but true: clothing production is not very automated because the product designs change every season, so it would be too expensive to change the machines to automate the job every few months. It’s better having many workers and sewing machines. In Lesotho, a large number of factory owners are foreigners, but the workers are mostly locals because wages are modest.

Factories in Lesotho export their products while Nigerian ones mainly produce for the internal market. This happens because Lesotho is a small country with a small population, but it’s near the excellent South African transport infrastructure. On the other hand Nigeria has a large population and bad roads.

Sad but true: it’s easier to pollute in Nigeria than in China because it’s legal. Government wants to attract foreign investors, so outdated machinery can be shipped from China to Nigeria. Moreover several Chinese businessmen use money to bribe government officials.

The author interviews also a Nigerian man who tells that Chinese-owned factories usually don’t meet safety standards. Moreover, you can’t ask questions, you can’t make phone calls and you have to work for twelve hours without talking. The author thinks that factories will bring full employment in Africa, but I believe she’s too optimistic.

Several Chinese factory owners think that Africans are lazy and this is why they fire a lot of them. They expect to be paid even if they don’t show up on time or they don’t go to work every day. The fact is that Chinese bosses are used to manage people from their own country who are more productive than the new African class of factory workers.

In Addis Ababa, the author finds out that a Chinese restaurant owner has married a local woman who works as a waitress in his restaurant and they have a curly-haired son. A nice example of mixed family! Other interesting pieces of information: in Lesotho women were used to live on remittances from their husbands working in South Africans mines, but now many of them are working in factories where the majority of workers are women. In Kenya, the manufacturing sector is instead dominated by East Africans of Indian descent. Intermarriage between this community and the locals is still rare, despite a century of living in the country. In West Africa, the same happens with the Lebanese community and its resistance to integration. The author hopes that Chinese people in Africa will follow a different path.

Other interesting opinions from the author: African countries should develop their own pharmaceutical factories because there is a limit to what outsiders can be expected to do. A generation ago, China was poorer than many African countries, but the government offered cheap land and tax incentives to establish pharmaceutical firms. Developing countries like China are more willing to invest in other developing countries like Ethiopia because few people from the developed world would work there without seeing their families for a year, living in a mud-field while building factories in inhospitable places.

Epilogue

Chinese population is ageing, labor costs are rising in China and Chinese economic growth is now slower than in the past three decades. This is why Chinese companies are investing and relocating their factories abroad, in places like Africa where the population is burgeoning and workers can be paid less than in China.

What I liked most: Chinese entrepreneurs interviewed by the author frankly admit that they’re investing in Africa for profit. If their moves have also positive effects on Africans that’s fine, but that’s not their main purpose. On the other hand, Western NGOs present themselves as pure altruism, but skeptical people don’t believe in fairy tales.

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