Chinese investment in Africa; ownership and local linkages

This paper argues that as peripheral African economies become increasingly integrated into global production and business networks from which they have traditionally been excluded, there is a need to engage with the complexities of the different contexts within which this international business occurs. Specifically, there is need to explore the nature of interactions between new Chinese investors into African industry and local actors.

Against a background of new flows of Chinese investment locating in a typical Sub-Saharan African economy, the paper explores the extent to which the ownership of FDI matters for African economies and the varying impacts of this on African domestic firms and local economies. Drawing upon the case of export zones in Kenya, the paper argues that despite the presence of export zones, there remain severe limitations in the ability of Sub-Saharan African economies to deviate from low-cost and labour-intensive production activities, which thereby perpetuates disadvantaged and marginal integration into global production and business networks.

This contribution links into ongoing debates on the contested merits of Chinese FDI flows into African industry via economic zones, and the potential for such investment flows to catalyze economic upgrading and development.