Africa’s economic transformation: the role of Chinese investment

SYNTHESIS REPORT

Africa¡¯s economic

transformation: the role of

Chinese investment

degrp.

@degrp_growth

Linda Calabrese and Xiaoyang Tang

June 2020

About the DFID-ESRC Growth Research Programme

The DFID-ESRC Growth Research Programme (DEGRP) funds world-class scientific research on inclusive

economic growth in low-income countries (LICs). The programme¡¯s principal aim is to generate policyrelevant research on four key areas: financial sector development and growth; agriculture and growth;

innovation and growth; and China¡¯s engagement in sub-Saharan African countries.

Readers are encouraged to reproduce material from DEGRP publications for their own outputs, as

long as they are not being sold commercially, and as long as there is due acknowledgement. For online

use, we ask readers to link to the original resource on the DEGRP website.

Cover image: Textile factory worker, Ethiopia, 2019 ? Davide Scalenghe.

All photos taken by Davide Scalenghe in this report are part of the SOAS project

Industrial development, construction and employment in africa.

About the authors

Linda Calabrese is Research Fellow in the International Economic Development Group at ODI and the

Evidence and Policy Group (EPG) China-Africa lead.

Tang Xiaoyang is Associate Professor in the Department of International Relations at Tsinghua

University and Deputy Director at the Carnegie-Tsinghua Center for Global Policy. His research

interests include political philosophy, China¡¯s engagement in Africa and the modernisation process of

the developing countries.

Acknowledgements

This report synthesises research undertaken by the DFID-ESRC Growth Research Programme (DEGRP).

The authors would like to thank DEGRP researchers and all the participants of the workshop held at

ODI on 20 September 2019 for contributing to shaping the concept of this synthesis, and participants to

the peer review roundtable held on 14 May 2020, for helpful comments and feedback on the report. The

authors would also like to acknowledge the support received from DFID and ESRC.

We would also like to thank DEGRP¡¯s Evidence and Policy Group at ODI, in particular Louise Shaxson,

Aaron Bailey-Athias, Dirk Willem te Velde, Elaine Antwi, Harriet Flower and Amanda Jones, for support

throughout the process. Errors and omissions remain our own.

3

CONTENTS

About the authors

3

Acknowledgements

3

Acronyms

5

Summary

6

1.

Introduction

9

2.

The DEGRP research

10

3.

Africa¡¯s economic transformation and Chinese investment:

the micro evidence

15

Africa¡¯s economic transformation and Chinese investment:

the macro evidence

21

4.

5.

Politics and institutions

26

6.

Conclusions, policy recommendations and research gaps

28

References

32

LIST OF BOXES AND FIGURES

Boxes

Box 1 The DEGRP research

14

Figures

Figure 1 African imports from and export to China, and trade balance,

2000¨C2018

Figure 2 China¡¯s FDI flows to Africa, 2003¨C2018

4

AFRICA¡¯S ECONOMIC TRANSFORMATION: THE ROLE OF CHINESE INVESTMENT

10

11

Acronyms

CHINCA

China International Contractors Association

DEGRP

DFID-ESRC Growth Research Programme

FDI

foreign direct investment

IDCEA

Industrial Development, Construction and Employment in Africa

OECD

Organisation for Economic Co-operation and Development

SOE

state-owned enterprise

UN

United Nations

5

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