Chinese Outward Manufacturing FDI in Africa: Performance, Policy Challenges, and Lessons

The final chapter presents propositions, lessons, and implication for policy. The book examines the factors that enabled Chinese manufacturing foreign direct investment (FDI), performance, and policy outcomes in Ethiopia. In addition to government policies and FDI promotion strategies, the sustained economic relationship between China and Ethiopia over the past two decades played a crucial role. The study draws on various disciplines, including development studies, development economics, international political economy, and international business. The Chinese firms that invested in Ethiopia’s manufacturing were privately owned, typically large, financially sound, and had prior experience in manufacturing and exporting. They were also aligned with the government’s industrial development and export-oriented strategy and integrated into global value chains (GVCs). Despite facing local challenges, these firms proved more adept at adapting to local conditions than their peers. However, the outcomes were not always as positive as anticipated. While these firms contributed to employment, localisation, and skill development, their domestic linkages and value addition were insufficient. The performance and outcome across sectors were uneven and mixed. Joint ventures and the development of managerial capabilities were also limited. The study underscores the importance of adopting a qualitative research strategy, using comparative case studies, and analysing Chinese FDI in Africa from multiple levels. The research also highlights the need to examine variations and unevenness and their underlying drivers.