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Already, China is preparing to relocate 85 million light manufacturing jobs from higher-income East Asian economies, including its own, to Africa. This represents an important opportunity for Africa to create more and better employment opportunities for its citizens, thereby reducing poverty and supporting dynamic growth.
The process has already started, and early results are encouraging. In Ethiopia, in particular, Chinese investment is helping to realise the ambitious development goals laid out in the country’s Growth and Transformation Plan, and has contributed to Ethiopia’s emergence as one of Africa’s fastest-growing economies over the last decade.
But no single country – not even one as powerful as China – can offer enough support to ensure the success of an African industrial revolution. But there is at least one more country in a strong position to step up: Italy.
As Europe’s second-largest manufacturing powerhouse, Italy is home to numerous companies that lead global value chains, particularly in light manufacturing and agrifood. These firms have the power to boost international consumer confidence in products made in Africa and, eventually, in African brands.
Italy is a rarity in boasting hundreds of small and medium-size enterprises (SMEs) that are global leaders in their respective market niches. Many of these “pocket multinationals” have invested in China. And Chinese companies are increasingly investing in Italian SMEs to accumulate skills, acquire brands, and access new markets.
These linkages provide an ideal foundation for joint penetration of African markets and joint exploration of the continent’s potential as a global manufacturing hub. Together, Chinese and Italian firms can overcome the challenges posed by an unstable political environment and limited financial and human resources.
Such an approach would complement government-level cooperation aimed at removing economy-wide constraints to sustainable economic growth. And, in fact, their experience cooperating around the world means that China and Italy have strong government ties, underpinned by mutual trust and respect. In Lebanon, for example, 418 Chinese troops operated under Italian leadership as recently as last July, as part of the United Nations Interim Force.
It seems only fitting that China and Italy should work together to seize the opportunity presented by African industrialization, integrate the continent’s workers into global value chains, and ensure the fair distribution of the resulting gains. As Chinese President Xi Jinping and his Italian counterpart Sergio Mattarella prepare for a bilateral summit later this month, they would do well to add Africa’s industrialisation to their agenda.
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Justin Yifu Lin, former Chief Economist of the World Bank, is Director of the Center for New Structural Economics, Dean of the Institute of South South Cooperation and Development, and Honorary Dean at the National School of Development, Peking University. Andrea Goldstein, formerly with the OECD, UNESCAP, and the World Bank Group, is Managing Director of Nomisma in Bologna.
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Copyright: Project Syndicate, 2017.
www.project-syndicate.org
