Former World Bank chief economist says China should move factories to Africa
Here’s an interesting morning snippet that’s doing the rounds of the Chinese dailies – apparently Justin Yifu Lin, a former chief economist at the World Bank – gave a speech yesterday at the annual China International Fair for Investment and Trade, in which he encouraged local manufacturers to consider moving labour intensive factories to the African continent. There’s been a lot of talk lately about the Chinese economy slowing down as labour costs rise, while Sino-African trade is booming. The sensible thing to do, says Lin, is to start outsourcing “low margin” production to Africa and focus on the top end of the skills chain in China.
From China Daily:
Rising labor costs are pinching businesses that relied on China’s cheap workforce for years. Many labor-intensive businesses have already relocated to Vietnam, Cambodia, Myanmar and other South Asian nations.
In Lin’s view, Africa is the obvious choice. “Africa has about 1 billion people and very young labor force. It’s just like China in the 1980s. There is substantial room in Africa to accommodate China’s labor intensive manufacturing,” he said.
Read the full story over here.
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