Book Review — The Next Factory of the World by Irene Yuan Sun
In October 2019, I finished Irene’s Sun’s “The Next Factory of the World — How Chinese Investment is Reshaping Africa”.
It is a book about how the Chinese are working alongside African businessmen, climbers, dreamers and every day citizen to change the economic landscape of the continent. It’s a book of hope on how Africa can benefit from the recent success of China in creating enduring factories for the benefit of Africa and the world.
Unlike what a lot of people think, an overwhelming number of Chinese companies in Africa are not state-owned. They are owed by tenacious businessmen looking for cheaper means of production due to rising labour costs and increasing competition in China. They are grinding it out. A lot of them have failed and continue to fail but the few that succeed tend to do so spectacularly.
You will be entertained by the story of a third-generation owner of one of the largest privately held firms in Nigeria, whose family came to Nigeria fifty years ago from China. Having made Nigeria their home, they send their kids abroad to study in the best schools in the world, but ultimately have them come back to live in Nigeria to run the businesses.
It is to be noted that this is not the first time Africa seems poised for an industrial take-off. Industrialists, from China and other places, had first showed up in the 1960s. It was especially good for Nigeria, with the country benefiting from having a vibrant textile industry, producing half the cotton cloth in all of West Africa, having its clothes prized in sophisticated markets and being the largest private employer of labour.
But the following years brought devastating shocks: a macroeconomic crisis, worsening government corruption and ineptitude, and increasingly fierce global competition. As a whole, Africa de-industrialized. Although manufacturing represented a respectable 10% of its national GDP in 1960, the share was down to 2% by 2010. This is emblematic of trends across the continent. Those who came for the ‘Gold’ rush ‘perished’ and had to tuck tails behind their legs and run.
But entrepreneurs seem to always eat optimism for breakfast. Chinese companies have sensed the opportunity for business again, especially with the tariff-free access to American and Asian markets, and are back in droves. Across Africa, there are already three to four thousand Chinese manufacturers. Hundreds of them were surveyed for the book and nearly all those firms are privately owned as opposed to being Chinese state-owned enterprises (SOEs), suggesting that these investments are driven by profit motives rather than by government directives. This may surprise readers familiar with reports that emphasize links between the Chinese government and Chinese business in Africa.
The book also touches on a common perception in Africa and the sentiment in African media that Chinese firms don’t hire Africans. Numerous studies have debunked this. Chinese companies in Africa overwhelmingly hire locals. Across a sample size of more than 1,000 Chinese firms employing more than 300,000 people, 89% of employees were Africans. In manufacturing, this proportion is even higher, at 95%. Moreover, other studies show that the longer Chinese companies operate in Africa, the higher their proportion of local hires.
And with this comes the main reason I picked up the book: How can Africans benefit from the success of Chinese in Africa and learn from their failures? African nations already have some of the highest unemployment rates in the world, with an overwhelming majority of them in their teens and early twenties.
First, we need to understand how important manufacturing is. Manufacturing drives demand for other jobs: for every manufacturing job that’s created, 1.6 service jobs follow. You may also be surprised that good factory jobs are one of the few ways that Africa can realistically make up for its bad schools. An average factory work requires no academic qualifications, yet the worker can progress to top management learning on the job.
As some of the stories in the book show, if young Africans taking factory jobs understand that such jobs open up tremendous entrepreneurial opportunities for them, they may be inclined to take the jobs more seriously. They should understand that some of the most successful Chinese factory owners were themselves factory workers. They learnt on the job.
In making this argument for Africans, Irene also touched on the tendency of Chinese managers to term African workers lazy, forgetting that ‘laziness’ is a universal quality that reflects the timeless tensions of industrialization. It’s not easy to get used to factory jobs. At the height of the Industrial Revolution, English workers were not only lazy on the job but also missed entire days of work; Mondays in particular were popular for not showing up. But the factories molded them and it was soon the turn of the Germans whose scholars considered “difficult to work with”. Productivity was so low that factory owners in Germany were described as casting “admiring and envious glances…across the Channel at the English industrial worker.” Fast forward a century, and the same complaints abound in the early days of Chinese industrialization. In 1991, the Wall Street Journal reported that the “Chinese lack work ethic…Most Chinese employees spend as much as half their eight-hour workdays goofing off.”
The point is that factory owners have always complained about their workers during the early phases of industrialization, and Chinese bosses in Africa today are no exception. That’s because they’re accustomed to managing workers from their own country. Both the African worker and the Chinese owner reach for race as the explanation, when in fact the new workers simply haven’t been industrialized as long as workers in their home country have.
My criticism: To get me past the first chapter, I had to forgive its dreadful economics, especially about the consequences of structural transformation programs in Africa. I also had to get through her narrative that the West has been tried and has failed, thus cannot be learned from. Her notion that Africa can only learn from China is misguided seeing that she alluded to successful Indian and Lebanese companies across the continent.
But forgive all these and you are treated to stories of human possibilities and economic triumph of individual people in Africa.
Chinese companies, despite their many failures, have a personal willingness to be in Africa as it is, as well as a fearlessness about building its future, come what may. Some of the owners and workers look at Africa and comment that they have seen worse poverty, failure and bureaucracy where they are coming from, and have a firm belief that the future can be great. Some of them have even renounced American citizenship in favour of citizenship of African countries. Balls!
Talk about words backed by actions. But do Africans believe as much as them? If not, progress would be a herculean task. History shows that no country becomes great without the belief and efforts of its citizens.
