With the reduction of China's cheap labor, the rising production costs of electricity and water, and increasingly strict environmental regulations, most of the “ Made in China †is now moving towards Africa, which is the next stage of China's foreign investment. - Investment in manufacturing.
The reason why Africa is chosen is because there is a huge amount of cheap labor in the local area. Although the current local staff in Africa are less proficient in operation and productivity, according to the World Bank, their production efficiency is only half that of Chinese workers, but local wages are only one-tenth that of local Chinese employees. Companies can use more employers to bridge the gap in productivity. For example, Hisson, a Chinese home appliance company based in Cape Town, South Africa, employs more than twice as many employees to reach production targets.
Second, because it can be used in the name of “African manufacturing†to bypass the various regulations imposed by the United States and Europe to contain China. At present, Chinese manufacturers have adopted African production bases as sales bases in Europe and North America.
Third, Africa can not only become a producer, but also the potential to become a consumer. Six of the 10 countries that have developed rapidly around the world are in Africa. Ethiopia’s growth rate will also exceed 10%. And there is a large population here. Nigeria has a population of 170 million and Ethiopia has 96 million. According to reports, the Chinese garment export enterprises will be filled with container exports to Ethiopia clothing, the results sold out within two weeks. At the same time, since nearly 80% of the economically active population in African countries are engaged in the primary industry, they have the conditions to carry out labor-intensive manufacturing.
In fact, the African market is like China 30 years ago. It is eager to invest in foreign capital and actively promote the development of the country to achieve an improvement in the local industrial structure. Although there has been a return of private entrepreneurs and state-owned enterprise employees in Africa in recent years, and the direct decline in China’s direct investment in Africa in the past year or two. However, in the medium and long term, under the model of mutual benefit between China and Africa, the "Made in China" migration will continue, and Africa will gradually become a new manufacturing base and consumer market.
Ethiopian cars rely on imports , and Ethiopia imports various goods, cars, clothing, etc. through the port of Djibouti. Among the enterprises in the Ethiopian Oriental Industrial Park, there are Zhongyu Cement, Great Wall Packaging Materials, Lifan Motors, Oriental Spinning and Printing and Dyeing Company. Lifan Group created the Ethiopian automobile brand and sold the whole vehicle to the Ethiopian market through the assembly of parts.
Textiles and clothing is one of the few commodities of Ethiopia's industrial development strategy. Ethiopia's state-owned textile and garment enterprises are not efficient and labor costs are low. In Ethiopia's clothing procurement enterprises, the average wage of workers is only about 50 US dollars, far lower than Kenya, Bangladesh, Countries such as Vietnam. In Ethiopia, with a population of 100 million people, infrastructure development and trucking factors have made Ethiopia a potential to become a clothing procurement centre for the Middle East market.
Ethiopian cars and garments enter through the port of Djibouti, through Dere Dawa and Mieso, to reach the Arabes and Ababa areas. The Ethiopian market needs the import of European and American markets to promote the development of the textile and garment industry, from fiber fabric imports to garment manufacturing. ,to satisfy the market's needs. Most of the production is still foreign, and Ethiopia is driving production by attracting retailers.
Since the 1990s, the global textile industry has spread to the Asian market. With the growth of textile and apparel costs, companies are looking for new business opportunities. East Africa is a potential investment destination, and global value chains provide opportunities for developing Chinese countries. apparel production is no longer cheap labor-intensive, cutting and sewing operations of increasingly intelligent machines, textile industry usher in growth opportunities in Ethiopia.
Through the establishment of manufacturing bases in industrial parks, Ethiopia established the first textile enterprise in 1939. In 2003, the Textile and Apparel Merchants Association was established. Ethiopia will also become the hub of the African textile and apparel market. Ethiopia's climate and soil environment are suitable for growing cotton and have larger cotton. Cultivate market potential. Ethiopia to provide cheaper electricity and water supply and environmental protection, labor costs are higher than the African average.
Asian companies and the Ethiopian market, Asian textile and garment companies and Ethiopian companies not only promote technical cooperation, promote the development of Ethiopia's textile and garment industry, but also contribute to the export of textiles and garments to Africa and the wider market in the Middle East. Ethiopia needs to introduce technology and raw materials. Asian textile and apparel companies may also welcome export opportunities in the Middle East market in Ethiopia.
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