Ethiopian Review

By James Lamont and Geoff Dyer

The World Bank and China are in discussions about setting up low-cost factories in industrial zones in Africa to help the continent develop a manufacturing base and reverse its declining share of global trade.

Robert Zoellick, the president of the World Bank, said Beijing had shown “strong interest” in the proposals.

“There is not only willingness but strong interest among some in China and I’ve discussed with the minister of commerce, Chen Deming, that there may be possibilities of moving some of the lower-value manufacturing facilities to sub-Saharan Africa, toys or footwear,” Mr Zoellick told the Financial Times in an interview. Chinese officials have been debating proposals to use the country’s vast foreign exchange reserves to stimulate demand in developing countries – ideas sometimes referred to as ‘China’s Marshall Plan’.

Last month, Wen Jiabao, China’s premier, pledged $10bn in low-cost loans over the next three years, the elimination of tariffs on 60 per cent of exports from leastdeveloped nations and debt forgiveness for several countries.

Beijing’s government-to-government deals have in the past attracted criticism for propping up unpopular regimes. Some African leaders have voiced fears that Chinese competition was undercutting Africa’s weak industrial base. Chinese officials are also worried that their growing relationship with Africa will be seen as a new form of colonialism. … continue reading