Divergent Paths of Industrial Transformation: Understanding Africa’s Low Manufacturing Value Added in Contrast to China’s Rise

The divergent industrial trajectories of Africa and China remain one of the most consequential developments in the global political economy. Although both regions entered the late twentieth century with aspirations for structural transformation, their outcomes could not be more different. China emerged as the world’s pre‑eminent manufacturing hub, contributing more than a quarter of global manufacturing value added by the 2010s, while Africa’s share stagnated or declined despite rapid population growth and increasing integration into global markets. This divergence is not simply a story of success versus failure. It reflects deep structural asymmetries, contrasting policy regimes, unequal power within global value chains, and the historical legacies that shaped each region’s capacity to industrialise.

China’s starting point in the late 1970s was characterised by a unified domestic market, a strong central state, and a political commitment to long‑term development planning. Land reform, literacy campaigns, and early protection of infant industries created a broad productive base from which industrialisation could proceed (Naughton, 2007). The Chinese state deployed a sequenced industrial strategy that combined export‑oriented growth with domestic capability building. Special economic zones attracted foreign investment under conditions that preserved state control, while technology‑transfer requirements and joint ventures enabled domestic firms to learn from multinational partners (Breslin, 2016). State‑owned banks channelled credit to priority sectors, and local governments competed to attract manufacturing investment, creating dense industrial clusters and supplier networks. Liberalisation was gradual rather than abrupt, allowing institutions and firms to adapt over time.

Africa’s historical starting point was fundamentally different. Colonial rule had structured most African economies around extraction rather than production, leaving behind fragmented markets, weak fiscal capacity, and infrastructure designed to move commodities to ports rather than support industrial ecosystems (Mkandawire, 2015). The post‑independence period saw attempts at state‑led industrialisation, but these efforts were undermined by narrow tax bases, political instability, and external pressures. From the 1980s onwards, structural adjustment programmes imposed by the IMF and World Bank dismantled many of the industrial policy tools that East Asian economies had used successfully. Tariffs were reduced prematurely, subsidies were removed, and state‑owned enterprises were privatised, often without creating viable domestic alternatives (Rodrik, 2018). The result was a hollowing out of manufacturing capacity and a policy environment in which long‑term industrial planning became difficult.

The contrasting policy regimes of China and Africa shaped their insertion into global value chains. China entered global markets strategically, initially specialising in low‑value assembly but rapidly upgrading into higher‑value activities such as design, branding, and capital goods production (Gereffi, 2019). Its control over logistics, ports, and industrial zones gave it bargaining power in negotiations with multinational firms. By contrast, Africa’s integration into global value chains has been largely peripheral. Many African economies remain dependent on commodity exports, with limited backward and forward linkages into domestic manufacturing. Foreign firms often control logistics, shipping, and export channels, and industrial zones frequently operate as enclaves with minimal spillovers into the wider economy (Whitfield et al., 2021). Even when manufacturing exports increase, the value added captured domestically remains low.

Market size and infrastructure further reinforce these divergent outcomes. China’s vast domestic market enabled firms to achieve economies of scale before competing globally. Massive state investment in transport, energy, and digital infrastructure created an environment in which manufacturing could flourish. Africa, by contrast, faces high transport costs, unreliable electricity, and fragmented markets shaped by colonial borders. The absence of dense supplier networks makes it difficult for firms to upgrade or compete internationally. Infrastructure investment has often prioritised extractive sectors rather than diversified production, perpetuating structural dependence.

Finance and capital flows also play a decisive role. China’s state‑controlled financial system directed credit to manufacturing and maintained capital controls that prevented destabilising outflows. High domestic savings provided a stable source of investment. African financial systems, by contrast, remain shallow, with high interest rates and short‑term lending horizons. Capital flight drains investable resources, while foreign direct investment is disproportionately concentrated in extractive industries rather than manufacturing (Ndikumana & Boyce, 2011). These dynamics shape the investment horizon: long‑term and developmental in China, short‑term and extractive in much of Africa.

Labour, skills, and technological capabilities further differentiate the two trajectories. China invested heavily in technical education and vocational training, enabling rapid learning and technology diffusion. Labour‑intensive manufacturing absorbed millions of rural workers, creating a virtuous cycle of productivity growth and capability accumulation. In Africa, skills mismatches persist, and manufacturing remains too small to generate the learning spillovers necessary for sustained upgrading. Capabilities accumulate where production happens; Africa’s low manufacturing value added reflects a capability trap in which limited production constrains learning, and limited learning constrains production.

Geopolitics and the international system also shaped the divergence. China benefited from Cold War dynamics that encouraged Western support for its integration into the global economy. Its accession to the WTO in 2001 accelerated export growth and consolidated its position in global manufacturing. African states, by contrast, have often been subject to externally imposed policy regimes that limit their industrial policy space. Trade agreements, donor conditionalities, and dependence on external finance constrain the ability of African governments to pursue long‑term industrial strategies. Commodity price volatility further exposes African economies to external shocks, reinforcing structural vulnerability.

Taken together, these factors explain why manufacturing value added remains low in Africa. The combination of structural adjustment, weak industrial ecosystems, peripheral global value chain integration, limited policy space, fragmented markets, high logistics costs, capital flight, and extractive investment patterns creates systemic barriers to industrialisation. These barriers are structural rather than cultural, reflecting historical legacies and contemporary power relations in the global economy.

Yet divergence is not destiny. Emerging opportunities in green industrialisation, regional value chains, digital manufacturing, and the African Continental Free Trade Area (AfCFTA) offer new pathways for transformation. Reclaiming industrial policy space, strengthening domestic firms, building regional logistics corridors, and negotiating better terms within global value chains are essential steps. China’s experience demonstrates what is possible when policy autonomy, long‑term planning, and strategic integration align. Africa’s challenge is not to replicate China’s model but to craft its own industrial future under different global constraints.

References

Breslin, S. (2016) China and the Global Political Economy. London: Palgrave Macmillan.

Gereffi, G. (2019) Global Value Chains and Development: Redefining the Contours of 21st Century Capitalism. Cambridge: Cambridge University Press.

Mkandawire, T. (2015) ‘Neopatrimonialism and the Political Economy of Economic Performance in Africa: Critical Reflections’, World Politics, 67(3), pp. 563–612.

Naughton, B. (2007) The Chinese Economy: Transitions and Growth. Cambridge, MA: MIT Press.

Ndikumana, L. and Boyce, J. (2011) Africa’s Odious Debts: How Foreign Loans and Capital Flight Bled a Continent. London: Zed Books.

Rodrik, D. (2018) ‘An African Growth Miracle?’, Journal of African Economies, 27(1), pp. 10–27.

Whitfield, L., Staritz, C. and Morris, M. (2021) Global Value Chains, Industrial Policy, and Economic Upgrading in Africa. Cambridge: Cambridge University Press.