title: The Dynamics of Chinese Private Outward Foreign Direct Investment in Ethiopia: A Comparison of the Light Manufacturing Industry and the Construction Materials Industry
Creators: name: Chen, Weiwei
Publisher: name: School of Oriental and African Studies, University of London
Year: 2021

description: Chinese outward foreign direct investment (OFDI) in Africa has increased significantly following the turn of the century. With the increasingly supportive ‘Going Out’ (zou chu qu) policy promoted by the Chinese government, ferocious competition in the domestic market due to rising globalisation and the experience and skills that Chinese private firms have accumulated, private OFDI in Africa is becoming less one-dimensional and growing increasingly dynamic. This research will take Ethiopia as a case study, employing a comparative analysis of the light manufacturing industry and construction materials industry to explore the nature and dynamics of Chinese private investment. To do so, it assesses the micro-firm level through the perspectives of economic geography, economic sociology and political economy, taking a mixed research methods approach. For the most part, qualitative research (e.g. comparative ethnographic studies) and quantitative research (e.g. statistical analysis) will be employed to ensure its in-depth coverage of not only the behaviour of Chinese private investors and other actors, but also the relevant linkages with sector structures and dynamics (in particular in relation to markets and products) and global/domestic production networks, as well as national (and sub-national) policies, institutions and organisations. This thesis offers new empirical evidence on the nature of Chinese private investment in Ethiopia, its diversity and its evolution since its inception in the early 2010s. This thesis argues that Chinese private investment in Ethiopia is highly diverse, fluid and complex, not liable to simple characterisations. There are varieties of Chinese private capital that have emerged and developed in the past four decades. Their investments in Ethiopia follow different trajectories. Nonetheless, Chinese private firms are, above all, capitalist enterprises moving overseas, and, like global private capital, their ‘Going Out’ primarily follows a profit-seeking and market-seeking logic. Their trajectories towards these broader goals vary and depend on the type of firm (in terms of origin, history and scale), the entrepreneur’s background (family, education and work experience) and guanxi networks. Moreover, both national and sub-national political economy conditions of the home and host country shape these diverse trajectories. Firms’ improvisation and adaptation on the ground establish new forms of capital, labour, state and institutional relations. These firms are also subject to the host country’s political and social pressures to a greater degree. Moreover, the relations between Chinese private businesses and the state (host country state in particular) are not always harmonious. Rather, they are complex and subject to contradictions. These connections are manifested in various forms (both formal and informal) and indicate an ongoing learning process for all actors, which continually generates new conflicts, contractions, opportunities and cooperation.