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Abstract
This paper examines China’s engagement with Africa through economic zones (EZs). It moves beyond the conceptualisation of EZs as undifferentiated enclaves of foreign investment to a dynamic perspective on the locally negotiated process of zone development. Such a perspective entails critical unpacking of the specific zone regime to understand the diverse and evolving relationships among different state and non-state actors. Drawing upon empirical research on the Eastern Industrial Zone (EIZ) in Ethiopia, we explore the complex process of learning and adaptation by government, developers, investors, and workers throughout the development of a zone regime, with specific attention to capital–labour and expatriate–local relations. We find that despite the EIZ being a state-level cooperation project, private Chinese developers work diligently with the Ethiopian government to improve the institutional support for EZs. Chinese investors also collectively generate a management regime to enhance their overseas operational capacity and experiment with various tactics to transform local recruits into an industrial workforce. Local workers, with limited protection by official labour unions, turn to individual- and group-based agency to improve their working conditions. Despite the momentum created by multiple stakeholders, there are concerns regarding the long-term contributions of EZs to engender sustained industrial transformation and skills development.
Acknowledgements
The authors thank Prof. Abdi I. Samatar and two anonymous reviewers for their comments on earlier drafts of the paper. The authors also thank Mekides Kumssa and Yoseph Weldemariam for their assistance in the field. The usual disclaimer applies.
Disclosure statement
No potential conflict of interest was reported by the authors.
Notes
1 The consortium consists of three private companies: Qiyuan Group, Yangyang Pipe-Making Company and Jianglian International Trading Company. Qiyuan Group is the lead developer, formed in 2006 by five private companies from Zhangjiagang, Jiangsu, that specialise in pipe-making, metallurgical equipment and steel products.
2 From the authors’ field research in 2014.
3 The term ‘industrial parks’ is widely used in Ethiopia’s policies and official documents. To remain consistent, the paper will continue to use the generic term ‘economic zones.’
4 For example, IPP requires developers to include domestic training institutions in the design of EZs, and operators to build linkages between resident companies and local businesses. Also, EZ developers, operators and resident companies can employ expatriates only for top management, supervisory or technical positions, and should commit to replacing expatriates with locals over time.
5 For example, developers are given income tax exemption for 10 years if building an EZ in Addis Ababa (and its surrounding special zone of Oromia), but for 15 years if EZs are built in other regions. The duration of land leasing is also longer for EZs in non-capital areas. In addition, a full exemption of customs duty on spare parts is granted to manufacturers who exclusively engage in export-oriented production, while partial exporters can receive exemptions only on parts equal to 15% of the total value of the capital goods. Manufacturers who export 80% of their products can enjoy additional years of income tax exemption. Moreover, priority is given to investment in agro-processing, textiles and garments, leather and leather products, sugar, chemicals, metal and pharmaceuticals.
6 Although bidding for zone construction is open to both local and international contractors, in practice, local companies can hardly compete with the more experienced and financially resourceful Chinese counterparts. The IPDC is reported to prefer awarding projects, from design to construction, to contractors who come with their own financial sources (Anberbir Citation2016; Tesfaye Citation2015). Other bidder qualifications include a minimum annual turnover of 6 billion Ethiopian Birr, prior experiences of building at least two EZs, and a sound local business record.
7 Data were compiled by the authors based on information from the IPDC website, interviews with key Chinese developers in Ethiopia and internal documents from the Ethiopian office of Chinese contractors/subcontractors.
8 For example, according to the official website of the EIZ, in less than four months’ time (late July to mid-November) in 2017, the zone hosted 17 official and business delegations from both countries.
9 Interview with a Chinese technician from a textile factory in EIZ, 2016, translated by the authors.
10 Interview with a Chinese technician from a garment factory in EIZ, 2016, translated by the authors.
11 The authors’ field research in 2017. Also discussed in Keyi Tang’s (Citation2019) working paper.
12 It is important to note that while certain consistencies in operational strategies exist, Chinese investors differ in the specific organisation of the production process. The variation is associated with the investors’ sectorial focus, market competitiveness, and industrial and institutional linkages. See Fei’s (Citation2018) working paper for a detailed discussion.
13 Our survey, however, captures more male than female respondents – 142 versus 62. Some female workers declined our survey request as they were in a rush to get home after work; some appeared very shy to talk to the researchers; and others were illiterate and could not read the survey form. To promote female representation, two local assistants worked with female participants by reading the survey to them and writing down their responses.
14 For example, a textile company employs six Chinese to supervise 500 locals. Besides a general manager, the remaining five Chinese are one accountant and four technicians who take turns supervising day and night shifts. Local management includes 10 local foremen who each manage 40–50 local workers. Arrangements of this kind are also found in other factories in the EIZ.
15 Such strict roles are imposed on both local workers and the Chinese technicians. For example, a textile company enforces the following rules upon its expatriates: ‘(1) Punching timecardbefore having breakfast is not allowed. Those who stay in the kitchen area after 7:30 am will be fined 100 Chinese Yuan (CNY). (2) Those arrive late for less than 30 minutes will be fined 100 CNY. Every additional 30 minutes will be fined an extra 100 CNY until reaching the day’s salary. (3) Those absent won’t receive salary for the day and will be fined an additional 100 CNY. (4) Smoking in the production area will be fined 1000 CNY. (5) Sleeping during the night shift will be fined 100 CNY.’
16 In Figure 4, the results are converted to numerical ranks and mapped out in two dimensions. The horizontal dimension reveals the total number of times (ie incidence) that one particular incentive or challenge was mentioned by workers. The vertical dimension shows the level of significance (ie rank) of the factor. It is calculated by rescaling the ordinal ranking into a 0–1 interval.
17 According to the World Bank, Ethiopia’s per-capita income was 590 U.S. Dollars in 2016.
18 Interview with a Chinese technician from a textile factory in EIZ, 2016, translated by the authors.
19 The frequent job-hopping, however, is inciting collective resistance from Chinese management. Chinese managers from a number of factories have reached a verbal consensus that they will not recruit local workers who quit other factories in the zone – although, in practice, it is hard for investors to track individual workers.
20 Interview with a Chinese manager from a textile factory in EIZ, 2016, translated by the authors.
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Notes on contributors
Ding Fei
Ding Fei is a development and economic geographer with research interests in the relationship among state, capital and human agency in the uneven process of China’s globalisation, and its implications for industrial transformation and local capacity building in the ‘Global South.’ Fei’s empirical research examines the variegated construction of local work regimes by globalised Chinese state and private capitals in Ethiopia, with case studies of Chinese companies operating in multiple sectors of overseas investment.
Chuan Liao
Chuan Liao is an assistant professor in the School of Sustainability at the Arizona State University. His research aims to understand relationships among land, rights and resources, as well as the causal mechanisms for achieving synergistic outcomes in agricultural production, environmental conservation and smallholder livelihoods. Much of his work focuses on empirically examining the complexity in the coupled natural–human systems to test and refine theories in both natural and social sciences.