Can Africa compete with China in manufacturing? The role of relative unit labour costs
| Autor: | Ahmadou Aly Mbaye, Varun Prasad, Stephen S. Golub, Janet Ceglowski |
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| Rok vydání: | 2017 |
| Předmět: |
Economics and Econometrics
business.industry 050204 development studies 05 social sciences International economics International trade Unit (housing) Business climate Manufacturing sector Bilateral trade Accounting Cost competitiveness 0502 economics and business Political Science and International Relations Economics 050207 economics China business Productivity Finance |
| Zdroj: | The World Economy. 41:1508-1528 |
| ISSN: | 0378-5920 |
| DOI: | 10.1111/twec.12603 |
| Popis: | In this paper examine Sub-Saharan Africa’s (SSA) bilateral trade and cost competitiveness with China. We review patterns of bilateral trade between SSA and China, showing an extraordinary imbalance in the structure of trade in that China overwhelmingly exports manufactured products to SSA and almost exclusively imports primary products in return. Our principal means of assessing the competitiveness of SSA’s manufacturing sector vis-a-vis China are measures of relative unit labor costs (RULC). We find that African RULC levels have generally been very high relative to China, but declined over the 2000s as China’s wages have risen faster than Chinese productivity while the reverse is true for the SSA countries in our sample. Nevertheless RULC vis-a-vis China remained elevated for many SSA countries as of 2010. Generally high RULC along with weaknesses in the business climate suggest that most SSA countries are unlikely to be competitive in labor-intensive manufacturing any time soon. |
| Databáze: | OpenAIRE |
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