Business Intelligence

Industrial Upgrading In Sub-Saharan Africa: The Competitive Impact Of China On Supplier Linkage Development Potentials Of Resident Asian Entepreneurs

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Executive Summary

Current efforts to explain the implications of China's growing economic attractiveness for development in other regions provide a framework that distinguishes between complimentary and competitive impact. From the perspective of competitive impact analysis its direct trade related manifestation arguably remains the least investigated to date. Focusing on the experience of sub-Saharan Africa, the authors explore the connection between importation of Chinese apparel intermediate material input and domestic supplier development (displacement) in the region. Insights from the GVC literature are used to motivate the working hypothesis of the paper that the potential spillover impact of Asian direct investment on local supplier development in Africa is currently being undermined by the former's reliance on intermediate material imports from China.

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