The Chinese factory owners seeking fortunes in Africa

{"text":[[{"start":7.14,"text":"In the search for fertile ground to plant a vast new garments factory for Shanghai-listed Zhende Medical, Wu Jianfei scoured south-east Asia before considering Morocco, Egypt, Ethiopia and Kenya."}],[{"start":19.76,"text":"He settled on a plot in Tatu City, on the periphery of Kenya’s sprawling capital Nairobi, joining hundreds of thousands of Chinese traders and entrepreneurs who migrated in the slipstream of the sovereign debt and infrastructure deals that characterised Beijing’s push into Africa earlier this century."}],[{"start":37.3,"text":"In between fields of coffee at Tatu, factories from China and elsewhere produce an array of products from solar panels to gas canisters and trucks in an old plantation repurposed as a special economic zone."}],[{"start":50.02,"text":"Their proliferating presence is emblematic of growing Chinese investment in mining, green energy and manufacturing in Africa, often led by private companies, after years in which state-funded infrastructure projects were the most visible symbol of Beijing’s engagement."}],[{"start":64.44,"text":"The total value of China’s direct investment in African manufacturing stood at almost $8bn in 2025, up more than 50 per cent from 2016, according to China’s commerce ministry."}],[{"start":null,"text":""}],[{"start":76.72,"text":"Alongside neighbouring Tanzania and Uganda, Kenya — which hosted the first Chinese explorers to Africa at Lamu in the 15th century — has quietly emerged as one of the top destinations in Africa for Chinese investors such as Wu, pouring long-term capital and knowhow into manufacturing."}],[{"start":93.92,"text":"According to the Kenyan Investment Authority, more than 350 Chinese companies are operating in the country, covering projects with an announced value of $11bn. Of these, more than half are in manufacturing."}],[{"start":null,"text":""}],[{"start":null,"text":""}],[{"start":106.48,"text":"In Tanzania, where labour and energy costs are significantly lower, a total of $12.5bn of Chinese capital has been committed since 2017, according to the Tanzania Investment Authority. Two-thirds of this is going into manufacturing."}],[{"start":120.88,"text":"The physical scale of these investments is often huge: two factories near Dar es Salaam, one producing ceramic tiles and glass, another steel, extend for more than 1km each."}],[{"start":131.84,"text":"Another — set to produce $300mn of solar panels a year for the US market — “will triple our exports” under the US African Growth and Opportunity Act (Agoa), which gives African exporters tariff-free access, according to Gilead Teri, head of the TIA."}],[{"start":null,"text":""}],[{"start":147.04,"text":"While Chinese investment is often matched by European and US inflows into the region, it is the Chinese who are creating the most jobs, he said, adding 150,000 have been created in manufacturing in Tanzania."}],[{"start":159.76,"text":"The influx of Chinese capital has been fuelled as much by overcapacity and dwindling profits back home as it has by cheaper labour, abundant resources and preferential access to western markets in east Africa, Teri said."}],[{"start":173.34,"text":"It has also been underpinned by the gathering pace of relations between China and Africa. Trade between the two reached $348bn in 2025, a rise of 17.7 per cent on 2024."}],[{"start":187.48,"text":"Data from Rhodium Group, a US research firm that monitors Chinese investment worldwide, shows that in the early 2010s, Chinese funding in Africa concentrated on projects tied to natural resource extraction. Last year, however, investment in manufacturing and processing reached $7.7bn, exceeding the $4.8bn invested in extraction."}],[{"start":null,"text":""}],[{"start":209.64,"text":"Growing numbers of Chinese are arriving on the continent seeking opportunity, with African countries standing to benefit from the jobs created when Chinese companies migrate, the shift up the economic value chain and the development of regional supply chains."}],[{"start":224.16,"text":"“They are now making everything to do with consumer goods, from plastic buckets to leather shoes, sanitary pads, nappies, glass, construction materials,” said Linda Calabrese, a specialist in China-Africa trade at the ODI, formerly known as the Overseas Development Institute, in London."}],[{"start":240.92,"text":"Zhende’s subsidiary factory was built at Tatu City in 2022. It manufactures surgical gowns, wound dressings and other disposable medical products for export to the rest of Africa, the US and Europe."}],[{"start":253.58,"text":"Wu said he was drawn to Kenya over the other African countries he looked at by its logistics infrastructure and port at Mombasa, the tax, customs and other incentives offered at special economic zones and the country’s neutrality when it comes to great-power geopolitics."}],[{"start":267.76,"text":"“Kenya is a relatively neutral country; it leans towards neither China nor the United States, which offers a stable environment for investors like us,” he said."}],[{"start":278,"text":"Labour and land costs were too high in Morocco, bureaucracy was too “complicated” in Egypt, and Ethiopia — after the 2020-2022 civil war — had proved unstable, losing its preferential tariff access to the US under Agoa."}],[{"start":291.64,"text":"The Zhende plant is in the second phase of a $100mn investment in which 8,000 jobs are expected to be created overall."}],[{"start":null,"text":""}],[{"start":null,"text":""}],[{"start":300.56,"text":"In a move emblematic of the organic way that Chinese companies often spread across supply chains, Wu left last year to start up his own business — a printing, labelling and cardboard packaging factory adjoining the site."}],[{"start":313.6,"text":"He said he plans to take advantage of a “$200mn gap in the regional market” for high-quality packaging."}],[{"start":320.52,"text":"Electricity and other input costs remain an obstacle to industrialisation, as does the fragmented nature of African markets."}],[{"start":327.4,"text":"But Kenya has also begun to draw in some textile companies migrating from south-east Asia, spurred by US President Donald Trump’s renewed tariff wars."}],[{"start":338.8,"text":"Electric-car makers are following. This month the government agreed the framework of a $3bn deal under which the Geely Auto Group would develop plants for assembling 50,000 cars and 100,000 motorbikes a year and build a nationwide network of solar charging hubs."}],[{"start":352.88,"text":"As well as big-ticket projects such as Geely’s, there has been an influx over the past decade of much smaller businesses into the region, contributing to a growing Chinese population in Kenya estimated at 50,000 — one of the largest in Africa."}],[{"start":null,"text":""}],[{"start":null,"text":""}],[{"start":366.92,"text":"A Chinese consultant in Nairobi, who asked not to be named, said more than 100 Chinese companies are operating in wood processing in Kenya, Tanzania and Uganda, for example."}],[{"start":378.36,"text":"“In the beginning the pull factor was stronger. People saw east Africa as an untapped resource base where nobody was doing processing,” the consultant said. “There is more timber than what the market needs. There is massive land, cheap labour. And back then, 10 years ago, it wasn’t super competitive.”"}],[{"start":395.16,"text":"Today, the market is “quite saturated”, she said, and the small fortunes that early movers made are much harder to achieve."}],[{"start":402.88,"text":"Some companies have begun investing as a result in more sophisticated machinery, sending higher-quality wood exports to Europe. Others have sought to expand their market for plywood and other basic products around the region. But some, who had begun by producing basic veneers, have been driven out of business."}],[{"start":421,"text":"Still the flow continues, she said. “What is encouraging them now is more the push factor. China is not doing super well. Our real estate sector had large bubbles so a lot of projects shut down, consumption is slowing — we are not in that stage of rapid development.”"}],[{"start":434.48,"text":"The building boom in east Africa is by contrast gathering pace."}],[{"start":439.12,"text":"“Kenya’s demand is structural. The national housing shortage has exceeded 2mn units. And the urbanisation rate is one of the fastest in the world,” said Lyu Liangjie, who is developing 54,000 square metres of residential and office space in Tatu City."}],[{"start":455.28,"text":"“In Tatu City, Chinese companies have already formed a considerable presence,” he said. “They’ve created nearly 10,000 local jobs.”"}],[{"start":463.84,"text":"Graphics by Haohsiang Ko"}],[{"start":469.12,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1792661344_3214.mp3"}