Road site crane
  1. The proportion of national (Ethiopian and Angolan) workers in the labour force is substantially higher than assumed in media perceptions. Our survey suggests that workforce localization rates are much higher than assumed. In Ethiopia about 90% of workers in Chinese firms were, in fact, Ethiopians. In Angola, where localization is more severely constrained by binding skill shortages, our estimated rates were close to 75%. We also found that localization had grown significantly in the previous 10 years as Chinese firms settled in the Angolan market, a trend that is shared by most other African countries, and that Chinese firms contributed to a large proportion of new jobs especially in construction.
  2. Wages in Chinese firms broadly similar to other top firms in the same sectors. One factor that contributes to wage variation is that in both countries there is significant labour force segmentation, especially in Angola, where Chinese firms tend to operate a ‘migrant dormitory regime, which includes food and accommodation in addition to cash wages, thereby attracting many young workers from the poorest provinces of the country. Our statistical analysis suggests that other key determinants of wages are the skill level of workers, job tenure in company (+); education (+); work experience (+); socio-economic status (+) and location effects, Once we take all these factors into account the origin of a firm does not impact on wages on average. In other words, wages in sampled Chinese firms were broadly similar to other top firms in the same sectors, once other worker and company characteristics are taken into account.
  3. Chinese firms contribute to training and skill development at least as much as other firms in the same sector, especially in the export-oriented manufacturing sector where organizational demands and skill requirements are more significant. Most of the training takes the form of on-site on the job practical training across a range of technical and ‘soft’ skills.
  4. We also found that new investors in manufacturing sectors in Ethiopia have created many jobs that are critical for the country’s employment challenge but, overall, working conditions could be improved in order to secure a more stable and committed industrial labour force. Better infrastructure around industrial parks as well as higher wages and suitable accommodation appear as key policy challenges to sustain the current process of industrialization in Ethiopia. In Angola, the government could emphasis labour outcomes more in their relations and bargaining with Chinese and other entreprises, especially in relation to skill development and localisation of the labour force, given that Chinese and other companies can adapt to a more demanding environment in terms of labour standards.

Video of presentation of findings

“Chinese firms and employment dynamics in Africa” was a workshop held at the Department of Development Studies, SOAS University of London on 27 June 2019.

In this workshop researchers from the IDCEA project (Industrial Development, Construction and Employment in Africa) presented the main findings of 4 years of research on employment patterns and outcomes in the infrastructure construction and manufacturing sectors in Angola and Ethiopia, where large-scale surveys of workers and extensive qualitative research were conducted between 2016 and 2018. Two discussants with substantial research experience on China-Africa themes also contributed with reflections on the main findings of this project and their implications for research and policy. The event was followed by a networking reception which included the exhibition of 25 photos taken from field sites in Angola and Ethiopia by Davide Scalenghe.