“The reason we chose Ethiopia as our first overseas factory is that it is relatively stable throughout Africa,” Zhao Jiang, director of operations of Sunshine Ethiopia Wool Textile, told CGTN, noting that the country is rich in human resources with a labor force of over 50 million.
It also has abundant water and power resources, without any tariffs when exporting to Europe and America, he added.
Chinese Textile Investment Expands in Ethiopia
According to Zhao, they began considering establishing their first overseas factory in Ethiopia in 2015, thinking about the increasing labor cost in the domestic and preferential policies under the BRI.
“We got green lights all the way on our project approval, whether from the National Development and Reform Commission (NDRC) or the Ministry of Commerce (MOFCOM). And MOFCOM has offered certain subsidies for our upfront investment,” he commented.
According to MOFCOM, the total of FDI outflows worldwide in 2018 decreased by 29 percent year on year, falling for three consecutive years, while China was up to the second-largest foreign investor, with the outward FDI flows reaching 143 billion U.S. dollars.
What’s more, the outward FDI stock of China at the end of 2018 was 66.3 times that of 2002, ranking third among all countries and regions, up from 25th place in 2002.
Despite Africa also facing a sharp fall in global investment, Jiangsu Sunshine Group decided to expand production in Ethiopia by about a third by the end of 2018.
Zhao told CGTN that recruitment in Ethiopia received an overwhelming response as locals believe that it is good to go to China to train or work in the factory.
“Three batches of 145 Ethiopian undergraduates were recruited for one-year training in China and the first batch has gone back to Ethiopia in March,” he cited.
“They started off with the basics, the production line, and made significant progress,” he said, explaining that most of them have basically accepted the company’s management model as well as the diligent spirit of the Chinese people after a year of living in China.
He held that the current development of Ethiopia is the same as during the early stage of China’s reform and opening-up.
“We brought technology and management to them after going there… we’ll withdraw 70-80 percent of the Chinese personnel within three years. And the salary of college students entering our factory is 40-50 percent higher than that of local civil servants,” he commented.
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