China and latecomer-industrialisation processes in Sub-Saharan Africa: Situating the role of (industrial) policy

Abstract

This paper examines how China’s systemic impact on the world economy and growing presence in Sub-Sahara Africa (SSA) affects processes of structural change in SSA countries. It is argued that these effects depend both on their size and composition which varies across different SSA countries, as well as their mediation through domestic policy. This paper explores potential China-related effects on industrialisation processes in SSA as well as the role of (industrial) policy in mediating these effects. In particular, it is argued that capitalising on the full potential of domestic markets by strengthening intersectoral and final consumer demand becomes increasingly important in light of the more limited scope for export-led manufacturing sector growth stemming from China’s systemic impact on the world economy. The paper further proposes a framework to separate empirically the differences in manufacturing sector growth that can be explained by differences in the size and composition of various China-related effects from those resulting from differences in country-specific factors.

Keywords: Industrialization; China-Africa, Industrial policy