With the increasing presence of Chinese investment in Sub-Saharan Africa, its political-economic impact on African countries’ industrialisation and economic development has become more significant. However, few studies have been conducted regarding the role of the Chinese private sector with its OFDI to Africa.. Since Chinese private firms’ globalisation and their OFDI, particularly in Africa, is a new and on-going phenomenon, data regarding Chinese private OFDI to Africa is either problematic or unreliable. This paper aims to fill this gap by examining the role that Chinese private FDI is playing in accelerating the industrialization of Ethiopia and advancing the host country’s economic transformation.
This paper argues that the interactions between Chinese investors/employers, labour and the state are far more complicated than previous academic studies have perceived. The paper demonstrates this by looking at the dynamics of Chinese private FDI in Ethiopia and its political economic implications. It is argued that Chinese private investment in Ethiopia is highly dynamic and responds actively and flexibly to the structural transformation aspirations of the Ethiopian government. Furthermore, the study finds out that investment trajectories of Chinese private firms in Ethiopia’s manufacturing industry differ not only with respect to attributes of investors’ own personal educational background, working experience and regional/ provincial government policy in his/her hometown, but also due to the politics and relations between investors, host country state and local labour.