China and Industrial Policy in the South

The Huajian factory outside Addis Ababa [The Economist]

What I'm reading:  A new paper by Daniel Poon at UNCTAD: China's Development Trajectory: a Strategic Opening for Industrial Policy in the South, UNCTAD, December 2014.

Poon points out that China is at a crucial crossroad, serving at the same time as the world's low-end workshop and its most prominent proponent of industrial policy. China wants to move up the value chain, and Poon says: “The gap between China’s industrial ambitions and its current capabilities provides a strategic opening for other developing countries to bargain for enhanced opportunities for domestic investment, learning, technical change and structural transformation.”

This paper helps frame the work on Chinese industrial investment in Ethiopia that we are doing at SAIS-CARI. I am just back from Addis-Ababa where we interviewed a number of firms in the leather sector with some kind of skill-building or technology-transfer linkage with China. Fascinating.