This book evaluates African Special Economic Zones from the perspective of learning from China’s experiences with such Zones and the impact of Chinese policy and investment on African Zones. Utilising case studies of perceived successful Special Economic Zones in China, the book proposes the Chinese Model of Special Economic Zones as an evaluation and benchmarking tool against which African Special Economic Zones are considered. Applying several case studies on African Special Economic Zones, the book then details the competitiveness of African Special Economic Zones with a specific focus on attracting Chinese investors to these Zones. The economic, social and environmental impact of these zones are appraised. African Nations’ efforts, or lack thereof, to enable successful Special Economic Zones are critically analysed. Finally, Special Economic Zones in Africa are compared against the Chinese Model; and an African Model of Special Economic Zones is proposed. Recommendations are presented to both African Nations’ leadership and Chinese policymakers and investors as to how these Zones can be improved to enhance competitiveness and the attainment of the Zones’ sustainable development objectives.
Author(s): Bryan Robinson
Publisher: Palgrave Macmillan
Year: 2022
Language: English
Pages: 479
City: Singapore
Preface
Acknowledgements
Definition of Special Economic Zones
Reference
Contents
List of Figures
List of Tables
Part I Context
1 Africa’s Economies
1.1 Africa: A Continent of Contrasts
1.2 The African Tree of Organic Growth
1.3 The State of African Economies and Economic Growth Prospects
1.4 Global, Regional and National Efforts to Stimulate Sustainable Economic Development in Africa
1.4.1 International and Regional Institutions for Development
1.4.1.1 World Bank
1.4.1.2 International Monetary Fund (IMF)
1.4.1.3 OECD
1.4.1.4 New Development Bank (NDB)
1.4.1.5 African Development Bank
1.4.1.6 African Union (AU)
1.4.2 National Development Finance Institutions
1.5 Foreign Direct Investment
1.6 What Is Needed to Shift Africa Towards Sustainable Development?
References
2 China’s Surge in Growth Facilitated by Special Economic Zones
2.1 Special Economic Zones: A Key Development Policy Instrument
2.2 Shenzhen Special Economic Zone
2.3 Chapter I—The Initial Phase: 1978–1992
2.4 Chapter II—Creating New Advantages, Making More Progress: 1992–2002
2.5 Chapter III—Braving a New Way with Scientific Development Outlook: 2002–2012
2.6 Zhuhai SEZ
2.7 Shantou Special Economic Zone
2.8 Conclusion
References
3 The Chinese Special Economic Zone Model and China of the Future
3.1 The ‘Pillars’ of the Chinese Model of Special Economic Zones
3.2 The ‘Protocols’ of the Chinese Model of Special Economic Zones
3.3 The Chinese Model of Special Economic Zones
3.4 Epilogue: The Future of Chinese Development
3.5 Xiong’an New Area
3.6 Belt and Road Initiative
3.7 Conclusion
References
Part II The Emergence of Chinese Special Economic Zones in Africa
4 China in Africa
4.1 China’s Intricate Relationship with Africa
4.1.1 Political and International Cooperation
4.1.2 Development Assistance
4.1.3 Humanitarian Support, Peacekeeping Efforts, Military Cooperation, and Law Enforcement
4.1.4 Education and Training
4.1.5 Science and Technology
4.1.6 Health
4.1.7 Environmental Issues
4.1.8 Cultural and Other Exchanges
4.1.9 Trade
4.1.10 Chinese Foreign Direct Investment in Africa
4.1.11 Natural Resources for China and Infrastructure for Africa
4.1.12 Chinese Loans, Debt-Traps and Debt Forgiveness
4.1.13 China’s Non-Intervention Policy and One-China Conditionality
4.1.14 Facts and Fallacies About the Impact of China on Africa
4.2 China’s Economic Policy in Africa
4.2.1 The Forum on China-Africa Cooperation (FOCAC)
4.2.2 FOCAC Economic Cooperation with a Specific Focus on Industrialisation and Special Economic Zones
4.2.3 FOCAC: Other Strategic Areas of Cooperation
4.2.4 BRICS Plus
4.3 Conclusion
References
5 The Emergence of Chinese Interest in Special Economic Zones in Africa
5.1 Special Economic Zones in Africa
5.1.1 Investment
5.1.2 Exports
5.1.3 Employment
5.2 Existing and Planned Special Economic Zones in Africa
5.3 Chinese Special Economic Zones: Policy on Global Investment
5.4 Chinese Special Economic Zones in Africa
5.5 Conclusion
References
Part III Evaluating Special Economic Zones in Africa
6 Critical Issues for Chinese Investment in Special Economic Zones in Africa
6.1 Financial Motivation
6.1.1 Tax Incentives
6.1.1.1 Tax Holidays and Allowances
6.1.1.2 Customs Duties and Requirements
6.1.1.3 VAT Exemptions
6.1.2 Duty Free Imports of Capital Equipment, Supplies and Raw Materials
6.1.3 Subsidised Utilities and Rental Rates
6.1.4 Financing and Preferential Interest Rates
6.2 Ease of Business
6.2.1 Ease of Business Initiatives
6.2.2 Permits and Licenses
6.2.3 Ability to Employ Foreign Nationals, Visas and Work Permits
6.3 Special Economic Zone Management and Infrastructure
6.3.1 Ownership and Management of Zones
6.3.2 Suitable Zone Infrastructure
6.3.3 In-house Customs Office
6.4 Location and Market Opportunities
6.4.1 Location Advantages and Disadvantages
6.4.2 Domestic Market
6.5 Human and Other Resources
6.5.1 Labour Productivity and Labour Cost and Labour Legislation
6.5.2 Access to Raw Material, Goods and Services, and Equipment
6.6 Ownership and Profits
6.6.1 No Restrictions on Foreign Ownership
6.6.2 Currency, Profits and Repatriation of Profits
6.7 Lifestyle
6.8 African Preferential Trade Arrangements
6.9 Chinese Policy Towards Africa
6.10 Reflection on the Pillars and Protocols of the Chinese Model of Special Economic Zones
References
7 Labour: Obstacles and Opportunities
7.1 The Scourge of Unemployment, Lack of Skills and Low Productivity in Africa
7.1.1 Unemployment in Africa
7.1.2 Skills Levels in Africa
7.1.3 Wage Rates
7.2 Economics 101: The Labour Market
7.3 The Decision: Employ Chinese or African Labour?
7.4 Perspectives on Labour in Africa by Chinese Investors in Special Economic Zones
7.4.1 Wage Rates, Education and Skills, and Productivity
7.4.2 Labour Legislation and Unions
7.5 Case Study: South Africa’s Labour Environment and Job Creation in Its Special Economic Zones
7.5.1 South Africa: High Unemployment, Limited Skills, Low Productivity and High Inequality
7.5.2 Policies and Institutions Supporting Industrialisation and Special Economic Zones
7.5.2.1 Pre-2010 Policy
7.5.2.2 Industrial Development Zones
7.5.2.3 Special Economic Zones Act
7.5.3 Organised Labour and Politics—A Volatile Combination
7.5.3.1 A Restless Nation
7.5.4 Labour Legislation
7.5.5 Overview of Special Economic Zones in South Africa
7.5.6 Evaluation of the South African Special Economic Zones Against the Pillars and Protocols of China’s Model of Special Economic Zones
References
8 The Social and Environmental Impact of Special Economic Zones in Africa
8.1 The Social Dimension of China in Africa
8.2 Evidence from Special Economic Zones
8.2.1 Enterprise Development
8.2.2 Local Communities and Urbanisation
8.2.3 Infrastructural Benefits
8.2.4 Access to Services and Facilities
8.2.5 Conflict with Local Communities
8.3 The Chinese Diaspora in Africa, Chinese Migration and Integration in local Communities
8.4 China’s Economic Growth and Environmental Degradation
8.4.1 Paris Agreement
8.4.2 China’s Policy Commitment to Mitigating Climate Change
8.4.3 China’s Water Scarcity and Water Pollution
8.5 Is China Shifting Environmental Risks to Emerging Economies?
8.5.1 China’s Declarations Towards Environmental Support in Africa
8.5.2 Chinese Special Economic Zones in Africa and the Environment
8.6 Case Study: Ethiopia—An Environmental Perspective
8.6.1 Ethiopia’s Eastern Industrial Park
8.7 Pillars and Protocols
References
9 African Governments’ Enabling (or Constraining) Influence on Special Economic Zone Investment by the Chinese
9.1 Political Leadership Commitment to Special Economic Zones
9.1.1 Ethiopia
9.1.2 Zambia
9.1.3 Nigeria
9.2 Political Stability, Security and Safety
9.3 Government Policy
9.3.1 Export Orientation
9.3.2 Import Restrictions
9.3.3 Currency Fluctuations
9.3.4 Policy Uncertainty
9.4 Corruption
9.5 Infrastructure: Promises Made; Promises Broken
9.5.1 Ethiopia
9.5.2 Zambia
9.5.3 Nigeria: Promises Broken
9.6 Inadequate Service Delivery
9.7 Ease of Business
9.7.1 Bureaucracy
9.7.2 Customs Office
9.7.3 Port Efficiency and Corruption: A Case of Ogun-Guangdong Free Trade Zone
9.8 Case Study: Government Commitment to Infrastructure of SEZs in South Africa
9.9 Pillars and Protocols
References
Part IV The African Model of Special Economic Zones
10 Towards Impactful Special Economic Zones in Africa
10.1 Rwanda’s Kigali Special Economic Zone
10.1.1 From Ashes to Rejuvenation
10.1.2 Facilitating Investment Through a Business-Friendly Environment
10.1.3 The Kigali Special Economic Zone
10.1.4 Critical Success Factors of the Kigali Special Economic Zone—A Reflection of the Chinese Model of Special Economic Zones
10.2 Mauritius: An Island of a Special Economic Zone
10.2.1 Sailing Ahead in Economic Development
10.2.2 Export Processing Zones
10.2.3 The Jinfei Economic and Trade Cooperation Zone: Not Living up to Expectations
10.2.4 Mauritius of the Future
10.2.5 Key Learnings from Mauritius in Terms of the Pillars and Protocols of the Chinese Model of Special Economic Zones
10.3 The Lessons and Investments from China for Africa
10.3.1 Pillar 1: Leadership Support
10.3.2 Pillar 2: Government Support
10.3.3 Pillar 3: Government Policy
10.3.4 Pillar 4: Location
10.3.5 Pillar 5: People
10.3.6 Pillar 6: Integration
10.3.7 Pillar 7: Infrastructure
10.3.8 Protocol 1: Phased Approach
10.3.9 Protocol 2: Ease of Business
10.3.10 Protocol 3: Preferential Policies
10.3.11 Protocol 4: Innovation and Learning
10.3.12 Protocol 5: Favourable Investment Climate
10.3.13 Protocol 6: Modern Service Industry
10.3.14 Protocol 7: Environmental Consideration
10.3.15 Protocol 8: International Cooperation
10.3.16 Protocol 9: Address Shortcomings
10.3.17 Protocol 10: Social System
10.3.18 Protocol 11 and 12: Export Orientation and Diversifies Industries
10.4 The African Model of Special Economic Zones
References
Index
