Chinese Shoe Manufacturers Consider Moving Factories To Africa To Enjoy Lower Labor Costs.

China's largest shoes Huajian, one of the class exporters, plans to invest millions of dollars in expanding factories in Ethiopia, a sign that Chinese manufacturers are considering moving factories to Africa to enjoy preferential tariffs and lower labor costs.

A year ago, Huajian opened its first factory in an industrial park outside Addisababa. Helen Hai, deputy chief executive of overseas investment company, said that the factory was doing well, and the company subsequently built a new injection molding shoe production line. The new production line will add more than 100 jobs to the Ethiopia plant.

Helen Hai said that Huajian also signed an agreement with the China Africa development foundation to invest $2 billion in ten years to develop a manufacturing cluster focusing on shoemaking in Ethiopia. She said this is expected to create 100 thousand jobs for the local community. Helen Hai said she hopes to make this a platform for attracting other shoemaking enterprises.

The Ethiopia economy is one of the fastest growing economies in the African continent. Leatherwear The industry is very mature, but the unemployment rate is very high. Helen Hai believes that in order to maintain a low cost in the long run, Ethiopia must encourage the ancillary industries by creating economies of scale.

According to the report, the ambition of Huajian is due to its confidence in the long-term prospects of Ethiopia's manufacturing industry. However, some African officials insist that China's motives for investing in Africa are not pure, and that the company's overseas investment is hindered. According to Helen Hai, the business logic is similar to that of the European shoemaker who moved from Europe to Japan. Then, when the cost of labor in these areas rose, they turned to China.