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“Reverse Technology Transfers Africa as a Capital Goods
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Morley, David - The Cambridge introduction to creative writing (2011) - libgen.li
| “Reverse Technology Transfers Africa as a Capital Goods Source Market for China and India Perhaps the most surprising finding from the business cases studies on the issue of technology spillovers involving Chinese and Indian firms in Africa is the phenomenon of reverse transfers of technology In several instances, used African-made capital goods are being purchased by Chinese and Indian firms to be used in their home countries. For example, a Chinese firm bought, dismantled, and then reconstructed in China a synthetic polymer plant that was operating in South Africa. An Indian firm did the same with an electric power station, also in South Africa. Source: World Bank staff. 06-Chap6:06-Chap6 10/9/06 2:39 PM Page 327 328 AFRICA ’ S SILK ROAD : CHINA AND INDIA ’ S NEW ECONOMIC FRONTIER equipment, but did not do so due to inferior quality instead it purchased more expensive equipment from Germany and United States. A foam mattress producer in Senegal tried to source covers from China, but ultimately cancelled the order due to poor craftsmanship. On the other hand, a bottled water manufacturer in Ghana recently purchased new filling machines and anew pasteurizer from China. Although the firm considers the Chinese equipment to be of a lower quality than European versions, the 25 percent cost advantage proved sufficiently offsetting. Finally, there is a clear recognition among all nationality firms covered in the business case studies that export competitiveness in Africa hinges greatly on the use of new, as opposed to used, machinery, especially in global market–targeted investments—where exports are destined for advanced country markets. This business strategy is consistent with findings in the empirical literature showing a positive correlation between superior export performance and new vintage equipment. 34 Several examples illustrate the point. One Chinese affiliate in Tanzania indicated that headquarters management forbids it to utilize used machinery in Africa at the same time, the firm is prohibited from selling any of its used machinery in Africa once a project is completed rather, headquarters deploys such machinery to other African affiliates of the enterprise group. Along- established Indian textile firm in South Africa recently purchased new weaving machines from Germany and Italy to produce high-quality blankets it sells not only locally in South Africa and in neighboring countries, but also in the United Kingdom. And, a struggling African textile firm in Ghana still using 1960s-vintage machines just placed an order in China for state-of-the-art equipment so that it can export—for the first time in its history—to other African markets as well as to markets outside the continent, based on its recognition that only by competing in terms of quality, price, and time will it be able to expand its reach. Download 5.17 Mb. Share with your friends:
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