CANBERRA: In a virtual meeting with a group of African students in late April, US Secretary of State Antony Blinken asked a question, implicitly, about China: “Are they bringing their own workers with them, or are they giving jobs to people in the country where they’re making investments?”
Blinken seemed to be suggesting that Chinese projects and investments in the continent do not provide benefits to locals. This view has been prominent in the media and commentary.
Certainly, it is possible to find individual examples of Chinese projects which have shipped in Chinese workers and not been involved in the local community.
However, the available evidence suggests that Chinese overseas economic engagement has become much more localised. Chinese firms are providing jobs, exports, budgetary revenue (through taxes) and technical expertise.
Gone are the days when large infrastructure projects, built by Chinese labour, formed the backbone of China’s economic engagement in the Indo-Pacific or elsewhere. In short, these projects are giving emerging economies what they want.
SIGNIFICANT EVIDENCE OF CHINESE COMPANY LOCALISATION
There is significant research evidence of Chinese company localisation across global emerging economies.
I published a journal article last year which showed every major Chinese company in Kyrgyzstan and Tajikistan had localised their workforce over the last ten years. Kyrgyzstan was then a democracy, and Tajikistan is an opaque autocracy – localisation occurred in both countries due to cheaper local wages and pressure from governments and society.
The speed of localisation varied depending on the type of project. Companies focused on short-term construction localised more slowly than those focused on longer-term investments.
Similar patterns have been shown around the world. McKinsey conducted field surveys at more than 1,000 Chinese companies across eight African countries. The surveys found that “89 per cent of employees were African, adding up to nearly 300,000 jobs for African workers”.
Antoine Kernen and Katy Lam similarly found in 2014 that Chinese state-owned enterprises in Ghana intended to “hire as many locals as possible”.
A team of researchers from Johns Hopkins surveyed 20 Chinese manufacturing firms in Nigeria and reported an average of 85 per cent local hires. Another study found that at a large Chinese-owned mine in Peru almost all employees were local except for a small number of foreigners.