China’s machine export posts 6.33% increase

The machinery transfers have mixed effects on Africa’s industrialisation.

China has recorded a 6.33% increase in the export of machines and their corresponding sectors targeted by the overcapacity elimination policy, according to a Hong Kong University of Science and Technology report.

According to the report, it did not impact export values in the downstream sector as the policy restricts old machine usage in the regulated sector.

As a result, firms are compelled to find alternative avenues for disposal, such as exporting to Africa, as it allows them to recoup some value from the machines.

However, the machinery transfers have mixed effects. On the one hand, African exporters are more likely to have access to and benefit from these transfers. On the other hand, it has no discernible impact on non-exporters, which are often smaller firms.

Moreover, the report observed significant increases in output and productivity in Africa’s downstream sector, indicating enhanced production capabilities.

In the local machinery sector, both output and productivity decreased, suggesting that imported machinery displaced domestic production.