Study refutes claim all Chinese firms in Africa underpay local workers

Chinese firms operating in Africa are often accused of underpaying local workers, but a new study conducted by British experts in Angola and Ethiopia suggests that this reputation is undeserved.

As Chinese companies have become active in sub-Saharan Africa, they’ve earned a reputation for paying their local workers less than their Chinese colleagues. But based on interviews conducted with more than 1,400 workers in Angola and Ethiopia, this reputation is not deserved.

The study by Carlos Oya from London’s School of Oriental and African Studies (SOAS) and Florian Schaefer from Kings College London aimed to discover whether it was true that Chinese firms consistently underpaid local workers—and what that even meant. They surveyed workers in manufacturing and construction at Chinese-owned and other foreign-owned firms in both countries, as well as at locally owned businesses in both countries. They asked not only what workers were paid, but also about their skills, education, role, and other personal details that might affect pay.

The research found that pay across the two countries displayed substantial variation. They did find “slightly lower wages in Chinese companies in some segments,” for example, among semi-skilled construction workers in Angola and semi-skilled manufacturing workers in Ethiopia, they wrote.

But the study concluded that much of that difference could be accounted for by specific differences in factors like workers’ education or skills. There is “no clear evidence that Chinese firms consistently pay less than comparator firms within same sectors and countries,” they wrote in the study, published in the journal World Development. The study certainly doesn’t absolve Chinese firms of any wrongdoing in sub-Saharan Africa, and only deals with pay in two countries. But it’s an indication that the narrative about Chinese firms exploiting locals might be more complicated than many assume.