China Ross Boss
What an Instagram account tells us about economic development in Africa
For the better part of the last year, we (Tobi and I) have been having a good laugh at the Instagram account of Ross Wu a.k.a ‘Mr. Ross’. It is hard to properly describe who he is or what he does but suffice to say that he’s a Chinese manufacturer (based in Guangzhou) and wholesaler of cheap (very cheap) Chinese used and new clothes and shoes. Given the nature of the products he enthusiastically markets via Instagram reels and videos, the majority of his customers (who often feature in his videos) are from Africa.
The videos are quite funny and not just for the ‘Chinglish’ he speaks but because he’s not afraid of coming across as funny. Here for example is a video in which he tells you how to get started in the business. He closes with a flourish: ‘follow Ross, let’s make money together and become the Big Boss’
The most telling videos are the ones featuring his visiting customers from Nigeria and other parts of Africa. Take this one, where he gives a Nigerian buyer the grand tour of shoes for men, women, and kids—a footwear buffet, if you like:
In this video, he brags about his eight-year track record with Nigerian customers while perched on a forklift, jokingly threatening to ship himself off in a container: "Ross is coming in a container!"
Another staple is the "customer testimonial" video. In this one, a Nigerian buyer named Chiboy vouches for Mr. Ross, declaring that he sells only the good stuff—and at great prices, too:
And then there’s the gem captioned "Nigeria brother visit our shoes factory," where the Nigerian buyer inquires about prices. Turns out, a pair of men’s sneakers goes for just $3.80 (new, presumably), while others are sold by weight—$1.50 per kilo for a 20kg minimum order. The "factory," a sprawling and slightly intimidating space, prompts Mr. Ross to tease his customer: “Big scare, eh?”:
You get the picture. The videos are undeniably funny, and it’s hard not to like Mr. Ross—a guy clearly hustling hard to earn a honest dollar.
The humour in the videos quickly fades when you ask a simple question: Why is China—a country that produces and exports high-speed trains, nuclear reactors, and cutting-edge computer technology—also a dominant player in the global market for cheap, one-dollar shoes? The story of how modern China became wealthy is broadly understood: American companies, seeking cheaper manufacturing options, outsourced much of their production to China. By starting with the production of items like Nike sneakers and IBM computers, China built a robust manufacturing base, which played a key role in its path to prosperity.
This perspective on prosperity suggests a kind of relay system, where lower-level manufacturing is passed on to poorer countries, giving them a chance to climb the economic ladder. Wealthier nations, meanwhile, focus on high-end industries, with economic growth benefiting everyone. For example, the U.S. hasn’t become poorer simply because it no longer manufactures shoes domestically. This is a topic we have discussed before in this Parish in The Broken Ladder. In it Tobi said:
For almost a decade, trade economists have been talking about the 'China shock' - which is analysing and quantifying the effect of China's economic rise to many Western economies. I believe this became part of the intellectual backbone for the trade war between the U.S and China. Of course, this has grown into economic currents that might reshape the structure of the global economy, for better or worse. But the important point here is that Africa is not only missing from that debate, it has failed to leverage the relationship with China for meaningful economic development.
As you know, we never only talk about something once here on 1914 Reader. But I was reminded about this topic again when I saw a report yesterday in the WSJ the upshot of which is that China's flood of cheap goods is testing its allies' patience, as local industries drown in competition and governments scramble for lifeboats in the form of trade barriers:
A deluge of cheap Chinese goods washing over the developing world is jacking up tensions between China and the Global South, complicating Beijing’s plans to build alliances as it confronts escalating trade tensions with the U.S.
With President-elect Donald Trump saying he plans to significantly increase tariffs on China, Beijing is hoping to unload more of its excess factory production to developing-world countries, from Indonesia to Pakistan to Brazil.
But many of those countries are pushing back, as cut-price Chinese imports put pressure on their factories, killing jobs and blocking efforts to grow manufacturing at home. Many poorer countries have been counting on expanding manufacturing as the best way to propel their rise up the development ladder.
For China, the emerging backlash threatens to undermine its goal of being a leader of the developing world, whose support it has courted as a means of building its own alliances to counter the U.S.
Many developing countries now fear they will endure the same kind of “China Shock” that gutted U.S. industry starting a quarter-century ago. Economists estimate the U.S. lost more than two million jobs between 1999 and 2011 as makers of furniture, toys and clothes buckled under competition from Chinese imports.
Apply the caveat that this is written from an American perspective. But there is clearly something going on:
To fight back, developing countries have implemented almost 250 trade-defense measuresaffecting Chinese imports since the start of 2022, including tariffs, antidumping investigations and antisubsidy probes, according to Global Trade Alert, a nonprofit based in Switzerland that supports open trade.
Brazil, a key member of the Brics group of developing economies that includes China, accounts for more than 120 of those interventions. Despite close personal ties between Brazilian President Luiz Inácio Lula da Silva and Chinese leader Xi Jinping, Brazil has raised tariffs on auto parts, telecommunications equipment and steel made in China and other countries.
In October, Indonesia banned Temu, the Chinese-origin app that shuttles cheap goods directly from Chinese factories to consumers’ doors worldwide. Indonesia said the model raises risks of predatory pricing.
“If foreign products enter with prices far lower than products from our own small businesses, consumers will choose the cheaper offerings,” said Prabunindya Revta Revolusi, director general of Indonesia’s Communications Ministry. “Our small businesses will struggle to compete.”
The "good news" is that countries like Nigeria don’t have a large-scale manufacturing industry at risk of being undercut by Chinese competition. With sneakers and clothing not yet produced at scale, cheap Chinese imports offer a practical benefit by making decent-quality clothing affordable for Nigerians. The deeper issue for many African countries, however, is that they never get the opportunity to build an industry to begin with, let alone protect one with tariffs and trade barriers.
China would argue that nothing is handed down freely, and with over a billion people to care for, unemployment on any significant scale poses an existential threat to the Chinese Communist Party (CCP). Therefore, China insists on staying competitive in every sector to support its population. Fair enough. After all, there's a limit to relying on handouts as a development strategy, and African nations shouldn't expect their arguments to be accepted at face value.
But the problem is the problem and as long as Mr. Ross is able to produce and ship one dollar shoes to Africa, the development ladder is not going to work as it should. What is to be done? The WSJ piece lists a range of actions being taken by developing countries to protect themselves against China:
Some developing-world leaders have carried their frustration all the way to Beijing. In a visit to the Chinese capital in July, Bangladesh’s then-Prime Minister Sheikh Hasina said she wished to create a “more equitable trade relationship” with China, which has a $22 billion annual trade surplus with Bangladesh. She got a commitment to start importing Bangladeshi mangoes, but not much more.
Mangoes are better than nothing, but a hallmark of poor countries is the inability to reliably produce anything at scale. When they do try, the results can sometimes be catastrophic—such as when China's demand for gelatin nearly decimated West Africa's donkey population:
In Nigeria alone, tens of thousands of donkeys are slaughtered annually due to the demand for hides, according to Ibrahim Ado Shehu, a veterinary epidemiologist in the capital, Abuja.
While Nigeria’s government banned exports of donkeys in 2019, slaughtering was still permitted. Typically, donkeys are brought from neighbouring Niger - across the northern border - on a market day, sold off and driven in trucks to southern Nigeria, where they are slaughtered and the skin is exported to China, he said.
The African Union - the 55-member regional bloc - said in February it had banned the slaughter of donkeys for their skin across the continent. The next step is the creation of policies by the Regional Economic Communities (REC) and member states to guide the implementation of the African Union resolution, said Mwenda Mbaka, a veterinarian and animal welfare expert based in Kenya.
“Any government that condones the continued slaughter of the donkeys is in contravention of the ban,” he said. “Such countries can be censored through the structures established for the purpose by the REC and Continental frameworks.”
The irony is that China often lectures poorer countries on development while dismissing anyone who offers a nuanced take on its own story. African leaders, in turn, play along to secure unconditional loans and infrastructure investments. This dynamic means the trade relationship between China and African nations is rarely a priority in discussions about partnerships and agreements. Examples like Mr. Ross highlight the issue, as the textile and garment sector—considered a low-entry, low-skilled, labor-intensive industry—represents exactly the kind of manufacturing Africa must master to industrialise. Yet in the lessons China insists Africa should learn, there is only criticism of "conventional" economic policies, with a heavy emphasis on industrial policy and government control.
David Pilling of the Financial Times has a good essay profiling how the government of Benin Republic is trying to do this in the textile and garment sector, by moving up the chain from exporter of raw cotton to manufactured textiles.
…In Benin, under President Patrice Talon — a business tycoon known as the “King of Cotton” for his involvement in the industry — the west African country is trying to emulate these success stories. The textile and apparel factory north of Cotonou, which will also produce bed linen, towels and garments such as polo shirts and leggings, is part of a national industrialisation strategy intended to quintuple the country’s manufacturing capacity by 2030. The finance ministry estimates that manufacturing contributes 9.8 per cent to GDP, but says that more than two-thirds of this is artisanal manufacturing. The formal industrial sector, restricted to a few activities such as cotton ginning, contributes only 3 per cent to GDP. If the entire cotton crop were processed into apparel, it would at a stroke add $12bn to Benin’s $17bn economy, say industry experts.
Talon says the country’s politicians and business class has traditionally lacked the ambition to industrialise, finding easier profits in trading. Many have got rich smuggling goods across the leaky border with Nigeria, a market of 220mn people. “Leaders were always willing to take commissions on the trade of raw materials. They never tried to get into the transformation phase,” he says. “We want to change that.
The textile industrial policy in Benin enjoys political support. There have been enormous public and private resources poured into it, with ambitious targets set on jobs and output. Yet, as the Ethiopian economist Arkebe Oqubay cautioned, it may all come undone under difficult trade conditions:
Oqubay, who ran Ethiopia’s industrialisation drive and is now an academic at Soas University of London, is sceptical about Benin’s chances of reaching its targets. He cautions how hard it is to build a manufacturing sector from scratch, saying that scale, single-minded determination and constant adjustment of strategy are required.
Ethiopia — with 120mn people and cheap hydroelectric energy — made steady progress in apparel, leather and shoes, but its success was interrupted by war and its subsequent removal in 2022 from tariff-free access to the US market under the African Growth and Opportunity Act, a heavy blow.
Many of the development lessons that 'China experts' often offer Africa cannot be trusted because they usually tell half the story: How China benefited from a more open global trade environment and China's ascension into the World Trade Organisation and the expiration of the 'MultiFibre Agreement' eroded almost all the gains made by many African countries under the 'African Growth and Opportunity Act' by drastically eating into their market share.
Why is any of this worth complaining about? Because more than two decades after entering the global stage and becoming a manufacturing export powerhouse, China is refusing to step off the lower rungs of the development ladder to let others climb. Instead, it’s determined to extend its reach both up and down the ladder. Driven by geopolitical tensions with the U.S. and a sluggish domestic economy, the CCP and Chairman Xi are doubling down on low-level manufacturing while also competing with the West at the technological frontier. Of course, this comes with a huge cost to its thriving service sector but it is a cost that China is prepared and has the resources to bear.
What can be done? First, African governments must recognize that moving beyond the export of natural resources to manufacturing requires cultivating export markets for manufactured goods. This means industrial policy must focus on export-oriented industrialization, and trade policy must underpin it. Second, serious efforts should be made to negotiate a deal with Donald Trump to renew AGOA, and if that fails, a contingency plan should aim for meaningful trade agreements with major markets like the BRIC countries. Third, Chinese investment in Africa must be leveraged not just for producing and consuming capital goods but as a channel to import technology and expertise from China. As Joe Studwell, author of a well-known book on Asia’s economic development, pointed out in the aforementioned FT article, the capability of African states remains the critical weak link in their development efforts:
Studwell says that, even without strong states, industrialisation can still occur. He cites Cambodia, where Chinese companies have invested as they have looked for lower-cost alternatives to manufacturing at home. “Cambodia is now exporting over $10bn of textiles a year, not because they got their act together but because the Chinese needed somewhere to go.”
Perhaps he is right. Having a capable and strong state may be one of the biggest lessons that China can offer Africa. But we must accept that strengthening the capacity of African states to deliver development also means that political leaders on the continent will have to stand up to China in crafting a mutually beneficial economic partnership.
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https://www.statista.com/statistics/236397/value-of-the-leading-global-textile-exporters-by-country/
Developing countries are surprisingly underrepresented in textile exports. That said, a lot of the lowest end of it is in fact moving out of China. This will take time though. Remember that China only became a textile powerhouse three decades ago and it has places that are still quite poor.
That said, we do need to get our shit together as African countries. I doubt we will though. After all, Nigeria was richer than China just 30 years ago. We still haven't industrialised after all that time.
Temu is here, and I fear for Jumia. My beloved Jumia.
Also, I think China is driving the organ trafficking market in Africa.