China’s manufacturing investment in Africa accelerates as Chinese firms open factories in Kenya’s Tatu City
China’s manufacturing investment in Africa surges as firms set up factories in Kenya’s Tatu City, drawn by lower costs, trade access and private capital.
Chinese companies expand into Kenya’s Tatu City
Jua Power, a family-run solar company, announced in March 2025 that it will build its first overseas factory in Tatu City, a special economic zone in Kenya. The move marks the six-decade-old firm’s first direct foreign investment and illustrates a wider shift of Chinese manufacturers toward Africa. Observers say the decision reflects slowing domestic demand in China and more attractive cost structures and market access in parts of Africa.
Record flows into African manufacturing in 2025
Data from FDI Markets shows a surge of Chinese investment into African manufacturing in 2025, with $12.3 billion committed across 64 new projects in the sector. That figure represents the largest annual total recorded in at least a decade and underscores a growing role for private Chinese capital in building steel mills, textile factories and EV-assembly lines on the continent. Officials in Nairobi report that parts of this investment wave are already moving from announcement to construction.
Local and company drivers behind the shift
Chinese executives cite several reasons for the pivot to Africa: relatively lower labour costs than some Chinese regions, youthful and expanding populations, and preferential access to overseas markets through trade agreements. Shu Bo, chief executive of Jua Power, said the company previously relied on robust domestic demand but reassessed its strategy amid China’s economic slowdown. In Kenya, the special economic zones are actively courting manufacturers, negotiating with hundreds of potential Chinese investors.
Project pipeline and on-the-ground activity
Tatu City officials say negotiations are underway with more than 1,000 Chinese firms interested in industrial space and assembly operations. Kenya’s investment agency reports that six out of seven headline Chinese projects announced last year have now started work, including a steel plant and a garment factory. Developers building industrial parks across Africa also confirm active talks with solar component suppliers and glass manufacturers seeking to establish production hubs closer to regional markets.
Manufacturing prospects and persistent gaps
Despite these inflows, African policymakers and analysts warn that manufacturing’s share of GDP has not rebounded uniformly. Ethiopia, once seen as a model for export-oriented industrialisation, saw its manufacturing share fall from a 2017 peak of about 6 percent of GDP to roughly 4.4 percent in 2024. Across sub‑Saharan Africa, manufacturing accounted for about 10 percent of GDP in 2024, down from around 18 percent in 1981. These trends indicate that headline investments do not automatically translate into broad-based industrial transformation.
Trade rules, geopolitics and the path ahead
The sustainability of Chinese manufacturing investment in Africa will hinge on several external factors, including the evolution of Western trade policies and regional trade arrangements. Rising protectionist pressures in some Western markets and uncertainty over U.S.-led initiatives designed to expand African exporters’ access to American markets may affect long-term export prospects for factories on the continent. Still, multilateral institutions had projected, before late‑February disruptions in global markets, that sub‑Saharan Africa’s growth could outpace parts of Asia, offering an incentive for exporters and manufacturers alike.
Tatu City and similar industrial clusters are betting that proximity to African consumers, lower operational costs and improving logistics will compensate for lingering structural challenges. For Chinese firms, the move south offers diversification from a slowing home market and closer access to emerging regional demand.
Manufacturing investment from China between 2023 and 2025 exceeded flows from the United States and Europe combined, signalling a strategic reorientation in global industrial geography. For African governments, the task now is to convert announced projects into sustainable supply chains, skills development and export capacity. That requires better infrastructure, streamlined regulations and workforce training tailored to modern manufacturing.
Regional implications are already visible: new plants for solar components, textiles and basic metals are creating local employment and supplier opportunities, while also exposing gaps in local input supplies and logistics. Developers and investors acknowledge that not all announced projects will reach completion, but the current pipeline represents the most significant concentration of Chinese private manufacturing capital in Africa in many years.
With competition for manufacturing investment intensifying, African policymakers face a choice between short‑term incentives and longer-term industrial strategies. How governments balance investment attraction with domestic capability building will shape whether China’s manufacturing investment in Africa becomes a catalyst for broad economic transformation or a collection of isolated export platforms.
As companies such as Jua Power take the first concrete steps into African production, the coming years will test whether this new wave of factory investment can generate durable jobs, deepen local value chains and help turn the continent into a more competitive manufacturing region.