How the World Really Works: The Science Behind How We Got Here and Where We're Going

by Vaclav Smil

If low labor costs were the sole reason for locating new factories abroad—as many people seem to erroneously believe—then sub-Saharan Africa would be the most obvious choice, and India would almost always be preferable to China. But during the second decade of the 21st century, China averaged about $230 billion of foreign direct investment a year, compared to less than $50 billion for India and just around $40 billion for all of sub-Saharan Africa (excluding South Africa).[9] China provided a combination of other attractors—above all, centralized one-party government that could guarantee political stability and acceptable investment conditions; a large, highly homogeneous and literate population; and an enormous domestic market—that made it the preferred choice over Nigeria, Bangladesh, and even India, resulting in a remarkable collusion between the world’s largest communist state and a nearly complete lineup of the world’s leading capitalist enterprises.[10]