In the context of reduced aid from traditional donors and the changing modalities of aid, FDI from non-traditional development partners as China has become an important driver for development agenda’s in African countries. As FDI does not automatically lead to economic growth and poverty reduction, and since there is no single “Chinese model” for economic cooperation, it is up to African leaders to ensure institutions and policies to reap the benefit of FDI. This paper sets out to further our understanding of how Chinese investments in the Zambian textile and clothing industry impacts economic development, as a sector important for employment creation and ultimately poverty alleviation. Overall, this paper demonstrates the challenges to industrialise in the context of a liberal market and the globalised international economy. Despite Chinese engagements in manufacturing, Zambia remains an exporter of unprocessed natural resources and loses out in terms of economic development from TC manufacturing activities.