Ethiopia, China relations reached its peak

Tesfaye Lemma

Ethiopian Prime Minister Hailemariam Desalen had a visit to China. The two countries have been working strongly to enhance their mutually beneficial cooperation. China and Ethiopia have always supported each other on the issues concerning each other's core interests.

Resources indicated that, China is willing to work with Ethiopia to deepen mutual political trust in an all-rounded way. In that discussion Hailemariam spoke highly of China's important status in international affairs, expressing appreciation that China has for a long time provided support and assistance for Ethiopia's development. He said that, Ethiopia welcomes more Chinese companies to Ethiopia to make investment and open businesses, so that, Ethiopia and China will achieve mutually beneficial results.

Though it has been half a century since Ethiopia and China started a diplomatic relation they have not yet established the desired level of economic cooperation. But starting from 1991 their relation has gone to new heights rendering the clicking of the two countries one that leans on mutual benefits. Strengthening the relation in 1992 they had signed an economic cooperation agreement.

As Ethiopia hosted the second “China-Africa” forum, they had deepened their relationship. Currently, the two countries have a long-standing and healthy relation. China reinforces the ongoing rapid growth. Aside from financial support, unstintingly,

it extends expertise and technical support. In areas of investment and trade, its back up and cooperation gestures are gigantic. In the spheres of diplomacy and politics too, its support is an unflagging one. That is why leaders of the two countries reiterate their vibrant diplomatic ties. Including the cooperation agreement that allows the two countries to work and share experience on humanitarian issues, Ethiopia and China have signed cooperation agreements translated into tangible works.

China's support and cooperation in technology transfer, research and education is also high. Specially its assistance in furnishing higher learning institutions and their laboratories with the required state-of-the-art equipment, facilities and teaching materials stands out.

It as well plays quite a role in building the human power of such institutions. In the economic front, when Ethiopia dispatches raw materials to China, conversely, the latter dispatches industrial products to the former depicting their conspicuous economic ties.

Various Chinese companies that studied the trade options of the country, outlaying a huge sum, have created job opportunities for many. From 1992 to 2015, the overall investment of China in Ethiopia has turned 16.2 billion birr. This is registered as one unmatched by any investment of a foreign country.

Djibouti, which is a gate for Ethiopia's foreign trade, is one of the African horn countries given prime attention in China's Belt and Road initiative. The Ethiopia-China friendship is tighter in infrastructure development, investment, international and African affairs, among others.

It is heartening to note that further forging this relationship and stepping up mutual benefits, efforts are underway to take Ethiopia-China's relation to strategic cooperation. The fact that the Chinese president has recently made clear his country's desire to strategize its partnership with Ethiopia substantiates the case in point. The Ethiopia-Djibouti rail Road is a common project of the two countries.

But as the project is part of China's one Belt and one Road initiative, it is expected that the project will buoy up the relation to continental level. The “Belt and road initiative” started by the two countries is an initiative meant to scale up the economic and investment relation between China and ally or satellite countries, with a sentiment of fraternity.

No doubt, this will step up Ethiopia's being a beneficiary country. China's desire to  deepen such ties testifies its desire in cementing relations. The partnership is going from ascent to ascent. It shows the two country's commitment to work hand-in-gloves even in trying circumstances.

They are in the right route. This chemistry, in strategic partnership, Ethiopia managed to portray with China is unprecedented in Africa. This is a source of pride to Ethiopia. Ethiopia's success in taking its ties with China to strategic partnership is sign enough that Ethiopia's role in maintaining peace and stability in the horn is lofty.

Ethiopia's being a hub for China's projects foreshadows the cementing of the economic ties between the two countries. Especially it will be a nerve-center in bringing China's manufacturing industries to Ethiopia. This favorable situation is expected to augment the country's foreign currency earnings, for Ethiopia will be a decisive link in the Djibouti-Dakar railway that links East and West Africa and has connection with Ethio-Djbuti railway.

This will catalyze the import and export trade. Ethiopia is a center of a broadband fiber optics that helps connect Africa. This is another sign why the balance is tilted towards Ethiopia. Hence seeing the effective utilization of the resource is sagacious.

Ethiopia is playing quite a role in connecting African countries. That is why China decided to make Addis Ababa an aviation center. About 80 percent of China-Africa's relation will be affected through Ethiopian Airline. This is a golden opportunity the country should utilize optimally and attentively.

It can't be gainsaid that China's Belt and Road Initiative aims at ensuring economic ties and prosperity o materialize this mammoth plan. Ethiopia, Kenya and Tanzania are selected from African countries. This is a golden opportunity. Hence efficiently and effectively utilizing a China's partnership, it is possible to ensure a broad-spectrum of benefits.

The central motive of this study was to investigate if the Ethio-Chinese investments indicate a win-win strategy. The South-South cooperative win-win ventures are supposed to bring proportional benefits through trade flows, foreign domestic flows, technology transfer, and integration in global value chains, in addition to aid flows, which otherwise the partners would not have access to before entering into these relations.

The four case studies seriously challenge the argument of political warfare theorists that China’s investment in Ethiopia would perpetuate underdevelopment through exploitation, extraction, and destruction of Ethiopia’s resources and industrial capacity. Except for the negative environmental externalities caused by the Sino-Ethiopian investments, the case studies have demonstrated that Ethiopia has substantially benefited from the Chinese cooperative investments.

The Chinese investments in Ethiopia are not complementary but appear to be aligned very closely with the South-South cooperative strategies and goals.

As the Chinese economy booms, Chinese multinational corporations are embarking on an acquisition drive to capture the oil, natural resources, and unexploited markets of Africa to sustain its rapid economic growth.

Based on the current Chinese investments and co-development projects existing in Africa, supporters of Chinese investment in Africa argue that the recent increase in Africa’s gross domestic product is because of Chinese investment.

The roads, bridges, and dams built by Chinese firms in Africa are low cost, good quality, and completed in a fraction of the time. Unlike the Western investments in Africa, the Chinese state-owned enterprises provide humanitarian and capital assistance to Africa without any condition. Ethiopia has achieved a high and sustained rate of growth. The presence and conduct of China’s foreign direct investment in Ethiopia since 2000 is fast becoming one of the fronts in reshaping Ethiopia’s economic architecture.

Now the bilateral relations of the two countries had reached its peak, which will further benefit the two people particularly Ethiopians. In other words, the bilateral relations between the two countries will help Ethiopia in realizing its vision of becoming one of the middle income countries in the coming few years.