Ethiopia is on a path to become Africa’s China in more ways than one

by Selam

(OPride) — Ethiopia’s dream to be the next China is becoming true. As Beijing rapidly expands its global footprints, its overseas national interests have to be protected. This is why China is already moving away from its traditional hands-off approach — a policy of non-interference in state’s domestic affairs — to become one of the global influencers of our time.

China’s paradigm shift is more evident in Africa than anywhere else as Beijing continues to deepen its presence on the continent. A closer examination of China’s bilateral relations with Ethiopia makes this point clear.

Prior to 1991, when the incumbent regime in Ethiopia came to power, the two countries did not have much contact but their mutual respect and interaction have grown over the past two decades. Ethio-Chinese relations had improved even remarkably in the last few years.

Ethiopia is a regional hub with several international organizations headquartered in Finfinnee (Addis Ababa). Beijing recognizes the potential of this for access to regional powers and markets, as well as the Ethiopia’s immediate and a seemingly insatiable need for loans and other development aid to bolster its infrastructures. Ethiopia also has a large and growing consumer base that’s already about 100 million strong. In fact, China has been Ethiopia’s largest trading partner. The current Sino-Ethiopia trade volume exceeds $3 billion.

Ethiopia is also relying heavily on Chinese loans to develop its foundations. For example, the Tekeze River Dam in Tigray region, one of Ethiopia’s mega hydroelectric projects and the highest dam on the African Continent, was built by the Chinese. China is also financing new dams being built on the Omo River in southwestern Ethiopia and the Grand Renaissance Dam on the Blue Nile River. The Chinese have built most of the roads in Ethiopia, including the Ethio-Djibouti railway project, the telecommunications infrastructure, and the much-celebrated light rail system in Addis Ababa. In fact, according to the Heritage Foundation and American Institute, China’s total investment in Ethiopia in 2016 is over $20 billion.

The economic relationship between China and Ethiopia has become stronger through both Chinese direct investment and trade in Ethiopia since the early 2000s. The sum of Chinese contracts in road construction, electricity and telecommunication sectors show a surge in Chinese foreign direct investment in the last few years. Dozens of Chinese firms are currently engaged in the construction of roads throughout the country, managing nearly 70 percent of the roadwork in Ethiopia.

Ethiopia is hoping to become the hub of light manufacturing in Africa and the government plans to establish 6 industrial parks within the next few years. The plan is backed by Chinese entrepreneurs and the Asia Development Bank Member States. The construction of an industrial park is estimated to cost around $500 million per park.  Ethiopia will not benefit as the industrial zones in part because the project is slated to flood the local market with competitive Chinese products, traders and workers. Besides, China’s political economy is based on state-sponsored economic relationship. As such, the investments are not

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