Ethiopia, China to Strengthen Industry, Trade Relations

Abiy-meets-XiApril 25, 2019 ( -- Ahead of the second Belt and Road Forum for International Cooperation, Ethiopia’s premier has on Wednesday held discussions with Chinese President Xi Jinping. Abiy is in China together with other world leaders to attend the second BRI convention.

The Chinese president reiterated the need for the two nations to continue promoting mutual trust and understanding, as well as a mutually-beneficial relationship.

Ethiopia Harnessing big from her economic engagements with China:

Ethiopia’s economic engagement with the Chinese is multi-faceted. Between 2000 and 2014, China offered US$12 billion in loans, which was meant to improve the country’s infrastructure.

Since then, there has been growing Chinese investment in the country’s economy. Imports of cheap consumer goods from China in 2015 was US$3.4 billion, but they exceeded Ethiopia’s exports to China which stood at just US$380 million.

Ethiopia is determined to expand its infrastructure, and in the process creates a myriad of opportunities for Chinese construction firms.

Chinese financial aid offers crucial support for the government at a time when transport, electricity, and employment opportunities continue expanding. This coincides with economic growth and it also helps promote exports to other countries.

Infrastructure loans:

Some of the loans obtained from China are concessional, with a grant element above 25%. All these are linked to construction work, which is undertaken by Chinese companies like the two Chinese-built energy projects set to be launched in the second half of 2019.

Frehiwot Woldehana, the Deputy Minister at the Ministry of Water and Irrigation, disclosed the 254 MW Genale Dawa III hydroelectric project and a newly constructed electricity transmission line linking Ethiopia and Kenya will be commissioned in the second half of 2019.

The hydroelectric project is currently underway in southeastern Ethiopia. It’s one of the Chinese funded projects, being undertaken by Gezhouba Group at an estimated cost of close to the US $450 million.

The energy sector is important to Ethiopia as the country aims to achieve its energy sector goal of becoming a light manufacturing hub in the continent with a middle-income economy by 2025.

President Xi told Abiy they should focus on strengthening collaboration in industry and trade, climate change and other regional affairs, under the Belt and Road Initiative.

His sentiments are in line with the goals of the BRI, which are:

- to build an open and efficient international partnership platform between different countries
- to establish a stronger partnership network (which is beneficial in terms of trade and investment)
- and to push for a just, balanced and sound international governance system.

According to the Ethiopian Investment Commission (EIC), trade volumes between Ethiopia and China reached US$6.37 billion in 2015. This figure is expected to quadruple by 2025, as the country is keen on strengthening ties with other countries.

Abiy said 2020 marks the 50th anniversary of Ethiopia-China diplomatic ties, and the former hopes to take the opportunity and strengthen their cooperation.

There’re varied opinions regarding China's role in the continent and what they aim to get in return. However, trade ties are one important aspect of bilateral engagements with the Chinese as it has helped Ethiopia’s economic growth. Whether it’s uneven and one-sided is debatable. However, Abiy noted that China respects African states and doesn’t impose its will on them.

Ethiopia remains committed to the BRI and will promote it based on the code of mutual growth, and decisively backs the establishment of a community with a shared future between Africa and China, said Abiy.

The prime minister is in China together with other world leaders, heads of state and governments from more than 37 countries. The UN Secretary-General and the IMF director are also attending the second Belt and Road Forum for International Cooperation where deals with China will be discussed and signed.



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