Post 1991 Ethio-China Economic Cooperation with Particular Reference to Trade and Road Construction
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Date
2011-04
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Addis Ababa University
Abstract
Economic cooperation plays a key role in promoting sustainable development and it is
also a major element of international cooperation. Based on this fact, the main objective
of this study was to examine post 1991 Ethio-China economic cooperation with
particular reference to trade and road construction. The study used both quantitative and
qualitative methodologies to assess the economic and political ties. Data were also
collected both from primary and secondary sources. The economic cooperation between
the two countries has shown improvement since the period under discussion. The major
contributing factors for this are, the change of economic policies in Ethiopia following
the change in leadership, China’s growing economic and political interests in Ethiopia
and in Africa at large, the strengthened ties between the two governments based on
common outlook of the ‘developmental state’, and the Chinese non-intervention policy.
After critical analysis of trade data between Ethiopia and China, this paper empirically
proved that Ethiopia incurs huge deficit in its trade with China in the period under
decision. The result from cross sectional data sources, i.e. secondary sources, official
reports and interviews, reveal that Ethiopia’s export to China is much short of its imports
from that country. Although trade figures show that there are improvements in the
country’s export, still the trade balance is largely in favor of China. Dependence on the
export of few primary products, weak export performance and geographic factors are
among the reasons for the country’s trade deficit. This paper has also found that the
engagement of Chinese construction firms in Ethiopia is much greater than companies
from other countries. Currently about 70 percent of the construction in the country is
being carried out by the Chinese enterprises. The low bid price these Chinese firms offer to carryout projects, the favorable environment for investment in Ethiopia, and the
relative peace and stability in the country are attributed to the dominance of the Chinese
firms
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International Relation