Ethiopia and China: Political and Economic Relations Since 2018
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Date
2025-09-01
Authors
Israel Sileshi
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Publisher
Addis Ababa University
Abstract
The purpose of this study was to assess the evolution of political and economic relationships between Ethiopia and China from 2018 onward. Recently Ethiopia experienced significant political reform under Prime Minister Abiy Ahmed during a period of significant regional instability; meanwhile, China began expanding its Belt and Road Initiative (BRI) throughout Africa. Therefore, the need to understand how Ethiopia will navigate this relationship is the research question.A qualitative case study methodology was used for this study. Primary data collection was conducted via semi-structured interviews with Ethiopian government and sectors' officials and review of policy documents and investment data. Semi-structured interview transcript responses were thematically coded to determine the patterns of diplomatic and economic interactions among the two countries. Politically, both Ethiopia and China have enhanced their relationship through regular high-level meetings and aligned foreign policies in international forums. Interview participants stated China as "a true friend" providing diplomatic support to Ethiopia, including support within the United Nations and in Ethiopia's conflict. Likewise, Ethiopia supported Chinese interest in BRICS membership. Economically, the increased Chinese foreign direct investment (FDI) and lending to Ethiopia as part of the BRI have enabled rapid expansion of Ethiopia's infrastructure roads, railways, electrical power, industrial parks resulting in job creation and industrialization. According to officials, the Chinese investments in manufacturing are also increasing significantly leading to increases in fixed capital formation and the beginnings of an industrial economy. Nevertheless, such benefits occur at a cost to Ethiopia, namely growing Chinese loan obligations, a large trade deficit and dependence upon Chinese imports. Furthermore, the interview participants described the varying results regarding the transfer of technology and job opportunities,while Chinese firms provide highly advanced machinery and equipment, the lack of technological capability and limited career advancement opportunities for Ethiopian employees continue to be problems. Officials stated they have established several strategies to address these challenges including: negotiation of debt relief, promotion of local content requirements, and diversification of potential investors beyond China.As a whole, Ethiopian officials have viewed the relationship between Ethiopia and China as generally mutually beneficial although requiring effective management. The partnership is viewed as contributing greatly to Ethiopia's developmental objectives while raising structural risks that Ethiopia must mitigate. This study provides insight into how an African state (Ethiopia) utilizes its agency in a South-South engagement: it uses Chinese financial and resource commitments to enhance its economic growth while attempting to maintain its sovereignty and to promote a diversified set of investment partners. This study adds to the body of knowledge regarding contemporary China-Africa relations and the strategies employed by African governments in development partnerships.
Keywords:Belt and RoadInitiative, Development partnership,Ethiopia–China relations, Political Alignment,South-South Cooperation
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Keywords
Belt and RoadInitiative, Development partnership, Ethiopia–China relations, Political Alignment, South-South Cooperation