Ethiopia and the Belt and Road Initiative: The impact of Chinese investments on the industrialization of Ethiopia

China is expanding its sphere of influence in the Horn of Africa along one of the world’s most important maritime trade routes. Chinese companies have been investing heavily in infrastructure and in industrial parks in Ethiopia, and they have expanded the Port of Djibouti to include several commercial specialty ports meant to provide sea access to minerals and goods produced in Ethiopia. Concomitantly, China also recently opened its first foreign naval base in Djibouti. The main question addressed in this chapter is whether the Chinese geo-economic expansion has been moderated by the Ethiopian government and global value chain networks. Empirically, the focus is first on the extent to which Chinese investments fit Ethiopia’s industrialisation strategy, and second, as a recipient of Chinese support: a growing foreign debt. It is concluded that the Ethiopian government has opportunities to moderate the growing Chinese involvement in its economy due to a historically consistent development vision and the ability to partner with China without jeopardising relationships with its traditional Western investors and partners. There is no equality in the China-Ethiopia relationship, however, and this may create dilemmas for Ethiopia’s international representation.

The chapter is published in the book: The China-led Belt and Road Initiative and its Reflections: The Crisis of Hegemony and Changing Global Orders