China invests in Ethiopia but at what cost?

China’s minister for commerce says trade with Ethiopia will reach $3 billion by 2015

China’s minister for commerce says trade with Ethiopia will reach $3 billion by 2015

ASK AN Addis Ababa taxi driver to take you to Ethio-China Friendship Road and he might just scratch his head.

The renaming of Wollo Sefer, one of the Ethiopian capital’s main thoroughfares, in tribute to the country’s burgeoning ties with Beijing might be obvious from the new street signs but it has yet to filter down to everyday use.

The road is not the only marker of China’s growing engagement with Ethiopia.


Addis Ababa’s ultramodern airport was built by the Chinese, as was the city’s ring road and flyover.

An extensive renovation of the African Union headquarters in downtown Addis is being financed by the Chinese to the tune of more than $100 million (€71 million).

Across the city, a Chinese government-built school, designed to cater for up to 3,000 students, offers Mandarin classes as part of its curriculum.

Scores of Ethiopians have been given scholarships to study subjects including engineering and architecture in China.

The Chinese restaurants and clinics advertising acupuncture and traditional herbal remedies that have become part of the landscape in almost every African city in recent years are here too. According to local media, some 1,000 Chinese companies operate in Ethiopia.

Besuited Chinese businessmen can be seen discussing deals in Addis hotel lobbies, while engineers and others fresh from working on road and telecommunications projects or building power stations and water supply systems haggle for souvenirs in the city’s sprawling Merkato before flying home to Beijing.

In some Ethiopian towns and villages, it is not uncommon for foreigners to find themselves being greeted by children yelling “China, China”.

Earlier this month Chen Deming, China’s minister for commerce, was in town predicting that trade volume between the two countries will reach $3 billion by 2015. Chinese investment in Ethiopia amounted to just under $1 billion last year, and there is much talk of future investment in agricultural projects.

“China and Ethiopia have been mutually supportive on the political front and closely co-operating on the economic front,” Chen said, going on to use the stock expression Chinese officials trot out when discussing relations with African states: “It is fair to regard the Sino-Ethiopian friendship as an all-weather one.”

China’s new engagement with Africa has played out very differently across the continent, helping revitalise moribund economies in some countries, while breeding resentment elsewhere due to support for unsavoury regimes, poor work practices and threatened local industries.

There have been a few cautionary tales for the Chinese along the way. In 2007, for example, nine Chinese oil workers were killed and seven briefly kidnapped in the restive Ogaden area of eastern Ethiopia.

Ethiopian prime minister Meles Zenawi says African states must be prudent in setting the parameters of the relationship.

“The Chinese interest in Ethiopia has been nothing short of a godsend,” he tells The Irish Times.

“We have benefited massively from it, but like everything else it is capable of becoming a nightmare . . . It is up to the host countries as to how they use the available resources from the Chinese in the best possible manner. Those who do will benefit, those who don’t may not benefit as perhaps they ought to.”

China’s assistance in building infrastructure and its investment in manufacturing has been invaluable for Ethiopia, Meles says.

“We need investment from any quarter we can get it. The Chinese have been more aggressive in investing in Ethiopia than many others and our hope is that Chinese investment will entice not only additional Chinese investment but also investment from other countries.”

But, as in every African country wooing Beijing, there is debate over who stands to gain. A 2008 study by an economist at Addis Ababa University noted that while Ethiopian consumers will benefit from cheap Chinese imports, small local firms, particularly in the clothing and footwear sectors, will lose out.

Opposition figures, like many of their counterparts elsewhere in Africa, mutter darkly about deals agreed behind closed doors, and speculate on the motives of both the government and Beijing.

One told me he suspects that the Meles regime sees China’s overtures as an opportunity to shore up support where it matters on the world stage.

Whatever way the debate shifts, however, the one thing everyone seems to agree on is that the Chinese are here to stay.