CACS Occasional Paper No 6

Sino-Ethiopian Trade and Investment Relations:
Actors, Determinants and Trends

Dr Messay Mulugeta
College of Development Studies, Addis Ababa University
September 2018

Since the late 1990s, extremely strong economic ties have developed between China and Ethiopia, with trade flows reaching more than US$3 billion a year, and Chinese investment in Ethiopia approaching US$3.5 billion in 2017 from a non-existent base two decades previously. Chinese investments have created vital infrastructure, jobs for thousands of Ethiopians, and valuable skills and technology transfers. This relationship provides Ethiopia with an unprecedented opportunity to benefit from the most rapidly developing economy in the world.

Given that the African Union is based in Addis Ababa, it also has major economic implications for Africa as a whole. At the same time, it presents Ethiopia with significant challenges, namely to adapt Chinese resources and technologies to local circumstances and local priorities, ensuring, among others, that development is sustainable, environmentally sound, and protects rather than displaces local communities. In this Occasional Paper, Dr Mulugeta argues that this will require transformative and accountable leaders capable of harnessing and channeling the vast opportunities coming in from China.

Produced in partnership with the Oxfam Pan Africa Programme.


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