China and Ethiopia have signed MOU to establish a Working Group to raise investment and economic cooperation.
The new work group is tasked to “help both nations to accomplish their commitment to efficiently implement the development strategies of the ‘Nine Programs’ of the 8th Ministerial Conference of Forum on China-Africa Cooperation (FOCAC) and the Belt and Road initiative.”
A news update from the Ministry of Finance cited Ahmed Shide as saying that ” the two countries’ long-standing relationship of more than half a century indicated China’s significant role in Ethiopia’s economy as its top trade and investment partner. The Minister added that Chinese enterprises have significantly invested in Ethiopia in diverse sectors, including industrial parks, processing, manufacturing, construction and so forth.”
According to information from the United States Institute of Peace, Chinese investment in Ethiopia is worth over $4 billion dollars. As many as 400 Chinese companies are operating in Ethiopia mostly in the construction and manufacturing sectors.
Mr Li Fei said his country is committed to encouraging Chinese enterprises to increase the volume of imports from Ethiopia.
He said, as cited in the Ministry of Finance update, that “China’s new preferential policy for zero-tariff treatment on 98% of taxable items that Ethiopia will enjoy from 1st March, will lead to tangible benefits from the 2 countries’ strengthened economic ties.”
There has been a noticeable great power race to make Ethiopia a sphere of influence. The United States has been employing trade as a policy tool to influence policy in Ethiopia. The latest example was the U.S. mission to rescue the Tigray People’s LIberation Front (TPLF) from total annihilation by the joint forces including from Eritrea.
The United States sanctioned Ethiopia by taking it off the list of “Africa Growth Opportunity Act” beneficiaries. China was advocating non-interference including at a time when the United States supported, it was noticeable, Egypt against Ethiopia’s right to use the water from the Nile River while over 85 % of the water is originating from Ethiopia.
