The Ethiopian Connection:
A Brief Overview of China’s Influence in Ethiopia
WHO’s Dr. Tedros Adhanom Ghebreyesus praise of China and inaction in the face of the coronavirus pandemic is no accident. Much of it has to do with his country’s heavy economic, financial, and political dependence on China.
To the Chinese government and business community, Ethiopia is the gateway to Africa. It is a launchpad from which to launch its greater ambitions in Africa: the Belt and Road initiative.
A Relationship Born from the Ashes of Civil War.
China’s relationship with Ethiopia is a rocky one until after 1991. From 1976 to 1991, the country was embroiled in the Ethiopian Civil War.
The Ethiopian Civil War left 1.4 million people dead. Critical agricultural infrastructure was damaged, leading to 1.0 million deaths from famine alone. Society collapsed under the weight of urban civil war, and terror tactics by both the government and rebels. Infrastructure was devastated, despite Soviet aid.
Relations between China and Ethiopia hit a low point in this time period, because of the Soviet Union’s military and economic support for Ethiopia, and China’s support for the Eritrean guerillas seeking independence. China at the time had a very terrible relationship with the USSR (almost came to war). Meanwhile Ethiopia had its hands full fighting a civil war, the Ogaden War, and the Eritrean guerillas.
That changed in 1991. In that year, weakened by internal struggles, Ethiopia’s main benefactor, the USSR collapsed. The civil war ended, with the Ethiopian People’s Revolutionary Democratic Front taking power.
Also in 1991, the Chinese supported Eritrean guerillas ended their battle with a peace deal with Ethiopia. In 1993, a UN backed independence vote granted Eritrea its independence. This landlocked Ethiopia, denying it the Eritrean Red Sea ports that it had previously used.
The timing of this in the 1990s is interesting. In the same year that Chinese backed Eritrean rebels gained independence, China began to normalize and invest with commercial relations with Ethiopia. While no proof exists, this may suggest there was some sort of a peace deal assisted by China with Ethiopia in exchange for peace, and ultimately Eritrean independence. China sits on the UN Security Council, and has the political and economic pull to do so.
Even if no deal existed, it would hobble Ethiopia economically enough to search out foreign aid. After all, their economy, government, and military had been dependent on it for so long by 1991. With the USSR gone, and their government was a Marxist one, so the US or Europe was not a political option.
And that is how, a poor country, devastated by decades of civil war and lacking ports, found a new patron: the rapidly industrialized and economically prosperous People’s Republic of China.
The Chinese Involvement in Ethiopia
In Ethiopia, China saw a commercial launch pad to Africa. This was a result of a need for new markets that grew under rapid development in the 1980s under Deng Xiaoping. Decades of controlled communist economy had resulted in oversupply, driving down prices for goods. It became a matter of life and death for the growing Chinese industry.
With a population of over 81.1 million people, the Ethiopian market was ripe for cheap imported Chinese goods. This is not to mention the tremendous investment and trade opportunities to support the movement of them. Combined with poverty and Ethiopia’s strategic location, this presented a major political and economic opportunity to expand Chinese dominance.
To do that, China used a very traditional political strategy: Give before you take.
To achieve this, they invested in infrastructure, over a period of 30 years, since 1991. China has funded Addis Ababa’s $475 million lightrail system and a $86 million dollar ring road. The PRC has also invested in key key infrastructure too, helping to add more than 50,000km of new roads since 2000.
China has become a major player in the field of infrastructure (roads, dams, power plants, etc.) and over 60% of all construction is undertaken by Chinese companies. The effect is a bidding war in which Chinese companies always win.
To pay for this infrastructure, Ethiopia has taken out massive loans from China, concessionary loans, totaling in the billions of dollars in debt. So much so, that China had to cancel some of these interest free loans in 2019. It is money that Ethiopia can neither afford, nor pay back.
As a result of this investment, Chinese products are heavily utilized in Ethiopia. One example is the Chinese mobile phone maker Tecno. The company has taken over Apple and Samsung to be one of the most popular phone brands in Ethiopia. It even created the first keyboard to use Ethiopia’s official language, Amharic.
Even this mobile phone giant has been displaced by another Chinese mobile phone giant: Transsion. Between Transsion, Huawei, and Tecno, Chiense mobile giants cornered over 60% of the market in the country.
To simplify costs, and reduce import and export costs, all three giants make manufacture their phones in Ethiopia, allowing average people to afford normally expensive phones.
This had major effects. The dumping of low priced Chinese export goods makes Ethiopian economic independence from China impossible. While it has allowed the average Ethiopian ability to buy consumer goods, it has forced domestic Ethiopian producers out of business because they cannot compete on price.
China’s influence in Ethiopia is not just simple investment or aid. It’s an attempt to create a tributary state in Africa. Much like the Europeans did in the race for Africa in the 19th Century. It is a new colonialism all over again.
So what does this mean for China?
First, strategic positioning.
Ethiopia fits into the greater Chinese political strategy in East Africa and the Indian Ocean. The goal is to gain a strategic position against a major shipping lane: the Red Sea. It is also used as a counter and monitor US interests in the region, namely the allies in the Arabian Peninsula and Egypt. This also allows further future projection of Chinese naval assets into the Indian Ocean, and disruption of US and Indian interests. China is not fond of India.
China maintains a strong diplomatic and economic ties between Eritrea and Djibouti which are next to the Red Sea. They even have a People’s Liberation Army naval base in Djibouti, on the Red Sea. The airport in Addis Ababa is frequently used to resupply this base, as well as Chinese military assets in the region.
Second, hold economic dependency.
Years of civil war devastated the economy so badly that infrastructure needed to be rebuilt using foreign loans. By giving loans that are unable to be paid back in full, China holds Ethiopia firmly within its grasp, creating a never ending cycle of debt. The fact that China had to forgive the country’s already interest free loans in 2019, says much about the country’s ability to pay them. Chinese lenders require collateral: in this case land and resources. This places the country more into Chinese control, and supplies cheap land for China to build overseas manufacturing.
Third. Create a jump off point for expansion of Chinese commercial interests in the region.
As mentioned before, the Bole International Airport at Addis Ababa is a major hub for Chinese commercial interests. China was heavily responsible for building the infrastructure for the airport, as well as turning it into a major cargo hub in East Africa in the last 10 years. The airport went from #92 on the busiest airports in East Africa….to #3 in 2019, because of this assistance. Traffic both passenger and cargo increased each year since 2008 by an average of 25%.
Ethiopian Airlines, China Air, Hainan Air, and Southern China airlines have direct cargo and passenger flights between several major Chinese cities to Bole International.
This suggests heavy investment annually by China. It also suggests that China is using this as a major cargo route, not only to supply its allies in Djibouti and Eritrea, but as a springboard to the rest of East Africa for Chinese goods. In November 2019, the Ethopian Government signed an agreement with Alibaba that promotes cross-border trade, logistics and fulfillment services for its products. China is investing heavily in the country, so that it can expand its reach in the Belt and Road initiative to expand its commercial interests in Africa.
There is no genuine partnership between China and Ethiopia. Not while China holds the majority of trade balance and loans in its pocket. While this might be slightly different from the traditional western domination, it is still a form of domination. A tributary relationship, in a sense. China’s stance on Ethiopia is likely to harden in the long run, with more manipulation and exploitation and less benefit for the country. And this has had longer term and lasting effects for the world.
It means a inept leader at the head of the World Health Organization, who elevated by Chinese interests and chained by their economic slavery, refused to declare a pandemic as coronavirus swept the world. Who made excuses for China. Who praised their technology, and suppressed information and did little action needed to contain the virus. Who waited until the world began to burn.
