CHINA-ETHIOPIA ECONOMIC AND POLITICAL RELATIONS POST 1991 PERIOD

Abstract

Since the establishment of diplomatic ties in 1970, particularly since the creation of Forum on China-Africa Cooperation in 2000, China and Ethiopia have forge fruitful exchanges and all-round interaction in the political, economic and cultural areas and also enjoyed closer cooperation in international and regional affairs. Based on this, the main objective of this study is to examine the economic and political relations between China and Ethiopia post 1991. The study used both quantitative and qualitative methodologies to assess the economic and political ties. Data were also collected both from primary and secondary sources. The economic and political cooperation between the two countries has shown improvement particularly since 1991.

Bilateral political relations have been undergoing healthy and sustainable development and exchanging high level visits are made frequently. Economic cooperation between China and Ethiopia has also expanded rapidly, especially in the areas like agricultural cooperation, renewable and clean energy industry, railway and expressway constructions, and telecommunications. Four important factors have strengthened the current bilateral political and economic relations between China and Ethiopia, and make the bilateral relations indeed bright and promising. However, there have been many challenges to the bilateral relationship between the two countries. FOCAC reflects the form and content of Sino-African relations. Mapping a future for both sides to achieve common prosperity, and Ethiopia greatly benefits from FOCAC, especially from the binding mechanism of FOCAC, diversifying product and export market, financial cooperation, debt relief and cancellations, job creation and poverty alleviation, tourism development, health sector development, human resources development and so on. Further cooperation between China and Ethiopia and China‘s experience of its own development shows that a country cannot develop through dependence on aid, and as a result China‘s cooperation with Ethiopia is based on trade and investment over aid for development. Ethiopia can benefits from pro-business cooperation investments with China. Finally, some suggestions are given to Ethiopian government in order to enable Ethiopia secure the full benefits following the Chinese development model.

CHAPTER ONE

1. INTRODUCTION

1.1 Background of China-Ethiopia Relations

The contacts between China and the continent, from the simple trade of silk and porcelain in the ancient times to the complex investment and economic cooperation atpresent, from the ingenuous trust to political mutual support, that makes more and more increasingly close relations between China and Africa, it has now become a hot topic in international relations.

Though not well documented as China‘s relations with Asia and Europe, various sources reveal that China and Africa have a long and unofficial history of relations dating back as far as 202 BC (Gamora and K.Mathews, 2010), which was through Silk Road. But the first contact of China with the Horn of Africa particularly with Ethiopia has begun around 1000 AD, when the Chinese started to import rhinoceros horn from Ethiopia. It was under the Ming (1368-1644) that Sino-African relations achieved their historical climax through a series of expeditions that reached the East African coast under the command of Admiral Zheng He (1405-1433). In the early 20^th century new China-Africa contacts were made when Chinese laborers were brought to work in mines and plantations in Europe‘s African colonies.

The establishment of relations between China and African countries was closely related to African countries surge for independence and economic development and Chinese drive for recognition. However that of Ethiopia, a country which was not colonized, except for the brief period of Italian occupation during the Second World War, underwent a different pattern．

In this context, after the establishment of the People‘s Republic of China (PRC) in 1949, itcoincided with the quest for African independence. The Five Principles of Peaceful Co-existence ¹ were proposed at the Bandung Conference² 1955 in context of Chinese diplomatic efforts to establish official contacts with newly independent countries in Africa. Ethiopia attended this conference as one important independent African country.Following the Conference China sent its first delegation to Africa in 1956. One of the countries visited by this cultural delegation was Ethiopia. It was the beginning of people to people relations between the two countries.

At the height of their interactions and Chinese activism, during 1963—1965，a major campaign included visits to Africa by Premier Zhou Enlai and Marshal Chen Yi to win African countries‘ recognition and support. The visits covered eleven countries of Africa, both with or without diplomatic relations with China. The Chinese Premier‘s visit to Africa also included Ethiopia. Though it was not planned beforehand, the visit to Ethiopia came at the time when Ethiopia was trying to strengthen relations with all the countries including China and the two super powers. While America, despite China‘s condemnations of US imperialist domination, was firmly established in Ethiopia, meanwhile Ethiopia was also on the way of improving ties with the Soviet Union. Zhou Enlai‘s visit to Ethiopia thus had the key objective of wooing the country for its geopolitical importance as the seat of the newly established Organization of African Unity.

• Five Principles of Peaceful Co-existence: mutual respect for sovereignty and territorial integrity, mutual non-aggression, non-interference in each other’s internal affairs, equality and mutual benefit, and peaceful coexistence.
• Bandung Conference, The first large-scale Asian–African or Afro–Asian Conference, it was a meeting of Asian and African states, most of which were newly independent, which took place on April 18–24, 1955 in Bandung, Indonesia.

Formal diplomatic relations with Ethiopia was established after 15 years from Bandung Conference. Immediately following theBandung Conference, Ethiopia and Japan restored diplomatic relations and Emperor Haile Selassie made a historic visit to Japan in 1956. Since China and Japan were not on friendly terms by that time. Ethiopia‘s move must have overshadowed the-would-be friendly contacts between Beijing and Addis Abba. Due to Ethiopian relations with the US and some other international factors, Ethiopia was not among the first African countries to establish formal relations with China. So relations were poor during the regime of Emperor Haile Sellassie, when Ethiopia was allied with the western powers during the Cold War. Chinese support to the Eritrean People‘s Liberation Front (EPLF) now the government of Eritrea, contributed to the tension from 1967. However, the two countries established formal diplomatic relations on December 1, 1970, when China agreed to recognize Eritrea as part of Ethiopia in exchange for Haile Selassie‘s recognition of Taiwan as part of China. The establishment of diplomatic ties was a breakthrough for fledgling links between the two countries. The exchanges and cooperation in the political, economic and social fields in the first few years after the establishment of diplomatic relations were encouraging and fruitful.

Ethiopian Emperor Haile Selassie visited China in 1971 and got warm welcome by the first Chairmen of new China Mao Zedong and the first nonstop airline between China and Africa from Shanghai to Addis Ababa was put into operation on February 21, 1973. However, relations improved for a short period after the Ethiopian revolution of 1974, but became strained as the Ethiopian military junta developed increasingly close ties with the USSR. In short, Sino-Ethiopian relationship was still not strong due to ideological differences.

Smooth interactions between the two countries came into being only as of the late 1980s. In that period, while the changing international environment and Ethiopia‘s need for alternative way out of its crisis were the major factors, China‘s self-confidence and ambition to fill the gaps left by the USSR had contributed to improved ties.

In the last decade of the 20^th century both China and Ethiopia had undergone remarkable historical events. While China was defending herself from Western threats of isolation, Ethiopia experienced a radical change of government and system of development. With such transformation both wanted each other for mutual assistance. Owing to the changes, relations between the two countries were strengthened.

Economically, the trade and economic and technological agreements was signed on October 9, 1991 in Beijing. China provided an interest free loan of about US$ 6.5 million (RMBï¿¥50 million) to the new Ethiopian government and showed its willingness to assist Ethiopia in times of financial problem. Economic ties were further strengthened when China was determined to complete the projects which were already underway in Ethiopia. One of those was the completion and handover of the water supply project on January 1993. Trade exchanges between the two countries grew relatively faster reaching US$ 88.9 million by the end of the last century.

The relations between the two countries had steadily improved with increasing diplomatic contacts and high-level ministerial visits. The 1995 Ethiopian Prime Minster‘s visit to China was reciprocated by the Chinese president Jiang Zemin‘s visit to Ethiopia later in 1996. The diplomatic ties between the two states have become closer when Ethiopia hosted the second ministerial meetings of the Forum on China-Africa Cooperation (FOCAC; launched in

2000) as a mechanism for collective dialogue and multilateral co-operation between China and Africa) in December 2003, presided by Ethiopian Prime Minister MelesZenawi and Chinese Premier Wen Jiabao, and attracting six African presidents. This was the first time the ministerial conference was held on the African continent.The founding of the Forum on China-Africa Cooperation provided all opportunities for Sino-Ethiopian interaction on a new perspective. In the six years following the creation of the Forum, China became widely visible all around Africa including Ethiopia,particularly in agriculture, infrastructure construction, trade, investment, development aid, human and natural resources development and debt relief. 2010 marked 40^th anniversary of the establishment of diplomatic ties between the People‘s Republic of China and Ethiopia. It was celebrated both in Addis Ababa (November 24) and Beijing (December 16).

In sum, ever after the dawn of the new Millennium, bilateral ties between China and Ethiopia have registered new progress with the joint effort of both sides among others in the economic and political fields.At the Beijing Summit (November 2006), when Hu Jintao announced a number of policy measures including zero tariff for African goods, debt cancellation and joint infrastructure projects, Ethiopia was the only country that has benefited from all.These clearly showed the future prospect of the relations between the two countries to continue and even to consolidate further.

1.2 Statement of the Problem

Politically, Ethiopia has a special position in Africa due to the fact that it is the only country in Africa to successfully resist colonization. Besides, the headquarters of African Union is located in Addis Ababa, the capital of Ethiopia. Economically, data shows that Ethiopia is one of the fastest growing developing countries in Africa, and it has potential to develop and catch up with any other African countries. Ethiopia has been playing an important role in the world and Africa in particular.

However, China‘s early historical contacts and current relations with Ethiopia are little documented than those with the West, but are important and enduring. Generally, the contacts which began in the second half of the twentieth century attracted the attentions of academicians，politicians and media and it is found that relations between China and Ethiopia are reflected in terms of complementary mutual support both politically and economically．

This study, therefore, analyzes the development of economic and political relations between the two states, especially post 1991 period and challenges, as well as draw a new vision for long-term stable partnership between China and Ethiopia, specially through Forum on China—Africa Cooperation. This paper also focus on getting the answers to the question that the main factors which prompted bilateral political and economic relations between the two countries, and attempts to explore a regular pattern or reference for further cooperation from past-experience already gained.

1.3 Research Questions

The major research questions that this study attempts to answer are as follows:

• What are the factors which prompted the bilateral political and economic relations between China and Ethiopia?
• What are the challenges of bilateral political and economic relations?
• Forum on China—Africa Cooperation：What is in it for Ethiopia? How does Ethiopia benefit from it?
• What can Ethiopian government learn from Chinese development model?

1.4 Objective of the Study

The general objective of this study is to understand and analyze China-Ethiopia political and economic relations, particularly post 1991 period; The specific objectives of this study include the following:

• To analyze the main factors which enhanced the bilateral political and economic relations between China and Ethiopia;
• To examine trade, loan, grant, investment and commercial activities;
• To explain the challenges of bilateral political and economic relations;
• To draw a new vision for long-term stable partnership between China and

Ethiopia, specially    through Forum on China—Africa Cooperation;

• To give some suggestions for Ethiopian government from Chinese development model.

1.5 Hypothesis

Despite there are some main factors driving the bilateral political and economic relations between China and Ethiopia, the bilateral economic and political relations between the two countries face challenges, but long-term stable partnership can be built.

1.6 Methodology and Methods of Data Collection

1.6.1 Methodology

This research is based on both qualitative and quantitative approaches. A qualitative approach is informed by multi—disciplinary orientation．It employs both the ―social scientific‖ approach of collecting qualitative data and the conventional approach of historians to identify the dynamics of change which include descriptive and analytical accounts of events．Apparently as the topic is mixed with the history of international relations，issues of diplomatic history within the contemporary quest for the creation of a fair and reasonable new international political and economic order had been taken into consideration in channelizing the data．

1.6.2 Methods of Data Collection

The researcher used both primary and secondary sources of data to carry out the study. Basically multi-method data collection techniques are employed for the various chapters of the study. The survey on the overview of China-Ethiopia relations was mainly based on secondary sources collected from libraries both in China and Ethiopia. The data still have included secondary sources are mainly dependent on government archives, reports and electronic databases. As a primary source, the structured and semi-structured interviews with concerned bodies working at Ethiopian Ministry of Industry, Ethiopian Ministry of Industry and China Embassy in Ethiopia are mainly used. A major methodological challenge of this study is to collect unbiased data．

1.7 Significance of the Study

The political and economic relations between China and Africa are informed in international relations. These views range from ―mutual support‖ to China‘s ―disguised neo-colonialist‖ adventure．This study focuses on the economic and political relations between China and Ethiopia, especially post 1991 period and give readers a vivid perspective of China-Africa relations as a case study from the perspective of Chinese foreign student in Ethiopia. Sino-Ethiopian relations are not studied as more as the relations between China and Africa, so this thesis also fills the gap in the existing knowledge in the relations between the two countries and thereby provides new information in the study of international relations. Moreover, it may help other researchers in undertaking further investigation in relation to the issue in question.

1.8 Scope and Limitations of the Research

The relations between China and African countries, Ethiopia in particular, has a historical background, the economic and political relations post 1991 period are chosen to be covered by this study. From the historical development to the current state of the relations between the two countries, from the factors which enhanced the bilateral economic and political relations to the challenges the two countries face, the relevant analysis and exploration are concerned. A vivid perspective is also given in this research which is how does Ethiopia benefit from Forum on China—Africa Cooperation. Valuable conclusion and recommendations are necessarily put forward as well.

With regard to the limitation of this research, since the topic of the paper focuses on a recent period, availability of sufficient material is the main limiting factor. When we see researches conducted on this issue from Chinese side there are few authorities．From the Ethiopian side few sources are worth mentioning. Most of the works on China-Africa relations have been conducted by foreign writers mainly from the West. But none of them have conducted study Sino- Ethiopian ties as the main area．So it would be of relevance to review only those important works regarding China and Africa. A further challenge is the time and resource allotted for carrying out the paper.

1.9 Organization of the Study

The study consists of five major chapters. The first chapter is an introduction under which background of the study, statement of the problem, research questions, objectives of the study, hypothesis, methodology, significance of the study, scope and limitations of the research, and organization of the study. The second chapter covered the review of related literature, the theoretical and conceptual frameworks. Chapter three is devoted to development of China-Ethiopia relations from 1949 to 1991, and through time period as a line to see the development. The fourth chapter touches upon the current state of economic and political relations between the two states. Main factors which enhanced the bilateral economic and political relations between China and Ethiopia are analyzed and challenges are discussed as well. One important point is also focused, which is how does Ethiopia benefit from Forum on China—Africa Cooperation. The last chapter gives conclusion and recommendations, especially to get the lessons which Ethiopian government can learn from Chinese development model.