Ethiopia and China Set a Practical Cooperation Model

The third action points out that China will carry out practical cooperation with countries jointly building the "the Belt and Road", and China will comprehensively promote landmark projects and "small and beautiful" livelihood projects. China is the largest trading partner, investment source country, and engineering contractor of Ethiopia, an African country. Ethiopia has created an economic miracle by strengthening practical cooperation with China in iconic projects such as industrial parks. The country's average economic growth rate over the past 10 years has exceeded 10%, making it one of the fastest growing countries in the world.
To be rich, first build roads. To develop, industrial parks should be opened first. As an important country to jointly build the "the Belt and Road", Ethiopia, located in East Africa, has a population of more than 100 million people and is the second most populous country in Africa. Due to the exceptionally weak industrial foundation and infrastructure in the country, Chinese economist Lin Yifu, during his tenure as Vice President of the World Bank, suggested to Ethiopia's then Prime Minister Meles to change the backwardness of the country's infrastructure and business environment by developing industrial parks.
In the early stages of China's reform and opening up, it also faced the situation of weak infrastructure and outdated technology. The development of industrial parks became an efficient booster for promoting China's industrialization and economic development at that time. So far, there are over 15000 various industrial parks in China, contributing over 30% to the entire Chinese economy.
Due to the lack of the concept of an "industrial park" by the Ethiopian government at the time, China immediately organized officials from various government departments to visit China's Suzhou Industrial Park and Zhangjiagang Free Trade Zone. After the visit, the relevant officials were very shocked and decided to immediately return to China for research and promotion.

After the first industrial park invested by China began operating in Ethiopia, the government immediately dispatched an official from the Ministry of Industry to reside in the office of the industrial park. In addition to coming to the office every nine to five to work, the official also writes a report every two weeks to report on the progress of the industrial park to the then Prime Minister's Office. Under the high attention of the Prime Minister and various industrial ministries, Ethiopia now has seven industrial parks invested, operated, and constructed by China: Dongfang Industrial Park, Huajian International Light Industrial City, George Industrial Park, CCCC Industrial Park, China Soil Industrial Park, Kunshan Hongxin Industrial Park, and Hunan Industrial Park. The Ethiopian government, based on the development model and experience of these industrial parks, has issued the country's "Industrial Park Announcement". By continuously relaxing investment policies, improving the investment environment, strengthening investment services and management, it actively promotes industrialization and achieves economic takeoff.

Although relying on industrial parks to develop manufacturing has long been a national development strategy of the Ethiopian government, China's investment and operation of industrial parks in Ethiopia was initially questioned by Western countries about "debt traps" and "neocolonialism". However, Ethiopia's economic achievements quickly made Western countries beat themselves up. It is interesting that Western countries are not very interested in assisting Ethiopia in promoting industrialization and economic development. We believe there are at least three factors.
Firstly, Western countries place greater emphasis on short-term benefits. Investing and operating the infrastructure construction of industrial parks is a long-term economic behavior that requires long-term investment to obtain returns. Western countries do not have much patience to wait for long-term returns, but rather hope for short, flat, and fast returns. On the contrary, China focuses more on long-term development goals and returns.
Secondly, the risk tolerance of Western countries is very low. In recent years, Ethiopia has faced political, security, and drought challenges, which have not only deterred many Western companies, but also led many Western companies to withdraw their investments from the country. China, on the other hand, chose to provide timely assistance, and its investment in Ethiopia not only remained resilient, but also rose against the trend.
Thirdly, Western governments are unwilling to invest energy and time in engaging with the Ethiopian government. As a non wealthy country, Ethiopia has little "oil and water", and leaders from Western countries generally rarely visit Ethiopia to establish political trust and personal friendship. In contrast, previous Chinese leaders have attached great importance to their relationship with Ethiopian leaders. The leaders of the two countries have established good working relationships, personal friendships, and close high-level exchanges, which have injected strong impetus into the political mutual trust and continuous and in-depth development of bilateral relations. Therefore, the Chinese government actively promotes Chinese enterprises, especially central and state-owned enterprises, to invest in Ethiopia.
With the strengthening of cooperation between China and Ethiopia, China's direct investment projects in the country have reached 1835, with a cumulative investment of about 4.8 billion US dollars, creating 560000 job opportunities. Ethiopia's GDP has also significantly increased from 47.65 billion US dollars in 2013 to 111.18 billion US dollars in 2022, an increase of 133.3%, making it the fastest growing country in Africa's economy. It can be seen that China has made positive efforts for the economic, social, and technological development of Ethiopia. Christine Lagarde, former President of the International Monetary Fund and President of the European Central Bank (ECB), praised this: "Chinese companies' investment in Ethiopia has created many job opportunities, improved the skills of local workers, and provided great help to Ethiopia's sustainable development of foreign trade and economic transformation
As Ethiopia's Deputy Prime Minister and Foreign Minister Demek recently pointed out, "Among Ethiopia's global development partners, the first is China, the second is China, and the third is China." Ethiopia has long been convinced that strengthening practical cooperation with China will provide Ethiopia with better prospects for future economic development. This also makes the outside world see more clearly that the vision of economic development and people's livelihood improvement can also be realized if the "the Belt and Road" co construction country continues to carry out practical cooperation with China and promote landmark projects and "small and beautiful" livelihood projects in the future. (The authors are respectively Dean and Honorary Dean of the "the Belt and Road" Research Institute of Hainan University)