China and Ethiopia diplomatic relationship was established in 1970 because it was mutually beneficial. China needed Ethiopia, and other African nations, at the UN and Ethiopia, which was ruled by Emperor Haile Selassie I, was a diplomatic leader towards African independence, and could no longer ignore the most populous third world nation involved in solidarity and material support in the anti-colonial struggle movements. However, a stronger relationship was recalibrated after the Cold War in 1991, with consolidation of power by the Ethiopian People’s Democratic Revolutionary Front (EPDRF).

Ethiopia-Chinese relationship is unique in many ways. First, Ethiopia’s traditional relationships with the industrialized nations are North to South whereas its relationship with China is South to South, allowing for a two-way approach that, at least in theory, is mutual. Second, China’s economic relationship with Ethiopia is in line with China’s policy of non-interference in the domestic affairs of nations. Third, such relations are bilateral, with the Forum on China-Africa Cooperation (FOCAC) serving as setting for engagement in areas related to economic, diplomatic, and social agendas.

Ethiopia is seen by the industrialized North as an aid recipient nation. The largest amount of its aid comes from the European Union (EU), and this is the major instrument in European cooperation. In contrast, China does not see Ethiopia primarily as an aid recipient, but as an important political and economic ally in its new Africa policy. Contrary to widespread assumptions that China primarily engages in resource-rich countries, Ethiopia, which for the most part does not have many resources, has become one of the largest recipients of official Chinese flows. This is because Ethiopia offers China much in the way of political resources, symbolized by the newly built, gleaming, steel and glass tower in Addis Ababa, funded by China as a gift to the African Union at a cost of $200 million, which continues to strengthen Beijing’s influence in Africa.

Chinese-Ethiopian cooperation is manifested at several levels. First, Ethiopia sees China as a source of economic assistance and investments as well as inexpensive technologies capable of lifting millions of small entrepreneurs out of poverty through access to farm machinery and transport. This is because state policymakers in Ethiopia have grasped that economic growth cannot be achieved without sustained technological and industrial upgrading and structural transformation of the country’s economic activities. In addition, Ethiopia considers China a vast market for its agricultural commodities and thus a vehicle for improving the lives of the peasantry, which make up about 80 percent of the population.

There are several variables to consider in China’s political interests in Ethiopia. One obvious fact is that Ethiopia has a number of political assets: Addis Ababa is increasingly becoming an inter-continental diplomatic hub hosting (a) the African Union, whose headquarters facility was built by China, (b) the UN Economic Commission for Africa, (c) the Intergovernmental Authority for Development (IGAD) located in nearby Djibouti, and (d) various important international non-governmental organizations. These organizations offer China an opportunity for close contact with African leaders as well as with eminent personages who influence individual African nations’ domestic and foreign policies.  A second variable is the reality that Ethiopia, with the largest standing army in sub-Saharan Africa, 130,000 strong, is a force for stability in the Horn of Africa. Although Ethiopia is undergoing a reform and transition process and national elections for parliament are planned for May 2020, it is still influential in Mogadishu, having helped establish the Federal Government of Somalia, and also has close relations with Somaliland, with its capital city Hargeisa, which has been an unrecognized, self-declared de facto sovereign state since 1991. Somaliland is not internationally recognized as an independent state but is considered an autonomous region of Somalia. Ethiopia’s interest in Somaliland is tied to the port of Berbera, which it needs in order to reduce its dependence on Djibouti. 

Ethiopia is also deeply involved with its western neighbors in the Republic of South Sudan, which is plagued with on-again, off-again civil war. Ethiopia has concerns for the security of its federal form of governance due to a rebel Nilotic ethnic group straddling the Ethiopia-South Sudan border. China and Ethiopia have a common interest in political stability in South Sudan. The oil that is being refined there by China and is critical for its energy needs is also critical to Ethiopia, which is landlocked and would like to acquire it through a cross-border pipeline. But both China and Ethiopia have had to contend with the politics of two Sudans because South Sudan’s oil flows through Port Sudan in the north.  

Thus, Chinese and Ethiopian interests in the Horn of Africa have led to a close partnership that includes military cooperation, with Beijing supplying Ethiopia with artillery, light armored vehicles, and troop transport. These relations have also resulted in several Ethiopian officers visiting China for training. This military relationship was cemented when Ethiopia signed a military cooperation agreement with Beijing in 2005 for training, exchange of technologies and joint peacekeeping missions. This close cooperation is underlined by the presence of a military attaché, one of the few on the continent, in the Chinese embassy in Addis Ababa.

China is also interested in Ethiopia because of the latter’s influence on the Republic of Sudan and Egypt due to its control of the Blue Nile River, whose flow generates some 80 percent of the water that reaches the Republic of Sudan and Egypt. Ethiopia’s Grand Renaissance dam is expected to revitalize the impoverished region with 6,000 GWh annually and Ethiopia intends to exploit its invaluable water sources to achieve the status of a middle-income country. In order to achieve its long-term objective of becoming a regional energy supplier to nations such as Djibouti, Kenya, Sudan, and Yemen, Ethiopia initiated its 25-year Master Plan, building hydroelectric dams along the nation’s vast waterways in 12 river basins. Five of the six proposed dam projects are with Chinese firms.

For Ethiopia, China is an alternative partner directly involved in building its infrastructure and engaged in its development strategies. During the Mao era, China’s involvement with Ethiopia was based on geopolitical values as China needed Ethiopia’s support in its quest for African solidarity and alliances against Taiwan and the West at the United Nations. But now China is interested in Ethiopia based on pragmatic political calculations; Ethiopia offers China a one-stop shopping center in Addis Ababa, where it can flex its diplomatic skills among African delegates at the African Union, the UN Economic Commission for Africa, and other international organizations. But there are also economic reasons; Ethiopia is the second most populous nation in Africa, estimated at 108 million, and offers China a good market. In addition, Ethiopia may also have vast potential in oil and gas resources in the restive region of Ogden, which, when realized, will augment China’s energy supply.