Partners in Poverty or Prosperity? The China-Ethiopia Relationship
Upholding a long-standing tradition, the first week of 2026 saw China's Foreign Minister Wang Yi begin his tour of the African Continent, opening with a meeting with Ethiopian Prime Minister Abiy Ahmed in Addis Ababa. The value of this 36-year tradition extends well beyond symbolism; as Ethiopia’s position as a marginalised state solidifies within the Horn of Africa, and at a precarious moment for its allies, China has become essential to the growth of Ethiopia. While Western partners grow increasingly critical of Ethiopia’s domestic wars and the humanitarian consequences, and Ethiopia's peripheries burn, in contrast Beijing is deepening its economic embrace of Addis Ababa - taking advantage of the state of exile befalling Addis Ababa.
As the depth of Ethiopia’s dependency grew deeper, Beijing shifted its influence away from bricks and steel towards currency and finance. Beginning with flagship projects such as the Grand Ethiopian Renaissance Dam (GERD), and the Ethiopia-Djibouti Standard Gauge Railway (SGR), the relationship tended towards the economy and was consolidated by the 2023 ‘all-weather partnership’. Today, China holds roughly half of Ethiopia's bilateral debt and co-chairs the creditor committee determining the country's financial future. And China’s donations don’t stop there; with Ethiopia’s forex reserves covering barely one month of imports - one third of the IMF’s recommended minimum - Beijing controls access to the hard currency that keeps the government afloat.
At a moment of particularly strained Ethiopian-Djiboutian relations, Beijing’s investment is significant, underpinning the economy of both countries. In a bid for autonomy from the co-dependency trap that is Ethiopia’s use of Djiboutian ports, Abiy met with Djiboutian President Ismail Omar Guelleh in the first week of January, during which Abiy threatened to diversify Ethiopian exports to include the port of Berbera and Kenya’s Lamu Port unless Djibouti lowers export costs. Although more likely an empty threat due to the impracticalities of access to the alternatives, this proposition would have no small impact on China-Ethiopia relations. Not only has China contributed significantly to the construction of Djibouti’s ports and to the infrastructure to enable Ethiopia’s access to it, but China is also at odds with the de facto state of Somaliland and Ethiopia’s indulgent approach towards it. Although Ethiopia is tempted by the idea of recognising Somaliland - a move in direct opposition to Beijing’s One-Somalia, One-China Policy - Beijing is showing no sign of abandoning its most reliant African partner.
A long pause followed the Ogaden National Liberation Front's (ONLF) attack on the Chinese-operated oil exploration site in Abole in April 2007, itself symbolising the sustained underdevelopment of Ethiopia’s Somali-speaking region. Almost two decades on, the Gode Oil Refinery was opened in partnership with Chinese Golden Concord Ltd in 2025, and there is little prospect for change to the development of the region. A true embodiment of the centralised political economy built by Abiy and Xi Jinping, the peripheral Somali Regional State (SRS) is unlikely to see the economic benefits of the new refinery. This project was not the first nor the last in a lengthy list of projects exploiting Ethiopia’s - largely unrealised - natural resources, all with the aid of Beijing, Abu Dhabi, and Moscow. China shows a uniquely high tolerance for instability when strategic assets are at stake, and Ethiopia’s chronic economic dysfunction and untapped potential has made it more valuable to China’s expansive regional ambitions.
Once reputed for favouring ‘status quo states’, China’s recent track record reveals a calculated willingness to take advantage of dysfunction when it creates dependency. Beijing arrived in Addis Ababa at a time of growing difficulty; three insurgencies raged across the country, Western donors were turning their backs, and the economy was plummeting. China’s helping hand arguably rescued Ethiopia from looming disaster. But it has also left Addis Ababa dangerously dependent on its Asian saviour. If Abiy succeeds in pulling his country back from the brink, de-escalating internal conflicts and putting the economy back on track, both Addis and Beijing stand to benefit. But if Ethiopia continues to wage costly domestic wars and descend even deeper into China’s debt, it is a relationship that both parties may yet come to regret.
The Ethiopian Cable Team
Gain unlimited access to all our Editorials. Unlock Full Access to Our Expert Editorials — Trusted Insights, Unlimited Reading.
Create your Sahan account LoginUnlock lifetime access to all our Premium editorial content
Most nights in a number of dimly lit bars in Addis Ababa, one can hear a vibraphone hum over a syncopated bassline. The sprightly rhythm is unmistakably jazz, but the scales are Ethiopian; pentatonic, looping and melodic. Five decades after its pioneering by visionary musician Mulatu Astatke, Ethio-jazz remains in full swing, with its renaissance from the late 1990s persevering despite tough political and cultural conditions.
Over the weekend, a flurry of viral posts on X (formerly Twitter) highly critical of Türkiye by the Ugandan army chief risked tipping the three-way relations between Somalia, Türkiye, and Uganda into a new tailspin. General Muhoozi - the son of Ugandan President Yoweri K. Museveni and the Chief of the Ugandan People's Defence Forces (UPDF) - accused Türkiye of disrespect, threatened to pull troops out of Somalia, and further demanded USD 1 billion in compensation from Ankara. Although the posts were deleted on Sunday, the storm the comments generated has not died down.
The sparks from the Middle East's conflagration have set Ethiopia's laboured fuel industry ablaze, and the country is grinding to a halt. Ongoing geopolitical and fiscal shocks emanating from the US/Israel war with Iran—and the spill-over across the Gulf—have left few regions untouched. With no satisfactory end in sight, the decades-old—if creaking—US-underpinned security architectThe sparks from the Middle East's conflagration have set Ethiopia's laboured fuel industry ablaze, and the country is grinding to a halt. Ongoing geopolitical and fiscal shocks emanating from the US/Israel war with Iran—and the spill-over across the Gulf—have left few regions untouched. With no satisfactory end in sight, the decades-old—if creaking—US-underpinned security architecture in the Middle East has been upended, as have the globalised hydrocarbon networks that long served as the financial lifeblood of energy-importing states.
Apathy pervades the Djiboutian population. A week tomorrow, on April 10, the country will head to the polls, with President Ismaïl Omar Guelleh seeking a 6th— essentially uncontested — term in office. With his coronation inevitable, his family's dynastic rule over this rentier city-state will be extended once more. But in a region wracked by armed conflict and geopolitical contestation, the ageing Guelleh's capacity to manage the familial, ethnic, and regional fractures within and without grows ever more complicated. And Djibouti's apparent stability is no product of institutional strength, but rather an increasingly fractious balance of external rents and coercive control-- underpinned by geopolitical relevance.
In the 17th century, the Ottoman polymath Kâtip Çelebi penned 'The Gift to the Great on Naval Campaigns', a great tome that analysed the history of Ottoman naval warfare at a moment when Constantinople sought to reclaim maritime supremacy over European powers.
Why have one mega-dam when you can have three more? Details are scarce, but Ethiopia has unveiled plans to build three more dams on the Blue Nile, just a few months after the Grand Ethiopian Renaissance Dam (GERD) was completed.
War has been averted in Tigray-- for now. In early February, tens of thousands of Ethiopian federal soldiers and heavy artillery streamed northwards, readying themselves on the edges of the northernmost region for seemingly imminent conflict.
Six general elections in Ethiopia have been held since the Ethiopian People's Revolutionary Democratic Front (EPRDF) implemented its ethnic-federal system in 1995. Each has delivered victory to the incumbent government of the day — including, most recently, the deeply discredited 2021 polls held in the shadow of the Tigray war. Once again, with Ethiopia's 7th elections — scheduled for 1 June 2026 — fast approaching, few anticipate anything other than a coronation in a country mired in raging insurgencies, state contraction, and the threat of broader inter-state conflict.
The Horn of Africa's political fate has always been wired to external commercial interests, with its expansive eastern edge on the Red Sea serving as an aorta of trade for millennia. A Greek merchant's manual from the 1st century AD describes the port of Obone in modern-day Puntland as a hub of ivory, tortoiseshell, enslaved people and cinnamon destined for Egypt. Today, as so often quoted, between 12-15% of the world's seaborne trade passes along the arterial waterway, with the Suez Canal bridging Europe and Asia. But well before the globalised world or the vying Gulf and Middle Powers over the Red Sea's littoral administrations, the logic of 'gunboat diplomacy' underpinned the passage over these seas.