Fitret Yitayew

Economics 367
Revised Abstract
Abstract: How has Chinese investment in Ethiopias energy, technology and agriculture
sectors affected the development of the country?
Chinese investment in Ethiopia has grown greatly in the last five years. Chinas
economic partnership with Ethiopia has grown greatly and in 2011, China was both the
largest import and largest export trading partner of Ethiopia. Foreign direct investments
have similarly followed suit. According to Chinas Ministry of Commerce, foreign direct
investment from China to Ethiopia has increased from virtually zero in 2004 to US$58.5
million in 2010.
This paper will analyze three of the Ethiopian sectors China has chosen to invest
in and how this has affected development in Ethiopia. The latest figures indicate that in
2013 China invested $10.2 billion dollars, marking Ethiopia as the second largest
invested country in Sub-Saharan Africa for China. This paper will focus on the energy
and technology sectors, as Chinese investment has mainly been confined to these two
sectors, with $4.3 billion allocated to the energy sector and $2.4 billion to the technology
sector in 2013. Though China has invested very little into Ethiopias agriculture sector
with $650 million, the Ethiopian government has made a commitment to the alleviation
of poverty through a focus of growth in its agricultural division and this paper will
analyze how Chinas investment has aided in this development.
This paper shall define Ethiopian development based on the countrys GDP
growth or decline, the poverty rates and its unemployment rates. GDP offers a statistical
view of the health of a countrys economy. Poverty rates and unemployment rates

however offer a more concise picture of development by showing an improvement or

decline of peoples lives in the country.
Outline:
-

Introduction
o Present abstract
Define development
o Background of Chinese-Ethiopian relations
o Statistics on Chinese investment in Ethiopia
Chinese investment in energy
o Amount invested
Specifics on how the investment has been used
o Employment created
For who
Training
o How has this benefitted Ethiopia as a whole
Chinese investment in technology
o Amount invested
Specifics on how the investment has been used
o Employment created
For who
Training
o How has this benefitted Ethiopia as a whole
Chinese investment in agriculture
o Amount invested
Specifics on how the investment has been used
o Employment created
For who
Training
o How has this benefitted Ethiopia as a whole
Development
o How has the investment in the three sectors benefitted/hurt the country as
a whole
o How has the GDP been affected
o How has unemployment been affected
o How has poverty been affected
Conclusion
o Answer abstract
o Benefits of Chinese investment
o Cost of Chinese investment
o Analysis of conclusion

Annotate Bibliography
Beyene, Abebe D., and Steven F. Koch. "Clean Fuel-Saving Technology Adoption In
Urban Ethiopia." Energy Economics 36.(2013): 605-613. EconLit. Web. 7 Nov.
2013.
This work focuses on the depletion of forest resources in Ethiopia due to poor technology
management. The government has attempted to encourage better technology and dissuade
the use of traditional technology however the adoption of the new technology has been
slow. There are economic factors such as price, wealth, and income that determine the
adoption of such new technologies. There are also regional differences in adoption rates
of the new technology, though the source could not answer exactly why this was so.
"Chinese FDI in Ethiopia." World Bank. The World Bank, n.d. Web. 3 Nov 2013.
<http://wwwwds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2012/12/14/00
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This World Bank survey deeply analyzes the Chinese foreign direct investment in
Ethiopia. It examines the reasons why Ethiopia has become so attractive to foreign
investors in the recent decades and also states the drawbacks that many foreign investors
have with Ethiopia. It provides data and charts created by the World Bank demonstrating
the growing interest China has had in the region.
Dodd, Jan. "China builds power and influence in Ethiopia." WindPower Monthly.
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<http://www.windpowermonthly.com/article/1208796/china-builds-powerinfluence-ethiopia>.
This article focuses on the Chinese manufacturer Dongfang Electrics upcoming project
to build a 120MW wind power facility in western Ethiopia. The project will receive
funding from China Exim Bank. The article also analyzes the growing influence that
China has in Ethiopias wind power sector. It attributes this growing influence to Chinas
presence on the continent for the last decade and also the fact that China is able to offer
attractive terms because unlike Western counterparts they are not constrained by political
ideological differences.
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Inc, 18 Oct 2013. Web. 3 Nov 2013. <http://www.ibtimes.com/african-

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This source analyzes Ethiopias newly developing manufacture sector. It looks at the
relationship that China and Ethiopia have formed and how Chinese investment is creating
manufacturing employment opportunities in Ethiopia. Ethiopia hopes to emulate Asian
countries like China and Korea, and looks to these countries to create its own
development model.
Hanjra, Munir A., Debel Gemechu Gutta, and Tadele Ferede. "Pathways To Breaking
The Poverty Trap In Ethiopia: Investments In Agricultural Water, Education, And
Markets [Electronic Resource]." Agricultural Water Management 96.11 (2009):
1596-1604. Agricola. Web. 7 Nov. 2013.
This source analyzes foreign investments in agricultural water, education and markets for
Ethiopia. It analyzes whether such investments can be used to break Ethiopia free of its
poverty stricken state. The source shows that while investments in agriculture water may
benefit the country in reducing poverty, it would be more effective if rural markets were
better developed. The paper finds that although investments in agricultural water and
irrigation may decrease poverty, there are direct ties between poverty reduction and
investments as well as education and market development.
The Heritage Foundation, China Global Investment Tracker dataset. Heritage.org. July
2013. http://www.heritage.org/research/projects/china-global-investment-trackerinteractive-map.
This online site gave an interactive map of Chinas investments worldwide. The
interactive map also indicated which sectors of a countries economy China was investing
in. The source gave a helpful tool to be able to view the worldwide whereabouts and
impacts of Chinese investment.
Kidane, Asmerom. "Demand For Energy In Rural And Urban Centres Of Ethiopia: An
Econometric Analysis." Energy Economics 13.2 (1991): 130-134. EconLit. Web.
7 Nov. 2013.
This source gives a good background on the current energy situation in Ethiopia. The
paper states that the largest consumer of energy in Ethiopia is the household. The paper
also presents a model of the supply and demand of energy in the country, and provides
data as well. The source finds that the price of traditional energy has an important role in
the consumption of energy in the country.