Capital Ethiopia Newspaper

China, Ethiopia agree to strengthen trade relations

With the aim of promoting the development of trade between China and Ethiopia a memorandum of understanding signing ceremony was held between the two countries on Friday July 13, 2012. The two parties agreed to exchange information on general economic status, taxation, investment opportunities, trade policies and legislative changes of their respective countries.
“China has proven itself to be a true and dependable friend to Ethiopia. The economic relations between the two countries bear a remarkable witness to the ever electrifying level and strength of cooperation between them,” said Mulu Solomon, President of the Ethiopian Chamber of Commerce and Sectoral Association.
The two countries also agreed on cooperation to assist their members or relevant organizations in exchange of trade delegation and missions, as well as visits of businessmen between the two countries, trade exhibitions and trade promotion to be held in their respective countries. President Mulu Solomon said the trade relation between Ethiopia and China has shown significant progress over the last few years following China’s allocation of quota and tariff free rights to African countries.
The total trade turnover of the two countries has reached nearly USD 1.7 billion in 2011 from USD 353 million in 2004. Ethiopia’s exports to the country have registered over USD 280 million in 2011 from USD 15 million in 2004 and imports reached over USD 1.4 billion in 2011 from USD 338 million in 2004. Mulu added that the balance of trade still remains in favor of China.
“Chinese investment has shown a significant expansion both in quality and quantity over the years between 1998 and 2012, Chinese investors obtained  a license for 938 projects with a registered capital of over USD 2.4 billion, most of the investment projects are in the manufacturing sector followed by real estate, machinery and equipment rental and consultancy services,” stated Mulu.
Chinese companies have invested in agriculture, cement and glass manufacturing, textile and pharmaceuticals. These projects have created 146 thousand permanent and temporary employment opportunities.
“Besides job creation there has also been technology and knowledge transfer, the interesting fact that has been observed in these investment projects is that they are more diverse,” Mulu further stated.
The representatives from the All-China Federation of Industry and Commerce as well as the business delegation has yet to specify about specific areas they want to invest in but Addis Ababa Chamber of Commerce and Sectoral Association gave them assurance that there are a lot of perks in investing in Ethiopia including a large, trainable, workforce. Furthermore Ethiopia enjoys duty free market access from different countries; the duty free market access under the EU’s Everything but Arms (EBA) initiative as well as through AGOA makes Ethiopia a favorable country for investors. Ethiopia is also an active member of COMESA that provides access to 19 countries.