China and India and Ethiopia final report - FES Ethiopia

usually appreciate the import of cheap manufactured products from Chinamaking these goods accessible for a large part of the population. But in the longterm, this trade relationship limits their development perspectives toagricultural production. Given the tendency to wealth accumulation in Chinaand the emergence of a middle class, we can assume that the export share ofagricultural products from Africa to China will continue to rise. This will atleast provide a basis for the further development and investment inagricultural production in Ethiopia. In the long run, other developmentopportunities might appear, especially in the fields of food processing and lightindustries.Among similar works on the issue, the study by Alemayehu Geda(2008) titled,“Scoping Study on the Chinese Relation with Sub Saharan Africa: The Case ofEthiopia” can be cited. His study attempted to give the scope of Chineseengagement in Ethiopia. He has indicated strengthening Ethio-Chinese relationin the last five years, particularly in the areas of road construction, supply ofmanufacture goods, telecommunication and installation of big electric powerstations by Chinese companies.He attributed the success of Chinese firms in this areas to the political ties theirgovernment created with the government of Ethiopia, the low initial biddingprice by Chinese firms offered in bidding for projects, the self financing options(sometimes referred as ‘vendor financing’) that they give to the Ethiopiangovernment owing to the support they get from the Chinese government, aswell as the relatively lower level of skilled Ethiopian personnel (in terms ofnegotiation, technical and managerial skill) as well as poor institutionalcapability of the Ethiopian experts in various ministries who are dealing withthe Chinese firms.15