Made in Ethiopia : Chinese investment in Ethiopia's manufacturing sector

Abstract

This thesis thoroughly analyses Chinese investment in Ethiopia, using empirical data to assess its multifaceted impact critically. The study aims to demonstrate that Chinese investment in Ethiopia has multiple implications, revealing substantial adverse effects, including labour rights violations, ecological degradation, and excessive reliance on China’s financial support. However, it also highlights positive outcomes, including infrastructural development, job creation, and skill and technology transfer.

Through an in-depth investigation of Chinese investment in Ethiopia, the study aims to establish that the nature of Chinese investment in Ethiopia differs from its investment in other African countries. Notably, over 70% of Chinese foreign direct investment to the country is in the manufacturing industry, one of the productive and value-added sectors, aligning with Ethiopia’s growth and transformation plan of becoming the manufacturing hub of Africa as a means to attain rapid economic growth. This challenges the widespread perception that the nature of Chinese investment in Africa is similar and consistent throughout the continent, often centred in the mining and construction sectors. The study used quantitative and qualitative methods to collect different data types from Chinese companies and other concerned bodies in Ethiopia. It demonstrates that Chinese investors are playing a leading role in bringing a significant change to the manufacturing sector.

While acknowledging the positive impacts and challenges, the study emphasizes collaborative endeavours between Chinese investors and Ethiopian agencies to address the identified issues effectively.

Therefore, this study’s primary significance lies in providing a new understanding of Chinese economic engagement with Africa. It showcases the significant impact of Chinese investment on Ethiopia’s manufacturing sector while also shedding light on pressing issues such as improper labour practices, environmental impacts, and dependencies. This study aims to stimulate further research and contribute to the growing literature on the field.