The dynamics of China-Ethiopia trade relations: economic capacity, balance of trade & trade regimes

Abstract

China's trade with Ethiopia currently at 1.3 billion USD annually is expected to rise to US$3 billion by 2015. This not only informs the level of bilateral trade ties that Ethiopia has had with China as compared to any other country in the region but also signifies the highest and the closest level of bilateral relations that Ethiopia has built upwith China over the past decade since the new government under Ethiopian People's Revolutionary Democratic Front (EPRDF) took over power in 1991. There have been extensive debates on China's role in Africa - whether it could be viewed as a constructive partner or otherwise. This essay puts forward the argument that while trade ties as one important channel of bilateral relations that China has embarked with the outside world and particularly with Africa is uneven and lop-sided. This is true of the Ethiopian context as well particularly when we look at the economic capacity, balance of trade and at the two countries relations with international trade regimes. While China is a full member of WTO for over a decade Ethiopia on the other hand has been aspiring to become a member for some time now and hence one of the important aspect of Ethio-China trade relations is the heavy reliance on bilateral/international trade regimes. Therefore, this research is aimed at unraveling the dynamics in Sino-Ethiopia trade relations with emphasis on the economic capacity of the two countries, balance of trade and explore whether Ethiopia's attempts to join WTO would lead to a more predictable trade relations between the two countries. In this attempt the research would largely rely on the analysis of relevant archival resources and literatures directly relating to the themes in this paper.