Introduction

This study elucidates the Belt and Road Initiative (BRI) and its effects on landlocked Ethiopia’s sustainable development and economic transformation. The main motto of the BRI is to connect and increase economic cooperation among multiple countries that are spread throughout the world; mainly, these countries are from Asia, Africa, and Europe. The BRI projects are involved to improve connectivity and cooperation on a transcontinental scale through the development of highways, maritime ports, railways, oil and gospelises, power grids, and other concern multi-purpose projects. After the economic rise in China, President Xi Jinping started to explore the world market in 2012–2013 through the inception of the “One Belt One Road (OBOR).” China’s strategy is an attempt to reshape the “Old Silk Route” into new ambitious economic engagement around the world. China’s diplomacy towards the African continent is one of the key engagements in the context of the BRI. This article also elaborates on China’s Maritime Silk Road Initiative (MSRI), a major OBOR/BRI component, in the context of connecting Ethiopia and the rest of Africa as well. The foreign ministry of China expressed that the BRI will engage with African countries and is the most important approach for China [1]. China’s MSRI initiative is the sea route corridor component of the BRI. The MSRI is the “belt” of China’s flagship BRI project. This initiative is associated with complementing the Silk Road Economic Belt (SREB) in the maritime domain across the global level. China’s intention through the MSRI is to invest in Africa, the South Pacific Ocean, Southeast Asia, Oceania, the South China Sea, and the Indian Ocean Region (IOR). “The MSRI complements China’s String of Pearl’s geopolitical theory, which asserts that China is attempting to build bases in the Indian Ocean Region (IOR) in order to expand their power and secure the Strait of Malacca from potential blockade during the war” [2, 3].

China’s economy has matured with real GDP growth dropping from 14.2% in 2007 to 6.6% in 2018. The International Monetary Fund (IMF) has projected China’s economic growth of 5.5% by 2024 [4]. The Chinese external affairs policy has been involving the expansion of BRI across the continental level to accelerate economic growth. In this context, China has expedited the BRI projects in African countries. There are many Chinese projects of BRI involving developing countries in their fold to bilateral engagements in African countries [5]. China covers more than 65% of the population in the world through these economic initiatives and dominates over 40% of the world’s gross domestic product (GDP). Due to regional engagement, China can engage with more than 80 countries on all continents [6, 7].

The BRI connected the world communities with China. Regional imbalances come in the way of development and the rate of production is continuously increasing after the BRI projects in Ethiopia [8]. Chinese President Xi proclaimed that BRI shapes the way of economic cooperation in the world. He announced that the “Silk Road Economic Belt” and “Maritime Silk Road” will be known as the new name of the BRI in 2013 and is also called the One Belt, One Road Initiative (OBORI). The BRI project is connecting the world from the land route to the sea route around the world [9].

In 2013, China unveiled the initiative that prima facie focuses on Asian countries. China has been spreading the BRI in the African countries and the Global South. China expedited the economic cooperation which gets support from other countries and regional groups. China has signed agreements on mutual understanding to accelerate intergovernmental cooperation and people-to-people connections among the BRI countries [10]. The BRI in the African continent paves way for high-level investment opportunities for China including various Chinese projects running in eastern African countries including Ethiopia. China’s Justin Lin Yifu, the former Vice-President of the World Bank and an economist, is supporting Chinese economic engagement and initiatives in African countries [11, 12].

According to the prominent Chinese scholar Wenping, BRI projects on the African continent are supported and promoted by South-South cooperation which benefits China and African countries as well. The inclusion of African countries in the BRI projects has unlocked the development roots of these countries. The Forum on China-Africa Cooperation (FOCAC) which was held in South Africa in 2015 has pioneered Sino-African cooperation in mutual benefits and opportunities. This cooperation shapes China’s footprint in African countries as a solid foothold for economic cooperation between countries [7, 13]. Thus, various literature are discussed about the BRI on African Continent. Several BRI corridors have been created in many African countries including Ethiopia. Therefore, this article tries to highlight the BRI projects and their implications in Ethiopia. This research uses data from sources like published articles, books, literature available online, government databases, think tanks, and research institutions’ published data as a form of primary and secondary resources. Also, this research highlights the major economic and other institutional development in Ethiopia in the context of BRI projects.

Theoretical Background

The Chinese BRI is deeply linked with the “theory of soft power.” The People’s Republic of China (PRC) is exploring soft power standards to expand BRI initiatives across the globe [14]. According to Nye [15], “Soft power uses persuasion and non-aggressive means to gain desired outcomes.” Furthermore, Nye describes that “people and nations can change their opinions due to carrots and sticks” [15]. Nye’s understanding of soft power can be used in the context of the Chinese BRI in Ethiopia. China is trying to set up many BRI projects across the world, which is a soft power endeavor. The BRI is truly changing its impression on cooperation and deepening trade and investment in African countries [16].

Rahman discusses that “the BRI’s trade and exchange programs allow it to manifest soft power” [17]. Nye argues that soft power has three main components to use in making cooperation, i.e., culture, foreign/domestic policy, and political values. Rahman [17] points out that the BRI would link China to many countries across the world. It is a suitable marketplace where China can spread its culture, education, knowledge, and experiences [16]. Thus, with the expansion of BRI in Ethiopia, Chinese brands have been spreading in the country. Apart from this, commercial goods, cultural goods, and companies are strengthening the BRI’s extensive infrastructural projects. Soft power has the strength to achieve the goal at the national and international levels: “Power is based on the particular material capabilities that a state possesses” [18].

Power matters in modern geopolitics and geoeconomic exercise with a distinction in the degree of intensity. It works with command, as opposed to alternative power. Co-optation and coercion are the main components for shaping the preferences of others: “Co-optive power is the ability of a country to structure a situation so that other countries develop preferences or define their interests in ways consistent with its own” [19]. Soft power is also seen as an alternative to military power, i.e., the armed forces within the framework of a state’s foreign policy. Soft power consists of the country’s internal and external mobilization capacities and an international approach to dominate in terms of geoeconomics [20]. In this context, Xi Jinping emerged as the pioneer of the BRI and this flagship project extends to all continental levels. The Horn of Africa has become China’s strategic location. Due to the success of the BRI in this region, the first Chinese military (Chinese People’s Liberation Army) presence has been established in Djibouti outside the national territory.

According to Nye [15], “soft power is the ability of its possessor to get favourable outcome through persuasion instead of coercion.” In other words, soft power is calculated as another kind of power in international politics. It is not linked with only culture, including political values which dominate international relations. Legitimacy is another core component of soft power politics. Nye asserts that there are three main sources at the primary level where soft power is strengthened. Culture is an essential component of the soft power that supports engagement through commerce. Chinese tourists have flocked to many places where BRI projects have been launched. The exchange program is an important part of cultural and business exchange. Trade can also attract investors, job seekers, and visitors to explore knowledge. Thus, China is using soft power tools to strengthen its flagship BRI in Ethiopia and other African countries [21].

China has a countrywide-specific policy for the expansion of BRI. Ethiopia is a key country of China’s BRI in the Horn of Africa region. Chinese entrepreneurs have political and economic support for Ethiopia’s development cooperation priorities. The BRI is a flagship economic project of China and has been strengthened on a broader level using soft power approaches [22].

Methodology and Data

The qualitative nature of the study is deeply focused on BRI and its related projects in Ethiopia. This research relies on empirical analysis to discuss the economic and trade cooperation of Ethiopia with China. The study focuses on Ethiopia and its gradual development process and transformations that have occurred after the launch of BRI in the country. In Ethiopia, the plethora of projects initiated under the BRI either is about to be completed or is still in progress. This research is based on a qualitative approach to explore the research questions and an empirical study of the economic development of Ethiopia. The study setting has many BRI-related enterprises operating in several areas of the economy and trade cooperation with China. Furthermore, this research flourished in the sectors of cooperation under BRI, i.e., trade, services, number of projects, education, and other industries in the country [23]. The analytical approach of the study also concentrates on infrastructure and trade promotion in the Horn of Africa. The systematic approach and coherent study are employed throughout this research design and implementation to assess the research result. Moreover, the data used in this research are from the various official governments and institutions’ websites and secondary literature.

China has started the investment in Ethiopia in various sectors to uplift human resource development across the country. In 2019, China promoted higher education for African students, and over 200 scholarships were awarded to Ethiopian students [24]. The Ethiopian Prime Minister visited China to accelerate the common understanding between both countries. The Chinese government provides funds to Ethiopian researchers and professors to participate in short-term research programs, symposiums, conferences, and training courses apart from the degree program. During a dialogue in Addis Ababa, the Chinese Ambassador pointed out that Human Development is the prime agenda of the BRI projects in Ethiopia. In Addis Ababa during the China-Ethiopia dialogue, both governments agreed to expedite the economic cooperation and a Memoranda of Understanding (MoU) was signed. It can play an important role to strengthen the economy of Ethiopia vis-a-vis China’s BRI expansion in the African Continent. Earlier, Chinese President Xi Jinping said that the BRI projects in African countries are based on the win–win possibility for each other. This agreement accelerates the manufacturing capacity in the country. The production capacity does increase for small and medium enterprises (SMEs). According to the Ethiopian agencies, the MOU accelerates the economic commitment of both countries to work on the development of small and medium enterprises [25].

The railway line between Ethiopia to Djibouti was modernized by the Chinese agency. This railway line is the livelihood of both countries and is 752 km long and costs USD 4000 million for its renovation. China’s Exim provides 70% of the total cost to modernize the railway line [26]. The BRI projects are also associated with proper sustainable development. There is a need to create employment opportunities for the younger generation after a Bachelor’s degree in Ethiopia. More business and trade between both countries can generate an abundance of opportunities for younger educated degree holders. This intra-continental collaboration can lead the social stability in Ethiopian society. Since 2013, China is the leading economic and trade partner with Ethiopia, more than any other global actor from the world. China is overtaking European investment in African countries. China’s national strategy towards Africa is to accelerate trade and economic cooperation among African countries. Through the BRI, China wants to gain market access across the continent [27]. Chinese companies are building the Djibouti-Ethiopia pipeline and the largest free trade zone on the African continent. Ethiopia as the second largest populous country in Africa has been integrated into China’s flagship project BRI through the adoption of a China-oriented agreement for social and economic development [28].

The Chinese government is strictly expanding BRI projects across the world. China’s foreign policy is always keen to emphasize projects that are easily launched without any political restrictions. The BRI initiative is a full economic component to connect the world. The world’s gross domestic product (GNP) is affected by China’s BRI projects by about 55%. The BRI projects are connecting the world’s people by around 70% [29]. Building political and economic cooperation among the nations causes de facto trade and investment. Thus, investment ties grow smoothly between the host government and the country of investment. Despite the various problems in disseminating the Gross Domestic Product (GDP), China has been involved in the economic partnership with Ethiopia. China has large-scale foreign exchange reserves of around USD 4 trillion. China wants to seize the opportunity of investing in various countries to become a giant in the economic race in the postmodern world [30]. In East Africa, Ethiopia is surrounded by many countries and is a landlocked nation. The sea trade route improves the connectivity for export and import as 90% of Ethiopia’s trade and investment come from port uses in Djibouti. The newly constructed railway line facilitates business and investment between China and Ethiopia [31].

In the sense of the language barrier in Ethiopia, it is not difficult for foreigners because English is a commonly understandable language in Ethiopian society. In recent years, the country’s internal political and social harmonies are well established. Ethiopian society lives full of joy, prosperously, peacefully, and cooperatively. The Chinese authorities are accelerating the manufacturing structure to shape the well-formed small and medium enterprises in the country. Earlier, in Ethiopia, China set an ambitious vision for 2025. The textile and clothing industries are key focal points to develop these projects in the country. The Chinese companies are coordinating with their Ethiopian counterparts to lead the tremendous growth through the development of the apparel industry. The younger generation is being trained by Chinese experts. Nowadays, Ethiopia is an emerging potential manufacturing hub for the textile and apparel value chain in the African continent [32].

The Maritime Silk Route Initiative (MSRI) is connecting Ethiopia for greater possibilities of Chinese investment in the country. Ethiopia has heavily participated and created better opportunities and is the home of the Chinese MSRI from the African continent. Ethiopia is the highest-profile of African countries and an integral part of Chinese economic initiatives. The Chinese Rail Engineering Corporation (CREC) and China Civil Engineering Construction Corporation (CCECC) are constructing the standard gauge rail (SGR) projects in the country. This rail route is becoming important to connect with the sea business route [33]. The Hawassa Park has been built by CCECC at the cost of USD 250 million. It is strategically important for manufacturing and gaining strong position around the African continent. The Chinese interest in the context of trade and commerce in the African continent surpasses that of the other economic powers of the world. The MSRI is connecting African countries at a broader level and it is a success story of China’s BRI beyond the continental boundaries [34].

Energy is a key sector for mutual cooperation between China and Ethiopia. Both countries agreed on extensive work to boost and shape the strong foundation of the gas pipeline and power liquefaction industry in Ethiopia with the help of Chinese companies. Apart from this cooperation, the Chinese are keen to establish high-voltage transmission lines on various routes. Furthermore, there is a common consensus on the establishment of hydroelectric and wind projects in the country [35]. Apart from these initiatives, China’s eyes are on the agricultural sector because Ethiopia has large areas of agricultural land that can be exploited which is probably the reason why China has included irrigation as one of the key agendas of the economic engagement in Ethiopia. Moreover, the light rail project and renovation of the airport are also key characteristics of Chinese investment in Ethiopia [36]. China has multiple economic engagements with Ethiopia in several sectors and Chinese investment is supporting the various projects in the countryside.

The MSRI is associated with two main positive affairs in Ethiopia. In light of these factors, the country is growing in the economic sector. Firstly, Ethiopia accepted Chinese economic cooperation in the country. The country’s leaders warmly welcomed and wholeheartedly embraced the Chinese initiatives. Ethiopian companies benefited in the form of loans, aid, and other assistance from China’s economic support. The Ethiopian ambassador in Beijing stated that China is providing aid to bolster the transport system in the country. It is also providing support and finance to build up welfare schemes and the telecommunication sector. Furthermore, now the Ethiopian power grid is operating at full scale and has export capacity. The manufacturing sector is expediting at a large scale with support from Chinese companies. Ethiopia is engraved by China’s special economic zones (SEZs) and industrial settlements in specific areas which have been calibrated to generate tax revenues and create employment for skilled and trained people. It has tremendous potential to get foreign reserve exchange and provide the roadmap of technology transfer as well [37].

Apart from this assistance from China, China is fulfilling the aspiration of Ethiopia’s manufacturing powerhouse in Africa. Ethiopia is ambitiously growing fast due to economic assistance from the BRI projects. The power sector is also getting a boost through the development of the MSRI [38]. China Communications Construction Company Limited (CCCC) is constructing the electrification work between Woldiya and Mekelle rail projects. It also established the industrial park which is 140 km east of Addis Ababa. Ethiopia is gradually developing the market in the country with the help of Chinese investors. The Ethiopian government’s ambition is to become a regional giant in the field of manufacturing. For this achievement, the country needs to be transparent and have infrastructural support to boost the economy. Ethiopia is getting infrastructural support from the BRI projects but there is a need to improve the hard groundwork to get success in this field [39].

The joining of the BRI projects by the Ethiopian government is also strengthening further economic cooperation as well in advance. Socio-economic development is not Ethiopia’s only key agenda within BRI. Ethiopia seems to be the dominant power in African countries through its economic advancement—one of the reasons why Ethiopia is focused towards the tourism sector. The Ethiopian government is cementing the Chinese-African economic cooperation in Africa. Now, African countries are becoming ideal economic partners of China. African development spirit expedited the Sino-African economic engagement and new concepts were created as a form of South-South cooperation [40]. China’s Outward Foreign Direct Investment (OFDI) is strengthening the sustainable development process in Ethiopia since the BRI projects were initiated in the country. African Union’s (AU) agenda for 2063 and its blueprint are transforming Africa into a future powerhouse. Its policy is working to strengthen the strategic development blueprint for economic development, political stability, protection, social prosperity, and regional integration in Africa. Furthermore, the African Union (AU) and China agreed to remove the poverty, malnutrition, and security threats. The BRI projects also got support from AU and have signed MoU for economic cooperation. The African continent is working to be drug-free, and breaking human trafficking, crime, and corruption from the African continent. The AU is also keen to restrict organized crime and any kind of criminal activity. The illicit trade is also a big question and the arms race and its proliferation need to be restricted. Attempts are being made so that foreign investors will easily come to invest in the continent without fear [41].

This study is a deep enquiry into how Ethiopia’s overall development has geared up after the BRI projects came into force. The Ethiopian economic growth has been increasing since Chinese investment in the country. There are several infrastructure development programs accelerated to an unprecedented level. Thus, wide-ranging areas tremendously emerging in Ethiopia include industry, transport, energy, and manufacturing. These sectors have been transformed after Chinese companies successfully worked in Ethiopia. Ethiopia’s average GDP reached a growth rate of about 8% after economic cooperation with China. In 2018, Ethiopian economic growth was also recognized by the World Bank. Ethiopia is the only African country whose GDP rate is the fastest among African countries [42]. The relationship between China and Ethiopia is rooted at a high level. This economic partnership is based on win–win possibilities for each other. But Ethiopia needs to improve its economic condition and China will seem to dominate over the other economic power in the region.

China has a bigger interest to get economic cooperation with Ethiopia. The Chinese authority is broadly thinking to spread their trade and commerce across the continent. China is also showing the proper development path to its Ethiopian counterparts in the countryside. China adopted an economic policy called “Going Out.” It is China’s strategy to expand its economic cooperation at the global level. That is why Ethiopia engaged with China for the country’s development. Since the BRI projects were launched in African countries, African countries were unable to get the largest recipient of China’s investment in the region [43].

Ethiopia and China’s bilateral partnership becomes a lesson for other countries from the Horn of Africa. This relationship is shaping the various development sectors of Ethiopia. The multidimensional coalition is developed by both countries and the strengthening of the relationship in business to business, government to government, and people to people. The Ethiopian party also seems to shape a strong partnership with China. Thus, in terms of capital, Chinese companies set up a cement factory in Ethiopia. China’s investments in Ethiopia and cement factories are getting much more successful since its establishment. Two Chinese companies are working on cement production in Ethiopia with a capital of USD 358 million. One of these companies is Sino-Saudi Joint Investment Cements PLC and the second company is C. H. Clinker Manufacturer PLC with a capital of USD 268 million [44].

China’s capital flow is expediting the active work and expansion of power plants in remote parts of the country. The electrification work is being updated by the Chinese companies in the rural town of Ethiopia. There are renowned Chinese companies that are actively shaping electrification work. To name a few, the responsible companies are the China General Chamber of Commerce (CGCC), Wamboo, and Tributyl Tetradecyl Phosphonium Chloride (TTPC) involved in electrification work. These companies are associated with other partner companies, i.e., Tis-Abay, Fincha Rivers, and Tekeze [45]. The Ethiopian Prime Minister openly supports the economic development of the country with the help of Chinese investment through the BRI initiatives in the country. He believes that Ethiopia will emerge as a manufacturing powerhouse in Africa. Thus, Prime Minister Desalegn understands that China’s support for Ethiopia is a great vision to become a stronger nation among the African countries [46].

As a result, China is the largest trading and business partner of Ethiopia and the biggest foreign investor across the world since 2013–2014. The Chinese companies are mainly associated with textile and garments, sugar and sugar-coated industry, metal, and engineering. Apart from these sectors, there are other fields where the Chinese are becoming a strong competitor for other companies in the world. The pharmaceutical, leather products, and agricultural processing are areas where Chinese investments are growing rapidly in recent years. The Chinese companies invest in the construction of highways, rail connectivity, telecommunication, electrification, and the establishment of power-sub stations in the country. China focuses on strength of the manufacturing sector in Ethiopia. Despite political and economic relations between both countries, Ethiopia has more Chinese diplomats than the rest of the other African countries. Nowadays, both countries share lots of common things to strengthen economic cooperation [47].

Discussion and Results of BRI in Ethiopia

Liu [48] discusses the China’s BRI projects have strengthened its regional cooperation across the world, and China has become an economic powerhouse through good governance and the implementation of infrastructure works. Today, the BRI initiatives perform like international governance and regional engagement. The various literature show that this research observed that BRI brought economic development to Ethiopia including Eastern Africa. The BRI projects create employment opportunities for young skilled and non-skilled employees. Thus, the level of socioeconomic position of people gained heights in Ethiopia [49]. Ethiopia is considered in the African continent as another home of China’s flagship BRI. China is constructing road and rail connectivity towards the Gulf of Aden which would become the lifeline of landlocked Ethiopia. China’s Exim Bank financed a loan of USD 4.2 billion to build this project [28].

BRI is engaged in multi-purposes with Ethiopia to facilitate socio-economic growth. Moreover, China has to prioritize other sectors beyond economic engagement to restore its global power in the African continent. China is accelerating several sectors to become an international player in the context of MSRI. The Chinese government also wants to surpass the other economic global powers in the African continent. The United States (US), France, India, Britain, and Japan are investing in many African countries but now China is ahead of these countries [26, 50]. There is no doubt that Ethiopia benefits from China’s extensive economic engagement in the context of BRI projects. The BRI has started wide-ranging economic cooperation in Ethiopia after China’s flagship BRI projects. Thus, the Ethiopian public and private sectors benefitted from these Chinese projects. The younger generation of Ethiopian society is getting multiple aids and job opportunities [51]. The Chinese companies are attracted by the Ethiopian government to invest in the country which is a multidimensional achievement in the development sectors. China’s companies have benefited to incorporate heavy production units because of the nature of cheap labor availability in Ethiopia as it reduces production costs [52]. China’s investment in Ethiopia boosted the relationship. Eastern African countries depend on Chinese knowledge and technology, e.g., as part of infrastructure projects, maintenance in general, and spare parts. In the case of Ethiopia, some significant projects are spotlighted in the country, for example, the modern light tram system in Addis Ababa. It is the first time in the Sub-Saharan region that a modern tram system has been implemented [53].

Table 1 shows the Chinese investment in various sectors as Ethiopia continues to expand its bilateral relation. Ethiopia provides all places to the Chinese companies and the government solves the critical issues to invest in Ethiopia (Table 2). The Ethiopian government appears to invite FDI and open up new sectors for investment from China as priorities. Thus, Ethiopia thinks to expand its developing sectors across the country and invites foreign companies to pioneer a variety of sustainable development programs. The Chinese government and its various companies have been pioneering the real estate business in Addis Ababa, Ethiopia. In 2007, the Chinese Lu brothers founded the Eastern Industrial Zone (EIZ) in Ethiopia. They decided to establish a cement factory in the country. Ethiopia also provided government support to launch the first industrial park in the country. Nowadays, the EIZ is home to more than 95 small and medium factories and employs 20,000 people. By and large, Chinese companies bring gradual economic development into several fields, namely Ethiopia’s agricultural sector, information and communication technology services, and real estate business, opening the range of sustainable development in the country. Thus, Chinese investors and companies are indulged to bring sustainability politically and economically [54].

Table 1 Industrial parks in Ethiopia built by China
Full size table
Table 2 Chinese investment projects by area, 2000–2020
Full size table

Figures 1 and 2 show Ethiopia getting heavy FDI in the manufacturing sector. In recent years, Chinese companies have successfully shaped manufacturing units in different industrial parks across the country. The construction materials, cement production, and textile industries, and food processing units tremendously attract the attention of global economic powers. China’s vision in African countries is getting successful investment goals after the launch of BRI projects in the country. Before the outbreak of COVID-19, Ethiopia gradually accelerated the growth rate in the manufacturing and construction sectors. However, some areas need to get more investment and are in a fragile position. Post-pandemic, Ethiopia’s economic progress, sustainable development, and growth rate are severely affected. Apart from these signs of progress, Ethiopia has a wide range of debt from various entities including China, Middle Eastern countries, and the World Bank. There is around USD 30 billion in total debt remaining for Ethiopia [55]. The Debt Services Suspension Initiatives (DSSI) highlight that China is getting much political support for the successful enhancement of the BRI projects and it is rated a trustworthy creditor in Ethiopian society. The Ethiopian government received a debt from China of around USD 8.7 billion, which is 32% of the total foreign debt of Ethiopia. The second-largest is the World Bank, providing around 31% of the debt in Ethiopia [56].

Fig. 1
figure 1

Source: MOFCOM (2021)

China’s FDI flows to Ethiopia.

Full size image
Fig. 2
figure 2

Source: ODI Report, https://cdn.odi.org/media/documents/BRI

Foreign direct investment (FDI) flows from 2014 to 2021.

Full size image

Ethiopia has an external debt of 60% of the country’s total GDP. Ethiopia is the 2nd largest country in Africa receiving borrower investments from China. The Ethiopian authority is scared about the future course of the Chinese reaction to debt [57]. Furthermore, the Chinese have a strong presence in Ethiopia with considerable acceptability by the people as well. The economic relationship between China and Ethiopia is assessed positively by political leaders and civilians alike—one of the main reasons why China’s BRI achieved success in the country. The Ethiopian society considers China a model of development and it should be carried forward for further development of the country [58].

Both government and their agencies share a master plan for sustainable development on the basis of the high-level investment. Chinese and Ethiopian counterparts agreed to infrastructure development with full potential to expedite the economic and productivity growth in the country. This research investigated those bilateral relations which might become more viable for future economic cooperation between China and Ethiopia. The Chinese favor structural development than the other sectors, which is beneficial for socio-economic development. Several funding agencies provided development aid and which has caused to remove poverty. Ethiopia is welcoming the traditional donor to make grants for the country’s health and education sector as well. China’s diplomatic channel has successfully linked its strategies for African countries in the BRI framework of cooperation with Sustainable Development Goals (SDGs) and Africa’s Agenda 2063. Through the BRI, China provides development funds to African countries, and Ethiopia is the largest recipient of Chinese aid to run development programs in the country [59].

The development of China’s BRI projects in Ethiopia is a success story of long-term investment. Now, the Chinese actors are in a win–win position in East Africa including Ethiopia. The research investigation pointed out that if China is in a losing position in any part of the country’s special project, that means that the Chinese authorities will not break the investment. In this context, the Chinese are seriously committed to doing something extra to counter the other economic powerhouse on the African continent. China’s eyes are on building stronger capabilities in entire African countries. China shows extra calibre beyond the continent for economic cooperation at a broader level in the prism of BRI projects. The collaboration between the China Development Bank (CDB) and the Development Bank of Ethiopia (DBE) is operating lots of development schemes and is providing a training program for thousands of Chinese-Ethiopian professionals under the China-Africa Consortium for financial engagement [60, 61].

China’s BRI projects successfully expanded toward African countries. Before, China was also connecting other parts of the world with New Silk Road Initiatives. The countries of Central and Eastern Europe are also associated with BRI projects. Moreover, Central Asian, South Asian, and Middle East countries gradually accept China’s BRI and economic cooperation. Thus, the Eastern African countries successfully accepted the Chinese proposal for economic cooperation, although China has to work a lot for the betterment of many African countries. African countries need much investment to exploit natural raw materials for manufacturing. The sustainability of development projects needs to be expedited in several African countries. China has impacted limited economic transformation and development in African countries. Ethiopia benefits far more than any other African country from China’s flagship BRI projects in the country [62].

The economic cooperation between China and Ethiopia is the motto to achieve strategic relations in MSRI and BRI projects. However, this research signifies the Chinese interest in the African continent to dominate over the Quadrilateral Security Dialogue (QUAD) member countries in the maritime business route in the South China Sea to the Indian Ocean. China is circling India in the South Asia region to restrict Indian expansion in the region. There is a rivalry between the US and China for the strengthened sea route to promote the blue economy and for domination in the oceanic silk route. That is why the study focuses on China bringing the BRI projects to African countries rather than African countries’ initiatives for economic cooperation with China.

China’s BRI is connecting developing countries to shape infrastructural development. The BRI projects are opportunities for skill development for the foundation of the construction and manufacturing industries. It is an ideal platform for third-world developing countries’ sustainable growth. Moreover, Ethiopia’s dependence on FDI is paving the way for China’s economic intervention in the country. Then the country will be able to nurture a master plan for sustainable development. The flow of aid and investment comes from developed countries when it needs proper economic transformation, like in a country such as Ethiopia where development sectors need an economic boost for modernization [63]. In addition, Ethiopia is a landlocked country and it is difficult to economically transition into the multidimensional development of the country. China’s BRI projects engage several neighboring countries through economic cooperation. Thus, China is reaching a landlocked country easily because its BRI projects already function in neighboring countries. The BRI brings economic transformation and is useful for alleviating poverty in the country [64]. The research investigates empirically the BRI projects that involve the stimulation of sustainable development in Ethiopia [65]. By and large, the BRI brings China’s entrepreneurs to invest in Ethiopia. The involvement of the Chinese government paves the way for Chinese companies’ entry into developing countries for the establishment of strategic locations for China’s global economic power [66].

The BRI projects’ negative side is that there are many countries that have had trouble paying back China’s massive loans. Some of their projects are not completed on time which had been projected to be completed within the deadline. The COVID-19 outbreak across the world affected the global economy to slowing down that is why many construction works were not completed on time. There is a lack of consensus between the common people and the leaders of opposition in the country. Because of this, a lack of trust emerged in China’s BRI in Ethiopia and other African countries as well. “This backlash matters for several reasons. First, if opposition to BRI within these countries grows too strong; leaders may be forced to scale back or halt projects. Second, if several high-profile BRI projects are suspended, it may create an image problem for China. Just as Chinese leaders are taking a higher profile role in global affairs, they would not look kindly on suffering multiple setbacks” [67].

BRI projects in Ethiopia are also affected by corruption. This kind of approach impacts China’s BRI negatively in Ethiopia and the rest of parts of the African continent. There were many construction site officials who complained of problems influenced by corruption in Ethiopia. In Ethiopia, the issue is that development-related decisions may be made to protect or establish economic and political power over some groups to dominate others. The political elites and entrepreneurs’ nexus may be legal in the country but such a kind of coalition of both groups is deeply involved in corruption and this kind of ties between businessmen and leaders distorts decision-making. Both the effective groups have been establishing an unequal playing ground in Ethiopia. Ethiopia’s corruption ranking has reached at 107th position in the corruption perception index and the BRI projects are not untouchable of corruption as well in the country [68].

There is huge criticism of China’s “debt trap diplomacy” which has created consternation among countries across the world not only in Ethiopia. Civil society activists and environmentalist groups are also criticizing the BRI-related projects. There are criticisms from Western countries, the US, and India against China’s debt trap policy [28]. “Despite being one of the most rapidly growing economies in the world, ensuring it remains within prudent borrowing limits in the near future, China has provided 30 per cent of Ethiopia’s total new public external debt over the past five years” [69].

Conclusion

This research highlights the key issues which are related to the BRI and the Ethiopian government creating history to reconstruct the capital flows and FDI in the country. Socio-economic improvement and human development have increased in Ethiopia. The Djibouti-Addis Ababa railway line has become a lifeline for the Ethiopian people and is helping the economic progress of the country. There are dozens of industrial park established by Chinese companies under the BRI projects. These industrial parks created thousands of employment opportunities for local people in the region eventually improving their economic position. There were some protests organized by the local people against the Chinese companies but the issues were later resolved by the agencies. These protests were organized in many areas because the projects and new constructions destroyed the people’s residential and agricultural lands. By and large, the foundation of BRI projects in Ethiopia is in a transition position to construct the economy of the country. The Chinese companies seem to force the manufacturing sectors to improve the capital flows and GDP of the country.

This research broadly investigates how Ethiopia achieves quasi-alleviating poverty in the country. The skill-based education, training, and pharmaceutical courses become the reality for Ethiopian students with the help of China. Various Chinese educational institutes are providing scholarships for getting higher education in China. Apart from these initiatives, the Chinese government itself provides lots of scholarships under the Confucius educational program. The BRI projects bring many facilities to the Ethiopian people under construction and industrial initiatives. The research further suggests that Ethiopia needs much economic investment to get proper multi-dimensional developments because lots of departments need financial support to transform according to modern global systems. The tourism sector is being developed by various agencies to bring more tourists to Ethiopia. And BRI supports the construction of new modern buildings for various governmental departments in Addis Ababa.

The BRI is based on the principles of mutual cooperation, peaceful coexistence, sustainable development, and mutual benefit. This economic initiative focuses on free trade, policy coordination, people-to-people connection, and regional development with deep connectivity. This research focused on China as a major investor in Ethiopia. China has major challenges in Ethiopia from the US and the European Union (EU). Environmental and population displacement issues represent two major challenges for China. Due to BRI’s several projects which is dangerous for the environment and the ecosystem, there has been a protest against BRI projects in Ethiopia. China and Ethiopia, the two countries, need to address the issues that are to contradict the BRI across the country. By and large, under the BRI framework of cooperation, Ethiopia is responsible for infrastructural development strategy across the country [70].

BRI has proven its potential in many areas: political, cultural, and environmental. BRI’s multibillion-dollar initiative has created some good opportunities in Ethiopia. It has produced jobs and fulfilment of sustainable development goals. BRI is helpful in reducing poverty, and in improving infrastructure across the country. Thus, China’s various development projects create job opportunities. The connectivity between the two countries has increased since 2017 and the educational exchange program provides training and innovation to Ethiopian researchers and professors in Chinese higher educational institutes. The study concludes that the Ethiopian assimilation with the Chinese BRI in the country has brought about several infrastructural developments.