China and Ethiopia marked 50 years of diplomatic relations in 2020, and relations were elevated to a Comprehensive Strategic Cooperative Partnership [全面战略合作伙伴关系] in 2017. Since the 1970s, Ethiopia and China have signed around 60 agreements and memoranda of understanding (MoU). including in areas like economic and technical cooperation, trade and investment, taxation, transport, and defense. Ethiopia was one of only two African countries with high-level delegation representation at the first Belt and Road Forum for International Cooperation in May 2017. In 2018, the two countries signed an MoU on cooperation within the framework of the Belt and Road Initiative (BRI).
As a country with no significant reserves of natural resources, Ethiopia has welcomed various Chinese contributions and investments to its economy. China is an important market for Ethiopian agricultural produce and Ethiopia has drawn on Chinese investment and expertise in several major aspects of its industrialization and broader economic development. It has engaged the Chinese government to finance key infrastructure, helping to add 66,000 kilometers of new roads since 2000 and increase power supply by 15% between 2010 and 2014. Ethiopia does not allow foreign firms to set up trading and most service-based businesses, so 62% of the nearly 700 Chinese firms in Ethiopia are operating in manufacturing. Ethiopia is one of the largest recipients of Chinese aid and loans in Africa, with a total of 52 loans amounting to 13.7 billion U.S. dollars (USD) from 2000 to 2018. In addition, Chinese foreign direct investment (FDI) increased from a low level in 2004 to 74 million USD in 2009. Ethiopia consistently imports more from China than it exports, leaving Ethiopia with a negative trade balance. The average trade exchange (total turnover) between the two countries from 2006 to 2015 was over 1.6 billion USD per annum, of which 1.4 billion USD constituted imports from China while Ethiopian exports to China constituted only 165 million USD.
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