This document summarizes a research paper on the international trade relationship between China and Ethiopia. It provides background on the political and economic ties between the two countries. It then examines the trade activities and volume between China and Ethiopia, noting that while trade has grown significantly, Ethiopia faces a large trade deficit. The document outlines several problems hindering further trade growth, such as political instability, foreign currency shortages, corruption, and infrastructure issues. It concludes by proposing countermeasures like improving policies, security, anti-corruption frameworks, government services, infrastructure, and promotion of domestic and foreign trade.

1. RESEARCH ON THE PROBLEMS &
COUNTERMEASURES OF INTERNATIONAL
TRADE BETWEEN CHINA AND ETHIOPIA
姓名
Name
KEBEDE SEFONYAS WELDU (李奎)
学号
Student ID
1911598106
专业所在学院
School
SCHOOL OF MANAGEMENT & ECONOMICS
班级
Class
INTERNATIONAL TRADE & ECONOMICS 19CL:1
指导教师
Advisor
LU HAO
日期
Time
DECEMBER 8TH 2022

2. TITLE SLIDES
 Introduction: Includes Research background, Research purpose, Literature
review, Research objective, and Research method.
 Ethiopia & China Political , Economical relation: Includes
Ethio-China political relation, Ethio-China economical relation, key cooperation
areas, China’s investment and Loan commitment.
 International Trade of China & Ethiopia: Includes overview of
trade activities, volume of the trade, balance of trade, Import & exports.
 Problems for Growth of the International Trade: Includes
Unstable political environment, Foreign currency shortage, Corruption, Improper
TAX administration, and Infrastructure related problems.
 Countermeasures to improve the Trade relation: Includes
Policy improvement, improve security (resolve political unstableness), Anti-
corruption frameworks, Improve government service level, promote domestic &
foreign trade investors, and improve the infrastructure.
 Conclusion and Acknowledgement: Summary and
Acknowledgement.

3. Introduction
Research Purpose: this study intended to explain the following:
 Current political & economical relation of the two countries
 Highlight the overview trade activities, balance of trade, and volume of the trade
between China & Ethiopia
 Identify existing problems this trade relation facing
 Propose a possible countermeasures to overcome the current problems
Literature Review: This study Research on the problems and countermeasures of
international trade between China and Ethiopia will gather and synthesize the main
obstacles, challenges and countermeasures that should be adopted in the future to
overcome the challenges in the international trade of these two countries.
Research objective: the main objective of this study is (1) determine the role of both
China & Ethiopia on this trade relation; (2) Identifying major challenges that obstacle
the smoothness of the trade relation; (3) Suggesting possible solutions and
Countermeasures.
Research Method: the study collects the necessary data from literatures, reports and
unpublished papers and analyzes them in order to know the main problems and
obstacles being faced in this international trade. And to put forward some suggestions
and countermeasures.

4. Ethiopia-China Political & Economical
relation background
 Ethio-China Political Relation: Among the reasons for China
politically partnering with Ethiopia are: Addis Ababa being the seat of
the African Union’s (AU’s) headquarters, As well as the seat for
United Nations Economic Commission for Africa (ECA), its strategic
location, And finally its regional and continental role, the states
economic centrality
 Ethio-China Economic Relation: Infrastructure projects in Ethiopia
has given Chinese construction companies several chances;
Chinese exports to Ethiopia are very popular; Additionally, Ethiopia
possesses a wealth of natural resources, particularly in the form of
cattle, mineral resources, supplies for the creation of renewable
energy.
 key cooperation areas: the main key cooperation areas of Ethiopia and
china are; Infrastructure construction the African Union headquarters,
Addis Ababa - Adama expressway, Addis Ababa light railway, Addis
Ababa-Djibouti Railway, the National bank of Ethiopia, power plants,
water supply projects.
 China’s loan commitment to Ethiopia: most of the above mentioned
projects are funded or built by Chinese investors. Majority of the projects
are financed by low-interest, concessional loan with 5 years of grace.
Which makes Ethiopia the second largest recipient of Chinese loans.

5. The International trade between
China & Ethiopia
Overview of the Trade Activities: Ethiopia as a center point with
international headquarters in its capital is source of attraction to China; and
is a huge potential for other regional markets. The international trade
between these two countries has grown steadily. The trade exchange
between China and Ethiopia was growing 35% annually on average since
2012.
The Volume of the Trade: China has become among the top destinations of
Ethiopia’s exports. In this report it observed that in terms of overall scale
ranking. And Ethiopia grew by 346 percent (2020) on its exports to
China.
The Balance of Trade: even though, the trade is growing the balance of trade
still favors China. Ethiopia recorded a trade deficit of $2366 million. On
the other hand China’s trade balance is on the positive side.
Ethiopia’s Imports from China: are mainly machinery and mechanical
equipments, electric appliances, rubbers, vehicles, manufactured products.
Ethiopia’s exports to China: Agricultural products ( mainly coffee, sesame
seeds & other oil seeds), leather, crude materials.

6. Problems for Growth of Ethio-
China International Trade
Unstable Political environment: Almost every once in a decade a civil war
keeps to happen in Ethiopia. Mostly, ethnic based wars; since end of
November 2020 there is still on going war in northern Ethiopia, Tigray.
With more than half million causalities, business shut down, and bad image
for Ethiopia on the international trade. And this is the main cause of
poverty and backwardness.
Foreign Currency shortage: The National Bank of Ethiopia’s reserve has
decreased, barely enough to fund 2 months’ worth of imports. Business
confirm the process to get foreign cash or the time it takes to receive is
unpredictable. 3 months – 1 full year.
Corruption: two kinds of corruption, political and petty. From minor to major
corruptions exist in the country, which downgrades the growth of the trade
and the country as a whole.
Improper TAX Administration: lack of Tax understanding main issue
between the Tax paying citizens and the authorities. Secondly, the
government imposes a high Tax on imported goods.

7. Problems for Growth of Ethio-
China International Trade
Infrastructure Related Problems: Transportation by land and air, water and
sanitation, energy, and information and communication technology are
among Ethiopia's infrastructure-related issues, Which makes it difficult for
the Import & Export trade relation.

8. Countermeasures to Improve the
China-Ethiopia Trade
Relationship
Policy Improvement: Most Trade infrastructures specially on the agriculture
side are delayed due to poor budgeting. To foster a productive work place
the government should adopt new rules that serve as guidelines for both
domestic and foreign Import & Exporters. Add low value-added un-
branded policy.
Improve security and Political Unstableness: Should solve the current
ongoing war immediately; cease fire from both sides; resolve the situation
by discussion.
Anti-Corruption framework: The Anti-corruption organization should work
fully independent from the government. It should give protection for
witnesses and whistleblowers. And the organization should be well funded.
Improve Government service level: The government must work to improve
the availability, accountability, and transparency of their workforce; and
should work to prevent favoritism and nepotism.
Promote domestic and foreign Import & Exporters: The government
should promote and give local investors special treatment in order to
compete with the Chinese Import Exporters. Do a better job at gathering

9. Countermeasures to Improve the
China-Ethiopia Trade
Relationship
And disseminating data on the international market & exporting needs.
Improve the Infrastructure: by using Ethiopia’s political and economical ties
with China, the government should give more focus on improving the
infrastructures like road, power supply, air ports, and so on.

10. Acknowledgement
I would like to express my heartfelt gratitude to my teachers and
supervisor Lu Hao next to Almighty GOD.