Ethiopia and China have signed a Memorandum of Understanding (MoU) in a bid to enhance their economic and trade relations.
The MoU to “establish an investment and economic cooperation working group aimed at jointly boosting bilateral economic and trade relations in strategic fields,” said the Ethiopian embassy in Beijing last week.
Ethiopia’s Finance minister Ahmed Shide and China’s Assistant Minister of Commerce Li Fei signed the MoU representing their respective countries.
Also read: Ethiopian signs MoU with IGAD
The signing took place on Tuesday in Beijing where a high level Ethiopian government delegation led by Finance minister Ahmed is currently on an official visit.
The delegation involves National Bank of Ethiopia’s Governor Mamo Mihretu, and Ethiopian Investment Commission (EIC) chief Lelise Neme.
The delegation held discussions on trade, investment, and economic cooperation with their Chinese officials following the signing ceremony.
‘China Remains ‘Ethiopia’s top trade & investment partner’
The two sides noted that the Working Group is will help both nations to accomplish their commitment to implement the development strategies of the “Nine Programs” of the 8th Ministerial Conference of Forum on China-Africa Cooperation (FOCAC) and the Belt and Road initiative.
In Beijing, Finance Minister Ahmed highlighted China’s significant role in Ethiopia’s economy saying it’s a top trade and investment partner of Ethiopia.
Chinese companies have also significantly invested in Ethiopia in diverse sectors, including industrial parks, processing, manufacturing, construction and so forth, the Minister added.
China is by far the top investor in the East African nation.
Between 1998 to March 2020 alone, reports say Chinese companies executed about 1,564 investment projects with a cumulative investment capital worth over $1.153 billion.
Over 1,130 of these projects are engaged in the manufacturing sector, as per EIC.
Chinese Zero-tariff treatment for Ethiopian export
The Ethiopian delegation began their visit to Beijing a few days after China decided to grant zero tariff treatment for 98% goods originating from Ethiopia.
The preferential treatment will become effective as of March 1, 2023.
China’s Assistant Minister Li expressed China’s commitment to encourage Chinese enterprises to increase imports of Ethiopia’s competitive products.
The list of products granted zero-tariff treatment involves 8,804 items, accorsing to China’s ambassador to Ethiopia Zhao Zhiyuan.
“I am confident that this preferential treatment will help boost Ethiopian exports to China,” ambassador Zhao said on Tuesday.
The move would also “bring more benefits to Ethiopian people and further strengthen the friendship between our two peoples,” the ambassador said in a tweet.
In Dec last year, the trade ministry announced that 1,600 manufacturing products from Ethiopia would get duty-free and quota-free access to the Chinese Market.