Asia > Eastern Asia > China > China’s Energy Security: Reality Roadblock In Ethiopia

China: China’s Energy Security: Reality Roadblock In Ethiopia


Massive Chinese infrastructure investments across the Eurasian landmass and Africa, together with the influx of Chinese personnel, are targeted by insurgents, rebels, and militants. The uncertainty in Ethiopia undermines China’s efforts to boost economic links with the African continent via the One Belt One Road Initiative.

Ethiopia, situated in the Horn of Africa and next to Djibouti where China is building its initial ever foreign military base, is a key node along the proposed route of the One Belt One Road, presently known as the Belt & Road Initiative (BRI). This ambitious project to reshape the world through infrastructure connectivity, however, is hampered by domestic conflicts and local opposition.

Early this year, Chinese national-owned companies (SOEs) scored a success at the same time as they completed the construction of a 750 km Addis Ababa-Djibouti electrical railway. The railway has prompted Ethiopia to engage China in its efforts to maintain economic increase at eight % a year.

Ethiopia’s Economic Plan and China’s Role

In 2015, Addis Ababa inked an agreement with Beijing to develop a 550 km refined petroleum pipeline. A US$4 billion natural gas project connecting Ethiopia with neighbouring Djibouti is next in line. Poly GCL Petroleum Group Holding Ltd is in charge of the project. It includes a liquefaction plant, a 770 km natural gas pipeline, and an export terminal in Djibouti with an expected capacity of 12 billion m3 of natural gas per year. Poly CGL is the energy arm of China Poly Group which includes Poly Technologies, one of the majority sophisticated defence manufacturers part Chinese companies.

Ethiopia’s instability and risks faced by Chinese investors originate from its government’s aggressive economic policy of farmland expropriation. In a country whose 80 % of GDP is generated by agriculture, opposition against farmland expropriation fuels ethnic tensions, independence movements, and militant actions such as neighbouring Somalia’s al-Shabab’s cross-border incursions.

On 15 March 2017, armed militia from South Sudan killed 28 people and kidnapped 43 children in neighbouring Ethiopia. On 23 March SITE Intelligence Group announced that al-Shabab claimed the killing of 17 soldiers in an attack in the coastal city of Barawe in southwestern Somalia.

Ethiopia is not only affected by the spillover of the South Sudan civil war but as well by latent belligerence along the Eritrean border and terrorist incursions from neighbouring Somalia. To complicate matters, Addis Ababa’s grip on independent ethnic movements from peripheral regions created a constant source of friction.

Insecurity along One Belt One Road

China’s footprint in Ethiopia and elsewhere in Africa has, however, not gone unchallenged.

Nine Chinese oil and gas prospectors were killed in 2007 in south-eastern Ethiopia. An extra seven were subsequently kidnapped and later released by the Ogaden National Liberation Front in a bid to force foreign oil companies to leave. Poly GCL is as well likely to be vulnerable to politically and criminally-motivated attacks.

Next the establishment of diplomatic relations with China in 1970, Ethiopia enacted a series of bilateral agreements to deepen economic and technological cooperation with Beijing. Despite long-standing ideological affinity during the Derg regime, whose revolutionary officers toppled Emperor Haile Selassie in 1974, trade between Ethiopia and China gained momentum only in 2006. By 2014, the cumulative price of Chinese-contracted projects exceeded $22 billion.

Chinese SOEs built the Tekeze Dam, highways, and roads. Chinese ICT companies such as ZTE and Huawei dominate the Ethiopian telecommunications sector. Chinese industrial parks have mushroomed with Chinese enterprises’ investment in industries ranging from textiles to electronics. At the same time, Poly GCL is not the initial foreign company interested in Ethiopian natural gas resources as oil companies from Russia and Malaysia have by presently left the country blank-handed.

Controversy Sparks Instability

Structural reforms designed to move Ethiopia away from “agricultural dependence” to “development-driven by industry” have fuelled not only economic increase but as well opposition and instability. Expropriation of huge tracts of farmland sparked protests that fed anti-Chinese sentiment.

Continued unrest could threaten China’s economic cooperation in the region. Ethiopia, like Pakistan, has promised to deploy its military to protect the pipeline projects. While Islamabad’s pledge includes positioning 15,000 soldiers along the Sino-Pakistan Economic Corridors, Addis Ababa is still evaluating options. At the same time, the ban on international private security corporation interested in providing armed contractors in Ethiopia is still in result.

Military and private armed protection is unlikely to be all that is needed. Chinese insurance companies and private security companies are likely to be called in to assess threats, monitor local stakeholder attitudes towards Chinese personnel, and provide crisis management at the same time as required.
Reality Check to Come?

From presently on, even that may not offer a sense of comfort and security. Chinese private security companies play different roles from Western operators in Iraq and Afghanistan. They face challenges whenever their Chinese clients underestimate threats, over-rely on security arrangements negotiated by their government, and ineffectively transaction with the host country’s armed security.

In addition, they fail to take into account anti-Chinese sentiments fuelled by the influx of Chinese workers and companies and subsequent disruption of power arrangements and redistribution of wealth. It is a recurring pattern across Southeast and Central Asia. The Chinese SOEs’ ability to provide accurate on-going risk assessment and contingency planning does not match their ability to acquire preferential credit line from the Chinese banks and constructing macro infrastructural projects.

The BRI has from presently on fulfilled its promise of a win-win situation for all parties involved. Very likely, increasing numbers of Chinese workers drawn to the BRI massive projects will sooner than later provide a reality check and force governments to review policies.

Related Articles
  • Chinese messaging app error sees n-word used in translation

    2017/10/14 Chinese messaging app WeChat has reportedly apologised next an AI error resulted in it translating a neutral Chinese phrase into the n-word .WeChat is blaming machine learning for erroneously converting a neutral phrase meaning ‘black foreigner’ into something far more offensive The WeChat error was reported by Shanghai-based theatre producer and actor Ann James, a black American. In a post on the service’s Twitter-like Moments feature, she wrote that it had translated hei laowai – a neutral phrase which literally means “black foreigner” – as the n-word. “We’re very sorry for the inappropriate translation,” a WeChat spokesperson told Chinese news site Sixth Tone. “Next receiving users’ feedback, we instantly fixed the problem.”
  • 5 charts that show how China is spending billions in foreign aid

    2017/10/14 China's foreign aid is sharply in focus this week with an unprecedented new data trove showing the country's growing global reach and detailing how Beijing spends its cash. In recent decades, the world's second largest economy has evolved from an aid recipient to a net aid donor. But a lack of official information on China's development activities had prevented the international community from understanding where and how the country spends its foreign aid. That's because the government considers its international development finance program to be a "state secret," according to AidData, a research lab at Virginia-based College of William & Mary.
  • Xi squeezing the life out of China’s media'

    2017/10/10 Everyone has their habits at the same time as they return to a favourite place. Landing in Guangzhou recently, my initial act — as always — was to seek out the new edition of Southern Weekend. It was formerly the vanguard of Chinese investigative journalism, exposing crooked officials, dodgy charities and official hypocrisy of all flavours. Its lead story would be an exposé, illustrated by a striking image. The 7 September edition was none of those things. A striking image did fill the front page, but it was of President Xi Jinping. The ‘chairman of everything’ is pictured striding across a marble floor, looking calm, composed and exhaustively pleased with himself as he prepares to address the media at the conclusion of the 9th BRICS Forum in Xiamen.
  • The Infrastructure Megaproject

    2017/10/03 The Infrastructure Megaproject To help simplify and increase cross-border trade, the top priority of BRI is infrastructure development While infrastructure development is focused on transportation, particularly railways inclunding highways and ports, it as well includes the telecommunications and energy sectors BRI projects will benefit infrastructure development specialists in China and around the world, create jobs for local people along the Belt and Road and help world distributors of a wide variety of goods reach new and existing markets faster
  • A single city in China built more skyscrapers last year than the US and Australia combined

    2017/10/03 China’s skyscraper craze reached another new high last year.