Critics overlook economic benefits to Africa of China’s support base in Djibouti

By Hu Weijia Source:Global Times Published: 2017/11/21 22:33:39

The Chinese People's Liberation Army's support base in Djibouti has once again sparked concern over Beijing's military buildup, and the state visit of Djibouti President Ismail Omar Guelleh to China, starting from Wednesday, is adding fuel to the discussion.

Why has there been a constant increase of China's presence in the African country? It is worth discovering the economic logic behind this.

Djibouti's privileged geographical position as a gateway into Northeast Africa and the Red Sea region gives significance to the nation as a regional logistics base. Its unusual economic structure and trade liberalization make the small Northeast African country a sound investment destination.

With a total initial investment of $340 million, construction began in January on the China-funded Djibouti Free Trade Zone (FTZ). It is positioned to be the largest FTZ in Africa, featuring manufacturing, transport and warehouse facilities. According to a Reuters report, the project has the potential to generate roughly 15,000 jobs in the country. That would mean that out of every 100 people in Djibouti, more than one will be engaged in work relating to the FTZ.

China is an important economic partner of Djibouti and a key source of infrastructure investment in the Northeast African country. The Chinese-built Addis Ababa-Djibouti Railway, an electrified line linking Ethiopia with Djibouti, has reduced travel time from seven days to only 10 hours.

China's support base in Djibouti is of course an important component of China's friendship with Djibouti, but the main direction of bilateral ties is economic cooperation, which has always been overlooked by Western observers. China has no intention of using its investment as bait in exchange for military cooperation, but Beijing now needs to take on more responsibility in peacekeeping given the increasing presence of Chinese investment in Northeast Africa, and the base can support logistics for Chinese troops.

We believe China will step up its economic cooperation and trade with Djibouti. In this regard, Guelleh's visit is an opportunity for China to write a new chapter in bilateral cooperation, and Djibouti's neighboring countries such as Ethiopia will benefit from this, because Djibouti offers landlocked Ethiopia its main access to the sea.

Improved infrastructure in Djibouti is vital not only for the country itself but also for other Northeast African countries wishing to be included into the global industrial chain.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn



Posted in: EYE ON THE ECONOMY

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