Chinese economic collaboration with Ethiopia has expanded for long time. As the relationship develops through time investing on different level has its own positive and negative impact on both countries. The next chapter will briefly explain in the case of Ethiopia and china. The local manufacturer of labor-intensive manufactures in Ethiopia may be affected negatively by rapid Chinese manufacturing firm in Ethiopia; the native producers could be moved out of the local market. So far, this problem has been seen in the construction projects that the Chinese has had concern in.
In these cases the local and other foreign construction firm has been pushed out form the market. The main reason for the local and other foreign construction moved out from the market is that they cannot compute against the Chinese firm. And it’s hard to grasp the information since; the Ethiopian government is collaborating with the Chinese firm in construction of roads and power plant construction projects. A best solution is to hire the local firms within the Ethiopia- Chinese construction projects and manufacturing section led by Chinese companies.
It can be requested that the Ethiopian government feels that they cannot go against Chinese desires and therefore collaborates, since china has delivered debt issues. Therefore Ethiopian-Chinese working relationship is very difficult to examine at these stage. However, a positive factor in the Chinese investment is the facilitation of reasonable and suitable technology in the local firms, thus giving back to the local firms. The Chinese firms are cooperating and the Ethiopian electric Authority, the Ethiopian Telecommunication Corporation, and Ethiopian Electric power corporation and through this cooperation, Ethiopia can develop their infrastructure more efficiently. But as I mentioned above, this also have negative aspects such as effect on local firm. Chapter 4:-Research Questionnaires This thesis’s subject of study is analysis of Chinese Foreign Direct Investment (FDI) in Ethiopia.
Chinese foreign direct investment into Africa is on the growth and Ethiopia is at the head of this development. On request of the different Chinese companies, I surveyed a couple of Chinese enterprises doing business in Ethiopia with a several question survey in January and February 2018. The assessment that I made covered several aspects of the foreign direct investment and private company in Ethiopia. The questionnaires contain how they are creating changes in structure, how they are making deals and purchases, how they acquire the property for investment, what are their inspiration, and opposition, finance, human capitals, and questions about overall opportunities and limitations for doing business in Ethiopia. This thesis summarizes the challenges, results of investigation which provides strategy suggestions in light of the analysis of Chinese FDI in Ethiopia; the thesis report also provides some wider background of the expected benefits of FDI into Ethiopia as well as present policies and methods to encourage incoming investment.
The main purpose of this thesis is to analysis how Chinese investors and Ethiopia accomplish their challenges for the both common goals. “Talking about problems of Ethiopia could help the country to take better benefit of foreign investors and use it in a proper way that can accelerate the change/transformation from a mainly low-productivity agriculture-based economy towards a higher-productivity manufacturing and export-based economy.” The Experiences that we observe in successful countries around the world and particularly East Asia countries such as China, Japan, and Korea and so on show that, foreign investment is an essential instrument to facilitate growth, structural transformation, and to maintain sustainable and broad-based economic development.