China's Aid and Poverty Reduction in Africa: The Case Study of Ethiopia

Abstract

Many “Emerging Powers” that have recently assumed a more important international role have significantly increased their economic activities in Africa. These new development partners have shown a substantial increase in their development cooperation activities. Since the Beijing Summit of the Forum on China–Africa Co-operation in 2006, China's renewed interest in Africa has garnered a lot of attention and generated a lot of debate. Western media and analysts have perhaps not surprisingly been generally very critical of China’s rising influence in Africa. The African reaction, however, has been more mixed. African leaders have welcomed what they see as a new approach to development and increased potential for meaningful South–South co-operation. With the strengthening of China's aid to Africa; there has been concern regarding the effectiveness of aid in Africa. Despite the fact that through China's aid and FDI, a great achievement of poverty reduction in Africa has been made, recent evidence from both China and Africa shows that there are still numerous problems in China's aid. To clarify the characteristic and dilemma of China’s aid, Ethiopia is selected as the pointcut in this paper for its intimate relationship with China, who has a lot of cooperation with china and accepted lots of China’s aid. The present study indicates that the development assistances from China to Ethiopia, has a direct and indirect impact which is at the same time complimentary and competitive to western aid, and thus have both opportunities and challenges. In this light, we also recommend policy interventions to minimize the challenges and maximize the benefits of the cooperation, which can be implemented unilaterally by Ethiopia and also by the Chinese as well as through the cooperation. The paper concludes, China seem to have found a way of peaceful coexistence with Western donors in offering assistance to Africa, giving priority to our own projects, with the adherence to the principles of ‘recipient responsibility’ and ‘local ownership’.

Keywords: Africa, Aid, China, Development, Ethiopia, Poverty Reduction