Addis Ababa–Djibouti Railway Open to Traffic: China-Africa Production Capacity Cooperation Achieves Significant Early Results

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Addis Ababa–Djibouti Railway Open to Traffic: China-Africa Production Capacity Cooperation Achieves Significant Early Results

With Addis Ababa–Djibouti Railway having been formally open to traffic Ethiopia, an ancient civilization on the East African Plateau, possessed an electrified railway leading to the harbor of Djibouti. The completion and opening to traffic of this railway will not only bring new hope for the development and prosperity of Ethiopia, Djibouti and even the entire East African region, but also symbolizes that China has taken its real actions to adhere to the principles of its Africa policy- sincerity, practical results, affinity and good faith, and to uphold the values of friendship, justice and shared interests proposed by Chinese President Xi Jinping.

At the invitation of the Ethiopian government, H.E. Mr. Xu Shaoshi, special envoy of President Xi Jinping and the Chairman of the National Development and Reform Commission, led a delegation to Addis Ababa, the capital of Ethiopia to attend the Addis Ababa–Djibouti Standard-gauge Railway Project Inauguration Ceremony and to celebrate such a memorable historic moment with the peoples of Ethiopia and Djibouti.

As the first standard-gauge electrified railway fully constructed by Chinese technology and equipments with mixed functions to carry passengers or freight in Africa, Addis Ababa–Djibouti Railway is not only a significant early result in the implementation of China-Africa Ten Cooperation Plans declared by President Xi Jinping at the Johannesburg Summit of Forum on China–Africa Cooperation, but also a landmark project under China and Africa cooperation on “Three Networks and Industrialization” as well as capacity cooperation. Ethiopia is a landlocked country which doesn’t have rich resources and energy. However, its government is committed to reform and opening up and adhere to the friendly cooperation with China, so that China takes Ethiopia as one of its leading demonstration countries for China-Africa production capacity cooperation. It is the long-term dream of the Ethiopian people and the necessary choice of China and Ethiopia promoting capacity cooperation and serving Chinese enterprises to invest in and engage in business with Ethiopia to build a shortcut railway bound to Djibouti harbor, connecting the main arteries for economic development which lead to the sea and the rest of the world. Meanwhile, Addis Ababa–Djibouti Railway also enables Djibouti to expand the cover range of the port, making it a portal and logistics hub of serving the regional development and will significantly promote the Chinese enterprises to conduct their win-win cooperation with Djibouti.

Addis Ababa–Djibouti Railway shortens the cost of time between Addis Ababa to Djibouti from the original three days by highway to 10 hours, and allows goods to be transfered between the two countries within one night, so as to greatly reduce the logistics cost, enhance investment competition of the two countries, create favorable conditions for enterprises of China and other countries to invest in and cooperate with Ethiopia and Djibouti, bring a wealth of foreign capital, and promote the process of industrialization of the two countries and even the entire East African region.

It is worth noting that China and Ethiopia also agree to uphold the concept of intensive development to jointly build the economic corridor along the Addis Ababa–Djibouti Railway, strive to push the construction of industrial parks either along the railway or near the port, promote development of local industry and logistics through the construction of the railway, so as to provide substaintial support for the self-sustainable operation of the railway, and to realize the positive interaction between the infrastructure construction and the development of industrial parks and logistics, and make it become a new growth point for stimulating the economic and social development of Ethiopia and Djibouti.

There are three bottlenecks impeding the development of Africa, namely, the backward infrastructure, inadequate professional and skilled personnel, and lack of financial resources. Those who could help Africa remove the three bottlenecks will be regarded as sincere friends and reliable cooperation partners to assist Africa in its efforts to realize economic independence and self-sustainable development. The Addis Ababa–Djibouti Railway is exactly another vivid portrayal of China’s sincere support for Africa in its efforts to realize economic independence and self-sustainable development. The Addis Ababa–Djibouti Railway is also an early result of the leading demonstration countries for China-Africa production capacity cooperation.

Since the Johannesburg Summit of the FOCAC held in December last year, China and Ethiopia have signed various cooperation agreements amounting to about 3 billion US dollar, 62.89% of which is the direct investment from enterprises, amounting to 1.725 billion US dollar. The Addis Ababa–Djibouti Railway will bring fundamental changes in the economic and social development of Ethiopia and Djibouti, and create a great deal of employment, tax revenue and foreign earnings for the two countries, therefore, it is a road leading to win-win cooperation for common development.

Taking a broad view of Africa, China-Africa production capacity cooperation is under rapid promotion, and the process of Africa’s industrialization has entered into a new stage. In addition to Addis Ababa–Djibouti Railway, Abuja-Kaduna modern railway in Nigeria and Benguela Railway in Angola, constructed by Chinese financial support and equipment, have been formally open to traffic; the Railway from Mombasa to Nairobi in Kenya will be open to traffic next year. The infrastructure projects in Africa financed and constructed by China including railways, highways, airports, ports, power generation, water supply, and communication and the cooperation projects such as industrial parks and special economic zones have sprung up like mushrooms. China-Africa production capacity cooperation is developed vigorously, with booming results of win-win cooperation, thus continued to make new contributions to China-Africa cooperation for development.

On October 5, H.E. Mr.Xu Shaoshi, special envoy of the Chinese President Xi Jinping and the Chairman of the National Development and Reform Commission of China, was invited to attend the inauguration ceremony of the Addis Ababa–Djibouti Railway held in Ethiopia. This is the first modern electrified railway in the East African region connecting Addis Ababa, capital of Ethiopia and Djibouti Port in the capital city of Djibouti, as well as the first railway project in Africa financed by China and constructed with “China elements” in the full process in technical standards, equipments, financing, construction, supervision, operation and management, having symbolized a solid step to the transformation and upgrading of China-Africa win-win cooperation.

The Addis Ababa–Djibouti Railway demonstrates new structural changes in China-Africa win-win cooperation. Addis Ababa–Djibouti Railway is another cross-border railway constructed by China in Africa after TANZARA. However, unlike TANZARA, the Addis Ababa–Djibouti Railway is not a simple project constructed with Chinese assistance, but rather a win-win project financed, constructed and operated by China. Therefore, it created a new model for China-Africa win-win cooperation in the new era, thus emboding the new changes in China-Africa cooperation, namely that China’s cooperation with Africa has shifted its focus from government assistance to business investment and financial cooperation, from trade in general goods to production capacity cooperation and processing trade, and gradually from project contracting to middle-end and high-end areas such as investment in and operation on infrastructure, special economic zones, industrial parks, trade and logistics centers and financial services. The cooperative pattern of Addis Ababa–Djibouti Railway has shown new changes in transformation and upgrading of China-Africa win-win cooperation, and demonstrated a good momentum of development and broad prospects.

Addis Ababa–Djibouti Railway has brought new ideas to the cooperations for development between China and two countries of Ethiopia and Djibouti. From the construction of Addis Ababa–Djibouti Railway, the governments of Ethiopia and Djibouti have seen new opportunities of cooperation with China for common development , which greatly enhance their awareness of openness and cooperation. They continuously improve the related laws, regulations, preferential policies and government services, commit to providing more attractive and favorable environments for foreign investors including the Chinese, and look forward to and welcome the Chinese enterprises to invest and succeed in business in the two countries. The Ethiopian side makes good use of every opportunity and platform to attract Chinese enterprises to invest and “earn money” in Ethiopia. For example, Ethiopian Prime Minister Hailemariam Desalegn held promotion activities in four Chinese provinces and municipalities to broadcast investment opportunities in Ethiopia by himself when he visited China last year.

At the same time, the Chinese enterprises have also changed their views toward African countries like Ethiopia and Djibouti. An increasing number of the Chinese enterprises see the historic opportunity of China-Africa industry alignment and production capacity cooperation, and the huge business opportunity in Africa. They regard African countries like Ethiopia and Djibouti as “investment depression” and “ideal land for development.”

Addis Ababa–Djibouti Railway has stimulated a new wave of investment for the Chinese enterprises to invest in and cooperate with Ethiopia and Djibouti. The construction of Addis Ababa–Djibouti Railway has greatly boosted the attraction of Ethiopia and Djibouti for the Chinese enterprises, making Ethiopia and Djibouti a popular destination for the enterprises to invest in and cooperate with Africa. Since the Johannesburg Summit of the FOCAC held in December last year, China and Ethiopia have signed various cooperation agreements amounting to about 3 billion US Dollar, among which the direct investment from enterprises reached 1.725 billion US Dollar , accounting for 62.89%.

With the Addis Ababa–Djibouti Railway as a sample, Chinese enterprises and financial institutions have become the key players of win-win cooperation between China and the two countries of Ethiopia and Djibouti, which demonstrated a new vision of “government building the platform, businesses playing the key role, and people reaping the benefits”. Guangdong Huajian Group, the first Chinese enterprise which invested and succeed in Ethiopia, recently announced a new investment of 1 billion US Dollar to construct Ethiopia-Huajian International Light Industrial Park in the suburbs of Addis Ababa. Jiangsu Sunshine Group has signed a investment intention with the Ethiopian side with a 980 million USD to construct a wool-based integrated production base in Ethiopia. Wuxi Jinmao Company invested 40 million USD to establish yarn-dyed fabrics and garment factories in Ethiopia. China Merchants Holdings International Company with some other Chinese enterprises have made plans to invest nearly 1 billion USD in Djibouti to construct free zones, new ports and carry out the renovation of old ports.

The Addis Ababa–Djibouti Railway gains achievements in the contemporary era and will benefit future generations and all parties involved. Now, China-Africa win-win cooperation has entered a new era of win-win cooperation for common development. The opening to traffic of Addis Ababa–Djibouti Railway is certain to encourage more Chinese enterprises and capital to rush into Ethiopia, Djibouti and their neighboring countries, and provide a strong impetus to accelerate the industrialization of the East African region. The Chinese enterprises will also win more opportunities for cooperation in Africa, and enjoy an even broader prospects for oversea development. It is the common aspiration of the peoples of China and Africa to seize this historic opportunity of China-Africa cooperation for development to realize the mutual complement of their advantages and win-win cooperation for common development.

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