How China Is Building Ethiopia’s Infrastructure

The World Bank estimates that more than 95 percent of Ethiopia’s import-export trade by volume navigates the Addis–Djibouti corridor. Thus, the railway is a vital economic lifeline for the 132 million Ethiopians seeking reliable access to global markets. When it functions well, Ethiopian producers can move goods efficiently. When it does not, the wider economy pays a substantial price.While the Chinese originally operated the railway, it has since been transferred to the Ethiopian and Djiboutian states. By then, thousands of workers had reportedly been trained in operations, maintenance, and safety management. While the railway corridor has become a massive boon for the Ethiopian economy, certain issues have limited the project’s full potential. Frequent railway theft and vandalism, combined with political instability and unreliable power grids, have markedly slowed operational speeds.>>> Are the Philippines Mending Ties With China?As of 2024, Ethiopia owes 3 billion for this project and 14 billion in total for other projects Beijing has invested in. Half of Ethiopia’s outstanding foreign debt is owed to China, though some restructuring efforts have occurred. While China’s role in Ethiopia is a strategic development worth monitoring, it is not limited to the Addis–Djibouti rail corridor.The Bishoftu Airport, expected to be the continent’s largest when completed sometime after 2029, is being constructed, at least in part, by the state-owned China Civil Engineering Construction Corporation. The airport is projected to cost 12.5 billion and handle between 60 and 110 million passengers and 3.73 million tons of cargo. While not an outright Chinese project, it does suggest that Beijing remains a key player in Ethiopia’s next major infrastructure push.In fact, the U.S. State Department’s 2025 Investment Climate Statement notes that China is the largest source of foreign direct investment in Ethiopia. Therefore, the Addis Ababa–Djibouti line and the Bishoftu Airport are simply the largest footholds for China in Ethiopian infrastructure, logistics, and industrial development. Moreover, Ethiopia’s own domestic constraints make outside capital more consequential.The Heritage Foundation’s 2026 Index of Economic Freedom assigns Ethiopia a score of 48.1, ranking it 155th worldwide. Weak rule of law, an uncertain regulatory framework, and underperformance across key policy areas are critical aspects the index considers in its evaluation of the country.>>> Why China’s Growing Economic Ties With Egypt MatterAdditionally, the World Bank projects that 9 percent of Ethiopians will be under the 3-a-day poverty threshold in 2025, down from 33 percent in 2015. Meanwhile, the International Monetary Fund reports resilient growth, falling inflation, and meaningful reform progress in Ethiopia, even as its joint debt sustainability analysis still finds the country in debt distress and stresses the need to restore debt sustainability and sustain reform momentum.While these infrastructure projects are important commercial assets for the landlocked country, Chinese financing comes with understandable tradeoffs. When a foreign power, especially of Beijing’s stature, holds sizable portions of a nation’s public debt, that relationship naturally deserves closer attention from policymakers, especially given the recent ownership transfer of a Sri Lankan port back to its Chinese builders.Ethiopia is a vital case study in how Chinese capital and construction capacity are becoming embedded in vital commercial sectors. Sustained foreign investments in a country’s logistics backbone can create commercial advantages, deepen institutional familiarity, and generate long-term influence that may matter later, especially in a strategically sensitive region like the Horn of Africa. As Ethiopia relies on foreign-funded infrastructure for growth, Washington should closely monitor Beijing’s expanding influence.This piece originally appeared in The National Interest.