Earlier this week (22 February) at the Joint Economic and Trade Commission meeting in Addis Ababa, Ethiopia and China signed an MoU to strengthen economic and trade connections in vital sectors.
Dr Sheng Lu, associate professor in the Department of Fashion and Apparel Studies at the University Delaware tells Just Style exclusively: “The latest MOU could further strengthen the close tie between Ethiopia and China in the textile and apparel sector. Notably, as a response to western fashion companies’ efforts to diversify sourcing, Chinese companies are encouraged to invest overseas, including countries like Ethiopia which enjoy preferential duty access to many western fashion markets.”
As of 1 March 2023, China will grant zero-tariff treatment to 98% of the tariff line, which includes 8,804 products made in Ethiopia.
The move is said to implement the initiatives announced by Chinese President Xi Jinping at the Opening Ceremony of the Eighth Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC).
The Ethiopian News Agency stated: “China will stand firmly with Ethiopia and other African countries to embody the everlasting spirit of China-Africa friendship, and fully implement the trade promotion measures announced by President Xi Jinping and all the outcomes of the FOCAC conference.”
It also added that the objective is to help expand exports to China, grow their economy and achieve independent and sustainable development.
Dr Lu explains China has played a significant role in supporting the development of Ethiopia’s textile and apparel industry, and adds: “Meanwhile, China has substantially expanded its role as Ethiopia’s textile raw materials supplier. Latest statistics show that over 75% of Ethiopia’s textile imports came from China in 2021, a significant increase from 49% in 2010.”
He points out that as one of Ethiopia’s leading foreign investment sources, China has provided capital, equipment, technical expertise, and management skills for local factories. As a result, a significant portion of Ethiopia’s apparel exports to the Western markets came from Chinese-invested factories.
Gheri Textil Partner Bob Antoshak agrees and states: “The announcement of closer economic ties between China and Ethiopia is unsurprising as China has been actively courting investment opportunities throughout Africa.”
Moreover, he highlights that many Chinese companies are entering into partnerships in Africa to capitalise on new production opportunities while diversifying production to various countries throughout Asia, Africa, and elsewhere.
Dr. Sheng Lu, used Global Data’s apparel brand and retail filings to investigate China as a market and sourcing base for Western fashion companies.