The Red Sea Region between War and Reconciliation by Shaul Shay Shaul Shay

Author:Shaul Shay, Shaul Shay [Shaul Shay, Shaul Shay]
Language: eng
Format: epub
ISBN: 9781782846666
Google: jc76xwEACAAJ
Publisher: Sussex Academic Press
Published: 2019-01-15T04:17:14+00:00

4

Civilian and Commercial

Development of the Region

The Chinese “One Belt, One Road” Strategy

The Red Sea waters are an essential part of Chinese President Xi Jinping’s “Belt and Road” initiative, also known as “One Belt, One Road”, which aims to establish land and sea routes linking China to Europe via Eurasia and the Middle East. Now the second-largest economy in the world after the United States, China plans to become the largest by the 2030s. The massive Chinese project is set to redraw the map of global trade with investments worth $8 trillion in infrastructure in 68 countries, including Djibouti, which is essential for the African and European routes to China. To serve its trade and economic interests in Africa, China spent $8.7 billion on infrastructure projects in sub-Saharan Africa in 2017 alone.1

China is investing heavily in the construction of infrastructure in the east of the continent. The establishment of the first Chinese military base in the region in Djibouti came after several years of increasing economic and commercial involvement in Africa and the Middle East. Beijing is seeking through its base in Djibouti to secure natural resources and to protect its growing economic interests in this part of the world. In addition to China’s economic aid, investment and business activities in the Horn of Africa and the Middle East, the region is also home to thousands of Chinese workers.

The Chinese base was also built in the context of growing economic relations between Beijing and Djibouti. Djibouti’s major infrastructure initiatives are being financed and spearheaded by Chinese companies and nearly 40 percent of the financing of major infrastructure and investment projects in Djibouti now comes from China. China’s Export Import Bank has granted $957 million to finance other infrastructure projects, including the railway line linking the Ethiopian capital Addis Ababa to Djibouti.2

Djibouti’s new Multi-Purpose Port (MPP) facility at Doraleh, for example, is managed and part-owned by China Merchants Group (CMG). Since 2013, the Hong Kong-based conglomerate has owned 23.5 percent of Djibouti’s Port and Free Zone Authority and, in early 2017, bought a minority stake in Ethiopia’s state-owned shipping line, whose home port is Djibouti. CMG is a leading commercial actor in numerous ports along China’s Maritime Silk Road, which links shipping lanes along Beijing’s global Belt and Road Initiative. CMG’s role in Djibouti mirrors Chinese involvement in ports and logistics elsewhere in Africa.3 Chinese companies also have significant stakes in Ethiopia’s oil and gas fields in the Ogaden region. In November 2017, they agreed to construct a 650-kilometer oil pipeline to Djibouti and proposed building a LNG refinery at Damerjog. China will finance the Ethiopia–Djibouti oil pipeline and the Ethiopia–Djibouti fresh water pipeline.4

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