Abstract: After three decades of economic growth, China reached an expansionist stage, with falling profit rate, overcapacity, under consumption and scarcity of material resources. All these imbalances, Chinese corporations with government support decided to search new opportunities abroad. Africa became one of the targeted areas for Chinese investments, in what some critics termed as a new “scramble” for Africa. One of the countries China put strategic importance is Djibouti in which it forged strong relations and financed major infrastructure developments, such as new airports, a water project, ports and a free trade zone. IMF’s 2017 report stated that Djibouti infrastructure projects, financed by Chinese institutions, have led to major economic growth in Djibouti. Djibouti ports also became part of President Xi's so-called "One Belt and One Road" initiative to develop trade and related infrastructure along the routes of the old land and maritime silk roads. The critics say that such investments will only help China to access African markets, hinder economic diversification and eventually lead to economic and political dependency and colonisation. Others, see Chinese investments as great opportunities for African states like Djibouti, as they often lack the necessary resources for investments in infrastructure. After studying the historical as well as the contemporary history of China’s relations with Africa in general and Djibouti in particular, this study supports the later and concludes that despite the risks of Djibouti failing to repay its debts, China’s infrastructure investments in Djibouti will benefit both countries. The study believes that the infrastructure investments will stimulate economic growth, bring knowledge-spreads to Djibouti and create new jobs for the locals.
Keywords: China, Africa, Djibouti, OBOR, infrastructure, FOCAC, neo-colonialism, dependency, interdependence.
Title: China’s Infrastructure Investments in Djibouti, Djibouti: Mutual gains or just an expansion of China power?
Author: Yassin Hussein
International Journal of Social Science and Humanities Research
ISSN 2348-3156 (Print), ISSN 2348-3164 (online)
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