As of February 22, 2023, Ethiopia and China have signed an MoU to strengthen their economic and trade connections in vital sectors. The move is aimed at further enhancing the close ties between the two countries in the textile and apparel sector.

The latest MOU will encourage Chinese companies to invest overseas, particularly in countries such as Ethiopia, which enjoys preferential duty access to many western fashion markets.

China has pledged to grant zero-tariff treatment to 98 per cent of the tariff line, which comprises of 8,804 products made in Ethiopia. This move is in line with the initiatives announced by Chinese President Xi Jinping at the Eighth Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC).

The objective of this partnership is to help expand exports to China, grow Ethiopia's economy and achieve independent and sustainable development. China has been instrumental in supporting Ethiopia's textile and apparel industry and substantially expanded its role as Ethiopia's textile raw materials supplier.

As per the latest statistics, over 75 per cent of Ethiopia's textile imports came from China in 2021, a significant increase from 49 per cent in 2010.

Ethiopia is also one of China's leading foreign investment sources, and 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 Western markets came from Chinese-invested factories.