China offers loans to Djibouti as they vow to establish closer ties

China vowed to establish a strategic partnership with Djibouti, the site of its first overseas military base, as leaders of the two countries signed an agreement on Thursday for Beijing to provide an undisclosed amount of loans to the Horn of Africa nation.

The framework pact for preferential loans was signed during Djibouti President Ismail Omar Guelleh’s three-day visit to China, where he met President Xi Jinping after being greeted with a military parade and flag-waving children.

Both leaders reiterated their commitment to deepened ties and cooperation, as they emphasised Djibouti’s location at a strategic choke point near the Red Sea, en route to the important maritime artery that is the Suez Canal.

Xi said China supported Djibouti to play a bigger role in regional and international affairs, and would provide medical assistance to the nation, state-run CCTV quoted him as saying.

“China pays high regard to its relationship with Djibouti,” Xi said.

Guelleh, who has been in power since 1999, said he considered himself a “great friend of China’s” and could not count the number of times he had visited.

“Djibouti is known for being a country of peace, exchanges and meetings,” Guelleh said.

“I would like to recall the geostrategic position of Djibouti and its importance in this part of the world as an island of stability for Asia, Africa and the Middle East.”

Chinese Assistant Foreign Minister Chen Xiaodong told reporters that Xi and Guelleh also discussed China’s first overseas military base in Djibouti, which opened officially on August 1.

“What I want to stress is that China building a logistics base in Djibouti benefits China to even better fulfil its naval protection, peacekeeping, disaster relief and other international work,” he said.

Many observers were initially wary of China’s naval base, which Beijing officially calls a logistics facility, given the presence of other military bases in the country, including those of the United States, Japan and France.

Christopher Alden, co-head of the Africa International Affairs programme at the London School of Economics and Political Science, said China’s expanding interests with its naval base and the commercial and developmental impact of its infrastructure projects would be the main issues raised during Guelleh’s visit.

Chinese firms have invested heavily in the east African nation, including in a multimillion-dollar free trade zone, a water pipeline from Ethiopia, a railway to Ethiopian capital Addis Ababa, and a new international airport.

“The focus would be on those sorts of concerns – are they delivering what Djibouti wants, how can they leverage their position there for access to more resources,” Alden said. “The Djibouti government has really one thing to sell: it’s strategic location.”

Martyn Davies, managing director of emerging markets and Africa at Deloitte Frontier Advisory, noted that China’s strategy on Djibouti cannot be separated from its broader regional presence, particularly in Ethiopia.

“China’s really only gotten more traction and more interest in Djibouti as Ethiopia’s economy has gotten much more grounded,” he said.

Ian Taylor, an expert in China’s relations with Africa at the University of St Andrews, said Guelleh’s visit to China this week is “emblematic of the growing ties” between the two countries, particularly as China seeks to slowly integrate the eastern coast of Africa into its maritime Silk Road – part of its signature belt and road infrastructure initiative.

“Djibouti has now become quite an important pivotal kind of country for China in East Africa,” he said. “China has become so embedded in the economies of Djibouti and also Ethiopia.”

He added that concerns over China’s base in Djibouti had not come to light, although he said India may continue to be wary of Beijing’s growing presence in the Indian Ocean under the belt and road framework.

Michael Ehizuelen, an African studies researcher at Zhejiang Normal University, said the visit had “special significance” at a time when India was trying to establish its presence in Africa.

“The present Chinese leadership has been targeting an aggressive expansion in Africa for decades,” he said. “The expansion is expected to further increase after the visit.”

Additional reporting by Reuters