14 November 2018
What Happened: Two U.S. senators have sent a letter to U.S. Secretary of State Mike Pompeo expressing their concern about Chinese involvement in Djibouti, Reuters reported Nov. 13. Specifically, both senators are worried about Djibouti’s decision to terminate DP World’s contract and nationalize the Doraleh Container Terminal, as well as the possibility that the country could award the port to a Chinese company.
Why It Matters: The United States is becoming increasingly concerned over Chinese investment in Africa, specifically around the Horn of Africa, where Beijing has contibuted funding for a number of projects. The U.S. government fears that African countries are accruing a significant amount of debt that could give China leverage in internal or regional affairs.
Background: China Merchants Port Holdings launched the $3.5 billion Djibouti International Free Trade Zone in July. DP World, a Dubai-based port operator, has said the new free trade zone violates its exclusive rights over commercial ports and free trade zone facilities in an agreement it signed with Djibouti for the Doraleh Container Terminal.