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Djibouti’s president has signed an agreement with China to set up a trade zone and establish legal framework to let Chinese banks operate in the country, according to a Reuters report
The trade zone is expected to cover an area of 48 sq km. The first phase covers an area of 1.5 sq km and is aimed to be operational by end of 2016.
It is unclear at this point who signed the documents on behalf of the Chinese government. Chinese Foreign Ministry spokesman Hong Lei did not provide any details on the same but confirmed the two countries will continue to “deepen political mutual trust” and have vibrant trade ties and personnel exchanges.
Another agreement aimed to expand Djibouti’s role for transhipment of goods in trade between China and the world, the statement said, implying the country’s role as an intermediate harbour for cargo headed for another destination.
China has already indicated their intention to build logistics facilities in the country last year.
Incidentally, World food Programme (WFP) also recently announced a logistics base to be opened in Djibouti. WFP claims a quarter of the people it assists worldwide live in countries that will be supported by the Djibouti hub.