When Djibouti gained its independence in 1977, no one thought the tiny African state would last. 40 years later, Djibouti is a geopolitical powerhouse.

Alright, Djibouti isn’t quite a household name, we admit that, but its status is steadily growing. Djibouti, a country about the size of Wales, has a population of 900000 and is sandwiched between Eritrea, Ethiopia and Somalia. It looks out to Yemen, between them lies the 20 miles wide Bab-el-Mandeb Strait, a vital shipping lane that connects the Red Sea and the Gulf of Aden. It is this geography which has defined Djibouti.

In recent history, the former French colony has been exploited for military strategy. The United States has Camp Lemonnier, an overseas military base, in the country’s capital, Djibouti City. Originally a French air base, the camp is attached to the Djibouti-Ambouli International Airport. The US took control in 2002 to operate drone strikes for its post-September 11 counterterror efforts. The US was attracted to Djibouti because of its access to high terror areas like the Middle East.

There are similarities between modern Djibouti and 1940s Casablanca, due to foreign military activity. Lemonnier accommodates French and German troops and Japan has its only overseas base in Djibouti, established to combat piracy threats to commercial ships off the coast of Somalia. Nevertheless, the Americans have the biggest military presence in Djibouti.

Well, at least they did because China’s building a new naval base just a few miles from Lemonnier.

China wants to be a global superpower and is strengthening its military. Beijing is predicted to spend US$232 billion on its forces come 2020, that’s more than all western countries put together. This overseas base is a first for the People’s Republic and marks its international growth.

China has cited anti-piracy operations as motivation for the new base. The Gulf of Aden is a notable piracy hotspot but hijacking in the area has been relatively dormant for the last five years. So the new base has the US concerned.

For some time China and the US have been strategic rivals. Both have an arsenal of intercontinental nuclear missiles, both snoop on one another with satellites and, occasionally, both face off in contested waters. But the two have always kept a good distance, however, this is too close for comfort for the US, who believe China can take a good look at its counterterror operations.

But, China has genuine trade interests. The Port of Djibouti has significance in the ‘One Belt, One Road’ project. The project defines the Chinese economic offensive to control international trade using East/West shipping lanes, so Djibouti is of strategic importance. China’s connectivity scheme develops key infrastructure through Myanmar, Sri Lanka and Greece. The plans will use the ever-expanding and state funded Cosco Line to export Chinese made goods through Asia, Africa and Europe.

China’s new naval base can help manage the belt’s operations. The Horn of Africa is renowned for piracy and, even if the situation has quietened over the past years, China needs a strong protection force for the project to be a success.

This seems like the same old story for Djibouti. But, it’s not just a new base the People’s Republic is building.

There has been a remarkable investment into Djibouti’s logistical capabilities. Beijing has invested US$3.5 billion in a ‘Free Trade Zone’ in Djibouti City. Currently, the Port of Djibouti is used for transhipment and refuelling but the investment by the state backed China Merchant Holdings is set to realise Djibouti’s potential. A new container terminal and a multi-purpose terminal alongside new stacking yards will revitalise the port.

With the new electric railway connecting Djibouti City to the Ethiopian capital, Addis Ababa (again, built by Chinese state owned companies) the Port of Djibouti could become a gateway for Eastern Africa and extend the belt’s reach.

Furthermore, Chinese investment extends to new fuel pipes, new water pipes and 2 airport proposals with a new high tech hospital already financed and constructed.

China has additionally considered mediating the Dumeira border dispute between neighbours, Eritrea and Djibouti. Both claim the Dumeira Islands and tensions have recently escalated with heightened patrols at the border. Qatar originally had peacekeeping responsibilities but pulled out as it entered a diplomatic crisis of its own.

China’s interest in the dispute is for its own good. Historic instability has plagued many states along the belt and if tensions continue to fluctuate there will be damages to China’s trade initiative. These investments are supposed to cement diplomatic relations so Eurasian trade prospers.

So, why should America be concerned? Well, they’ve had a tough time in Djibouti. The US has never had good public relations in Djibouti. US troops are prohibited from leaving Lemonnier and many locals wonder why as there’s no pressing threat to American safety.

Drones have also caused a nuisance, some have crashed into local neighbourhoods and Djiboutian air traffic controllers have rejected them from taking off or landing out of resentment. In response, the US paid to retrain the controllers but many refused to attend lessons and American teachers were locked outside the control tower.

The US has tried to make up some public relations by providing free dental care for Djiboutians but this is nothing compared to what the Chinese promise. The US pays a whopping US$70 million a year for Lemonnier and that’s incentive for the Djiboutian government. Lemonnier is easy income but the Djiboutians may start to favour the Chinese considering the new crops of investment.

But the US shouldn’t be too concerned because Djibouti needs all it can get. With a mostly arid climate, there is very little Djibouti is able to accommodate yet its GDP has steadily risen since 2002 thanks to Lemonnier, and it should expect more of the same.

Djibouti will see its GDP grow thanks to Chinese investment and China will to see its trade prosper thanks, in part, to Djibouti. And the US? It will see all this happening from the front row.

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