Strategic Risk Management and Competitiveness Enhancement Positioning of Chinese Construction Firms in Ethiopia’s Infrastructure Sector

Abstract

This study investigates the strategic risks confronting Chinese construction firms operating within Ethiopia’s rapidly expanding infrastructure sector and critically evaluates their current risk management practices in relation to enhancing competitiveness. Ethiopia’s infrastructure development landscape presents a complex set of challenges characterized by political instability, legal ambiguities, financial volatility, socio-cultural tensions, and operational difficulties. These multidimensional risks collectively threaten project timeliness, cost control, quality delivery, and the overall sustainability of construction firms. The research findings reveal that while Chinese firms possess significant technical and financial strengths, their risk management approaches are predominantly reactive and focused on operational risks. There is a notable lack of integrated, proactive, and strategic risk frameworks that holistically address the interconnected political, legal, financial, social, and operational risk dimensions inherent in the Ethiopian context. Firms with more comprehensive and structured risk management systems report superior project outcomes, fewer delays and cost overruns, stronger client relationships, and improved reputation within the market. The study highlights the critical importance of tailoring risk management strategies to Ethiopia’s unique local environment. Effective risk mitigation hinges on enhanced stakeholder engagement, collaboration with government authorities, legal clarity, and cultural sensitivity. To strengthen competitiveness, Chinese firms must incorporate enterprise-wide risk frameworks, improve partnership building with local entities, bolster legal and financial risk controls, and invest in employee training and localization, and leverage emerging technologies for risk monitoring and predictive analytics. Overall, this research provides valuable insights for Chinese construction companies seeking to improve their resilience, operational effectiveness, and market position in Ethiopia’s infrastructure sector while contributing to the broader academic discourse on international construction risk management in developing countries.