Management Economic Systems and Governance to Reduce Potential Risks in Digital Silk Road Investments: Legal Cooperation between Hainan Free Trade Port and Ethiopia

Round 1

Reviewer 1 Report

Comments and Suggestions for Authors

The research is interesting and important in actual international debate regarding the AI technologies.

The structure of paper is good but I suggest to improve by indicate more clearly the objectives of the paper.

 The methodology is well presented and appropriate to the proposed objective of the research paper.   I suggest to improve presentation by eliminate the text regarding the keywords because are presented after the abstract of the paper.

Regarding the literature review, I suggest to develop more the opinions of authors regarding the paper cites and focus on the impact of DSR in Ethiopia as result of cooperation with China.  This will be in accord with the objective mention “It draws attention to how the law and legal cooperation between Ethiopia and China may promote mutually advantageous outcomes, promote transparency, and lessen the likelihood of disputes.”

It is important to mention how the China’s activity could align with national development priorities and national needs in Ethiopia in order to avoid the any associated risk and maximize the opportunities and effects of this cooperation.

Also, I suggest to explain more  some aspects presented as citations opinion (3.1, 3.3, 3.5, 3.7)   in order to highlight the authors opinions..

The Discussion and Results parts of the paper it is necessary to corelate more with the objective s of the paper. In these aspects, I suggest to avoid to use so many tables and figures from other papers and chose to those to objective of this paper using the primary data form international database of organizations (OECD, Word Bank, UNESCO, so on) and explain them in order to offer arguments for own ideas.  Also, it is more useful to present clear in tables and figures the period of analysis and eventually, if it is possible, a tendency of relevant indicators after the DSR Investment implementation (figure 3, 6 and table 1).  For example, the WJP Rule of Law Index (worldjusticeproject.org) offer historical information (2015-2023) that should sustain the points of view of authors. Should be useful to mention if the are international rules and low that offer a legal support for DSR Investment and if the national legislation form Ethiopia and China are in accord with those and the China’s standards are compatible with others. Also, the Table 2 should be developed with the information regarding the percent of China's Direct Investment Stock in total Direct Investment stock of Ethiopia in order to highlight the dominant aspect of this indicators.

The conclusions of the paper should be more corelated with the objective in order to offer a clear view of solutions offered by the authors.

Also, I have some recommendations regarding the redaction of paper in order to avoid the to repeat some item (rows 252-257 with different source; rows 156-158 and 400-403), avoid to cited the explanations of the indicators (because it is explained usually on methodologies of indices-see rows 406-409). It is useful to explain: LDC’s, KPI’s, for example.

Author Response

Response to reviewers’ 1 comments

Respected Reviewer: we have enclosed a PDF file of our response to the reviewer’s comments on our manuscript, please find in the attachment "Fig-Tab", 

 (Manuscript Ref: systems-3136750)

The authors gratefully thank the reviewers for their comments and suggestions. We appreciate the reviewer’s comments and advice to improve the quality of our manuscript. We have enclosed the revised manuscript wherein we have addressed all the comments point by point and revised the manuscript accordingly. The major comments are addressed below. All the changes made in the manuscript were highlighted in yellow color

Reviewer #1: The research is interesting and important in actual international debate regarding the AI technologies. The structure of paper is good but I suggest to improve by indicate more clearly the objectives of the paper.

Response: Thank you so much, reviewer, for your positive advice on the relevance of our research and the overall structure of the paper, we appreciate your suggestion to clarify the objectives more explicitly. We have revised the manuscript to clearly outline the specifics of the study, ensuring that prominently stated and aligned with the discussions throughout the paper, your insights help enhance the clarity, and focus of our manuscript, and try our best to improve the quality of our manuscript based on your suggestions, once again thank you for your effort and made quality research regarding the clarity of the logic presented.

Reviewer comment# 1. The methodology is well presented and appropriate to the proposed objective of the research paper.   I suggest to improve presentation by eliminate the text regarding the keywords because are presented after the abstract of the paper.

Response to Reviewer: Thank you so much, reviewer, for your positive and scholarly comments on the methodology. We appreciate your suggestion to improve the presentation by eliminating the text regarding keywords, as they are already included after the abstract, again we have made the necessary adjustments to enhance the clarity and flow of the paper, and your insights are invaluable in refining our research work, thank you once again for your constructive review. We try our best to improve the quality of our manuscript based on your suggestions.

This research explores the interplay between innovation, economic systems, governance structures, and law interacting with one another about China and Ethiopia's investments in the Digital Silk Road. The way cutting-edge methods for governance and economic systems might help lower the risks involved in major infrastructure projects like the Digital Silk Road beneath Law and 5G. The impact of these transnational investments on fair growth and sustainable development while exploring the evolving agendas and procedures governing investments. It draws attention to how the law and legal cooperation between Ethiopia and China may promote mutually advantageous outcomes, promote transparency, and governance mechanisms, and lessen the likelihood of disputes. The influencing of the future of the Digital Silk Road and its consequences for long-term, sustainable economic growth, and business in the area aims to provide valuable insights for policymakers, development professionals, academics, and copromotion of China and Ethiopia in digital investment. Promoting the African Continental Free Trade Area (AfCFTA) construction, and economic development. Examines how DSR raises concerns about data security and privacy, cross-border transactions, technology transfer, cyberterrorism, and encouraging digital investment, such as enhancing digital governance regulations, modernizing international investment agreements (IIAs), and bolstering global health, coordination, and cooperation, the article concludes by analyzing the implications for Africa's. It would support Africa's digital transformation and sustainable development while strengthening China-African cooperation.

Reviewer comment# 2. Regarding the literature review, I suggest to develop more the opinions of authors regarding the paper cites and focus on the impact of DSR in Ethiopia as result of cooperation with China.  This will be in accord with the objective mention “It draws attention to how the law and legal cooperation between Ethiopia and China may promote mutually advantageous outcomes, promote transparency, and lessen the likelihood of disputes.”

Response to Reviewer: Thank you so much, reviewer for your kind suggestions in the revised manuscript on the literature review. We appreciate your suggestion to further develop the opinions cited in our paper, particularly focusing on the impact of DSR in Ethiopia as a result of cooperation with China, we have revised and enhanced this section to align more closely with our objective, emphasizing how legal cooperation between Ethiopia and China can promote mutually advantageous outcomes, transparency, and reduce the likelihood of disputes. Your insights significantly improve the depth and relevance of our discussion, we have resolved the issues with procedural fairness, and the revised manuscript is given below.

These agreements can set precise rules for the protection of investments, procedures for resolving disputes, and equitable treatment of investors. For instance, the Bilateral Investment Treaty (BIT) that Ethiopian enterprises investing in China get the same legal safeguards which will be best for Ethiopian development, legal scholars can be advantageous, and mutual knowledge of one another's legal systems and practices may improve. For example, Ethiopian legal scholars can impart knowledge on African Union legislation, and Chinese legal professionals can instruct their Ethiopian colleagues on how to handle business conflicts. Legal process transparency can be improved via e-governance technologies to expedite judicial proceedings, Ethiopia can, for instance, take a cue from China's experience with digital legal platforms and online courts. The creation of cooperative arbitration centers might offer a third with impartiality in conflict resolution. These can focus on business conflicts between Chinese and Ethiopian companies together, China's sophisticated intellectual property registration and enforcement mechanisms could be advantageous to Ethiopia, and reduced trade disputes can result from the implementation of technology-driven trade facilitation measures. This will strengthen Ethiopia's legal cooperation and foster a transparent and stable environment for social and economic exchanges, which will ultimately reduce conflict and increase the likelihood of mutually beneficial outcomes. This all-encompassing strategy reduces the possibility of conflicts by encouraging socially conscious and sustainable economic activity in addition to building trust and confidence among investors and enterprises.

Reviewer comment# 3. It is important to mention how the China’s activity could align with national development priorities and national needs in Ethiopia in order to avoid the any associated risk and maximize the opportunities and effects of this cooperation.

Response to Reviewer: Thank you, reviewer, for raising this concern about your insightful comment regarding the alignment of China’s activities with Ethiopia’s national development priorities. We recognize the importance of addressing how this cooperation can avoid associated risks while maximizing opportunities and benefits. We enhance our discussion to clearly outline how China's initiatives can support Ethiopia's national needs, ensuring that our analysis reflects the strategic alignment of these efforts. Your comment helped us present a more comprehensive view of the cooperation's potential impacts. The revised manuscript is given below.

China's initiatives in Ethiopia, which prioritize infrastructure development, technology transfer, and capacity building, may greatly complement Ethiopia's national development aspirations. China can assist Ethiopia achieve its Vision 2025, which aims to reduce poverty and promote economic progress, by investing in initiatives that would benefit Ethiopian companies and create jobs. Furthermore, by matching these initiatives to Ethiopia's particular requirements such as enhancing the country's energy and transportation systems risks related to an excessive reliance on foreign investment can be reduced. Through the promotion of sustainable development and the guarantee that projects are customized for local settings, this strategic cooperation can optimize advantages. Furthermore, encouraging openness and putting in place systems for include stakeholders will contribute to the development of trust and the avoidance of possible disputes. China and Ethiopia may establish a mutually advantageous collaboration that serves both short-term demands and long-term stability and growth by concentrating on these areas.

Reviewer comment# 4. Also, I suggest to explain more  some aspects presented as citations opinion (3.1, 3.3, 3.5, 3.7)   in order to highlight the authors opinions.

Response to Reviewer: Thanks, reviewer for their kind suggestion for our revision, we have provided a more detailed explanation of the cited authors' viewpoints, highlighting their relevance to our discussion. This would enhance the reader's understanding of the various perspectives and allow us to better showcase the significance of these opinions. In the revised manuscript we have resolved the issues with procedural fairness, and we appreciate your suggestion to elaborate on the authors' opinions within these sections the revised manuscript is given below.

Cyberterrorism-related privacy and security hazards are serious threats to both persons and companies. Sensitive personal and corporate data is more vulnerable to theft, manipulation, and destruction as hackers take advantage of weaknesses in digital infrastructures. Serious repercussions could result from this, such as loss of money, harm to one's reputation, and a decline in public confidence. The environment is further complicated by the rise of state-sponsored cyberterrorism, which targets vital infrastructure and interferes with important services if geopolitical tensions turn into cyber wars. Strong cybersecurity measures such as encryption, frequent security audits, and personnel training are necessary to reduce these threats. Furthermore, promoting global collaboration in the realm of cyber defense has the potential to improve overall security and resistance to these dynamic threats.

The goal of national programs like environmental laws or infrastructure development is to advance sustainable growth and public welfare. Nevertheless, this can occasionally impede business objectives in conflicts. Strict rules, for example, can make it more difficult for businesses to operate freely, and corporations might put profit ahead of social obligations, which could undermine national objectives. Working together is crucial to reducing these tensions. Dialogue between stakeholders from both sectors can promote understanding and result in policies that strike a balance between business viability and national interests. which will boost economic growth and satisfy societal demands at the same time. Fostering a robust and sustainable economy that satisfies the goals of the public and private sectors requires this kind of cooperation.

Through encouraging accountability, efficiency, and openness in public administration, digital investment plays a critical role in improving governance procedures. Governments may improve service delivery, expedite procedures, and encourage citizen participation as they embrace digital technologies. However, to guarantee that these investments are in line with ethical norms and national interests, strong governance structures are necessary.  Establishing strong frameworks that handle data privacy, cybersecurity, and equitable access is essential to maximizing the benefits of digital investments. This increases public confidence and motivates people to take part in digital projects. Governments can successfully address new issues and guarantee that digital transformation results in better governance and sustainable development by incorporating stakeholder feedback and preserving flexible governance agendas.

To facilitate international cooperation, digital investment is essential. It allows countries to work together on infrastructure development and technology breakthroughs. Nations can more successfully address global issues like economic injustice, public health, and climate change by combining their resources and expertise. Investments in digital technology promote innovation and knowledge exchange, strengthening the bonds between nations in the global economy. International collaborations can also improve cybersecurity protocols, guaranteeing the security of digital infrastructures against attacks. However, confidence among participating countries and open governance structures are necessary for successful digital investment.

Reviewer comment# 5. The Discussion and Results parts of the paper it is necessary to corelate more with the objective s of the paper. In these aspects, I suggest to avoid to use so many tables and figures from other papers and chose to those to objective of this paper using the primary data form international database of organizations (OECD, Word Bank, UNESCO, so on) and explain them in order to offer arguments for own ideas.  Also, it is more useful to present clear in tables and figures the period of analysis and eventually, if it is possible, a tendency of relevant indicators after the DSR Investment implementation (figure 3, 6 and table 1).  For example, the WJP Rule of Law Index (worldjusticeproject.org) offer historical information (2015-2023) that should sustain the points of view of authors. Should be useful to mention if the are international rules and low that offer a legal support for DSR Investment and if the national legislation form Ethiopia and China are in accord with those and the China’s standards are compatible with others. Also, the Table 2 should be developed with the information regarding the percent of China's Direct Investment Stock in total Direct Investment stock of Ethiopia in order to highlight the dominant aspect of this indicators.

Response to Reviewer: Thank you very much, esteemed reviewer, for your insightful questions regarding the discussion and results sections. We are truly grateful for your wonderful suggestions to improve our manuscript. In response to your valuable comments, we have created figures and tables from both our primary and secondary databases. Additionally, we have separated the discussion and analysis into distinct sections. We have added a new section, 4. Discussion, and subsection 4.1. Results and Analysis, following your advice and new ideas. We also identified further corrections and made slight structural changes to the manuscript. Your constructive comments have been immensely helpful in enhancing the quality of our manuscript for our readers. We have made the following modifications and highlighted them in the manuscript. The modifications have been highlighted in the revised version for your convenience. Thank you once again for your helpful visions that have improved the quality of our research work for readers.

Firstly, delete references [60] [61] [62], as these contents can be found in references [16] [17] [18], which are all data from international organizations and are more authoritative.

Secondly, supplement the analysis of Figure 3 to support our viewpoint. Specifically, as follows:

As shown in Figure 3, the political risks of countries along the B&R can be divided into four levels, Level 1 represents extremely high political risk, Level 2 represents high political risk, Level 3 represents moderate political risk, and Level 4 represents negligible political risk. Among them, the proportion of Level 1 and Level 2 is quite high, while Level 4 is very rare. It indicates that the political risks of countries along the B&R are generally high.

Thirdly, supplement the analysis of Figure 7 and Table 2, as follows:

In practice, the two countries have launched in-depth cooperation, and China is an important partner of Ethiopia in both trade imports and exports, as well as foreign direct investment (see Figure 7 and Table 2).

Fourthly, supplement the trend of changes in relevant indicators after the implementation of DSR investment. Specifically, as follows:

At the same time, investment in the DSR has also had a positive impact on improving the investment environment in Ethiopia. For example, in terms of legal risks, taking WJP ROL as an example, Ethiopia's ranking shows a slight upward trend (Table 4). It indicates that the legal environment and business environment in Ethiopia have improved, which is beneficial for investment cooperation between China and Ethiopia.

Table 4 WJP ROL in Ethiopia

Year

2023

2022

2021

2020

2019

2017-2018

Index

Overall Score

Ranking

Overall Score

Ranking

Overall Score

Ranking

Overall Score

Ranking

Overall Score

Ranking

Overall Score

Ranking

Ethiopia

0.38

129/142

0.39

123/140

0.41

122/139

0.41

114/128

0.39

118/126

0.38

107/113

Source: WJP ROL.

Fifth, supplement the information on the percentage of China's direct investment stock in Ethiopia's total direct investment stock in Table 2. The revised table is shown below:

Table 2 China's Direct Investment Stock in Ethiopia

Year	2014	2015	2016	2017	2018	2019	2020	2021	2022
China's stock of direct investment in Ethiopia (10,000 US Dollars)	91462	113013	200065	197556	256816	255887	299280	281090	262032
Total stock of foreign direct investment flowing into Ethiopia (10,000 US Dollars)	726400	1069200	1370000	1851200	2225300	2492300	2735100	3161100	3528100
Percentage of total stock of direct investment in Ethiopia	12.6%	10.6%	14.6%	10.7%	11.5%	10.3%	10.9%	8.9%	7.4%

 Source: Ministry of Commerce of the People's Republic of China, National Bureau of Statistics, State Administration of Foreign Exchange Statistical Bulletin of China's Outward Foreign Direct Investment; UNCTAD, World Investment Report.

 

Reviewer comment# 6. The conclusions of the paper should be more corelated with the objective in order to offer a clear view of solutions offered by the authors.

Response to Reviewer: Thank you so much, reviewer, for your scholarly advice, and we appreciate your suggestion to enhance the clarity and coherence of our conclusions concerning revising the conclusion to ensure a stronger correlation with the research objectives including a more explicit discussion of address the initial research and contribute to the proposed solutions. We are confident that this revision has provided a clearer and more comprehensive understanding of the outcomes of your advice has been followed, presented in the conclusion which has been added in the revised version of the manuscript is given below. Once again thank you for your golden time and effort.

All things considered, the study has some theoretical and applied value. The knowledge of hazards in DSR investments and their mitigation strategies is improved, to start, with our research findings, we also, discuss the digital investment cooperation between China and Ethiopia and its spillover effects on Africa, which complements the existing research. Secondly, the study helps to provide governments and enterprises with suggestions for improving governance mechanisms and resisting digital investment risks. It also guides the construction of a China-Africa community with a shared future and realizing sustainable development goals. Ethiopia should promote health Economics growth, improve systems and governance, and improve its educational level, thereby further promoting digital investment cooperation between China and Ethiopia and improving its ability to deal with risks. Due to Ethiopia's special and important position in Africa, the cooperation between China and Ethiopia has a spillover effect that will radiate throughout Africa. Of course, for Africa, there are both advantages and risks. DSR investment brings many advantages and opportunities to Africa [90]. It is undoubtedly highly consistent with the AfCFTA, which aims to reduce tariffs, eliminate trade barriers, and achieve the free flow of goods, services, and capital on the African continent. While rich countries have excluded Chinese companies from critical infrastructure networks due to security concerns, many developing economies appear reluctant to follow suit. A country's participation in DSR will further promote its ICT development and increase its participation in the global ICT value chain. Overall, the benefits of participating in B&R for ICT development are enhanced by participating in DSR [91]. Currently, investments in ICT and digital connectivity are positively impacting the implementation of SDGs in these recipient countries. The potential for fostering healthy economic growth, sustainable development, and strengthening China-African connections exists through the cooperation between Ethiopia and the Hainan Free Trade Port. However, managing regulatory environments and cultural differences will be essential to this partnership's success. It helps promote health Economics growth in rural areas of least-developed countries and middle-income countries, promotes the development of SMEs, encourages traditional industries' digital transformation and green growth, narrows the digital divide, and enhances digital inclusion. DSTRI shows Africa has made significant progress in lowering digital trade barriers. It not only supplements existing research, but also has certain significance for future research; it has promoted the resolution of risks in DSR digital investments in practice, promoted digital investment cooperation between China and Ethiopia, and the construction of a China-Africa community with a shared future.

Reviewer comment# 7. Also, I have some recommendations regarding the redaction of paper in order to avoid the to repeat some item (rows 252-257 with different source; rows 156-158 and 400-403), avoid to cited the explanations of the indicators (because it is explained usually on methodologies of indices-see rows 406-409). It is useful to explain: LDC’s, KPI’s, for example.

Response to Reviewer: Thanks, reviewer, for your thorough review and constructive recommendations, appreciate your attention to detail. We have carefully revised the manuscript, and removed the repetition in rows 252-257, 156-158, and 400-403 as you suggested, we have also acknowledged the need to clarify specific terms such as LDCs and KPIs.  Once again, thank you for your valuable input, and help in improving our manuscript which has been added in the revised version of the manuscript is given below.

LDCs and some developing countries continue to play a marginal role in digital investment. In addition, due to a lack of Internet connectivity, underdeveloped digital infrastructure, lack of necessary Internet equipment resources, and lack of policies to help Small and Micro-sized Enterprises (SMEs) enter the digital market, SMEs in these developing countries often cannot access digital platforms.

Special Appreciate to the Reviewer 1:

We, the authors, are deeply grateful to the reviewers for their time and effort, we express our sincere gratitude to the reviewers for their thoughtful suggestions, which have contributed to the improvement of our manuscript, and many thanks.

 

 

Author Response File: Author Response.pdf

Reviewer 2 Report

Comments and Suggestions for Authors

This study aims to examine how innovation, economic institutions, governance structures, and laws interact in digital Silk Road investments in China and Ethiopia.

Although the content is rich, I think the logic of this manuscript is not clear. The manuscript cannot be published until major revisions have been made.

1) The title is difficult to understand, I suggest modifying it. There are too many abstracts, which require a clear presentation of the methodology, subjects, and key findings.

2) The first paragraph of the introduction should explain the importance of the Belt and Road for relevant countries and their current major risks and challenges, thus leading to research topics.

3) The introduction section does not need to discuss too much concepts and definitions, which should show the core issues of the research, relevant literature, the main points of the research and its contributions.

4) The literature part should be before the research method, and the subject object of the literature discussion part is not clear.

5) I have major concerns about the diagram in this manuscript. Most of the charts are not original. For example, Figure 1 and Figure 2, such a large number of references to pictures should not be in line with academic norms.

6）This study claims to be about China and Ethiopia, but it includes a lot of analysis of other countries, which is not appropriate.

7）I look forward to this study focusing on research issues and demonstrating a more logical discussion.

Author Response

Response to reviewers’ 2 comments

 Respected Reviewer: we have enclosed a PDF file of our response to the reviewer’s comments on our manuscript, please find in the attachment "Fig-Tab", 

(Manuscript Ref: systems-3136750)

The authors gratefully thank the reviewers for their comments and suggestions. We appreciate the reviewer’s comments and advice to improve the quality of our manuscript. We have enclosed the revised manuscript wherein we have addressed all the comments point by point and revised the manuscript accordingly. The major comments are addressed below. All the changes made in the manuscript were highlighted in yellow color

Reviewer #2: This study aims to examine how innovation, economic institutions, governance structures, and laws interact in digital Silk Road investments in China and Ethiopia. Although the content is rich, I think the logic of this manuscript is not clear. The manuscript cannot be published until major revisions have been made.

Response: Thank you for your comments and feedback on our paper examination, we appreciate your recognition of the richness of the content and your constructive criticism regarding the clarity of the logic presented, and try our best to improve the quality of our manuscript based on your suggestions.

Reviewer comment# 1. The title is difficult to understand, I suggest modifying it. There are too many abstracts, which require a clear presentation of the methodology, subjects, and key findings.

Response to Reviewer: Thank you for your Scholarly valuable advice on our manuscript, we appreciate your suggestions and have made significant revisions to address your concerns. The revised version of the manuscript is given below.

Title: Management Economic Systems and Governance to Reduce Potential Risks, in Digital Silk Road Investments: Cooperation of Hainan Free Trade Port and Ethiopia

Reviewer comment# 2. The first paragraph of the introduction should explain the importance of the Belt and Road for relevant countries and their current major risks and challenges, thus leading to research topics.

Response to Reviewer: Thank you so much, reviewer, for your insightful comment regarding the introduction. We have revised the first paragraph to emphasize the significance of the Belt and Road Initiative for the relevant countries, highlighting the current major risks and challenges they face. This context now serves to effectively lead into the research topics we addressed in the manuscript. In the updated introduction, framing issues, we aim to clarify the relevance of our research within the broader context. We appreciate your guidance in improving the clarity and impact of our introduction. The revised version of the manuscript is given below.

The Belt and Road Initiative (BRI) holds great significance for the participating countries, as it aims to improve trade and economic cooperation between them, hence having a substantial impact on their respective growth paths. The Belt and Road Initiative (BRI) offers numerous countries prospects for enhancing infrastructure, augmenting investment, and enhancing connectivity. It does, however, that the participating nations must negotiate these challenges to maximize the advantages of the BRI while minimizing any potential risks. Comprehending these dynamics is imperative to ascertain pertinent research subjects that tackle the consequences of the Belt and Road Initiative on local stability and advancement.

Reviewer comment# 3. The introduction section does not need to discuss too much concepts and definitions, which should show the core issues of the research, relevant literature, the main points of the research and its contributions.

Response to Reviewer: Thank you so much, previewer, for your insightful comment, this streamlined approach enhances clarity and allows readers to grasp the significance of findings without unnecessary conceptual elaboration, we sincerely appreciate your constructive advice and your agreement with our approach to focus on the core issues of research. Once again thank you for your support in enhancing the clarity and impact of research work.

Reviewer comment# 4. The literature part should be before the research method, and the subject object of the literature discussion part is not clear.

Response to Reviewer: Thank you so much, reviewer, for your suggestion regarding the structure of the manuscript. We agree that placing the literature review before the research methods enhances the flow and context of the paper. This arrangement allows readers to understand the existing research landscape and identify the gaps our study addresses, thereby providing a solid foundation for the methodology that follows. The subject and object in the literature discussion. We recognize the importance of clearly defining these elements to enhance understanding, and this section explicitly outlines the key subjects being discussed and their relevance to our research objectives, ensuring that the connections between the literature and our study are clear and coherent, we hope the respected reviewer understands our key points clearly, and agreed, modify, placing the literature review before the research methods in the main document.

Reviewer comment# 5. I have major concerns about the diagram in this manuscript. Most of the charts are not original. For example, in Figure 1 and Figure 2, such a large number of references to pictures should not be in line with academic norms.

Response to Reviewer: Thank you, we understand your concerns about the particularly figures 1 and 2, these are original and, we have revised these figures to ensure they properly adhere to academic norms. We appreciate your guidance in enhancing the quality of our work. The revised version of the manuscript is given below.

Figure.1

Figure.2

Reviewer comment# 6. This study claims to be about China and Ethiopia, but it includes a lot of analysis of other countries, which is not appropriate.

Response to Reviewer: Thank you for your important reaction regarding the focus of our study on China and Ethiopia. We recognize that the inclusion of extensive analyses from other countries may detract from our primary objectives, we clarify the relevance of these analyses to the main themes of our research and ensure that they enhance, rather than distract from, our examination of the relationship between China and Ethiopia, and your insights help us refine our focus and improve the manuscript. Once again thank you so much for your kindness and help in the manuscript.

Reviewer comment# 7. I look forward to this study focusing on research issues and demonstrating a more logical discussion.

Response to Reviewer: Thank you for your constructive reaction, we appreciate your emphasis on the need for a more logical discussion and a focused approach to the research issues, we have revised the manuscript to ensure that our arguments are articulated and directly addressed, enhancing the overall coherence and flow of the discussion, and your insights greatly assist us in strengthening the study, and we have added in the main documents of manuscript, many thanks.

From a broader perspective, risks such as data security and privacy, cross-border transactions, technology transfer, and cyberterrorism are risks faced by DSR investments and generally faced by digital investments worldwide. In fact, on a global scale, the digital divide is very severe; there is a huge gap in digitalization levels, and the level of digitalization is often closely related to the income level

Level 1 represents extremely high political risk, Level 2 represents high political risk, Level 3 represents moderate political risk, and Level 4 represents negligible political risk

Ethiopia and the Hainan Free Trade Port (HFTP), with their distinct characteristics and prospects, present fascinating case studies in health Economics development. China launched the HFTP in 2018 to make Hainan Island a major international free trade zone by 2035. Its emphasis on cutting taxes, trade barriers, and customs procedures makes the environment more appealing to foreign companies. The port focuses on important industries including high-tech, modern services, and tourism to draw in more foreign investment and incorporate Hainan into global trade networks. Contrarily, Ethiopia's economy is among the fastest-growing in Africa and is fueled by industries including manufacturing, services, and agriculture. With a population of over 110 million and a strategic location in the Horn of Africa, the nation is well-positioned to play a major role in regional trade and development. Ethiopia's capital, Addis Ababa, is home to the African Union headquarters and is a significant political and health Economics center. When Ethiopia and HFTP are examined jointly, possible synergies are revealed. The sophisticated infrastructure and trade facilitation skills of HFTP may be an asset to Ethiopia's expanding health Economics sectors. Trade agreements and joint ventures, especially in the fields of technology and agriculture, can promote healthy economic progress on both sides. By combining Ethiopia's aspirations for growth with HFTP's strategic objectives, this cooperation would promote greater health Economics integration and involvement in international trade for both regions.

As mentioned earlier, the DSR has played a positive role in Ethiopia's digital transformation. For example, in terms of telecommunications infrastructure, since 2008, Chinese telecom providers, Huawei and ZTE, have dominated Ethiopia's telecoms infrastructure market, supplying the country's sole telecoms provider, state-owned Ethiopian Telecom. In May 2022, Ethiopian Telecom collaborated with Huawei to launch 5G network pilot services in Ethiopia. In addition, the Ethiopian Government’s investment arm, Ethiopian Investment Holdings (EIH), signed a memorandum of understanding with Hong Kong-based West Data Group’s Center Service PLC to commence mining bitcoin. This will make Ethiopia the first African country to start Bitcoin mining.

 

Special Appreciate to the Reviewer 2:

We, the authors, are deeply grateful to the reviewers for their time and effort, we express our sincere gratitude to the reviewers for their thoughtful suggestions, which have contributed to the improvement of our manuscript, and many thanks.

 

 

Author Response File: Author Response.pdf

Round 2

Reviewer 1 Report

Comments and Suggestions for Authors

 I consider that the recommendations  was applied and the paper was improved.

Author Response

Reviewer 1 and Round 2

Reviewer: I consider that the recommendations were applied and the paper was improved.

Response to Reviewer: I sincerely appreciate your recognition review. I am grateful for your acknowledgment that the improvements made to the manuscript based on your recommendations have been crucial in refining it. I value your insights, and once again, thank you very much for agreeing.

Reviewer 2 Report

Comments and Suggestions for Authors

1.Whether the comma in the title is required.

2.I still worry about the originality of the image.

3.Section 4 is analysis and discussion.

4.I expect the author to review this manuscript again and try to strengthen the logical consistency of the content of the article as much as possible.

Author Response

Respected Reviewer 2 and Round 2, please find the attached PDF file. T-F

Thank you very much for taking the time to review this manuscript in round 2. All of us authors have carefully read the comments that you have given us again, and have discussed and revised each of these issues. The following is the list of revisions, we have resubmitted an updated manuscript in the revised state, with the revisions highlighted in yellow.

1. Whether the comma in the title is required.

Response to Reviewer: Thank you for your insightful question regarding the title. We believe that the comma in the title isn’t necessary, we are very grateful for your willingness to revise the title again, however, we have decided to remove the comma from the title. We appreciate your understanding of our perspective on this matter. Thank you once again for raising this point.

 2.1. Still worry about the originality of the image.

Response to Reviewer: Thank you for your concern regarding the originality of the figure. We understand the importance of this matter and have made significant modifications to the figure to enhance its clarity and originality. Previously, it was blurred and had broken pixels, but we have now ensured it meets the required standards. We appreciate your feedback and attention to detail.

3. Section 4 is an analysis and discussion.s

Response to Reviewer: Thank you for your observation regarding Section 4. We acknowledge that this section serves as both an analysis and a discussion of the findings. We agree that the content was previously superficial and lacking depth. In response to your valuable suggestions, we have added explanations for the research results and analyzed the differences between relevant studies and our findings. The main revisions are as follows, and can be seen in the main revision’s manuscript  

4. Yes, we have modified “Analysis and Discussion”

4. I expect the author to review this manuscript again and try to strengthen the logical consistency of the content of the article as much as possible.

Response to Reviewer: Thank you very much, respected reviewer. We appreciate your valuable suggestions regarding the logical consistency of the manuscript. In response, we have carefully revised the manuscript to strengthen the coherence and clarity of the content. We are committed to enhancing the logical flow and ensuring that the arguments presented are well-supported. Your insights are greatly appreciated, and we have made the necessary revisions according to your advice and hope we reached your requirements, and we appreciate for Reviewers' warm work earnestly and hope that the correction meets with approval. The main revisions are as follows, and clearly can be seen in the revision’s manuscript.  

3.3. Results

2.3.1 Digital Investment Cooperation between China and Ethiopia

Ethiopia's state formation is unique because it resulted from African rather than European imperial conquest. Ethiopia has undergone rapid transformation in less than two decades as Africa's second most populous country. It transformed from a state on the verge of collapse at the end of the Cold War to one of the world's fastest-growing economies and a regional power in the Horn of Africa.

In practice, the two countries have launched in-depth cooperation, and China is an important partner of Ethiopia in both trade imports and exports, as well as the foreign direct investment table.1 in October 2023, They upgraded their bilateral relations to an all-weather strategic partnership.

Table 1 China's Direct Investment Stock in Ethiopia

Year	2014	2015	2016	2017	2018	2019	2020	2021	2022
China's stock of direct investment in Ethiopia (10,000 US Dollars)	91462	113013	200065	197556	256816	255887	299280	281090	262032
Total stock of foreign direct investment flowing into Ethiopia (10,000 US Dollars)	726400	1069200	1370000	1851200	2225300	2492300	2735100	3161100	3528100
Percentage of the total stock of direct investment in Ethiopia	12.6%	10.6%	14.6%	10.7%	11.5%	10.3%	10.9%	8.9%	7.4%

Source: Ministry of Commerce of the People's Republic of China, National Bureau of Statistics, State Administration of Foreign Exchange Statistical Bulletin of China's Outward Foreign Direct Investment; UNCTAD, WIR.

Ethiopia aims to reach lower-middle-income status by 2025. Under the Digital Ethiopia 2025 Strategy, the country has started focusing on several key technology sectors, especially smart cities, cyber security, information economy, mobility, digital healthcare, and telecom[61]. Ethiopia hopes to become Africa's next technology hub[62], which seems to go hand in hand with China's push for DSR. From Ethiopia's perspective, China builds transnational network infrastructure in B&R countries, which is an opportunity to strengthen interconnection; from China's perspective, DSR attempts to narrow the gap between underdeveloped and developed countries, eliminate bottlenecks that hinder the development of relevant countries, and significantly improve (relevant countries') own production capabilities[63]. The digitalization of Ethiopia's economy has been achieved with China's technology and support, and digital investment cooperation between the two countries is also very close. Since 2008, Chinese telecom providers Huawei and ZTE have dominated Ethiopia's telecoms infrastructure market, supplying the country's sole telecoms provider, state-owned Ethiopian Telecom. Ethiopia is among the top five countries estimated to spend on the global DSR.

As mentioned earlier, the DSR has played a positive role in Ethiopia's digital transformation. For example, in terms of telecommunications infrastructure, since 2008, Chinese telecom providers, Huawei and ZTE, have dominated Ethiopia's telecoms infrastructure market, supplying the country's sole telecoms provider, state-owned Ethiopian Telecom. In May 2022, Ethiopian Telecom collaborated with Huawei to launch 5G network pilot services in Ethiopia. In addition, the Ethiopian Government’s investment arm, Ethiopian Investment Holdings (EIH), signed a memorandum of understanding with Hong Kong-based West Data Group’s Center Service PLC to commence mining bitcoin. This will make Ethiopia the first African country to start Bitcoin mining[66].

Table 2 China Financed and Led Telecom Infrastructure Projects in Africa

Country	Project	Financier	Borrower	Implementation	Amount	Year
Tanzania	National ICT Broadband Backbone (NICTBB) Phase II	Exim bank	Tanzanian government	CITCC, Huawei	$100m	2010
Cameroon	National Broadband Network Phase I:4G mobile broadband (LTE)	Exim bank	Cameroonian government	Huawei	$168m	2011
Kenya	National Optic Fibre Backbone Infrastructure (NOFBI). Phase Il: E-government	Exim bank	Kenyan government	Huawei	$7lm	2012
Nigeria	Galaxy Backbone project for National Security development system	Exim bank	Nigerian government	Huawei	$100m	2012
Ethiopia	Telecom Transformation and Expansion (4G network and mobile expansion) 6 Circles - ZTE	Exim bank	Ethiopian government	ZTE	$300m	2013
Ethiopia	Telecom Transformation and Expansion (4G network and mobile expansion) 7 Circles - Huawei	Exim bank	Ethiopian government	Huawei	$800m	2013
Tanzania	National ICT Broadband Backbone (NICTBB) Phase III	Exim bank	Tanzanian government	CITCC, Huawei	$94m	2013
Nigeria	National Information Communication Technology Infrastructure Backbone (NICTIB) Phase I	Exim bank	Tanzanian government	Huawei	$100m	2013
Guinea	National Backbone fiber optics	Exim bank	Guinean government	Huawei	$214.2m	2014
Cameroon	National Telecommunications Broadband Network Project Phase II	Exim bank	Cameroonian government	Huawei	$337m	2015
Ivory Coast	Abidjan Video Surveillance Platform	Exim bank	Ivory Coast government	Huawei	$56.7m	2016
Cameroon	South Atlantic Inter Link (SAIL)	Exim bank	Cameroonian government	Huawei	$85m	2017
Nigeria	National Information Communication Technology Infrastructure Backbone (NICTIB) Phase II	Exim bank	Nigerian government	Huawei	$334m	2018
Sierra Leone	Fibre Optic Backbone Network Phase II	Exim bank	Sierra Leonean government	Huawei	$30m	2019

3.3.2. WJP and ROL

 

At the same time, investment in the DSR has also had a positive impact on improving the investment environment in Ethiopia. For example, in terms of legal risks, taking WJP ROL as an example, Ethiopia's ranking shows a slight upward trend in Table 3. It indicates that the legal environment and business environment in Ethiopia have improved, which is beneficial for investment cooperation between China and Ethiopia.

Table 3 WJP ROL in Ethiopia

Year

2023

2022

2021

2020

2019

2017-2018

Index

Overall Score

Ranking

Overall Score

Ranking

Overall Score

Ranking

Overall Score

Ranking

Overall Score

Ranking

Overall Score

Ranking

Ethiopia

0.38

129/142

0.39

123/140

0.41

122/139

0.41

114/128

0.39

118/126

0.38

107/113

 

Source: WJP ROL.

 

About table 4 lists the legal risks of B&R countries under the above indicators. The ease of DB score is reflected on a scale of 0 to 100, where 0 represents the lowest and 100 represents the best; the ease of doing business ranking ranges from 1-190 [68]. The regulatory quality and rule of law in the WGI are presented in terms of the estimation of governance and percentile rank, respectively. The estimate of governance refers to the governance performance range from approximately -2.5 (weak) to 2.5 (strong), and the percentile rank ranges from 0 (lowest) to 100 (highest) [69]. The WJP ROL Index score ranges from 0 to 1, with 1 indicating the greatest compliance with the rule of law; the ranking range is 1 to 142. Although various indicators' calculation methods and consideration factors differ, the trends are generally the same. The legal environment among the B&R countries is quite different, and the legal risks are also very different.

Table 4. Legal Risk Assessment Index of B&R Countries

Area	Country	DB Index		WGI				WJP ROL Index
		Ease of DB score	Ease of DB ranking	Regulatory quality		Rule of law		Overall Score	Ranking
				estimate of governance	Percentile ranking	Estima-te of govern-ance	Percentile ranking
East Asia	Mongolia	67.8	81	-0.27	42.45	-0.19	45.75	0.53	64
	China	77.9	31	-0.42	36.79	-0.04	52.83	0.47	97
Southeast Asia	Brunei	70.1	66	1.07	82.55	0.93	80.19	—	—
	Indonesia	69.6	73	0.21	59.43	-0.19	45.28	0.53	66
	Laos	50.8	154	-0.99	16.04	-0.18	23.58	—	—
	Malaysia	81.5	12	0.64	72.64	0.56	68.40	0.57	55
	Myanmar	46.8	165	-1.24	9.91	-1.53	5.66	0.35	135
	Philippines	62.8	95	0.06	53.77	-0.52	33.49	0.46	100
	Singapore	86.2	2	2.21	100.00	1.78	99.06	0.78	17
	Thailand	80.1	21	0.17	58.49	0.07	54.72	0.49	82
	Vietnam	69.8	70	-0.43	36.32	-0.16	47.64	0.49	87
West Asia	Bahrain	76	43	0.97	78.30	0.44	65.09	—	—
	Iran	58.5	127	-1.59	4.25	-1.02	17.45	0.39	126
	Iraq	44.7	172	-1.18	11.79	-1.75	3.30	—	—
	Israel	76.7	35	1.21	86.32	0.95	81.13	—	—
	Jordan	69	75	0.16	57.08	0.22	57.08	0.55	62
	Kuwait	67.4	83	0.21	60.38	0.28	57.55	0.58	52
	Lebanon	54.3	143	-1.13	13.68	-1.10	13.68	0.45	107
	Oman	70	68	0.43	65.57	0.50	66.51	—	—
	Palestine	—	—	—	—	—	—	—	—
	Qatar	68.7	77	0.87	77.36	0.92	79.25	—	—
	Saudi Arabia	71.6	62	0.42	65.09	0.29	58.02	—	—
	Syria	42	176	-1.82	3.77	-2.07	0.94	—	—
	Turkey	76.8	33	-0.24	43.40	0.46	36.79	0.41	117
	The United Arab Emirates	80.9	16	1.03	82.08	0.84	78.77	0.64	37
	Yemen	31.8	187	-1.92	2.83	-1.85	1.89	—	—
	Cyprus	73.4	54	0.77	75.47	0.57	68.87	0.68	31
	Greece	68.4	79	0.46	67.45	0.33	59.91	0.61	47
	Egypt	60.1	114	-0.71	24.53	-0.26	42.45	0.35	136
South Asia	Afghanistan	44.1	173	-1.27	8.96	-1.66	5.19	0.32	140
	Bangladesh	45	168	-0.93	17.92	-0.60	29.72	0.38	127
	Bhutan	66	89	-0.38	38.68	0.67	71.70	—	—
	India	71	63	-0.05	50.94	0.11	55.19	0.49	79
	Maldives	53.3	147	-0.66	26.89	-0.03	53.30	—	—
	Nepal	63.2	94	-0.65	27.83	-0.45	37.74	0.52	71
	Pakistan	61	108	-0.89	20.28	-0.67	25	0.38	130
	Sri Lanka	61.8	99	-0.65	27.36	-0.06	52.36	0.50	77
Central Asia	Kazakhstan	79.6	25	-0.01	52.83	-0.47	35.85	0.53	65
	Kyrgyzstan	67.8	80	-0.63	28.77	-1.15	12.74	0.45	103
	Tajikistan	61.3	106	-1.20	11.32	-1.26	10.85	—	—
	Turkmenistan	—	—	-2.07	1.89	-1.49	6.13	—	—
	Uzbekistan	69.9	69	-0.55	31.60	-0.85	21.70	0.50	78
CIS	Armenia	74.5	47	-0.02	51.89	-0.14	46.23	—	—
	Azerbaijan	76.7	34	-0.10	48.11	-0.62	25.94	—	—
	Belarus	74.3	49	-1.33	7.55	-1.22	11.79	0.45	104
	Georgia	83.7	7	1.03	81.60	0.17	56.60	0.60	48
	Moldova	74.4	48	0.10	54.72	-0.29	41.98	0.53	68
	Russia	78.2	28	-1.14	13.21	-1.20	12.26	0.44	113
	Ukraine	70.2	64	-0.33	40.57	-0.92	18.87	0.49	89
Central and Eastern Europe	Bosnia and Herzegovina	65.4	90	-0.16	45.75	-0.31	41.51	0.51	75
	Bulgaria	72	61	0.22	61.79	-0.11	49.53	0.56	59
	Croatia	73.6	51	0.50	68.40	0.37	61.32	0.61	45
	Czech Republic	76.3	41	1.39	88.68	1.10	83.49	0.73	20
	Estonia	80.6	18	1.56	92.92	1.42	89.62	0.82	9
	Hungary	73.4	52	0.41	64.62	0.42	63.21	0.51	73
	Latvia	80.3	19	1.17	84.91	0.92	79.72	0.73	22
	Lithuania	81.6	11	1.30	87.74	1.06	83.02	0.77	18
	North Macedonia	80.7	17	0.45	66.98	-0.10	50.00	0.53	67
	Montenegro	73.7	50	0.54	69.34	-0.13	48.58	0.56	57
	Poland	76.4	40	0.72	74.53	0.43	64.15	0.64	36
	Romania	73.3	55	0.36	63.68	0.40	62.26	0.63	40
	Serbia	75.7	44	0.14	56.13	-0.11	49.06	0.48	93
	Slovakia	75.6	45	0.85	76.89	0.62	70.28	0.66	34
	Slovenia	76.5	37	0.85	76.89	0.97	82.55	0.69	27

Source: DB Index, WGI, WJP ROL Index[71]

4. Analysis and Discussion

From a broader perspective, risks such as data security and privacy, cross-border transactions, technology transfer, and cyberterrorism are risks faced by DSR investments and generally faced by digital investments worldwide. In fact, on a global scale, the digital divide is very severe; there is a huge gap in digitalization levels, and the level of digitalization is often closely related to the income level [73]. Generally speaking, the business environment in lower-income economies is poorer. Therefore, digital investments by high-income, high-digitalization economies in lower-income, low-digitalization economies are more likely to face the above risks. Multinational enterprises in socio-politically and economically underdeveloped host countries are likely to encounter non-violent political risks, such as adverse legal rulings and strict entry requirements, or more serious risks, such as regime overthrow, war, and expropriation[74].

The political risks of countries along the B&R can be divided into four levels, Level 1 represents extremely high political risk, Level 2 represents high political risk, Level 3 represents moderate political risk, and Level 4 represents negligible political risk. Among them, the proportion of Level 1 and Level 2 is quite high, while Level 4 is very rare. It indicates that the political risks of countries along the B&R are generally high.

Ethiopia and the Hainan Free Trade Port (HFTP), with their distinct characteristics and prospects, present fascinating case studies in health Economics development. China launched the HFTP in 2018 to make Hainan Island a major international free trade zone by 2035. Its emphasis on cutting taxes, trade barriers, and customs procedures makes the environment more appealing to foreign companies. The port focuses on important industries including high-tech, modern services, and tourism to draw in more foreign investment and incorporate Hainan into global trade networks. Contrarily, Ethiopia's economy is among the fastest-growing in Africa and is fueled by industries including manufacturing, services, and agriculture. With a population of over 110 million and a strategic location in the Horn of Africa, the nation is well-positioned to play a major role in regional trade and development. Ethiopia's capital, Addis Ababa, is home to the African Union headquarters and is a significant political and health Economics center. When Ethiopia and HFTP are examined jointly, possible synergies are revealed. The sophisticated infrastructure and trade facilitation skills of HFTP may be an asset to Ethiopia's expanding health Economics sectors. Trade agreements and joint ventures, especially in the fields of technology and agriculture, can promote healthy economic progress on both sides. Combining Ethiopia's aspirations for growth with H FTP's strategic objectives, this cooperation would promote greater health Economics integration and involvement in international trade for both regions. China's initiatives in Ethiopia, which prioritize infrastructure development, technology transfer, and capacity building, may greatly complement Ethiopia's national development aspirations. China can assist Ethiopia achieve its Vision 2025 [77], which aims to reduce poverty and promote economic progress, by investing in initiatives that would benefit Ethiopian companies and create jobs. Furthermore, by matching these initiatives to Ethiopia's particular requirements such as enhancing the country's energy and transportation systems risks related to an excessive reliance on foreign investment can be reduced. Through the promotion of sustainable development and the guarantee that projects are customized for local settings, this strategic cooperation can optimize advantages. Furthermore, encouraging openness and putting in place systems for include stakeholders will contribute to the development of trust and the avoidance of possible disputes. China and Ethiopia may establish a mutually advantageous collaboration that serves both short-term demands and long-term stability and growth.

China's influence in internationalizing technical standards increases, and technical standards are becoming geopolitical[79]. DSR not only spreads Chinese standards and technologies to the world but also spreads American and European standards and technologies to the world. Indeed, technology products are rarely completely monolithic. Rather, they are a synthesis of international components and generally adhere to common standards. It is a more ideal state than over-reliance on a certain country's technical standards.

The digital economy has emerged as a key factor in international trade and economic expansion in the age of globalization. However, increasing digital trade barriers, especially those related to connectivity and infrastructure present serious difficulties for both companies and legislators. The uneven development of digital infrastructure between nations and regions is one of the main causes of concern. Variations in broadband availability, data transfer rates, and network dependability can engender substantial obstacles to international digital commerce. Companies frequently find it difficult to get access to the digital infrastructure required for e-commerce, cloud computing, and other digital services, especially small and medium-sized businesses. Furthermore, the smooth cross-border transfer of data and digital services may be hampered by the absence of unified regulatory frameworks and interoperability standards. Different data protection regulations, requirements for data localization, and limitations on the transmission of personal data can cause global supply chains to get disrupted and make it difficult for digital assets to move freely.

4.1. Paths to Resolve Risks in DSR Investment

IIAs (IIAs and investment provisions in international trade agreements) mitigate the political risks in foreign investments. Commitments to protect foreign investors' property rights are intended to allow developing countries to mitigate political risks without other credible investor protection measures. Typically, these countries are capital-poor and have weak rule of law[81]. Among them, the Investor-State Dispute Settlement (ISDS) mechanism is the most important. Regarding the risks in DSR investment, foreign investors can use ISDS to claim compensation from the host country.

Improve data governance rules. Currently, when it comes to investment in digital infrastructure, large technology companies and telecommunications companies have an asymmetric power, and they have established a de facto monopoly over the data held. It would have negative impacts, such as bias and manipulation in algorithmic decision-making, privacy violations, and security risks. It is necessary to correct these distortions. Many actors from the public sector, academia, business, and civil society, as well as activists and social entrepreneurs, are seeking alternatives to mainstream data governance models. Civil society and public institutions are key actors in democratizing data governance and redistributing the value generated by data. Strengthen international cooperation and coordination. Countries are encouraged to build partnerships and industry-based alliances to implement effective changes in digital investments. Establish information-sharing mechanisms to address common issues [84]. This partnership facilitates innovation and digital investment and promotes governance innovation, cross-border transactions, and technology transfer. However, various problems in Ethiopia severely restrict the digital investment cooperation between China and Ethiopia and weaken the ability to deal with investment risks. The UN still classifies Ethiopia as a least-developed country, and the World Bank ranks it as a low-income country. The quality of governance and institutions in Ethiopia remains low. Indicators such as the Global Competitiveness Index 2019, Corruption Perception Index 2021, and the IIAG 2020 identify the country's challenges. The World Economic Forum's Global Competitiveness Index ranked Ethiopia 126 out of 141 economies in 2019. In 2021, Ethiopia ranked 87 out of 180 in the Corruption Perception Index, 2020 IIAG rating places Ethiopia 31st out of 54. Third, the level of educational development in Ethiopia is low, especially in rural areas. The educational level in Ethiopia remains low, especially in rural areas. In 2021, only 55 percent of the population attended school, and only 12 percent had graduated with at least a secondary education [85].

4.2. Digital Investment, Governance Mechanisms, Cross-Border Transactions, and Technology

LDCs and some developing countries continue to play a marginal role in digital investment. In addition, due to a lack of Internet connectivity, underdeveloped digital infrastructure, lack of necessary Internet equipment resources, and lack of policies to help Small and Micro-sized Enterprises (SMEs) enter the digital market, SMEs in these developing countries often cannot access digital platforms.

Therefore, investment in digital infrastructure requires governments to establish a regulatory and policy environment that promotes investment in the digital world and produces inclusive and sustainable outcomes[87]. It would promote cross-border transactions and technology transfer in digital investment and mitigate risks therein. However, the current governance mechanisms, such as laws and policies on cross-border transactions and technology transfer, are difficult to provide due protection for digital investments and may exacerbate investment risks. In digital investments, ubiquitous cross-border data flows raise concerns among governments and citizens. For example, there are implications of collecting and using so much information, often without the data subject's knowledge.

Figure 4 Imports of ICT goods in total merchandise trade

 

DSTRI ranges from 0 to 1, with 1 being the most stringent. The degree of restrictions is assessed against benchmarks in different areas of the industrial and technological sectors. In some areas, a lack of regulation is considered restrictive. The 2022 DSTRI database also revealed significant regional differences. OECD economies have lower average restrictions, and the Americas have lower average restrictions than African and Asian economies. Also, cross-border transactions are a complex financial system that needs to be updated to catch up with the development of financial technology. For example, blockchain technology can be introduced into trading systems, and an asymmetric alliance blockchain system can be established to build a fairer and more intelligent cross-border trading system[89].

4.3. The Hainan FTP to Solving Future Development Prospects for African Nations

Future export growth potential for Ethiopia may be facilitated by the Hainan FTP. There are some exciting prospects for African economic development in China. Africa, home to some of the fastest-growing economies on the planet, has been actively pursuing international trade and investment relations[91]. Businesses in Ethiopia and other nations may benefit from the free trade policies and incentives provided by the Hainan FTP [92]. For example, more access to China's enormous consumer market may be advantageous for their agriculture sector, which is a major economic engine. The port's simplified customs processes and reduced tariffs may facilitate the export of premium coffee, fruits, vegetables, and other produce to China for its farmers and agribusinesses. Additionally, this might result in increased earnings and a deeper integration of Ethiopian agriculture into international supply networks [93]. Moreover, Ethiopian businesses operating in the textile, leather processing, and light industrial goods sectors may find opportunities due to the free trade port's emphasis on modern manufacturing and services. Ethiopian businesses may be able to take advantage of Hainan's favorable policies to set up manufacturing sites or distribution centers, giving them access to the rich Chinese market. The Hainan FTP appears to offer valuable economic opportunities that African nations should carefully explore to drive their continued growth and development. Technology transfer and knowledge-sharing in these industries have the potential to help Ethiopia and other African countries strengthen their industrial capabilities and move up the value chain in the future.

Respected reviewer: 2 

On behalf of all the authors, would like to express our deepest gratitude for the time and effort you invested in improving our manuscript. We carefully reviewed each of your comments and made the necessary revisions to enhance our research work. After thorough consideration and multiple revisions, we believe that the updated version of our manuscript is significantly improved, thanks to your insightful suggestions. We are truly appreciative of your contribution to the quality of our research, benefiting both us and our readers, we carefully considered each of your comments and believe that the changes have substantially improved the clarity and impact of our research, once again, thank you so much on behalf of all the authors for helping us to deliver a stronger and more polished manuscript.

 

 

 

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