Given that domestic manufacturing enterprises are weak and uncompetitive in the international market, the Ethiopian government acknowledges the need for foreign investors to achieve sectoral development. Currently, the majority of new foreign investors are Chinese. This policy brief focuses on Chinese investment in Ethiopia’s leather sector and its impact on local development. This study can help us understand foreign investments’ spillover effects and the specific characteristics displayed by increasing Chinese investments in Africa. From 2010 to 2018, nine Chinese (including from Taiwan and Hong Kong) firms have established tanneries in Ethiopia, making China the largest investing country in Ethiopia’s leather sector.