From the Document: "The small, arid East African country of Djibouti is strategically located along one of the world's busiest shipping routes on the Bab el Mandeb Strait, which serves as the gateway from the Red Sea to the Gulf of Aden and the Indian Ocean. Djibouti has become a hub for foreign militaries. It is home to U.S. Africa Command's Combined Joint Task Force-Horn of Africa (CJTF-HOA), based at Camp Lemonnier, the only enduring U.S. military installation in Africa. A former French colony, Djibouti also hosts a sizable French military presence and provides facilities for multinational antipiracy operations off Somalia's coast. [...] With almost no arable land, few natural resources, and little industry, Djibouti's economy depends heavily on its services sector and trade through its busy international port complex. Rents and related revenue from foreign militaries are an important source of revenue (reportedly over $125 million annually). The country is pursuing an ambitious agenda to become a commercial trade hub for the broader region. Neighboring Ethiopia, a landlocked country of over 100 million people, relies on Djibouti for the transit of 90% of its formal trade, recently facilitated by a new Chinese-built rail line between the two countries. China's growing engagement with Djibouti is multifaceted, ranging from major investments in infrastructure to China's establishment of a geostrategic naval base there. China, which holds a majority of Djibouti's external sovereign debt, considers the country as part of its Belt and Road Initiative, which aims to connect countries to Chinese global trade routes."
CRS In Focus, IF11303
Congressional Research Service: https://crsreports.congress.gov/