President John Magufuli and Chinese Foreign Minister Wang Yi oversaw the signing of the contract at an event broadcast live on state television.
China's warning comes after New York Stock Exchange's statement that it would delist China Telecom Corp Ltd, China Mobile Ltd and China Unicom Hong Kong Ltd.
The new 700 kilometre electrified train line runs parallel to the now abandoned Ethiopia-Djibouti railway. It is the first part of a vast network of 5,000 kilometres of rail which Ethiopia hopes to build by 2020.
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