Djibouti is an important gateway to Africa for the “21st Century Maritime Silk Road”. The country has experienced positive economic development over the past ten years. A politically stable and economically successful Djibouti would facilitate China’s cooperation with other countries in the region, and economically benefit the Great Horn region by exploiting the “flying geese Model”. The paper starts with an overview of Djibouti after 1977 as well as its relationship with neighboring countries and world powers. Then, the paper explores Djibouti’s political system and its path of economic development. Ethiopia is the most influential country for Djibouti in Africa, so studying the relationship between Ethiopia and Djibouti is an unavoidable step in further understanding this country in depth. Djibouti is an important participating country of the Maritime Silk Road. In recent years, China and Djibouti have developed a very close relationship in many fields and at different levels. Accordingly, the fifth part of this paper focuses on the China-Djibouti relationship. Finally, the last part of the paper is dedicated to a case study, analyzing four Chinese companies in Djibouti. Their investment and operating characteristics are different but each of them represents a strategy for overseas investment.