By Arwa Damon and Brent Swails

Djibouti (CNN)A dirt track at Djibouti’s Doraleh Port leads to a series of unassuming single-story buildings that, earlier this year, hosted the world’s two superpowers.

The Chinese contingent took their seats to the far right of the podium where US Rear Adm. Heidi Berg formally launched the US-led military exercise, Cutlass Express.

Cutlass, and the handful of other annual US-led drills held throughout the African continent, are a low-risk and relatively low-cost way for US Africa Command (AFRICOM) to gain and keep regional allies.

But in Djibouti — a tiny nation of just 884,000 people that is a key Red Sea ally of the US — and throughout Africa, there’s new competition for local loyalties from China’s military, which is increasingly asserting its influence on the continent.

In 2017, China’s People Liberation Army (PLA) opened its first overseas base in Djibouti. The sprawling, gray concrete complex sits on a prime location next to one of Djibouti’s main ports — and is just a 15-minute drive from the US military’s only permanent base on the continent, Camp Lemonnier.

Lemonnier is a strategic asset for US missions abroad, used as a staging area for America’s intelligence and counterterrorism operations on the African continent and beyond. One AFRICOM official, who was authorized to speak on the condition of anonymity, says the physical PLA presence in Africa is becoming a long-term strategic concern for America.

“They (China) have upped their game, in plain language, and ultimately they are offering things that our partners want, that our partners need,” said the AFRICOM official. “In places, we have concerns we are being out-competed.”

On the ground, however, both sides are engaged in respectful diplomacy. The night before the Cutlass Express, Chinese military officials invited Adm. Berg and her contingent on board a Chinese destroyer docked at the nearby harbor. And, for the first time, Berg welcomed PLA commander Liang Yang to the exercise’s opening ceremony.

When Berg was asked to comment on the “us or them” narrative, she was quick to refocus attention on what the US can do for its allies.

“I think we want to ensure that we don’t frame it … that Africa is a backdrop and an arena for us to score points off China,” Berg said. “We are here and our investment and focus is on building our African partners.”

The Chinese contingent at the Cutlass Express launch declined to comment to CNN, but President Xi Jinping made it clear at a high-level summit in Beijing last September that he’s pursuing a “comprehensive strategic and cooperative partnership” with Africa, which includes a $60 billion package of aid, investment and loans to Africa.

“We are about to set out on a new journey in history,” he said.

To read more click here: China and the United States face off in Djibouti