China bets big on Kenya

• As Africa turns to the East for trade and aid, Chinese firms are establishing base in lucrative businesses

New oil wealth countries rarely have people with the experience, capacity or political strength to negotiate good terms for their nations. Prof Kasozi says Africa had no choice to sell its goods to the highest bidder. However, he says, the granting of political independence and the coming of other traders to Africa should help the African producer to sell his products at competitive prices.

Africa trade curve

Mr Satchu says: “The Chinese have been in Africa for very long . I come from Mombasa and if you care to potter through the Museum at Fort Jesus you will find centuries old Chinese Porcelain. Whilst the last decade has seen a super growth China Africa trade curve, they have not come out of nowhere. So I do see the continent as being a winner in this relationship.”

Chinese construction firms have been preferred against local ones given their comparatively low bidding prices, a fact that Mr Ashu Sharma, director at Spencon, a construction company, says is working against local firms.

Another reason for Chinese interest, analysts say is that the Chinese government buys hard currency earned by Chinese contractors overseas at preferential rates.

Mr Joseph Schwartzman the managing director H Young says “Chinese companies’ presence in Kenya is not beneficial to the country.  Their presence has only one purpose: transfer of hard currency back to China.

China is among the a few countries that have a separate fully-supportive Economic and Commercial Counsels in Kenya.

“What was noticeable when the crisis hit, there was beneath the Chinese State, an entrepreneurial class that was less well endowed and these fellows hit the eject button very quickly. Look at the copper mines in Zambia. I think the Chinese Government need to better integrate their entrepreneurial class because the backlash whilst contained was significant,” Mr Satchu says.

Chinese firms have won massive bids for power projects in Kenya. The Chinese contractor won an international tender for capacity enhancement of the Nairobi-Eldoret Pipeline System in 2007.

China Road and Bridge Corporation and Wu Yi are currently undertaking major infrastructure projects in Kenya including the Sh10 billion expansions of the Jomo Kenyatta International Airport (JKIA) and construction of Thika-Nairobi highway.

jnyabiage@nation.co.ke