China to reduce trade imbalance
Cooperation with China has been crucial in the building of many roads in Kenya. The Chinese government says it is working to reduce the trade imbalance between the two countries. Photo/FILE
The Chinese government is fast-tracking modalities to reduce trade imbalances with Kenya as it seeks to cement bilateral ties between the two countries. The fastest growing economy in the world, China has emerged as one of Kenya and Africa’s most important trading partner giving the traditional Western traders a run for their money.
Chinese envoy to Kenya, Mr Deng Hongbo, says the country’s Foreign minister, Mr Yang Jiechi, will visit the country next week. China has been looking towards Africa for raw materials to run its vibrant industries.
In 2006, Chinese president Hu Jintao was on a three-day visit to Nairobi during which he signed a deal with President Kibaki for the upgrading of the 22 kilometre Mombasa Road from Jomo Kenyatta International Airport to Gigiri.
However, trade has remained firmly in favour of China. According to the Economic Survey 2009, Kenya exported goods worth Sh2 billion in 2008 but imports from mainland China stood at Sh63 billion. The Chinese envoy said his government was making conscious efforts to bridge the gap.
He said China would extend subsidies to its traders to make Kenyan exports cheap. Kenya mainly exports leather, tea, coffee, sisal fibre, scrap metal and horticultural produce to China and in turns buys machinery, electronic and electrical goods, textiles and fertiliser. The envoy said the subsidies covered a wide range of products including tea, coffee and flowers.
“We are keen on improving on the quality of the bilateral trade so that everyone is happy in the arrangement,” said Mr Hongbo. Besides the subsidies, the envoy said, China was also granting Kenyan exporters and companies free exhibition space at trade fairs on its soil so as to boost the visibility of their goods and services.
At the same time, the envoy said bilateral trade with Kenya had shown resilience in the face of the crippling effects of the global financial crisis and drought. He said performance in 2009 was expected to outdo the volumes traded in the previous years. Already, the value of bilateral trade between Kenya and China stood at $1.02 million in the last 10 months compared to $1.2 million realized over 2008.
“Trade between Kenya and China has generally defied the global economic downturn and drought conditions. We expect the value to at least equal that realised in 2008,” said Mr Hongbo.
