Kenya secures trade deal with China but rising debt, US competition complicate deeper ties

Chinese Vice-President Han Zheng met with Kenyan President William Ruto in Nairobi, Kenya, on March 24 and the two countries reached key trade and infrastructure deals.

Photo: Xinhua Nairobi has secured trade and infrastructure financing deals during Chinese Vice-President Han Zheng’s visit, but analysts cautioned that deepening ties were complicated by rising debt and Nairobi’s balancing act between global powers.

The “early harvest” Economic Partnership Agreement grants Kenyan products – including tea, coffee and avocados – duty-free and quota-free access to the Chinese market starting in May.

President William Ruto hailed the deal, alongside new memorandums of understanding on agriculture and infrastructure, as a major boost for the economy amid growing US-China competition for influence in East Africa.

A day earlier, Han flagged off the first shipment of Kenyan agricultural products under the new zero-tariff deal, calling it a “major benefit” that helped Kenya expand exports.

The shipment followed China’s pledge of zero-tariff treatment for 53 African countries starting on May 1.

Kenya imports US$4.3 billion from China annually but exports only US$200 million.

In a statement after the talks, Ruto said cooperation with China was delivering key infrastructure projects, including the extension of the Standard Gauge Railway (SGR) from Naivasha to Malaba on the Uganda border, stalled for over six years, and the Rironi-Mau Summit highway.

Chinese firms, including China Road and Bridge, are investing billions of dollars in the projects, which they will recoup through around three decades of management.

Han’s visit followed the March 19 groundbreaking ceremony for the US$5.4 billion SGR extension to Malaba, intended to link the Port of Mombasa to landlocked neighbours including Uganda, the Democratic Republic of Congo, Rwanda and South Sudan.

Although the revival of such infrastructure signals a deepening of ties, David Shinn, a professor at George Washington University, said the relationship remains “complex” due to the US$1 billion Kenya spends annually servicing Chinese debt.

Shinn suggested that completing the rail link to Kampala was now Nairobi’s top priority to ensure the project’s commercial viability. “Kenya considers completion of the railway to Kampala, Uganda, critical to its financial success.

This will probably be the top item on Kenya’s agenda in the meeting with Han Zheng,” Shinn said.

He said China saw Kenya as a critically import

原文链接: 南华早报