Kenya, China talks address existing trade imbalances

Kenya is moving to boost its exports to China, following talks between Kenya’s Minister for Trade Amos Kimunya and Vice Minister of Commerce of the People’s Republic of China, Jiang Zengwei.

The talks, held in Nairobi recently, sought the way forward to sound development of China-Africa trade.

Among other things, the ministers proposed that the zero-tariff treatment on products from Africa be scaled up to 95 per cent, with 60 per cent being considered this year; that an African commodities trade centre be set up in China and that preferential policies such as fees reduction be adopted.

According to Kenya’s Ministry of Trade, since 1964 when the two countries signed a bilateral trade agreement, an imbalance has existed in favour of China.

The value of exports and imports in the past five years show an average trade imbalance of Ksh18 billion ($223 million).

The majority of Kenya’s imports are capital goods, which are of higher value than its exports which include cotton, scrap metal, sisal and leather.

In a statement posted on its website, Kenya’s Ministry of Trade said the two countries agreed to address the matter by exchanging trade and investment related information, as well as participating in trade fairs and exhibitions in each other’s countries.

After the Beijing Summit in 2006, China expressed its intentions to expand the tariff exemption list for developing countries in Africa from 478 to 4700 products.

Since Kenya is under the East Africa Custom Union, China would consider extending zero tariff treatment to some of the country’s exports.

Airlines’ expansion has also created a wider network for trade between the two countries. In 2009, Kenya Airways and China Southern launched code-share co-operation on their Guangzhou-Dubai and Dubai-Nairobi routes.

This year, KQ became a full member of the SkyTeam global airline alliance expanding relations with China Southern Airline, which has been a member since 2007. China Eastern Airlines is expected to become a member in mid-2011.

Emirates has also launched the first scheduled Airbus A380 service to the Chinese capital, Beijing. The airline said it would use its Dubai hub to promote Kenya- China trade.

Emirates’ regional manager for East Africa Essa Sulaiman Ahmad said: “Destinations like Southern China’s commercial capital Guangzhou have been popular with Kenyan traders and businessmen. Others like Beijing and Shanghai have been source markets for Kenya’s tourism.”

Emirates operates double-daily services to Beijing, Shanghai and Hong Kong, and daily services to Guangzhou.