China has entered into an agreement with the East African Community on economy, trade, investment and technical co-operation.

Officials said the parties, led by EAC Secretary General Richard Sezibera and China Vice Minister for Commerce Jiang Yaoping, discussed priority projects in infrastructure worth over $500 million

The agreement seeks to further open up opportunities for Sino-EAC trade, which in 2010 stood at nearly $4 billion, 39 per cent up from the previous year. In the period under review, Kenya alone saw the value of China’s exports grow by 62 per cent bringing in $1.5 billion.

By September, China’s investments in the EAC hit $750 millio in textiles, shoes, pharmaceuticals, industrial machinery, electronics and ICT.

In the past few months, EAC countries have signed deals with Chinese firms ranging from oil exploration to mining and infrastructure developments.

The new agreement is expected to increase trade and investment through promotion of the commodity trade, joint venture investments, infrastructure and human resource development.

China and the EAC have also created a Joint Committee on Economy, Trade, Investment and Technical Co-operation (JCET) to spearhead the implementation of the agreement.

Mr Yaoping said that China hopes to raise its business investments in the region to $1,500 million by 2013 to stimulate economic growth.

At the trade talks, China and EAC placed emphasis on infrastructure development, an area in which the EAC has great interest and in which China has made big strides.

EAC proposed a number of priority projects which require funding, including the rehabilitation of the Arusha-Holili-Voi Road estimated to cost $566 million, improvement of public facilities (markets, parking bays for long distance drivers and emergency co-ordination) along the EAC Corridors, and feasibility as well as detailed engineering design studies for four priority roads in East Africa. 

Chairperson of the EAC Council of Ministers Hafsa Mossi said she looked forward to the EAC-China relationship moving from trade-related to investment- centred. (READ: Experts caution EAC states over Monetary Union)

“China and the EAC need to develop more robust partnerships to spur trading relationships through investments in a broad range of sectors including infrastructure, energy, agricultural production and processing,” Ms Mossi said.

In the energy sector, Ms Mossi mentioned Kenya with over 2,000 Megawatts of geothermal power potential but that only exploits only 127 MW; Rwanda’s potential in methane gas in the Lake Kivu and hydropower potential in Uganda and Tanzania.
A lecturer in development studies at Tumaini University, Dr Gasper Mpehongwa, said China’s entry into East Africa is targeting raw materials like timber, coal, gas, mineral and consumer goods. 

Dr Mpehongwa cautioned EAC to be careful in what it wants to offer China.

“Let China establish factories in the region and not extract raw materials for their factories back home,” he said.