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See the trade initiative aimed at bridging Kenya's trade gap with China

See the trade initiative aimed at bridging Kenya's trade gap with China
  • Kenya and China collaborate to enhance economic ties, focusing on B2B and B2C connections through exhibitions. 
  • The trade deficit between the two nations will reach $3.62 billion in 2022, prompting efforts to reduce the gap and boost Kenyan exports to China.
  • The Chongqing and Sichuan Export Commodity exhibition in Nairobi brings together various sectors, fostering cooperation in manufacturing, trade, technology, and other key areas.

In an effort to make Kenya a preferred entry point to the African market, the governments of Kenya and China have underlined their cooperation to strengthen bilateral economic ties.

This is accomplished by utilizing the business-to-business and business-to-consumer connections at exhibitions to reach out to China's two industrial regions, Chongqing and Sichuan.

Building on long-standing ties between the two trading blocs, the initiative has also been supported for its potential to reduce the present trade gap, which favors the Asian nation.

The trade imbalance between the two countries increased to $3.62 billion (Sh526.2 billion) in 2022 from $3.51 billion (Sh510.2 billion) the year before, according to data from the Central Bank of Kenya. “This was the highest goods trade deficit between the pair since $3.68 billion (Sh534.9 billion) in 2017,” CBK says.

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Irene Mumo, the State Department's Deputy Director for Investment and Promotion, said such trade platforms give the nations an opportunity to expand their areas of mutual cooperation last Thursday at the opening of the Chongqing and Sichuan Export Commodity exhibition in Nairobi.

“This includes areas of manufacturing, trade, technology, and other key sectors targeted under the bottom-up economic model,” Mumo said.

The three-day exhibition, which began on August 31, included a variety of enterprises, including those in the automotive, agricultural, healthcare, textile and apparel, food processing, electronics, industrial machinery, and housing sectors.

It brought together 30 exhibitors, including four from Kenya and 26 from Chongqing and Sichuan in China, both of which were eager to take advantage of the new trade prospects.

The friendship and collaboration between China and Kenya have reportedly produced results in the past, and according to Zhang Yijun, Minister Counselor of the Chinese Embassy in Kenya, they are looking to capitalize on this to strengthen ties moving forward.

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“China has become Kenya’s largest trading partner, the largest source of foreign direct investment, and the largest project contractor,” Yijun said.

China surpassed India to overtake it as Kenya's largest importer of commodities in 2014, and since then, China has played a significant role in supplying raw materials to local industries and completed items that are widely traded by small local enterprises.

It is a significant supplier of commodities and a business-building factor for Micro, Small, and Medium-Sized Enterprises (MSMEs), of which Kenya is projected to have more than 7.4 million and employ over 14.9 million Kenyans across the economy. In Kenya, the largest economy in East Africa, SMEs account for 98% of all enterprises and generate 30% of all employment annually.

As China continues to be a significant worldwide producer and supplier, including Europe and the US, key imports include commercial cars, fast-moving consumer products like electric materials and electronics, apparel items, and industrial and construction gear.

Additionally, Kenya is a significant market for pharmaceuticals, iron and steel, plastics, rubbers, furniture, lighting signs, prefabricated structures, optical products, medical equipment, footwear, paper and paperboard, and electrical and electronic equipment.

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