Unbalance China-Kenya economic ties

 

Chinese Foreign Minister Chen Yi meeting with Jomo Kenyatta on his visit to Kenya in February 1964.

Political ties history between China and Kenya

This bilateral relations date back to 14 December 1963, two days after the formal establishment of Kenyan independence, when China became the fourth country to open an embassy in Nairobi. Military exchange between the two countries has been increasing in the past decade. General Liu Jingsong, commander of the Lanzhou Military Region, led China’s first military delegation to Kenya in December 1996; Major General Nick Leshan, commander of the Kenyan air force, paid a return visit in 1997. Kenyan president Mwai Kibaki visited Beijing in August 2005.

In 2013, President Uhuru Kenyatta visited China. He held talks with his Chinese counterpart, Xi Jingping. Kenya and China ended up signing deals worth (US$5 billion).

The Premier of China, Li Keqiang visited Nairobi on his 2014 Africa tour. He and President Kenyatta witnessed the signing of 17 multi-billion deals to fund multiple infrastructural projects and various agreements. This included the establishment of a China-Africa Development Bank.

Economic relations between China and Kenya

Bilateral trade amounted to US$186.37 million in 2002; China exported US$180.576 million to Kenya, while only importing US$5.798 million of Kenyan goods, mainly black tea, coffee, and leather.

Early in 2006 Chinese President Hu Jintao signed an oil exploration contract with Kenya; the latest in a series of deals designed to expand Chinese overseas economic engagement with Africa. The deal allowed for China’s state-controlled offshore oil and gas company, CNOOC Ltd., to prospect for oil in Kenya, which is just beginning to drill its first exploratory wells on the borders of Sudan and Somalia and in coastal waters. No oil has been produced yet, and there has been no formal estimate of the possible reserves.

In April 2007, the Jinchuan Group, a state-owned metal manufacturing group, became the first Chinese company to enter Kenya’s mining sector, purchasing a 20% stake in Tiomin Kenya.

Debt-trap diplomacy

China lent Kenya extensive loans to build a standard gauge railway between Mombasa and Nairobi and highways in Kenya. In 2018, Kenyan President Uhuru Kenyata banned Chinese fish imports in response to public outcry over the unregulated importation of fish from China with Kenyan fishermen lamenting on how the foreign fish had flooded markets. The Chinese government use the Standard Gauge Railway as leverage against Kenya by threatening to completely pull funding for the project as well as threatening to impose trade sanctions. The Kenyan government soon after lifted the ban of Chinese fish imports.

The Kenyan government reportedly waived the sovereign immunity of its largest and most lucrative port,the Port of Mombasa, to be used as collateral for Chinese loans to construct the Standard Gauge Railway. It was reported in late December 2018 that Kenya may soon face default on Chinese loans, which could force Kenya to relinquish control of the port to China.

The Kenyan media has debated whether Chinese loans are worth the risk of falling into debt traps, drawing analogies with § Sri Lanka, and some commentators have argued that these loans could jeopardize Kenyan sovereignty.

From 2000 to 2011, there are approximately 65 Chinese official development finance projects identified in Kenya through various media reports.[16] These projects range from a 108 million USD grant from Chinese government to build the North and East Ring Road sections in Nairobi,[17] to a concessional loan to finance the construction of the Kenyatta University Teaching, Research and Referral Hospital Project in 2011. PRC state-owned China Radio International has operated radio station CRI Nairobi 91.9 FM since 2006.

The Garlic and other tensions arising  in Kenya

Farmers saying that, they are being undercut by producers who ship garlic almost 7,000 miles by sea from the world’s most populous country. They accuse Beijing of “garlic dumping” and say they can’t compete.

“If you go the markets you will see that 80 percent of garlic is from China,” said James Kamau, who runs a support group for fellow farmers.

Munyua and Kamau, 40, are among those who say that China’s growing presence in Kenya is having a negative impact on their lives, culture, and ability to make ends meet.

But garlic is only a microcosm of the impact Chinese influence and investment are having across Africa. Garlic is heaped on a mat beside a roadside stall in Kiawara, Kenya. The agriculture sector employs 40 percent of Kenya’s 49 million people and accounts for 26 percent of its economy.

In recent years, China has offered African countries loans, development aid and vast infrastructure projects as part of the Belt and Road Initiative, a $1.4 trillion network of modern trading routes. Kenya now owes 72 percent of its bilateral debt — or around $5.3 billion — to China. That’s around one-fifth of Kenya’s total external debt. With China holding the purse strings, it has the upper hand in any battle of wills — and garlic is just the latest foodstuff to be at the center of tensions here.

Eunice Ngima runs a small roadside stall selling garlic, onions, potatoes and other vegetables in Kiawara, Kenya.

In October, Beijing’s ambassador to Kenya threatened a trade war after Chinese fish imports were halted amid claims the market was being flooded.

China also threatened to pull funding for the second phase of a railway line connecting Nairobi with the major Indian Ocean port of Mombasa. China financed and built the initial stage of the project at an estimated cost of $3.2 billion, making it Kenya’s most expensive infrastructure project since independence from Britain in 1963.

Around three months later, Kenya relented and scrapped the import ban on Chinese fish. It cited market forces.

‘VIRGIN LAND’

Most garlic farms in Nyeri County, the remote area where Munyua is based, are small-scale operations.

The location of his small plot of land makes it difficult to transport produce after it is harvested in May and November.

Munyua has to rent donkeys to carry the garlic along steep mountain cliffs and through forested valleys before reaching a mud road. Kiawara, the nearest town, is a 30-minute drive away from his farm and a further 4-hour journey from the capital, Nairobi.

Garlic farmer Solomon Wambogo Munyua in his field in Embaringo; Munyua planted his garlic shoots in January, with the help of two workers he hires for the day at a cost of $3 each. There’s ample water supply and rich volcanic soil here on what Munyua calls “virgin land.” His plot typically yields up to 600 pounds of garlic per season — earning him as much as $400, enough to send his son and daughter to school. But he struggles to comprehend why many Kenyan consumers are opting for the rounder and smoother white Chinese garlic bulbs over locally grown produce. While Chinese garlic features larger cloves that are easier to peel by hand than the more intricate Kenyan variety, Munyua believes his country’s crop boasts a key advantage: its taste.

“Kenyan garlic is really sweet,” he said.

Garlic is also grown on an adjacent farm. Cousins James Kariuki Wahome, 36, and Peter Munene Ndurui, 40, rent half an acre of land here.

Garlic farmer Peter Munene Ndururi rests in his field in Embaringo, Kenya. They live around 12 miles from the farm, so every morning they have to pay to jump on the back of a motorbike to get them here.

They arrive around 8 a.m. every day — except Sundays when they go to church — as any earlier in the morning is too cold to work on their plot of land. Whistling young men who sell lunch bags to farmers containing bread, milk and water drop by around 1 p.m., and the cousins continue to toil until around 5 p.m.

“Life is very hard,” Wahome said.

Wahome admits that he often struggles to support his five children due to the price of garlic fluctuating in the local market. The influx of Chinese produce hasn’t helped. One pound of garlic earns farmers around 36 cents “when it’s good,” but that figure can be a low as 23 cents at times, according to Wahome.

Munyua is among the farmers so worried about the imported bulbs that they want the government to take action, as it did with fish last year.

“Chinese garlic should be taxed high so that the Kenyan farmer can earn something,” Munyua said.

CORRUPTION

Garlic is only part of the picture. Kenya exported $96.88 million in goods to China, but imported a total of $3.79 billion. The Kenyan government’s horticultural crops directorate said supply and demand were among the factors when it comes to the availability of foreign garlic.

“As long as we don’t produce enough garlic, we may still continue buying garlic from China,” a spokesperson said, adding that the lack of sufficient farming knowledge and technology and limited machinery were also challenges in Kenya. Kenya currently imports around 50 percent of its garlic, according to official statistics.

Fields of garlic in Embaringo, Kenya. While African governments have embraced China with open arms, Munyua questions whether the “win-win” notion that underpins the relationship is a reality.

“Is it beneficial for the common man?” he asked, claiming that one group benefits the most from China’s presence in Kenya. “The politicians.”

Transparency International ranks Kenya among the most corrupt countries in the world — 144th out of 180 nations on last year’s index.

Charles Gichuhi Ngari, a garlic farmer and village elder, was a child when the British battled Mau Mau rebels in the 1950s.

Charles Gichuhi Ngari sits with his wife, Esther Wairimu Gichuhi, and granddaughter Rose Wamboi Njoroge at their home in Embaringo, Kenya.Nichole Sobecki / for NBC News

The anti-colonial rebels used to hide from the British military not far from today’s garlic farms.

These lush green hills were known as “the white heights,” because they were full of white British settlers who took the best land.

“When black people heard, ‘this is not their land,’ they started fighting for it,” Ngari recounted.

He sees modern parallels.

“I have never gone to China, but China is a superpower,” Ngari said. “I just get up every morning to go to my farm … I see the news, ‘Kenya has borrowed this money from [China].’ I cannot tell you where the money goes.”

He highlighted the lack of local infrastructure that makes it so tough to compete with imports shipped from overseas.

“There is no road here,” Ngari said. “The money has been eaten.”

https://www.nbcnews.com/news/world/china-s-relationship-africa-illustrated-garlic-tensions-n994486

According to Enric Olander on LinkedIn, China often talks about how its relationship with countries in Africa and along its Belt and Road Initiative is “win-win.” In China’s view, that means Beijing provides these countries with badly-needed capital and access to its vast market which, supposedly, benefits both sides equally.

But the situation in Kenya tells a very different story, one where “win-win” increasingly looks like China wins twice.

Consider the following:

1) DEBT: From 2014 to 2018, China’s lending to Kenya tripled to more than $6 billion. While this capital is incredibly important for Kenya to build vital infrastructure projects, these are nonetheless interest-bearing loans that will pay China sizable dividends over the long term.

2) TRADE: Kenya buys a lot from China but China buys almost nothing from Kenya. In 2018, Kenya exported just $97 million worth of goods to China but imported a stunning $3.8 billion. Beijing is going to have to be much more proactive about equalizing the balance of trade or else it just won’t be sustainable for a country like Kenya.

3) MARKET ACCESS: While China restricts the import of a lot of Kenyan agricultural products, there are many fewer limitations on low-cost Chinese imports like garlic & fish that flood the market & put enormous pricing pressure on local producers.

It is very clear,i that most of the African countries China is dealing with may have been having similar issues. Economic tensions ariving due to the bilitary relalationships with China by underdeveloped countries is a negative economic effect. Great attention should be put in place, in order to prevent future occurence of such.  African integration is paramount to strengthened now than never. Unless, all these toxic economic situation will continue. The New-world order is exploitative, African leaders should rise intellectually, forget thinking of dying in office and resist these modern slavery.

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