Expo chance for Kenya to improve trade with China

The third annual China International Import Expo (CIIE) is set for Shanghai early next month as planned. The staging of the event is emblematic of China’s triumph over Covid-19 and a demonstration of the confidence in the vitality of the Chinese economy.

With over 1,400 enterprises revving up to exhibit their products and services, the 2020 CIIE also builds on the resilience and recovery of the second largest economy from the global pandemic. The World Bank estimates that China’s economy will expand by 1.6 per cent this year, against a 5.2 per cent contraction of the global economy. China is the only super power to have eschewed recession in a global health crisis.

The expo, which has drawn over 180 countries, captures China’s multilateralism aspirations while firming up its commitment to open up to the world.

Export opportunities

Kenyan enterprises have participated in the previous CIIE and will leverage this edition to further scout for export opportunities to China. As a head-start, in 2018, Nairobi and Beijing signed formal Sanitary and phytosanitary agreements to facilitate entry of agricultural produce into China. Products now cleared for export to China include legumes, flowers, vegetables, meat, hides, herbs and fruits.

Like China, Kenya is one of the economies projected to grow despite the coronavirus. Key Kenyan sectors to feature in the CIIE include tourism, agriculture, financial services and technology, which also hold the greatest promise to turn around the economy.

Biggest trade partner

At the inaugural CIIE in 2018, President Kenyatta reported that Kenya-China trade had increased over 80-fold in 2007-2017, making Beijing the biggest trade partner with 17.2 per cent stake in Kenya’s total global trade. But the trade was heavily lopsided in favour of China: In 2017, Kenya’s exports to China were $96.88 million and imports $3.79 billion.

Both countries need to effect a number things. First is product quality. China has opened its trading rooms to all countries, hence stiffer competition for Kenyan products. It will take targeted investments in our production lines to meet and exceed China’s quality thresholds like sanitation and packaging.

Secondly, in past CIIE events, Kenyan exhibitors reported demand for the products in quantities they could not supply due to high production costs, hence the need for significant capital injection. Ways out of this bottleneck include the government guaranteeing local enterprises’ borrowing; taking up the matchmaking and joint venture opportunities at the expo for the enterprises; and enhancing inter-cultural communication and understanding.

Lastly, both countries should reduce trade tariffs to enhance accessibility of the markets. With a population of 1.4 billion, tapping into the Chinese market is a strategy that Kenya should actively pursue.

@Cavinceworld