Since President Kibaki took over in December, 2002, the govermnent’s policy has targeted the intensification of trade relations with Eastern countries. Kenya has entered into trade and economic partnerships with five countries in the Middle East and Asia, namely China, Iran, UAE, Japan and Singapore.
China has emerged the key partner.
When Kenya gained independence in 1963, China was the fourth country to recognise the new nation. It considers Kenya as a gateway to Africa. New enhanced economic relations between Kenya and China began in 2005 with
President Kibaki’s visit to Beijing, whose culmination was a five-part agreement covering aid in infrastructure and energy, extended aviation services, technical assistance for assessment and industrial products’ classification and standards, and modernisation of equipment at the Kenya Broadcasting Corporation (KBC).
As a direct consequence of these agreements, Kenya’s imports from China grew by 224.5 per cent, from Kshs23 billion in 2005 to Kshs74.5 billion in 2009. Imports from China between January and November, 2010, amounted to Ksh110.1 billion making China the first origin of imports before the UAE (Kshs108.4 billion) and India (Kshs82.9 billion).
Chinese direct investments in Kenya also increased. Between 2004 and 2007, China invested a capital of Kshs2.5 billion. In 2009, FDI from China was Kshs530 million, up from Kshs53.4 million in 2008.
Chinese companies are active in construction, tourism and manufacturing. There are currently 96 investment projects undertaken by the Chinese, mainly road construction, employing a workforce of about 9,000 Kenyans. An increasing number of small to medium-sized Chinese firms specialising in auto repair and maintenance, home furnishings, construction equipment and agricultural machinery have also settled in Kenya.
China provides monetary and non-monetary aid to Kenya, exclusively on a project basis. It supports infrastructure, equipment and plants, academic and technical training, human relief and tariff exemption.
The share of Chinese aid became signiﬁcant in 2002 when it exceeded one per cent of total development assistance received by Kenya. In 2005, the share of Chinese development assistance rose to 8.25 per cent, placing China second among bilateral donors.
The strong relations between Kenya and China have continued to grow.
China donated Ksh6.65 billion in food aid to the affected countries in the Horn of Africa and Ksh1.82 billion worth of emergency food in Kenya.
The two countries also signed a Memorandum of Understanding that will provide cooperation in diplomacy training and exchange of information between the two countries.
The agreement is between the Foreign Service Institute (FSI) of Kenya’s Ministry of Foreign Affairs and the Chinese Foreign Affairs University (CFAU).
The MoU outlines a wide range of areas of cooperation which include planning of joint academic courses, seminars and conferences and exchange of research information, training materials as well as teaching staff and students.