China has asked East Africa countries to consider its free trade proposal, saying it will be of great economic benefit to the region.

Chinese Embassy’s economic and commercial affairs counsellor, Guo Ce further downplayed claims that Kenya had declined the plan, noting that they are yet to receive any formal response on the proposal from any of the EAC member countries.

“Claims that Kenya has opposed free trade proposal are not true. Not a single country has responded to this proposal. The proposed trade arrangement will deepen economic and cultural ties between China and East Africa, opening numerous opportunities for business operators,’’ said Guo.

Last week, Trade PS Chris Kiptoo told a local daily that Kenya will not sign a free trade agreement that China is advancing with EAC but instead propose for a preferential trade agreement with the Asian economic giant.

Kiptoo said that the free trade pact will worsen the huge trade imbalance between the two countries and would further benefit China at the detriment of Kenya’s economy.

According to Economic Survey 2018, Kenya’s imports from China narrowly missed the Sh400 billion mark to hit Sh390 billion, accounting for 23 per cent of total imports.

The glaring trade imbalance between Kenya and China resonates across Africa, with data from China Africa Research Initiative (CARI) showing that the continent sold $34 billion (Sh3.4 trillion) with China on a total trade of Sh17.2 trillion in 2015.

“It is time we review our trade partnership with China if we want to grow our manufacturing sector as enshrined in President Uhuru Kenyatta’s Big four agenda. Already China accounts for 25 per cent of Kenya’s import bill. Kenya’s exports to China was less than Sh10 billion last year,’’ said Kiptoo.

In April 2016, China wrote to the EAC Secretary-General proposing to negotiate with partners a comprehensive free trade agreement (EAC-China FTA) and even offered to fund and undertake a joint feasibility study to measure benefits.

The community’s council of ministers meeting in Arusha, Tanzania that year directed its secretariat to undertake a comprehensive cost-benefit analysis on the implications of negotiating FTAs with third parties but no progress has been made.

Speaking during a Sino-Kenya cooperation forum hosted by the Kenya Chinese Chambers of Commerce and Kenya Investment Authority yesterday in Nairobi, Guo acknowledged the existing trade imbalance in favor of China, saying that open trade borders will remedy the situation.

“This being the first forum on Kenya-China cooperation, we are confident to come up with roadmaps that will guide our future of doing business where we foresee increased collaboration between companies from the two countries through harmonized trading practices’’.

KenInvest managing director Moses Ikiara and Kenya National Chembers of Commerce and Industry chief executive Angela Ndambuki welcomed Chinese investors in the country, but asked Chinese government to reciprocate invite for Kenyan manufactures and products.

Source: The Star

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