China sets $100bn trade goal with EAC

East African heads of state at a past summit. The EAC is developing a joint master plan to mitigate climate change. Photo/FILE
East African heads of state at a past summit. China is looking for ways increase trade with the EAC states. 

China is looking for ways increase trade with the East African Community (EAC) states.

According to the country’s envoy to Tanzania, Mr Liu Xinsheng, the Asian country has set a trade volume target of $100 billion with EAC states by 2010. In 2006, the trade volume was estimated at $55.5 billion.

Mr Xinsheng said that this goal would be achieved through the China Africa Development Bank.

China is also looking into doubling its assistance to African countries. The country has already written off a total of US$1.6 billion it was owed by 31 African countries.

“We have provided duty free treatment for 190 export commodities,” he added.


He said China had signed several trade agreements with African countries to boost trade, including bilateral agreements with more than 40 African countries, bilateral agreements to encourage and protect investments in 23 African countries and agreements geared at avoiding double taxation with eight African countries.

The bilateral economy and trade agreements signed between China and Kenya include the Agreement on Economic and Technological Cooperation between the People’s Republic of China and the Republic of Kenya and the Agreement on Trade between the People’s Republic of China and the Republic of Kenya that was signed in 1978.

China has recently been proactively seeking to increase its investments in African countries, Kenya among them. Last month, the Lake Basin Development Authority (LBDA) announced that the Magwagwa Dam Multipurpose development project in Nyamira district in western Kenya would be constructed by a Chinese firm, Sinohydro Corporation.

Flood mitigation
According to the LBDA boss, Joseph Khaemba, the 103 metres high dam would have a storage capacity of 645 million cubic meters and would be used for hydroelectric power generation, irrigation and flood mitigation.

The project is expected to be completed by 2011 and will 120 mega watts of hydropower, irrigate 15,000 hectares of land in Kano and Nyakach plains and supply water to more than 60, 000 families in Nyakach and Sotik district.

It is also expected to act as a reservoir, with the upstream dam site measuring 3,160 square kilometres. It will employ more than 100 people at power station and enable 8, 000 families to benefit from irrigation.

The Kenyan and Chinese governments have also partnered in the High Grand Falls power generation project along Athi and Tana basins which is expected to inject an additional 200 MW into the national electricity grid.

Past projects undertaken by China in Kenya include the construction of the Moi International Sports Center, the expansion of the Eldoret hospital and the building of the Gambogi-Serem Highway.

Populous nation
China’s main exports to Kenya are electric appliances, industrial and agricultural implements, textiles, building materials and drugs. Kenya on the other hand exports tea, coffee, leather to the world’s most populous nation.

According to the embassy, in 2002 the value of trade between China and Kenya reach $186.4 million, with China exporting $180.6 million to Kenya and importing goods from Kenya worth $5.8 million.

At present, the Chinese Embassy estimates that there are over 20 Chinese companies doing business in Kenya. The two countries also collaborate in education.