Economy

China promises to remove more tariffs for Kenyan goods

china

China’s Vice-President Xi Jinping. China has announced a plan to remove tariffs on certain Kenyan goods to ease their entry into China and rescue diplomatic relations. Photo/AFP

China has floated another preferential trade policy to Kenya as part of its wider campaign to bolster commercial relations with the African continent, a key source of its raw materials and market for its goods.

Last week, Chinese officials announced a plan to remove tariffs on “some of Kenyan goods” to ease entry into the 1.3 billion-people market and rescue diplomatic relations that have been uneasy over claims of exploitation.

“Co-operation must flow both ways. We do not wish to engage in cooperation that only benefits us while hurting others,” China’s Vice President Xi Jinping told the Kenyan delegation attending the fifth Forum for China Africa Cooperation in Beijing last week.

READ: Leaders optimistic of Africa growth as Beijing forum closes

Embraced wholeheartedly ten years ago by Kenya and other African countries escaping from what they saw as flawed but patronising economic policies of the West, China is today on the receiving end, accused of exploiting Africa.

Mr Xi said: “As we continue to develop, we will remain sensitive to the needs of other developing countries so that they can also develop with us. We cannot repeat the mistakes that those who have developed ahead of us have made.”

This is the second time China has dangled elimination of tariffs to stave off criticism of a skewed bilateral arrangement.

In 2010, just as growing frustration with cross-border counterfeit goods galvanised African countries against their new-found economic partner, China’s Finance ministry announced plans to scrap tariff on unspecified products from Kenya and 32 other developing countries.

Kenya has a rich list of products it sells in China such as scrap metal, fruits, nuts, sisal fibre, raw hides and skins, fish, black tea, coffee and leather wares.

While these attract up to 30 per cent import tariffs to enter China, the 2010 tariff removal — if it was ever effected — had little impact as local firms exported just Sh3.8 billion to China in 2011 against Sh144 billion that Chinese shipped in.

“Nothing ever came out of the 2010 announcement because we have paid tariffs all through. May be this is the time they intend to implement the old announcement,” Fahd Faisel, managing director of Nakuru Tanners told the Business Daily on Friday.

Fresh produce exporters and players in the tourism industry have frequently cited the direct link to China by Kenya Airways and China Airlines via Beijing and Shanghai as a sign that only tariff barriers were holding back trade between the two countries.

Apart from Kenya, China has planned tariff elimination on goods from Tanzania, Uganda, Burundi, Ethiopia, Liberia, Mali, Madagascar, the Comoros, the Democratic Republic of Congo, Malawi, Mozambique, Benin, Togo, Zambia and the Central African Republic.

In Asia-Pacific, countries such as Afghanistan, Bangladesh, Nepal, Samoa and Vanuatu are also on China’s zero-tariff list.

In Beijing last week, Prime Minister Raila Odinga urged China to invest more money in the Kenyan economy.

In yet another face saving gesture, China last week pledged to finance African countries to strengthen their customs departments to control influx of counterfeit and substandard goods.

African countries have blamed Chinese firms for most of the counterfeit goods — from electronics to medical supplies — that have flooded the region’s market in the last ten years.

Data from the Kenya Association of Manufacturers puts annual market and tax lost by Kenya due to counterfeits and substandard goods at Sh50 billion.

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