China and Kenya

In a well-written article, Michael Chege (2008) informs us that China-Kenya trade has shifted from the 1960s to 1980s when Kenya sent agricultural products of China in exchange for lower-end consumer and textile goods. In contemporary times, most of Kenya’s exports to China are unprocessed nonfuel materials (soda ash and recycled metals) and manufactured goods. Kenya’s imports are dominated by manufactured goods as well (electronics, office equipment, medicine, furniture) and machinery and transport equipment for the industrial and agricultural sectors.

The telecommunications industry is booming in Nairobi and Mombasa because in 2006, the Kenyan government removed tariffs on computers and computer equipment.

In terms of aid, China has become the largest bilateral donor at $56 million right behind the European Union at $60 million. Chege, a UNDP adviser to Kenya’s Ministry of Planning and National Development, though footnotes that this article reflects his own “personal” views, favors China’s collaboration with the Kenyan government in providing efficient and rapid completion of projects. This includes the Nairobi Roads Project and the building of telecommunications infrastructure in the rural areas between 2003 and 2005, using “Chinese equipment of course” (25).

According to Chege, there are about 44 Chinese construction firms operating in Kenya, the large ones including Jiangsu International Economic and Technological Cooperation Company, Sichuan International Economic and Technological Cooperation Company and China Road and Bridge Construction Company. These companies have won bids over local and European contractors because, as Chege insists, they are quick and efficient at lower costs. It was estimated that it would take China Wu Yi company 10 months to renovate the Jomo Kenyatta International Airport. “Quality infrastructure at a bargain price,” Chege emphasizes.

China also made headway in the resources sector. As of 2006, the Kenyan government gave China National Offshore Oil Company (CNOOC) six out of 11 oil exploration blocks “with no competitive bidding”. Due to protests from Spain’s Compania Espinola de Petrolas and Sweden’s Lundin International, negotiations allowed them to obtain rights to CNOOC oil blocks with a fee. Other companies participating in oil exploration are Woodside Energy (Australia), Chevron, Exxon and Petronas of Malaysia. Another huge project involving Chinese investment is in titanium mining. The Chinese state-owned company Jichuan agreed in 2009 to invest $25 million and take over 70 percent of shares of a Canadian mining company called Tiomin. Apparently, Tiomin experienced severe financial problems in the 1990s when it encountered protests from environmentalists and from local land-owners in Kenya’s Kwale District, who claimed that the prices they offered (originally at $114 per acre, which they increased to $505 per acre) were too low. Many of the problems associated with Tiomin Mines are delineated here. Now that Tiomin has received substantial backing by the Chinese state, it remains to be seen whether land disputes will continue to halt the mining process. It is quite peculiar that I cannot seem to find any current news reports on the status of Tiomin Mines, except for this article, which claims a transfer of ownership to an Australian firm, without any mention of Jichuan or the Chinese state.

In any case, what I find most fascinating about Chege’s explication of Chinese engagement in Kenya is the position of the flower industry. Kenya is the leading supplier of cut flowers to European markets since the 1980s. Yet, it seems China is also entering the competition in cut flowers. However, as Chege points out, the real threat lies in Ethiopia, where many Kenyan flower farmers have taken their businesses with the lure of free land, heavy subsidies and tax breaks. Kenya’s flower industry is primarily constituted by multinational corporations owned by the Dutch and British. The Chinese flower industry (on the mainland) caters to the Japanese market and is also owned by multinational corporations (mainly, Australian, Holland and a Dutch-Taiwanese company). This link and an excerpt, which I have copied and pasted below, tells us more about the flower industry in Kenya. A more critical examination of fair trade practices and labor violations of MNCs in the floral business, as well as a look at the great paradox of capitalism in catering to affluent consumers who expect fresh flowers year round, can be found at PBS and the Greenbelt Movement.

Africa

Kenya and Zimbabwe are the leading flower exporters in Africa. South Africa, Uganda, Tanzania and Zambia are also major producers, while some other African countries export a much smaller volume.

Two options are open to African growers: to directly market their flowers to consumer countries, or export them through the Netherlands auctions. The more-developed cut flower operations (such as Kenya’s) have the means to directly market some of their product, most of which is exported to Europe and the U.S. In less-developed African countries, however, such as Tanzania, where most of the growers are small-scale, the Netherlands auctions take 90% of the flower production.

Just a few flower types dominate African flower exports. Roses make up 70% to 95% of the exports in some African countries, particularly the less-developed ones. Other top flowers exported are Dendranthema (chrysanthemums), Dianthus (carnations), and Limonium (statice). A broad range of other flowers (not just those native to Africa) are grown in smaller quantities.

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