Chinese Companies have a positive Influence on Kenya’s Economy

Chinese companies and businesses have become more visible in Kenya and are making an even greater impact on the country’s economy than most of us can comprehend. China’s investment in trade with the country is steadily rising and Chinese goods are flooding the Kenyan market, as they are doing in the rest of the world.

The enormous volume of the two-way trade between China and Kenya has inevitably caused some problems. Local traders are facing stiff competition from Chinese investors who they accuse of selling their goods at cheaper prices and driving them out of business. However, we need to interrogate how the Chinese investors and traders thrive above us and are able to sell cheaply and still make profits. Nonetheless, these challenges cannot outweigh the positive impact that Chinese companies and businesses have had in the country.

There seems to be a constant attempt to portray China’s expansion in Kenya and the rest of Africa as a threat to our economy and a case of economic domination. There is also the notion that Chinese investment is predominantly in natural resources. However, the truth is that this is a win-win situation where each party gets the best of what it bargained for.

What creates fear for Chinese companies and businesses is that they have the numbers, technology and innovations. But these are the exact attributes that our country needs for our economic take off. Investors should create jobs and probably add value by bringing in the kind of skills that we still don’t have in our country. Therefore, Kenyans should fairly compete with their Chinese counterparts and learn from them and together drive the Kenyan economy to greater heights.

As China’s relationship with Kenya shifts from being essentially government to government cooperation to business to business cooperation, enormous potential has been seen in the manufacturing industry, retail in Chinese products and ICT sectors. Chinese companies are increasing their investment in other sectors, such as food processing, the service industry and telecommunications and ICT.

More and more Chinese companies and businesses are looking at Kenya as a new destination for investment, trade harbor and manufacturing base. Kenya is the gateway to the region and an ideal regional base for Chinese investors to expand their business in the region and the rest of Africa. Many Chinese companies and businesses have set up their headquarters in Nairobi with an aim of expanding into the region. They have created job opportunities to Kenyans, increased the levels of local production and reduced the cost of machinery, electronics and automobiles in the region. Kenyans can now buy phones, laptops other home appliances from China due to affordability. Previously, these modern gadgets were such a luxury and too expensive for many Kenyans.

The flocking of Chinese investors and businesses in Kenya has played a big role in promoting Kenya’s economic development. China-Kenya cooperation continues to expand, bringing more benefits to both sides. The bilateral trade volume between China and Kenya hit a record 2.841 billion USD in 2012; a 16.7% increase compared to 2011. Our trade volume has continued to increase at an annual rate of 30 percent since 2010.

China’s accumulative investment to Kenya amounted to USD 280 million by the end of 2012. Its increased investment has seen it become the second-largest source of foreign direct investment in Kenya last year. Compared to assistance, investment in business is a more constructive way to achieve common development on a much larger scale. This is achieved by bringing in technology, skills, management conceptions and employment opportunities to Kenyans. 

China’s investment to Kenya mainly covered real estate development, vehicle assembly, household electrical appliances, light industry, building materials, resource survey and exploration, food and beverages, tourism among other sectors.

Chinese companies have played a major role in improving the local conditions for economic growth and self development capacity by building transport, communication and energy infrastructure which are catalysts to the fast growth of our economy. They have completed the construction of Moi International Sports Centre, JKIA-Uhuru Highway-Gigiri (Unep) Roads, Gambogi-Serem Road, and a number of rural primary schools. Other projects include the new Unit 4 Passenger Terminal at Jomo Kenyatta International Airport, and Berth No.19 at the port of Mombasa. All these projects are aimed improving the Kenyan economy.