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Roundup: Kenya, China Vow to Boost Economic Ties
The Kenyan and Chinese governments agreed on Monday that a great potential remains to be tapped in the economic cooperation and trade between the two countries, and pledged to gear up joint efforts to promote the growth in the sector.
As a specific step toward this direction, the Chinese government Monday canceled about 13.6 million U.S. dollars, or 55 percent of Kenya's total debt owed to China, and meanwhile, the two governments signed two agreements, one on economic and technical cooperation and the other on promotion and protection of investment between the two countries.
The agreements were signed here between visiting Chinese Vice- Minister for Foreign Trade and Economic Cooperation Sun Zhenyu and Kenyan Finance Minister Chris Okemo who described the documents as creating "favorable conditions for increased trade and investment by Chinese enterprises in Kenya and vice versa".
Kenya ranked the third among the 24 southern and eastern African countries in terms of trade with China. Official figures indicate that trade between Kenya and China has been on steady rise over the past decade, and in 2000, the volume of bilateral trade hit a record of over 136 million dollars, compared with about 26 million dollars in 1991.
From January to May this year, the trade volume between the two countries reached over 55 million dollars, up 23 percent over the same period last year with Kenya's export to China jumping nearly 47 percent.
"The volume of trade is still relatively low, considering the potentials lying between the two countries," said Kenyan Trade and Industry Minister Nicholas Biwott while meeting with Sun Zhenyu on the same day, adding that trade balance is still in China's favor.
He attributed the imbalanced trade to the sophisticated modern technology employed in the Chinese industries which produced high valued products and exported to Kenya, while Kenya's export to China mainly includes primary and semi-processed products.
Kenya mainly exports to China tea, textile fibers, hide and skins, crude vegetable materials and tobacco while its imports from China include hand machine tools, manufactured base metal, fabrics, textiles and electrical machinery.
Biwott said that some of that Chinese high tech and medium technology, if relocated to Kenya, could not only increase the flow of trade but also help narrow the existing trade gap.
Sun told Biwott that the Chinese government strongly encourages its capable enterprises to invest abroad, especially in the field of overseas processing.
Since the 2000 China-Africa Cooperation Forum, the Chinese government has allocated special funds to support Chinese enterprises to make investments in Africa and carry out cooperative projects for mutual benefits.
"China and Kenya are highly complementary in economy," Sun said, citing the facts that China is relatively more developed in industrial technologies, especially in textile and electronics sectors while Kenya is endowed with strategic geological location, abundant resources and well-developed agriculture.
Both countries will benefit a lot if they bring their comparative advantages into full play, said Sun who is leading a large trade delegation including entrepreneurs from prestigious Chinese companies.
The Chinese entrepreneurs have involved in face to face talks with their Kenyan counterparts since this morning, exploring ways to boost their cooperation.
Up to date, 44 Chinese companies have found their presence in Kenya, of which 12 are joint ventures with Kenyans. These companies mainly operate in sectors of infrastructure construction, telecommunications, pesticide, farm machinery among others.
President Daniel arap Moi and the general public have expressed their appreciation of high quality of the roads, stadiums and other projects constructed by Chinese companies.
"More investment opportunities are lying ahead," Biwott told the Chinese business people, adding that Kenya is seeking new investments from China in areas including the manufacturing of hand-tractors and agricultural machinery, electronics and textiles as well as the assembly of telecommunications equipment.
He said that the ongoing privatization of Kenya's government- owned companies in sectors such as railways, port facilities, power generation and sugar production provides new opportunities for Chinese enterprises.
China, which has 1.3 billion population, is a huge market, said Sun, pledging that China will work closely with Kenya to explore new approaches to promote direct cooperation between enterprises of the two countries so as to further cement their economic ties.
China Writes off About 14 Million Dollars of Kenya's Debt The Chinese government on Monday canceled part of Kenya's debts amounting to 113 million RMB yuan (about 13.66 million US dollars) which is about 55 percent of its total debts owed to China.
Visiting Chinese Vice Minister for Foreign Trade and Economic Cooperation Sun Zhenyu and Kenyan Finance Minister Chris Okemo signed a protocol on write-off of partial debt of Kenya to China on behalf of their respective governments in Kenya's capital Nairobi.
Sun and Okemo also signed another two agreements on economic and technical cooperation and on promotion and protection of investment between the two countries.
According to the agreement on economic and technical cooperation, the Chinese government will provide the Kenyan government with an interest-free loan of 50 million RMB yuan ( about 6.05 million dollars) in a period of five years starting from September 1, 2001.
The loan will meet part of the costs for the construction of the Kipsigak-Serem-Shamakhokho road project in western Kenya.
Speaking at the signing ceremony, Okemo extended sincere gratitude to the Chinese government and people on behalf of the Kenyan government for their continued financial and technical support to Kenya, especially to the physical infrastructure.
He noted the loan to the road project, which traverses through an area of high agricultural potential in western Kenya, will not only enhance the exploitation of the agricultural potential, but also open up the areas to other economic activities aimed at improving the quality of life of people in the area.
Referring to the debt relief, Okemo said the debt reduction arrangement was "a positive response in relieving us of the heavy debt burden which is a bottleneck to Kenya's socioeconomic development".
Okemo said the implementation of the agreement on promotion and protection of investment will create favorable conditions for increased trade and investment by the Chinese entrepreneurs in Kenya and vice versa.
The Chinese vice minister said the signing of the three documents will further enhance the bilateral relations, promoting the economic cooperation and trade between the two countries to a higher level.
After visiting Mauritius, Mozambique and Zimbabwe, the Chinese trade delegation led by Sun arrived in Kenya last Friday for a five-day visit.
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