China 2017 imports to pass Sh400 billion

China 2017 imports to pass Sh400 billionChina is likely to cross the Sh400 billion export mark to Kenya this year, a move that is likely to further widen the huge trade deficit between the two countries.

Last year, Kenya exported goods worth Sh10 billion to China but imported goods imports worth Sh337.4 billion from the Asian powerhouse, necessitating a trade deficit of a whopping Sh317.4 billion.

According to leading economic indicator by the Kenya National Bureau of Statistics, Kenya imported goods worth Sh175 billion from China starting January to May this year, an average of Sh35 billion per month.

If this trend persists, imports from China will reach Sh420 billion, breaking the Sh400 billion ceiling for the first time, just two years after it defiantly broke the Sh300 billion mask to import goods worth Sh320.8 billion in 2015, dethroning India as the biggest net exporter to Kenya.

High import rate from China is attributed to increased infrastructure projects in Kenya, with the ongoing construction of the standard gauge railway taking the lion’s share.

Data by the state statistician shows that steel and other railway equipment accounted for 40 per cent of imported goods during the period.

The first part from Mombasa-Nairobi valued at Sh380 billion was launched in June this year, with the second phase from Nairobi-Naivasha currently taking shape.

The glaring trade imbalance between Kenya and China resonates across Africa, with the recent data by the China Africa Research Initiative (CARI) showing that the continent $34 billion (Sh3.4 trillion) with China on a total trade of Sh17.2 trillion in 2015.

It is perhaps this skewed trade relationship that provoked President Uhuru Kenyatta to beg Beijing in May this year to reciprocate by creating market for goods from Africa.

Kenyatta who was the only leader from East Africa to attend the the Belt and Road regional infrastructure programme told the Financial Times that if China’s win-win strategy is going to work, it means that, just as Africa opens to China, China must also open up for Africa.

The huge trade deficit with China is complicating matters for Kenya which is already struggling to balance its trade.

The country’s exports declined marginally in 2016 to Sh578.1 billion compared to Sh581 billion the previous year. However, total imports contracted by 9.2 per cent to reach Sh1.43 trillion from Sh1.57 trillion in 2015.