China Gives Kenya Tariff-Free Access to Its Market, Scraps 10% Tax
- China imports goods worth billions of shillings from Kenya and other African countries, which were previously subjected to tax
- Chinese ambassador to Kenya Guo Haiyan asked Kenyan exporters to tap opportunities offered by the new trade deal
- The Third Quarter, 2024 Balance of Payment Report published by the Kenya National Bureau of Statistics (KNBS) revealed exports to China
- Geopolitical economist Aly-Khan Satchu explained to TUKO.co.ke why China scrapped the tariffs on Kenyan and African goods
TUKO.co.ke journalist Japhet Ruto has over eight years of experience in financial, business, and technology reporting and offers deep insights into Kenyan and global economic trends.
China has announced a new economic deal that will allow duty-free access of Kenyan exports to its market.
Source: Getty Images
The declaration was made following a high-level Forum on China-Africa Cooperation (FOCAC) conference in Changsha, China.
Kenya is one of the 53 African nations whose goods will no longer be subject to tariffs under the deal.
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Chinese ambassador to Kenya, Guo Haiyan, asked Kenyan exporters to tap into the trade opportunities by exporting quality products.
"China is importing different goods from Kenya. These include coffee, tea, fruits and flowers. The key here is how to seize the opportunity and the preferences of Chinese consumers. Exporters should ensure that the products meet Chinese standards, including safety and inspection requirements," Haiyan explained, as reported by Capital FM.
Why did China scrap tariffs?
Geopolitical economist Aly-Khan Satchu told TUKO.co.ke that China is strategically positioning itself as a more favourable economic partner for Kenya and Africa, especially in light of recent US tariffs on African goods.
He opined that the move will escalate the US-China trade war.
"China is further tilting the pitch in favour of Kenya and Africa, particularly after the US imposed tariffs on the continent. China is promoting regulatory consistency and a massive market opportunity and contrasting it with the US. Of course, the US will react," he expounded.
What's the value of Kenyan exports to China?
According to the Third Quarter, 2024 Balance of Payment Report published by the Kenya National Bureau of Statistics (KNBS), China accounted for almost 3% of Kenya's exports as of 2023.
Compared to other markets like the US, Europe, and the East African Community, China is not a significant market for Kenya, but it offers a sizable market for textile, metal, vegetable, animal, and mineral products.
On average, the Asian country imposed 10% tariffs on all imports into Beijing before the latest development.
Kenya shipped $221 million (KSh 28.6 billion) worth of commodities to China in 2023, according to the Observatory of Economic Complexity.
With 31% of the overall export value that year, titanium ore was Kenya's largest export to China.
"In light of the uncertainty surrounding AGOA and the US administration's tariffs on imports from the African continent, Africa's initiative to grant duty-free access to the Chinese market is a welcome policy that promotes a multilateral minimal to free market access as a best practice for international trade," the Institute of Economic Affairs stated.
Source: Getty Images
Which deals did Ruto ink with China?
In other news, President William Ruto witnessed the signing of more than KSh 126 billion in investment funds for several projects during a Kenya-China investors roundtable meeting on Wednesday, April 23.
China Wu Yi consented to provide $150 million (KSh 19.4 billion) to fund the Kikambala Special Economic Zone (EPZ) in Kilifi County.
About 5,000 Kenyans would gain work thanks to the EPZ, which will also help local manufacturing, processing, and warehousing.
A $100 million (KSh 12.9 billion) investment was agreed upon by Rongtai Steel Company Limited.
The funds will be utilised to establish and expand a research centre in Machakos County's Lukenya.
Huatian Hotels agreed to acquire the Nairobi hotel for $23 million (KSh 2.97 billion).
Proofreading by Asher Omondi, copy editor at TUKO.co.ke.
Source: TUKO.co.ke
