EDITORIAL: Take full advantage of Chinese market
Wednesday, May 22, 2019 20:16
At last count, the trade deficit between Kenya and China stood at Sh715 billion, really high for an economy like Kenya’s. To be sure, Kenya is not the only country with a deficit in regard to its largest trading partner.
However, other countries like the US have decided to address the matter, albeit in the latter case in total abrogation of the multilateral trade system designed by the World Trade Organisation (WTO).
True, imports are in large part necessary to oil the wheels of the economy. But Kenya and China have to amicably work hard to address the yawning deficit — which incidentally also applies to other large trading partners like India and the UAE.
From the look of things, Kenya and China have started working on the issue, and this is a positive first step. For one, China allowed Kenya to be the first African country to export frozen avocados to the Asian giant, as well as stevia.
True, these are not Kenya’s largest or highest potential crops. But it is a good starting point.
Nevertheless, it emerges that China’s phytosanitary conditions are proving to be a major barrier to trade in horticulture, especially the demand for freezing avocadoes, which should be addressed.
The Chinese ambassador to Kenya says the two countries are looking at these non-tariff barriers with a view to unblocking the exports. This is a welcome offer and should be pursued to its logical conclusion.
Welcome as this announcement is, county governments should be challenged to lead the way in investing in relevant storage and processing capacity to unlock this export potential. With a billion and a half people, the market in China is infinite. The returns from such an investment are understandably high if exploited.
At the same time, we urge the government to push for processing of the exports to spur industrialisation. We should be moving from exporting raw materials to boost job creation.
While for a moment we do not suggest China is different, Kenya has to take advantage of the current goodwill to push for its trade agenda. Horticultural goods export is a good starting point.