Monday, March 28, 2016

China-Kenya Economic Relations: Dealing with Myths

The World Bank published a paper in March 2016 titled "Deal or No Deal: Strictly Business for China in Kenya?" by Apurva Sanghi and Dylan Johnson.

The paper examines China's economic presence in Kenya and some of the myths surrounding that relationship.  It notes that 78 percent of full-time and 95 percent of part-time employees in Chinese companies are hired locally.  Although China represents a large potential market for Kenyan exporters, China has a better chance of expanding its exports to Kenya than Kenya does to China.  Nevertheless, Kenyan policy makers should be less concerned about bilateral trade imbalances, like the trade deficit with China, and worry about Kenya's overall trade balance.

Chinese firms offer relatively few technology transfer or supplier opportunities for Kenyan firms and academic institutions.  There is a tendency to underestimate the benefits Kenyan consumers derive from the availability of more affordable Chinese goods. 

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