Chi­nese Com­pa­nies are Seek­ing Busi­ness Op­por­tu­ni­ties from Kenya’s Vi­sion 2030 Scheme

China's Foreign Trade (English) - - Exhibit On Observation - By Guo Yan

In re­cent years, as China and Kenya are strength­en­ing political mu­tual trust, ex­pand­ing cul­tural com­mu­ni­ca­tions and deep­en­ing eco­nomic ex­changes, the two sides are ush­er­ing in the ever best era.

Ac­cord­ing to sta­tis­tics from China Cus­toms, China-kenya bi­lat­eral trade vol­ume hit USD 6.016 bil­lion in the year of 2015, up 20.12% year on year; China’s ex­ports to Kenya reached USD 5.918 bil­lion, up 20% year on year; China’s im­ports from Kenya stood at USD 99 mil­lion, up 27.65% year on year. China-kenya trade saw rapid growth in the past three con­sec­u­tive years, and Kenya jumps to the 64th rank­ing from 88th among China’s trade part­ners and has be­come China’s sixth big­gest trade part­ner in Africa; China has re­placed In­dia as Kenya’s big­gest trade part­ners.

Kenyan pres­i­dent ap­pre­ci­ates “Made in China”

From Oc­to­ber 3 to 9 of 2016, the 20 Kenya In­ter­na­tional Trade Fair (Made in China Expo) was held in Nairobi, cap­i­tal of Kenya. Kenyan pres­i­dent Uhuru Keny­atta at­tended the open­ing cer­e­mony and vis­ited the China Pav­il­ion.

In the booth of Shandong Wuzheng Group, pres­i­dent Uhuru Keny­atta rode a tri-wheel ve­hi­cle and asked about the tech­ni­cal func­tion and sales per­for­mance of Wuzheng en­gi­neer­ing tri- wheel ve­hi­cles in Kenya. Ac­cord­ing to Pres­i­dent Uhuru Keny­atta, this kind of tri-wheel ve­hi­cle is highly pop­u­lar in Kenya with an in­creas­ing mar­ket share, which has brought con­ve­nience and ben­e­fit to the Kenyan peo­ple. And the Kenyan govern­ment will con­sider pur­chas­ing prod­ucts of Wuzheng Group.

In the past years Wuzheng Group spared great ef­forts in car­ry­ing out in­ter­na­tional strat­egy by ex­pand­ing overseas mar­ket and es­tab­lish­ing in­ter­na­tional mar­ket­ing net­work. Treat­ing Africa as the key tar­get mar­ket, Wuzheng Group or­ga­nized spe­cial R& D team to con­duct field re­search and de­vel­oped sev­eral types of tri-wheel ve­hi­cles suit­able to the African mar­ket. Be­sides, Wuzheng Group has or plans to set up tri-wheel ve­hi­cle assem­bly plants in coun­tries like Ghana and Mau­ri­ta­nia, and 2,550 units of Wuzheng tri-wheel ve­hi­cle have be­come des­ig­nated ve­hi­cles for China to pro­vide as­sis­tance to Africa.

In the booth of Ji­nan Yaguo Eco­nomic Trade Co., Ltd., pres­i­dent Uhuru Keny­atta was much in­ter­ested in the Chi­nese heavy trucks and said that Kenya badly need this kind of trucks. Pres­i­dent Uhuru Keny­atta ex­pressed grat­i­tude to the Chi­nese com­pa­nies for bring­ing such prod­ucts and ser­vices to the Kenyan mar­ket.

Pres­i­dent Uhuru Keny­atta said that “Made in China” was very im­pres­sive and ex­pressed thanks to the CCPIT and the China Cham­ber of In­ter­na­tional Com­merce for or­ga­niz­ing the Chi­nese com­pa­nies to at­tend the trade fair.

Kenya In­ter­na­tional Trade Fair is one of the most im­por­tant trade fairs in Kenya and East Africa, and the trade fair in 2016 at­tracted nearly 1,000 com­pa­nies with over 10,000 ex­hibits from more than 80 coun­tries and re­gions.

Over the years, Kenya In­ter­na­tional Trade Fair has been al­ways a sig­nif­i­cant plat­form for Chi­nese com­pa­nies to learn about and en­ter into the lo­cal mar­ket. In this year’s trade fair, the China Cham­ber of In­ter­na­tional Com­merce or­ga­nized 67 com­pa­nies from 10 provinces and au­tonomous re­gions in­clud­ing Shandong, Sichuan, Zhe­jiang, Shang­hai and Guang­dong with a to­tal ex­hi­bi­tion area of 1,041 sq m.

Chi­nese com­pa­nies in­vest more in Kenya’s in­fra­struc­ture con­struc­tion

On March 21, the China Gen­eral Nu­clear Power Group (CGN) an­nounced that it has signed co­op­er­a­tion agree­ment with Kenya Nu­clear Elec­tric­ity Bureau (KNEB). Ac­cord­ing to the re­quire­ment of KNEB, CGN will pro­vide paid staff train­ing, train­ing ca­pa­bil­ity con­struc­tion and shar­ing ser­vice of train­ing in­for­ma­tion re­gard­ing “hua­long one” and its im­proved nu­clear power tech­nolo­gies. China’s

nu­clear power tech­nol­ogy has nudged into the African mar­ket.

This is one ex­am­ple for Chi­nese com­pa­nies to con­tin­u­ously ex­pand the lo­cal mar­ket in re­cent years. As China and Kenya keep deep­en­ing bi­lat­eral re­la­tions, many Chi­nese com­pa­nies are proac­tively ex­pand­ing the lo­cal mar­ket.

Last year, China’s smart­phone OPPO en­tered into the Kenyan mar­ket and re­ceived fa­vor­able mar­ket re­sponse by virtue of its ex­cel­lent camera ef­fect. In the year of 2017, OPPO is ex­pected to dou­ble its sales vol­ume in the Kenyan mar­ket.

China North Power and Kenya Power Trans­mis­sion signed con­tract for con­struct­ing the Kenya sec­tion of the Kenya-tan­za­nia trans­mis­sion line project. The project is worth USD 26 mil­lion with a to­tal length of 96 kilo­me­ters in Kenya. Sources re­vealed that the project con­sists of Kenya sec­tion and Tan­za­nia sec­tion with a to­tal length of 510 kilo­me­ters, in­clud­ing 96 kilo­me­ters in Kenya and the rest 414 kilo­me­ters in Tan­za­nia. The Kenya sec­tion will be in­vested in by the Kenyan govern­ment and the African De­vel­op­ment Bank. Ac­cord­ing to the per­son in charge of Kenya Power Trans­mis­sion, com­ple­tion of the project will help Kenya to im­port cheap power re­sources from the neigh­bor­ing coun­tries such as Tan­za­nia and will boost re­gional power en­ergy trade.

At present, about 40,000 Chi­nese peo­ple are work­ing and liv­ing in Kenya, and cul­ture & lan­guage is the big­gest bar­rier for the Chi­nese peo­ple to com­mu­ni­cate with the lo­cal Kenyan peo­ple. Chi­nese com­pa­nies are in­vest­ing more in high­way con­struc­tion, hous­ing projects as well as Chi­nese lan­guage ed­u­ca­tion and train­ing.

Kenya’s Vi­sion 2030

The Kenyan govern­ment is proac­tively push­ing for­ward the Vi­sion 2030, which is to build the coun­try into an emerg­ing in­dus­tri­al­ized and moder­ately de­vel­oped coun­try by the year of 2030.

Kenya treats im­prov­ing trans­port in­fra­struc­ture con­struc­tion as one of the im­por­tant pil­lars for re­al­iz­ing the Vi­sion 2030. Dur­ing 2013-2017, the Kenyan govern­ment plans to in­put KES 148.9 bil­lion (about USD 1.71 bil­lion) in road con­struc­tion and main­te­nance. De­vel­op­ment of trans­port net­work not only de­pends on road con­struc­tion, but more im­por­tantly de­pends on re­new­ing the back­ward rail­way net­work.

Kenya’s in­put in such in­fra­struc­ture con­struc­tion as trans­port, pub­lic fa­cil­i­ties and com­mu­ni­ca­tions is also an im­por­tant fac­tor to boost de­vel­op­ment of Kenya’s real es­tate sec­tor. In the mean­time, Kenya’s grow­ing high-end tourism and busi­ness de­mands has at­tracted many in­ter­na­tional ho­tel chain groups to in­vest in Kenya.

As Kenya has in­creas­ing power de­mands, the Kenyan govern­ment has es­tab­lished a new power de­vel­op­ment scheme with the ob­jec­tive to en­able the state power net­work to cover 90% of the do­mes­tic pop­u­la­tion by 2030 and to newly build 16,000-kilo­me­ter power trans­mis­sion lines by 2031. In the Kenyan govern­ment’s blue­print, the sig­nif­i­cance of geother­mal power gen­er­a­tion only comes next to ther­mal power. Ac­cord­ing to Kenya’s plan, the to­tal ca­pac­ity of geother­mal power will reach 90 kilo­watts in 20 years, for which an in­vest­ment of KES 82 bil­lion (about USD 1.28 bil­lion) is needed.

The In­ter­na­tional Mon­e­tary Fund pre­dicted that Kenya will re­al­ize com­mer­cial ex­ploita­tion and scale pro­duc­tion of its oil stor­age by the year of 2019 at the ear­li­est. Fa­vor­able forecast of oil ex­ploita­tion has at­tracted lots of in­vest­ment to Kenya. At the same time, Kenya be­gins to turn to green en­ergy, which is ex­pected to solve the prob­lem of de­creas­ing power sup­ply. Ac­cord­ing to Ken­gen, the big­gest power com­pany in Kenya, Kenya plans to in­vest USD 7-8 bil­lion in the green en­ergy projects such as geother­mal en­ergy, wide power and clean coal, and the project cap­i­tal will be contributed by the govern­ment, de­vel­op­ment agen­cies and pri­vate in­vest­ment.

The Kenyan govern­ment is proac­tively push­ing for­ward the Vi­sion 2030, which is to build the coun­try into an emerg­ing in­dus­tri­al­ized and moder­ately de­vel­oped coun­try by the year of 2030.

“China is far away from Do­minica, but the Do­mini­can peo­ple like the Chi­nese cul­ture and highly praise Chi­nese peo­ple’s dili­gent qual­ity. China has be­come Do­minica’s most im­por­tant trade part­ner in Asia, and the lo­cal au­thor­i­ties are sup­posed to pro­vide more con­ve­nience for Chi­nese tourists so as to strengthen bi­lat­eral com­mu­ni­ca­tions be­tween the two sides,” said Rafael Blanco Canto, pres­i­dent of Do­minica Na­tional Coun­cil of Pri­vate Com­pa­nies, when at­tend­ing the Peo­ple’s Repub­lic of China Trade Expo held in Do­minica at the end of 2016.

Trade fair es­tab­lishes plat­form for Chi­nese and Do­mini­can com­pa­nies

The Peo­ple’s Repub­lic of China Trade Expo was held in Do­minica’s cap­i­tal Santo Domingo in Novem­ber of 2016. Zhang­wei— vice chair­man of the CCPIT, Fu Xin­rong— China’s rep­re­sen­ta­tive in Do­minica Trade De­vel­op­ment Of­fice, En­rique Ramirez— Do­minica Gen­eral Ad­min­is­tra­tion of Cus­toms and Rafael Blanco Canto— pres­i­dent of Do­minica Na­tional Coun­cil of Pri­vate Com­pa­nies at­tended the open­ing cer­e­mony and cut the ribbon for the expo.

Zhang­wei ad­dressed at the open­ing cer­e­mony that with re­form & open­ing up to the out­side as well as eco­nomic de­vel­op­ment over the past 30 years, China has be­come the sec­ond largest econ­omy across the world and the big­gest trade part­ner of nearly 130 coun­tries. Chi­nese prod­ucts are com­pet­i­tive in terms of cost in the in­ter­na­tional mar­ket. At present, it is the right time for China and the Latin Amer­i­can coun­tries to con­duct eco­nomic, trade and in­vest­ment co­op­er­a­tion, as the in­dus­tries and mar­kets of the two sides are highly com­ple­men­tary. As China and Do­minica are deep­en­ing eco­nomic and trade ties, the boom­ing Chi­nese econ­omy and grow­ing Chi­nese con­sump­tion mar­ket will bring abun­dant busi­ness op­por­tu­ni­ties to Do­minica’s in­dus­trial and com­mer­cial do­mains.

This is the sixth time for the CCPIT to hold the Peo­ple’s Repub­lic of China Trade Expo. This year’s expo at­tracted 35 qual­ity Chi­nese com­pa­nies from rel­e­vant do­mains with ex­hibits in­clud­ing au­to­mo­bile, mo­tor­cy­cle, cell­phone, build­ing dec­o­ra­tion and me­chan­i­cal prod­ucts. A string of well­known com­pa­nies such as Zong­shen Mo­tor, Kong Long Au­to­mo­tive, Huawei Com­mu­ni­ca­tion and China Na­tional Heavy Duty Truck Group at­tended the expo.

CIP pro­gram be­comes Do­minica’s most im­por­tant non­tax rev­enue source

Roo­sevelt Sk­er­rit, pre­mier of Do­minica an­nounced that in the fis­cal year of 2015 and 2016, the Do­mini­can govern­ment spent XCD 133 mil­lion, namely USD 49.44 mil­lion or RMB 319.2 mil­lion for the Ci­ti­zen­ship by In­vest­ment Pro­gram (CIP), Do­minica News On­line re­ported.

Roo­sevelt Sk­er­rit in­tro­duced that re­gard­ing the cap­i­tal use of the CIP pro­gram, XCD 44 mil­lion, namely USD 16.3569 mil­lion or RMB 105.6 mil­lion was spent on the na­tional em­ploy­ment project as well as hous­ing, small en­ter­prise and pub­lic en­gi­neer­ing projects; XCD 54 mil­lion, namely USD 20.07 mil­lion or RMB 130 mil­lion on govern­ment debt re­pay­ment, debt in­ter­est pay­ment and fis­cal sup­port; and XCD 99 mil­lion was trans­ferred to the govern­ment-run fund.

Dur­ing the fis­cal year of 2015 and 2016, the Do­mini­can govern­ment made prof­its of over XCD 200 mil­lion, namely USD 74.35 mil­lion or RMB 480 mil­lion from the CIP pro­gram, which has be­come the govern­ment’s most im­por­tant non- tax rev­enue source.

Lo­cated in the dis­tant East Caribbean, Do­minica is an is­land coun­try with a ter­ri­to­rial area of 751 sq km and a pop­u­la­tion of 71,000. The Do­mini­can govern­ment first launched the CIP pro­gram as early as the year of 1993, which is re­garded by many Chi­nese in­vestors as a sim­ple yet prac­ti­cal “pass­port buy­ing pro­gram”. To at­tract more in­vestors, the Do­minica govern­ment es­tab­lished a spe­cial depart­ment to be re­spon­si­ble for im­ple­men­ta­tion of the CIP pro­gram.

When vis­it­ing China in the year of 2015, Roo­sevelt Sk­er­rit said that ef­forts will be sped up to in­crease the value of the Do­mini­can pass­port. At present, Do­mini­can cit­i­zen are visa free to 95 coun­tries and re­gions, in­clud­ing the UK, Hong Kong, Korea, Sin­ga­pore and Mal­dives.

Com­par­ing with the UK’S T1 Gbp-2-mil­lion in­vest­ment im­mi­grant, Do­minica’s CIP pro­gram has much lower re­quire­ment of in­vest­ment amount: in­di­vid­ual im­mi­grant needs USD 100,000, a cou­ple of im­mi­grants USD 175,000 and USD 200,000 for one cou­ple with two chil­dren un­der 18 years old. For a cou­ple with more than two chil­dren, an ex­tra USD 50,000 is re­quired for each ad­di­tional child. The money do­nated will go to the Do­mini­can govern­ment fund, which is used to build schools, hos­pi­tals, gyms as well as off­shore projects and for de­vel­op­ing tourism, in­for­ma­tion tech­nol­ogy and agri­cul­ture.

Roo­sevelt Sk­er­rit said that “CIP is an en­er­getic win-win pro­gram, as on one hand it plays an ac­tive role to the Do­mini­can eco­nomic and so­cial de­vel­op­ment, and on the other hand it brings out­bound con­ve­nience and cap­i­tal re­turn to in­vestors”.

Another rea­son for Roo­sevelt Sk­er­rit vis­it­ing China is to meet the po­ten­tial Chi­nese in­vestors, par­tic­u­larly the pri­vate com­pa­nies and at­tract them to par­tic­i­pate in Do­minica’s largescale project con­struc­tion. Apart from the real es­tate sec­tor, Do­minica is also in­ten­si­fy­ing in­vest­ments in the in­fra­struc­ture con­struc­tion.

China’s aid greatly boosts lo­cal eco­nomic de­vel­op­ment

Since China and Do­minica have es­tab­lished diplo­matic re­la­tions, the bi­lat­eral eco­nomic and trade co­op­er­a­tion has de­vel­oped rapidly. Sta­tis­tics from China Cus­toms shows that in the year of 2015 the bi­lat­eral trade vol­ume be­tween China and Do­minica stood at USD 34.59 bil­lion, down 8% year on year. To be spe­cific, China’s ex­ports to Do­minica were USD 33.93 mil­lion, down 8.4% year on year; China’s im­ports from Do­minica reached USD 0.65 mil­lion, up 15.5% year on year.

China ex­ports such prod­ucts as ma­chin­ery, elec­tri­cal ma­chines, chem­i­cal fiber fil­a­ments, or­ganic chem­i­cals and steels to Do­minica. China’s im­ports from Do­minica in­clude elec­tri­cal ma­chines, cop­per prod­ucts as well as pa­per and pa­per­board. By the end of 2015, China’s to­tal di­rect in­vest­ment to Do­minica reached USD 3.15 mil­lion.

Ac­cord­ing to sta­tis­tics from the Com­merce Min­istry, Chi­nese com­pa­nies signed a new en­gi­neer­ing con­tract in Do­minica with a con­tract amount of USD 38.50 mil­lion and busi­ness rev­enue of USD 0.66 mil­lion. Largescale en­gi­neer­ing projects are signed such as the Rmb-100-mil­lion main­te­nance and ex­pan­sion aid project con­structed by Hu­nan Con­struc­tion En­gi­neer­ing Group in Do­minica.

Do­minica’s pre­mier Roo­sevelt Sk­er­rit said con­struc­tion of the project will bring “great im­pact” to the Do­mini­can econ­omy when in­spect­ing the on­go­ing new na­tional hos­pi­tal project at the end of Jan­uary.

Roo­sevelt Sk­er­rit said that at present 42 Do­mini­can work­ers are di­rectly hired by the Chi­nese com­pany to par­tic­i­pate in the new na­tional hos­pi­tal project con­struc­tion. The Chi­nese com­pany in charge of the project con­struc­tion pur­chased in the lo­cal mar­ket a large amount of com­modi­ties and ser­vices, such as ce­ment, con­crete and di­nas and rented heavy equip­ment. In fu­ture, the com­pany will also pur­chase a large amount of bricks from the lo­cal mar­ket. All of th­ese will play a sig­nif­i­cant role to the lo­cal econ­omy.

On De­cem­ber 9th of 2016, China Civil En­gi­neer­ing Con­struc­tion Cor­po­ra­tion signed “Do­minica set­tle­ment hous­ing new project” en­gi­neer­ing con­tract with Montreal Man­age­ment Con­sult­ing en­trusted by the Do­mini­can govern­ment, which is the first en­gi­neer­ing con­tract signed by the Chi­nese-funded com­pany in Do­minica, sig­nal­ing that Chi­nese com­pa­nies has of­fi­cially nudged into the Do­mini­can en­gi­neer­ing con­tract­ing mar­ket.

This project is a gen­eral con­tract project in­clud­ing de­sign and con­struc­tion with a con­tract vol­ume of USD 29.1727 mil­lion and a build­ing area of about 33,000 sq m. With a fully framed and shear wall struc­ture, the project will con­struct 111 build­ings and 340 apart­ments. The project is to be started in April, and af­ter a con­struc­tion pe­riod of 19 months it will be com­pleted in June of 2018.

The Good France, an event that in­volved more than 2,000 chefs and 71 cook­ing schools and aimed to dis­play the best of French cook­ing skills and de­li­cious food, was held on March 21, 2017. Good France ban­quets were not only held in China; they were also held at more than 140 French em­bassies around the world. The theme of the ban­quet in French em­bassy in Bei­jing was “Paris, Cabaret”. French food has also been in­cluded into the list of in­tan­gi­ble cul­tural her­itage of UNESCO ( United Na­tions Ed­u­ca­tional Sci­en­tific and Cul­tural Or­ga­ni­za­tion).

The Good France, which was first pro­posed by the Min­is­ter of For­eign Af­fairs and In­ter­na­tional De­vel­op­ment of France in 2015, has been held around the world ev­ery March since then. It aims to in­tro­duce French cul­ture to the out­side world through the dis­play of French food and way of life.

Many fa­mous chefs joined din­ner prepa­ra­tion

This year’s Good France in­vited chefs in­clud­ing Miche­lin 2-star chef Jean-pierre Ja­cob; chef of the French Em­bassy To­mas Ciret; Philippe Rigol­lot 2007 French best pas­try chef and 2005 World Pas­try Cham­pion; and Christian Vabret pi­o­neer of the World Bread Con­test and global R& D direc­tor of Mccormick.

The French em­bassy gar­den be­came a ban­quet venue for peo­ple to taste de­li­cious French food. The food stand, bread store, meat store, grocery

and wine store were lo­cated in or­der and guests walked through the small lanes, as if they were the streets of Paris, with the fra­grance of bread.

This global feast fea­tures healthy food that con­tains lit­tle oil, sugar or salt. On top of that, restau­rants par­tic­i­pat­ing in this event would also do­nate 5% of their sale rev­enue to NGOS that are ded­i­cated to health and en­vi­ron­men­tal is­sues.

Good France in­creases at­trac­tion of French tourism

The Good France event orig­i­nated from the Epi­cu­rus Sup­per raised by Au­guste Es­coffier in 1912. On the same day many cities around the world would pro­mote the same menu for their cus­tomers. When propos­ing Good France, the French Min­is­ter of For­eign Af­fairs and In­ter­na­tional De­vel­op­ment took in­spi­ra­tion from this story.

About 60 French restau­rants from Bei­jing, Shang­hai, Guangzhou and other 10 cities were in­volved in the 2017 Good France event. The food in­cluded aperitifs, French toast, ap­pe­tiz­ers, main dishes, cheese, French desserts, as well as French wine and cham­pagne. Guests could also en­joy a dis­count through book­ing on the En­joy app, the on­line plat­form co­op­er­at­ing with Good France.

France is many tourists first choice of tourism des­ti­na­tion and more than 1/ 3 in­ter­na­tional tourists would put “tak­ing de­li­cious food and wine” on top of their “to-do” list. Good France has in­creased world tourists’ at­ten­tion to France.

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