China has had a tumultuous trading time of late, not least due to Donald Trump’s sanctions and the trade war on the brink of which the two nations have been teetering. Indeed, the Hong Kong extradition issue may also add a strain to the Chinese economy, which has already seen pressure in the job market following the stranglehold placed by the US.
China tried to fight this at the UN, taking umbrage at the fact that the EU and US could place duties on cheap goods from China – but has since rescinded the challenge. Indeed, China has even gone back to the state-owned national champions for assistance to boost its industrial profits. But, all is not lost for one of the largest economies in the world.
It appears that China has other plans to help stabilize its economy and to ensure that it continues to succeed and dominate the world’s financial markets.
A port . [Source/Pixabay]
China to Deepen Economic Ties with Kenya
China need not look too far west to solve their problems, as a plan to deepen their economic ties with Kenya could help diversify and stabilize any knock-on effects of their economic woes.
The fifth edition of the China Trade Week launched in Nairobi with more than 500 exhibitors and an expected 30,000 visitors looking to purchase anything from textiles to appliances.
A representative from the Chinese embassy in Kenya claimed that these exhibitions helped promote bilateral Sino-Kenya trade, which has already seen a rise in recent years.
Indeed, Chinese investment in the Kenyan economy could increase the share price of its assets, which people can take advantage of through CFD (contracts for difference) trading, whereby they can speculate on the price of an asset, without owning the underlying asset.
This is open to everyone, of course, but the digital nature of Kenya means that its own citizens may well be primed to do this.
Fruits in the market. [Source/Pixabay]
Kenya’s Digital Revolution
That's also why it makes complete sense that China would look to Kenya as a new partner in global trade and financial affairs. Kenya’s digital revolution has acted as a catalyst for change.
There is a thriving mobile money sector and Kenya is leading the evolution in Africa away from standard methods of banking and finance. China has long been at the forefront of great digital change, so marrying the two for greater economic prosperity seems a worthwhile feat.
The 2007 debut in Kenya of M-PESA - a mobile phone-based money transfer system - has helped revolutionize how people look at money.
It now has 30 million users spanning 10 countries, showing that the power of the phone is significantly growing, while the power of traditional banking is waning and placing Kenya at the forefront of that movement.
Indeed, more people have internet access than do easy access to a bank account, so in remote areas especially it makes sense. And if Chinese investment focuses on the next wave of digital technology, both countries look set to create a lucrative and profitable partnership.
The very nature of globalization has thrown a host of issues at economies around the world – but this also generates some very real opportunities for greater collaboration between economies that complement one another.
Kenya could even benefit from the illustrious Belt and Road Initiative that plans to deepen investment and infrastructure in 152 other countries.
As China looks elsewhere to build financial and trade ties, countries such as Kenya look to benefit.