Premier seeks to balance trade
Updated: 2014-05-11 07:41
By Zhao Yinan in Nairobi, Kenya and Li Xiaokun in Beijing(China Daily)
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China and Kenya sign basket of cooperation accords during visit
China will take measures to balance its trade with other countries since excessive foreign exchange reserves have become a big burden for Beijing, Premier Li Keqiang said on Saturday.
Li made the remarks when meeting reporters in Kenya's capital, Nairobi, after talks with the country's President Uhuru Kenyatta at the president's residence.
"We do not pursue a trade imbalance with Kenya - quite the opposite," Li said when asked about Kenya's trade deficit with China. "We'll take measures to balance the trade."
China's foreign exchange reserves hit $3.95 trillion at the end of March, according to the People's Bank of China. That was $130 billion more than at the end of 2013.
China is now the world's largest holder of foreign exchange reserves. Its reserves account for one-third of the world's total and are three times that of the second largest holder, Japan.
"An overall trade imbalance will present quite a big problem for China's sustainable development," Li said.
He added that it will challenge the country's efforts to curb inflation if excessive reserves are changed to yuan.
However, inflation is currently low, and the market decides trade.
In dealing with Kenya, Li said, China will facilitate the entry of Kenyan products into the Chinese market; encourage Chinese investment in Kenya's manufacturing sector to enhance local enterprises' competitiveness; and continue constructing industrial parks in the East African nation.
Li and Kenyatta on Saturday officiated during the signing of a basket of cooperation documents, covering areas including infrastructure, finance and environmental protection.
Under the agreements, China will donate materials used for wildlife conservation to Kenya and assist forest and ecological protection.
China will offer interest-free loans and concessional loans to Kenya, although the exact number was not made public.
China also signed a memorandum on aviation cooperation in Kenya and eastern Africa at large, as well as on an upgrade of the Mombasa port.
Kenyatta told media Kenya appreciates Beijing's support in combating the ivory trade and protecting Kenya's natural heritage - a point enshrined in a newly signed document he said bears great significance.
Li said China has included wildlife protection on the list of the major fields in which it will assist Africa. He promised the country will spend $10 million on relevant projects in coming years.
Kenyan green advocates agreed Li's visit heralds new opportunities for their country's environment, economy and sustainability.
Mithika Mwenda, coordinator of the Nairobi-based Pan-African Climate Justice Alliance, said China is a global leader in promoting ecological civilization.
"I am aware that top Chinese leaders have pledged support toward ecological civilization that would benefit the country and the world," Mwenda said.
"This ideal is embedded in Confucian values and traditions."
Kenyatta also expected Beijing to play a greater role in regional security.
Beijing's support is crucial on issues concerning Somalia and South Sudan, which border Kenya, he said.
Li promised Beijing will continue its humanitarian assistance to South Sudan and will give refugees returning to Somalia material assistance via Kenya.
Kenyatta said in a meeting with China's ambassador to Kenya, Liu Xianfa, in Nairobi last week that this region requires a strong partner like China, which will not only support it in economic ventures but also in peace settlements.
Li's visit to Kenya is crucial for East Africa's development, Kenyatta said.
The Kenyan president, as well as Deputy President William Ruto, welcomed Li at the airport upon his arrival on Friday.
Kenya's Foreign Affairs and International Trade Principal Secretary Karanja Kibicho said before the visit that the agreements to be signed "will signify to the world that Kenya and China mean business".
"Action speaks louder than words, and Kenya prefers partners who do not attach conditions. China is building our roads, ports, airports and railways. In the last few years, we have invited Chinese investors in all sectors of the economy."
Chinese firms tend to get most government infrastructure projects because they are the most qualified, he said.
"When we advertise the contracts internationally, it is Chinese firms that tend to offer the best quality and price compared to other competitors."
China's trade with Kenya rose to $3.27 billion last year, from $137 million in 2000, the Chinese embassy in Kenya said.
China has also become Kenya's biggest source of foreign direct investment and the second largest trade partner. Its direct investment in the country increased by 52.5 percent to $120 million last year.
Kenya is the last leg of Li's four-nation Africa tour, which also took him to Ethiopia, Nigeria and Angola. It is Li's first Africa visit since taking office last year.
Contact the writers through zhaoyinan@chinadaily.com.cn.
Xinhua contributed to this story.
(China Daily 05/11/2014 page1)