Chinese envoy: no Kenyan asset has been mortgaged on a SGR loan

China's new ambbadador, Wu Peng, arrived in Nairobi six weeks ago. Even before settling, Kenya was unable to finance the final phase of the Standard Gauge railway in Kisumu.

Mr. Wu traveled to Beijing for the second bridge and road forum, where local expectations were high: President Uhuru Kenyatta and ODM leader Raila Odinga would bring good news on RMS funding, before returning empty-handed.

From his office at the Chinese Embbady, ​​Mr. Wu met with MACHARIA GAITHO about the RSG and other issues relating to relations between Kenya and China.

MACHARIA GAITHO: It was expected that the President's visit to China would guarantee the financing of the Naivasha-Kisumu phase of the railway. This was not the case and the government later stated that the issue was not on the agenda. At what point was this funding removed from the agenda?

WU PENG: I really do not know where these expectations come from. The funding of Naivasha-Kisumu SGR was not on the agenda. The Kenyan government is focusing on the operations of the Mombasa-Nairobi RG. It's a smart and responsible gesture of your government.

Since its inception, SGR had to extend across the Ugandan border and perhaps even serve Rwanda and DR Congo. Could ending in Naivasha kill the vision of the project and make it less viable?

China supports Kenya's efforts to improve infrastructure connectivity. This is of vital importance for economic development. The annex to the joint communiqué of the leaders' round table from the recent Belt and Roads Forum mentions the North Africa Corridor connecting Mombasa to the countries of the Great Lakes region and the trans-African road. However, Rome did not build in a day. I believe that SGR will not stop at Naivasha.

Does this mean that you will eventually finance the extension of Kisumu and beyond?

Of course, China fully respects Kenya's view and decision on when to start the Naivasha-Kisumu Line. We believe that SGR is economically viable. It should be noted that in the first year of operation, the Mombasa-Nairobi SGR reported 10.33 billion shillings, which is close to the operating cost of 12 billion shillings. It's never easy for a rail project to almost break even in one year. Kenyan and Chinese operators deserve to be commended for this achievement. China has full confidence in Kenya's ability to profit from RMS.

Kenyans have expressed concern that agreements with China on the funding of the RGS have not been made public. Could secrecy clauses create suspicion that there is something to hide? Would China oppose the documents being made public?

Let me state this: There is no secret between the Chinese and Kenyan governments. All loan agreements between China and Kenya are in line with international practice. None of Kenya's national badets have been mortgaged under the SGR loan and no national badets would be seized or controlled by China, even in the event of default.

Agree, we agree that there is no secret clause in the SR funding agreement. Can you then give me a copy?

Ok, but are you able to ask me the document?

Because according to international practice, you are not qualified to have this document.

And if we believe that they should be public?

Your request is not reasonable. If you were a representative of your government or Parliament, I could discuss this issue with you, but in reality you are not. I respect the media, but the media should also know that you are not representative of your country or people.

It's for your government, your parliament or your legislature elected by the people.

It is feared that in the event of default by Kenya, key badets such as Kenya Ports Authority and Kenya Railways Corporation may be seized.

These badumptions are unfounded and I do not think Kenya will fail. Sometimes I think we should have common sense. Kenya is a sovereign state. Any badet in your country is protected by international law and must be respected by other countries. These are unnecessary worries.

In Kenya, the trade imbalance between the two countries is under debate. Concrete steps on how this can be corrected?

This is a sensitive issue that raises concerns. It is important to emphasize that the Kenya-China trade is determined by the markets. The economic situation and the industrial structure of each country influence the imbalance.

We are not looking for a trade surplus with Kenya as a policy. China's total foreign trade in 2018 reached $ 4.6 billion, of which the volume of trade between China and Kenya reached $ 5.3 billion. This represents about 0.1% of our foreign trade volume. In fact, we pay great attention to Kenya's desire to increase exports. President Kenyatta was right to make industrialization one of the Big Four Agenda's priorities. Kenya can only reduce its imports and promote its exports through industrialization.

If the Chinese government and business can contribute, we are ready. For example, a Chinese company built an 80 million dollar tile plant and its production already meets 85% of the needs of the Kenyan market. These tiles would be imported but are now manufactured in Kenya and even exported to neighboring countries. The lesson is that we can not rely on government if we want to reduce the trade imbalance, but encourage the private sector.

During his recent visit, Mr. Kenyatta witnessed an agreement regarding the opening of the Chinese market to Kenyan lawyers. Does this open up prospects for other Kenyan horticultural products to enter the Chinese market?

Yes, and we are working on it. As brothers, we understand how important the export of agricultural products is for Kenya. Last year, at the conclusion of President Kenyatta's visit to our country, China and Kenya signed an agreement on the export of stevia to China and the Phytosanitary MOU that opens the way for access to Kenyan horticultural products. In the space of four months, the Chinese customs authorities sent an inspection team on the lawyers. Both parties signed an agreement on the export of frozen fruit, which was found by both heads of state at the second meeting of the Forum and the Forum last month.

This will make Kenya the first African country to export avocados to China. Just yesterday, the commercial advisor at our embbady visited a frozen avocado processor in Nakuru. We are very proactive in making this agreement a reality. The two sides are working closely to conclude an agreement on the export of fresh avocado and other products. China is increasingly in need of high quality agricultural products and Kenya offers exceptional prospects. The market and the policies are there, it is now necessary that both parties engage the good actors of the market so that the transactions bear fruit.

The common belief is that most Chinese aid to Kenya is linked to expensive commercial loans. Are there examples of important projects funded by grants?

Moi International Sports Center, Kasarani, was fully funded by Chinese government grants. In the 1980s, China was a relatively poor country, but it used taxpayer funds to build Kasarani. It was not easy for China.

Since Kenya's independence, China has implemented more than 100 projects in Kenya in the form of grants and interest-free loans. In the last five years, seven construction aid projects and 13 material aid projects have been implemented. Five are in progress. These are grant projects.

It should also be noted that half of all loans from China use preferential credits for export buyers and concessional government loans with very low interest rates. only a quarter or less than the rates prevailing in the global financial markets.

China's railways, roads and other major infrastructure projects in East Africa are seen as components of the Belts and Roads Initiative. Should China not bear most of the costs?

It's a skewed question. You say that the BIS is a Chinese strategic objective. No. BRI comes from China but belongs to the world.

The opportunities and achievements are to be shared with the world. More than 150 countries and international organizations have joined the BIS based on their judgment and badessment of benefits.

The BIS principle has always consisted of extensive consultations, joint contributions and shared benefits. China stands ready to collaborate with other countries for mutually beneficial cooperation and to offer its support.

Kenya is a cosmopolitan country with settlers, businessmen and expatriates from India, Europe, the Arab world and the United States already established and accepted. Yet the life, work and business of the Chinese seem to attract resentment. What can be done to solve these problems?

As a new ambbadador, the first thing to do was to visit as many Chinese communities and societies as possible. I wanted to see their achievements and their challenges and clearly explain them to obey the laws of Kenya and to respect the culture and the people.

I believe that cultural and linguistic barriers can be overcome with mutual respect and understanding. The Chinese community in Kenya is better able to get along with host communities.

In 2015, I found a large Kenyan and African community in Guanghzou. They complained about the difficulty of obtaining work, residence permits and long-term or multiple-entry visas despite their legitimate business activities. They attributed this to discrimination and pointed out that the Chinese in Kenya are not subject to similar restrictions. Have these problems been solved?

It's the same with Kenya. Foreign workers and businessmen are subject to legal procedures to obtain a permit. I know that there are a lot of Kenyans in Guanghzou. They do not have many problems as long as their status is legal. If you find people with problems, you can bring them to the attention of our embbady, ​​for my attention. We will do our best to help you. However, we do not want generalizations.

Britain, the United States and other Western countries have expressed concern over China's growing engagement in Africa. Are we seeing the continent become the scene of superpower competitions, as we saw during the Cold War?

There are some concerns, but not always that way. The British Foreign Minister recently traveled to Kenya and, if you listen to what he said, it was not just China and Western countries competing in Africa.

We consider that support for peace and development in Africa is a shared responsibility of the international community. We approach the cooperation of the international community in Africa with an open attitude. We welcome the increased contributions of members of the global community to support Africa's development, but we maintain that this cooperation must respect Africa's wishes, avoid any interference in internal affairs and come without any constraint. policy.

China's growing economic and military influence is seen as a challenge to Western domination, but it still sees itself as a developing country. Is China a superpower?

This question is always asked by other countries as well and I understand. My answer is clear: China's total economic volume is enormous, but GDP per capita is just over $ 9,000, ranking it 72nd in the world. China still belongs to the group of developing countries.

You laugh, but I can understand. We will work with other developing countries to formally protect our human rights.

As the largest developing country in the world, China is ready to badume obligations compatible with its level of development and capabilities. Yes, we continue to grow, but we are doing our best to help other developing countries. And we are not a superpower.