Kenya –China trade and investment are at a record high with China’s entry point being heavy infrastructural investments in Kenya. China now controls 66 per cent of Kenya’s bilateral debt. Given the rapid penetration of Chinese manufactured exports to the East African market, prospects for Kenya’s industrialization could be in jeopardy. The flooding of counterfeit products from China into the Kenyan local market reduces the entry of genuine products, making fair competition impossible. Considering that “Trade, not aid is regarded as an important aspect of development strategy promoted by some nations. But in the context of Kenya’s commitments to “trade not aid” strategy there is flimsy research done in current of body of knowledge to give direction.
This paper focuses on China- Kenya trade investments to unveil knowledge on a nexus of “Trade not Aid” phenomenon and its effectiveness to economic growth. The paper utilizes secondary database and content analysis approach for drawing inference. The findings indicate that China- Kenya relations in trade and investment is not only a great opportunity to harness trade and aid benefits but also poses a cut-throat competition to Kenya’s manufacturing sub-sector considering that trade between China and Kenya is in favor of China. Further, the influx of low quality products into Kenyan markets from China have direct negative effect on Kenya’s labour market. The research concludes that “Trade not Aid” is a critical policy strategy that Kenya as a country should embrace and populate as a best opportunity to strengthen and increase trade and investment with China.
Keywords: International Trade, aid, investment opportunities, economic growth