Written by Andrew Korybko on 2018-10-31
Kenya and China have to quickly overcome their trade controversy otherwise the Silk Road will suffer.
Acting Chinese Ambassador to Kenya Li Xuhang lashed out at his hosts for ordering a ban on specific fish imports at the beginning of next year that’s widely interpreted as targeting one of his East Asian nation’s exports, supposedly describing the decision as the beginning of a “trade war” that he warned might prompt the People’s Republic to react to it in a similar fashion as it’s doing to the US right now. The Daily Nation noted how this was issued after President Kenyatta spoke about the problem that his country’s fishermen have been experiencing in the face of heightened competition from foreign fish, and although the decree doesn’t directly mention China as the main reason, it’s singling out of Tilapia is surmised as implying that Beijing is to blame for their woes given that it’s the chief exporter of this type.
“An Eye For An Eye Leaves The Whole World Blind”
The outlet also speculated that China might once again withhold funding for the second half of the Standard Gauge Railway (SGR) that it’s constructing in the country to Uganda, Congo, and beyond, seeing as how it declined to sign an agreement for dispensing the requisite amount during Kenyatta’s last trip to China in September when he attended the Forum on China-Africa Cooperation (FOCAC). He’ll be in the People’s Republic once again early next month where the issue of the SGR’s second phase will inevitably come up, which is why The Daily Nation decided to connect the Acting Ambassador’s ominous warning of an impending “trade war” with the possibility of China continuing to withhold funding for the project’s completion until Kenya does away with its decree. It’s not known whether that particular scenario will materialize or not, but the disagreement itself is nevertheless very troubling.
On the one hand, it’s understandable why China felt so concerned about Kenya’s increasingly hostile political and media environments that it decided to hold off on the second part of the SGR until tensions cooled down, but on the other, it’s admittedly disturbing that China might make another supposedly apolitical infrastructure financing agreement with Kenya conditional on the recipient rescinding a very sector-specific but nevertheless still protectionist trade policy that it plans to implement next year. Instead of the “no-strings-attached” low-interest developmental infrastructure loans that China’s meticulously cultivated its reputation around providing, it now seems that these are issued on the quid-pro-quo basis of its partners ensuring China’s free and unrestricted access to their markets. The implication is that making it more difficult for China to export to any of its Silk Road partners might lead to a curtailment of Silk Road funding.
Kenya As The Next New Cold War Battleground
This developing dispute isn’t occurring in a vacuum, though, but is taking place amidst a heated “deep state” war within Kenya over the future geostrategic direction of the country vis-à-vis China or the US. It’s also a direct consequence of the Hybrid War on China’s Belt & Road Initiative (BRI) and the emerging trend of “Trumpism”, as well as the larger systemic shifts of the New Cold War, specifically as they relate to China’s inheritance of the “New World Order”. All of this is covered in much more contextual detail in the author’s following analyses that should be read as reference materials for anyone who’s interested:
The gist is that Kenya is becoming a central battleground in the US and China’s global competition. The US is trying to incentivize some of the country’s “deep state” to “defect” away from China, while China is trying to retain its influence through the “trickle-down theory” of its low-interest loans benefiting both the elite and the populace (the first of which immediately gain while the latter do with time and conditional on the successful completion of Silk Road projects). In response to American strategic inroads, China has now shown a willingness to “instrumentalize” some of its Silk Road outreach efforts.
The course and ultimate conclusion of the Kenyan-Chinese trade controversy will largely shape the US and China’s offensive and defensive Hybrid War models, respectively, which is why it’s so important to follow. The ideal win-win solution would be for China to agree to fund the second phase of the SGR and simply look for new markets for its fish exports, though while discretely conveying (if it hasn’t already) that reciprocal access to one another’s markets is mutually beneficial and will eventually help Kenya repay its SGR loans quicker.
China shouldn’t “coerce” Kenya into anything because this would risk contradicting its vaunted soft power image (and value-added differentiating factor compared to its competitors) of refusing to interfere in its partners’ domestic affairs, which will in turn inadvertently feed into the infowar narrative that BRI is a “weaponized neo-colonial scheme”, though it also shouldn’t stand by idly if the situation escalates and begins to pose a threat to its larger economic interests in the country. All in all, everything is so sensitive that China must proceed with the utmost caution.