Inside Kenya's battle to wrap up China trade pact

Kenya is facing intensifying pressure to formalise its bilateral trade agreement with China, as Beijing ramps up a continental charm offensive, offering sweeping zero-tariff access to nearly every diplomatic partner in Africa. 

The push comes after Chinese President Xi Jinping announced a major expansion of high-level opening up during the recently concluded 39th African Union (AU) Summit held in Addis Ababa, Ethiopia.  

In a congratulatory message to AU leaders, Xi revealed that China will fully implement zero-tariff treatment for 53 African countries that maintain diplomatic relations with Beijing, effective May 1, 2026. 

The move is a significant escalation of a policy first declared in June 2024 and signals Beijing’s intent to cement its role as the primary economic partner for the Global South, analysts said.  

For Nairobi, the announcement creates a sense of urgency to finalise its own “Early Harvest” arrangement, a long-awaited trade deal designed to rescue Kenya from a lopsided trade deficit that has long strained the bilateral relationship. 

While the continental zero-tariff offer is broad, Kenyan officials and Chinese diplomats are moving to clarify that Nairobi’s specific “Early Harvest” of the Agreement on Economic Partnership for Shared Development (CADEPA) remains the superior vehicle for long-term growth. According to technical briefs, the zero-tariff coverage in Kenya’s early harvest arrangement is identical to the product lines in the latest continental measure.

However, the Kenyan pact is not made redundant by the AU-wide offer. Instead, the early harvest arrangement forms a “solid foundation” for further negotiations on the full CADEPA, which is expected to evolve into a comprehensive Free Trade Agreement (FTA), officials said. 

“The early harvest arrangement is in alignment with the latest trade facilitation measures announced by President Xi and will not be undercut by them,” a senior diplomat noted following the Xi announcement at the AU Summit. 

For Kenya, being a middle-income country, this bilateral path is critical, economists say.

Previous duty-free offers from Beijing were often restricted to Least Developed Countries (LDCs), leaving Kenyan exporters at a competitive disadvantage against regional neighbours.

By securing 98.2 per cent duty-free access through the early harvest framework, Nairobi aims to level the playing field for its agricultural sector. 

The economic urgency for the deal is rooted in a staggering trade imbalance. In 2023, China was Kenya’s largest source of imports, with the value of goods flowing into the country reaching Sh459 billion. In contrast, Kenyan exports to China, mostly primary agricultural products, totalled a mere Sh29 billion. 

Trade Cabinet Secretary Lee Kinyanjui recently confirmed that the preliminary agreement would eliminate average import tariffs that can reach 10 per cent on key products.  

This is expected to instantly boost the competitiveness of Kenyan specialty tea, coffee, macadamia nuts, and avocados in a consumer market of 1.4 billion people.

“This early harvest framework is a monumental progression that signifies China’s commitment to strengthening our trade ties further,” Kinyanjui said in a statement last month.

“It will unlock vast economic potential and generate substantial employment in our agricultural backbone.” 

Nairobi’s pivot toward a formalised Chinese trade pact comes at a sensitive time for its relations with the West.  

The United States has recently ramped up its own engagement through the African Growth and Opportunity Act (AGOA) Extension Act, with some US lawmakers explicitly framing the renewal of duty-free access as a tool to counter Chinese influence. 

Despite rumours that the China deal had been “shelved” to appease Washington, Kenyan Foreign Affairs Principal Secretary Korir Sing’Oei has dismissed such claims as “unfounded.”

The government maintains there is “no tension” in pursuing market access in both the East and the West, even as it walks a delicate diplomatic tightrope. 

The geopolitical landscape is shifting as the “strength of the Global South grows remarkably,” according to President Xi’s message to the AU. As Africa promotes its own integration process, Beijing is positioning itself as the partner for “joint pursuit of the dream of modernisation.” The push for the trade deal is also a domestic necessity for President William Ruto’s administration, analysts say. 

As the country navigates a “fiscal tightrope” characterised by high debt-servicing costs and revenue shortfalls, the government is desperate for non-debt-driven growth, especially through new trade frontiers.  

The Standard Bank Kenya Purchasing Managers’ Index (PMI) dropped to 51.9 in January 2026, signalling that while the private sector is expanding, the pace of growth is hitting four-month lows. Business activity has moderated, and firms are reporting softer hiring and purchasing growth. 

Inflation also remains a concern for ordinary Kenyans. While the overall inflation rate was recorded at 4.4 per cent in January 2026, the cost of food and non-alcoholic beverages continues to be a primary driver of the cost-of-living crisis. 

In this environment, the role of Chinese investment in job creation has become a vital talking point, according to state officials. 

Principal Secretary for Culture Ummi Bashir noted recently that Nairobi has risen as a regional hub hosting over 400 Chinese government agencies and corporations.

These entities have reportedly created over 200,000 jobs in Kenya, providing a cushion for a youthful demographic increasingly restless over employment prospects. 

The expected formalisation of the trade deal coincides with the “China-Africa Year of People-to-People Exchanges” in 2026.  

Beyond trade in goods, the two nations are deepening cooperation in “tea diplomacy”—working on blends for the export market—and archaeological research into human origins at Lake Baringo. 

Chinese Ambassador to Kenya Guo Haiyan noted that 2026 marks the 70th anniversary of the start of diplomatic relations between China and African countries. Beijing is ready to work with Kenya to “carry forward traditional friendship” and “jointly advance modernisation.” For the Kenyan Treasury, the “Early Harvest” deal represents more than just a trade agreement, officials say.  

They reckon it is a strategic manoeuvre to stabilise the economy before the 2027 general elections. By upgrading the “green channel” for African exports and removing tariffs, Beijing is offering a lifeline that Nairobi can ill afford to ignore, according to some diplomatic watchers.