Why Ruto is looking East for debt and trade
By Victor Mukabi, August 8, 2025President William Ruto is increasingly turning to China for both trade and debt, driven by a combination of strategic, economic, and diplomatic considerations that position the Asian giant as a key partner in his ambitions.
With domestic manufacturing dwindling, Kenya’s trade imbalance continues to widen, prompting the country to tap into the opportunities that China offers to bridge the gap.
China has emerged as Kenya’s largest source of imports, supplying electronics, machinery, construction materials, and textiles. As global financial institutions tighten lending conditions, Chinese financing is now viewed by the President as more flexible and outcome-focused, unlike traditional Western lenders who often attach strict governance and reform conditions.
Ruto, speaking during an engagement with the Kenya Private Sector Alliance (KEPSA) on August 6, 2025, acknowledged that Kenya has a substantial trade deficit with China. He pointed out that while Kenya imports goods worth about Sh600 billion from China annually, exports to the Asian country amount to less than five per cent of that value.
“Some of our friends are complaining that we are doing too much trade with China. When I sat with President Xi Jinping, I told him Kenya is importing 600 billion shillings of products from China, yet we are only exporting maybe five percent. That trade imbalance is serious,” Ruto said.
As part of a high-level agreement, China has scrapped tariffs on all of Kenya’s agricultural products—including tea, coffee, and avocados—creating a significant opening for Kenyan businesses. Ruto described this as a major breakthrough, noting that Kenya is in the final stages of signing bilateral instruments to fully exploit the opportunity within the next few months.
He acknowledged that Kenya’s growing trade alignment with China has raised concerns among some development partners, but maintained that the decision is in the country’s best interests. “This is something that we must do for Kenya,” he said.
Plug farmers into vast market
Cabinet Secretary for Industry, Trade and Investment, Lee Kinyanjui, emphasized that Kenyan farmers stand to gain immensely from China’s vast market. “If we were to plug our farmers into even one Chinese province—roughly 140 million people—we would completely change their lives,” he said, adding that Kenya is currently concluding the third round of discussions with China to implement this plan.
According to the latest Kenya National Bureau of Statistics data on the Balance of Payment, imports from Asia rose to Sh445.6 billion, with Chinese shipments increasing from Sh126 billion in Q1 2024 to Sh148.6 billion in Q1 2025.
However, President Ruto warned that Kenya’s ability to take full advantage of trade opportunities is undermined by businesses bypassing official trade procedures.
“What I would ask the industry to do is to work with the regulations as passed so we can position the country appropriately and access green finance, which is a big pool of resources available for both the public and private sectors,” he said.
Previously, tariffs on Kenyan goods made it more profitable for exporters to use third-party jurisdictions. With tariffs now eliminated, more exporters are expected to trade directly with China, helping to reduce the trade deficit.
This shift comes amid rising geopolitical tensions and a trade war between China and the US. In June, China announced zero-tariff treatment for 100 percent of tariff lines from 53 African countries with diplomatic ties, including Kenya.