China in Kenya: Addressing Counterfeit Goods and Construction Sector Imbalances

This research paper by the South African Institute of International Affairs examines the economic impact of Chinese trade, investment, and construction firms in Kenya. It highlights a significant trade imbalance, the proliferation of counterfeit Chinese goods, and the competitive pressures faced by local construction firms, while evaluating the effectiveness of Kenyan legislative responses such as the Anti-Counterfeit Act of 2008 and the National Construction Authority Act of 2010.

• Trade between China and Kenya is characterized by a significant imbalance in China's favor, as Kenya primarily exports unfinished goods while importing finished manufactured products. This imbalance reached a high in 2010.
• China is identified as the primary source of counterfeit goods in Kenya, causing an annual net loss of $368 million. These counterfeits lead to brand erosion, loss of market share, and an estimated annual loss of $84490 million in government taxes.
• Chinese construction firms are praised for their efficiency, speed, and ability to complete projects at competitive prices, which has introduced discipline to a sector previously plagued by 'cowboy contractors'.
• Local Kenyan contractors face severe disadvantages compared to Chinese firms because the Chinese government provides its companies with operating capital and favorable financial terms, whereas local firms must source expensive bank loans.
• The Kenyan government has implemented two major legislative frameworks to address market failures: the Anti-Counterfeit Act of 2008 and the National Construction Authority Act of 2010. However, the Anti-Counterfeit Agency's effectiveness is hindered by overlapping mandates and a court ruling that created a 'safe haven' for counterfeiters regarding generic drugs.
• Chinese investment in Kenya includes large-scale infrastructure projects such as the NairobiThika superhighway, the Jomo Kenyatta International Airport expansion, and the Lamu Port and Southern SudanEthiopia Transport Corridor (LAPSSET).
• Chinese firms in Kenya are criticized for using Chinese labor over indigenous workers, following unconventional labor practices, and causing negative environmental effects at project sites.

APA

Patroba, H. (2012). China in Kenya: Addressing Counterfeit Goods and Construction Sector Imbalances. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2012/03/Occasional-Paper-110.pdf

Chicago

Patroba, Hilary. China in Kenya: Addressing Counterfeit Goods and Construction Sector Imbalances. South African Institute of International Affairs, 2012. https://saiia.org.za/wp-content/uploads/2012/03/Occasional-Paper-110.pdf.

Wikipedia

{{cite report |last1=Patroba |first1=Hilary |title=China in Kenya: Addressing Counterfeit Goods and Construction Sector Imbalances |publisher=South African Institute of International Affairs |date=March 2012 |url=https://saiia.org.za/wp-content/uploads/2012/03/Occasional-Paper-110.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{patroba2012china, author = {Patroba, Hilary}, title = {{China in Kenya: Addressing Counterfeit Goods and Construction Sector Imbalances}}, institution = {South African Institute of International Affairs}, year = {2012}, month = mar, url = {https://saiia.org.za/wp-content/uploads/2012/03/Occasional-Paper-110.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }