China in Africa: Kenya railway study shows investment projects aren’t a one-way street

By Gediminas Lesutis, University of Amsterdam, Zhengli Huang, Tongji University

China is an important economic player in Africa. In 2021 alone, China accounted for nearly US$5 billion in foreign direct investment in African countries. The rapidly increasing Chinese presence across Africa has become a contentious issue both for Beijing and African governments.

In particular, mega projects funded by China have resulted in public controversies about the relationship between external investments and public debt. China is Africa’s biggest bilateral lender. In 2020, it held over US$73 billion of Africa’s public debt and nearly US$9 billion of its private debt. Due to this, US Treasury Secretary Janet Yellen has accused China of leaving countries “trapped in debt”.

Kenya has been no exception. China’s involvement in the construction of Kenya’s Standard Gauge Railway is a typical example of controversies brought by China-supported investments. These include issues of increasing socio-economic inequalities between different population groups advanced by large-scale investments, local labour mistreatment by Chinese managers, accusations of neo-colonialism, and the long-term sustainability of loans issued by the Exim Bank of China for projects.

In 2022, with a total debt of US$6.83 billion, China was Kenya’s biggest bilateral creditor. Out of this amount, US$5.3 billion was advanced by the Exim Bank of China to finance the Standard Gauge Railway.

It is against this background that our study asked if Chinese actors indeed determined how mega-infrastructures are realised in African countries. We examined the specific ways in which Chinese state-owned enterprises are involved in the construction of Kenya’s Standard Gauge Railway. We analysed how infrastructure development was realised on the ground and how Chinese construction companies shaped the process.

The study showed that the decisions of Chinese state-owned enterprises in Kenya do not necessarily present a grand Chinese strategy. Instead, they result from changing political and economic circumstances in China, and reflect both state and private Chinese interests.

Acknowledging these dynamics is important because it demonstrates how narratives about China’s involvement in mega-infrastructure development might overemphasise the power of the Chinese state.

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