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China Signs Deal for Kenya Oil Exploration


Chinese President Hu Jintao is in Kenya to bolster bilateral ties on the final leg of his week-long Africa tour. Among the agreements the two countries signed was a deal to allow China's largest offshore oil producer to prospect for oil off Kenya's coast.

The deal enables the China National Offshore Oil Corporation to search for oil in six areas covering more than 100,000 square kilometers in the Indian Ocean area.

Officials from both countries did not give details of the oil pact, which was not mentioned in a joint statement listing agreements signed during President Hu Jintao's visit.

The statement said that China would give Kenya $7.5 million (60 million yuan) as part of an economic and technical cooperation package.

Grants from China to Kenya were also issued for anti-malarial medicine and rice, and China promised to maintain a sports stadium in Nairobi, help carry out studies to rehabilitate Nairobi roads, and provide educational opportunities for Kenyan students.

Reading from the joint statement, Kenyan Foreign Minister Raphael Tuju reiterated Kenya's position that Taiwan belongs to the People's Republic of China.

"The Kenyan government expressed its opposition to Taiwan independence in any form and expressed its support for China's efforts to realize national reunification," he said. "The Chinese side highly appreciated the position of the Kenyan side."

Commentators say the oil and other deals are consolidating China's presence in East Africa so that it could extract resources to fuel its burgeoning economy.

Total bilateral trade between China and Kenya came to $475 million in 2005. But of this, China's exports to Kenya totaled $457 million in 2005, a 30 percent increase from the previous year, while Kenyan exports to China were almost $18 million.

Critics fear that cheap Chinese imports will flood Kenyan markets, endangering the livelihoods of many Kenyans. They also say there should be more Kenyan exports to China.

There are also concerns that China does not require its partners to adhere to human rights and good governance standards in their economic activities.

President Hu told reporters that, in his government's dealings with African countries, China respects each country's road to development and political model. He says China follows a policy of non-interference in other countries' internal affairs.

The Chinese leader says China's economic dealings with Kenya and other African countries are based on what he calls "win-win" outcomes, with both countries mutually benefiting from the arrangement.

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