Chinese businessman Lei Cheng was left in a bind over the weekend, announcing the temporary closing of his store in Kenya less than two months after it opened and drew crowds of customers.
(Bloomberg) — Chinese businessman Lei Cheng was left in a bind over the weekend, announcing the temporary closing of his store in Kenya less than two months after it opened and drew crowds of customers.
The suspension of shopping at China Square in the capital, Nairobi, follows Kenyan Trade Secretary Moses Kuria saying on Feb. 24 that he’d offered to buy out the store’s lease because of its potential effect on local traders. The supermarket in a university-owned building about 17 kilometers (11 miles) from the central business district, has since its opening become popular for selling a wide range of relatively cheap household items.
“We welcome Chinese investors to Kenya but as manufacturers not traders,” Kuria said on his Twitter Account. If he takes over the lease, it will be handed to local city traders, the minister said.
China Square is still to determine when it will resume sales, Lei said by phone on Monday. He declined to comment on Kuria’s post.
The decision to temporarily close “has been made to allow us to re-evaluate and replan our company strategy,” the retailer said in a statement that Kuria posted on his Twitter account. “We are also considering the possibility of cooperating with local traders to enhance our offerings and better integrate with the community.”
China Square was among the trending topics on Twitter in Kenya on Monday, with the incident fueling debate on the balance between fair competition and protectionism in the East African nation’s economy. Consumers Federation of Kenya Secretary General Stephen Mutoro said in a tweet that Kuria was distorting the market.
Kenya and China’s economic relationship has grown over the past two decades as Beijing provided loans and contractors for key infrastructure, including railroads and highways. More Chinese tourists have since visited Kenya and its nationals have opened businesses in sectors such as real estate.
Kenyan exports to China amounted to 20.7 billion shillings ($163.5 million) in the nine months through September 2022, while imports from the Asian country totaled about 342.2 billion shillings in the period, according to data from the Kenya National Bureau of Statistics.
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