China will finance the building of a second port in Kenya, a transport corridor connecting South Sudan and the upgrading of a railroad linking Kenya's Mombasa port and the Ugandan capital, a statement said Wednesday.

Kenya is a gateway to East Africa and a key focus of China's trade and economic cooperation with the African continent. The war-free country with stable political situation made Kenya an ideal regional base for Chinese investors to expand their business in Africa.

China has had a long involvement with Africa, going back to the early days of independence movements in the 1960s and before. But the current level and intent of China’s involvement is different. China’s principal interest in the continent is access to natural resources. But it is not its only interest. China’s economic interests are wider. China’s trade with Africa has risen sharply, from $10 billion in 2003 to $20 billion in 2004 and another 50 percent increase is expected in 2005. Chinese goods are flooding African markets, and – not so different from the United States – there has been growing concern in Africa about the effect on local industry. The primary focus is on textiles where the growth of Chinese exports constitutes a double whammy for Africa. Exports of Chinese textiles to Africa are undermining local African industry while the growth of Chinese exports to the United States is shutting down the promising growth of African exports in this field.

The road could provide a route to export Chinese oil from southern Sudan.

Recently, China's CNOOC (0883.HK) spudded a $26 million exploration well in northern Kenya on Wednesday that will be the deepest yet in a country that has searched in vain for commercial oil and gas deposits for decades.

The Boghal-1 well in Block 9 of the Anza Basin is the 32nd drilled in the east African nation, which hopes to capitalise on growing interest in the continent among explorers due to high oil prices and growing energy nationalism elsewhere.