Sunday, June 4, 2017

China's Policy in the Caribbean-Opportunities for Jamaica

On May 30, 2017,  the Department of Government of the University of the West Indies (UWI), Mona,  hosted a panel discussion on China's Policy  in the Caribbean   and Latin America. The panel discussion, organized by  Head of department of governance Dr. Lloyd Waller and the Embassy of the People's Republic of China, featured guest speakers such as  Ambassador Richard Bernal, Pro-Vice Chancellor for Global Affairs  at University of the West Indies, Chinese  Ambassador to Jamaica,  NIU Qingbao, , Mrs. Irene Cousins, President of the Jamaica-China  Friendship Association and myself representing JAMPRO.

Ambassador Niu outlined the general objective of China's policy on LACChina wishes to build a new relationship with Latin America and the Caribbean with five salient features. Namely, sincerity and mutual trust in the political field, win-win cooperation on the economic front, mutual learning in culture, close coordination in international affairs, as well as mutual reinforcement between China's cooperation with the region as a whole and its bilateral relations with individual countries in the region.

Regarding investment, China encourages its enterprises to invest and start businesses in LAC countries, and promote production capacity cooperation.   China  also wishes to expand and deepen cooperation in the fields of energy and resources. China encourages the Public-Private Partnership (PPP) model and joint construction of industrial parks to promote inter-connectivity in the area of infrastructure in assisting LAC's industrial upgrading. 

This aspect of building and bolstering infrastructure creates a paradigm where Jamaica's economic growth objectives and Chinese companies financial interest meet in the middle. There is an umbilical cord between road, port and air infrastructure and attracting foreign direct investment. 

Jamaica needs to upgrade infrastructure, expand manufacturing, revive agriculture, and attract more foreign tourism. The location of the Caribbean islands-right in the middle of the North and South American trade markets-make them very appealing to Chinese Investors. 

Chinese companies evolving economic strategy is now one of diversification, with less emphasis on traditional industries such as minig and energy and more on sectors such as infrastructure (including airports, seaports and roads), construction, telecommunication, manufacturing, agriculture and tourism. 

At a major international conference held in China in 2016 and attended by representatives of CELAC (Community of Latin American and Caribbean States), Chinese president Xi Jinping announced his country's intention to invest US$250 billion over the next ten years into Latin America and the Caribbean. Let us make no mistake, the Caribbean faces competition for Chinese Investment. Most notably from our neighbours in Latin America. Higher wages, modest natural resources and smaller markets relative to Latin America, make the Caribbean less attractive on paper.

Jamaica, however, has had a comparative advantage relative to our other Caribbean neighbors. Both of Jamaica's political parties have been committed to attracting foreign direct investment, agreements made under one administration have been honored by incoming administrations, there is no restrictions on foreign ownership of companies or land in Jamaica. The Chinese have found in a Jamaica, a willing partner for reliable, long-term business opportunities.

China Harbour Engineering Company's decision to locate their regional headquarters in Jamaica is an indication of the confidence and vision of Jamaica as a country with the potential for long-term profitable growth.

Finally, Jamaica's aspiration to be the fourth node in the global trading system along with Singapore, Dubai and Rotterdam, require massive capital expenditure. Jamaica's current debt status handicaps its financial ability to build out the infrastructure, Special Economic Zones, industrial parks for light manufacturing and repacking of shipping containers, which would make this a reality. The interest and plans of Chinese firms to invest in and build out these operations, allows Jamaica to attract companies from other parts of the world who require these facilities  to be in place before they consider investment.

 Jamaica sits between the two large land masses of North and South America, and enjoys free trade agreements with North America and Europe, among others. The transformation of Jamaica into the logistics hub of the region has positive  far-reaching ramifications for our country and our population in terms of jobs and sustainable economic growth. 

Jamaica has been embarking down the path of building a symbiotic relationship with China and Chinese firms which embody the "Win-Win Cooperation" policy outlined by the Chinese government. 

Jamaica, for it's part has treated  Chinese investors with one simple mindset, "It's a relationship, not a transaction.
Fan , Jianghong -Economic Counsellor, Embassy of China, Niu QingBao- Ambassador of China to Jamaica and myself at panel.

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