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Sunday's
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China
in the Caribbean Region: Some observations
By
Kathy M Higgins Senior Governance Adviser DFID Caribbean
Chinese
companies are increasingly winning many large construction bids
in the Eastern Caribbean, for which they also provide the labour.
They are soon to be awarded the contracts for construction of
the two secondary schools being funded by the World Bank under
the Organisation of Eastern Caribbean States Education Development
Project, where the Chinese bid came in EC$3m (£265,000)
below the next lowest tender.
Another
aspect of the Chinese face in the Caribbean is that of development
assistance being delivered in several visible infrastructure projects
including: the construction of national stadiums in Dominica,
St Lucia, and Grenada; the construction of a psychiatric hospital
in St Lucia; redevelopment of the Botanical Gardens in Dominica
and the construction of a new block in a school nearby. China
has also promised support for the development of a major highway
in St Lucia, and is active in Jamaica, Guyana and Surinam.
Regional
governments praise the generosity of the Peoples Republic of China,
and have switched long held allegiances with Taiwan so that only
three countries in the English speaking Caribbean Belize, St Kitts
and Nevis, and St Vincent and the Grenadines, plus Haiti and the
Dominican Republic, still maintain relations with Taiwan. China
is a non-regional member of the Caribbean Development Bank (CDB)
with shares worth US$56m and contributions to the CDB's Special
Development Fund of approx US$33 so far. The PRC, so far, is the
only non-Caribbean country to have promised bilateral support
to the proposal for a Regional Development Fund. In December 2005
a delegation from the People's Bank of China visited the CDB and
spoke about the PRC's plans to increase aid to developing countries
and offered to host a meeting of the Annual Board of Governors
in the future From Chairman's report to the Board of Directors
December 2005.
China,
Trade and the Caribbean
During
a recent visit by the finance ministers of eight Caribbean countries
Surinam, Guyana, St Lucia, Trinidad and Tobago, Barbados, Antigua
and Barbuda, the Bahamas and Jamaica to the PRC the trade volume
between it and the eight countries was announced as reaching $220m
in 2003, up 31 per cent year on year; twenty three Chinese funded
companies have been established in the Region; a special investment
introductory conference for entrepreneurs to the Caribbean was
held at the International Trade Fair in Xiamen in 2005. Of these
countries, Jamaica is the largest trading partner (and there is
an agreement to explore the possibilities of PRC aid to resuscitate
the island's railway system, among many other agreements signed)
and the most recent tourist destination accredited by China. The
Vice President (Zheng Qinhong) led a large delegation of trade
and economic cooperation officials to Kingston on a four day visit
for the Sino/Caribbean Trade fair where Jamaica was intended to
be a 'jump-off point for expanding its (China's ) markets in the
region.' (Jamaica Observer October 2005).
Why?
Why
is the PRC interested in expanding its relations in the Caribbean?
Chinese people have long had a presence in the region: as migrant
workers e.g. to Guyana in the 19 century; immigrants to Peru;
as workers on the Panama Canal at the beginning of the twentieth
century and beyond. But this is different: this is a conscious
thread in the global strategy of an emerging superpower.
The
Global Context
China
has a long history of pre-eminence as a nation state and only
for the last 150 years or so, has it been 'humiliated' by the
incursion and interference of foreign powers. The current Communist
regime sits on centuries of power, innovation, and self regard.
Many China watchers see its economic growth fuelling a foreign
policy that is ultimately aimed at establishing the country as
the world's most powerful nation, and in doing so, replacing the
US in that role. In capitals where there is any dissatisfaction
with Washington's policies, this strategy is unlikely to be hindered.
The
PRC started on a path of economic reforms in 1978 and over the
last two decades economic growth has averaged just over 9 per
cent and seems likely to continue at this level for the next twenty
years Justin Yifu Lin - Director of the China Centre for Economic
Research: Peking University, Beijing. In 1978, the country accounted
for less than 1% of the world economy, with total foreign trade
worth US$20.6 billion. In 1986 the General Agreement on Trade
and Tariffs (GATT) gave China until 2005 to open and liberalize
its economy and become a full member of the World Trade Organisation
(WTO). Under its obligations as a member of the WTO, in early
2006 China will establish a system to allow the Yuan to float
more freely against foreign currencies and has approved 13 domestic
and foreign banks to undertake the mechanism to allow this to
happen BBC news item 30.12.05.
Today
it accounts for four percent of the world economy and its trade
is worth US$851 billion. This represents one of the most sustained
and rapid economic transformations the world has seen in the last
50 years. National income has been doubling every eight years
and it is estimated that over half the reduction in absolute poverty
in the world between 1980 and 2000 occurred in the PRC. It is
expected that it will continue to evolve its reform policies and
address the huge inequalities and poverty that remain.
China's
big picture foreign policy needs resources to feed its domestic
industrialisation and urbanisation. Twenty years ago it was East
Asia's largest oil exporter, now it is the world's second largest
importer. Its combined share of the world's consumption of aluminium,
copper, nickel and iron ore for example, more than doubled in
the last ten years and is likely to double again by the end of
this decade (meaning that this one country will consume approximately
one third of the world's supply of these commodities).
Within
five years only three OECD countries may exceed the size of PRC's
economy and the country could have become the world's largest
exporter by 2010 All figures from 'Economic Survey of China 2005:
Key Challenges for the Chinese Economy'. OECD September 2005.
In export terms, PRC overtook the UK in 2002, and France in 2003,
becoming the world's fourth largest exporter after the US, Germany
and Japan. In the developing world it is already the largest exporter.
A breakdown of PRC's exports indicates that it has a massively
growing world market share in low and high technology products
'People's Republic of China's Competitive Threat to Latin America:
an Analysis for 1990-2002' Working Paper 22, December 2004./ Latin
America/Caribbean and Asia/pacific Economics and Business association.
Joint venture of the IADB and ADB. as well as increasing its share
of medium technology and some primary products. In January 2006
the country announced a tripling of its exports from 2005.
Kathy
M Higgins is Senior Governance Adviser DFID
Caribbean. Petroleumworld not necessarily share these views.
Editor's Note: The above paper is an edited version of a paper
prepared by Kathy M. Higgins that examines: the growth of China's
interest and trade relations in the Caribbean generally and then
asks why this interest? It attempts to answer this question by
looking at some aspects of the global context of China's growth
and China-US relations, given that the Caribbean has been referred
to as the US' third border. There follows a section with detail
of relations between China, the Caribbean and Latin America where
this is pertinent. It ends with a comment on China and development
assistance.
This
version was originally published by The Trinidad Express, Wednesday,
February 28th 2007. Petroleumworld reprint this article in the
interest of our readers.
http://www.trinidadexpress.com/index.pl/article_business_mag?id=161109765
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Petroleumworld
News 03/11/07
Copyright
© 2006 Kathy M Higgins.
All rights reserved.
