The slide presentation is about China influence in the Caribbean economies, specially in the CARICOM countries and evaluate the China-Caribbean relationship

1. INTERNATIONAL RELATIONS
OF THE CARIBBEAN
China emergence and its presence
in the Caribbean
Dr. Jacqueline LAGUARDIA MARTINEZ

3. China economic figures (2000-2010)
2º Largest Economy (7º en 2000)
GDP growth (average): 9,7%
1º Exporter of Goods
1º Importer of Goods
5º Exporter of Services
5º in FDI
1º World Savings (FOREX)
1º Market of Renewable Energies
1º Market of Iron and Steel
2º Scientific Publications
The Chinese economy is now not only the second largest in
the world, but it is larger than all the rest of the BRICS

4. But in 2013…
• The expected growth of 8% that would allow
China to keep on being the main force behind
the world economy recovery did not happened
(7,3% in 2013)
• China was to supposed to advanced faster
towards a new economic model that shift from
investment and exports towards domestic
consumption…

5. Lower GDP growth rate (7,5%)
Minor dynamics but:
•Structural reforms: health and social
provisions, pension system, subsidies for
housing, changes in the one child policy
•Eradicate poverty
•Diminish the gap urban-rural societies
•Sustainable employment of natural
resources
•Environmental protection

6. Reasons to change
1. World economic crisis
2. The cost of production is increasing due to:
• the rising cost of production inputs (energy and land)
• Increasing skilled labor shortages
• rising wage cost
• lack of adequate infrastructure to link production bases
to consumption bases
3. Environmental pollution
4. Overemployment of resources
Political decision to change towards an economic model
more consumption orientated

7. Similar to the BRICS
Future challenges: to set a new development
agenda, which must incorporate elements of
inclusive growth, sustainable and equitable
development, and perhaps most importantly,
uplifting those at the bottom of the pyramid

8. China is working on changing its
economic model to a
consumption-led one!!!!!!
How will that change impact on
the Caribbean?

9. China and the Caribbean
Traditional economic relations with China were
established from Chinese migrants who came to
work in the Caribbean after the abolition of African
slavery

10. The Caribbean’s interest in China
New type of relationship due to the
current geopolitical considerations
and changes in the global economy

11. Economy
• China could be the main driver of global growth
creating opportunities for a market for Caribbean
exports
• Trade that generates long term growth and
development
• Opportunity to diversify the Caribbean’s trade and
economic relations
• Important source of Development Aid
• Foreign Direct Investment (FDI)
• China is a Member of the Caribbean Development
Bank and the Inter-American Development Bank

12. International Politics
• China can act as a voice for Southern countries and an
intermediary between the Caribbean and developed
countries in multilateral fora
• China has the potential of transforming the global
economic order
• China presents an alternative to USA and EU aid and
development assistance. The Caribbean has decreased
in importance to both the EU and the US (ACP is no
longer considered to be a relevant framework to the
EU)
• Attracted by Chinese policy of neutrality, non
interference and ease of access to Chinese loans

13. What China wants
• To usurp Caribbean diplomatic support for Taiwan
(One China Policy)
• Broader foreign policy objectives in an
increasingly globalized economy
• Strategy towards acquiring big power status
• Attaining food, raw materials, energy security for
sustaining its economic growth (The Caribbean is
the source of minerals: asphalt and gas in Trinidad
and Tobago; bauxite in Jamaica and Guyana and
timber and minerals in Guyana)

14. • The Caribbean provides an attractive market for
Chinese products and investments
• CARICOM countries provide a ‘production
platform’ due to preferential arrangements
provided by the Caribbean Basin Economic
Recovery Act (CBERA), (Caribbean-Canada Trade
Agreement) CARIBCAN and the CARIFORUM–EU
EPA
• Openings for Chinese investments and business
opportunities for Chinese firms and employment
of Chinese labor

15. Caribbean–China Economic Relations
• Largely bilateral
• Multilateral effort in the biennial China
Caribbean Economic and Trade Cooperation
fora: preferential loans for infrastructural
development, training opportunities (natural
disaster mitigation and prevention) and
increasing and diversification of export
• China is a member of the Caribbean
Development Bank as well as the Inter-American
Development Bank and has also contributed to
the Caribbean Development Fund (CDF)

16. China comes with “advantages”:
They were never colonizers and is not
perceived to have been in an
exploitative relationship with the
Caribbean in the past

17. Source: Annita Montoute, Caribbean-China Economic Relations: wha are the Implications?

18. Source: Annita Montoute, Caribbean-China Economic Relations: wha are the Implications?

19. Source: Annita Montoute, Caribbean-China Economic Relations: wha are the Implications?

20. Source: Annita Montoute, Caribbean-China Economic Relations: wha are the Implications?

21. Source: Annita Montoute, Caribbean-China Economic Relations: wha are the Implications?

22. Development projects
• September 2011, Jamaica: agreements totaling US
7.985 million (Montego Bay Convention Centre,
Palisadoes Peninsula project)
• 2011, Trinidad and Tobago: received 40 million Yuan in
grant funding (National Academy of the Performing
Arts)
• 2011, Bahamas: Technical and Cooperation Agreement
(total Chinese investment in the Bahamas to an
estimated $2.66 billion)
• 2011, Barbados: Grant of approximately BDS$6.15
million for various small scale development projects
(Widley Gymnasium)

23. • 2011, Guyana: RMB 30 million grant for the funding
several projects
• Dominica: Infrastructural development on four projects
totaling over $100 million
• Antigua and Barbuda : a street lighting program,
concessionary loans and grants for the Sir Vivian
Richards Cricket Stadium, an airport terminal and a
secondary school in Five Islands
• Grenada: 86% of the cost of the rehabilitation of the St.
Paul’s Sports, Cultural and Development Organization
• Suriname: Foreign Ministry building; provided military
assistance, construction of low-income housing, help
with shrimp farming and an upgrade of the national
television network

24. Interesting
• In October 2011, China sent a navy hospital ship,
the Peace Ark, to the region; in addition to docking
in Cuba, the ship made stopovers in Jamaica,
Trinidad and Tobago, and Costa Rica, in a 100-day
mission called “Harmonious Mission 2011”
• In Trinidad and Tobago, the Chinese government
has developed a program to support martial arts
initiatives, bringing performers from the Chung
Shan Association to China for further training
• Opening of Confucius Institutes

25. China’s investments
• Particularly strong with the “Big Six” CARICOM
member-states, with Jamaica having become
China's top trading partner in the Caribbean in
2012
• China's EximBank is financing the construction of a
3,800-room resort in the Bahamas featuring the
largest casino in the Caribbean
• China has become an important source of
tourists and CARICOM states have looked to
develop new ways to tap this potential

26. The Caribbean may be able to use the opportunity to
take advantage of the competition among the
emerging and traditional players for their benefit
•Renewed interest in the Caribbean (and Africa) by the
EU
•Joint Caribbean-EU Strategy (JCEUS)
China’s policy of non-interference in the governance of
countries and claims of no conditionality attached to
development assistance makes it more appealing than
traditional partners (but the use of Chinese labor,
design, and technology associated with Chinese aid and
investment)

27. Other consequences to be considered
• Increasing trade deficit
• Cheaper Chinese imports may also be replacing
local products
• the trade relationship is largely based on the
importation of manufactured products from China
and the exportation of raw materials from the
Caribbean (replicating the previous scheme of
trade with traditional partners?)
• Work force unemployed
• Investment in manufactured sector, not in services
and does not promote technology transfer