China and the Caribbean


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

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  • among the three regions in the ACP, Africa has stolen
    the spotlight and the Caribbean and the Pacific have been largely
    marginalised. The Caribbean saw declining US interest, aid and
    assistance from the beginning of the 1990s.
    During the Cold War period, the world was caught in a state of bipolarity and great power competition principally between the US and the Soviet Union.  The location of the Caribbean in relation to the US, the presence of Cuba (a communist state in the Caribbean) and the status of  Caribbean countries as former colonies and colonies of Europe explain the strategic interests of the US and Europe in the Caribbean in the Cold War period
  • there may be existing
    opportunities in the Chinese market that are underexploited by
    CARICOM entrepreneurs for example plants and cut flowers, meats,
    dairy products and eggs. Chinese products may also be competing
    with local businesses, farmers and craftsmen for example ceramic
    products, beverages and vegetables.
  • as imports from China increase, imports from the USA
    and the EU are not decreasing. Chinese imports therefore do not
    seem to be displacing those from the USA and the EU but total
    imports are increasing with China in the equation.
  • whereas there have been periods of surplus
    in trade with the US and the EU, there has consistently been a trade
    deficit with China for the ten year period.
  • One of the distinct features of development cooperation in the
    area of infrastructural projects in the Caribbean is the dominance
    of Chinese labour.
  • Recent project proposals and ongoing projects by Chinese firms also suggest that China is trying to identify the untapped potential in some of these countries; for instance, in Suriname, China is interested in prospecting for minerals and timber in densely forested areas.
  • China and the Caribbean

    1. 1. INTERNATIONAL RELATIONS OF THE CARIBBEAN China emergence and its presence in the Caribbean Dr. Jacqueline LAGUARDIA MARTINEZ
    2. 2. 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
    3. 3. 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…
    4. 4. 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
    5. 5. 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
    6. 6. 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
    7. 7. China is working on changing its economic model to a consumption-led one!!!!!! How will that change impact on the Caribbean?
    8. 8. 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
    9. 9. The Caribbean’s interest in China New type of relationship due to the current geopolitical considerations and changes in the global economy
    10. 10. 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
    11. 11. 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
    12. 12. 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)
    13. 13. • 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
    14. 14. 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)
    15. 15. 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
    16. 16. Source: Annita Montoute, Caribbean-China Economic Relations: wha are the Implications?
    17. 17. Source: Annita Montoute, Caribbean-China Economic Relations: wha are the Implications?
    18. 18. Source: Annita Montoute, Caribbean-China Economic Relations: wha are the Implications?
    19. 19. Source: Annita Montoute, Caribbean-China Economic Relations: wha are the Implications?
    20. 20. Source: Annita Montoute, Caribbean-China Economic Relations: wha are the Implications?
    21. 21. 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)
    22. 22. • 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
    23. 23. 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
    24. 24. 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
    25. 25. 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)
    26. 26. 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