Chinese eggs waiting to be hatched

Jun 09, 2013 Features / Columnists, Ronald Sanders

By Sir Ronald Sanders

From the government of China’s point of view, the visit of President Xi Jinping to Trinidad to meet nine Caribbean Heads of Government was a great success.
Each of the nine leaders made statements after individual short meetings with President Xi praising China for the loans and assistance the government is giving to their countries individually.
From the news reports, it appears that only the Prime Minister of Barbados, Freundel Stuart, raised with the Chinese President the need to improve China’s imports so as to redress the considerable surplus in China’s favour of the trade between China and Caribbean countries.
Indeed, this is only one of the issues between China and the nine Caribbean Community (CARICOM) countries that require attention. Crucially, among the other urgent issues are: an agreement laying down rules for Chinese construction and infrastructure development loans to Caribbean countries that ensure that a sizeable number of the workforce on such projects are local people (at the moment in a number of Caribbean countries, Chinese companies import labour from China to the exclusion of local workers for the most part); respect for the labour laws and industrial practices of Caribbean countries that would not disadvantage local companies that enter competitive bids with China; adherence to the immigration and work permit laws of CARICOM countries; and agreement on ‘aid for trade’.
In addressing these issues, the nine CARICOM countries would be doing no more than bringing their arrangements with China into line with the understandings they have with other nations of the world.   Dealing with these issues in ways consistent with their own laws would also help to give their own private sector – construction companies and even retail outlets – a more level playing field on which to compete with Chinese firms in their own countries.
Both the Prime Minister of Barbados and the Prime Minister of the Bahamas, Perry Christie, are reported to have rightly raised with President Xi, the matter of Chinese tourism to the Caribbean. Both Barbados and the Bahamas are highly dependent on tourism, and both now suffer balance of trade deficits with China. Naturally, they are seeking to redress the imbalance as far as possible through the export earnings they would derive from Chinese tourists to their countries.
The achievement of regular tourists from China to the Caribbean is not easily accomplished. Apart from the need to create an awareness of the Caribbean in China and a desire to visit, the length of the journey and its cost, as well as training tourism workers to speak Chinese, are factors that have to be overcome. These are also matters that need a master plan, best prepared on a regional basis by the Caribbean Hotel and Tourism Association and the Caribbean Tourism Organisation.
Of course, there may be a problem for these two organizations even in considering a master plan for Chinese tourism to the Caribbean. It is a problem that was manifest at the meeting in Trinidad on June 2 between President Xi and the Caribbean leaders. Only nine of the 14 independent CARICOM states were present at the meeting and, unlike an earlier encounter between CARICOM leaders and US Vice President, Joseph Biden, neither the Secretary-General of CARICOM nor any CARICOM Secretariat official was present at the meeting.   This is because five of the CARICOM states have diplomatic relations with Taiwan and not China. A ‘one-China’ policy is a non-negotiable pillar of Chinese foreign policy.
This division in CARICOM has resulted in the group’s inability to devise a joint strategy for the relations of its member states with China. It is this same division, already paralyzing CARICOM action as a group, that would equally paralyze the Caribbean Hotel and Tourism Association, whose membership includes the five countries that are tied to Taiwan.
At the end of meetings with President Xi, the host head of government, Prime Minister Kamla Persad-Bissessar, told reporters that President Xi had pledged US$3 billion in concessionary loans to the Caribbean.   It is unclear whether the US$3 billion is new money or whether part of it is the remainder of a 2011 pledge of US$1.5 billion that may not have been fully disbursed.
A search of the Chinese Foreign Ministry’s website, while giving an account of some of the areas of China’s assistance, does not mention the pledge of US$3 billion (www.fmprc.gov.cn/eng/zxxx/t1047479.shtml). Chinese diplomats in the Caribbean say that China has also allocated RMB 50 million (about US$8 million) for projects in each of the 9 countries.
In the event, the nine CARICOM countries have been honoured by the visit of President Xi.   It is the first visit of a Chinese President to any of the CARICOM countries and it comes soon after his assumption of the Presidency.
The visit does demonstrate an interest in the region from a country that is now the second largest economy in the world; whose influence around the globe has grown exponentially; and which has a strong voice in key international bodies such as the International Monetary Fund and the G20.
Importantly, it is also a country with US$3 trillion in foreign reserves which has to be invested to work for the Chinese economy.
It is important to note that whatever the full sum of money that President Xi may have pledged and whatever period it covers, it is not budgetary support to governments. The Chinese expect rightly that the governments will submit applications for projects that are economically viable and sustainable. Until the projects are submitted and approved, the eggs have not been hatched and no chickens should be counted.
There is much good purpose to which Chinese funds could be used. These include solar-powered energy generation; the development of other renewable and clean energy sources; and agricultural technology to help give the CARICOM countries some level of food security.
China is not the answer to the Caribbean’s economic difficulties or the deep malaise in several countries, but it can contribute to overcoming them if the projects that individual Caribbean countries propose for funding are viable and sustainable.
China could do much more in tourism, in ‘aid for trade’, and helping to fund regional sea transportation if it were dealing with a truly economically integrated region. Is it too much to hope that the possibilities that China offers will encourage the unification of Caribbean foreign policy, including the kind of mutually beneficial and principled relationship it would like with China, and the deepening of CARICOM’s economic integration?