Assistant Professor of Economics, University of the Virgin Islands, Dr Mark Wenner believes that T&T’s business sector should be selling more goods and services to the large Chinese market and so expand their business operations.
“In terms of the Chinese tourism, which would be considered exports from the region, I think that there is considerable work that needs to be done and it needs to be targeted. The Chinese get their travel, sun, sand and beach fix in the South Pacific. We may not be able to attract the lower to middle end of that market because it is so costly and so long to get here.
“But we could entice the cultural Chinese tourists. The steelband of T&T is a very hot thing in China. So, this is an opportunity to bring people to the region to learn to play steelband and produce steelbands for their market. Those are little markets we can pursue. I think the Chinese market is ripe for more high value imports from the Caribbean. We must aim for quality and niche markets,” he said.
Wenner spoke last week at a forum on China and its economic relationship with T&T and the Caribbean region hosted by the Trade and economic development unit, University of the West Indies (UWI), St Augustine. Former Minister of Public Administration in the People’s Partnership Dr Bhoe Tewarie, who also spoke on opportunities for the business sector in China, gave examples of what T&T businesses can sell to China.
“You are dealing with a big country. We can’t produce much but we really need good quality niche interventions. Let’s say the belaboured idea of pepper sauce but the point is that a unique flavour of pepper sauce that is flavoursome can make a difference. You have 800 million people out of poverty in China and to sell a million bottles of pepper sauce at any given time, would be of tremendous value to any company producing here.
“It means private sector intervention and somebody has to take the risk. The organisation has to be done and the technology applied to have an efficient system and you have to have the logistics right to have all your things at the destination point. If someone can sell a million bottles of pepper sauce in China every year, they are in business.”
Apart from physical goods, Tewarie said that T&T can also sell its culture to the large Chinese market.
“We have a diverse culture. We have calypso, we have soca, we have chutney, we have tassa. Selling a programme to a 100,000 people in China is nothing. That would be a larger audience than any audience you can command in the Western Hemisphere. But you’ve got to link a tourism strategy to that. We should be working with the tourism market from China and the culture market from T&T for exports.”
Tewarie also said that there needs to be greater efficiency and forward-looking thinking from the local business sector and country as a whole if T&T is to break into these larger markets.
“We have an existing Caribbean Basin Initiative (CBI) agreement with the United States, but we do not capitalise on it. The Canadians expanding Caribbean trade agreement without us even advocating for it by ten years to give us an opportunity.
“We also have arrangements with Europe and we are not capitalising on that. We have a triple problem. We have a leadership and vision problem where we cannot see ourselves as being anything other than small states. You need governance requirements in a country to facilitate business. You cannot be lazy and prosper. You have to have an attitude of productivity and production and competitiveness.”
Chinese imperialism
While there are opportunities for T&T and Caribbean businesses in China, Wenner warns the Caribbean small island states that China is not giving free handouts.
“There are some troubling undertones and negative elements that need more studying and fleshing out. I have personally seen this in Guyana and in Jamaica and my interaction with big Chinese companies trying to do projects.
“There are troubling things in the way the Chinese do business. You have to be wary and to negotiate well. China is not a saviour. China is just a new style of imperialists. They are focusing on developing an economic empire around the globe that benefits them and that they are in control of. Their end goal is to surpass the United States and to be a big power. They do not necessarily love you.”
He gave examples of how the Chinese do business.
“They way the Chinese operate is that they do not put any conditionalities on anything. No conditionality compared to if you deal with the World Bank and Inter-American development Bank (IDB). In their loan documents, you have to tell them, how many women will benefit, how many indigenous people will benefit, there are equity and environmental conditions. But in the case of China, they don’t care what you do with the money. They don’t care if you are corrupt or if you are leftist or if you are rightist or a dictator, or if you are a good person or bad person. They just want business with you.
“The lack of conditionalities and environmental safety may seem attractive as they lower transaction costs for Caribbean states. Their lack of transparency and their willingness to engage in people with no standards lead to the fostering of corruption. So far in the Caribbean, we have been lucky to have no Chinese white elephants.”
Wenner also gave statistics for China’s loans in the region.
“Currently ten Caribbean countries have participated in the Belt Road Initiative (BRI). What we see in terms of development finance, we see over the period of 2005 to 2022, the Caribbean region received US$5.7 billion. It goes up and down and 2019 was a very good year. But this is only 4 per cent of what went to Latin America. The Latin American region got US$130.3 billion.”
He added that China was only able to gain a foothold in the region because of American neglect.
“The United States had largely been neglectful. The US in their limited amount of developmental assistance to the region was focusing more on drug interdiction and not large infrastructure development projects. The US always tends to ignore Latin America and the Caribbean because of crises in the Middle East and Russia. The global war on terror always seem to take first priority.”
Foreign direct investment
UWI Professor of Economics, Dr Roger Hosein, who also spoke at the forum, said given T&T’s economic challenges, this would be the best time to increase economic ties with China.
“We need the injection of Chinese capital where it is possible because our growth performance from 2016 to 2023 was the seventh worst, in the world according to the IMF data. This injection of capital especially if it helps to come with export markets would help open up economic opportunities for T&T at a time when our natural gas production is poised to go even further downwards. It is time to get more of the Phoenix Park and eTeck Park activity going.”
At the same time, he acknowledged that there are concerns about countries falling into China’s “debt trap.”
“Caricom negotiators must keep that in mind and there cannot be overreach with regard with seeking investment opportunities. We must do our homework for this to work in our favour.”