Go east, young man, not west - Editorials, Current Issues & Opinion Articles

Wednesday, March 10, 2010

Editorial

Go east, young man, not west

Wednesday, February 03, 2010

THE phenomenal economic growth of China has changed and will continue to change the pattern of trade, finance and investment in the world economy. China, despite its own modesty, is forecasted to become the world's largest economy in 30 years.

Its rise towards economic dominance, and its enormous military prowess, ranging from nuclear weapons to the largest army in the world, make China a superpower.

By its sheer size and phenomenal growth, China has caused tectonic shifts in the world economy with implications for Jamaica's exports, imports, foreign investment, aid and tourism.

Prime Minister Bruce Golding is keenly aware of the enormous possibilities represented by China and hence his current trip. The two countries have been strengthening their growing ties since formal diplomatic relations between them began in 1972.

We belatedly established an embassy in Beijing in July 2005. Jamaica and China signed a Bilateral Investment Agreement in 1994 and a Double Taxation Avoidance Agreement in 1996. High-level visits have taken place, including former Prime Minister P J Patterson to China in 1998 and Vice President Zheng Qinhon to the first China-Caribbean Economic and Trade Co-operation Forum and China-Caribbean Trade Fair in Jamaica in 2005.

In recent years, China has expanded its trade and development assistance with Jamaica, including a major line of credit. Chinese workers were also employed in Jamaica in building part of the Trelawny Multi-purpose Stadium. Goods from China have proven very attractive because of their prices and have increasingly substituted for goods from traditional trading partners. Indeed, normal life cannot be conducted without Chinese products.

PM Golding's agenda must be development assistance, investment, exports and tourism.

China is one of the largest providers of aid, but it is not dispensed solely for altruism or need. Kingston's entrée is the strategic value that China attaches to Jamaica as its selected gateway to the Caribbean. To ask for more lines of credit when we have not used the existing one will be a difficult sell. Small business is good domestic politics but will not arouse much interest in Beijing.

Foreign investment flows from China have concentrated on oil, minerals, raw materials and food-producing land. They should be interested in purchasing our bauxite plants, although they are relatively inefficient, because guaranteed long-term supply is more important to China's expansion than price of output. Their state enterprise could afford to modernise and refurbish the alumina "clunkers". Large-scale infrastructure projects will be of interest, particularly if their firms can carry out the construction.

Our exporters are not adequately exploiting the gigantic opportunities for exporting. China is the second-largest market in the world and has grown at an average rate of 10 per cent per year during the period 1990-2005.

In 2008, nearly 46 million Chinese travelled abroad and spent US$30 billion. By 2020, China will generate 100 million outbound tourists per annum. Increasing Chinese tourist arrivals should be possible since Japanese tourists travel similar distance to that faced by potential Chinese tourists. The potentially gigantic Chinese market can be developed with improved air links and specialised promotion.

Mah Jong is normally a game for four players. Let us hope that in this two-player version it will be a win-win.

If you are made redundant today, would it be a disaster or an opportunity for you?
	Opportunity
	Disaster

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