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Careful along the ‘Silk Road’

Sunday, June 3, 2018

T&T approaches China in the reality of continuing and complete dependence on foreign direct investment (FDI), enterprise, and international marketing connections to survive.

It is a self-inflicted state; the end result of having not strategically utilised and invested billions earned during three gas and oil price booms to transform the economy from its one-crop dependence.

Swimming with a shark such as China, therefore becomes an imperative for capital injection, investment, enterprise, and innovation.

In addition to the above failures, we did not seize the initiative to regionalise production within the Caricom Single Market and Economy when we had the resources and leadership opportunities.

After our centuries-old historical dependence on the US and Britain, Prime Minister Rowley is looking east, China, for investment capital, initiative, and markets.

He rightly noted that it is not about spending large chunks of forex to have the Chinese construction firms build infrastructure here; but rather having China as an investment partner in commerce and industrial production.

So far, the Prime Minister has only given a generalised outline of potential projects, too early therefore to make judgments on the nature of the projects, and whether or not they have the potential for meaningful and sustainable development for T&T.

China’s 2025 strategic plan of President Ji is to become the major world economy and no doubt political power.

Amongst the areas identified in the plan for focus are: information technology, automation and robotics, aerospace and aeronautics, oceanographic engineering and high-tech shipping, high-speed rail, electric vehicles, electric power equipment, agricultural machinery, new materials, pharmaceuticals, and medical equipment.

To achieve the global spread required, China is furiously expanding in its own economic and geo-political space amongst the Newly Industrialised Countries, Malaysia, Sri Lanka; into eastern and western Europe; in Africa, and with long-established bridgeheads in the USA and Canada.

Into the Caribbean, China has been making inroads over the last couple decades, constructing infrastructure, granting loans for already highly-indebted countries to leave for future generations to repay.

In resource-rich countries in Africa and Asia, the Chinese are exchanging debt for raw materials to feed the hungry production grids at home.

In the process, many developing countries are losing the once popular image of China as a fellow developing country in the trenches with them to dig their way out of American and European imperialism.

European giants such as Germany and England are also becoming beholden to Chinese capital and technology.

Of great significance is the Silk Road being constructed by Chinese engineering and technology to establish a train route across Europe for trade and investment.

US President Donald Trump has alerted his country to the reality of the US$150 billion trade imbalance with China, and the need to redress that imbalance.

In Latin America (LA), a once reserved backyard of the US, China is surging into the region extracting raw materials, increasing investment (US$70 billion since 2012) while lending US$20 billion in 2015 and 2016. As reported by Reuters, since 2005 those loans have exceeded the combined financing to the region from the Inter-American Development Bank and CAF, the LA development bank.

To illustrate and compound the reality of China’s reach and influence in LA, the 2019 meeting of the IDB is scheduled to be held in China; a development which “does not serve the interests of the Western Hemisphere,” a claim made by David Malpass, the US Treasury Department’s undersecretary for international affairs.

The picture emerging is that of a resurgent China rising out of the 1949 Mao Political and Cultural Revolution, a seemingly unstoppable tidal wave.

Given our condition in T&T, and the Caribbean in desperate need of foreign investment, trade, enterprise, innovation, and dependent on the rest of the world, we cannot stay out of that tide; we have to be a part of the globalism that is evolving; we have to expand from our historical boundary relationships, old-time Mercantilism with the UK and in the last century with North America.

The critical issue is how we engage with China. A good entry point is to disabuse our minds of the Chinese being our saviours.

The planning, the strategising, and the gathering of the human resources to negotiate our way forward into the relationship have to come to the fore.

Hopefully, there would be constructive political dialogue to guide the way forward.


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