COULD CHINESE CRUNCH CAUSE CUTBACK IN CARIBBEAN?

CHINA could soon cut back on its multi-billion-dollar investments and trade in Latin America and the Caribbean, including Trinidad and Tobago.

The Asian powerhouse has seen its economy stumble in recent months, and this has prompted speculation of reduced financial activities in the region.

In recent years, China has pumped more than US $10 billion into the Caribbean, including US $2.28 billion in the port of La Brea.

China has a 10 per cent stake in Atlantic LNG.

There is reportedly Chinese interest in leasing the ports of Port of Spain and Point Lisas and constructing the $2 billion Toco deepwater harbour facilities.

T&T’s debt to China is around US $7 billion.

China is also the second largest trading partner and a source of direct foreign investments to Latin America, with annual trade valued at around US $700 billion.

In recent years, trade has grown 26-fold, especially with Brazil, Peru, Colombia, and Mexico.

Bolivia, Cuba, and Brazil have huge loans from the Chinese Development Bank and the Export-Import Bank of China.

The total worth of loans from both institutions to Latin America is US $140 billion.

There are free trade agreements between China and several Latin countries.

Each year, T&T imports around US $4 .2 billion worth of iron and steel structures, computer parts, air-conditioning parts, and other items.

Annual exports hover at around US $175 million, made up mainly of chemicals, edible preparations, iron and steel, mineral fields and oils, and meat and seafood.

China also has been involved in major infrastructural projects in Jamaica, Guyana, Antigua and Barbados, Suriname, Bahamas, and Cuba.

Construction of the North-South Highway and ownership of Kingston port in Jamaica are worth US $3.2 billion.

There are plans to build a US $6 billion industrial park.

The lavish Antiguan port cost US $90 million.

The US $3.1 billion investment in Guyana includes 30 per cent stake in a consortium exploring the oil-rich Stabroek Block.

There has also been Chinese security assistance to some countries, especially with the donation of army and police equipment, and stronger military ties with Cuba.

The authorities in the Asian country have also been engaging in soft power in the Latin American and Caribbean region, designed to grow influence and counter that of the United States.

President Xi Jinping has visited the region 10 times over the past decade.

Regional officials are courted by Beijing, and there are cultural exchanges and various forms of assistance.

But international experts project a long-term economic Chinese decline, partly as a result of reduced domestic consumption in the post-Covid-19 era.

There is a fall-off in private sector confidence, according to economists.

The country’s aging population and declining birth rate are also factors, according to the professionals.

Youth unemployment is at 22 per cent.

The economic crunch could mark the end of an era of unprecedented Chinese trade and loans, along with the widespread presence and high-stakes diplomacy in this region.

Reduced Chinese economic involvement in this part of the world could give the United States an upper hand in boosting ties with Latin America and the Caribbean.

The US was stunned by the quiet Chinese engagement and introduced the Build Back Better programme and the Americas Partnership for Economic Prosperity.

In addition, Vice President Kamala Harris and Secretary of State Antony Blinken have come to recent Caricom meetings bearing gifts and vowing the US’ abiding support for the region.

China is expected to continue to buy commodities from this part of the world, but the era of excessive imports and lavish loans may have come to an end.

An equally intriguing period lies ahead.