China is the second largest trading partner of Latin America and the Caribbean, which is also a major destination for outbound Chinese investment, second only to Asia. China’s direct investment in Latin America and the Caribbean has exceeded US$150 billion.
According to a draft Policy paper by the Chinese Government, China sees itself as brining development opportunities to the rest of the world. It is estimated that in the next five years, China will import US$8 trillion of goods, invest US$750 billion overseas, and Chinese tourists will make 700 million outbound visits. All this will present an even bigger market, more capital, a greater variety of products and more valuable cooperation opportunities to countries around the world, including Guyana.
Very often we hear the saying that Guyana boasts great development potential. However, there is one huge potential which is widely ignored, the potential of strengthened economic ties with China. According to the Statistical Bulletin of China’s Outward Foreign Direct Investment, China’s FDI stock to Guyana at the end of 2014 is only US$0.24 billion, less than 0.03 per cent of China’ global amount of that year.
In view of bilateral trade, if we check the statistics compiled by Guyana Bureau of Statistics, China, the soon-to-be largest market of the world, is not even on the list of top ten destinations of Guyana’s exports and the value of exports to China is tallied among “other countries”. Ironically, some local media still complain that Guyana had sold too much volume of commodities to China.
While enjoying deep diplomatic relations, China and Guyana hold similar views and have consistently echoed and supported each other’s positions, be it on key international issues such as UN reform, climate change, sustainable development, regional integration and cooperation between China and the Caribbean.
Guyana is the largest Caribbean country and one of the only two Caricom countries located on the South American continent. On the south of Guyana is Brazil, the largest economy in South America, also a member of BRIC countries. On the north is the whole Caribbean Basin toward the North American continent.
So geographically and culturally, Guyana plays a strategic role in bridging South America with the Caribbean and further north. This unique advantage, now becoming even more valuable due to the rising trade protectionism, can be taken off in service of Guyana’s economic development goal. The countries share in the benefits of the tremendous volume of goods, people and services which flow between South America and the Caribbean, via Guyana, only when certain infrastructure bottlenecks of land and sea transportation can be overcome, namely, when the highway and deep-water harbour projects are initiated. In pursuing connectivity of this magnitude, supporting industries like energy and telecommunication also need to be expanded and upgraded.
Based on the above analysis, four fields in the cooperation between China and Guyana could be identified and prioritised for further strengthening; these include infrastructure, energy, ICT technology application and capacity building. In tandem with other partners and stakeholders, the Chinese government and enterprises are willing and able to play a more active role in those fields in Guyana.
Over the years, Guyana has seen tangible benefits in a number of areas, particularly health, infrastructure and information technology. The most recent projects include the Smart Guyana Project by Hauwei Technologies and a multimillion-dollar contract with China’s Exim Bank for the construction of roads in West Demerara.
Right after Chinese President Xi Jinping wrapped up his state visits to Ecuador, Peru and Chile in November, the Chinese government issued its second Policy Paper on Latin America and Caribbean. The Policy paper aims at summarizing the development experience and elaborating new ideas, proposals and initiatives in guiding China’s cooperation with Latin America and the Caribbean in various areas for the future. This is a “now or never” opportunity that both China and Guyana must grasp.
