Why the Caribbean is so attractive to Chinese investors
By Dr Johnny Hon
The Caribbean has been close to my heart for many years. I love the islands’ beautiful environments, their amazing people, and their rich, diverse culture. In my role as the Ambassador-at-Large for Grenada, as well as through my links with St Vincent, St Kitts and various other islands, I have worked for over 10 years to attract foreign investment to the region. This has allowed me to learn about the many unique business benefits offered by the Caribbean and why these are attractive to Chinese investors.
The Caribbean possesses an established and well-respected business infrastructure and legal system. The political framework is stable and the region is generally safe. Various Caribbean governments have also created attractive incentives for international investors, including tax exemptions and citizenship by investment. When coupled with the wonderful culture and landscapes of the Caribbean, there is much to appeal to global investors.
In particular, the region’s proximity to the USA provides excellent opportunities in areas including logistics, transshipment, manufacturing and ‘back office’ operations. The recent expansion of the Panama Canal, with a Chinese vessel being the first to ply the new waters, brings these opportunities significantly closer to the Chinese and Asia-Pacific markets.
The Chinese domestic economic environment is conducive to outbound investment. After decades of vertiginously high growth rates, China’s GDP is slowing to a more long-term sustainable pace. It is still growing steadily but the returns on domestic investments anticipated ten years ago are less prevalent, meaning investors are looking elsewhere.
There is a huge opportunity for international investment in Caribbean tourism and hospitality. China’s emerging and affluent middle class is becoming increasingly interested in international tourism.
There is real promise for Chinese investors willing and able to work closely with domestic businesses to develop a tourism infrastructure which appeals to Chinese holidaymakers’ tastes. To provide a personal example, I am currently contributing to a modernisation and refurbishment project at a beautiful Grenada hotel, the Grand View Inn. The recent inauguration of direct flights between China and Cuba is another indication of opening the Caribbean to the burgeoning Chinese demand for outbound tourism.
Chinese people, myself included, feel at home in the Caribbean. Probably no region on earth has proved itself to be such a joyous melting pot of people and cultures. The contribution of people of Chinese origin to the development of Jamaica, Trinidad and Guyana, in particular, is known to all students of the region and has become an indispensable part of their national make-up.
Investment in the Caribbean enjoys active support at the highest level in China. For example, in 2013, President Xi Jinping paid a state visit to Trinidad and Tobago and met with the leaders of 10 Caribbean countries, pledging US$3 billion in loans. Consequently, the Caribbean has benefited greatly from inward investment and will continue to do so. China recently invested $600 million in the ‘Beijing Highway’ to be built across Jamaica and has pledged $1.5 billion in investment to create a deep water container port in the country.
International investment in the Caribbean is driving growth in the regional economy. The common thread underpinning all of these projects is to maintain and preserve the beauty and magic of the Caribbean for generations to come.
Dr Johnny Hon is the founder and Chairman of Global Group, an angel investment and venture capital business that helps international businesses to grow with the benefit of Chinese investment and mentorship. He is also the Ambassador-at-Large for Grenada.
Note: the opinions expressed in Caribbean Journal Op-Eds are those of the author and do not necessarily reflect the views of the Caribbean Journal.