Invest SVG attends Business China-LAC Summit

Countries in Latin America and the Caribbean (LAC) should seriously consider making Foreign Direct Investments (FDI) in China, as that country is experiencing vast and growing importance as a consumer market.

Director of Invest SVG Bernadette Ambrose-Black says that Invest {{more}}SVG continues to support private sector development and, as a result, has explored Latin America and the Caribbean’s (LAC) opportunities for investment in China.

Earlier this month, Ambrose-Black and Invest SVG’s Export Development manager Shanna Browne attended the Eighth Business China-LAC Summit in China, which looked at, among other things, ‘A New Chapter in Latin America and the Caribbean-China Relations’.

The summit was organized by the Inter-American Development Bank (IDB), China Council for Promotion of International Trade (CCPIT), the People’s Bank of China, and the Government of the Hunan Province (Changsha City, Hunan Province, China. It ran from September 12 to 13 and was held in Changsha, China at the St Tropez Hotel in Changsha.

The two-day summit covered areas of relations of China and LAC and strengthening a platform for economic and trade cooperation.

Describing the trade between China and Latin America and the Caribbean over the past decade, “as nothing short of remarkable”, the Invest SVG head stressed that “distinct commodities-for-manufactures pattern has occasioned concerns in the region over specialization, over-reliance on low value-added commodity exports, and deindustrialization in the face of Chinese competition.”

She said that as a result, a major preoccupation of policymakers and academics in LAC has been how to diversify the region’s commercial ties with China.

She said that for firms in the region, setting up operations in China can be a potent strategy to overcome the disadvantages inherent in the region’s distance from China and integrate into global value chains.

“A direct presence in China can help LAC firms expand their reach in the market, establish a brand identity, and meet the demands of Chinese consumers,” said Ambrose-Black.

According to Ambrose-Black, the opportunity exists, but the question remains, “how to seize it?”

She stressed that while it is a known fact that SVG does not have diplomatic relations with the People’s Republic of China, but rather with the Republic of China on Taiwan, “it is our intention and certainly so at the investment level to deepen our relations with Taiwan,” but this does not stop the private sector from engaging in export related activities with mainland China.

She said that Invest SVG’s attendance at the summit was twofold in nature, in that it afforded them the opportunity to obtain knowledge and greater insight into China’s interest in LAC, along with investment opportunities, as well as the potential for SVG to export to the Asian market.

While at the summit, Ambrose-Black took part in a trade promotions roundtable discussion, which pointed to the structure of LAC-China trade being built on comparative-advantage fundamentals.

She noted that China faces a relative scarcity of natural resources and abundant labour, while it is the opposite for LAC countries and this leads “to a distinct commodities-for-manufacturing trade pattern.”

As a result of the visit to China, Invest SVG has already engaged in discussions with the SVG Chamber of Industry and Commerce on how they can work together to ensure that members of the private sector capitalize on this golden opportunity.

Ambrose-Black revealed that one thing that was lacking at the Summit was a greater concentration of the Caribbean region as a whole, with the exception of the larger countries such as Jamaica, Trinidad and Haiti, “who have quite successfully penetrated the China market.”

She said that SVG and other countries should consider moving towards deepening ties with Latin America, so that we are not left out or forgotten in the economic discourse.

Ambrose-Black said that among the areas we are looking at when it comes to China relations are exports of agro processing (condiments and other things) and funds to implement projects related to agriculture and hotel and tourism development.

It was also noted that there are business executives in China who are interested in investing here in the agro-processing and renewable energy sector, while there is funding available in the form of soft loans from the China Development Bank.