China awakening: What are we doing?
Rosalea Hamilton, GUEST COLUMNIST
"Let her sleep, for when she wakes, she will shake the world."
- Napoleon Bonaparte
China's growth is shaking the world as she wakes. During the period 1989-2014, China's GDP annual growth rate averaged about 9%, reaching a height of 14.2% in the fourth quarter of 1992. In the second quarter of 2014, China has already hit its 7.5% growth target for this year.
In 2010, China's industrial output marginally exceeded that of the US. By 2012, the value of China's industrial production was 126% of the US level, at a value of US$3.7 trillion, compared to US$2.9 trillion for the US. This is the first time in more than a century that a country has surpassed the US as the world's largest industrial producer. Using the purchasing power parity (PPP) measure, Bloomberg projects that China will overtake the US as the world's biggest economy this year.
China has the world's fastest growth of consumption compared to the G7 and BRIC economies and "easily has the world's fastest rise in living standards", according to John Ross, senior fellow at Chongyang Institute for Financial Studies, Renmin University of China. Data on the rapid growth of Chinese spending on smartphones, cars, designer clothes, Internet, foreign holidays, etc. are evidence of its rising living standards. Ross argues, "China's 9.9% average increase in GDP per capita during the two last five-year plans is the fastest economic growth per capita ever achieved by a major country in human history."
For those correctly concerned about the millions of Chinese living in poverty amid the rapid growth of a wealthy Chinese middle class, Professor Danny Quah, of the London School of Economics, in 2010, noted that: "In the last three decades, China alone has lifted more people out of extreme poverty than the rest of the world combined." In 1981, World Bank data revealed that 972 million people in China were living on an expenditure of less than US$37.50 a month. By 2009, the number fell to 157 million, lifting 678 million people out of extreme poverty. During this period, the number of persons living at this level of poverty in the world outside China increased by about 500 million.
China's growth has been meteoric, from one of the world's least-developed countries in 1949 to the biggest creditor to the US today. Many countries are positioning themselves to take advantage of new, emerging opportunities in China. What are we doing to position ourselves?
Jamaica has had a long-standing relationship with China. In fact, this year marks 160 years since the first Chinese came to Jamaica as indentured workers. Up to the 1970s, when there was a heavy migration of the Chinese from Jamaica, many Jamaicans interacted with Chinese-Jamaicans and got to know small aspects (perhaps too small) of the Chinese culture and personality. It could also be argued that because of the Chinese migration in the 1970s, two generations of Jamaicans have had only cursory interaction with persons of Chinese heritage.
What is even less known is Jamaica's special relationship with China because of our early support in 1972 for the 'One China' policy. Also, most Jamaicans do not have first-hand experience of the rapid development taking place in China as it rockets to the number one position in the world.
This limited knowledge and understanding of China, coupled with negative reactions to recent Chinese activities associated with the trans-shipment port and logistics hub facility on the Goat Islands and labour disputes with Chinese construction officials, is contributing to growing anti-Chinese sentiments. This has led Prof Anthony Chen, in his inaugural presidential address at the launch of the Chinese Cultural Association of Jamaica in March 2014, to argue that increasing anti-Chinese sentiments can create conditions for violence against Jamaica's Chinese community, as happened previously in the anti-Chinese riots of 1918 and 1965.
This is an unfortunate development rooted in the terms of our recent engagement with the Chinese. Over the past few years, Jamaicans have become aware of the many gifts and very generous loans from the Chinese government, including the Sligoville stadium, MoBay Convention Centre, North-South toll road and more.
Sceptics are not convinced that some of these edifices have delivered (or will deliver) their promised benefits. The consequence of this seemingly one-sided relationship is a growing dependence on the Chinese to solve our economic woes. For some, reminded of our dependent colonial past and observing a similar dependent relationship in Africa and other parts of the world, this new dependency is seen as a form of Chinese imperialism to be resisted.
These negative perspectives of the recent Chinese experience in Jamaica were recently challenged by the experience of nine Jamaicans who participated in a tour of China organised by the Scotiabank Chair in Entrepreneurship and Development at the University of Technology, Jamaica (UTech) and Sias International University (Sias) from May 26 to June 16. The tour, covering five major cities (Beijing, Zhengzhou, Xi'an, Hangzhou and Shanghai), provided an excellent opportunity to witness China's rich cultural history, the phenomenal growth in infrastructure, growing opulence as well as the pride, discipline, friendliness and humility of the Chinese people. Results from a pre-/post-perception survey of participants revealed discernible shifts in perspectives after the tour. The following comments are instructive:
"Was just the tip of an iceberg … allowed me to see a significant scope for expanding the Jamaica-China relationship."
"Caused me to question whether Jamaica is clear on its role in the relationship … . It is not adequately articulated to the Jamaican people."
"Not being fully informed about present China-Jamaica relationship … . Now positive and sure that any China-Jamaica relationship would be a fruitful and beneficial venture for us if we actively pursue it."
"Tour cemented in my mind that a robust post-modern China policy must be developed very quickly and not a policy that seeks to go to China cap in hand, but one that recognises the mutual path and appetites of both countries."
It's not just about what China is doing to us but, importantly, it's also about what we are doing to China. As this giant awakens with an appetite for international tastes, are we actively seeking to understand how to whet their appetite for exotic Jamaican goods and services using the awesome power of the Internet, social media and other means? Are we confident and bold enough to create new demand in China for our unique cultural products: reggae, fashion, jerk and other spices, Patois, etc.? Are we leveraging the Chinese-Jamaican cultural experience to penetrate China?
We were able to penetrate the Japanese market (127 million population) with our music. What about the vast and growing China market (1.3 billion population)? Are we building on the tremendous brand recognition of Jamaica in China spawned by our athletes, especially Usain Bolt? Are we cultivating the 'guanxi' (social capital) required to benefit from our special relationship with China so as to create sustainable opportunities for the Jamaican people?
Instead of passively reacting in negative ways to the global expansion of China as she awakes, we need to proactively do these things and much more to create mutually beneficial relationships. In so doing, we avoid a new form of dependency and the associated negative perceptions and socially regressive outcomes.
Rosalea Hamilton, PhD, is VP, community service and development, UTech; and Scotiabank Chair professor, entrepreneurship and development, UTech. Email feedback to firstname.lastname@example.org and email@example.com.
DATE TYPE PURPOSE LENDER AMOUNT
Nov 2005 Infrastructure Trelawny Stadium China China Ex-Im Bank $30M
June 2007 Infrastructure MoBay Convention Centre China Ex-Im Bank $45M
Feb 2009 Other Short-term trade financing China Ex-Im Bank $118M
Feb 2010 Infrastructure Shoreline reconstruction China Ex-Im Bank $58M
Aug 2010 Infrastructure Road construction China Ex-Im Bank $340M
Sept 2011 Other Jamaica Economic Housing China Ex-Im Bank $71M
Aug 2013 Infrastructure Road and bridge rehab China Ex-Im Bank $292M
Sept 2013 Infrastructure North-South toll road China Dev Bank $457M
Source: China-Latin America Finance Database (2013)