It's easy to explain. But this country's private firms are largely missing in Jamaica's deepening economic relationship with China, except, perhaps, as importers of Chinese goods.
The flow of Chinese capital to Kingston, for instance, has been either in loans to the Government from Chinese policy banks - such as the US$350 million from the China Export-Import Bank for road rehabilitation - or investments by state firms, like the planned highway and port projects by China Harbour Engineering Company and the acquisition of sugar factories by Complant.
The easy explanation for this is the structure of China's economy, with its big state firms and banks that respond to government policy signals, such as, in the case of Jamaica, steering capital to diplomatically friendly countries. Then there is the difficulty of relatively small firms, such as those in Jamaica, understanding and penetrating a distant, huge and complex market like China.
While we appreciate the problems, this newspaper does not believe that the latter argument ought to be an enduring constraint - not for creative enterprises looking for opportunities and eager for profit.
Indeed, proposed economic reforms in China, if they take hold, may not only force Jamaica into new strategic thinking about how it conducts its economic relations with China, but could open opportunities for perceptive and nimble Jamaican firms.
Reduced reliance on exports
China remains manufacturer-to-the-world. But the global financial crisis of 2008, and the recession it spawned, which slowed Chinese exports, has seemingly convinced Beijing's policymakers of the need to accelerate economic reforms. The result is the declared intent to rebalance the drivers of growth in favour of domestic demand, rather than an overreliance on exports.
This effort presumes that it will be easier for private/non-state enterprises - which, according to official data, already account for 60 per cent of China's GDP, 70 per cent of its jobs and half of its taxes - to do business, including their ability to access credit.
With China's big state-owned banks preferring to lend to other state firms, many private firms head to the 'shadow banking' sector for capital, sometimes paying usurious rates. A 'normalisation' of domestic financial intermediation could lessen the ability of China's banks and state firm to undertake the level of policy loans/investments.
It is a matter of which Kingston should be aware, even as it grasps existing opportunities. At the same time, the investment promotion agency JAMPRO, in conjunction with the Private Sector Organisation of Jamaica, should begin to aggressively seek out, and develop, partnerships with private Chinese firms, especially in niches where Jamaica has a comparative advantage.
Although immediately obvious, one sector in which private Jamaican institutions might find opportunity for partnership in China is banking.
Big state-owned Chinese banks already lend. Beijing's officials predict that this will expand as the yuan, the Chinese currency, becomes increasingly convertible.
Jamaica and the Caribbean Community are not yet significantly on the radar of these banks, either for private-sector credit or government bonds. Innovative and savvy Jamaican banking institutions that meet the regulatory requirements could well be the conduits through which Chinese firms find routes to these markets.
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