The Tribune

EDITOR, The Tribune.

We should all be alarmed by the recent xenophobic rhetoric aimed at our friend and partner China and it is high time we hit the pause button and reflect on our national interest and on geo-politics.

It is tempting for us to think that the goings-on in Nassau rattle the minds of the movers and shakers in Beijing. Contrary to the belief of many Bahamians, we are not the centre of the universe and China does not fashion its regional or its global economic and foreign policy based on what effect it might have on their relatively puny investments in our country.

People who ought to know better have been attacking China and impugning its motives here based, presumably, on long-held prejudices, a pro-western bias and just plain old wrong information.

At the time of our independence in 1973 the Pindling government unwittingly conducted a two China policy. We officially recognized the Republic of China, better known as Taiwan and formally as Formosa. For a time, former MP Ervin Knowles was packing his bags to head to Taipei as our resident Ambassador. He never left.

China was subjected to civil wars and changing national alliances over the years culminating in the great power struggle after World War II between the nationalists led by Chiang Kai-Shek and the communists led by Mao Zedong.

The communists won that war and Mr. Chiang and his cohorts fled to Taiwan. Communists were dreaded in those days and so Taiwan held the official Chinese seat at the United Nations until 1971. Most countries delicately navigated a two-China policy until then. The United States recognized Taiwan until President Richard Nixon’s famous rapprochement with Beijing the following year. China rejects the sovereignty of Taiwan.

We stuck with Taiwan until 1997 largely because it was in our economic interest to do so but also because Pindling never had any real foreign policy chops and our longest serving Foreign Minister, Paul Adderley, wasn’t much of a globalist.

Like the US, Britain and other states including Jamaica, recognized the People’s Republic of China in 1972. It took the bold leadership of Hubert Ingraham to finally get the Bahamas to recognize the PRC on May 23, 1997 and we haven’t looked back since.

Our interests with China have been largely economic though over the years cultural ties have strengthened through scholarships and exchange programmes. China has always treated us with respect, promptly and efficiently establishing a physical presence here and filling their Ambassador’s chair with haste. We haven’t always reciprocated that courtesy.

We gained great respect with the Chinese when we named Sir Arthur Foulkes as our first (non-resident) Ambassador to China. The Chinese consider it an honour when deference is shown by recommending individuals of the highest stature to serve in Beijing. We haven’t done so good since Sir Arthur.

Some people believe that the Chinese courted us in 2008 and used Sarkis Izmirlian and his Baha Mar project as a foil to establish a beachhead in this hemisphere. We flatter ourselves if we believe such horse pucky.

It is true that the Chinese have been investing strategically around the world, mostly looking for natural resources that they don’t have such as in Australia, Africa and South America, or to create a balance of influence with the United States by investing heavily there.

The US is, by far, the largest recipient of Chinese investment and some iconic American companies are now owned by Chinese interests. Between 2015 and this year, China invested over $160 billion in the US. Compare that with the small fries involved with the Baha Mar project and you understand the importance of scaling.

In 2008 when the world’s bankers headed for their silos, it was only China left standing with pots of money to invest. Recall that at the time the interest rate earned on our money was near zero per cent. What else was China to do with its trillions in reserves but invest it, even if some of those projects would fail. Remember, China for centuries, plays a long game. Time longer than rope.

Izmirlian turned to the Chinese because he had nowhere else to turn back then. The terms of the deal didn’t bother him enough to cause him to walk away. It was the best he could get at the time and he took it.

The Chinese were obviously not minded to conduct any real due diligence. The project created jobs for Chinese and allowed their state-owned construction company to profile in the Americas. If they had looked into the numbers they would have discovered that the project was simply too big for their novice construction company to do all at once, which was what Izmirlian wanted.

If the Bechtel Group, the largest contractor in the world, had undertaken the project it might have finished on time and (maybe, somewhat) within budget, but Nassau still would have been left with too many high-end hotel rooms chasing a sluggish pool of US tourists.

The country needed a phased development, like Atlantis did. We probably needed more hotel rooms outside of Nassau and we definitely need more middle-of-the-range two and three star hotels.

What we are getting in Baha Mar is more clustering at the top of the price spectrum while the real growth in the Caribbean is in the middle.

When the project stalled we blamed the Chinese. There is plenty of blame to go around, not the least of which is the inept Christie government, desperate to take credit for a project which the FNM has had to save twice, once with Hubert Ingraham and now with Hubert Minnis.

It is hubris to believe that the recently announced Chinese government policy against investing in hotels, casinos and entertainment has its genesis in the hiccups at Baha Mar. The $3 billion spent on Baha Mar is but a rounding error for the accountants in Beijing.

We should consider instead that the new policy owes its origins to the election of Donald Trump in the US and to the irritation the Chinese have with his maladroit presidency. Chinese investments in the US have fallen off sharply this year and it is a safe bet that President Xi Jinping doesn’t want to pour his money into the US at a time of such uncertainty.

Last year, Chinese companies invested heavily in the US hotel and entertainment sector while the government wants to project its wealth as a force for good in the world – building roads and schools and hospitals.

We in The Bahamas, the rest of the Caribbean and the rest of world just got swept up in the wake caused by China shutting down their ATM.

Therefore, instead of criticising the Chinese and speculating on some supposed grand plot whereby the second largest economy in the world wants to take over and control the 138th largest, we should concentrate on how we could engage with them to our benefit.

We have a massive trade imbalance with China. We could start to fix that by getting more globe-trotting Chinese tourists to buy their duty-free Louis Vuitton bags and Rolex watches here.

Let’s ramp up pharmaceuticals production on Grand Bahama and export more to China. And, instead of allowing them or any other country to fish in our waters, let’s dispatch our new ambassador to negotiate for importing our seafood. Sea creatures that we curse or throw back such as urchins, hermit crabs or porcupine fish will find willing buyers in China alongside lobster and conch.

For centuries China has been a great player in foreign affairs. They established the famous Silk Road in 200 BCE to broaden trade and to cement their influence near and far.

The guiding principle of our foreign policy is peace with all nations. Let’s practice what we preach and stop bad-mouthing our Chinese friends.

President Xi has extended the Silk Road to the Bahamas but some of us are too blinded by our prejudices to use it.

THE GRADUATE

Nassau,

September 6, 2017.