Structuring deals with Chinese partners can take a long time, according to a Cayman professional who counts the Export Import Bank of China among his firm’s clients.
Martyn Bould, chairman of Rider Levett Bucknall Caribbean, said one of the most visible developments in the region was the Baha Mar complex in the Bahamas. The deal alone for the $3.5 billion project took four years from initial discussions to completion, something that can be common in such discussions, he said.
“Normally it involves a requirement that there are Chinese workers, so for many of our islands there are work permit issues. Those are political issues.
There are often concessions that the Chinese may be looking for to do with duty concessions and so on.
About 1,000 acres [of the Baha Mar development] involved public and private properties.
“It is complex … the open market is just not lending for projects generally, and certainly not projects of this kind,” Mr. Bould said.
The chairman was in attendance at the Caribbean Hotel Investment Conference and Operation Summit in Nassau, Bahamas, where more than 200 delegates discussed creating successful integrated results, the importance of hospitality education and training, survival tactics and attracting alternative capital to the Caribbean.
“The Brazilians also have an interest in similar types of investment,” he said.
Substantial tourism
At the conference, a view from Adam Wu of the China Business Network was that there is an increasing number of middle income Chinese travellers that could represent a substantial amount of tourists coming to the Caribbean.
“Part of the interest of the Chinese into the region is to pave the way of welcoming Chinese tourists into the Caribbean,” Mr. Bould said.
“Hence his stated view that a lot of the loans which have been made for infrastructural projects – concessionary loans at quite low interest rates – according to Dr. Wu, is in part soft diplomacy.”
Mr. Bould said the Chinese were looking for a strong track record in their partnerships.
“They are not in the hotel business nor do they want to be … they are interested in the development aspect, but they do not want to be the developer,” he said.
At the conference, it was felt that private/public partnerships were essential. Some of the concessions in attracting investment required were
“I think what we might find difficult here with large numbers of imported labour would be [a potential] a strong resistance,” he said.
“The way Bahamas overcame it was that the first $400 million of the project would have to go to Bahamian contractors.
[Some of the work] went to Bahamian contractors with no Chinese involved which kick-started the local economy.
“It’s negotiable,” he said. “Originally, the Bahamian content in that project was $200 million but that was raised during negotiations.”
Man camps
One aspect of imported labour is the question of where an influx of non-native workers will be housed during the project.
At some of the China Harbour Engineering Company’s Jamaican developments, this takes the form of barrack-like dwellings, where the Chinese workers stay close to the site.
“The issue of ‘man camps’ is very interesting; people always ask about it. They have their own entertainment, their own food and the first work permits [at Baha Mar] were for chefs. They have first-class conditions, air conditioning,” Mr. Bould said.
“The other thing is that getting workers here is a challenge; imagine hiring someone from a rural area of China and sending him a Bahamian immigration form [for example], which is not dissimilar to a Caymanian one.
What does a police record from remote China really mean? “Physically they have to fly through Moscow and Cuba because they cannot go through the United States.”
He said the Chinese Embassy in Nassau had addressed that issue by issuing special visas specific to the projects there.
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I see no reason why we should exercise patience – the project should have been started already, and would have been if the Government had only accepted one of the English speaking companies which bid on the project. This is ridiculous – will we be asked to speak Chinese soon?!
Check out this article –
http://blogs.ft.com/beyond-brics/2011/06/07/the-chinese-are-coming-to-cuba/#axzz1ejvjaHzX
– and note the last paragraph.
Also read this warning, issued at the beginning of the year –
http://kerrycollison.blogspot.com/2011/01/beware-of-chinese-executives-bearing.html
I think you need more than patience to deal with the Chinese.
Cayman cannot wait for 4 years of negotiation before a project begins. We are in a financial crisis NOW. And forcing us to hire Chinese Workers is outrageous — when we sign a deal with any other country, do they make this requirement? OF course not! As if that’s not bad enough, demanding duty concessions on top! Outrageous.
Give our contracts to the USA — the # 1 country that sends us tourists and keeps Cayman afloat — they need the money and the work. Or to Britain — we look to Britain to help us out in a crisis and lend us money — then aren’t we morally obligated to give them any lucritive contracts? Dealing with China is the kiss of death. It should not even be under consideration.
I agree with CaymanMermaid. I am sick and tired of the Chinese everywhere making demands on failing nations, and infiltrating these countries with their policies and demands.
I will go back to beating mosquitoes before I agree to any business dealings with the Chinese. They will cripple your economy.
Stick with the Americans, I agree, they are spending millions in our country every year. We see from the Filipinos how much money remains in this country. That is what they do, they come to your country make loads of money of deals and jobs and send it all home, and they spend as little as possible. They even share cloths, beds, eat off the same plate to fatten their country’s public spending when they send back the majority of their earnings.
I say we don’t have to travel that far for better business. Who really trust the Chinese? I will tell you, not even them themselves do.
@ John Evans: Thanks for sharing the information. I have heard of such shady business going on in China, but didn’t realize the extent in which the recent growth in commercial crim from Asia had increased. Good info1