China policy
Oct 06, 2016, , http://www.kaieteurnewsonline..../10/06/china-policy/
The repossession of state lands given to Chinese mega company Bai Shan Lin will have severe repercussions for Chinese investments in Guyana. The government has taken this decision without considering the repercussions for investment and business in Guyana.
The government has not carefully considered the economic and the political consequences of its decision. China is not the United States. It is more important to Guyana than the United States.
The Chinese have already scaled back on investments in Guyana following an aggressive attitude towards their nationals and companies by the Guyanese government. This latest decision will force them to halt almost totally all investment and support in Guyana.
Guyana has to consider the fact that China has other options in terms of investments and markets. Its economic growth has slowed and therefore it is importing less in Latin America and the Caribbean. The countries of South America are better suited to Chinese investments than Guyana. Guyana is shooting itself in the foot by taking the sort of action that it is taking against Bai Shan Lin.
Guyana is in competition with the rest of South America for Chinese investments. The government is so obsessed with believing that any arrangement which China signed with the PPPC must be discredited. It is not thinking through the full ramifications of its actions.
Guyana needs a China policy. It is too important a country for there to be a loose or no policy at all towards this Asian economic giant.
Guyana’s economic interests are at stake. The economy can grind to halt should Chinese companies withdraw from Guyana.
The government does not understand how the Chinese operate. They can wait out the five-year term of this government. They are not that desperate for Guyana, not with an economic slowdown in China and the countries of South America clamouring for increased trade and investment.
If Chinese companies withdraw from Guyana, it will ruin the investment climate in the country. The climate is already bad with the government also repossessing the lands leased to a private individual. These actions by the government are sending shivers down the spine of investors, both local and foreign.
The loss of Chinese investment will hurt the Guyanese economy. Chinese assistance to Guyana is more substantial than the United States. A depressed global economy has caused problems for Chinese companies in Guyana. Guyana, of all countries, should understand the fact that the global economy can affect local investment. It should be supporting foreign companies to ride through this difficult period.
In the case of Bai Shan Lin, the government is not dealing with a small company. It is dealing with a sole trade. It is not dealing with a family-business. The government is dealing with a firm with substantial assets. The company is obviously in serious financial problems. But many companies are in serious financial problems. These companies can ride through the crisis, merge with other companies or sell their shares to another firm.
Investment from China will dry up with this threat to repossess lands given to Bai Shan Lin on the East Bank of Demerara. The Chinese are patient. They will wait out the term of this government. They can afford to wait. Guyana cannot afford. Guyana needs Chinese investments.
If China freezes all its investments, then where will the stimulus that is badly needed from the economy come from? Not from the Americans!
It will not also come from local investors. Business has slowed considerably since the coalition came to power. It will slow further because of the loss of the rice market in Venezuela and the fact that local investors are worried about the government land repossession policy.
The government does not seem to have any control. It is acting impulsively. The left hand does not seem to know what the right hand is doing.
