October 26, 2020

The “Yellow Peril”

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Sax Rohmer, an English novelist, wrote a number of books about a Chinese criminal called (Dr.) Fu Manchu in the early to middle 1900’s. His heroes faced the worldwide conspiracy of the “Yellow Peril.” The term was used as a colour metaphor for races that originated in the late 19th century with immigration of Chinese labourers chiefly to the USA.  Sax Rohmer would be astonished to know that his “Yellow Peril” is well on its way to world domination by legitimate means and invitation. A recent BBC poll of 22 countries shows that China plays a significantly more positive role in the world than the USA, Russia or UK. If all goes according to Beijing’s plans, in the next few decades China will take its “rightful place” among the great powers in the international system–if not atop the international system.  China’s actions are worrisome in Latin America and the Caribbean because some national leaders, such as Venezuela’s Hugo Chávez, welcome the arrival of another world power to offer an alternative to the United States. On 5th Sept. our premier, Hon. McKeeva Bush signed a tax deal with the People’s Republic of China. He said it was a “significant step in enhancing Cayman’s relationship” with China.

At a cruise industry conference two weeks ago, Mr. Bush said a pending deal with a Chinese developer could be finalised next month, allowing construction of a dock facility to begin by the end of the year.  Under the proposal, China Harbour Engineering Company Ltd, a subsidiary of China Communications Construction Company Ltd, would pay to develop a dock and retail complex, estimated to cost up to $300 million. The state-owned Chinese company would manage it for 49 years to recoup its investment.  Despite Mr. Bush’s assertion that the project will create many jobs for our failing building industry this has not been borne out in other countries where Chinese construction companies have moved in. There, they have imported thousands of Chinese workers who stay in camps and send their earnings home, depriving the local economy of stimulus. Ground was broken in February on Baha Mar, a 1,000-acre resort-casino at the city of Nassau on New Providence Island. When completed in 2014, it will encompass 3,500 rooms in six hotels and a number of condominium buildings. China State Construction Engineering Corp. that has a financial stake in the project hired its subsidiary, China Construction America Inc. (CCA), to serve as the general contractor and construction manager. China State immediately requested permits for 8,150 foreign workers, presumably mostly Chinese, constituting 71% of the total workforce of 11,500.

One must also have real concerns over China Harbour’s cost overruns on a project in Jamaica, and over the recent conviction of the son of Bangladesh’s former prime minister for taking bribes from China Harbour.

We have seen our cruise passenger volume drop dramatically (26%) over the last few months whilst overall numbers have increased throughout the rest of the Caribbean. Tourism Association President, Trina Christian said recently, “Every day that goes by that we are not building our pier it is really setting our destiny for the next 18 to 24 months. This is because cruise lines book their ports of call up to two years out. By not building a pier there is going to be certain limitations on how many tourists we are going to have and what that means to our economy.”

When a company is putting 300 million dollars into a project the reality is, despite Mr. Bush’s claim that there will be protection for Caymanian workers, they ‘call the shots.’

Cruise line executives are taking a wait-and-see approach because previous elected officials have said a berthing facility was in the works and none materialised. So, we have to move quickly, and there would seem to be no alternatives. Contractors Association President Rayal Bodden claims that, “Investment managers of hedge funds are looking for these kind of projects. It would be very easy for a reputable company to raise this kind of money.” That may have been the case two years ago but I seriously doubt this is the case now.

We have to trust Mr. Bush to get the very best deal he can but the time of waiting is over. If there are anymore delays something more unpleasant than the “yellow peril” may be upon us.

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