Identifier
Created
Classification
Origin
05KINGSTON1757
2005-07-18 20:32:00
UNCLASSIFIED
Embassy Kingston
Cable title:  

JAMAICA STRENGTHENS ECONOMIC TIES WITH CHINA

Tags:  ECON EFIN JM 
pdf how-to read a cable
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 02 KINGSTON 001757 

SIPDIS

STATE FOR WHA/CAR/ (WBENT),WHA/EPSC (JSLATTERY)

SANTO DOMINGO FOR FCS AND FAS

TREASURY FOR L LAMONICA

E.O. 12958: NA
TAGS: ECON EFIN JM
SUBJECT: JAMAICA STRENGTHENS ECONOMIC TIES WITH CHINA

REF: KINGSTON 386

UNCLAS SECTION 01 OF 02 KINGSTON 001757

SIPDIS

STATE FOR WHA/CAR/ (WBENT),WHA/EPSC (JSLATTERY)

SANTO DOMINGO FOR FCS AND FAS

TREASURY FOR L LAMONICA

E.O. 12958: NA
TAGS: ECON EFIN JM
SUBJECT: JAMAICA STRENGTHENS ECONOMIC TIES WITH CHINA

REF: KINGSTON 386


1. Summary: Recognizing China's emergence as an economic
powerhouse and the attendant benefits to be derived, the
GOJ led by Prime Minister PJ Patterson has moved to forge
closer and stronger ties with the Government of China.
The fledgling economic relationship between both countries
received a fillip in February when a delegation of Chinese
government and business officials visited Jamaica,
culminating in the island receiving approved destination
status. The economic ties were further strengthened in
June when Patterson signed four bilateral agreements
covering bauxite, education and technical cooperation
during an official visit to China. These agreements
should augur well for Jamaica's economic development,
particularly at a time when the country is losing its
preferential trade arrangements. End summary.


2. Although diplomatic and economic ties between Jamaica
and China date back to 1972, there has only been a
mushrooming of the economic relationship between both
countries in 2005. This is not surprising given that
Jamaica's preferential trading arrangements have been
coming under immense pressure, while China has been trying
to extend its sphere of influence. In February 2005, a
Chinese delegation of government and business officials
visited Jamaica for a four-day Trade Fair, the highlight
of which was the granting of approved destination status
to the island (REFTEL). With outbound Chinese visitors
reaching almost 30 million in 2004, Jamaica can expect to
grow its share of Chinese visitors by the end of 2005.
Numbers apart though, Chinese visitors are important to
Jamaica's tourism because of their long length of stay.
Jamaica and China also signed twelve bilateral agreements
during the trade fair. Buoyed by China's show of interest
in Jamaica, the GOJ appointed its first resident
ambassador to the People's Republic of China in April

2005. Seeking to capitalize on the country's renewed
relationship with China, Prime Minister PJ Patterson, who
currently chairs the Group of 77 of which China is a
strategic member, made an official visit to China from
June 19 to 24. Patterson and Chinese President Hu Jintao
signed four bilateral agreements covering bauxite,
education and technical cooperation.



3. With Chinese demand for high priced aluminum on the
increase, China Minmetals Corporation agreed to pursue the
feasibility of establishing a bauxite and alumina refinery
in Jamaica. Due diligence and site visit for the 1.4
million ton per annum refinery has already taken place.
The GOJ-led delegation also signed a memorandum of
understanding (MOU) with China to undertake the
development of professional skills in various fields of
education, technical assistance for Chinese training and
to facilitate cooperation between institutions of higher
learning in both countries. The GOJ was also granted USD
1.3 million in aid to be used for the implementation of
economic and technical projects. In a follow up to
February's MOU, a Chinese delegation is set to visit
Jamaica in July for further talks on the restoration of
the rail service. The team is expected to assess the
routes from a technical and engineering point of view and
determine a date for the possible resumption of service.
Under the agreement China would provide passenger coaches,
including cargo wagons and locomotives.


4. Patterson also held discussions with Chinese
entrepreneurs on the redevelopment of a Chinatown in
Kingston. To this end, someone will be sent to work with
Jamaica's Urban Development Corporation to see how the
China Town concept could fit into the redevelopment of
downtown Kingston. Patterson also used the opportunity to
woo Chinese investors, by highlighting a number of
positives in Jamaica. He pointed to Jamaica's stable
economic climate as reflected in rising NIR, a stable
currency and positive ratings by international rating
agencies, which have culminated in increased foreign
direct investment. In citing Jamaica as the ICT center
for the Caribbean, he stated that telecoms liberalization
has opened the way for access to services such as
broadband and Internet and fixed voice telephony. He said
the expansion of the island's port facilities through a
partnership with the Port Authority of Jamaica and China
Ocean Shipping Group Company would establish Jamaica as a
distribution hub for the export of Chinese goods to the
Americas. Patterson also marketed a number of investment
opportunities, chief among them the Highway 2000 project
and a convention center in Montego Bay. The Chinese
government has already agreed to provide concessionary
financing for the construction of the convention center
and a multi-purpose stadium in the western end of the
island.


5. Comment: The visit of a Chinese delegation in
February and more importantly the recent visit of
Patterson to China could bring tangible economic benefits
to Jamaica in the medium to long term. In particular, the
island should benefit from China's ever increasing demand
for aluminum, food and tourism services. Jamaica's
already buoyant tourism industry should receive a further
boost from the influx of Chinese visitors, with
preliminary figures showing a jump in visitors from China
since the approval of destination status. If the Chinese
interest in reviving Jamaica's moribund railway service
should bear fruit it would also bring immense economic and
social benefits to the country by way of cheaper
transportation and reduced traffic congestion. The
possible establishment of a Chinatown would also provide a
much-needed fillip for the stalled urban renewal effort.
These developments should help to temper some of the
dislocation expected from the dismantling of the island's
preferential arrangements. End comment.

TIGHE