China’s Rising Investment Profile in the Caribbean

The Inter-American Dialogue is pleased to publish China’s Rising Investment Profile in the Caribbean, an issue brief prepared by Richard Bernal, senior counselor for the Caribbean region at the Inter-American Development Bank. Bernal’s paper is the fifth in a series of economics briefs published by the Inter-American Dialogue’s China and Latin America Program. Previous contributors to the series have addressed such topics as China’s approach to renminbi internationalization in Latin America, China’s free trade agreements in Peru and Chile, commodities-related trends in the region, and the competitiveness of Asian and Latin American cities.

Bernal finds that China’s FDI in the Caribbean increased by more than 500 percent in relative terms between 2003 and 2011, with estimated stock of FDI totaling almost $500 million in 2011. Chinese companies have initiated ventures in more than a dozen Caribbean countries. Cuba, Guyana, Suriname, and Jamaica stand out as the most important destinations for investment.

Also, diplomatic competition between China and Taiwan continues to influence investment. Despite an informal true in place since the election of Taiwanese president Ma Ying-Jeou in 2008, China invests most often in countries that recognize the People’s Republic of China as the sole legitimate Chinese government.