Dr Warren Smith, President, CDB, speaking at the opening ceremony on July 10, 2017. Credits: Caribbeannewsnow.com
BRIDGETOWN, Barbados.- As global financial institutions continue to withdraw banking services from the region, the Chinese renminbi could help to safeguard the region’s access to global financial services. This was one of the topics explored at a conference hosted by Caribbean Development Bank (CDB), held under the theme ‘Chinese Renminbi in the Caribbean: Opportunities for Trade, Aid and Investment’.
“The conference comes at a time when the ability of many Caribbean countries to engage in international trade and financial services is being undermined by the withdrawal of correspondent banking services by North American and European financial institutions. An urgent resolution of the dilemma is required,” said CDB, Dr Warren Smith.
Smith also highlighted the partnership between China and the Caribbean, which has been growing in recent decades.
“China has itself been successfully undergoing major economic transformation built on the win-win strategy of opening-up for common prosperity. It is that strategy that helps to explain the strengthening of China-Caribbean diplomatic ties and our increasing engagement in the areas of investment, contracted projects, and bilateral trade over the past two to three decades. One of the spin-off benefits of the transformation taking place in China is the rapid internationalisation of the renminbi, starting in 2006 with the floating of the exchange rate,” he said.
The conference also explored the opportunities for deepening trade between China and the Caribbean and how greater use of the renminbi, which is now an International Monetary Fund (IMF) reserve currency, could facilitate greater foreign direct investment from China into the Caribbean.
As an IMF reserve currency, the renminbi is now in the IMF's special drawing rights (SDR) basket, which determines currencies that countries can receive as part of IMF loans. The other currencies in the basket are the US dollar, the euro, the yen and British pound
Chinese ambassador of to Barbados, Wang Ke, said China is continuing to build economic and diplomatic partnerships in the Caribbean, noting that the country welcomes further cooperation efforts.
“In the wake of the 2008 financial crisis many Caribbean countries have struggled with bottlenecks such as having indebtedness, difficult access to finance and insufficient connectivity, and with addition of rising global protectionism and uncertainties between the Caribbean and its traditional partners, the Caribbean countries are facing more challenges in achieving sustainable growth. China is working on building new international relations based on cooperation and mutual benefit and stands ready to strengthen global cooperation with the Caribbean countries,” she said.
The conference was held on July 10, 2017, and topics discussed included deepening investment cooperation between China and the Caribbean, and how the use of the renminbi could enhance trade facilitation, finance, banking relationships, and tourism.
The agenda included presentations by, and panel discussions featuring, thought leaders and experts from the Caribbean and China. Approximately 100 participants from regional public and private institutions, including commercial banks and government ministries, attended.
China has been a member of CDB since 1998.