Over the past decade, China has become an increasingly important source of investment for developing countries, both in terms of foreign direct investment (FDI) and investment financed by loans and grants from China’s state-owned banks. China’s investment in the Caribbean is still minimalOver the past decade, China has become an increasingly important source of investment for developing countries, both in terms of foreign direct investment (FDI) and investment financed by loans and grants from China’s state-owned banks. China’s investment in the Caribbean is still minimal, especially when excluding sizeable flows to the Cayman Islands and British Virgin Islands, and is largely directed toward securing supplies of raw materials and developing infrastructure, including the construction of buildings, stadiums, and roads. Opportunity exists to increase Chinese investment in the Caribbean, however, especially by means of a collective regional approach.

The Inter-American Dialogue is pleased to publish this issue brief prepared by Richard Bernal, senior counselor for the Caribbean region at the Inter-American Development Bank. As former Jamaican ambassador to the United States and permanent representative to the Organization of American States, Bernal has written and spoken widely on development policy, prospects for economic growth, Caribbean trade relations and China’s expanding presence in the region. This brief examines China’s growing role as an economic partner in the Caribbean, with a specific focus on Chinese foreign direct investment.

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.

We are pleased to recognize Open Society Foundations and The Henry Luce Foundation for their assistance in publishing this and forthcoming China and Latin America economics briefs.

Download the complete report below.