China’s population of 1.4 billion includes grandparents whose vision has been vastly improved by eye lenses produced in Barbados. In an era when the ‘Made in China’ label frequents store shelves here and abroad, such a major breakthrough is an exception to the norm. Yet it illustrates the possibilities which exist.
“We are the biggest exporter from Barbados to China and we have been doing it for over ten years,” Ian Hickling says proudly.
He is the President of Lenstec (Barbados) Inc., which has manufactured and exported millions of eye lenses since its establishment in Barbados more than 24 years ago. “We sell millions of dollars’ worth to China every year, which is hundreds of thousands of lenses. They are one of our biggest customers and they keep a good proportion of our 260 staff employed, so we are huge supporters of China,” Hickling declared.
Barbados’ Armstrong Group of Companies imports items from the Asian giant and favours the prices on offer. The company operates in the import, wholesale, distribution and marketing industries. It also has a manufacturing arm. Despite decades of experience doing business here and overseas, representatives of the group say they have not been able to penetrate China’s huge market with their own products. They have visited the country three times, but so far it has not been a case of third time lucky.
“We import a raw material from China for one of our products that we manufacture here. We import through an American company which does the due diligence for us. We are happy with the delivery and the quality. The main advantages of importing from China are the prices. A lot of products exported from the US are actually made in China and then re-exported,” explained Armstrong Group director Andy Armstrong.
“Challenges are that often you have to take larger amounts than you would be comfortable buying and also you usually have to pay upfront. Unless you know the exporter or have an intermediary who looks out for you in China, there is a danger that you could pay upfront and not get the goods,” he noted.
For Armstrong, exporting to China is the higher hurdle. Having to comply with stringent regulations before you enter remains the biggest barrier.
“We have been trying to export Claytons Kola Tonic to China for a few years now. It is a very long process. China has a lot of rules and regulations that need to be satisfied before you are allowed to export to them,” he stressed. “We are working with a company now to see if they will import some. It is hopeful but we have been there three times before and we were never able to sell anything there despite a lot of effort and cost. It is frustrating but the potential prize if you can break into China is huge.” While Hickling’s company sells to China, he can relate to Armstrong’s challenges. This is especially so since Lenstec’s products are medical and therefore heavily regulated. “Our products have to be registered with the Chinese version of the US Food and Drug Administration and that used to take about 18 months, now it takes about three and a half years. It’s a very sophisticated system,” he observed. “What we are selling tends to be for older people with cataracts and because the Chinese government pays for those lenses the government is trying to encourage domestic production so that is something we are coming up against all of the time.”
THE KEY TO SUCCESS
Hickling said the key was building and sustaining relationships with people in China. “That’s why we go every year because we want to make sure we keep our relationships. We have a good distributor there and they are responsible for registering the products with the Chinese food and drug administration. So for us it’s a relatively easy task.” “So if you are trying to do business in China the most important thing is finding a good person to have a relationship with, a distributor or an agent,” he advised.
The business traffic between Bridgetown and Beijing is not one-way, but the vast majority flows in Barbados’ direction. Information provided by the Barbados Statistical Service (BSS) showed that between 2014 and 2019 Barbados imported more than $1.16 billion in items from China. Its exports in that period were about $106 million in total value. The BSS said last year Barbados bought about $184.2 million worth of goods from China, but exported the equivalent of $81 916. The state agency gave no reason for the drastic fall-off when compared to 2018’s reported $2.89 million in exports. And even that was a reduction when matched up against 2016’s $44.1 million in exports to China.
The Chinese-made items brought into this country are numerous, in both number and variety. There is not enough space to list them all.
Based on a breakdown of the BSS data, in 2019 alone Barbados’ China imports included vegetables and fruits, canned foods, fish, beverages, home improvement and building materials, toiletries, office supplies, personal hygiene products, automobile tyres, agricultural insecticides, plastic utensils, clothing, fake hair, kitchen appliances, musical equipment, fire alarms, and industrial tools. Most of these items are imported by businesses, but individual Barbadians conduct their own trade with China. One of them is a baker, Lisa. For the last five years she has been a user of AliExpress, the international online retail service owned by China’s Alibaba Group. Alibaba is a multinational technology company specialising in electronic commerce, retail, internet, and technology. “I started using the service to purchase baking supplies because the prices were cheaper when compared to other options,” she said.
“It is cheaper but the process takes long because obviously it is coming from China so it will take about three months to get to Barbados. “I would recommend it to others, the only improvement they need is the time frame between when you order and the time it takes to get here. But the products that they offer are wide and varied and they are reasonably priced and you have free shipping,” Lisa added.
Alicia Nicholls is a trade researcher with the Shridath Ramphal Centre for International Trade Law, Policy & Services at The University of the West Indies’ (UWI) Cave Hill Campus.
Nicholls, who also has a blog on trade-related matters, said China was third only to the United States and Trinidad & Tobago as Barbados’ largest import market, but sold comparatively little to it.
What Barbados sells to China is limited. Exports were largely in the category of optical, photo, technical and medical apparatus, she said.
She acknowledged that regulatory issues and the absence of direct air and sea connectivity were challenges to Barbados and its Caribbean neighbours that wanted to increased trade with China.
There was a need for “sound market research to assess the level of demand for any goods or services they wish to offer, the level of competition in the market and whether, at a firm level, they have the capacity to meet demand”, she said.
Also needed was an appreciation of the legal and regulatory context, such as approval processes, tax and labour laws, intellectual property rights protection and any laws governing repatriation of profits.
Nicholls suggested one way of overcoming the linguistic, cultural, logistical and regulatory barriers included engaging the services of the growing Chinese diaspora in the region and returning Caribbean scholars from China who speak the Chinese language and are aware of the Chinese business culture and often possess networks of business contacts.
Having established diplomatic ties with China on May 30, 1977, Barbados has benefitted from the relationship in various ways beyond trade. Barbados has both a Bilateral Investment Treaty and a Double Taxation Agreement with China.
Barbadians perhaps best relate to China’s presence here via the several restaurants offering various forms of Chinese cuisine and its presence in the construction sector, as seen in places such as the Garfield Sobers Gymnasium, Wildey, St. Michael.
Over the years Barbados has benefitted from Chinese investment and other forms of assistance, including scholarships and technical expertise. China’s Export Import Bank provided funding for the redevelopment of the historic Sam Lord’s Castle and a Chinese contractor is carrying out the work at the St. Philip property.
The Chinese Embassy in Barbados was, however, unable to say how many Chinese- owned businesses there are in Barbados, but Chinese people are a growing segment of the Asian population here.
Last year Barbados also signed on to China’s massive Belt and Road Initiative (BRI), a global development strategy involving infrastructure development and investments in dozens of countries.
China’s Ambassador to Barbados, Yan Xiusheng, told China’s state-owned People’s Daily newspaper that under BRI the two countries would cooperate in various areas, including shipping, aviation, infrastructure and modern agriculture.
Language is another barrier being broken down. At UWI, Cave Hill there is The Barbados Confucius Institute, a non-profit public educational organisation that provides Chinese language and cultural training resources, and facilitates cultural and educational exchanges. Barbados’ current Ambassador to China, Francois Jackman, who is a former director of The Barbados Confucius Institute, told The People’s Daily recently that as Chinese companies come to Barbados and increase investment in the country via BRI, enterprises from Barbados would also enter the Chinese market.
This would be via platforms including BRI and the China International Import Expo, which Jackman said created opportunities for products and services of Barbados to enter the Chinese market.
Barbados also has The Association of Barbados- China Friendship (ABCF), which was launched last year. Its president, former Central Bank of Barbados Governor Dr. Delisle Worrell, said at the launch that it was a “people-centred organisation with an emphasis on facilitating personal contacts between Barbadians and Chinese”.
While Barbados will never be able to compete with China’s manufactured goods, there are opportunities for it to pursue niches, especially in the provision of services. This issue was highlighted recently when the ABCF and The Barbados Confucius Institute held a symposium titled Exploring New Horizons In Caribbean-China Trade and Investment Relations.
The areas of possible pursuit suggested included film making, the provision of financial services, attracting Chinese tourists, and being a hub facilitating business to and from China.
There are reasons to be optimistic that Barbados can benefit from its relationship with China, says international trade expert Matthew Wilson. Wilson, who is a Barbadian, is the chief of staff and chief advisor to the executive director of the International Trade Centre (ITC). The ITC is a joint agency of the World Trade Organisation and the United Nations through the United Nations Conference on Trade and Development. Wilson said from Geneva, Switzerland that based on an ITC assessment of Barbados’ goods and services export potential with China, there were opportunities for major growth. The ITC found that export potential of US$30.7 million in China, with 55 per cent of this now untapped. While artificial parts of the body (eye lenses) were now the biggest export, Wilson said for Barbados “additional exports appear to be possible in other sectors like alcoholic beverages, electronic equipment, optical products, watches and medical instruments and sugar”.
The potential was even bigger in relation to services exports - US$1.5 billion.
“The large majority of this potential, 97 per cent of it, is in the travel sector. Essentially you are talking about air links with China, tourists from China, everything that goes around that. China is the largest market in terms of export potential of services from Barbados, followed by Poland, the US and the UK,” he explained.
However, Wilson said there was a need to “have the necessary policies in place”.
“Right now the two countries have a very friendly relationship. We have a very well- working embassy in China, and a very well- working Chinese Embassy in Barbados where they look at cultural exchanges and educational exchanges and all that. The ante now needs to be upped and we need to now look at the economic part of that relationship,” he recommended.
“To make that happen we have to look at the policies that would allow trade in goods and services to flow freely between the two economies, to have a better idea of what China’s market demands are versus what Barbados can produce, and more importantly, invest more in the services and travel industry because this is where the biggest potential is.
“Part of this has to do with appropriate air links as well and better marketing and branding of Barbados in China as well,” Wilson added.