Commentary: Quick thought on Barbados

When Barbados dumped Queen Elizabeth II as their head of state, there were concerns that the move was a precursor to increasing the level of Chinese influence in the Caribbean in general and Barbados in particular.  It will be a while before the Chinese catch up to the level of investment the United States has in Barbados.

While Chinese products account for nine percent of the island nation’s imports (BSD134.07 million), products from the United States account for 47% of Barbados imports (BSD1,574.28 million).

China will have to up its quality and quantity game to make a dent in U.S. market share in the region.  Great Britain sure isn’t doing that where its product accounts for four percent of imports to Barbados.  The reportedly lukewarm economic relationship between the United Kingdom and Barbados may not be helping the UK’s market share of imports or maybe the UK simply doesn’t have much to offer.

At the current exchange rate of CNY/BBD=0.29188, if the Chinese were to increase their quality and quantity of shipment, all things being equal, it would be one more country, this time in the Caribbean, that could reduce its cost of economic growth by turning away from US currency (USD/BBD=2.00) and investing in technology and infrastructure at a lower rate.

https://tradeswithedge.com/?r=348

No, the USD/BBD or CNY/BBD currency pairs won’t be entering the top tier of traded currency pairs any time soon, but China’s presence in the region should continue to put the US on economic alert.

For the retail trader, the bigger picture is how important geopolitical issues are to currency trade.  Shifts in currency regimes are not just relegated to Asia and Europe.  The Latin America and Caribbean regions are pretty large, diverse, and resource rich. 

Maybe American policy makers believe they can continue to ignore the region.  Bankers are not which means that traders should not.

Alton Drew

26 August 2022

 Disclaimer: This blog post should not be construed as legal advice or an agreement to provide legal or political analysis.  To set up a consultation, contact us at altondrew@altondrew.com. Follow me on LinkedIn at www.linkedin.com/in/alton-drew-aa56b31a3.