China’s economic growth has slowed down, but its multitrillion-dollar economy still affects Guam and other islands in the Western Pacific, said a local economist.
When China’s economic growth slows, it tends, like other countries would, to rattle its military sabers, said Joseph Bradley, senior vice president, chief economist and business continuity officer at the Bank of Guam.
Bradley and two other experts were guest speakers Friday at an economic forum sponsored by the Guam Chamber of Commerce Small Business Focus and Development Committee, in partnership with the Guam Small Business Development Center. The forum was held in the Outrigger Guam Resort.
China’s saber-rattling — such as its current territorial disputes with smaller neighboring countries in the South China Sea — could lead to increased U.S. military presence and spending in Guam, Bradley said.
He’s neutral on U.S. military expansion on the island, but Bradley said if U.S. military spending does increase significantly, more economic opportunities could open up on the island.
Increased U.S. military presence in Guam could add jobs, more income for island residents and increased tax contributions from the paychecks of military and support personnel, he said.
Tourism and defense spending are key drivers of Guam’s $4 billion-a-year economy.
The number of tourists from mainland China isn’t huge; it’s just above 1 percent of Guam’s 1.4 million visitor arrivals last fiscal year, Bradley said.
However, Guam’s visitor industry has been hoping that the mainland Chinese tourism market could become a major source of the island’s tourists.
Guam has spent years trying to pursue a visa-waiver program for mainland Chinese visitors, but has so far been unsuccessful.
Chinese investments are already dominant in Palau and Saipan, local experts said.
In the island Republic of Palau, Bradley said, Chinese investors have brought in “buckets full of money.”
They’re buying up hotels and apartment buildings and converting them into bed-and-breakfast places, Bradley said.
Some of the small, local tourism operators in Palau, however, are beginning to feel pinched by the massive foreign investment.
Bradley said Chinese investors are also bringing in their own tour boat and tour bus operators in Palau, so local small businesses are struggling to compete.
In Saipan, Chinese investments include proposed massive hotel and casino development projects.
If all of the proposed hotel developments in Saipan materialize, Saipan would have more hotel rooms than Guam, said money management expert David John, another speaker at the “Guam Economic Outlook” seminar.