Wednesday, December 1, 2010

Chinese in Broadcasting - Investment in Jamaica to reach the USA

It seems that development is finally coming to Jamaica, as the Government of Jamaica has signed agreements with the Government of People’s Republic of China to secure loans in exchange for which the Chinese Private Sector will be able to come to Jamaica and operate as an FDI (Foreign Direct Investor).

The Government of People’s Republic of China have already begun negotiating with the Government of Jamaica as it relates to acquiring the Kingston Wharves as part of a US$6 billion investment in the relocation of Tinson Pen and VernamField Aerodromes.

The development of the railway specifically for the transshipment of goods and services between the aerodromes and Kingston Wharves as stated in the article “CHINESE WANT KINGSTON WHARVES” published Monday, March 08, 2010 by Paul Henry Observer staff reporter, The Jamaica Observer

Senator Karl Samuda, Minister of Commerce, further goes on to stress the importance of the deal with Jamaica by stating “It is the last chance we have. It's the best opportunity we have and that's why we are pushing so hard to get investors, who have the capital and the willingness to share this with us and we feel satisfied that the Chinese are the ones that are best suited for that right now because we have not had the kind of interest and support that has been expressed by the Chinese.”

Thus, the learned John Public is somewhat wondering if this is another election scheme, despite Senator Karl Samuda, Minister of Commerce asserting that the negotiations had be on going for more than a year. It will be very difficult for the Government of Jamaica to aquire the lands of Vernamfield Aerodrome, let alone relocate Tinson Pen Aerodrome, as Vernamfield currently has squatter living on the land.

Many have constructed palatial houses over a twenty (20) year period on land that they had been warned by Government officials as being Government owned. In this economic climate, forcefully evicting twenty (20) year middle aged people and pensioners living on squatter land would not win Senator Mike Henry, Minister of Transportation and Works or the JLP (Jamaica Labour Party) much support, especially as this is his constituency.

Thus, John Public surmises that despite past broken promises, this extraordinary declaration by Senator Karl Samuda, Minister of Commerce is a sign of a genuine unified effort on the part of the ruling JLP. This unity serves the dual purpose of getting growth and jobs going from the only investor in town and thus staying in power by having success to crow about before General Elections in 2012.

It also satisfies John Public and most importantly the IMF (International Monetary Fund) as it relaters to the divestment of key infrastructure in a bid to remove non-productive Government of Jamaica assets and attract investment, much in the same way that it is divesting Air Jamaica.

But the next bit of news is what brings a sparkle in my eye. The Government of People’s Republic of China, possibly also as an additional tradeoff for billion of dollars of loans made to the Government of Jamaica, will be allowed to become a broadcaster in Jamaica.

Thus adding immeasurably to the value of broadcasting and music in a landscape that is already oversaturated with three (3) local free-to-air television broadcasters, namely TVJ, CVM TV and LOVE TV, numerous cable providers both legal and illegal, one (1) all Digital Triple Play cable provider, FLOW and nearly twenty (20) local free-to-air radio stations.

This the entry of another media company owed by the Chinese to potentially compete with them for the ever shrinking advertising dollar has the MAJ (Media Association of Jamaica) worried, as not only was their decision announced suddenly last week.

But the fact that the MAJ are and apparently were always unsure of the Government of Jamaica media policy is an indication that for the first time, the Media itself was in the dark about its own future as slyly hinted in the article “Chinese media proposal troubles local interest group”, published: Tuesday  April 6, 2010, The Jamaica Gleaner.

But the fact that Senator Daryl Vaz, Minister of Information has been saying that the Chinese broadcaster was not intended to compete with local broadcasters for the local advertising dollar and curiously enough would be broadcasting Chinese programs, as Senator Daryl Vaz, Minister of Information stated that “The Cabinet has given approval for the pursuit of discussions in respect to a proposal received for cooperation between the Government of Jamaica and the Government of People’s Republic of China to transmit Chinese programmes over free-to-air radio and television stations” .

This apparently is being done in a bid to facilitate closer ties between the Government of People’s Republic of China and Jamaica, relations with the communist state which began as far back as 1972 and apparently now being cemented with trade and cultural ties.

But why is the MAJ so up in arms? After all, these Chinese broadcasters present in the delegation from China Radio International and China Central Television would most likely be aware that there are plans to go DSO (Digital Switch Over) as stated in the article “Slow road to Digital Switch-Over - Cable groups mum; FLOW ahead but Network coverage behind”, published: Saturday  August 15, 2009 by Mark Titus, The Jamaica Gleaner.

The Spectrum currently being occupied by the free-to-air Radio and Television Broadcasters is not only being inefficiently used, as HDTV (High Definition Television) is more spectrally efficient. The Spectrum and the “white spaces” are prime real estate to be auctioned off as a means of raising initial capital to finance the DSO and allow Telecoms Provider access to low frequency Spectrum as demand Spectrum for mobile communications services.

3G and 4G data services are set to explode as soon as interest in having internet-on-the-go increases. Prices for Data Services will decrease due to the implementation of MNP (Mobile Number Portability) and speeds closer to that of wired services such as ADSL and Cable Internet, as predicted in the article "Can 4G wireless take on traditional broadband?" published March 22, 2010 4:00 AM PDT by Marguerite Reardon, CTIA 2010 - CNET Reviews.

A clue lies in the statement by Senator Daryl Vaz, Minister of Information in which he says that they [Chinese Broadcasters] will not be competing with local broadcasters for local advertising dollar.

This suggests that they will most likely be broadcasting not only Chinese programs (do I need to start learning Chinese from now?) but also Far East and Chinese Content and Advertising, ostensibly in a bid to sell goods and services directly to the Jamaica populace (which we already consume).

A price reduction windfall for the people of Jamaica which John Public welcomes with suspicion and elation.

It would also explain the previous month’s negotiation with Senator Karl Samuda, Minister of Commerce for acquiring Kingston Wharves as the Government of People’s Republic of China is possible the largest manufacturer of good and services in Asia. But as the Jamaica Market is not so large to consume all of the Chinese products and services to warrant owning the Kingston Wharves and going even further to invest a US$6 billion investment in the relocation of Tinson Pen and VernamField Aerodromes.

The development of the railway specifically for the transshipment of goods and services between the aerodromes and Kingston Wharves, indicates a long term push by the Government of People’s Republic of China to establish a foothold in Jamaica. Their intent is obvious: use Jamaica, which has a privileged position as member of CARICOM, good trade relationships with the United States of America as well as Free Trade Agreements with the United States of America and Central and South America to gain access to the lucrative American Market.

In short, this move is all about trade, both in terms of trade with Jamaica and the bigger Market, the United States of America and South America, ostensibly using cheap and plentiful Jamaican labour and possibly future investments in Energy to reduce their operating costs and thus make it possible to set up factories in Jamaica.

So the MAJ is being small-mindedly suspicious for no reason at all. It is not about and will never be about the chump change of the local advertising dollar. Albeit there is an outside possibility that the Chinese will also be going DSO (Digital Switch Over) now on the cards as stated in my blog article entitled “Broadcasting and Digital Switch Over - Back to the Future to compete with LIME TV”.

Broadcasting in HDTV possibly using a DVB-T (Digital Video Broadcast – Terrestrial) and providing premium cable channels via this wireless facility and a set top box and at lower prices is also on the cards. Telecoms could be their next investment also, combined with an all Digital broadcast facility to deliver Triple Play service wirelessly, effectively competing with the Big Three (3) Wireless Telecoms Providers and FLOW for Telecoms Market share, thus another reason to hasten the implementation of MNP (Mobile number Portability).

There is even the possibility of investing in the local Energy infrastructure by supplying technical expertise as well as LNG (Liquid Natural Gas). The People’s Republic of Trinidad and Tobago’s Prime Minister of People’s Republic of Trinidad and Tobago, Patrick Manning, had committed to supplying LNG for Jamaica as a “national priority” as stated in the article “LNG for Jamaica a National Priority - Manning”, published Friday June 26, 2009, The Friday Gleaner, by Linda Hutchinson-Jafar, Business Writer, The Jamaica Gleaner.

This would lower the cost of the production of alumina with Republic of Trinidad and Tobago supplying Jamaica LNG for Jamalco. This alumina would then be shipped to the Alutrint Facility in People’s Republic of Trinidad and Tobago to be smelted and converted to Aluminum. China can produce LNG at significantly cheaper prices than the People’s Republic of Trinidad and Tobago.

Currently there is no central body or cartel that controls the price of LNG Market worldwide, much in the same way that OPEC (Organization of Petroleum Exporting Countries) controls the price of Oil worldwide. Government of People’s Republic of China

LNG is merely a by-product as they produce more valuable chemicals such as methanol and ammonia, can flood the LNG Market with large and cheaper volumes of LNG. The same People’s Republic of China can supply both the Government of Jamaica and the Government of the United States of America at cheaper prices in a bid to wean them off a dependence on Foreign Imported Oil, the price of which is constantly rising.

The Government of People’s Republic of China, first in acquiring Kingston Wharves and now being a local Broadcaster. Their next investments possibly being in the lucrative multibillion dollar Energy Sector after liberalization, currently being held up in Parliament as stated in the article “Government, Opposition wrangle over Energy”, published Saturday April 3, 2010, The Saturday Gleaner.

All this is both welcome and wonderful, especially for the JLP and now the ruling PNP now seeking to establish themselves as the party that created growth and jobs for all and a John Public wanting change. 
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