The Wall Street Journal reports that a $3.4 billion hotel, casino and resort in the Bahamas will break ground on Monday with the help of two unlikely partners: China State Construction Engineering Corp. and the Export-Import Bank of China.
The Journal says the project in Nassau will be the largest property to be built and partly owned by a Chinese company outside of China.
Money appears to be at the heart of the matter — the Export-Import Bank is providing a $2.5 billion loan for the project. Part of that financing deal allows China State Construction to take a $150 million equity stake and “import” 8,000 construction workers to build the resort.
It’s not the first time Chinese workers have been “imported” for a construction project in North America. China State Construction recently renovated the Alexander Hamilton Bridge in New York City and built a new Metro-North train platform at Yankee Stadium.
I don’t know what those 8,000 workers will be getting paid in Nassau, but I bet it will be less than what a crew from North America would cost.
That couldn’t bode well for U.S. construction workers, who face 20 percent unemployment and developers looking to save on project costs amid a tough financing environment.
Is there more to come?
The Journal says the Chinese government is encouraging homeland companies to go abroad to help diversify China’s $2.85 trillion foreign-exchange reserves and reduce its reliance on the greenback.