Fellow citizens, I am pleased to report to you this evening on the progress made during my visit last week to the People's Republic of China and the discussions I held with officials of the Chinese Government regarding the normalising of diplomatic relations between the PRC and Grenada.

Given the importance of ensuring Grenada is strategically placed in the international community, and in light of the devastation caused to our Nation by the passage of Hurricane Ivan, your Government has been reviewing all development strategies. This, naturally, includes our diplomatic relations.

The world has changed in the last two decades. The fall of the Soviet Union unleashed significant changes; so too has the growth of terrorism and the events following 9/11.

The forces of globalisation and the shift in economic power, along with technological developments, have all made the world of 1989 significantly different from the world of 2005.

Grenada, a Small Island Developing State, cannot afford to ignore these changes or refuse to adjust accordingly. In a changing world Grenada must adjust; Grenada must accommodate these changes.

We will be continually grateful for the many benefits the Government and people of Grenada have received from the Republic of China on Taiwan, and the many friendships that have been formed since establishing diplomatic relations with the ROC in 1989.

None the less, our responsibility requires us to place the long term interest of our people in the forefront and to make those changes in policy that can best secure the well being and development of Grenada, Carriacou and Petit Martinique.

We have had to make some difficult decisions. Such decisions took considerable soul searching. However, international trends dictate that we consider Grenada's global position. We cannot ignore the fact that the number of countries in the world that have diplomatic relations with China has been steadily increasing since the 1970s.

By normalising relations with China, Grenada joins some 156 other nations with such relations. This includes the majority of our Caribbean neighbours. It is sensible and practical for Grenada to harmonise its foreign policy and diplomatic interests with those of our Caribbean sisters and brothers.

I refer to the Governments of Antigua and Barbuda, the Commonwealth of the Bahamas, Barbados, the Republic of Cuba, the Commonwealth of Dominica, the Republic of Guyana, Jamaica, St. Lucia, the Republic of Suriname and the Republic of Trinidad and Tobago.

As a matter of fact, Grenada first established diplomatic relations with the People's Republic of China in 1985. However, in July 1989 the Government of Grenada severed diplomatic relations with the PRC and established diplomatic relations with the ROC on Taiwan. Therefore, fellow citizens, the decision to normalise relations with the People's Republic of China is not an unusual step to take.

While we have been contemplating this change for some time now, Ivan forced us to act with decisiveness since the entire economic and social structure of our Nation, along with our physical infrastructure, had been drastically altered.

Hurricane Ivan caused Government to review all areas associated with the sustainable development of our Country. In the words of the Prime Minister: Our foreign policy and diplomatic relations must now be strongly related to our reconstruction goals. The effectiveness of our relations with the international community must be informed by our reconstruction and development needs.

Therefore fellow citizens, it is in this context that I am very pleased to inform you that on January 20, I signed a Joint Communiqu‚ between Grenada and the People's Republic of China with my Chinese counterpart, the Vice Minister of Foreign Affairs of the PRC.

Our two countries have agreed to exchange ambassadors and to facilitate each other in the establishment of embassies in our respective countries. We signed a Memorandum of Understanding that recognises the sovereignty and territorial integrity of our two countries. We both recognise mutual non-aggression and non-interference in each other's internal affairs.

Like so many other countries in the world we too acknowledge that the PRC is the sole legal government representing China and that Taiwan is an inalienable part of Chinese territory. The PRC respects Grenada's sovereignty and independence and agrees to support the development of our national economy.

Fellow citizens, in order to develop our economy, following the destruction by Ivan, we need extensive and long-term financial, technical and other forms of support. The reality is, on our own; we cannot rebuild our Country and provide all the necessary support services to you, the citizens of this beautiful Nation. We need external support and cooperation.

A number of the initiatives taken by the Prime Minister during the first visit to Beijing were brought to successful conclusion upon my return last week. We have negotiated an agreement of cooperation with the PRC which, in addition to the normalisation of relations, will open the door to significant assistance for the reconstruction and long term development of Grenada.

In this context and in terms of post Ivan needs, economic and technical cooperation grants will cover the following major developmental projects:

(1). Rehabilitation and expansion of the National Stadium. Our mutual goal in this project is to have the facility completed in time to adhere to the requirements of the International Cricket Council so that Grenada will be a host venue for the 2007 Cricket World Cup.

(2). The construction of 2,000 low-income housing units. This is crucial, given the widespread destruction of houses by Ivan.

(3). Additional facilities for the General Hospital, to be mutually agreed upon.

(4). Support for our Agricultural programmes. This is also a critical component of our rebuilding efforts, both for the generation of foreign exchange and our national Food Security programme.

*A grant of six million US dollars has also been provided, some of which will be used to complete community projects originally funded by Taiwan, among other things. In addition to this grant of six million US dollars, we will receive a grant of one million US dollars annually from 2005 to 2009.

*A cash donation of one million US dollars has also been provided for the Government Scholarship Fund.

Fellow Grenadians, the above mentioned items reflect the main priorities of your Government in this post Ivan period and, indeed, in the long-term. I wish to make it clear that while the Government of Grenada recognises there is one China, and that, as of yesterday, January 26, Grenada has officially severed official relations with Taiwan; none-the-less, with goodwill in mind, we have officially informed the Government of the Republic of China on Taiwan that we are willing to maintain non-official economic, trade and cultural relations between Grenada and Taiwan.

I take this opportunity of this national address to state publicly, that the Government and people of Grenada sincerely appreciate the financial, technical and other forms of support and assistance that we have received from Taiwan over the years.

However, the Government of Grenada recognises that our long term interests require us to adjust our diplomatic relations and to normalise our relationship with the PRC. We do so with clarity of vision, and with the developmental interests of our Nation as our number one priority, as we endeavour to Build Back Better.

Finally, I am pleased to inform that Grenada will establish an Embassy in China to ensure that we have presence in Beijing, and the PRC will also encourage Chinese companies to invest in and trade with Grenada.