China Extends Attain within the Caribbean, Unsettling the U.S.

MEXICO CITY – China has offered Jamaica loans and expertise to build miles of new highways. Across the Caribbean, she has donated safety equipment to military and police forces and built a network of Chinese cultural centers. And it has been shipping large shipments of test kits, masks and ventilators to help governments respond to the pandemic.

The initiatives are part of a quiet but determined push by China in recent years to expand its presence and influence in the region through government grants and loans, investments by Chinese companies, and diplomatic, cultural and security efforts.

But while governments in the region have welcomed Beijing’s interest, the Trump administration views China’s growing presence – and its potential to challenge Washington’s influence in the region – with concern and suspicion.

Caribbean markets are generally small and most countries lack the sizeable reserves of minerals and other raw materials that often attract the attention of the Chinese. But the region is strategically important as a hub for logistics, banking, and commerce, analysts say, and, due to its proximity to the United States, could have a high security value in a military conflict.

“There are many reasons beyond balance sheets,” said R. Evan Ellis, research professor of Latin American Studies at the US Army War College’s Strategic Studies Institute. “China intuitively understands the strategic importance of this area.”

China’s efforts in the region are part of its global strategy of forging deep economic ties and strong diplomatic ties around the world, in part through building major infrastructure projects as part of its ambitious Belt and Road initiative.

A key motivation for China’s Caribbean strategy is also to win the remaining nations to officially recognize Taiwan instead of China, most of which are in the Caribbean and Latin America, said Richard L. Bernal, professor at the University of the West Indies in Jamaica and former Jamaican Ambassador to the United States.

China views Taiwan as part of its territory and has long tried to reduce the number of countries that recognize it. But recently, Taiwan’s international reputation has grown with its aggressive response to the coronavirus pandemic.

“China’s goal is to gradually revoke Taiwan’s recognition,” said Bernal.

China’s growing interest has proven to provide much-needed aid to Caribbean nations who have serious infrastructure needs but whose middle-income status makes it difficult to access finance for development.

According to Inter-American Dialogue, a Washington-based research organization, the Chinese government’s low-interest loans totaling more than $ 6 billion have funded major infrastructure projects and other initiatives across the Caribbean over a 15-year period. The total increases by $ 62 billion if Venezuela provides additional aid, much of it in exchange for long-term oil supplies.

During the same period, Chinese companies have invested in ports and maritime logistics, mining and oil companies, the sugar and wood industries, tourist centers and technology projects. Between 2002 and 2019, trade between China and the Caribbean increased eight-fold, said Ellis, a professor at the US Army War College.

China’s global drive for business and allies has drawn criticism, particularly in the United States and Western Europe, who have labeled the Belt and Road Initiative as predatory. In 2018, Sri Lanka, unable to repay Chinese loans, surrendered its main port to China.

However, analysts who are closely following China’s activity in the Caribbean say that while there are some concerns about the sustainability of some of the debt taken on by the regional governments, they have seen no signs of a debt trap as in the case of the Sri Lankan port.

“Loans are not just a business deal, they are also a way to build goodwill,” said Bernal, a professor at the University of the West Indies.

Jamaica, which has become an anchor of Chinese activities in the Caribbean, has received more Chinese government loans than any other Caribbean island nation, according to the Inter-American Dialogue, which is closely monitoring Chinese public finance in the region.

Over the past 15 years, Beijing has loaned Jamaica around $ 2.1 billion to build roads, bridges, a convention center and housing, the group said. According to the Jamaica Planning Institute, grants have financed a children’s hospital, schools and an office building for the State Department, among other things.

And direct investment by Chinese firms in Jamaica has poured more than $ 3 billion into projects like bauxite mining and sugar production, Chinese business leaders said, according to local news reports.

Last November, the Jamaican government announced that it would halt negotiations on new loans from China as part of its efforts to reduce debt quickly, but would continue to work with the Chinese on major infrastructure projects through joint ventures and public-private partnerships, among other things.

However, according to Jamaican officials, outstanding Chinese loans are not an exceptional burden on the country: They only make up about 4 percent of Jamaica’s total loan portfolio and are expected to be repaid within a decade.

China has also expanded its influence in the Caribbean through security collaborations, including donating equipment to military and police forces and cultural outreach programs like expanding its network of Confucius Institutes. These institutes offer language classes and cultural programs, but have been accused of spreading Chinese government propaganda.

The pandemic enabled China to further strengthen these relationships by donating or selling personal protective equipment as part of what is known as “mask diplomacy”. Chinese Foreign Minister Wang Yi promised in July that China would provide US $ 1 billion in vaccine loans to Latin American and Caribbean countries.

Although China has increased its presence in the region, it has avoided directly challenging the United States in the Caribbean through rhetorical or military and political initiatives, Ellis said.

Still, China’s rise in the Caribbean has led the Trump administration to vigorously promote its own development programs. These include Growth in the Americas, an investment initiative launched last year that many analysts saw as a direct response to China’s diplomatic and trade efforts in the Caribbean and Latin America.

And in October, a delegation from the Trump administration visited Suriname, Guyana, Jamaica, Haiti and the Dominican Republic to promote American private sector investment.

The United States has also stepped up warning its allies in the region about the risks of doing business with Beijing, underscoring that there are potential dangers ranging from seedy construction to predatory loans and espionage.

In recent weeks, the American ambassador to Jamaica, Donald Tapia, warned the country against installing fifth generation cellular networks from Huawei and ZTE, two Chinese companies. and support authoritarian regimes. “

Last November, in an interview with the Jamaica Gleaner China, Mr. Tapia called “a kite with two heads,” the newspaper reported.

On a visit to Jamaica in January, Secretary of State Mike Pompeo said it was “tempting to take easy money from places like China.”

“But what good is it if it feeds corruption and undermines your rule of law?” He asked. “What use are these investments if they actually ruin your environment and do not create jobs for your employees?”

The Chinese Embassy in Kingston said in a statement following Mr Pompeo’s remarks that it has deepened its cooperation with the Caribbean countries “on the basis of mutual respect, equality and mutual benefit.” And she accused the United States of causing quarrels.

“It seems that some US politicians have nowhere to go without attacking China, damaging China’s reputation, starting fires and stirring the flames and sowing discord,” the Chinese embassy said. “You can keep talking if you want, but we’ll move on. The world will clearly tell who is causing trouble and who is trying to make a difference. “

Increasing competition between the two superpowers has put the Caribbean nations in a difficult position and they don’t want to be forced to choose either side, said Pepe Zhang, deputy director of the Atlantic Council’s Adrienne Arsht Latin America Center.

“You want to be able to work with both the US and China in meaningful areas,” he said. “And I think that will be even more true now as the region is going through a very severe economic recession.”