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China Buys Inroads in the Caribbean, Catching U.S. Notice

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Reposted from The New York Times

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China Buys Inroads in the Caribbean, Catching U.S. Notice

Randal C. Archibald | April 7, 2012 | NY Times

NASSAU, the Bahamas — A brand new $35 million stadium opened here in the Bahamas a few weeks ago, a gift from the Chinese government.

The tiny island nation of Dominica has received a grammar school, a renovated hospital and a sports stadium, also courtesy of the Chinese. Antigua and Barbuda got a power plant and a cricket stadium, and a new school is on its way. The prime minister of Trinidad and Tobago can thank Chinese contractors for the craftsmanship in her official residence.

China’s economic might has rolled up to America’s doorstep in the Caribbean, with a flurry of loans from state banks, investments by companies and outright gifts from the government in the form of new stadiums, roads, official buildings, ports and resorts in a region where the United States has long been a prime benefactor.

The Chinese have flexed their economic prowess in nearly every corner of the world. But planting a flag so close to the United States has generated intense vetting — and some raised eyebrows — among diplomats, economists and investors.

“When you’ve got a new player in the hemisphere all of a sudden, it’s obviously something talked about at the highest level of governments,” said Kevin P. Gallagher, a Boston University professor who is an author of a recent report on Chinese financing, “The New Banks in Town.”

Most analysts do not see a security threat, noting that the Chinese are not building bases or forging any military ties that could invoke fears of another Cuban missile crisis. But they do see an emerging superpower securing economic inroads and political support from a bloc of developing countries with anemic budgets that once counted almost exclusively on the United States, Canada and Europe.

China announced late last year that it would lend $6.3 billion to Caribbean governments, adding considerably to the hundreds of millions of dollars in loans, grants and other forms of economic assistance it has already channeled there in the past decade.

Unlike in Africa, South America and other parts of the world where China’s forays are largely driven by a search for commodities, its presence in the Caribbean derives mainly from long-term economic ventures, like tourism and loans, and potential new allies that are inexpensive to win over, analysts say.

American diplomatic cables released through WikiLeaks and published in the British newspaper The Guardian quoted diplomats as being increasingly worried about the Chinese presence here “less than 190 miles from the United States” and speculating on its purpose. One theory, according to a 2003 cable, suggested that China was lining up allies as “a strategic move” for the eventual end of the Castro era in Cuba, with which it has strong relations.

But the public line today is to be untroubled.

“I am not particularly worried, but it is something the U.S. should continue to monitor,” said Dennis C. Shea, the chairman of the U.S.-China Economic and Security Review Commission, a bipartisan Congressional panel. But, he added, “With China you have to be wary of possible policy goals behind the effort.”

This archipelago, less than a one-hour flight from Florida, has gotten particular attention from the Chinese. Aside from the new stadium, with its “China Aid” plaque affixed prominently at the entrance, Chinese workers here in the Bahamas are busy helping build the $3.5 billion Baha Mar, one of the region’s largest megaresorts.

Beyond that, a Chinese state bank agreed in recent weeks to put up $41 million for a new port and bridge, and a new, large Chinese Embassy is being built downtown.

The new stadium here, Bahamian officials said, was in part a reward for breaking ties with Taiwan in 1997 and establishing and keeping relations with China.

It is one of several sporting arenas that China has sprinkled in Caribbean and Central American nations as gratitude for their recognition of “one China” — in other words, for their refusal to recognize Taiwan, which Chinese officials consider part of their country.

“They offered a substantial gift and we opted for a national stadium,” said Charles Maynard, the Bahamian sports minister, adding that his government could never have afforded to build it on its own.

In this enduring tug of war with Taiwan, others have switched, too, with a little financial encouragement. Grenada ended relations with Taiwan in 2004, and it is now in talks with China about getting a new national track and field stadium. The parting has not been entirely amicable; Taiwan and Grenada are now locked in a financial dispute over loans that Grenada received to finance the construction of its airport.

Determined not to be sidelined, Taiwan is seeking to solidify its existing relationships with countries like Belize, St. Kitts and Nevis, and St. Lucia — which in 2007 broke relations with China in favor of Taiwan — with a bevy of projects, many of them agricultural, including an agreement signed with Belize in recent weeks to develop the fish farming industry there.

Still, Taiwanese diplomats in the region conceded that they could never keep up with China’s largess but continued to make strategic investments in the Caribbean.

There are some commodities in the region that China wants. In August, a Chinese company, Complant, bought the last three government sugar estates in Jamaica and leased cane fields, for a total investment of $166 million. Last year, Jamaica for the first time shipped its famed Blue Mountain Coffee to China.

The Jamaican government has also received several hundred million dollars in loans from China, including $400 million announced in 2010 over five years to rebuild roads and other infrastructure.

“In order to be prosperous you need to build roads first,” said Adam Wu, an executive with China Business Network, a consulting group for Chinese businesses that has been making the case for China in several Caribbean countries.

Several analysts in the Caribbean say they believe that China eventually will emerge as a political force in the region, with so many countries indebted to it, at a time when the United States is perceived as preoccupied with the Middle East and paying little attention to the region.

“They are buying loyalty and taking up the vacuum left by the United States, Canada and other countries, particularly in infrastructure improvements,” said Sir Ronald Sanders, a former diplomat from Antigua and Barbuda.

“If China continues to invest the way it is doing in the Caribbean, the U.S. is almost making itself irrelevant to the region,” he added. “You don’t leave your flank exposed.”

In some places, Chinese contractors or workers have stayed on, beginning to build communities and businesses. So many have opened in Roseau, Dominica, that local merchants have complained about being squeezed out.

Trinidad and Tobago has had waves of Chinese immigration over the past century, but locals are now seeing more Chinese restaurants and shops, as well as other signs of a new immigrant generation.

“I am second-generation Trinidadian-Chinese, and like most of us of this era, we have integrated very well in society, having friends, girlfriends, spouses and kids with people of other ethnicities,” said Robert Johnson-Attin, 36, a mechanical engineer now with his own successful business. “It’ll only be a matter of time before it happens with the Chinese coming in now.”

Here in the Bahamas, Tan Jian, the economic counselor at the Chinese Embassy, said he that believed “it’s only the start” of the Chinese presence across the Caribbean, casting it as one developing country using its growing economic power to help other developing ones.

The Bahamian government, he said, “cannot afford to build huge projects by itself.”

While the Chinese built the stadium, the Bahamas is responsible for utility hookups and the roads and landscaping outside it.

The $35 million gift “is costing us $50 million,” said Mr. Maynard, the sports minister. “But at the end of the day it will pay for itself” by putting the Bahamas in position to host major sporting events and reap the tourism revenue that comes with that.

For Baha Mar, the Chinese Export-Import Bank is financing $2.6 billion, nearly three-quarters of the cost, and China’s state construction company is a partner.

The Bahamas agreed to allow up to 8,000 foreign workers, most of them Chinese, to work on the project in stages, but it also required employment for 4,000 Bahamians, dampening concerns that Chinese workers were taking jobs. American companies will also take part in building and running it.

Mr. Jian played down any economic competition with the United States, whose tourists, he asserted, stood to benefit from China’s presence in the Caribbean. The Chinese workers here live in barracks behind the project fences, largely shielded from public view.

“We hardly know they are here,” said James Duffy, watching a track practice next to the stadium one recent afternoon, adding with a chuckle: “Except for the big things they build.”

Karla Zabludovsky contributed reporting from Mexico City, Camilo Thame from Kingston, Jamaica, and Prior Beharry from Port of Spain, Trinidad and Tobago.

5 Responses to “China Buys Inroads in the Caribbean, Catching U.S. Notice”

  1. Bob Hall says:

    “China Said This. You Should Know This.”

    http://www.facebook.com/note.php?note_id=273174179380178

    From a conversation* between Mo Xiusong, Vice Chairman of the Chinese People’s Political Consultative Conference, and Dr. Clark Bowers, member of a U.S. delegation to China:

    Clark Bowers: Is the long-term goal of the Communist Party of China still world Communism?

    Mo Xiusong: Yes, of course, that is the reason we exist. However, the road to Communism may take well over a hundred years and the transition doesn’t have to be violent.

    Clark Bowers: Is it possible to reach your goal of world Communism while any of the bourgeois or their economic environment still exist?

    Mo Xiusong: No, that would be against the laws of science.

    Clark Bowers: As part of your reform, do you even desire to ever allow for anti-Socialist political parties?

    Mo Xiusong: No, that would be unconstitutional.

    Clark Bowers: Do you have any desire to change this part of the constitution?

    Mo Xiusong: No, the people wouldn’t support it.

    Clark Bowers: Who speaks for the people of China?

    Mo Xiusong: The Communist Party of China acts on behalf of the workers of China. We are their mind.

    Mo Xiusong continues: The historical miscalculations of Gorbachev led to an unbridled chaos that tore the social fabric of the USSR apart. We opposed a similar destabilization in Tiananmen Square in 1989, and history has vindicated our leadership by the economic and political stability that has followed.

    “Dollar to the Giant” note: Surprisingly few Americans remember that the Communist Party of China created the People’s Liberation Army long before there was a People’s Republic of China. The CCP and PLA then — “out of the barrel of a gun,” in Mao’s words — established the People’s Republic of China. Essentially, they are all one and the same. When we buy Chinese-made goods, our money supports the People’s Liberation Army. When multinational corporations do business in China, they partner with the Chinese Communist Party

    [ -- worth thinking about now that people are thinking about "Wall Street." Follow the money trail and you will not bark up the wrong tree].

    http://www.facebook.com/BobHall2012Campaign

    *Quoted in Beating the Unbeatable Foe, by Frederick Schwarz, M.D., pages 408 – 410

  2. Joe Brooks says:

    I find it interesting that the Chinese have built a sports stadium for the Bahamas. Keith Laumer wrote a series of satirical and hilarious short stories and novels about a fictional character named Jame Retief, who was a junior member in a diplomatic corps, in an allegorical diplomatic battle between the USA and International Communism.

    One of the techniques used by the corps to influence and befriend other nations was to build a Yankee style stadium, while the Communists built a Bolshoi type ballet theater. The main tool used to supposedly spread influence was trade agreements. These Retief always had to modify, or trash altogether as they were unfair to everyone except vested special interest groups on both sides.

    He based these stories on his personal experiences as the military attaché to Burma. He did not paint a pretty picture of the senior diplomats of the US 1950 to 1972. He felt they were incompetent, venal, and corrupt, some were outright traitors, and the governments’ limitations and policies for the ambassadorial service were absurd.

    These books were easily found in the 60s, 70s and 80s, but you can find them online.

  3. China Watcher says:

    The golden rule applies here — the one with the gold, rules. China has it, and we do not. Even if China wastes an enormous amount of money in overseas ventures (and it will probably continue to do so), its foreign exchange holdings are replenished daily thanks to the misalignment of the yuan. One would think that the Obama administration could connect these dots, but it’s a proven failure. The only chance this country has of regaining influence close to home and around the world is to confront China’s mercantilism and rebuild our manufacturing economy.

  4. robert says:

    What went unmentioned (besides the obvious listenting post in the Bahamas) is that Trindidad has so much natural gas it is all but free. Under the radar, more resource access. Anhyone remember the Cuban missile crisis?

  5. Linda says:

    The responses by Bob Hall, Joe Brooks, and China Watcher are as interesting and valuable as the article itself. The quality of insight and references are amazing. When will our “leaders” in Washington realize the significance of the dangerous game they play with Communist China, ignoring their tactics that have been so successfully undermining our domestic economy?

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