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China In the heart of the Caribbean

Posted by Caribbean World Magazine on 8 January 2021 | 0 Comments

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8 January 2021

Beijing’s Ploughs millions into Caribbean Infrastructure. Where Will It’s Influence Extend Next?

Though China has long standing ties with the Caribbean, it’s presence has become significantly more powerful in recent years, from early foreign aid projects in the 1970s in Guyana to around $9 billion of Beijing funding to the Caribbean Community states (CARICOM). All efforts to extend China’s influence into Latin American and the Caribbean, have been focused on strategic assets such as ports in a quiet but assertive push by Beijing. Economic, diplomatic, cultural, and security clout in the region have substantially expanded China’s footprint and influence in the Caribbean through government grants and loans, investments by Chinese companies, and diplomatic trade-offs.

China’s investment in infrastructure projects are part of a long-term geo-political strategy that is accompanying its rise to super power status. Projects like these are widely welcomed on islands where roads, shipping facilities and airports are lacking. On Grand Bahama Island more than $3 billion has been injected into the development of a much-expanded deep-water container port. The Freeport Container Port’s Chinese and Bahamian backers expect to benefit from increased shipping through the region as a result of the expansion of the Panama Canal, not to mention an overall boost in trade between China and Latin America and the Caribbean. China upped its new areas for investment, just as the Western nations ceased theirs due to the 2008 economic crisis, an astute move by Chinese President Xi Jinping’s Belt and Road Initiative that has not onlyincreased its power and presence in the Caribbean but has also enable China to woo Caribbean nations via a charm offensive that has encouraged them away from ties with Taiwan in favour of Beijing.

At the Second China-Community of Latin American and Caribbean States (CELAC) Ministerial Forum held in Santiago, Chile, a ten-page action plan indicated that China is keen to implement regional and sub-regional programmes now to expand its presence further.  A reading of the ‘CELAC and China Joint Plan of Action for Cooperation on Priority Areas 2019-2021’ makes clear that it is China’s intention is to advance relations in ways that go far beyond trade and development. Beijing is seeking new ways to deliver support on a scale that in recent years other nations have short-sightedly set aside for financial, political or other reasons. China has already cemented strong relationships with some of the largest economies in the Caribbean - and it is unlikely to stop diplomatic efforts any time soon.

The Dominican Republic has broken off relations with Taiwan and now formally recognises China in a move that is widely beneficial for both countries. China, already the Dominican Republic’s second largest supplier of imported products, will now deliver significant investments in road, rail and energy infrastructure, as well as in agriculture and tourism to an estimated value of $3.1bn.

Trinidad also confirmed that it signed a Memorandum of Understanding (MOU) with China, in an investment and trade initiative which aims to ‘promote sustainable development, advance market-based industrial transformation and encourage diversification’ through Chinese financed projects.

But this isn’t all.

China’s depending relations with the Bahamas, Cuba, Jamaica, Guyana, Barbados, Suriname, and some of the islands of the Eastern Caribbean suggest, is that it is now poised to rapidly broaden and consolidate its regional economic and political role. China’s rise is of profound significance. It demonstrates that the world’s centre of gravity is relocating. Only Belize, St Lucia, St Kitts, Haiti and St Vincent largely continue to fall outside of its development reach as they continue to recognise Taiwan. Five Caribbean countries have so far signed up for Belt and Road funding: Trinidad and Tobago, Grenada, Dominica, Antigua and Barbuda, and the Dominican Republic. Chinese money is also building hospitals, building roads and significantly enhancing transportation, shipping and air freight opportunities. The Belt and Road Initiative - China’s ambitious global development campaign - has provided hundreds of billions of dollars in state financing for infrastructure projects across Asia, Africa, Europe and Latin America. Of course, it not only serves the local populations but also increases trade and diplomatic links between China and developing countries. Beijing is making massive inroads from what was “once a small base”, according to a report by the Inter-American Development Bank. China now has more equity capital invested in the Caribbean on a per capita basis than it has in the rest of Latin America.

Besides the Freeport Container site, China has invested billions building up the Bahamas’ tourism sector with state-owned China Export-Import Bank providing $2.5 billion to build the Baha Mar resort and casino — the largest such complex in the Caribbean. Beijing is also actively seeking greater engagement with Jamaica after funding the $700 million for a badly needed highway connecting Jamaica’s north and south coasts which, in return, the Jamaican government granted China Harbour Engineering Company a 50-year lease on roughly 1,200 acres of prime real estate alongside the highway. China has also security equipment to military and police forces throughout the Caribbean, which has unsettled the administration in the White House. However, this will cause little concern in the Caribbean, which has been largely ignored by the US during the Covid Crisis and will no doubt claim it is part of a trend of ‘diversifying relationships of dependence’.