China’s Engagement In The Caribbean And The United States’ Response

This past week brought the Chinese New Year and the largest annual migration on the planet with over 200 million people traveling within China and from various parts of the world traveling back to China to visit family. While the global community marvels at such an event, what has gone unnoticed is the migration of Chinese people, capital and resources flowing to the Caribbean. Traditionally, the United States has had unparalleled influence over the Caribbean. However, over the past few decades, America has become complacent in its position of power and competing foreign policy priorities, and has enabled China to erode America’s “soft power” and dominance. Although the US contributes to multilateral financing of infrastructure projects throughout the region, there is still a lack of infrastructure projects funded directly by the US. Moreover, a real sense of economic and political neglect that permeates the entire Caribbean has allowed China to take advantage of the economic vacuum created by the US-led economic model that relies on globalized supply chains. China is now one of the largest trading partners of many Caribbean countries and finances infrastructure projects across the region as part of its Belt and Road Initiative (BRI).

How China gained a foothold in the region

Once hailed as one of America’s strongest partners, the perception by many Caribbean leaders and the public is that America’s influence in the region is waning. As Prime Minister Philip “Brave” Davis of the Bahamas stated after an event at the Aqualina development in June 2022, “Those talks were about the fact that we in the Caribbean felt really neglected by the world leader, the United States and the United States and that we felt like, as I told the vice president, that sometimes we only know each other when we need them and also that access to us, or around us, is always without us and we needed to have conversations.” This lack of adequate attention has resulted in the homogeneous treatment of the Caribbean by the US. Policymakers have spent little effort understanding the nuances and needs of individual nations. Instead, in an effort to prevent Caribbean states from signing agreements with China , Washington has repeated baseless claims that China is engaging in debt trap diplomacy. This rhetoric has not worked in dissuading African states from engaging economically with China, and it will not work in the Caribbean. Furthermore, US Foreign Policy has been intentional to convey that Caribbean leaders must choose between the US or China. On my most recent business trip to Jamaica, when I met with Daryl Vaz, Jamaica’s Minister of Energy, he said: “Jamaica is a sovereign country and will make decisions based on what is in the best interest of the country.”

Chinese economic engagement

So far, Antigua and Barbuda, Barbados, Cuba, Dominica, Dominican Republic, Grenada, Guyana, Jamaica, Suriname and Trinidad and Tobago have all signed Memorandums of Understanding to be part of the BRI initiative. The most prominent of these major infrastructure projects is the creation of ports, but they also range from bridges, highways, airports, etc. China Harbor Engineering Company (CHEC) is the most active Chinese company in the region and loans to finance these projects come from multiple sources such as China’s policy banks, China Development Bank (CDB), Export-Import Bank of China ( Ex-Im Bank). ), and the governments of Caribbean countries.

As of 2022, Jamaica is the centerpiece of Chinese engagement in the region. China is currently financing $2.1 billion worth of projects there, followed by their investment in Suriname of $773 million.

Chinese Diplomatic Engagement

It is important to note that Chinese engagement in the Caribbean is not only economic. The Chinese make it a central point of their policy to ensure that representatives of Caribbean governments believe that their respective nations are a priority, that their needs are not neglected, and to foster a long-term relationship. High-level Chinese officials have also engaged regional officials. Examples include when in late 2022 Premier Li Keqiang met with Cuban President Miguel Díaz-Canel and, also, when Special Representative Qiu Xiaoqi met with Dominican Republic President Luis Abinader and Foreign Minister Robert Alvarez.

The reaction of the United States

The United States must realize that the Caribbean countries are no longer complacent actors. These countries have experienced a lack of direct initiative from the United States to help develop the region in recent decades. The Chinese have taken advantage of this neglect and onerous conditions mandated by multilateral development institutions and introduced their economic and diplomatic presence in the region. These Caribbean countries are in dire need of infrastructure development and are happy to accept help in the form of Chinese investment and loans. As a result, China has gained unprecedented influence for a non-Western country in the Caribbean. This rise in Chinese soft power over the Caribbean presents several geopolitical and economic challenges for the US.

Although Chinese engagement in the Caribbean region is growing, it is not too late for the United States to reverse its wavering position in the region. As Senior Caribbean Policy Advisor Gerard Johnson says of China’s place in the region, “An acid test of this will be China’s response to the anticipated wave of sovereign debt defaults in emerging economies. Will will China forgive or restructure or claim infrastructure and land as collateral? Interestingly, when Caribbean borrowers from Venezuela’s PetroCaribe program faced economic difficulties, Caracas forgave and restructured extremely concessional loans. What will China do?” Last week, Treasury Secretary Janet Yellen echoed that rhetoric and called on China to forgive debts owed to Zambia. In fact, the current status in these regions has not gone unnoticed in Washington. US officials have increasingly made statements designed to raise awareness of this developing situation, and members of Congress recently introduced two bills in an effort to counter Chinese action in the Caribbean. The two bills are H.Res.1480-Promoting stronger economic relations between the United States and countries in Latin America and the Caribbean, and HR 9211-Las Americas Energy Security Act. Under President Obama, HR 4939 was passed to strengthen relations with the Caribbean by “requiring the Secretary of State and the Administrator of the US Agency for International Development (USAID) to present to Congress a multi-year strategy focused on increasing engagement with Caribbean countries .” Unfortunately, there has not been a new report published on the State Department website since 2020.

US action so far is not enough to counter Chinese “soft” and “hard” power. Greater attention must be paid to this situation and to the actions of Congress if the United States truly wishes to regain its traditional influence and greater cultural competence. One possible avenue for increased engagement stems from recent geopolitical events. Due to rising tensions with China and Russia, there is a greater desire in Washington to support supply chains. According to a recent CSIS report, the United States could use this development to shift more supply chains to the Caribbean. The US can take advantage of the special economic zones recently created by some of the countries in the region. This would help allay fears from Caribbean countries about a lack of US attention to the region and provide greater security of the supply chain. The United States could also use its vibrant private sector to encourage public-private partnerships (PPPs) in the Caribbean and not saddle the region with additional debt through traditional loans. As Johnson goes on to say, “it is also important not to forget that most Caribbean countries are facing a debt crisis. As such, more credit is not the answer. The private sector needs to grow. PPPs need to are given priority over traditional loans. to sovereigns”.

Regardless of the approach the United States takes to increase economic and diplomatic engagement with the Caribbean, time is of the essence or America risks giving China more influence in the region. The time to act is now.

Special thanks to Nathanial Schochet, Analyst at CJPA Global Advisors and graduate student at American University SIS for his outstanding research and editorial skills.