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Is China setting up Caribbean ports for economic blackmail?

PortandTerminal.com, March 28, 2019

Marco Rubio (R-FL), says he is ‘very concerned’ about China’s efforts to extend influence into Latin American and the Caribbean.

On Grand Bahama Island, 55 miles off the continental United States, a Hong Kong-based company has spent approximately $3 billion developing and expanding a deep-water container port.

The Port of Freeport is just 55 miles from the United States and strategically located close to a handful of East Coast ports

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.

But China’s financial ties to the site, which go back two decades, are receiving new scrutiny from U.S. analysts, particularly given what happened to Sri Lanka in 2017. When the South Asian nation lagged in debt payments for an ambitious Chinese-financed port project at Hambantota that fell woefully short of economic expectations, the Sri Lankan government signed-over the port in a 99-year lease. That allowed China to gain control of a vital piece of real estate that sits along a major shipping and naval sea-lane in the Indian Ocean, and a strategic spot to potentially project military power.

White House: One of its aims to “counter China’s predatory economic practices.” in the Caribbean

On March 22 at his Mar-a-Lago Florida resort, President Donald Trump held a rare meeting with the leaders of five Caribbean nations — Bahamas, the Dominican Republic, Haiti, Jamaica and St. Lucia — to discuss trade, energy investment and security issues. It remains to be seen whether the high-profile summit will mark a period of sustained regional engagement or be a one-off for the administration.

Ahead of the meeting though the White House said one of its aims was to “counter China’s predatory economic practices.”

This is not the first time that China has been accused of using “debt-book diplomacy” to spread its strategic aims.

Debt-book diplomacy

Chinese warship visiting Greece’s Port of Piraeus in 2017. In 2016 China’s state-owned Cosco bought a majority stake in the Piraeus Port Authority in a concession agreement that runs until at least 2052.

The Chinese government is leveraging billions of dollars in debts to gain political leverage with developing countries across Asia and the PacificThe Chinese government is leveraging billions of dollars in debts to gain political leverage with developing countries across Asia and the Pacific, a new report presented to the US State Department claims.

The independent report, written by a pair of Harvard University scholars, identified 16 countries targeted by the Chinese government for “debt-book diplomacy, ” with Pakistan, Djibouti and Sri Lanka identified as being most vulnerable. According to the report, in some cases the huge debts grow to a size too large to pay back, allowing Beijing to leverage the loans to “acquire strategic assets or political influence over debtor nations.”

In one example from the report, an unprofitable Sri Lankan port built with billion-dollar loans from Beijing was leased to Chinese state-owned firms for 99 years to help repay the country’s debts.

Gareth Evans: Laos and Cambodia are now “wholly owned subsidiaries of China”

Former Australian Foreign Minister Gareth Evans is quoted in the report saying Laos and Cambodia, each of which has borrowed more than $5 billion, are now wholly owned subsidiaries of China.”

A growing number of politicians and strategic advisors are concerned that China is once again deploying its “debt-book diplomacy” strategy. This time though 55 miles off of the coast of Florida.

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