April 11, 2012

China in the Caribbean? Don't Be Scared

By Stan Abrams  

The New York Times seems to be concern trolling on the issue of Chinese investment in the Caribbean. To be fair, though, it’s not just the NYT that’s playing this game, but folks in the U.S. government. You’ve seen how this goes down in the media: first a “threat” is presented, always as a concern of others, and then later on in the article, there is an acknowledgement that the danger is either unfounded or the fear is premature. 

What are we left with? Usually the message in the headline, plus a vague sense of unease. In this case, the headline reads: “U.S. Alert as China’s Cash Buys Inroads in Caribbean.” Scary, no? This also feeds into the general uneasiness Americans are feeling about a rising China. Isn’t this special?

A few specifics so you can see the game in action. Here’s an opening gambit, setting out the “threat”:
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.
Note the language. “China’s economic might” — a threat in and of itself. This has “rolled up to America’s doorstep” — China is spreading out across the globe like Nazi Germany in those old propaganda films, painting each country it taints an evil red color. America’s doorstep of course is the Caribbean, whose proximity to the U.S. has been used for decades now to the detriment of the Cubans. The Chinese are “planting a flag” — a symbol of ownership that has somewhat of a colonial flavor to it. And finally, there are raised eyebrows among diplomats, economists and investors; important folks are very worried about all this.

I don’t know about you, but I just got so scared I soiled my undergarments.
Apparently some idiots at the State Department are also nervous:
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.
My goodness. The Chinese are lending money, building roads and sports stadiums, and insinuating themselves with the locals. What on earth are they up to? Sounds like USSR/Cuba all over again. Sort of. Well, not at all really. I’m not sure if the State Department guys are up on the news, but the Chinese don’t need to invest in the Caribbean to be close to the U.S. — they can invest in the U.S. directly! They don’t need to “roll up” to America’s doorstep, they’ve already been invited inside and asked if they wish to purchase any of the furniture.

The Times article does, later on in the article of course, point out the reasons why “China” (i.e. Chinese financial institutions, construction companies, commodities traders, etc.) are making moves in the Caribbean. First and foremost, there is money to be made. Imagine that. Second, the Caribbean is home to quite a few very small nations whose political loyalties can be purchased on the cheap. So if China lends a few million RMB to these guys, the next time an argument ensues regarding whether Taiwan should join an international organization as an independent country, China should be able to count on votes from the Caribbean. Third, indirectly, the U.S. hasn’t been paying sufficient 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.”
“Leave your flank exposed”? Calm down, Field Marshal. We’re talking about foreign aid and infrastructure construction, not the Franco-Prussian War.

You might think that if a group of nations on America’s “doorstep” needed foreign aid, it would be the U.S., not China, that would be giving it. Apparently not — most Americans don’t believe in foreign aid, and their government representatives are only keen if it goes to arms purchases by Israel and Egypt.

But I digress.

So what’s the bottom line here? China has found an opportunity to make some money and find a few cheap friends. Unless the U.S. is willing to put up some cash, what’s the problem with this? It’s not like China is putting missile sites in Antigua or threatening to censor Jimmy Buffett’s lyrics (the latter might actually be a good thing). Are these State Department goofballs worried that Chinese largess will push Jamaica over to the Communist camp? Domino Theory 2.0?

China in the Caribbean — sounds like a scary conspiracy, but the facts do not reveal a threat to America’s shores. As the philosopher said: “Jah show every mon him hand, and Jah has show I mine.” I have no idea what that means, but China’s position in the Caribbean is quite easy to discern


About The Author - Stan Abrams is a Beijing-based IP/IT lawyer and law professor with an M.A. from Johns Hopkins in International Relations, a J.D. from Boston College Law School, a B.A. from Pomona College, and writes at China Hearsay.  (EconMatters author archive here)

The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.

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