From November 3 to 9, Jamaican Prime Minister Andrew Holness led a delegation to attend the second China International Import Expo (CIIE) in Shanghai. It was the Jamaican leader’s first official trip to China and the first time the Caribbean island participated in the CIIE as a Guest Country of Honor. During the trip, Prime Minister Holness met with Chinese leader Xi Jinping and Premier Li Keqiang to sign a cooperation plan to jointly promote the Belt and Road Initiative (BRI), “setting a precedent in the political relations between China and Caribbean countries in the new era,” as China’s ambassador to Jamaica, Tian Qi, stated.
Prime Minister Holness’ trip to China clearly signaled a “new era” in bilateral relations, made even more evident by the prompt U.S. response to the trip. But this new era is not exclusive to China and the Caribbean, as it extends to the rest of the world.
Speaking to the local newspaper, The Gleaner, U.S. Ambassador to Jamaica Donald Tapia questioned the basis on which China has—through direct investment and loans—injected an estimated $2 billion into Jamaica over the past decade, most of which went to infrastructure projects or industries critical to the island’s economy. The U.S. ambassador noted China’s particular interest in minerals and ports. Ambassador Tapia also shared his concern over China’s behavior when countries fail to keep up with their payments, with China usually controlling the narrative on their behalf: “I could tell you horror stories of countries where [China] has taken over ports because those countries could not pay for their investment. China usually has a great propaganda story as to why it has happened.”
The U.S. Ambassador’s displeasure over Holness’ trip to China did not go over well in Jamaica. An editorial from The Gleaner noted: “Mr. Tapia should be given a message about where Jamaica’s foreign policy is formulated, which oughn’t be Foggy Bottom.” The editorial also suggested that under the current world order, where new centers of power—such as China—are rising as a result of global realignments, small countries like Jamaica are increasingly interested in “maintaining a viable system of multilateral partnerships.”
Ambassador Tapia’s reaction to Prime Minister Holness’ visit—and The Gleaner’s editorial response—exemplify the shifting tides in Caribbean international relations, a region where the United States risks losing influence over players like China.
Three major shifts in U.S.-Caribbean relations
The U.S.-Jamaica diplomatic tiff over China mirrors three major changes in the global system. First and foremost there is a shift away from globalization and multilateralism to economic nationalism, turning the power dynamics between the world’s two largest economies, the United States and China, into a more sharp-elbowed interaction.
The Trump administration has been willing to start trade wars to fix China’s unfair trade practices, while China, since Xi Jinping’s ascent in 2012, has more aggressively pursued taking control of the commanding heights of the global economy through ambitious expansion plans.
In particular, the Asian giant’s “Made in China” strategic plan seeks to move away from the production of cheap, low-quality goods to more higher-value products and services, including technology such as artificial intelligence (AI) and facial recognition programs. As power is increasingly linked to technological wherewithal, China has emerged as a challenger.
China is also actively extending its economic clout through its Belt and Road Initiative (BRI). Launched in 2013, the BRI is seeking to create a major Eurasian trade zone extending from China to Europe, woven together by an extensive network of road, rail and other critical infrastructure. Latin America and Caribbean countries have also been invited to join the BRI, a region where China’s pocket-book diplomacy has sparked interest in several countries. According to the Economic Commission for Latin America and the Caribbean (ECLAC), as of mid-2019, 18 countries in the region have signed a memorandum of understanding (MOU) with China under the initiative, including 10 in the Caribbean.
The Sino-American rivalry also has a political dimension, with some analysts holding up the United States as the leader of democratic-capitalism and private sector-led growth, compared to China’s authoritarian/autocratic and state-led economic expansion. Along these lines, Xi Jinping has sought to make China a competing model of development, especially in the aftermath of the Great Recession.
Another political offshoot of what some are calling the “New Cold War” is China’s grab for the South China Sea, with the building of islands and establishment of bases, and support for opponents to a U.S.-led world order such as Iran, Venezuela and Cuba.
The second shift is that the Caribbean is reverting back to the region’s historical role of being a cockpit of great power rivalries. The Caribbean has long been one of the more transited parts of the planet, seen as a gateway into the region, dating from the movement of sugar, tobacco and slaves in the trans-Atlantic community to the shipments of goods from the Americas to Asia. Great wealth was created in the Caribbean by enterprising and ruthless Spanish, French, Dutch and English, who were often locked in wars over controlling the fertile islands. Although U.S. interests in the Caribbean never entirely left in the aftermath of the Cold War, Washington’s engagement faded considerably without the catalyst of an external aggressor.
It was not until China began showing up in the Caribbean that U.S. attention gradually refocused on a region often referred to as Washington’s “backyard” or “third border.” While part of China’s drive into the Caribbean was motivated by the search for markets and commodities, it also required a string of ports to facilitate broader hemispheric trade with both North and South America.
The strategically located Caribbean offers a number of harbors that sit between China and one of its major customers of consumer goods, the United States. It also connects the Asian country to commodity exporters Argentina, Brazil and Venezuela. In this, the Panama Canal plays a major role—and has become a major focus of Chinese investment—something that has alarmed Washington, considering the importance of the canal to hemispheric and international trade.
China’s presence is also evident in Venezuela, whose government is estimated to have received $50 billion in return for oil. As the political situation deteriorated in the aftermath of Hugo Chávez’s death in 2013 and the implosion of oil prices in 2014, along with Cuba and Russia, China became a key supporter of President Nicolás Maduro’s regime. In 2019, China continues to support the regime, even after learning that 4.6 million Venezuelans have fled the country’s dire situation as of November 2019, according to the United Nations. Many Venezuelans head to the Caribbean, mainly the Dominican Republic and Trinidad and Tobago, but also Guyana, Aruba and Curaçao.
China’s footprint in the Caribbean has been marked by considerable infrastructure development, which is desperately needed and for which financing from traditional Western sources has been tight since the financial crisis in 2008. Chinese companies and banks are involved in projects throughout the region, including luxury hotels, sports stadiums, hospitals, and investment in regional extractive industries. By becoming a helpful economic force in the Caribbean, China is making friends that in turn are granting the country greater geopolitical influence in the region. Infrastructure development also allows China to poke at the U.S.’ strategic underbelly, something that the U.S. does to China in the South China Sea and through its support of Taiwan’s sovereignty.
The third shift, Caribbean countries are more emboldened to exercise their sovereignty in terms of playing off great powers to meet their national interests. With China’s economic penetration into the Caribbean, the U.S. now has a rival for the hearts and minds of people in the region. In this regard, while the U.S. has trimmed its foreign assistance to Jamaica (to under $1 million in 2019 according to the Congressional Research Service’s report as of March 2019), the Caribbean country has benefited from a closer relationship with China.
Chinese companies and banks are active in a number of projects ranging from transportation to other large infrastructure projects, such as the $730 million North-South Highway, connecting Kingston to Ocho Rios; the reopening of an alumina refinery (JISCO), and an upgrade of an industrial park. Plans exist for a children’s hospital, two infant schools, and the new headquarters building for Jamaica’s Foreign Affairs Ministry in Kingston.
Public opinion toward Jamaica-China relations
While China has played its economic statecraft well in Jamaica, there still remains some hesitation from the Jamaican public. Jamaicans have mobilized to halt infrastructure projects sponsored by Chinese lending, and in one case, the Jamaican government opted not to proceed with a container port around Goat Island after environmental groups opposed the project.
Local architects also pushed back over talks on the construction of a new parliamentary building by a Chinese company. To fend off public concern over the new parliamentary building, the Jamaican government opened an international competition to bid on the project: eligible teams had to be led by a Jamaican citizen, residing locally or abroad, who was also a registered and licensed Jamaican architect.
There are also claims by residents around the JISCO alumina refinery that the Chinese-owned company has caused environmental damage and are demanding the company’s relocation. On yet another front, Prime Minister Holness stated on his return from China that Jamaica would continue cooperation with China on infrastructure projects, but without committing to any new loans.
Sino-Caribbean relations: Lessons from Sri Lanka
Chinese loans are something to pay close attention to. The cautionary tale here is Sri Lanka, where the government could not repay its debt for the construction of the port of Hambantota. Under a deal hashed out in 2017 between the Sri Lankan government and China Merchants Port Holdings, the Chinese firm will run the $1.5 billion port on a 99-year lease. The deal convert the $6 billion loans owed by Sri Lanka to China into equity. It is the geopolitics of Sri Lanka’s situation that concerns the U.S., where poor debt management gave Beijing a strategic access point into India’s sphere of influence, and begs the question of whether the same could happen in the Caribbean.
Although Ambassador Tapia’s warnings were perceived as rude by many Jamaicans, his concerns are echoed by U.S. national security thinkers. At the same time, Jamaicans share some of his sentiments toward Chinese loans. As one comment on The Gleaner’s editorial states: “We need to be wary of the kinds of agreements and contracts we enter into with the Chinese. There are countries which are now realizing that the rose that they saw in China is nothing but thorn bush.”
In December, following the aftermath of the uproar over Ambassador Tapia’s comments, the U.S. government announced the launch of its “América Crece” Initiative (Growth in the Americas), described to be “an innovative approach to support economic growth by catalyzing private sector investment in energy and infrastructure projects across Latin America and the Caribbean, including telecommunications, ports, roads, and airports.”
Jamaica figured prominently at the launch, joining the U.S. Caribbean Energy Security Initiative, a loan guarantee program that will help to mobilize $25 million in private finance for energy projects in the region in cooperation with the National Commercial Bank of Jamaica, under the umbrella of the Growth in the Americas project. No doubt Prime Minister Holness’ trip helped drive the mention of Jamaica during the meetings, but the package of assistance projects that resulted from a November meeting between Suriname’s President Desi Bouterse and Chinese leader Xi Jinping, could have also pushed the U.S. to create a policy response following Holness’ return from China.
The development of closer China-Jamaica relations and the U.S. reaction underscore the shifting tides in international relations to what increasingly looks like a new Cold War in the Caribbean. The sharpness of the debate over this situation is most likely to intensify as China’s economic largesse in Caribbean countries, like Jamaica, continues to meet financial needs related to badly-needed infrastructure and the U.S. continues to cut back its assistance to the region. While América Crece is a positive step, it falls short of the large-scale aid China has pumped into the region and appears willing to continue. If Washington wants to be taken more seriously, it needs a bigger checkbook and less lecturing on accepting Chinese help.
Scott B. MacDonald is the head of MacDonald’s Economic and Geopolitical Risk Limited, a non-resident Senior Associate at the Americans Program at the Center for Strategic & International Studies (CSIS), and a Research Fellow at Global Americans. He is currently writing a book on the New Cold War in the Caribbean.