In recent years, China’s expansion in Latin America and the Caribbean has been a topic of discussion in the world’s major political and economic circles. And the reason is clear: China seeks to become the region’s main trading partner and leader over the rest of the world in the financing, construction, and operation of marine terminals in Latin America and the Caribbean.
A study by U.S. security and defense think tank, Center for a Secure Free Society (SFS) indicated that the People’s Republic of China (PRC) has investments in close to 40 ports in Latin America and the Caribbean — number that is added to an even higher one worldwide.
According to the Liner Shipping Connectivity Index (LSCI), in just two decades the Asian country increased its maritime connectivity by more than 60 percent and is today the best connected country globally. “China today has 95 ports and six of them figure in the ranking of the 10 largest in the world,” Agustín Barletti, Argentine writer and journalist, who specializes in ports, maritime transport, and logistics, told Diálogo.
A colossal maritime network that experts assure has been woven in a stealthy and strategic way to achieve goals beyond economic and commercial ones. “This is an example of the Chinese saying bu zhan er qu ren zhi bing, which means to subdue your enemy without fighting, to use all kinds of hidden ways to gain advantages, and this is exactly what has been happening,” Leland Lazarus, associate director of research at Florida International University (FIU), told Diálogo.
While this string of ports is a PRC strategy to increase its wealth and guarantee constant and direct access to natural resources for national security and the country’s growing industrial sector — such as lithium, for example, a situation reflected in our special report, China Goes After South America’s New Treasure: Lithium — it is also enormously valuable for China’s global power projection: its military power. “National security and economic security are intertwined, inseparable, and absolutely linked,” Lazarus said.
According to experts, behind these civil infrastructures there is the stamp of military hegemony and Chinese commercial ports, they argue, are strategically designed for dual use. For Joseph Humire, executive director of SFS and an expert on global security and transnational threats, the dual strategy of Chinese ports is evident from their geographic location. “Most of the ports are concentrated in the Pacific, they want to use commercial transport links to open channels through which the military can pass, it is a strategic straight line that they are building.”
A situation that worries Barletti. “Time has shown that, in a future deployment of the Chinese Navy, all Chinese commercial ports will be able to serve as military bases.”
Alert! the fiery breath of the Dragon is dangerously close
In early June 2023, the scope of activities of the Xi Jinping government in Latin America and the Caribbean became evident when the U.S. government declassified information from its intelligence services and confirmed to the world the existence of a Chinese spy base on the island of Cuba. This situation revealed the Asian country’s great scope of interest in strengthening ties with the region beyond economic and commercial ones. “These moves reflect China’s efforts to increase its influence in Latin America and the Caribbean,” Lazarus from FIU told Diálogo.
Influence that is feared will penetrate the region with greater force through port expansion, which, according to experts, brings with it economic dependence, loss of sovereignty, and national security risks.
Experts say port infrastructure supports the global operations of the Chinese People’s Liberation Army (PLA). “Through the companies that operate in the ports, Chinese intelligence agencies could track any movement of commercial or naval vessels that could help China understand where to restrict sea lanes during a potential military conflict, or even close the Panama Canal if they wanted to,” R. Evan Ellis, research professor of Latin American Studies at the U.S. Army War College, told Diálogo.
As the bulk of trade between the Atlantic and Pacific Oceans, the Panama Canal is highly strategic. Chinese companies have invested billions of dollars in this area and today already have two ports on both sides of the canal: the Port of Colón and the Port of Balboa.
Ellis’ concerns are the same as those of Panamanians, who, although see opportunities for economic development with the Asian country, also fear the implications of dependence behind these investments.
Eddie Tapieri, Panamanian economist and expert on Sino-Panamanian relations, echoed this fear. “Thinking in a Machiavellian manner, China could interfere in the port control system. All the infrastructure is Chinese. From the cranes, the forklifts, the robots that are being used, and this undoubtedly increases the risk of the ‘China military Vision.’”
Added to that is the loss of sovereignty for security control and greater risk of an eventual military strategy. “They have the right to restrict any entry, so what do they do inside the ports? It’s not known. What if they have an office where they have hackers, I don’t know; it’s a security clause that they put in place and now they have to comply with it for 25 more years,” Tapieri said.
He refers to the renewal of the concession contract of the port of Balboa to the Chinese company Hutchison Ports, which was much discussed and controversial because it is presumed that corruption was involved. “In that port they do what they want, in 25 years only $3 million was generated for the country with the justification that the rest has been reinvested, and now they give it to them again,” Tapieri said.
It is worth mentioning that the vice-president of COSCO Shipping, a Chinese state-owned shipping company, is a member of the Panama Canal Advisory Assembly, a curious representation that does not fail to raise questions and suspicions. Although sources close to the Canal assured Diálogo that this is a representation as part of the industry and second user of the Canal, it is clear that through this seat Beijing obtains privileged and sensitive information that could be used during critical moments in a possible economic and military confrontation.
The Caribbean in the spotlight
Another strategic port to highlight in the region with significant Chinese influence is the port in Freeport in the Bahamas. “The Bahamas is very valuable in terms of security and China understands how strategic this area is,” Ellis said.
U.S. Air Force General Glen VanHerck, commander of U.S. Northern Command, highlighted China’s aggressiveness on the island and said that not only does China have its largest embassy here in the world, but that Chinese-investment projects in the Bahamas “have access […] to an overwatch, if you will, of our Navy’ test and training facilities,” Business Insider reported.
While the Caribbean is often on the back burner in discussions about China’s penetration of Latin America because it does not have the mineral reserves and other raw materials that have gotten China’s attention, this region is as strategic as South America. “The whole game is in the Caribbean, the Pacific is the gateway, but everything will end up in the Caribbean,” Humire told Diálogo.
The fire increases at lightning speed
One of the ports where China is investing most heavily is the Chancay Multipurpose Port Terminal in Peru. The mega project some 108 kilometers from Lima, with a $3.5 billion investment, is managed by state-owned shipping company COSCO Shipping. This port, where China holds a 60 percent stake, is expected to be operational by mid-2024 and will be China’s first logistics center in South America. For analysts such as Tapieri, the port of Chancay is an example of what China attempted to do in Panama but did not succeed — now they are coming with all the momentum.
While there are those who believe that this is a great development opportunity for the Peruvian economy, its detractors warn of the risks that this investment brings. “We are not talking about just any company but about China Ocean Shipping Company (COSCO), which is owned by the Chinese government, managed by the State-owned Assets Supervision and Administration Commission, under the control of the Communist Party, so it is an extension of Chinese power,” Barletti told Diálogo.
This situation has generated much distrust in the host country. “We feel that they have betrayed us and sold our homeland,” Miriam Arce, president of the Association in Defense of Housing and the Environment of the Port of Chancay, told Diálogo. “This is not just any port, we are talking about the first 100 percent private port in Peru in which we have lost all sovereignty by handing over our seas to the Chinese,” she added. “We are becoming more and more aware of this, and we see how geopolitics are influencing and to what extent, it is not only a problem of economic war, but of military power, which is very likely to happen here in this port.”
A giant Chinese-chartered freighter nudged its way into the expanded Panama Canal on Sunday to mark the completion of nearly a decade of work forecast to boost global trade.
Concerns that are very much valid. According to the China Index 2022, an initiative of Doublethink Lab, a civil society organization dedicated to studying the malign influence of digital authoritarianism, which seeks to classify the penetration of China in the world, the Latin American and Caribbean country where China has penetrated with greater force is Peru, which is also in fifth place globally only surpassed by Pakistan, Cambodia, Singapore, and Thailand. “I was very surprised by this ranking, I expected Venezuela or Ecuador to lead this list in the region, so let’s not be surprised that in the future we could have a military base in Peru,” Barletti said.
Polar strategy?
In December 2022, China Shaanxi Chemical Industry Group, a state-owned energy and chemical firm, signed a memorandum with the governor of the Argentine province of Tierra del Fuego for the construction of a multipurpose port in the city of Río Grande. It was striking that a chemical company was chosen for the construction of this type of infrastructure and it is speculated that HydroChina Corp. Shaanxi Group, another massive company under the control of the Xi Jinping government, was behind it, according to an investigation by Argentine news site Infobae. But what most set off the alarms was that Argentina would be opening the doors of Antarctica to China, thus facilitating the Asian country’s power strategy.
According to a study by the Center for Strategic Studies (CSIS), China’s ambition has led the Asian country to seek to conquer the world’s most remote frontiers to promote its strategic and military interests. The center refers to the two poles: the Antarctic and the Arctic.
In the Arctic region, China already has a presence through partnerships with other states to promote its interests. According to CSIS, China has two permanent research stations in the region, one in Norway’s Svalbard archipelago and the other in Iceland. While focused on scientific knowledge, China’s strategic writings lay bare the PLA’s interests in the region. “Combining military and civilians is the main way great powers achieve a polar military presence,” reads the 2020 edition of The Science of Military Strategy, one of the PLA’s leading military doctrinal books on the study of warfare, published by China’s National Defense University.
According to global security expert Humire, it is at these two geographic points that China’s entire dual port strategy lands. “Once they have access to both poles, China will no longer need the Panama Canal. They will have alternatives that other countries will not have, and that is when they will start to create problems.”
Dual strategy: commercial and military
The concentration of Chinese ownership in the port sector is mainly in just three conglomerates; these companies are China Ocean Shipping Company (COSCO), China Merchants Ports, and Hutchinson Ports. “The first two are state-owned enterprises, the last one is a private company, but it lost its autonomy in recent years due to China’s security law,” Lazarus said.
While commercial ports are not designed to have high-level capabilities for military functions, they do provide Beijing with a window of opportunity for them to be used for military purposes if it wanted to. “Under Chinese law, in an eventual military mobilization, all civilian assets must be made available to the PLA,” Ellis said. To which Lazarus added that, “in the event of a global conflict, it is quite feasible for the Chinese government to put pressure on these port companies,” he said. “Such as pressuring them to rest naval forces in those ports or forcing them to give or restrict access to those sea lanes valuable to the United States or its allies.”
Such a situation has already begun to become evident in some countries around the world. According to an investigation by U.S. international relations magazine Foreign Affairs, some overseas port terminals operated by China already serve PLA Navy warships for refueling, maintenance, or shore leave. Examples include the port of Singapore, Dar es Salaam in Tanzania, and Piraeus in Greece.
But that’s not all. Through these ports Beijing can obtain strategic information for national security decision-making. “Chinese companies are getting an invaluable treasure trove of maritime commodity information and information from the United States, as well as any other country,” Lazarus said.
Even more valuable information when one considers that some of these ports are located next to military bases of the host nations, such as Haifa in Israel. “This allows China to observe the operational routes, personnel, requirements, and movements of other armed forces,” Ellis said.
In Latin America and the Caribbean, several of China’s major ports in the region are close to these naval bases. Such is the case in Mexico, where the port of Veracruz is close to the Gulf Sea Naval Force in Tuxpan, or in Panama, where the port of Balboa is just 6 kilometers from the Noel Rodriguez Naval Base.
There are also other ports, such as Paniagua in Brazil, which is close to the Logistics Support Base “created to centralize the [Brazilian] Army’s supply operations with headquarters in Rio de Janeiro and which carries out most of the unloading operations of military material, mostly from the United States,” Barletti told Diálogo. And, finally, it is worth noting the construction of the port of Chancay in Peru, which is only 73 kilometers away from the Callao Naval Base.
Caution: He who rules the seas rules the world
One of the biggest threats that experts see to Beijing’s efforts to expand its maritime network are the debts that some countries have with the PRC, the loans it has begun to cash in on with strategic infrastructure. “That’s the business,” Barletti says. “China has taken advantage of vulnerable situations and then collects its debts with assets of the lending countries.”
The most emblematic example is Sri Lanka, a country that, faced with the inability to repay its debt to China, had to lease its port to China for 99 years. “If there is a finished model of China’s strategy, it is the Hambantota port,” Barletti said. “China convinces Sri Lanka to receive a loan for the creation of a second port that had no future and in the face of failure, China kept it; now we already see warships visiting its docks.”
The debts are becoming even more worrying in view of the evident economic slowdown in the Asian country as The New York Times recently reported. What will happen to the countries that cannot pay their debts when China’s economy starts to falter?
The challenges increase, and more so when the risks that China’s maritime expansion may bring are taken into consideration. While experts believe China is far from achieving formal military alliance agreements or having a military base as it did in Djibouti, one should not be complacent. “Militarization could happen at any time because the reality is that China does not need a formal agreement for a military deployment or base,” Ellis said.
China’s ability to impose its security objectives on civilian assets is what makes it so dominant yet dangerous, say experts like Lazarus who compares the American strategy to China’s when it comes to deploying its military forces. “The U.S. seeks authorization from the local government to establish any forward operating location, conduct military training, or host any military exercise on its territory. With China, there is a deliberate mix in what they call ‘civil-military’ fusion. You never know for sure when a Chinese company is engaged in simple capitalism or serving the national interests of the state.”
But there is another concern that troubles global security specialists even more. “The biggest risk is not China itself, it is the alliance China has built with Russia and Iran,” Humire said. For the expert, these three countries have a strategy of “political-military” penetration through China. “China has, in the eyes of the region, great political legitimacy and credibility as a commercial ally. A role, which it wants to continue to preserve and which Iran does not have. But since China does not have the economic power to take over the region on its own, it turns to other countries to unite and add to its military strength. In the end, China continues with the clear and legitimate role that has always been seen, while leaving the dirty work to Iran and together they take over the region. A strategy that is already evident in the Middle East, Ukraine, and Latin America,” Humire said.
Faced with this tough and complex perspective that looms over Latin America, experts recommend its leaders to measure and be attentive to the maritime strategies that are gradually being unveiled, as in the case of China. Never before has the prediction of the famous English writer and sailor Sir Walter Raleigh been so valuable and important: “For whosoever commands the sea commands […] the world itself.”