China’s Presence in the Bahamas: A Greater Role After Hurricane Dorian?

By: Jared Ward

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Introduction

The Bahamas, an island paradise less than 60 miles off the coast of Florida, faces a long and expensive rebuild in the aftermath of Hurricane Dorian. Nearly 50 percent of the Caribbean island nation’s housing has been destroyed; and its infrastructure, upon which its tourism economy so badly depends, has been decimated. The international community has worked to stave off the immediate dangers of food and water shortages, but the task of rebuilding the Bahamas will be shouldered by its people for generations to come. The Inter-American Development Bank has calculated $3.4 billion in initial damages from Hurricane Dorian, and it is still uncertain where the funding for disaster relief will come from. (IDB, November 15)

Senator Marco Rubio of Florida, whose state enjoys close ties to the Bahamas, warned in a recent editorial that the devastation caused by Hurricane Dorian could create an opening for the People’s Republic of China (PRC) to use aid as a Trojan Horse to gain a foothold near American shores (Miami Herald, September 14). However, while the destructive path of the hurricane has ostensibly created a blank slate for the PRC’s Belt and Road Initiative (BRI) to rebuild badly needed infrastructure, Beijing’s presence in the Bahamas has already been growing for years: Chinese investors are major players in the Bahamas’ lucrative tourism industry, and Chinese companies like the China Harbor Engineering Company (CHEC) have added to their growing Caribbean portfolio with infrastructure projects throughout the country.

The rise of Chinese presence and influence has placed the Bahamas and its leaders in the unenviable position of navigating Sino-American tensions in the Caribbean. Washington has responded to Beijing’s recent spate of spending by warning the country against China’s “predatory economic practices,” yet has focused its foreign policy attention towards faraway regions considered more strategically important (The Tribune, March 20) . Beijing’s role in the Bahamas will be watched intently by Caribbean leaders bracing for their own battles with climate change and other pressing issues. Inaction or mixed signals from the Trump Administration towards its neighbor in crisis will make the PRC an attractive and necessary partner—thereby lessening Washington’s ability to draw upon the support of Caribbean leaders for important hemispheric issues like Venezuela.

The “Distracted Neighbor” Posture of the United States

Days after Hurricane Dorian finished its slow, two-day slog over the Bahamas, President Trump took questions in the White House. He voiced his support for the country but hedged at American responsibility, calling the Bahamas a “British protectorate” (White House, September 4). The words likely took the sovereign nation of 400,000 people by surprise, but they also highlight the difficult political climate facing Bahamian leaders. Since the Bahamas broke free from the British Empire in 1972, America has carried unrivaled political and economic influence in the country.

The Bahamian economy heavily relies on American tourists and wealthy individuals that use its financial industries, but in recent years America’s political role has waned. America’s ambassadorial position to the Bahamas has been unfilled since 2011, by far the longest span in the nearly fifty-year history of U.S.-Bahamian bilateral relations. While the muck of political partisanship can help explain slowed confirmations, it’s only one indication that America’s influence is, as one Bahamian newspaper editorial put it, “slowly slipping away” (The Tribune, August 3, 2017).

According to the Bahamian Consulate General in Miami, Prime Minister Hubert Minnis pledged to President Trump in March to help keep Chinese influence out of his country (Palm Beach Post, October 15). Holding Chinese companies accountable was a campaign issue that helped propel Minnis to his 2017 election victory, but campaign promises won’t solve the messy reality his country faces. Publicly, Bahamian officials have said they will stay out of Sino-American conflicts, instead focusing on their own economy and interests; however, it’s not entirely clear where those interests lie. As then-Vice President Joe Biden reportedly said in 2014 to Progressive Liberal Party (PLP) chairman Fred Mitchell that while America had no money to give, “China has money; and if they want to give you money, God bless you, go right ahead” (EW News, May 21).

Beijing’s Relations with the Bahamas

The Bahamas are a relative latecomer in opening diplomatic relations with the PRC. For over three decades Nassau recognized Taipei exclusively, before announcing in 1997 its decision to agree to Beijing’s “One-China” mandate—thereby effectively ending any relationship with Taiwan. That same year, Hubert Ingraham became the first Bahamian Prime Minister to visit China. The first decade of relations was uneventful, and nations like Cuba and Jamaica were a bigger focus of Beijing’s Caribbean interests.

In 2009, in the wake of the global financial crisis, signs of a closer relationship emerged. In February 2009, the PRC sent a high-ranking cadre, then-Vice Premier Hui Liangyu, to sign a number of agreements, including a $30-million dollar grant to build the Thomas A. Robinson National Stadium (Bahamas Government, February 17, 2009). That same year Beijing opened a Confucius Institute at the University of the Bahamas to act as a cultural bridge, teaching language and Chinese culture to Bahamian students. In 2010, the China EXIM Bank provided over $54 million in preferential loans to build a four-lane highway that runs from Sir Lynden Pindling Airport to Nassau’s city center. China has also granted preferential loans to build a $3 billion mega-port at Freeport (Roll Call, March 25), and another $40-million to build a port off the island of Abaco (The Abaconian, December 12, 2018). The controversial Chinese tech-firm Huawei has upgraded the Bahamas’ digital infrastructure, connecting the island’s grid to 4G service and the surrounding region. Over 3,500 kilometers of cables run between the Bahamas and Haiti, carrying data around the hemisphere. In 2018, China Worldwide agreed to build wind turbines, which will move the nation toward cleaner energy while preserving its natural tropical beauty (Nassau Guardian, March 5).

Besides infrastructure, many Chinese investments in the Bahamas are aimed at reaping the benefits of its robust tourism industry. In 2011, the China EXIM Bank loaned nearly $3 billion dollars to build the Baha Mar Resort; and in 2015, the China State Engineering Corporation purchased the iconic British Hilton Colonial as part of the construction of a $250 million complex near Nassau’s cruise terminals called “The Pointe” (The Bahamas Investor, August 11, 2015).

Despite talk of China “colonizing” the Bahamas, the country has benefited from a relationship with China in tangible ways. Baha Mar created thousands of jobs for locals who work in the hospitality business. America’s trade war with China has also opened up new opportunities for Bahamian exports: for example, the Chinese market has opened for fishermen to sell their lobster and crayfish catches in record numbers. As one fisherman said, “For years we have been trying to get into the Chinese market. We are allowed to ship seafood from here to China. We don’t just have to depend on Europe and America. Our lobster is number one in the world. It’s all about supply and demand” (The Tribune, September 2).Image: At a March 2010 ceremony, representatives of Baha Mar Resorts Ltd., the China EXIM Bank, and the China State Construction Engineering Company sign agreements to proceed with the financing and construction of the Baha Mar Resort complex in the Bahamas. (Source: Global Construction Review)

Problems in the Sino–Bahamian Relationship

Despite such economic benefits, China’s presence in the Bahamas has not been without controversy. The Baha Mar resort, the largest of its kind in the Caribbean, was plagued with delays and shortfalls in funding. More recently, it has become the target of a $2.5 billion dollar suit alleging “massive fraud” (Reuters, December 26, 2017). Among Bahamian society a disquiet has emerged that Chinese projects have little trickle-down effect: jobs go to Chinese workers and companies, while saddling their country with debt.

For America, China’s growing presence exacerbates worries that expensive port facilities in the Bahamas might be seized by the PRC for delinquent payments, as has occurred in Sri Lanka (China Brief, January 5). In 2016, Latre Rahming, an influential member of the People’s Liberation Party (PLP), fanned these fears by stating in a speech that China “will actively provide military assistance to the Bahamas and defense dialogue” (Sunshine State News, September 10). According to a State Department report, American officials expect the Caribbean to become an increasingly popular transit space for drug and human smugglers (State Department, July 23). Given reports that 200,000 Chinese nationals have been illegally smuggled into America through the Caribbean, a growing Chinese presence in the Bahamas could also become a matter of national security (ReliefWeb, June 20, 2017).

Why Is China Interested in the Bahamas?

There are pragmatic explanations for China’s presence that don’t involve the Chinese navy operating off the coast of Florida. The success of China’s projects in the Bahamas, including its ability to have loans repaid, depends on a healthy American economy. Chinese tourism has made little headway in the region—and therefore, multi-billion projects like Baha Mar and other high-traffic tourist enterprises require American travelers to fill the rooms. Furthermore, the value of high-capacity port access for China outweighs the antagonisms that a naval base would cause. China’s port access in the Bahamas means that China will have access to ports on each side of the expanded Panama Canal—thereby giving Beijing access to an important corridor of the Western market.

A more plausible and immediate concern is that increased Chinese leverage in the wake of Hurricane Dorian could give the PRC greater access to natural resources. The Bahamas lacks mineral or timber wealth like some other Caribbean nations, but Beijing has long tried to gain a greater role in the fishing industry. Shortly after Hurricane Matthew, China proposed a joint fishing venture that would give Chinese commercial ships access to Bahamian waters. One such deal was scrapped in 2016—due at least in part to pressures by Florida fishermen (Sun Sentinel, November 29, 2016)—but Nassau will be looking for new revenue streams following Hurricane Dorian. This could pressure the Bahamas’ fishing industry to rethink turning away Beijing, and to invite Chinese competition into Caribbean waters—thereby squeezing the Florida fishing industry (Seafood Source, April 12, 2016).

Conclusion

In the aftermath of Dorian, political debates regarding the longer-term implications of how the Bahamas should manage its relations with China will take a backseat to more immediate concerns. On one-hand, Hurricane Dorian could provide a reset for America’s role in the country, providing a way to re-forge old ties and provide incentives for Nassau to stay in the U.S. sphere of influence. For Beijing, Dorian could push the Bahamas to join the Belt and Road Initiative (BRI) and serve as an example for Caribbean leaders bracing themselves for future hurricanes and wondering about their place between Washington and Beijing.

The Bahamas has not joined the BRI like many of its neighbors, but will likely become more attracted to the program to help build back up its shattered infrastructure. In the weeks following Dorian, the PRC sent Cai Defeng, a high-level cadre and standing member of the National People’s Congress, to the Bahamas. The symbolism of sending a high-ranking official shows that Beijing intends to take an active role in reshaping the Bahamas. During the meeting, Bahamian House Speaker Haison Moultrie said that Dorian is an opportunity to redistribute his nation’s development resources to the country’s southern islands—creating new commercial and tourist centers—effectively giving China a hand in molding the country in a new direction (The Tribune, September 20).

America’s influence in the Bahamas, and the entire Caribbean region, remains strong. However, Caribbean nations have a strong regional identity and face common problems like climate change. In Dominica, a nation recently ravaged by Hurricane Irma, Beijing has become Prime Minister Roosevelt Skeritt’s principal ally and a benefactor to help make good on his election promises. America has been criticized for its efforts to rebuild Puerto Rico—its own territory—so the response to Dorian will provide a case study as to whether Caribbean nations can count on their neighbor to the north, or whether they should bind themselves more closely to China.

Jared Ward has a PhD in Chinese history and is a Lecturer at the University of Akron in the Department of History. His research focuses on China’s foreign relations with the Caribbean during the Cold War and today. You can follow him on Twitter at JA_Ward_