China's checkbook diplomacy wins Dominica

China's checkbook diplomacy wins Dominica
By Peter Richards

PORT OF SPAIN - Critics call it the "kiss of deception", the switch of diplomatic recognition from Taiwan to China by the tiny cash-strapped Caribbean island of Dominica, population 70,000. It's known for nature preserves and little else - except its valuable vote in international forums. Big bucks again carry the day in China's checkbook offensive to isolate Taiwan.

Dominican Prime Minister Roosevelt Skerrit, however, can hardly contain his joy.

Late last month his administration had been lambasted for its decision to end 27 years of diplomatic relations with Taiwan in favor of mainland China, even though Beijing had promised far more than US$100 million in aid to his cash-strapped island. Skerrit said he would use the money to construct a sports stadium, a highway linking the capital, Roseau, with the second city of Portsmouth, and to expand the main hospital and build schools.

As he received the first payment of $6 million on Tuesday, the leader took a swipe at "many people who have been questioning the relationship, [and] whether the Chinese government will fulfill its commitment to Dominica".

"We are seeing a tangible demonstration of the Chinese government's seriousness," Skerrit told journalists.

Dominica has emerged as the latest pawn in the continuing expansion of the People's Republic of China (PRC) in the Caribbean and Central America, at the expense of Taiwan. In fiscal year 2003, the Caribbean island had a budget of $123 million with a deficit of $14 million. The shortfall is predicted to grow to $24 million in this fiscal year.

"China offered Dominica money totaling approximately $170 million. That's a huge amount of money for a small country with a population of 70,000 people only," Taiwanese Foreign Minister Eugene Chien said when Roseau made its announcement last month.

Only 26 countries still recognize Taiwan
Only 26 countries in the world still recognize Taiwan and almost half of them are in the Caribbean and Central America, and desperately in need of funds.

Since it was expelled by the United Nations in 1971, and the PRC took over the "China seat", successive Taiwan governments have spent millions of dollars in aid to persuade countries to support their struggle with China for international recognition.

That policy has borne fruit for Taiwan over the years, with seven nations in Central America, including the Dominican Republic, Costa Rica and El Salvador, still preferring to recognize the island that many in Taipei consider a nation but that the PRC calls a breakaway province.

Taiwan has also been able to count on the support of some members of the Caribbean Community (CARICOM), namely Grenada, St Vincent and the Grenadines, Haiti, Belize, and St Kitts-Nevis. Over the years, Taiwan has pumped millions of dollars into their coffers, and the governments in these islands have reciprocated by seeking membership for Taiwan in a number of regional organizations, including the Barbados-based Caribbean Development Bank (CDB).

But their efforts have been strongly opposed by other Caribbean states, such as Barbados, which enjoy diplomatic relations with the PRC.

Grenada was among countries that publicly condemned the assassination attempts on Taiwanese President Chen Shui-bian and Vice President Annette Lu during the presidential election campaign last month. St George's viewed the shooting as "a direct attack on the Taiwanese people and on democracy", adding at the time, "our prayers are with the people of Taiwan, truest friends of Grenada".

When he announced the decision to enter into diplomatic relations with Beijing, Skerrit said Dominica's existing policy toward Taiwan was based on unrealistic and fallacious historical interpretations. "The difficulty in Dominica cannot wait until the political situation in Taiwan is resolved. We do not know how long that is going to last," he said.

Dominica's mantra: There is only one China
"We have concluded that the clear truth is there is but one China," he added in a live radio and television broadcast. "I have to go out there and lead the people of Dominica out of difficulty, and I have to bring prosperity and pride and hope to our people," Skerrit said.

Dominica and Taiwan established diplomatic ties in 1983.

Dominica's main opposition United Workers Party (UWP) also maintained ties with Taipei while it was in office from 1995-2000, and it is severely critical of the switch by the Skerrit administration, describing it as "a kiss of deception", particularly after the island had recently received $3.5 million in budgetary support from Taiwan. "What we have done here is replace actual assistance with promised assistance," UWP leader and former prime minister Edison James told reporters.

The China dispute has surfaced elsewhere in the Caribbean.

During last month's election campaign in Antigua and Barbuda, Prime Minister Lester Bird said Beijing had promised $20 million to build a new stadium for the 2007 World Cup of cricket. He called on the opposition United Progressive Party (UPP) to admit that it had received $1 million from Taiwan during the 1999 election.

"I think that this can become a serious foreign-affairs problem," Bird said during the campaign.

"We have already spoken to the People's Republic of China, and they are very upset about it, and we cannot have a situation where they are spending all this money to build a stadium for us and giving us all this assistance and turn around and ... discover that the UPP, I gather, has taken $1 million from them [Taiwan] for the last elections," he said.

Beijing appears to have ambitious plans for bringing the Caribbean into its orbit, says one observer.

"China's aim is to displace Taiwan in the region and this comes at a time of China's aggressive reach across the Pacific and into the Caribbean," Dan Fisk, deputy director of foreign-policy research at the conservative Heritage Foundation, told the Trinidad-based Caribbean Investor publication.

The Bahamas, another CARICOM member, appears to have benefited tremendously from its decision in 2001 to switch allegiance from Taiwan to the PRC. The island nation has been able to attract the Hong Kong-based shipping conglomerate Hutchison Whampoa, whose owner Li Ka-shing is known to have close connections with the political and military leadership in Beijing.

University of Miami's Anthony Brian, an expert on the Caribbean, says Dominica's decision underscores the fact that the Caribbean cannot afford to ignore China's growing influence in global trade and international relations.

"I don't think it's just dollar diplomacy," the head of the university's Caribbean international relations program told the Caribbean Media Corp. "There may have been genuine interest [in Taiwan] at some point on the part of some of the leaders, but the kaleidoscope changes - it's a much different world now than it was in 2000."

The Washington Times
Published in Washington, D.C. 5am -- August 12, 1999 www.washtimes.com
China company grabs power over Panama Canal
By Rowan Scarborough
THE WASHINGTON TIMES
Senate Majority Leader Trent Lott recently wrote to Defense Secretary William S. Cohen that a Chinese shipping company is gaining broad authority over the Panama Canal and could deny passage to U.S. ships.
"It appears that we have given away the farm without a shot being fired," the Mississippi Republican said in the Aug. 1 letter requesting Mr. Cohen's security assessment.
It was the first time a congressional leader has raised questions about growing Chinese influence over one of the world's most strategic waterways. Until now, warnings were being raised primarily by a handful of conservative lawmakers, led by Rep. Dana Rohrabacher, California Republican, who plans a fact-finding trip to Panama on Monday.
The focus of concern is Hutchinson Whampoa Ltd., a giant Hong Kong-based shipping firm with ties to China's leadership and its armed forces, the People's Liberation Army (PLA).
Under circumstances the U.S. Embassy in Panama called unusual, the government in 1997 awarded Hutchinson a 25- to 50-year contract to run the two major ports on the canal's Atlantic and Pacific entrances.
Moreover, conservatives assert that Panama gave Hutchinson broader powers in legislation known as "Law No. 5."
Al Santoli, an aide to Mr. Rohrabacher, said the law enables Hutchinson to assign the pilots who take control of ships and steer them through the canal. He also said the Chinese company can block passage of ships to meet its business needs.
This contention was challenged by a spokesman for the Panama Canal Commission, a panel of five Americans and four Panamanians who run the waterway. The Panama Canal Commission spokesman said the treaty gives the United States the right to intervene militarily to protect access.
Mr. Lott wrote to Mr. Cohen, "This administration is allowing a scenario to develop where U.S. national security interests could not be protected without confronting the Chinese communists in the Americas. U.S. naval ships will be at the mercy of Chinese-controlled pilots and could even be denied passage through the Panama Canal by Hutchinson, an arm of the People's Liberation Army.
"In addition, the Chinese Communist Party will gain an intelligence information advantage by controlling this strategic chokepoint. It appears that we have given away the farm without a shot being fired."
The senator sent the letter based on an article in Insight magazine, a sister publication of The Washington Times, that detailed Hutchinson's ties to the PLA. The Times first reported in 1997 that Hutchinson had gained control of the port of Balboa on the Pacific and Cristobal on the Atlantic.
The United States is the No. 1 user of the canal that carries 13,000 ships per year.
The U.S. military is abandoning bases in Panama under a 1977 treaty, signed by President Carter, that gives canal ownership to Panama, effective Dec. 31.
Mr. Santoli said the canal is part of a Chinese strategy to move into countries abandoned by the United States and the former Soviet Union. In Cuba, for example, Chinese intelligence officials are helping Cuba build a communications facility, he said.
"They're using Panama as a staging area for the region," Mr. Santoli said. "They're doing a massive amount of construction, a lot of investment. Literally hundreds of mainland Chinese are moving into Panama at all levels."
The Miami Herald on Monday quoted Panama's ousted intelligence chief as accusing his country's president, Ernesto Perez Balladares, of personally demanding visas for 140 Chinese immigrants.
The newspaper said the U.S. Justice Department is investigating a scheme in which Chinese immigrants paid $15,000 each for visas to use Panama as a staging area for illegal entry into the United States.
The Panama debate comes amid broader questions about China's strategic intentions and criticism of President Clinton's pro-Beijing policies from both Democrats and Republicans.
Military experts say a pattern of Chinese actions reveals a long-range strategic plan to dominate Asia and exert influence worldwide. The moves include its forays in Panama, its failed attempt to take over the old Long Beach, Calif., naval base, its suspected spying at U.S. nuclear labs, its illegal injection of campaign cash into Democratic Party coffers and its increased military spending, especially on nuclear weapons.
Reporting on a trip he and outside experts made to Panama in June, Mr. Santoli wrote in a report, "The delegation was concerned about the growing presence of communist China directly at the canal and in the region. Panama has become the central base of operations for communist China in Latin America."
Mr. Santoli said a Hutchinson subsidiary in Panama, Panama Ports Co., is partly owned by China Resources Enterprise, the commercial arm of the Chinese Ministry of Trade.
The Senate Governmental Affairs Committee has identified the Ministry of Trade as a conduit for "espionage -- economic, political and military -- for China."
Mr. Santoli said Li Kashing, chairman of Hutchinson, has served as a middleman for PLA dealings with the West, including satellite purchases from Hughes Corp.
Some downplay potential problems with Hutchinson's role in canal operations. For example, a former staffer to Sen. Jesse Helms, North Carolina Republican, issued a report in 1997 dismissing the company as a security threat.
Copyright © 1999 News World Communications, Inc.

Re-post from October 1999 ---

Rep. Rohrabacher: United States-China Military Exchanges

Crime/Corruption News
Source: Washington Weekly
Published: Monday, October 4, 1999 Author: Rep. Rohrabacher, House of Representatives, Sep. 29, 1999
Posted on 10/03/1999 09:38:26 PDT by JeanS

United States-China Military Exchanges
Rep. Rohrabacher, House of Representatives, Sep. 29, 1999

Mr. Speaker, 2 days ago, the U.S. Secretary of Defense, William Cohen, told reporters that he hopes the U.S. military will resume contacts with the Communist Chinese military. At the very same time that Secretary Cohen was speaking, in Shanghai, Chinese dictator Jiang Zemin was speaking to a gathering of elite U.S. corporate chairmen who were in China to help celebrate the 50th anniversary of the communist takeover of the mainland of China .
Jiang Zemin blatantly renewed threats by the communist regime to conquer Taiwan by force, and then he threatened the United States. 'We will not allow any foreign force to create or support Taiwanese independence.'
I have in my possession, Mr. Chairman, Pentagon documents detailing the Clinton Administration's exchange program between the United States and Communist China. It is a military exchange program. This program of military exchanges has, in effect, assisted the Communist Chinese Air Force in improving its capabilities to conduct bombing raids on Taiwan.
The May 1999 Air Force exchange, and this was an exchange in May of 1999, this year, introduced the Communist Chinese , and these are military leaders in the Communist Chinese military, to our most advanced Air Force capabilities. This may eventually cause the death of Americans serving in any U.S. air or naval forces that would attempt to defend Taiwan against communist attack.
This is mind boggling. I pray that those people who are listening to this or reading it in the Congressional Record or my colleagues will please pay attention. We are talking about training Communist Chinese military people in ways that will result in the death of thousands, if not tens of thousands, of American military personnel. It is outrageous. It is incredible. What can you say? What can we do to draw attention to this absolute outrage?
The Chinese Communist People's Liberation Air Force and government air traffic control delegation visited the United States between May 9 and May 20 of this year. Air traffic control certainly sounds harmless. The Pentagon documents used to brief these Chinese visitors show that they observed or participated in advanced combat Air Force exercises with the U.S. 389th Fighter Squadron at Luke Air Force Base in Arizona. They also observed fighter bomber operations at Edwards Air Force Base test center in California.
At these exercises, they experienced the real or simulated flights of bombing runs and strafing runs by our most sophisticated military aircraft. Especially useful for the Communist Chinese in their potential attack by the Communist Chinese on Taiwan was the briefing they got, and these DOD documents verify this, that they were shown how the military can use civilian airfields to conduct military operations.
What we see by these DOD documents is that our government, our Defense Department, showed the Communist Chinese how we would use our radar systems for air traffic control of fighter bombers at remote airfields.
We showed the Communists how to use AWACs in coordinating bombing campaigns. We showed the Communists how we coordinate our AWACS with in-flight refueling for long-range missions.
Mr. Speaker, earlier in this session, when I discovered this military exchange program and made it public, the Congress appealed to the Defense Department and passed legislation to end military exchanges that would benefit the warfighting skills of the Chinese military.
These DOD documents prove that the Pentagon has ignored the will of Congress. Instead, they have not only jeopardized the 24 million people who live on Democratic Taiwan but this administration is in effect teaching the Communist Chinese how to improve their ability to kill America's defenders.
Again, this is bizarre. It is almost surrealistic. I beg my colleagues to pay attention to this. I beg the administration to come to their senses, quit trying to treat the world's worst human rights abuser, a regime that constantly reminds us that they do not believe in anything that America believes in, hates everything America stands for. I beg them to quit trying to call these people our strategic partners and training them how to do their military.
I stand ready to give my colleagues all of these documents upon request.

Newsmax.com, January 19, 2000
Chinese Company Completes World's Largest Port in Bahamas
by Christopher Ruddy and Stephan Archer
Bahamas --- The same Chinese company that recently took operational control of the Panama Canal is currently completing construction of the largest container port in the world in Freeport, Bahamas --- just 60 miles from Florida. View Photos of the Port
Several U.S. military experts say that the activities of Hutchison Whampoa Limited, a Hong Kong-based conglomerate, in both Panama and the Bahamas, pose a significant risk to U.S. national security.
Officials for Hutchison Whampoa have heatedly denied any links with the Red Chinese government, but several established connections --- including new evidence uncovered by NewsMax.com --- suggest the Chinese government has a keen interest in the company's activities.
One port facility that has captured the interest of the Chinese government is Hutchison Whampoa's sprawling port facility in the tourist destination of Freeport on Grand Bahama Island.
Strategically Located Near U.S. East Coast
According to the company's Web site, the port is located at one of the most strategic spots in the world because "Freeport is the closest offshore port to the east coast of the United States, at the cross-roads of routes between Europe and the Americas and through the Panama Canal."
In 1995, Hutchison Whampoa entered into a 50-50 partnership with the Grand Bahama Development Company, a privately owned Bahamian company, to develop and expand the small Freeport facility that had catered to cruise ships.
Since then, Hutchison has helped dredge and expand the port, making it capable of handling the largest container ships on the high seas.
According to Michael Powers, Hutchison Whampoa's General Manager for the Freeport development, the container port is simply a "dedicated deep water trans-shipment hub."
'Hub' Port for Container Shipping
Large container ships coming from several directions can off-load their container boxes, which can be re-routed on to other large or small container ships for delivery. The port operates, he says, much like Miami airport might serve as a "hub" for travelers going to destinations around the globe.
Already the port is doing a brisk business in container shipments, Powers said, and has the capacity to become the world's largest container port. He said the company also plans to make the port the world's largest cruise ship destination port. Already, Disney cruise lines will soon make Freeport a port of call.
The company has ambitious plans to create the largest air cargo facility on land adjacent to the port. Hutchison has a 50 percent stake in the Grand Bahama Airport Company, which owns one of the largest airport runways in the world --- more than 11,000 feet long. According to Powers, the runway is capable of handling the world's largest cargo and military aircraft.
On 800 acres of wooded land adjacent to the airport, Hutchison plans to create the Grand Bahama Sea-Air Business Center --- a center that could potentially allow for 8 million square feet in warehouse space.
Communist China Ties Disturbing
While Hutchison Whampoa has a sterling reputation as a commercial enterprise --- and has not been linked to any illegal activities such as drug or gun smuggling --- the firm's ties to Communist China have raised concerns.
Senate Majority Leader Trent Lott, R-Miss., and former U.S. Defense Secretary Caspar Weinberger have expressed concerns about Hutchison's influence over the Panama Canal.
Lott has described the Hong Kong firm as "an arm of the People's Liberation Army."
Hutchison Whampoa's chairman, Li Ka-Shing, is also a board member of CITIC --- the China International Trust and Investment Corporation. U.S. intelligence sources have described the firm as a front for China's governmental State Council.
Congressman Dana Rohrbacher, R-Calif., has stated that CITIC has been used as a front company by China's military to acquire technology for weapons development.
Closely Tied to Beijing Rulers
A recently declassified report by the United States Southern Command's Joint Intelligence Center, prepared in October 1999 and obtained by the government watchdog Judicial Watch, said that "Hutchison Whampoa's owner, Hong Kong tycoon Li Ka-Shing, has extensive business ties in Beijing and has compelling financial reasons to maintain a good relationship with China's leadership."
The military intelligence report also warns that "Hutchison containerized shipping facilities in the Panama Canal, as well as the Bahamas, could provide a conduit for illegal shipments of technology or prohibited items from the West to the PRC, or facilitate the movement of arms and other prohibited items into the Americas." View the Actual Secret U.S. Military Report
John Meredith, the group-managing director for Hutchison Port Holdings, told NewsMax.com that comments made about Hutchison have often been erroneous and "outrageous."
He said the firm's involvement at the port in the Bahamas is simply a trans-shipment service.
Just Cranes, That's All
"We have no pilots. We have no tugs. We have no boats. We have no ships. We have no containers. All we have is cranes," he said.
Meredith angrily denied any connection between the firm and the Chinese government.
"We're a public company in Hong Kong. We're not an arm of anybody," said Meredith. He pointed out that less than 1 percent of all Hutchison investors are Chinese.
"I'm British for starters. I don't even speak the language. It would be very difficult for someone to instruct me as to what to do," he said
"We've had the most outrageous comments made about what we've got down [in Panama] --- missile silos and all sorts of rubbish. Anybody can come and investigate," added Meredith.
No Chinese on Payroll
According to Powers, Hutchison employs about 500 Bahamians. Only five managers are not Bahamians, mostly British nationals. None are Chinese. Bahamian officials told NewsMax.com they have noticed no increase in Chinese nationals at the port or on the island.
Despite the strong claims made by Hutchison that China has no interest in their Bahamian port, evidence suggests otherwise.
A review of the visitor's log by NewsMax.com at the company's main office in Freeport shows that Chinese government officials have been frequent visitors to the port facility.
According to the log, China's ambassador to the Bahamas, MA Shuxue, has visited the port facility at least a half dozen times in the past few years. He has also accompanied groups of Chinese government officials. On other occasions Chinese governmental or commercial representatives have also paid visits without the presence of Ambassador Shuxue.
Chinese Hold Frequent-Visitor Record
The visitor logbook indicates Chinese officials have visited the port more often than officials from any other country, including the United States. View Photos of Entries by Chinese Officials in the Visitor Log
The logbook also shows that on June 2, 1999, the Cuban ambassador, Lazaro Cabeza, also paid a visit to the facility. Cuba is a strong ally of China's.
"If they have no connection to Hutchison and the port, if they are not interested in this company, why is China sending its ambassador there?" asks retired Admiral Thomas Moorer. "Why are other Chinese officials showing up there? Why is Castro's ambassador going there?"
Moorer, former chairman of the Joint Chiefs of Staff, also served as former commander in chief of the Pacific and Atlantic Fleets.
"Of course the Chinese military sees the benefit of having a base, a future base, so close to the United States," Moorer said, adding, "What China is trying to do is get a kind of maritime position worldwide, and they need a home base --- so to speak --- in every ocean."
They Even Wanted Long Beach
"Not only are the Chinese in the Bahamas, they're in Panama and the Spratly Islands right off the Philippines. They tried to get Long Beach," Moorer said.
"There's no question about the fact in my mind that the Chinese military forces are affiliated with Mr. Li, who in turn runs Hutchison Whampoa," added Moorer.
Moorer said while the port facilities appear harmless today, they could be used as a staging ground by the Chinese at some future point if hostilities were to arise in the Korean peninsula or over Taiwan.
The Bahamian government said they are pleased with Hutchison's activities, however.
Bahamians All in Favor
Lindy Russell, the parliamentary secretary in the office of the prime minister for the Bahamas, said that Bahamians are excited about the economic development the port brings to the island nation.
Besides development of the port, Hutchison has other investments on the island including a 370-acre resort in Lucaya, Grand Bahama, which includes a 49-acre beachfront site.
Russell said that U.S. officials have expressed concerns to him regarding human cargo of Chinese labor possibly coming through the ports. They had no concerns about the actual operation of the port, Russell said.

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