El Salvador project shows how China wields growing power in America’s backyard

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WASHINGTON – Two years ago, the U.S. government began loudly questioning a Chinese push to buy an island off the coast of El Salvador, where a Chinese company was proposing to build a deep-water port and manufacturing.

US objections seemed to have had an impact, as a political backlash in El Salvador blocked the project. But the Chinese were not deterred. After what US officials have publicly claimed to be a successful Chinese effort to bribe Salvadoran politicians, the project is now moving forward. NBC News obtained a PowerPoint presentation from a Chinese state-owned company called “Shared Opportunities, Shared Future,” which outlines a version of the proposal.

US intelligence and military officials say the port project would give China an important economic and strategic foothold in what has traditionally been a US sphere of influence. It is one of many examples of how China is making its power and influence felt across Latin America and the Caribbean in a way that officials say is detrimental to American interests, and through methods that the United States cannot use.

“Chinese influence is global, and it’s everywhere in this hemisphere, and growing alarmingly,” Admiral Craig Faller, head of US Southern Command, said in an exclusive interview with NBC News.

“China is pursuing several portals in this hemisphere,” he continued, referring to seaports, airports and other transit hubs. “Depending on the day, count around 40. And looking at where they strategically focus – west coast, east coast, southern Panama, the Caribbean – I can absolutely see a future where these ports will become a hub for their navy. growing blue water that far exceeds their… need for homeland defense. “

But it’s not just the military implications that worry US officials. Faller said China is moving rapidly towards a goal of economic domination in Central and South America over the next decade. In 2019, he said, the PRC overtook the United States as a major trading partner with Brazil, Chile, Peru and Uruguay and is now the region’s second largest trading partner behind the states. -United.

From 2002 to 2019, Chinese trade with Latin America grew from $ 17 billion to over $ 315 billion, he said.

With economic influence comes political influence, said Evan Ellis, a research professor of Latin American studies at the Institute for Strategic Studies at the US Army War College.

“If you bring in the projects and you have the political connections and all the influence that comes with politicians and ruling families,” he said, “then other types of influence come naturally.”

The problem in El Salvador is a proposed expansion and development of a Japanese-built deep-water port called La Unión, located in the Gulf of Fonseca at the intersection of Salvadoran, Honduran and Nicaraguan territories.

China is proposing to expand the port and establish trade zones that would exclude US and European companies, allowing Chinese port operators, Chinese shipping companies and possibly Chinese service providers to dominate the zones, Ellis said.

China aims to use the port and areas to import Chinese products and distribute them to other Central American markets without involving local businesses, Ellis said, adding that Chinese investors have expressed interest in building the ‘an airport in La Unión, which would further strengthen the area. as a multimodal hub.

A Sino-Salvadoran investor, Bo Yang, quietly bought land for the port expansion, including half of Perico Island, according to the State Department. He offered island residents up to $ 7,000 each to relocate, Ellis said, and the purchase was finalized in late 2019. US officials say Yang is China’s agent in El Salvador and there. has been promoting chords for 30 years.

In 2018, Yang told Salvadoran media that he deals directly with the island’s landowners and does not work with a government. “It’s just business, like when you go to buy a house, you see it with the owners,” he said.

The 46-page presentation obtained by NBC News said the economic zone would be a $ 3 billion project covering 1,700 square miles.

Earlier this year, the State Department released a Congress-mandated list of officials in El Salvador “who have knowingly committed acts that undermine democratic processes or institutions, have engaged in significant corruption, or have obstructed investigations into such acts of corruption in Guatemala, Honduras and El Salvador. “On the list was Ezequiel Milla Guerra, former mayor of La Unión, who” engaged in significant corruption by abusing his authority as mayor in the sale of the island of Perico to agents of the People’s Republic of China in exchange for personal benefits, ”the document states, in an extraordinarily blunt public assessment of the US government.

State Department officials say China is increasingly adept at using bribes and other corrupt methods to advance its business interests, which is illegal for US companies.

The list also named associates of Salvadoran President Nayib Bukele, including a close associate and a former security minister.

Bukele has expanded cooperation with China since his predecessor moved the country’s embassy from Taipei to Beijing three years ago. In response to the State Department’s “corrupt” list, he doubled down.

Bukele on Twitter hailed what he called China’s $ 500 million investment in El Salvador “without conditions”, which has been interpreted as an attack on the terms of good governance that Washington and lenders backed by the United States often attaches to aid.

Diplomatic representatives from China and El Salvador did not respond to requests for comment.

“You have a new generation of governments, who if they want to engage in corruption and protect themselves from the consequences, they can turn away from Western investors in the United States and look to China as an alternative,” Ellis said. . “China has effectively become an incubator for populist governments.”

U.S. Southern Command covers Central America, South America, and the Caribbean, including responsibility for defending the Panama Canal. Faller, who ends his three-year tour of duty as Southcom commander in October, said he had observed China steadily encroaching on its area of ​​operations.

“China seeks to capitalize on its vision for the future, its vision of the world order, and does not seek partnerships based on mutual respect and trust. It seeks and builds on dependence.”

In addition to strategic investments, Faller said, China provides technology to authoritarian governments, including Venezuela and Cuba, that allows them to more effectively suppress dissent.

Venezuelan President Nicholas Maduro “uses Chinese technology, Chinese training, to socially control this population,” he said, adding that the Chinese “are working alongside Cuba, Russia and more and more of the world. Iran to ensure that Maduro remains in power, and that a form of government favorable to Chinese economic interests remains.

The Cuban government was able to quickly quell the civil unrest, he said, as it uses Chinese suppliers Huawei and ZTE to manage its mobile phone and information technology networks. “There is a growing Chinese influence in Cuba,” he said.

The Biden administration’s response to China’s aggressive outreach has been measured.

“It is not the policy of the United States to force our partners to choose between the United States and China,” said a senior administration official who was not authorized to be appointed. “But what we are proposing is a partnership that works in the interests of those of our partners, centered on our common values, democratic governance, respect for human rights, transparency … inclusive economic growth, entrepreneurship.

The official admitted, however, that China has a much more strategic approach than the United States in leveraging its economic strength.

“They use a geostrategic approach where if they feel they need something necessary for their investment purposes, the government orders it to happen,” the official said.

“We don’t have a state-led approach,” the official added. “Obviously, we are working to encourage American investment, including major projects in Latin America and Central America, whether in the Panama Canal or other major investment projects.”

Yet many experts say China is winning and the United States should put aside its rigid adherence to pure free market principles when it comes to foreign investment.

“It is probably counterproductive and impractical to try to prevent our partners from engaging commercially with China,” Ellis told NBC News. “However, the United States can shape how this happens in a way that is less inconsistent with the principles of democracy and human rights, the rule of law and free markets, and less threatening to the region and the United States. “

The US government can do this, he said, by “insisting, using our commercial leverage and other transparency tools, because transparent interactions prevent your Chinese companies and local elites from making win-win deals.” in which they mainly deliver the goods of the country. to the Chinese without benefiting the peoples of these countries. “


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