Chinese Ambassador Dai Qingli, left, presents Bahamas Prime Minister Philip Davis with a gift to mark the Chinese Year of the Rabbit.
R. EVAN ELLIS
The People’s Republic of China (PRC) has been making a series of strategic investments in the Bahamas that include ports, multimillion-dollar construction projects and tourism ventures.
It’s part of an influence campaign, according to March 2023 testimony by Gen. Glen D. VanHerck, the leader of U.S. Northern Command, that involves “efforts to gain a foothold only 50 miles from the U.S. East Coast.”
It’s a campaign that has expanded over two decades, and one that merits examination.
The Bahamas established relations with the PRC in May 1997. Since then, the PRC recognized the Bahamas strategic importance. Hong Kong-based Hutchison Whampoa bid for and won a concession for the Freeport Container terminal in November 2001 just four years after the Bahamas recognized the PRC. Although ethnic Chinese are a tiny fraction of the Bahamian population, the PRC has built a large embassy in the country.
As in other countries, the PRC has provided aid to the Bahamas, both after Hurricane Dorian devastated the country in September 2019, and during COVID-19, delivering 13 batches of medical goods in the four-year period between 2019 through 2022.
The PRC’s ambassador to the Bahamas, Dai Qingli, who arrived in March 2021, is a fluent English speaker and has been active in promoting PRC interests, including continuing the PRC’s goodwill gifts to the country. Those included a donation of medical equipment in August 2022 and greenhouses for agricultural research in partnership with Hunan province in May 2023.
The PRC also has focused significant attention on the country relative to its small size. In February 2023, PRC Ministry of Foreign Affairs Director General for Latin America Cai Wei traveled to the Bahamas to attend the CARICOM Heads of Government conference in Nassau. In July 2023, Vice Chairman of the National People’s Congress Xiao Jie also visited, meeting with the leadership of the Bahamas Parliament.
As with other parts of the region, PRC-Caribbean trade is highly imbalanced. From 2018 to 2020, the Bahamas exported only $500,000 in products to PRC, while importing $112 million in goods. As elsewhere in the Caribbean, trade with the PRC was severely impacted by the COVID-19 pandemic, although it has subsequently begun to recover. PRC-Bahamas trade in 2021 was $492 million, up 42% over the prior period, according to The Nassau Guardian newspaper.
The PRC commercial presence in the Bahamas has concentrated in logistics, construction, tourism and telecommunications. For the size of the Bahamas, the footprint of PRC-based companies, and the associated influence in Bahamian business circles and politics has been significant, although virtually all major PRC initiatives have been beset by problems that raise questions concerning the benefit of those projects for the Bahamian people, including the use of illegal workers. Reciprocally, the Bahamas is one of the few governments in the Caribbean that recognizes the PRC, but has not signed onto the PRC’s One Belt, One Road initiative.
As noted previously, Hutchison Port Holdings has operated concessions in the Bahamas since November 2001. Currently, Hutchison continues to be the operator of the country’s principal cargo port at Freeport, as well as the cruise ship terminal there. Hutchison previously held the concession for the main international airport on Grand Bahama island, but the property was badly damaged in 2019 by Hurricane Dorian and the government reclaimed it after Hutchison delayed in repairing it. Despite disappointment with Hutchinson’s performance, the Bahamas allocated $200 million to rebuild the airport and is considering contracting PRC-based companies to do so, according to The Nassau Guardian.
Construction has been a major focus of PRC commercial interest in the Bahamas. The first major project was construction of the Thomas A. Robinson cricket stadium in 2011. Because of the rapid deterioration of the stadium, the Bahamian government is negotiating a $30 million project with the PRC to rebuild the facility.
The Bahamian government argues the rapid deterioration has been caused by the Chinese builders cutting corners. It also objects to PRC plans to bring in Chinese workers for the project rather than using Bahamian labor, according to The Nassau Guardian
Beyond the stadium, PRC-based companies built an expressway, connecting the then-Chinese operated airport to the main tourist area, funded by a $54 million concessional loan from China Export-Import Bank. Separately, China Harbour Engineering Corp. built a secondary port facility on North Abaco island, similarly funded by a $40 million PRC concessional loan.
Beyond logistics, the PRC’s major investments in the Bahamas have been in the tourism sector. China State Construction Engineering (CSCE), doing business in the region as China Construction Americas (CCA), built the Bahamas’ biggest resort hotel complex, Baha Mar, supported by a $2.45 billion loan from China Export-Import bank. Serious problems with CCA’s performance, however, delayed the opening of the project and forced it into bankruptcy.
Although COVID-19 further complicated the resort’s financial situation, by 2023 it was fully open and is directly or indirectly responsible for 5,000 jobs and contributes 12% of the national GDP.
Beyond Baha Mar, the major seaside commercial complex The Pointe was built and funded by CCA, opening in 2020. In 2014, CCA also bought one of the Bahamas historically most significant longstanding resorts, the British Colonial Hilton, for $250 million. Due to a combination of COVID-19-related challenges and CCA failure to invest in a major overhaul of the facility, the property closed in 2022. In a similar fashion, when Hutchison took over the cargo port on Grand Bahama island, it agreed to operate another commercially distressed property, the hotel and golf resort, the Grand Lucayan, as part of the deal. After Hutchison failed to turn the hotel around, the Bahamian government subsequently bought it back from Hutchinson in August 2018 for $65 million, to resell it at a loss.
The Chinese firm Huawei dominates the telecommunications market in the Bahamas as a provider of both devices and infrastructure. In 2014, the Bahamas Telecommunications Co. (BTC) selected Huawei to upgrade the country’s infrastructure to 4G LTE. BTC’s main rival, Aliv, also principally uses Huawei in its network.
Chinese companies have also expanded their digital footprint in the country through donations to the government. In April 2023, for example, the PRC provided smart TVs to use in private meeting rooms in the Bahamas Parliament, where sensitive discussions take place., according to The Nassau Guardian.
Concern over the information security risks from Huawei’s near monopoly of the Bahamas telecommunication infrastructure became an international issue when in 2020, when an article by the leading British newspaper The Guardian published evidence that Huawei equipment supplied to BTC had been used for cyber espionage against U.S. citizens.
As with other sovereign nations, the Bahamas has the right to pursue political and economic relationships with the PRC. The Bahamas also has the ability and expertise to recognize that the Chinese have a track record of aggressively pursuing their own interests. Given this track record, the Bahamas can evaluate future agreements with healthy doses of transparency and oversight.
- Evan Ellis is a Latin American Studies research professor at the U.S. Army War College.
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