Subcommittee on the Western Hemisphere

Representing the Bronx, Westchester, and Rockland Counties
Offices in the Bronx, Mount Vernon and West Nyack
2161 Rayburn HOB, Washington, DC 20515
Contact: Eric Jacobstein or Jason Steinbaum, 202-226-9980
For Release: Wednesday, June 11, 2008

ENGEL CHAIRS HEARING ON THE NEW CHALLENGE OF CHINA IN THE WESTERN HEMISPHERE

Washington, D.C. – Congressman Eliot Engel, Chairman of the House Foreign Affairs Subcommittee on the Western Hemisphere, is chairing a hearing today on the role of China in the Western Hemisphere. Witnesses at the hearing include Daniel P. Erikson from the Inter-American Dialogue, Evan Ellis from the University of Miami and Francisco Gonzalez from the Paul H. Nitze School of Advanced International Studies (SAIS) at John Hopkins University.

Following the hearing, testimony can be read and the proceedings can be viewed at http://foreignaffairs.house.gov/sub_westhem.asp

The following is Chairman Engel’s opening statement at today’s hearing:

“I am pleased to welcome you to today’s hearing, entitled ‘The New Challenge: China in the Western Hemisphere.’ This is a topic of growing interest, and I look forward to exploring the issue.

“Here on the Western Hemisphere Subcommittee, we are charged with keeping a close watch on developments throughout Latin America and the Caribbean. Several countries have for years required a great deal of attention: Colombia, Cuba, and Haiti have often led the list. Likewise, regional issues like poverty and inequality, energy production, remittances, and migration also top the list of issues we must monitor.

“In recent years, another challenge has also caught the attention of the Subcommittee – and it emanates from the other side of the globe. The growth and increasing power of the People’s Republic of China is today forcing policy-makers to take a new look at our priorities, not only in Asia, but Latin America, as well.

“The expansion of the Chinese economic juggernaut has not only had a great impact on businesses and workers in the United States, it is also powerfully affecting the entire hemisphere. In 1999, total trade between China and the Latin America and Caribbean region stood at $8.2 billion. By 2007, it had risen to almost $102 billion – a more than ten fold increase in less than 10 years. Likewise, Chinese exports to the region have soared by a similar amount.

“In November 2004, Chinese President Hu Jintao’s visit to several Latin American countries underscored China’s increased presence in the hemisphere. Cynthia Watson recently wrote that `the November 2004 "rock star" visit of Chinese President Hu Jintao to Latin America was a wake-up for many in the United States that China had ‘discovered’ Latin America.' During a speech to the Brazilian Congress, Hu stated that China would invest $100 billion over the next decade, and $20 billion in Argentina, alone. While China has a tendency of overpromising investment in Latin America, there is no doubt that Beijing’s presence in the region is growing.

“I was particularly struck by China’s visibility in the Western Hemisphere when I led a Congressional Delegation to the southern Caribbean last year. Our visit just happened to coincide with the International Cricket Championships, held in several Caribbean countries -- and Grenadian Prime Minister Keith Mitchell scheduled our meeting at their brand new Chinese-built cricket stadium during a cricket match. I learned that everyone in Grenada knew that the Chinese built the multi-million dollar stadium.

“Unfortunately, people were not nearly aware of what the United States has done for the island. In September 2004, Hurricane Ivan slammed into Grenada and did terrible damage. Although people know about the Chinese building of a sports arena, they don’t know that the United States provided $42 million to Grenada for recovery and reconstruction in the aftermath of the hurricane or that we repaired over 1,000 private homes, helped 269 small businesses to reopen, and assisted 1300 farmers to plant new crops.

“But, we should keep the Chinese challenge in perspective. The U.S. remains the biggest player in the hemisphere, by far. While China’s reported foreign direct investment in the region was $11.5 billion in 2005, U.S. investment was $366 billion. U.S. geographic proximity to Latin America, close cultural ties, and long-standing trade patterns give the United States overwhelming advantages. Nevertheless, the challenge is clear – and if we don’t pay attention and conduct effective public diplomacy, as we didn’t in Grenada, even the best intentions and the most worthy humanitarian efforts might go unrecognized. Likewise, if we’re not careful American businesses could find their investments undercut and their trade diminished.

“The battle for diplomatic recognition between China and Taiwan is also alive and well in the Western Hemisphere, and is thought by many to be China’s number one priority in the region. Of the 33 independent countries in the Latin America and Caribbean region, China currently has official diplomatic relations with 21 states, while the remaining 12 nations currently maintain relations with Taiwan. For decades, Taiwan was a consistent provider of financial assistance and investment in Latin America and the Caribbean in order to nurture its remaining official relationships. Today it is hard-pressed to compete against the growing economic and diplomatic clout of China, which in recent years has stepped up its own version of what is sometimes called `checkbook diplomacy.'

“The growth of Beijing’s power and wealth is now visible in the numbers of countries recognizing China. Since 2004, Dominica, Costa Rica, and Grenada have switched their recognition to the PRC and reports indicate that other countries in the region might soon follow.

“But not everything always goes well for Beijing in its efforts to expand official relations in the hemisphere. When national anthems were played at the inauguration of that Chinese-built cricket stadium in Grenada, the Grenadian police band made a serious mistake. It performed the national anthem of the Republic of China (also known as Taiwan), instead of the People’s Republic of China (China). So, I guess China can’t win them all.

“We have a distinguished group of experts with us today to discuss today’s hearing topic: `The New Challenge: China in the Western Hemisphere.' First, I would like to introduce Daniel P. Erikson, Senior Associate for U.S. Policy, at the Inter-American Dialogue. Second, we have Evan Ellis, Adjunct Professor at the University of Miami. Finally, I am pleased to welcome Francisco E. González, Assistant Professor of Latin American Studies, at The Paul H. Nitze School of Advanced International Studies of Johns Hopkins University.

“I would now like to recognize the Ranking Member of the Subcommittee and my good friend, Dan Burton, for his opening statement.”