Opening Statement
Chairman Eliot L. Engel
House Foreign Affairs Subcommittee on the Western Hemisphere
The New Challenge: China in the Western
Hemisphere
Wednesday,
June 11, 2008
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.