State Department: Latin America Turning Its Back on ‘Crappy’ Chinese Debt Trap Deals

People walk past a Chinese supermarket in the Chinatown in Buenos Aires, Argentina, May 10
Meng Dingbo/Xinhua via Getty Images

Latin America, once fertile ground for China to sign “Belt and Road” infrastructure deals with poor countries, is turning its back on “crappy” construction projects that erode the sovereignty of local governments, a senior State Department official told Breitbart News.

The administration of President Donald Trump has focused heavily on warning friendly countries that China’s Belt and Road Initiative (BRI) — in which if offers predatory loans to poor countries to be used to pay Beijing to build ports, roads, and railways — is a threat to their sovereignty. The BRI is a global plan that has dozens of signatory countries, from belligerent enemies of America such as Cuba to governments increasingly dependent on America to continue existing, such as Ukraine. Originally debuting as the “One Belt, One Road” initiative, genocidal dictator Xi Jinping touted the plan as the reconstruction of the Ancient Silk Road connecting Beijing to Western Europe.

The scope of that project expanded dramatically to include most of Africa and some of the Western Hemisphere’s most vulnerable countries. Africa and Southeast Asia have suffered some of its direst consequences. Sri Lanka, for example, lost control of a critical port to China for almost 200 years as a result of a predatory deal. Officials in Pakistan estimate losses in the hundreds of millions of dollars for the country due to BRI corruption. Rampant reports of racist behavior, apartheid workplaces, and abuses against locals linked to the BRI are common in countries such as Kenya, Zimbabwe, and Zambia.

Speaking to Breitbart News on Friday, a senior State Department official emphasized another factor in growing distrust of Chinese infrastructure deals aside from the sovereignty threat — the quality of the final product. In diplomatic engagements with the Western Hemisphere, the official explained, at major events such as last week’s United Nations General Assembly, a growing list of countries is questioning whether trusting China with major infrastructure projects is worth the headache of a substandard product or not.

“China, I mean, you know, everybody is caught in the dilemma of China offers money at low rates, they offer infrastructure at low rates and so on, and it always has a poison pill in it,” the official continued. “I think most of the countries in the region are catching on to that, but then the trouble is that the Chinese go at the subnational level and try to subvert them that way, so we had discussions with quite a few countries about specific Chinese initiatives and investments.”

“Interestingly,” the official added, “one of the big challenges we face is people understand China gives you poor quality — bad, not on schedule, bad terms — and ends up compromising your sovereignty or your security in the end.”

“There is a great deal of caution and concern on the part of most of the national level governments [in the Western Hemisphere] that they know the products is crappy,” the official said, “you’re going to end up in a debt trap, they’re going to end up taking a mortgage on your port or something, and then you lose control of your own assets.”

In South America, Belt and Road partners include Chile, Argentina, Bolivia, Peru, Colombia, and Venezuela — the outliers being Paraguay, which maintains diplomatic relations with Taiwan, and Brazil, one of the world’s few countries to enjoy a trade surplus with China. In Peru, Xi Jinping celebrated a massive BRI victory in November by opening a new port in Chancay to expand Chinese exports to the country and recently pitched the construction of a transcontinental railroad to connect that port to Brazil, diminishing the importance of the Panama Canal.

Yet skepticism about the value of BRI deals in the region has grown. Panama withdrew from the BRI in February, following a visit by Secretary of State Marco Rubio. Costa Rica is actively in conflict with the Chinese telecommunications giant Huawei. Even countries with leftist governments, such as Chile, have made moves to protect their economies from Chinese colonization.

“We’re not telling people, ‘Don’t buy flat screen TVs from China,’ or something,” the official clarified, “and we can’t credibly say, ‘Don’t do it.’ But we are saying, ‘Look, if you have Huawei put in your 5g network, you’re handing over all your data to the Communist Party of China and they will use it against you.'”

Huawei working in tandem with the Communist Party for illicit intelligence gathering and espionage was a high priority concern for the first Trump administration. Trump blocked the sale of Huawei mobile phones, cameras, and other equipment via executive order in 2019.

The Chinese government, as it typically has in the last decade, used its time before the U.N. General Assembly on Friday to sell the BRI to the world — alongside a host of new “initiatives” from the mind of totalitarian leader Xi Jinping, primarily the “Global Governance Initiative” to reshape the infrastructure of the United Nations in the image of communist China. Xi has also launched the “Global Development Initiative,” a plan to expand BRI-style economic colonialism into all aspects of financing states. Premier Li Qiang, speaking on Xi’s behalf in New York, celebrated Beijing’s alleged “high-quality Belt and Road cooperation with over 150 countries” during his speech.

“China is taking solid steps to promote high-quality development at home… Philosophical concepts such as harmonious coexistence are deeply ingrained in the DNA of the Chinese nation,” he claimed.

That message, the State Department official claims, is increasingly less successful, particular in the Western Hemisphere, leading China to find alternatives to working with regional governments.

“What we’re seeing now is that the Chinese will go in and make a deal with a university or something, to say, ‘Oh, let us put in an astronomical telescope in your university,'” the official explained, “and then it turns out it’s a thing to spy on U.S. satellites or something.”

“The national level governments are, I think, sensitive to that. They’re having some legal difficulties figuring out how to put a stop to it, how do they control it,” the official noted. “To me its a sign of success that the Chinese have been forced to go down to that level.”

Ultimately, the official added, many of these countries, with limited options outside of the BRI, will require America to offer another path.

“The real issue, more than anything, I would say, is what’s the alternative?” the official noted. “We need to step up our game and say, ‘How can we get American and European countries, companies, to compete on some of these things’… It’s both the deterrent but you have to offer a viable alternative.”

Follow Frances Martel on Facebook and Twitter.

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