Assistant Secretary of State Kimberly Breier says China’s growing influence in region is ‘eroding good governance and challenging state security.’
A Senior US diplomat has accused China of enabling corruption and undermining national security and the sovereignty of countries across Latin America.
Kimberly Breier, Assistant Secretary of State for Western Hemisphere affairs at the US State Department, told an Americas Society event in Washington that China failed to meet the America’s standards for transparency, anti-corruption and debt sustainability.
“In Latin America and the Caribbean, we have seen that China too often departs from these international standards, and when it does, its opaque practices enable corruption, erode good governance, and challenge state sovereignty,” said Breier, according to a speech transcript released by the organiser of the event on Monday.
However, Breier acknowledged that China was able to “play by international standards”, saying: “Not every Chinese investment project is malign or comes at the expense of your sovereignty.”
Brier was speaking following the second Belt and Road Forum in Beijing last week, where China attempted to address concerns that participants were at risk of a “debt trap”.
President Xi Jinping promised during the forum that belt and road infrastructure projects would be carried out according to internationally accepted rules, standards and best practices.
“We must adhere to the concept of openness, greenness, and cleanliness,” Xi told delegates. “Operate in the sun and fight corruption together with zero tolerance.”
Although Latin America is outside the main geographical area covered by the Belt and Road Initiative, a number of governments in the region have expressed interest in the scheme.
Chilean President Sebastián Piñera attended the forum in Beijing last week, while Panama’s President Juan Carlos Varela said during a visit to Hong Kong earlier this month the saw “big opportunities” in the initiative.
But the US, which did not send a high-level representative to the forum, has become increasingly wary about the expansion of Chinese investments and influence in Latin America.
Breier said “the government of China, and Chinese firms, have engaged in behaviour in the hemisphere that undermines the sovereignty and national security of both the United States and democratic partners throughout the Americas”.
She singled out the example of the Coca Codo Sinclair dam in Ecuador, a hydroelectric project funded by a loan from Chinese Export-Import Bank that amounts to US$1.7 billion with interest payments of US$125 million a year, according to a New York Times report last December.
Ecuador repays its debt to China by providing oil “at a discount”, which meant by 2018 that China kept 80 per cent of oil produced in the country, the report said.
“Nearly every top Ecuadorean official involved in the dam’s construction either is imprisoned or the Ecuadorean courts have sentenced them on bribery charges,” Breier claimed, “Ecuador is now looking for assistance to pay off or buy out the Chinese debt.
“We hope others look to this example, to fight corruption and impunity.”
Brier also warned that Beijing uses “debt diplomacy to create dependencies”, which “will eventually constitute very real leverage over governments and societies and could pose a challenge to state sovereignty”.
She also accused China of potentially comprising other countries’ data security – a warning that reflects heightened US concerns about the activities of the Chinese tech giant Huawei.
Citing China’s national intelligence law that “compels any Chinese company to cooperate with China’s intelligence services”, Breier said that “this means that any data transiting through China or processed by a Chinese company is potentially available to the Chinese government, by law, with total secrecy and no legal limitations on its collection or subsequent use.
“Citizens living in democracies in the western hemisphere could potentially have their entire digital identity under the control and surveillance of an authoritarian government.”