Hi, China Watchers. Today we look at Beijing’s inroads into the Caribbean, sketch out the challenges facing the new U.S. ambassador to China and profile a book that argues that only the brave can invest in China these days.

Let’s get to it. — Phelim.

‘WE HAVE TAKEN OUR EYE OFF THE BALL IN OUR HEMISPHERE’

China’s global economic and diplomatic muscle flexing in the Caribbean has serious implications for U.S. national security.

That’s the key takeaway of House Permanent Select Committee on Intelligence Chair Rick Crawford (R-Ark.) following a trip he and Rep. Ronny Jackson (R-Texas) took to Guyana, Suriname and Barbados last week. Crawford told China Watcher that Beijing is on track to displace U.S. influence in the region unless Washington boosts trade and investment.

“We have taken our eye off the ball in our hemisphere, and that has allowed an entrée for the Chinese to fill that void, and they’ve done it pretty masterfully, right under our nose, and they’re becoming more aggressive,” Crawford said.

Beijing’s interests in the region range from huge oil and gas deposits in Guyana and Suriname to access to strategic sea lanes. China is making massive investments in the Caribbean through the Belt and Road international infrastructure initiative for everything from port and bridge construction to electrical grid upgrades. Crawford said those projects give Beijing regional footholds that could eventually menace the U.S.

“If the Chinese say they would like to put a port in the Dominican Republic, well, of course they would, because they’d like another Djibouti [military base] right here in close proximity to the U.S. homeland,” Crawford said.

China is also using its growing regional clout to try to convince countries to sever ties with Taiwan. Taipei maintains relations with Belize, Haiti, St. Kitts and Nevis, Saint Lucia and St. Vincent and the Grenadines.

“There are 12 countries that recognize Taipei and five of them are in the Caribbean, so it’s a key flank in that struggle,” said Leland Lazarus, a former special assistant to the head of U.S. Southern Command.

Crawford said Congress has long neglected the Caribbean in general , blaming in part the public optics of outreach to countries synonymous with tropical vacations rather than geostrategic beachheads.

“Who wants to be out in Jamaica, or Barbados, or Trinidad on the government nickel and be thought of as ‘You’re just vacationing,’” Crawford said.

The Trump administration has declared fostering deeper ties with the Caribbean a foreign policy priority. Through closer relations the administration wants to “address illegal immigration, seek to dismantle criminal networks and push back against malign influences that threaten the stability of our hemisphere,” State Department spokesperson Tammy Bruce told reporters last month.

Secretary of State Marco Rubio did a swing through Suriname, Guyana and Jamaica last month. While there he made a point of cautioning Chinese-ally Venezuela against military “adventurism” over a territorial dispute with Guyana and critiqued the “terrible” quality of Chinese-built roads.

But it’s unclear if either the administration or Congress are going further than rhetoric. Crawford said he’d like to see a two-pronged strategy that boosts U.S. security interests through participation in the Caribbean Community’s Regional Security System grouping and deepens U.S. economic ties to the region. Joining the RSS will require either congressional legislation or joint action by the president, steps that Crawford said he has yet to plan out.

Crawford also proposed deploying elements of the Army Corps of Engineers to assist with infrastructure development in the region. Targeted financing from the Inter-American Development Bank, a regional multilateral lender focused on spurring economic growth in Latin America and the Caribbean, is a potential source of funding for such projects, he added. A senior State Department official sits on the IDB board, creating the opportunity for U.S. influence in what the bank finances in the region.

“We’ve got to give them some options so that they can actually do business with us,” Crawford said.

Trump’s “Liberation Day” tariffs — which imposed a 38 percent levy on imports from Guyana and 10 percent on those from other Caribbean countries — may complicate that. And widen opportunities for Beijing.

“The Caribbean’s development challenges are skyrocketing — energy insecurity, food insecurity, spikes of crime and violence,” said Wazim Mowla, a native of Guyana who leads the Atlantic Council’s Caribbean Initiative. “There is a lot of financing and technical assistance that is needed for the region and at the moment there hasn’t been a single country to step up and raise their hand,” he added.

MR. PERDUE GOES TO BEIJING (SOON)

The Senate surprised nobody by confirming former Georgia Sen. David Perdue as the new U.S. ambassador to China on Tuesday.

That will put Perdue at the forefront of administration efforts to navigate a U.S.-China relationship roiled by a trade conflict and rising concerns about Beijing’s increasingly aggressive military footprint in the Indo-Pacific, as your host wrote here.

Perdue’s confirmation coincides with a stalemate in the U.S. tariff war. That makes him a potentially valuable player in efforts to get the two countries talking.

“In the Trump administration what matters is being the guy in the room — being Laura Loomer, or whoever it is, right before the president makes a decision,” said Dave Rank, former chargé d’affaires at the U.S. embassy in Beijing during the Obama administration. “Perdue’s just not set up to do that but he does have the opportunity to send a message to say ‘the president asked me to say this.’”

Beijing will likely seek clarity from Perdue on the Trump administration’s longer-term intentions for U.S.-China ties.

“Beijing continues to debate intensely the end state that Trump is seeking on trade with China. Trump has not shown his hand and this is driving the Chinese to distraction,” said Dennis Wilder, who served as director for China at the National Security Council under George W. Bush. “They will be hoping Perdue comes with the answer.”

TRANSLATING WASHINGTON

— BESSENT: CHINA CAN’T SUSTAIN U.S. TARIFFS: Treasury Secretary Scott Bessent said that the Trump administration’s 145 percent tariffs on Chinese imports are about to inflict “unsustainable” pain on the country’s economy. “We will see that the Chinese tariffs are unsustainable for China,” Bessent told reporters Tuesday. “I’ve seen some very large numbers over the past few days that show if these numbers stay on, China could lose 10 million jobs very quickly, and even if there is a drop in the tariffs, that they could lose 5 million jobs.”

That economic risk means that “the onus will be on them to take off the tariffs,” Bessent added.

Beijing is having none of it. “If a negotiated solution is truly what the U.S. wants, it should stop threatening and exerting pressure, and seek dialogue with China based on equality, respect and mutual benefit,” said Chinese embassy spokesperson Liu Pengyu.

— KRISHNAMOORTHI: TRUMP POLICIES BOOSTING BEIJING: House Select Committee on China ranking member Raja Krishnamoorthi (D-Ill.) marked Trump’s first 100 days in office by declaring the president’s policies a win for Beijing.

“After all its talk about ‘America First,’ the Trump administration’s first 100 days in office have only hurt America and helped our adversaries like the Chinese Communist Party — abandoning U.S. allies and partners, gutting foreign aid, and making America retreat from the global stage,” Krishnamoorthi said in a statement Tuesday.

The White House didn’t respond to a request for comment.

—TREASURY SANCTIONS IRAN-LINKED CHINESE FIRMS: Five Chinese firms have ended up on the latest Treasury Department sanctions list aimed at stymying Iran’s ballistic missile program, POLITICO’s Robbie Gramer writes in. The sanctions against the companies — which include Dongying Weiaien Chemical Co Ltd. and Yanling Chuanxing Chemical Plant — are “for their role in a network procuring ballistic missile propellant ingredients on behalf of Iran’s Islamic Revolutionary Guard Corps,” Treasury said in a statement Tuesday. It’s another data point of what some national security hawks in Washington are referring to as an “axis of aggressors” — Russia, China, Iran and North Korea — all deepening military and security cooperation.

Liu at the Chinese embassy condemned the action, saying: “We oppose the U.S. using national apparatus and long-arm jurisdiction to bring down Chinese companies.”

TRANSLATING EUROPE

— CHINESE SPIES TARGET BELGIAN LAWMAKER: Chinese spies sought to gain information on Samuel Cogolati, a Belgian co-chair of the Greens party and prominent China critic, by attempting to coerce one of his political opponents, local media reported Wednesday.

Chinese intelligence services in 2020 approached Eric Dosogne, the then mayor of Huy in southern Belgium and a political rival of Cogolati. That outreach came through Dosogne’s close relationship with Beijing due to a city friendship agreement. POLITICO’s Antoaneta Roussi has the full story here.

— BEIJING TO LIFT SOME EU SANCTIONS: The Chinese government is planning to lift sanctions on five current and former European Parliament lawmakers to allow for trade talks between the two countries. European Parliament President Roberta Metsola will announce the agreement on Wednesday, POLITICO’s Max Griera reported.

Last week, Metsola’s spokesperson confirmed that negotiations to end the sanctions between the Parliament and the Chinese government were in “their final stages.”

The lifting of sanctions comes against the backdrop of a decision by Trump to upend international trade relations by slapping tariffs on imports, with the most punitive levies falling on China. The resulting uncertainty has jump-started EU trade negotiations with countries around the world.

HOT FROM THE CHINA WATCHERSPHERE

— BEIJING BLAMES COVID ON THE U.S.: The Chinese government has ramped up its counterattack on the White House’s new website that blames the Covid-19 pandemic on a lab leak in Wuhan. Beijing published an 8,000 word “white paper” Wednesday praising China’s “open and transparent” approach to Covid-19. And it reiterates Beijing’s claim that Covid-19 emerged from a lab leak in the U.S.

The document links alleged cases of Covid-like illnesses in Virginia in July 2019 to a nearby U.S. military lab. “That same month, the Fort Detrick Biological Laboratory, located just one hour’s drive from the affected area, was suddenly shut down,” the document said. The White House didn’t respond to a request for comment.

— RADIO FREE ASIA CLOSING TIBETAN, UYGHUR SERVICES: Radio Free Asia’s cash crunch will force the broadcaster to shut down its Tibetan and Uyghur language news services on May 9. The Department of Justice has appealed a district court’s ruling last week that blocked Kari Lake, who oversees RFA’s parent, the U.S. Agency for Global Media, from terminating RFA’s funding.

“USAGM has not assured us of any timely or consistent release of our congressionally appropriated funds,” said RFA spokesperson Rohit Mahajan. “This extends our financial strain, sadly forcing us to move forward with plans to continue furloughs and let 50 percent of our language services go dark in the coming weeks.” Lake didn’t respond to China Watcher’s request for comment.

— MANILA’S MIXED MESSAGES ON TAIWAN’S MILITARY: What a difference a day makes. Philippine Rear Admiral Roy Vincent Trinidad said Tuesday that China’s increasingly aggressive incursions into Philippine waters of the South China Sea are pushing Manila toward direct naval cooperation with Taipei.

“We now have the regularization of cross-Strait transit of warships,” Philippine Rear Admiral Roy Vincent Trinidad told TaiwanPlus news Tuesday. “That will also be just one step away from doing joint activities — military to military.”

Philippine Defense Secretary Gilbert Teodoro Jr. quickly walked that back (perhaps after a terse call from the Chinese embassy in Manila). Such cooperation “would not be in accord with the Department of Foreign Affairs interpretation of the One-China policy,” Teodoro told reporters Wednesday. Beijing isn’t pleased. “We call on relevant officials of the Philippines to refrain from making provocations on the Taiwan question,” said the Chinese embassy’s Liu.

HEADLINES

The Guardian: Revealed: online campaign urged far right to attack China’s opponents in UK

New York Times: Your home without China

The Diplomat: This is how Washington loses the Pacific islands

Bloomberg: The U.S. is already losing the new Cold War to China

HEADS UP

— TAIWAN’S LAI EYES PAPAL INAUGURATION INVITE: Taiwan’s diplomatic ties to The Vatican face a new test: whether Taiwanese President Lai Ching-te gets an invitation to the inauguration of Pope Francis’ still-to-be-announced successor.

The Vatican didn’t invite Lai to Francis’ funeral last week despite Taiwan’s Deputy Foreign Minister Francois Wu’s pledge that it was the ministry’s “most important aim,” per Reuters. Taiwan instead dispatched the island’s former Vice President Chen Chien-jen. That underscores the fragility of Vatican–Taiwan ties as the Holy See seeks to expand official links with China and its millions of Catholics. Chen spent time in Rome lobbying for a funeral invitation for Lai and “expressed hope” the Vatican would do so, Taiwan state media reported last week. Stay tuned.

ONE BOOK, THREE QUESTIONS

The China Business Conundrum by Ken Wilcox |

Responses have been edited for length and clarity.

The Book: The China Business Conundrum: Ensure that “Win-Win” Doesn’t Mean Western Companies Lose Twice

The Author: Ken Wilcox is a board member of the 21^st Century China Center at the University of California San Diego and former president of the Shanghai Silicon Valley Bank.

Responses have been edited for length and clarity.

You advise investors to “go to China but go with your eyes open.” Does that match this moment of deepening trade war?

We’re at the end of an era right now. In most technological realms, China either believes it has, or actually has caught up with the U.S. So they believe they have fewer things to learn from our companies. They’re in a mood to just go ahead and decouple.

You write of Chinese business negotiation style. Any tips for the Trump administration as it tries to get Beijing to the bargaining table?

At this point the negotiation is over. I would back off. I would say something face-saving, but I wouldn’t scream from the rooftops. I would just issue a very calm message to the world that makes the Chinese look as bad as we possibly can at this point. But I think the negotiations are over and Trump lost. So it’s not going to end until Trump blinks in a more obvious way, in a way that makes [Chinese leader] Xi Jinping feel that he can describe it to the world as his victory.

Former Commerce Secretary Gina Raimondo said in 2023 that China was becoming “uninvestable” for U.S. firms. Are we there yet?

It’s still a place for the brave. I’ve talked to people in big private equity companies in the past week and they’re pulling back. But they still think China’s investable, just not in any of the areas that have dual [civilian military] use, or anything that the Defense Department isn’t happy about. Wall Street licks its wounds and comes back the next day for another fight.

Thanks to: Heidi Vogt, Robbie Gramer, Antoaneta Roussi, Max Griera, Emma Cordover and Dean Southwell.

China Watcher Wants You!!!

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