Our 'Front Line' With China Is the Mexico Border | Opinion

Chinese "money brokers," working for Latin American drug gangs, are quickly displacing Mexican and Colombian money launders.

With burner phones and Chinese banking apps, the gangs are "moving vast sums quickly and quietly." As a result, they are taking over the movement of dirty cash, especially in Mexico. For instance, one Chinese ring, based in Guadalajara, worked for the Sinaloa Cartel and other drug gangs. Criminals from China, in the words of federal prosecutors, "have come to dominate international money laundering markets."

"I look at this hemisphere as the front line of competition," said Admiral Craig Faller, the commander of U.S. Southern Command, to the Senate Armed Services Committee earlier this month.

He called Chinese activities "insidious." "One of the prime sources that underwrites their efforts is Chinese money laundering," Admiral Faller stated.

The Chinese Communist Party is, either directly or indirectly, responsible for money laundering for Latin America drug gangs—and others. The Party runs a near-total surveillance state and tightly controls the Chinese banking system. Most of China's large banks are either wholly or majority-owned by the state.

No one could launder sums through the Chinese financial system without the knowledge of the regime, especially given the regime's near-total surveillance state.

Even if the Chinese regime is not a direct participant in the money laundering, it at least knows about these activities and chooses to let them continue. As Reuters reported, China's authorities did not cooperate with U.S. requests for assistance in connection with the Chinese gang in Guadalajara.

Beijing has also been uncooperative regarding large and far-flung Chinese drug gangs, which are responsible for much of illegal fentanyl pouring into the United States through the southern border. Fentanyl and precursor agents are often either cooked in Chinese labs and smuggled into the U.S. through Mexico or made from Chinese compounds by gangs south of the American border. In either case, the result is, as Vanda Felbab-Brown of the Brookings Institution states in a paper issued last July, "the deadliest drug epidemic in U.S. history."

China's gangs don't just operate in Latin America; they also corrupt ruling elites—in other words, countries—in the process. Moreover, the corruption, as it has in other regions, follows and supports even legitimate trade. "For me, in the near term, the most dangerous aspect of China's presence in Latin America and the Caribbean is its distortion of the region's business and politics as it uses state-supported predatory practices to secure its strategic objectives—largely economic—there," Robert Evan Ellis of the U.S. Army War College told Newsweek.

China merchandise trade with the region has soared since 2001, when it joined the World Trade Organization. In 2002, such trade totaled $17 billion. In 2019, it surpassed $315 billion. Reuters reports that, if Mexico were removed from calculations, China is now Latin America's biggest trading partner.

"Along with the trade," Joseph Humire tells Newsweek, "comes Chinese military training, spy tech, security supplies and a range of other extra-economic activities, including the People's Liberation Army-run satellite stations and almost 50 Confucius Institutes." As the executive director of the Center for a Secure Free Society tells this publication, "The results are more corruption, more conflicts and greater destabilization in the region where we live, giving rise to more anti-American authoritarians in our neighborhood." Of course, the Chinese presence in Latin America's democracies is intended to both undermine representative governance and further Beijing's anti-America agenda.

U.S.-Mexico border wall in Arizona
U.S.-Mexico border wall in Arizona Andrew Lichtenstein/Corbis via Getty Images

Humire calls China's approach to the region "neo-colonial." That assessment appears correct. As Ellis notes, Beijing's actions ensure that its companies—and not those in Latin America—secure most of the benefit from the extraction of resources, the building and operation of infrastructure, and merchandise trade.

Moreover, China's trade and loans, Ellis says, "extend the life of corrupt authoritarian regimes such as Venezuela, and create a safe path for leftist populists from Argentina to Bolivia to Ecuador to hijack democratic institutions, destroy the private sector and pursue anti-Western activities without having to fear the financial repercussions."

As Ellis told this publication, "Beijing is moving us toward a dystopian world, far removed from the West, in which any depredation is permitted so long as it serves the interests of China."

China's moves are becoming openly brazen. Admiral Faller reports China's "illegal, unregulated and unreported fishing." Chinese crafts have appeared off the coasts of Chile, Ecuador and Peru.

Moreover, Beijing is almost surely behind the cyberattack beginning September 24, 2019 on the network of the Inter-American Development Bank. The persistent requests from thousands of Chinese IP addresses resulted in portions of the institution's website going offline. The bombardment, revealed this month, coincided with the 60th anniversary celebrations of the bank in Washington, D.C.

Beijing's arrogance is showing. It made fast gains in the region, as Washington welcomed Chinese participation in the Inter-American Development Bank and across the hemisphere, more broadly. Now, America is pushing back. A "senior State Department official," speaking anonymously to Time, said "China is a malign influence."

And that is one reason why Americans should view with alarm the Chinese presence in the Bahamas. In Freeport on Grand Bahama island, a Chinese party is committing about $3 billion to building a container port. The facility is supposed to benefit from improvements in the Panama Canal, but the economic justification looks weak, especially in a period of stagnant trade volumes. The port is, in fact, part of Beijing's highly ambitious Belt and Road Initiative. So far, 19 countries in Latin America and the Caribbean have signed on to the Chinese plan.

Even more suspicious is a Chinese-built port on the Abaco Islands in the Bahamas. There appears to be no discernible commercial justification for the facility, and the project without additional investment is essentially unusable.

The Bahamian ports could become another Hambantota, which in turn could become another Colombo. China in December 2017 took control of the Hambantota port in Sri Lanka by grabbing 70 percent of the equity and signing a 99-year lease after that project could not repay high-interest loans extended by China. Beijing's takeover was inevitable because Hambantota was misled from the get-go. In both September and October 2014, furthermore, the Sri Lankan government allowed a Chinese submarine to dock at the Chinese-funded Colombo International Container Terminals facility at the Port of Colombo.

So will we soon see Chinese warships docked at Abaco and Freeport?

Abaco is about 193 miles from Florida. Freeport is 87.

Gordon G. Chang is the author of The Coming Collapse of China. Follow him on Twitter: @GordonGChang.

The views expressed in this article are the writer's own.