China’s Digital Warfare Reaches America’s Doorstep

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We welcome you to the Greater Caribbean Monitor (GCaM). This is our last issue of the year. We will be back in January.

In this issue, you will find:

•China’s Digital Warfare Reaches America’s Doorstep

•With Trump’s Victory, Europe Must “Man Up” Against Russia

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The GCaM Team

China’s Digital Warfare Reaches America’s Doorstep
838 words | 4 minutes reading time

Over the past decade, China has exponentially expanded its influence across Central America, the region closest to the southern border of the United States. Through a combination of business networks and infrastructure development donations, Beijing has solidified its foothold in the region, even venturing into sectors that could pose risks to U.S. national security.

Overview. The Costa Rican government recently launched criminal investigations into alleged fraud, bribery, and influence peddling involving representatives of the Chinese telecommunications giant Huawei, alongside current and former officials of the Costa Rican Electricity Institute (ICE).

• This development follows months of escalating tensions between President Rodrigo Chaves’ administration and Huawei, stemming from a 2023 decree that barred companies from countries outside the Budapest Convention, such as China, from bidding on public tenders for the development of 5G networks.

• The decree, issued over cybersecurity concerns, was challenged by Huawei in Costa Rican courts. In an initial constitutional ruling, the appeal was dismissed, though the legal process is still ongoing.

• Warnings from Costa Rican authorities regarding potential corruption and China’s aggressive entry into the telecommunications sector appear to be well-founded. According to a report by The Tico Times, in April 2024, Huawei allegedly hosted an exclusive event for several ICE employees, including officials responsible for overseeing public contracts. Furthermore, in the days following the announcement of the investigations, the U.S. Embassy in Costa Rica issued a statement revealing that Chinese cybercriminal groups had been identified within Costa Rica’s cyberspace.
  
  

The Chinese Model. Beijing employs a strategy of corporate diplomacy to advance its geopolitical interests, particularly in Latin America, where it aims to operate discreetly to avoid drawing too much attention, given its geographic proximity to the United States. Under this approach, China bypasses the traditional reliance on embassies to establish and manage its networks of influence abroad, instead leveraging the power and reach of its major enterprises.

• Major Chinese companies, whether state-owned or private—such as Huawei, BYD, or Alibaba—are legally required to include a Chinese Communist Party (CCP) committee within their organizational structure. It is believed that this mandate has even been extended to foreign companies operating in China, including firms like BMW and Volkswagen. 

• These committees reflect the CCP’s determination to ensure that all sectors of Chinese society remain aligned with its vision and ideology. They are particularly focused on the country’s most successful companies, which the party can leverage to coordinate global actions in support of its foreign policy objectives. In return, these companies benefit from generous subsidies and public policies designed to fuel their growth and strengthen their international position.

• This reinforces the perception that the events in Costa Rica are, at their core, yet another attempt by the CCP to expand its influence over critical digital infrastructure essential to national security, in what has traditionally been considered Washington’s “backyard.” 
  
  

Why It Matters. Weak institutions, poor infrastructure, and limited legislation in Central American countries make them particularly vulnerable to cyberattacks and other digital threats. This situation also poses a significant risk to the United States, which is witnessing its primary geopolitical rival steadily gaining influence over strategic assets near its southern border.

• In an interview with República, Robert Evan Ellis, a professor at the U.S. Army War College and a Latin America specialist, highlighted the significant activity of Huawei representatives in Guatemala. Among its key initiatives are cloud services and strategic partnerships with various organizations and companies across the region. According to Ellis, these collaborations could pose cybersecurity risks similar to those in Costa Rica. 

• Despite recent discussions on the matter, Guatemala lacks a cybersecurity law or regulations to protect digital information. This regulatory gap significantly increases the risk of cyberattacks, and more broadly, makes the country’s digital infrastructure more susceptible to being compromised or co-opted by external actors. 

• Guatemala, one of the few countries that still recognizes Taiwan, exemplifies how China expands its influence without relying on formal diplomatic ties, using its corporate network as a primary tool. According to Ellis, in challenging environments like Guatemala, Beijing supplements its efforts with strategies such as offering scholarships to students, purchasing advertising space in local media, and funding trips to China for journalists and business leaders.
  
  

Balance. Latin America is poised to become one of the most significant geopolitical arenas in the coming decade. Current developments suggest that the region should hold a top priority in Donald Trump’s foreign policy, given his focus on curbing illegal immigration and countering China’s rise.

• The appointment of Marco Rubio, known for his involvement in Latin American affairs, as Secretary of State suggests that Washington may be gearing up to pay closer attention to developments south of the border.

• The United States will likely need to devise effective mechanisms to compete with both China’s corporate and checkbook diplomacy—strategies through which Beijing has successfully gained the favor of most Central American countries.

• Sooner or later, Washington will need to allocate more time and resources to address the risks to its national security stemming from immigration and China’s growing influence in the Western Hemisphere. The sooner it begins, the better. 

With Trump’s Victory, Europe Must “Man Up” Against Russia
794 words | 4 minutes reading time

Donald Trump’s victory and his promise to end the war between Russia and Ukraine has put Europe in check. After almost three years of conflict, with Europe allowing Washington to become Ukraine’s main backstop, Brussels must now countenance Trump’s drive for peace, which may not align with the European Union’s desires. 

• The president-elect has stated that he will end the war within 24 to 48 hours of taking office. As unlikely as this may seem, it certainly marks the beginning of the end to the conflict.

• What began as a Russian Blitzkrieg has become a war of attrition. Russia has some experience with these “frozen conflicts,” but its war economy shows some signs of breaking. Ukrainian offensives, for their part, have not succeeded, although the Ukrainian Army has outperformed expectations.

• From the beginning of the conflict, Brussels ceded most decision-making responsibilities to Washington. Eurocrats remain committed to supporting Ukraine, but enthusiasm is far from uniform across European capitals.
  
  

Between the Lines. EU Commission President Ursula von der Leyen has long said the EU will support Ukraine for “as long as it takes.” The slogan still rings true in Brussels, but support has not translated into concrete action. Indeed, concerns elsewhere, especially Gaza and Syria, have taken attention away from Ukraine, thus dividing the EU’s often ineffective geopolitical efforts.

• Trump’s inauguration will likely lead to a ceasefire, which will be followed by peace talks. It is possible that in the run up to his swearing-in, both sides will make a final push, since they wish to negotiate from an advantageous position.

• Little is known of Trump’s peace plan, but Keith Kellogg’s presumptive appointment as Russia-Ukraine envoy provides some insight. The retired lieutenant general had earlier suggested a two-pronged plan: making continued support for Ukraine conditional on peace talks and threatening Russia with increased support for Ukraine if it failed to negotiate.

• He will likely seek a solution to Russia’s territorial claims in eastern Ukraine, that is, the territories that provided Moscow’s casus belli in 2022. Ukraine will be displeased by any talk of formally ceding territory, including Crimea.
  
  

Yes, But. The solution remains unclear, since neither Russia nor Ukraine will be willing to give up what they consider to be their sovereign territory. Some have suggested respecting each country’s area of effective control at the time of negotiations. Another possible route would be an armistice, followed by the establishment of a Korean-style demilitarized zone to be guarded by third countries.

• It is not certain, however, that Europe will be willing to provide the necessary troops to ensure peace on the border established between Russia and Ukraine.

• Europe faces an uncertain future, with Russia possibly emerging as the greatest beneficiary. This must not be exaggerated, however, since a hypothetical deal under Trump is unlikely to solely harm Ukraine’s goals.
  
  

On the Radar. The current panorama forces Europe to change its continental security policy. Trump’s pressure will prove unflinching: NATO member states will be compelled to direct around 2% of GDP to their military. Only a few European states are currently fulfilling this requirement. 

• According to Nicolás Pascual de la Parte, Spanish ambassador to the European Parliament, the EU has to return to a policy of containment similar to that which resulted from the Truman Telegram.

• Since 2008, Putin has shown Russia to be a revisionist power seeking to restore its old imperial claims and status. It began with his intervention in Georgia in 2008, followed by his takeover of Crimea in 2014, which Moscow regards as historically and legitimately Russian, and the invasion of Ukraine in 2022.

• Pascual de la Parte believes the invasion would not have happened if Europe had put up a credible deterrent. Its capacity to put up such a deterrent is now doubtful.
  
  

To Close. Pascual de la Parte says he does not know if “the EU will be able to create the credible deterrence necessary to prevent further political and military adventurism by Putin.” Such an endeavor would require years of compromise, but government collapses in Germany and France have slowed down all political activity in Brussels. With Trump’s arrival, the EU knows that its blank check has run out; Europe will no longer be able to be NATO’s freeloader.

• Besides not relying on the United States, the EU must nourish its own technological, military, and industrial development. NATO’s 2% of GDP requirement is no longer a ceiling, but the absolute minimum for defense spending.

• The EU must start to worry about innovating and stop regulating. The war in Ukraine has revealed its great military weakness, while the U.S. economy’s markedly better post-COVID performance has revealed the European economic model’s limitations.

• If Europe fears future Russian expansionism, it must instill a credible fear of retaliation in Putin. Even if it wishes to reach some degree of amicable coexistence with Russia, it must have the resources to defend itself.