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China's interest in Central America is only to "take Taiwan out of the game"

Policy specialists point out that the Asian giant is exercising restraint in the region so as not to send the wrong message to the US

Chinese President Xi Jinping. Photo: EFE | Confidential

13 de diciembre 2022

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On the first anniversary of the reestablishment of diplomatic relations between the People's Republic of China and Nicaragua, specialists in international politics agree that the presence of the Asian giant in Central America is motivated by "the diplomatic battle with Taiwan" and not by economic interests, given that in practice "Nicaragua has nothing to offer China".

China's interests in Latin America are located in southern countries such as Chile, Colombia, Peru and Brazil, from where they import raw materials such as iron and copper. In the case of Central America, their interest "is the battle to wrest the last diplomatic residues from Taiwan as well as to create some kind of global presence as the great power they really are", said Costa Rican political scientist Constantino Urcuyo Fournier


Urcuyo, who is a professor of International Politics at the University of Costa Rica, noted that in Central America, Honduras and Guatemala still maintain diplomatic relations with Taiwan. That means, he says, that "China's relationship with Central America must be placed in that context".

A more political than economic interest

Marisela Connelly, an expert in Asian affairs, says that there are necessary questions when analyzing the diplomatic relationship between the two countries. "What are China's interests in establishing a relationship with a country like Nicaragua? How has the Taiwan Strait issue developed? And, above all, how has the position of the United States changed with respect to that conflict?"

In Connelly's opinion, the aid that the US has been providing to the Taiwanese government has caused the People’s Republic of China’s government to adopt "very drastic measures on a point that seriously hurts the Taiwanese government": diplomatic recognition "which is ultimately what gives Taiwan international presence and what is what it relies on to say that it is a state.”

This is the reason that Central American countries, which had always been allies of the island, one by one have been breaking off relations with Taiwan to establish them with China.

"The case of Nicaragua is taking place in a very specific context, as the Ortega government becomes increasingly authoritarian and the U.S. and its allies are beginning to impose sanctions". This situation "was convenient" for the People's Republic of China as it tries to increase Taiwan’s isolation, the expert pointed out.

China is being cautious in the region

Between January and November 2022, Nicaragua's exports to China barely reached US$11.3 million, according to the Foreign Trade Report of the Central Bank of Nicaragua.

In contrast, the United States, Nicaragua's largest trading partner and with which the Ortega regime maintains an open political confrontation, registered more than $1.4 billion million in exports in the same period.

For Urcuyo, the timid beginnings of the commercial relationship between China and Nicaragua are due to the Chinese “being cautious” and that they “do not want to send the wrong message to the United States, that they are meddling heavily in their backyard”. He added that China “was interested in Nicaragua moving away from Taiwan and they achieved it, but it’s a market that is not attractive to China. What does Nicaragua have to offer China from the economic point of view?”

“Nicaragua has nothing to offer China from the point of view of exports. Maybe there could be a little something on the meat issue, the Chinese market doesn’t ask to order two containers of meat; they’ll ask for a huge quantity, and Nicaragua cannot offer that”, according to Urcuyo.

Skepticism about trade relations

Connelly also pointed out that the economic relationship between China and Nicaragua is "a highly asymmetrical” one, and considered that if Nicaraguan entrepreneurs have already established markets where they are competitive, which are mostly geographically close by, “they will not be interested in exporting to China, a market they do not know, which is very far away and in which it is very difficult to establish all that is needed to be able to export.”

The expert in Asian affairs does not see many possibilities for the commercial relationship between Nicaragua and China, even signing a Free Trade Agreement or an Early Harvest Agreement, as the Ortega regime has celebrated. “Nicaragua can hardly be competitive in the Chinese market. It doesn’t have what it takes, it doesn’t have the infrastructure to be able to establish a productive commercial relationship with China”, she stressed.

Experts also point out that it is still “too early” to see the results of the reestablishment of relations between Nicaragua and China, but they consider that the situation is unlikely to change.

“Chinese interest changes based on the attractiveness of the region. Here in Central America, we are not that attractive... The necessary infrastructure for logistical support for exports is not built overnight,” Urcuyo emphasized.

Mistake to believe China would be a generous partner

During this first year of diplomatic relations, China's aid to Nicaragua consisted of the donation of 800,000 doses of Sinopharm vaccines against Covid-19, the delivery of six containers with medical supplies valued at a little over a million dollars, the promise to start the construction of 12,000 "two-room, one-story" houses in the Bismarck Martínez housing project, and the offer to restore a special education center located in the city of León.

Urcuyo estimates that by 2023 it is possible that this diplomatic relationship will generate certain investments in social infrastructure for Nicaragua, but warns that Daniel Ortega was mistaken if he believed that in the People's Republic of China he would have a generous partner and that Xi Jinping would be "a kind of Santa Claus".

Urcuyo considers that when Ortega reestablished diplomatic relations with the People's Republic of China, he was thinking the same thing that Hugo Chávez, the late former President of Venezuela, thought at some point, "that this was going to be a socialist solidarity between similar parties and that it was going to serve to create a very serious problem for the United States." However, Urcuyo concludes, "neither of these things " actually happened.

Also: Ortega spends 369 million córdobas of "remaining funds" from Taiwan

A different relationship from that with Russia

Urcuyo warns that China's behavior is very different from that of Russia, a country whose foreign policy is "more aggressive" and which "will try to be a much stronger player" in the region. Even so, Nicaragua is not a heavyweight player for Russia.

Russian President Vladimir Putin "is going to try much harder to play the exchange card that, well, now the Americans are in my neighborhood, I'm going to somehow increase my presence in their living room," Urcuyo said.

However, Urcuyo warns, "I don't think they are going to raise the ante on the Russians for Nicaragua because it is still such a minor player for the Russians".

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This article was originally published in Spanish in Confidencial and translated by Our Staff
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