In the historic heart of San Salvador, a modern library inaugurated with great fanfare by Salvadoran President Nayib Bukele is the latest symbol of China’s growing presence in Central America, investing primarily in energy and infrastructure.
According to an official video released on Tuesday, Mr. Bukele, accompanied by the Chinese ambassador, visited the six floors of the 24,000 square meter building and its digital rooms, built with a $54 million donation from China. China will also offer a stadium like the one in Costa Rica and a pier on the Pacific coast as part of a non-repayable cooperation.
On Wednesday, Nicaraguan President Daniel Ortega’s son Laureano Ortega boarded one of the 250 Chinese buses delivered to the country and thanked China for this “special relationship” that he said will help Nicaragua climb out of poverty. In addition to road, airport and energy infrastructure, Laureano Ortega spoke of a plan to develop 5G mobile technology after recently visiting the headquarters of Chinese telecommunications giant Huawei, which has been accused of espionage by Washington.
“From the left-wing authoritarian regime of Ortega to the right-wing authoritarian regime of Bukele, the region’s new policies have increased China’s influence to create distance between the United States and Central America,” American researcher Evan Ellis told AFP.
Since Costa Rica cut ties with Taiwan in 2007, China has gained ground in Central America, establishing diplomatic relations with Panama (2017), El Salvador (2018), Nicaragua (2021) and, more recently, Honduras (2023).
“China’s efforts in Central America have been motivated by its interest in politically isolating Taiwan (…) and it will pursue them to gain the support of these governments in international organizations,” Margaret Myers, Asia and Latin America specialist, told AFP at the Inter-American Dialogue.
In Central America, only Guatemala and Belize are among the 13 countries worldwide that have diplomatic relations with Taiwan, which China considers its territory. “Central America is part of this isolation policy,” said Salvadoran economist César Villalona.
Free trade agreements
With the inauguration of the library on Thursday, Nicaragua ratified a free trade agreement that El Salvador and Honduras are currently negotiating.
But trade is mostly favorable for the Asian giant. In Costa Rica, Chinese imports amount to 3.35 billion dollars and exports to 400 million; in El Salvador 2.8 billion compared to 48 million, according to official figures.
“China is very far away. Our production capacity is low and freight and insurance prices hardly compensate for the costs. “In Nicaragua, the deficit will increase with this contract,” estimates Enrique Saenz, a Nicaraguan economist living in exile in Costa Rica.
While these are micro markets for China, Central America offers easy access to the Pacific and Atlantic.
Panama, of geopolitical importance thanks to its canal, has involved Chinese companies in the construction of maritime terminals on the interoceanic waterway, whose second largest customer in the world after the United States is China. And the largest Chinese banks are located in Panama’s financial center, former Panamanian deputy foreign minister Luis Miguel Hincapié told AFP.
Addressing the leaders of several Latin American countries, President Joe Biden warned of the Chinese “debt trap.”
But for Rodolfo Pastor, Minister of the Presidency of Honduras, relations with the United States over the past 40 years have not helped the region “escap poverty or initiate development.” “We have to focus on something new.”
Guatemala’s President-elect Bernardo Arévalo, who will take office in January, assured that his government will “continue relations with Taiwan” without ruling out exploring ties with China.
“No one can deny the importance of China in world trade. It is therefore only a matter of time before the countries still tied to Taiwan change their position, warns Mr. Hincapié