03 09 2024

This is an excerpt from an article in the Magazine “THE DIPLOMAT”.

Although Costa Rica has recognized Beijing as its diplomatic partner since 2007, the regional avalanche in favor of China truly began with Panama in 2017, followed by El Salvador in 2018, Nicaragua in 2021, and Honduras in 2023.

The rapprochements between Central American nations and China were accompanied by grandiose narratives disseminated by officials and propaganda apparatuses on both sides, continually alluding to opportunities and benefits, with symbolic gifts ranging from stadiums to amusement parks.  

In reality, these relations between Central American countries and China have, within a few years, resulted in a huge trade deficit, failed projects and a marked lack of transparency in Beijing’s relations with the corrupt elites of countries with authoritarian leaders. Meanwhile, the expected financial windfalls have failed to materialize.

Chinese foreign direct investment (FDI) in Central America represented only 0.34 percent of the total received by the region between 2000 and 2016, before the recent wave of diplomatic normalization. From 2010 to 2021, according to the Central American Monetary Council, Chinese FDI barely represented 0.3 percent of the total received in the period. In other words, the relative share of Chinese FDI in Central America actually dropped despite four countries cementing new ties with Beijing.  

Read more by clicking on the following link:

https://thediplomat.com/2024/08/china-in-central-america-just-a-mirage