China's growing influence in Central America continues as both Nicaragua and Guatemala explore the possibility of developing commercial ties with China while maintaining their existing relations with Taiwan. Nicaragua recently upgraded its bilateral ties with China to a strategic partnership, seeking financial support in the face of Western sanctions. The decision was made during a phone call between Chinese President Xi Jinping and Nicaraguan President Daniel Ortega [2df0307c].
Nicaragua's congress has canceled a Chinese interoceanic canal concession that was granted to Chinese businessman Wang Jing. The proposed $50 billion, 172-mile canal was meant to link Nicaragua's Atlantic and Pacific coasts, but no work was done on it. Thousands of Nicaraguan farmers protested against the project, and in 2019, three farmers' leaders were sentenced to prison for participating in the protests. The canal was viewed as a symbol of President Daniel Ortega's repressive regime. Supporters claimed it would create jobs and stimulate the economy, while detractors argued it posed environmental risks and would displace families. The concession was granted to HK Nicaragua Canal Development Investment Co. Limited [2df0307c].
Meanwhile, Guatemala, another ally of Taiwan, is also considering developing formal trade ties with China. Guatemalan Foreign Minister Carlos Ramiro Martinez stated that they will continue working with Taiwan but cannot ignore the weight and power China represents. The outreach to China could materialize as an 'office of trade interests' to find a Chinese market for Guatemalan products. Guatemala is one of Taiwan's remaining allies as countries increasingly side with China, which claims Taiwan as its territory [2dc6d4a0].
This development comes as Taiwan has signaled that it no longer wants to compete with China in 'checkbook diplomacy'. Taiwan's international support has been weakened as many Central American countries have switched their allegiances to China. The Chinese foreign ministry hopes that Guatemala will make a correct decision in the long-term interests of the nation and people. Cooperation on fighting corruption and drug trafficking will be key issues in discussions with the US [2854292b].
The United States is also taking steps to counter China's influence in Latin America. The US has publicly cozyed up to El Salvador President Nayib Bukele, recognizing his success in smashing gang violence, which has led to a decline in migration. However, the US is pushing Bukele to wind down his government's crackdown on gangs, which has resulted in human rights abuses. China has spent $500 million on infrastructure projects in El Salvador, offering a foothold in Central America. The US is seeking to curb migration to the southern border and offset growing Chinese influence in the region. US officials have moved critical diplomacy with Bukele behind closed doors. The US hopes to mend fences with El Salvador and strengthen relations to counter China's presence in Latin America [2854292b].
Guatemala is considering developing formal trade ties with China while maintaining its existing relations with Taiwan. President Bernardo Arevalo plans to establish relations with China and develop a trade relationship. Taiwan will continue to deepen exchanges and cooperation with Guatemala. China has increased its economic influence in Latin America, and many Central American countries have switched loyalties from Taiwan to China. Taiwan no longer wants to compete with China in 'chequebook diplomacy.' The Chinese Foreign Ministry hopes Guatemala will make a correct decision in the long-term interests of the nation and people. Guatemala's new government plans to focus on fighting corruption and drug trafficking and re-establish cooperation with the US [626d1da3].
U.S. Senator Marco Rubio (R-FL), along with Senators Jeff Merkley (D-OR), Chuck Grassley (R-IA), Tim Kaine (D-VA), John Boozman (R-AR), Roger Wicker (R-MS), and Steve Daines (R-MT), sent a letter to President Bernardo Arévalo of Guatemala affirming the importance of Guatemala's ties with Taiwan. The letter urges President Arévalo to resist pressure from the People's Republic of China (PRC) and continue to recognize and support Taiwan. The senators commend Guatemala's dedication to maintaining formal diplomatic relations with Taiwan as a demonstration of courage and integrity in the face of coercion and economic inducements from the CCP. They emphasize that Guatemala's stance safeguards its autonomy and contributes to a free and open international order. The senators also note that Chinese foreign direct investment in Latin America has decreased significantly since 2019. They highlight that Guatemala's commitment to Taiwan reflects the will of the Guatemalan people to forge a future rooted in democratic governance, economic prosperity, and respect for fundamental freedoms [b9780801].
China's growing influence in Latin America has led to conflicts and tensions in several countries. Guatemala faced a ban on the import of its goods by China, which was believed to be connected to its ties with Taiwan. Costa Rica experienced tensions with Chinese technology giant Huawei after government officials attended a party organized by the company. Brazil has imposed tariffs on Chinese imports to protect its industries, particularly in steel and textiles. Latin American countries are increasingly feeling that China has benefited more from the economic relations, leading to criticism of China's trade practices. The conflicts between Central American countries and China are seen as the beginning of more conflict-ridden relations in the future. The rise of China as a dominant actor in the region has raised concerns about its intentions and actions, particularly in the context of geopolitical rivalry between the US and China. Chinese espionage activities in Europe have further fueled mistrust and led to a crisis of confidence towards China. Japan is concerned about India surpassing it as the fourth-largest economy, following China and Germany. The decline of Japan's economy is attributed to factors such as the weakness of the yen, lack of structural reforms, and an aging population. The detention of Tibetan women in Paris during a demonstration against Chinese President Xi Jinping's visit has raised concerns about freedom of expression and the safety of Tibetans from Chinese rule [13e9fd83].