Central America’s Diplomatic Shift to Beijing
Since Costa Rica first recognized Beijing as its diplomatic partner in 2007, a wave of Central American nations has followed suit. Panama in 2017, El Salvador in 2018, Nicaragua in 2021, and Honduras in 2023 all abandoned Taiwan in favor of China, lured by promises of economic prosperity and grand infrastructure projects. However, the reality of these diplomatic ties has been far less rosy. Behind the fanfare and symbolic gifts—stadiums, amusement parks—lies a tale of failed projects, economic imbalance, and the erosion of transparency in governance.
The Promises vs. The Reality: Unmet Expectations
When Central American countries switched allegiance to Beijing, they were promised vast economic benefits. Officials on both sides painted a picture of boundless opportunities, from increased foreign direct investment (FDI) to large-scale infrastructure projects. However, the numbers tell a different story.
Chinese FDI in Central America remains minuscule, accounting for a mere 0.34 percent of the total investment the region received between 2000 and 2016. From 2010 to 2021, Chinese FDI in Central America barely increased, still representing just 0.3 percent of the total. In fact, despite four countries cementing new ties with Beijing, China’s relative investment share in the region has actually declined.
Out of 600 registered Chinese investments in Latin America and the Caribbean between 2000 and 2022, only 17 were in Central America, amounting to just $1.5 billion out of $184.6 billion. These figures starkly contrast with the grand promises made when these nations shifted their diplomatic alliances.
Failed Projects and Economic Disappointments
Even the projects that have materialized under Chinese partnership have often been riddled with issues. In Costa Rica, a much-heralded refinery project never broke ground, and a highway intended to link the capital, San José, with the Caribbean coast remains unfinished after more than a decade.
These failures highlight a broader issue: China’s involvement in Central America has not lived up to the expectations set by both Chinese and Central American officials. The anticipated financial windfalls have largely failed to materialize, leaving many questioning whether these diplomatic shifts were worth the cost.
Political and Diplomatic Implications: China’s Strategic Interests
China’s interest in Central America goes beyond mere economic partnerships. Politically, Beijing presents itself as a cooperative power, uninterested in hegemony, promoting international peace, and fostering a multipolar world order. However, like any major power, China’s foreign policy is driven by its strategic interests, and in Central America, that means isolating Taiwan.
By gaining the allegiance of Central American countries, China has successfully pushed Taiwan out of the region—a significant victory for Beijing. But what remains is China’s support for authoritarian regimes in Nicaragua, El Salvador, and Honduras, which poses a serious threat to democratic and economic stability not only in these countries but across the hemisphere.
China’s Influence on Authoritarian Regimes
Nicaragua, under President Daniel Ortega, has sought Chinese backing to sidestep international norms on democracy and human rights. Similarly, El Salvador and Honduras, both led by populist governments, have found a willing partner in China to support their political agendas. These alliances have further weakened the already fragile democracies in these countries, where institutional weaknesses are exploited to strike opaque deals that primarily benefit corrupt elites.
Chinese-funded projects in these countries are often agreed upon under confidential terms, with high interest rates that favor China’s strategic goals rather than the host nations. This lack of transparency has allowed China to deepen its influence in Central America while avoiding scrutiny from independent media, public institutions, and civil society.
Questionable Projects and Opaque Deals
One of the most significant issues with Chinese involvement in Central America is the design and execution of its projects. Many of these initiatives lack proper technical criteria, and their execution is shielded from public oversight. The Chinese government’s claim of offering cooperation “without strings attached” is increasingly seen as hollow rhetoric, especially when the details of these deals remain hidden from the public eye.
Expediente Público, a digital media outlet, has documented the presence of Chinese companies in Central America with dubious records of corruption and unethical practices, both in Latin America and Africa. These companies often operate with impunity, protected by the very governments that should be holding them accountable.
China’s Influence on Regional Governance
The influence of the Chinese Communist Party in Central America goes beyond economics. China has successfully conditioned the foreign policies of these countries to align with its strategic interests. Through bilateral relations characterized by opacity and propaganda, China has managed to promote disinformation that benefits its goals in the region.
These tactics are analyzed in depth in the recent publication of Expediente Abierto, titled “China in Central America: Strategies, Influence, and Operations in the 21st Century.” The study offers a comprehensive view of China’s influence on the region’s economy, cooperation, and governance, and provides recommendations for civil society, aid workers, businessmen, and governments to navigate these complex relationships.
Rethinking Sino-Central American Relations
The relationship between Central America and China has not yielded the results that were promised. The grand narratives of economic prosperity have given way to a reality of unmet expectations, failed projects, and increased authoritarianism. Far from suggesting a complete break with China, there is an urgent need to reassess and rethink these relations from a pragmatic standpoint.
Recognizing that China is a global power pursuing its strategic interests is crucial. To protect the interests of Central American nations, it is essential to approach these relationships with a clear understanding of the potential risks and to demand greater transparency and accountability from both Chinese and local authorities.
Moving Forward: A Call for Pragmatism
For Central America, the key to a more beneficial relationship with China lies in pragmatism and realpolitik. By demanding transparency and safeguarding democratic institutions, Central American countries can engage with China on more equal terms, ensuring that these relationships yield tangible benefits rather than empty promises.
In the end, the future of Sino-Central American relations depends on a careful balance of interests, one that acknowledges the power dynamics at play and seeks to secure the best possible outcomes for the region’s people.
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