On the first anniversary of the reestablishment of diplomatic relations between the People’s Republic of China and Nicaragua, International policy specialists agree that the presence of the Asian giant in Central America is motivated by “the diplomatic battle with Taiwan” and not by economic interests. Since 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 that battle to wrest the last diplomatic residue from Taiwan and also to create some kind of global presence as the great power that 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, recalled that in Central America Honduras and Guatemala still maintain diplomatic relations with Taiwan. Therefore, he considered that “this relationship between China and Central America must be placed in that context.”
A political rather than economic interest
The expert in Asian affairs, Marisela Connelly, suggests 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 problem developed? And, above all, how has the position of the United States (USA) changed regarding that conflict?
In Connelly’s opinion, the aid that the US has been providing to the Taiwanese government has caused the Government of the People’s Republic of China to adopt “very drastic measures on a point that hurts the Taiwanese government very much.” Its diplomatic recognition “which is ultimately what gives it a presence at the international level and on which it can be based to say that it is a State.” It is for this reason that the countries of Central America, which had always been allies of the island, one by one have been breaking relations with Taiwan to establish them with China.
“The case of Nicaragua occurs at a very specific juncture. When the Ortega government becomes more and more authoritarian, which implies that the US and its allies begin to impose sanctions on it”. This situation “suited” the People’s Republic of China because it is in that line of increasingly isolating Taiwan, said the expert.
China handled cautiously in the region
Between January and November 2022, Nicaraguan exports to China barely reached 11.3 million dollars, according to the Foreign Trade Report of the Central Bank of Nicaragua.
By contrast, United States, which is Nicaragua’s largest trading partner and with which the Ortega regime maintains an open political confrontation, registers in the same period 1425.9 million dollars in exports.
For Urcuyo, the timid start of the commercial relationship is due to the fact that the Chinese “are cautious” and “do not want to send the wrong message to the United States, that they are strongly interfering in their backyard.” It was for Nicaragua to move away from Taiwan and it succeeded, but it is a market that is not attractive to China. What does Nicaragua have to offer China from an economic point of view?” he questioned.
“Nicaragua has nothing to offer China from the point of view of exports. Maybe a bit in the matter of meat it could be, but it is that the Chinese market does not ask for two containers of meat to be exported, the Chinese market will ask for a large volume and Nicaragua cannot offer that,” Urcuyo stressed.
Skepticism about trade relations
Connelly, for his part, pointed out that the economic relationship between China and Nicaragua is “a highly asymmetric relationship” and estimated that if Nicaraguan businessmen already have their markets where they are competitive, which are above all nearby markets, “they are not going to interested in exporting to China, a market that they do not know, which is very far away and in which it is very difficult to establish everything that is needed to be able to export”.
The expert in Asian affairs does not perceive 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 relationship at a commercial level with China,” she stressed.
The 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 estimate that the situation will hardly change.
“Chinese interest changes according to the attractions of the region. Here in Central America we don’t have that appeal… This infrastructure for logistical support for exports is not built overnight,” Urcuyo emphasized.
Mistake to believe that it would be a generous partner
In this year of diplomatic relations, China’s cooperation with 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 just over a million dollars, the promise to start the construction of 12,000 “two-bedroom, one-story” homes 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 generates certain investments in social infrastructure for Nicaragua, but warns that Daniel Ortega was wrong 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”.
For the political scientist, when reestablishing diplomatic relations with the People’s Republic of China, Ortega was thinking the same thing that the late former president of Venezuela, Hugo Chávez, thought at some point, “that this was going to be a socialist solidarity between similar parties and that this was going to serve to create a very serious problem for him in the United States”, but he warns, “neither one nor the other” was achieved.
A different relationship from Russia
However, the political scientist warns that China’s behavior is very different from that of Russia, a country whose foreign policy is “more aggressive” and that “it will try to play much more strongly” in the region. Even so, Nicaragua is not a weight token for Russia.
Russian President Vladimir Putin “is going to try to play much more strongly the trading card that, well, the Americans are in my immediate neighborhood, I’m going to somehow increase their presence in the room.” Urcuyo assessed.
However, warns the political scientist “I don’t think they are going to raise the bet on the Russians for Nicaragua because it is also a minor token for the Russians.”
