China’s new relations with Panama and Costa Rica are another step towards a Beijing Consensus in Central America from freeamfva's blog

China’s new relations with Panama and Costa Rica are another step towards a Beijing Consensus in Central America

ncreased trade, aid, investment, and diplomatic engagement between China and both Costa Rica and Panama signal a more general projection of Chinese economic and political standards in international trade policy, writes Sophie Wintgens (Université Libre de Bruxelles).Get more news about China To Costa Rica,you can vist our website!

China’s strategy towards Latin America and the Caribbean (LAC) fulfils four main interests:

securing energy, mining, and agricultural resources abroad to maintain domestic economic growth
getting political and economic support in regional and international forums
encouraging nations to recognise China instead of Taiwan
opening new markets for Chinese goods
Over the past 15 years, China has become an obvious trading partner, a major source of foreign direct investment, and a key provider of financing to an increasing number of South American countries.

This trend is now extending into Central America, where China’s growing diplomatic involvement and economic activity reveal a strengthening of ties to Beijing.
The geographic characteristics of this narrow isthmus separating the Pacific and Atlantic oceans have already sparked interest from Chinese firms in constructing alternate transit routes to the Panama Canal, as with Nicaragua’s $40 billion interoceanic canal project. Despite its involvement in significant infrastructure projects, Beijing’s relationship with Central America differs from its presence in South America. Central America’s lack of energy and mineral resources, its deeply rooted political and economic connections to the United States, and the 11 states in the hemisphere that still recognise Taiwan have also led Chinese diplomats and firms to focus more on expanded trade and political recognition.

China’s growing economic presence in Central America is especially evident in its exports and development assistance to the region. The relative poverty and lack of infrastructure of the Central American isthmus make recognition of China a profitable move for regional leaders seeking financial aid. Historically, governments switching diplomatic relations to China have been rewarded with investment, improved access to the Chinese market, and loans.

For example, China offered Costa Rica a $130 million aid package and purchased $300 million in Costa Rican bonds. In Panama, meanwhile, aside from being the second most important user of the Panama Canal, China is also the largest supplier of goods to the free-trade zone of Colón. By providing both of these Central American states with public works and economic incentives, Beijing obtained political recognition from Costa Rica in May 2007 and from Panama in June 2017.