San Salvador, El Salvador, one of several Central American countries developing economic ties to China.
As caravans traverse Mexico heading towards the U.S. border, part of a growing exodus of people from Central America, the government of El Salvador is drawing closer to China to secure funding for development and infrastructure projects it hopes will help reduce outwards migration. On November 7, Salvadoran President Salvador Sánchez Cerén announced the signing of an agreement with China for $150 million to fund such projects.
“This historic meeting between the governments of the People’s Republic of China and the Republic of El Salvador has produced excellent results,” Sánchez Ceren said. “This confirms that the establishment of diplomatic relations with China is my government’s most important decision in foreign policy.”
There is a new battle brewing among countries seeking influence over Central America, and China is leading the way. Its goals include gaining political influence and severing the region’s diplomatic relations with Taiwan.
It seems to be working.
On August 20, President Sánchez Cerén announced that El Salvador was breaking diplomatic relations with Taiwan in favor of growing closer to China. Sánchez Cerén said these closer relations will benefit the people of El Salvador through investments in infrastructure, health care, education, and the economy.
El Salvador follows the decisions of the Dominican Republic, Panama, and Costa Rica in making the decision to cut ties with Taiwan. Only seventeen countries around the world, including Guatemala, Honduras, and Haiti, continue to officially recognize the Taiwanese government.
The response from the United States was swift. The day following El Salvador’s announcement, Senator Marco Rubio, Republican of Florida, and Senator Cory Gardner, Republican of Colorado, proposed an amendment to restrict funding for El Salvador in retaliation for recognizing “one China.”
“It is extremely disappointing that El Salvador chose to sever diplomatic relations with democratic Taiwan and embrace communist China,” Rubio said in a statement. “This is a grave mistake that harms relations with the U.S., and will likely prove to be costly and short-sighted given what we know about China’s ‘debt traps’ and economic exploitation globally.”
On September 7, the United States recalled its top diplomats to El Salvador, Dominican Republic, and Panama due to the countries’ decision to end diplomatic relationships with Taiwan.
The U.S. has recalled top diplomats to El Salvador, Dominican Republic, and Panama due to the countries’ decision to end diplomatic relationships with Taiwan.
The Trump Administration deems the rise of Chinese influence in Central America as a threat to national security. It has repeatedly warned these governments against such alliances.
“Trump has not minced any words about China in general. He has been very critical,” Margaret Myers, the director of the Asia and Latin America program at the group Inter-American Dialogue in Washington, D.C., tells The Progressive. “There is concern about China’s rise on U.S. influence in various forms, be it private sector competitiveness or political influence.”
The geopolitical struggle has little to do with communism. “This is not a confrontation between two systems,” Edgardo Mira, an analyst with the Salvadorian Center for the Investigation of Investment and Commerce, explained to me at a hotel in the capital city of San Salvador. “Rather a confrontation between capitalists trying to guarantee and control of access and control of the market.”
The exodus of Hondurans seeking refuge in the United States has continued to grow. After a second caravan set out for the Mexican border on October 21, President Donald Trump took to twitter to threaten Honduras, Guatemala, and El Salvador over their failure to stop the flow of migrants.
“We will now begin cutting off, or substantially reducing, the massive foreign aid routinely given to them,” he tweeted.
Meanwhile, the government of El Salvador has taken steps to distance itself from Trump. On October 23, President Sánchez Cerén expressed his solidarity with the migrant caravans and rejected Trump’s position on migration.
“Migration is a human right, therefore the rights of migrants must be respected,” Sánchez Cerén said during a visit to Cuba. “We are opposed to Donald Trump’s vision and policy on migration. Salvadoran migrants are an important population, they help the United States economy. Many of them are entrepreneurs. Migration helps the development of the United States."
Sánchez Cerén and his administration have continued efforts to decrease migration by improving access to health care and education.
The number of Salvadorans being deported has fallen, according to U.S. Customs and Border Protection statistics. Yet Reuters attributes this to the end of the Temporary Protected Status, which the Trump administration canceled in January 2018. This data also fails to take into account deportations from Mexico, which only fell 7.8 percent from 2017 to 2018.
Development projects and aid from the United States have historically come with strings attached, especially requirements that expand U.S. interest in the region and create environments for corporate investments.
“[The United States] has made El Salvador jump through so many hoops in recent years to get any development aid,” Alexis Stoumbelis from the Washington, D.C.-based Committee in Solidarity with the People of El Salvador tells The Progressive. “These hoops incentivized private investment and U.S. business interests.”
The Alliance for Prosperity, an Obama Administration initiative to curb migration,
has continued long standing efforts to expand business interests in the region. From the beginning of the plan in 2015, analysts expressed concern over the lack of social projects within the plan.
But these efforts have done little to end migration from El Salvador. In late October and early November, nearly 2,000 people left for the U.S. border as part of four different caravans, which was inspired by the caravan of Honduran migrants that left San Pedro Sula on October 13.
The Salvadoran government did little to impede the exodus. This stands in contrast to the militarization of migratory routes that occurred in Guatemala and Honduras.
Between 2000 and 2016, trade between Latin American countries and China has grown from 2 percent to 11 percent of total trade according to Forbes. During the same period, trade with the United States fell from 53 percent of total trade to 37 percent.
This trade is primarily based on the exportation of raw materials from the region, including oil and mineral wealth, and the importation of Chinese products. Increasingly, China and Chinese banks have entered the region to finance infrastructure projects and to provide investments.
“It is something anachronistic that countries like Honduras do not have relations with the second largest economy in the world,” Hugo Noé Pino, the former Honduran Minister of Finances during the administration of Manuel Zelaya, told The Progressive. “The investment from Taiwan in Honduras is insignificant. Relations with Taiwan primarily is with a few officials and with the army. But in commerce, it is insignificant. China opens a great range of possibilities and opportunities that we should take advantage of.”
“China opens a great range of possibilities and opportunities that we should take advantage of.”
On November 15 and 16, Guatemala is hosting the the 2018 Ibero-American Summit of Heads of State, which since 1991 has brought together the representatives of Spain, Portugal, and the heads of state of Latin America. Among the planned topics of discussion is the need to draw closer to China for sustainable development.
The shift in influence comes as the Trump Administration is moving towards nationalism and protectionism, alienating allies and generating uncertainty across the region. In response, Latin American countries are looking towards China with increased confidence.
“The United States is losing its hegemony,” Mira tells The Progressive. “At the same time, the credibility and confidence in the economy of China has been rising. The United States is trying to maintain its influence, so now their enemies are the countries on the rise, such as China.”