China in Central America II

The Chinese Communist Party’s (CCP) unrestricted warfare against the United States is gaining footholds in Central and Latin America. Rather than direct kinetic military conflict, unrestricted warfare includes economic, political, and law warfare against the “villain” United States.

“China in Central America - #1” discussed gains in Honduras and El Salvador. Nicaragua, Costa Rica, and Panama will be discussed in #2.

Nicaragua
Nicaragua is a communist dictatorship under the Marxist leadership of Daniel Ortega, a former Sandinista insurrection leader. First serving as President from 1984 to 1990, he was re-elected in 2007 and has served as President since. The integrity of his election(s) is suspect, as is usual with communist dictatorships.

In 2005, Ortega converted to Catholicism before winning the presidential election. He has remained in power partly due to assistance from Cuban and Russian intelligence. He renounced his Catholicism after winning the election.

Ortega has manifested typical Marxist behavior by persecuting Christianity. In February of this year, his judicial officials sentenced Bishop Alvarez, an outspoken government critic, to 26 years in prison for treason. Also in February, Ortega released over 200 political prisoners; some were former presidential candidates and expelled them to the U.S. Ortega described them as “criminal provocateurs.”

China and Nicaragua re-established diplomatic relations in December 2021, the same day President Biden held his Summit for Democracy. Ortega had diplomatic relations with China during his previous presidency, but his successor, President Violeta Barrios de Chamorro, re-established relations with Taiwan in 1990.

China’s Foreign Ministry claimed the resumption of ties in 2021 was a “political decision” and definitely not tied to economic assistance. Nicaraguan foreign minister, Denis Moncada, said there was an “ideological affinity” between the two countries. Increased trade and Chinese infrastructure loans through its Belt and Road Initiative (BRI) have followed. Confucius Institutes will no doubt also follow.

Costa Rica
Costa Rica was the first Central American country to establish diplomatic ties with the Peoples' Republic of China (PRC) in 2007. Since then, with the exception of Guatemala and Belize, all have broken diplomatic relations with Taiwan and established relations with the PRC. The reasons given were to open trade and tourism, funding of infrastructure, cooperation in developing technology and security systems and increasing investments. Left unsaid is massive bribery and corruption of elites with Chinese monies.

Costa Rican expectations of increased China economic benefits have not materialized.
The trade balance in 2021 was negative $2.6 million, with a 70% decrease in investments since 2007. A Belt and Road Initiative has been signed, but Costa Rican bureaucracy has slowed many projects. Lack of transparency in loan details is a factor.
A proposed new oil refinery was canceled due to local environmental concerns.

An environmental model for the world, Costa Rica has increased and protected its forest cover and created a power grid almost entirely powered by renewables - 70% is hydroelectric, 15% is wind turbine, and 8% is geothermal. (All of the renewables have their own environmental issues).

Tourism is a major factor in economic wealth and now accounts for more than all agricultural products. With a relatively happy, healthy, and educated population, Costa Rica is able to devote resources to its people since it has not had a military budget since 1947.

Panama
Panama has a significant percentage of its population with a Chinese heritage; estimates range as high as 35 percent. Beginning in the early 20th century, with chaos in China and the building of the Panama Canal, many Chinese migrated to Panama for economic opportunity. Now Chinese Panamanians hold many prominent positions in society.

In November 1999, after the U.S. turned control of the Panama Canal to Panama, the government awarded the Chinese firm Hutchison-Whampoa (HW) concessions to operate ports on both the Atlantic and Pacific sides of the canal. Headquartered in Hong Kong, HW operates in five of the seven busiest ports in the world and has diverse operations in 54 countries with a staff of approximately 230,000.

Panama was the first country in the region to sign on to the Belt and Road Initiative. Within two years, 19 other countries signed on.

As a global logistic hub, Panama has a unique relationship with China. In trade, China exported $905 million to Panama in 2019 while importing only $33 million, or a deficit of $872 million. (The United States has a trade deficit with China of over $380 billion.)

Former President Varela switched diplomatic recognition from Taiwan to the PRC in 2017, resulting in increased investments from China and a December 2018 visit by President Xi of China. However, with the election of President Cortizo in 2019, many Chinese investment projects were canceled or suspended due to non-compliance with many of the contractual terms.

Summary
Nations will trade and have relations with China. Investments, infrastructure, cultural relations, and economic growth will follow. It does not mean that the United States is excluded; rather, the nations will benefit from the competition.

China is a great nation with a proud civilization. For much of human history, China was the greatest nation in the world. China is now a fascist state ruled by the CCP, whose goal is world domination. The villain United States stands in its way.

The United States cannot stop China from being a force in the world. The U.S. can, however, alter CCP behavior and hopefully end its dictatorial rule. The U.S. must rebuild its military and economic strength. “Peace Through Strength” is not just a slogan - it is an action plan. We need to be aggressive in the “gray zone.” Expand Voice of America and other media and state organizations in pointing out the moral defects of the CCP - persecution of religion, lack of freedoms, and an all-encompassing police state. Work with our allies to strengthen economic, political, and military ties. Promote American civilization. How many people are migrating to China versus the U.S.?

Peace Through Strength!

Laurence F. Sanford
Senior Analyst
American Security Council Foundation