The main motivation for Honduras’ rapprochement with China is to benefit from the alleged “economic generosity” of the Asian giant, say analysts, who agree that Taiwan is running out of ground to move in Latin America, while warning about “the siren songs” of Beijing.
Over the weekend, the Castro government severed diplomatic relations with Taipei for 82 years, and announced the establishment of ties with Chinaa decision that the Chinese Foreign Ministry described as “the right decision.”
“Honduran President Xiomara Castro has pointed out that the decision to cut ties with Taiwan was economically motivated, and that appears to be the case. Chinese trade with the Central American nation has grown remarkably in recent years, and Honduras is seeking support for another hydroelectric dam project,” said Margaret Myers, director of the Asia and Latin America Program of the think tank Inter-American Dialogue.
Last January, Honduran Foreign Minister Enrique Reina reported that during a meeting with the Chinese Vice Minister of Foreign Affairs, Xie Feng, where they had discussed the establishment of “a process of cooperation for the construction of the Patuca II dam”. Reina recalled at that moment that they had already built a previous project on the same river with Chinese credits.
The Honduran minister highlighted the importance of collaboration with Beijing to promote “clean energy generation in the country and strengthen the capacities of the National Electric Power Company.”
A month later, Reina denied that Tegucigalpa was considering turning its back on Taipei. “It was a purely commercial issue, we maintain the relationship with Taiwan,” insisted the foreign minister, according to a report of Honduran public television.
A “pragmatic decision”
“One assumes that President Castro believes that poor Honduras will benefit substantially from China’s economic and development largesse. (…) Willingness to finance infrastructure development remains a hallmark of China’s Belt and Road incentives,” said former US diplomat Ray Walser.
In a question-and-answer session with experts, organized by the Inter-American Dialogue, political scientist and analyst Mitch Hayes warned that Castro’s decision is “a pragmatic decision, driven by internal pressure to improve the Honduran economy and long-term geopolitical coverage.” term as the US-China rivalry intensifies.
“Honduras faces endemic poverty, inequality, and a mounting debt burden. Beijing’s promises of infrastructure investment, loans, and market access are material incentives for the Castro government to align with China over Taiwan,” the founder said. of the specialized publication The Chinese Signal.
For the associate researcher of the Institute of Latin American Studies of the Chinese Academy of Social Sciences (CASS), Lin Hua, the rapprochement between Tegucigalpa and Beijing “is not a new idea”, since Xiomara Castro had already announced it since her presidential campaign. This is “an autonomous option in line with Honduras’ own national interests,” he said.
“From the perspective of economic and trade cooperation, the establishment of diplomatic relations with China can bring more development opportunities for Honduras and help Honduras develop its economy and improve people’s lives,” Hua stressed.
Benefits, but at what costs?
However, several of the experts express suspicion. “The move may bring economic benefits, but the diplomatic, political and economic trade-offs will become more complicated over time,” Hayes says.
“Honduras can’t necessarily count on China to drastically improve the economic outlook there. Decisions in Latin America and the Caribbean to cut ties with Taiwan have produced dramatically different results, with some countries, like Panama, reaching more than a dozen countries. sometimes substantial deals. In other cases, there is relatively little to show for having made the switch,” Myers said.
Mitch Hayes takes a different angle, mentioning the “long-term” risks to the Honduran economy and business environment. “Companies will have to compete or partner with Chinese companies, and this will require increased due diligence and skillful management of ESG criteria.”
“Corruption scandals, environmental damage, violations of indigenous peoples’ rights, and supply chain challenges are topical issues with Chinese players in Latin America. Balancing Beijing’s economic promises with these issues is a “This is a novelty for most Latin American governments and businesses. The Castro pact may therefore sacrifice long-term sovereignty for short-term political gain,” he said.
A difficult outlook for Taiwan
Honduras is the fifth country in Central America to strengthen ties with China, the second largest economy in the world after the US, at a time when Tension grows between Washington and Beijing.
The principle of one china stipulates that Taiwan is part of Chinese territory. The Chinese government rejects most contacts with countries that maintain formal ties to the democratically-ruled island and frequently threatens reprisals for those who increase their contacts with Taipei.
Despite recognizing the official Chinese position, Washington maintains strong relationships with Taiwan, to which supplies defensive weapons.
“To date, 181 countries, including the US and 25 countries in Latin America and the Caribbean, have accepted this principle. If Honduras can do the same, Taiwan’s efforts to seek independence would suffer another setback,” said the director of the Center for Latin American Studies at Shanghai University, Jiang Shixue.
“A prosperous Honduras is beneficial not only for the Central American region, but also for the US, as there would be fewer Honduran emigrants moving north. Hopefully, the remaining eight countries in the Western Hemisphere that still maintain ‘diplomatic relations’ with the province Chinese Taiwan, including Belize, Guatemala, Haiti, Paraguay, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines, will soon respect the principle of one china”.
This move by Tegucigalpa “is important because it continues Taiwan’s declining diplomatic relations at a time when reunification is very important,” Alicia García-Herrero, an expert economist in the Asia Pacific region, warned.
“Honduras surely wants to maximize the benefits to be gained from such a move, but it is also unclear what those benefits might be and how they might affect the population as a whole. One would imagine that the other Central American country that still maintains diplomatic relations with Taiwan: Guatemala, but also Paraguay; they will surely be attentive to the situation in Honduras after the diplomatic change, to better assess what it could mean for them,” he predicted.
Ray Walser, however, noted that “the well-known caveat is China’s propensity for ‘debt-trap diplomacy'” and said that “the decision is likely not to have a significant impact on the region’s preparedness to respond. to the siren song of Beijing”.
“Indeed, Honduras is late. With Vladimir Putin and Xi Jinping currently working hand in hand to break the liberal international order and throw Ukraine under the bus, the Honduran decision barely registers on the geopolitical scale. (…) The President Castro is choosing in the name of economic gain and self-interest to align herself with authoritarianism instead of democracy,” the former diplomat remarked.
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