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Chinese Businessman Seeks to Build Nicaraguan Canal

4:04 PM, Jul 24, 2013 • By JAIME DAREMBLUM
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China’s motivations in South America have always been obvious: Its economy needs raw materials and commodities from countries such as Argentina, Brazil, Chile, and Peru. By contrast, Beijing’s motivations in Central America and the Caribbean have less to do with economics and more to do with geopolitics. A 2009 U.S. diplomatic cable warned that China was using its investments in the Bahamas “solely to establish a relationship of patronage with a U.S. trading partner less than 190 miles from the United States.” At a time when the Obama administration is “pivoting” to East Asia, Beijing wants to remind Washington that it can easily pivot to the Caribbean.

Then there is the Taiwan factor: China refuses to have diplomatic relations with any country that formally recognizes the island democracy. Back in the late 1990s and early 2000s, the Chinese conducted an aggressive international campaign to reduce the number of countries recognizing Taiwan. The campaign was quite successful, especially in the Caribbean: Between 1997 and 2005, the Bahamas, Saint Lucia, Dominica, and Grenada all switched recognition from Taipei to Beijing. Costa Rica followed suit in 2007. Each country was rewarded with a Chinese-financed stadium and other economic goodies.

After the Taiwanese elected a more Beijing-friendly government in 2008, China halted its efforts to poach Taipei’s diplomatic partners. But its fundamental position on Taiwan has not changed: China still considers it a renegade province that must be unified with the mainland, and Communist officials still want to delegitimize the Taiwanese government. They are aware that eleven of the 23 countries recognizing Taiwan are located in Central America or the Caribbean. Indeed, with the exception of Costa Rica, every single Central American nation—including Nicaragua—still has formal diplomatic relations with Taipei, as do five Caribbean nations: the Dominican Republic, Haiti, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines. (Saint Lucia switched recognition back to Taiwan in 2007, after ten years of recognizing China. Beijing was not pleased.)

As you might imagine, the Taiwanese are worried that Wang Jing’s Nicaraguan canal project will encourage the government in Managua to distance itself from Taipei diplomatically. Again, we still don’t know whether the canal will actually get built, and we still don’t know how much influence Beijing is exerting. But we do know that China is rapidly expanding its presence in Central America and the Caribbean—and Washington needs to start paying more attention.

Ambassador Jaime Daremblum is director of the Center for Latin American Studies at the Hudson Institute.

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