Why China’s Nicaragua move is as much about the US as it is about Taiwan

When Managua switched its diplomatic allegiance from Taipei to Beijing on Friday, mainland China boosted its in uence in the US’ backyard, say observers

The announcement came on the same day as the US State Department slapped sanctions on a national security adviser to Nicaraguan President Ortega

Ben Zhao and Teddy Ng   Published: 8:37pm, 10 Dec, 2021

In 2007, Taiwan and Nicaragua relations were solid as students in Managua hold ags representing both nations at a farewell ceremony for then Taiwanese president Chen Shui-bian. Photo: AP Photo

Beijing’s wooing of Taiwan’s ally Nicaragua on Friday is not just retaliation for the island’s independence efforts but it is also a sign of intensifying rivalry between China and the US in America’s own backyard, according to observers.

Nicaragua brings to four the number of Central American nations that have established formal relations with Beijing in recent years, following Panama in 2017 and El Salvador in 2018. The Dominican Republic in the Caribbean also switched to Beijing in 2018.

Honduras may be next, with president-elect Xiamara Castro indicating she may switch ties to Beijing after claiming victory in last month’s election.

Li Da-jung, professor of international relations and strategic studies at Tamkang University in Taipei, said the US was facing a rival for influence in the region.

“Beijing has in the past few years wooed away four … Taiwan allies ... in Latin America. This definitely will help increase its influence in this part of America which is considered the US backyard,” he said.

The US has long been concerned about increasing Chinese influence in the region. When El Salvador established ties with Beijing, its oicials warned about China’s intentions to turn the La Union commercial port in El Salvador’s east into a “military base”.

Weeks later, Washington recalled its top diplomats in the Dominican Republic, El Salvador and Panama over their decisions to no longer recognise Taiwan.

In May, the US labelled 17 Central American politicians as corrupt, including a close aide of El Salvadoran President Nayib Bukele and his former security minister.

Bukele praised China’s US$500 million investment in public investments in El Salvador “without conditions” and the nation’s Congress ratified a cooperation agreement with China which was signed in 2019 and that included US$62 million investment in a water purification plant, a stadium, a library and other infrastructure.

The announcement by Nicaragua to recognise Beijing came on the same day as the US State Department slapped sanctions on Nestor Moncada Lau, a national security adviser to Nicaraguan President Daniel Ortega, over his alleged operation of an import and customs fraud scheme to enrich members of Ortega’s government.

US State Department spokesman Ned Price said Nicaragua’s decision to break diplomatic ties with Taiwan did not reflect the will of the Nicaraguan people because its government was not freely elected.

Wang Jianmin, a Taiwan affairs specialist at Minnan Normal University in Fujian province, said the sanctions could be part of the reason Nicaragua had switched to Beijing.

“China can back up Nicaragua in the United Nations as a UN Security Council permanent member and also help with the nation’s economic development … This is useful for China to improve relations with Central America.”

But Wang said other Central American nations might not follow Nicaragua’s decision because US influence was still significant.

China was Nicaragua’s third-biggest trading partner in 2020, following the US and Mexico, with a trading volume of US$913.35 million.

There have been reports that Nicaragua and a Chinese company were discussing a deal to build and operate a Nicaraguan canal, but oicials from both sides have been quiet on the issue.

Guo Cunhai, director of the Centre for China and Latin America Studies in Beijing, said the establishment of diplomatic relations between Beijing and Managua would accelerate economic and trade relations between the two countries, especially in developing infrastructure and people-to-people exchanges.

But he said the Chinese government was not involved in the Nicaraguan canal project, and China was not expected to develop the project in the future.

“The risks of building a large canal in Nicaragua are high,” Guo said, adding the project would also adversely affect relations between China and Panama.

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Shi Yinhong, an international relations professor at Renmin University, said China’s establishment of diplomatic ties with Nicaragua was a response to Taiwan’s pushing an independence agenda.

Beijing regards Taiwan as a breakaway province and opposes formal relations between the island and other nations.

Shi said more investment, including state-run capital, would reach Nicaragua in the foreseeable future.

Zhang Wensheng, deputy dean of the Taiwan Research Institute at Xiamen University, said: “The number of diplomatic allies of Taiwan is dwindling.”

Additional reporting by Amber Wang and Lawrence Chung