Honduran President Xiomara Castro’s order in late March to establish relations with China has raised concerns about the influence that this major power will have on the region – and the political and economic consequences for Honduras.
“I have instructed Foreign Minister Eduardo Reina to begin the opening of official relations with the People’s Republic of China as a token of my determination to fulfill the plan of government and expand the borders with freedom in concert with the nations of the world,” Castro wrote in a tweet on March 14.
Curiously, the message did not refer to Taiwan, a country with which Honduras had enjoyed more than 80 years of diplomatic relations. One of the first reactions from the Foreign Affairs Ministry of Taiwan was a warning for Honduras “to avoid falling into China’s trap” and reiterating its desire to continue being a “sincere and trustworthy partner.”
Honduras’ government, however, formalized the switch on March 26, when its foreign minister signed a joint communique establishing diplomatic relations with China.
Critics Raise Concerns
U.S. senators were among the first to show their concern over Castro’s decision. Chairman of the U.S. Senate Foreign Relations Committee, Senator Robert Menendez (D-NJ), posted a tweet stating that “as China continues its campaign to peel off Taiwan’s diplomatic allies, Honduras’ decision to align with Beijing will have implications lasting long beyond the current leadership.” In the same thread, he urged Honduras to “be diligent in protecting their sovereignty and human rights even as they deepen relations with one of the world’s most autocratic regimes.”
Meanwhile, Bill Cassidy (R-LA) warned that Castro was “moving her country closer to Communist China while the world is moving away. The Honduran people will suffer because of her failed leadership.”
Generally, the establishment of diplomatic relations between two sovereign states should not be worrisome, said Alonso Illueca, an attorney and specialist in international law, in an interview with Expediente Público.
But in the case of Honduras and China, the “causes for concern are the possible implications and negotiations that happen behind the scenes and the types of principles or values that are being compromised.”
Javier Melendez, director of the Central America initiative Expediente Abierto, said that “China has also been very successful [at] spreading the narrative that liberal democracy is not the best system for achieving adequate socioeconomic development.”
Honduras, which is part of regional organizations like the Central American Integration System (SICA in Spanish) and the Organization of American States (OAS), should be clear about the values of the inter-American order – and how it might be challenged by China’s growing presence.
The Chimera of Commercial Benefits
The embrace of China is the most radical shift in foreign affairs for the Castro government so far, and it has been clear on the motivation.
“The idea is obviously to search for mechanisms to improve investment, trade, [etc.] If we have risen to power, it is to do good things for Honduras and for that reason, we must look for ways to better benefit the country using all the countries in the world. In this case, China is a reality for us, as we must look for opportunities for the Honduran population,” Foreign Minister Enrique Reina said on a television show that aired on March 14.
In general terms, the narrative of commercial opportunities is part of the process by which other countries have become close with China. However, these promises have largely proved empty, with other Central American countries reaping fewer benefits than expected from their China ties.
Honduras already had “a fruitful relationship with Taiwan,” even though it “imports many things” from mainland China, R. Evan Ellis, a professor and researcher of Latin American Studies at the Institute of Strategic Studies at the U.S. Army War College, told Expediente Público in an interview.
The question is whether Honduras can maintain commercial relations with both countries, he said, since countries that recognize China “generally lose the ability to trade with Taiwan.”
Ellis also raised an important question: Will Honduras really increase its exports, “as China always promises,” by making this diplomatic shift? Or is it only possible to increase the country’s imports from China?
Ellis, who in another publication referred to the broken promises of China, using the COVID-19 vaccines as an example, recalled that in 2022, Honduras exported $8 million worth of goods to China, and imported quantities worth $1.6 billion.
“When one looks at the cases of Costa Rica, Panama, El Salvador, and the Dominican Republic” – all countries that have broken ties with Taiwan to set up relations with China over the past 16 years – “these countries have always, with some exceptions, expected to sell more coffee, fruit, and traditional products than what has usually happened,” Ellis said.
Melendez of Expediente Abierto, said that China has racked up important successes in Central America by disseminating the idea that having relations with Beijing brings important and transcendental commercial benefits.
“However, from our China-Central America observatory, we have done the numbers and basically the region has not obtained minimally significant benefits,” Melendez explained.
“On the contrary, by far the main trading partners are still the United States and the European Union and that will not does not change in the coming years so far.”
In Honduras, the Patuca III hydropower project began in 2011 with funding from the National Company of Electric Energy and the Chinese state-owned ICBC Bank. It was executed by the Chinese company, Sinohydro, tied to Power China, which is also state-run.
Sinohydro was also in charge of constructing the hydroelectric plant, Coca Codo Sinclair in Ecuador, where the company was accused of hiding information since 2012 about some 8,000 fissures in the dam.
Patuca III, a project that was marked by protests, showed poor planning, and the high pricing of certain works and services. It began operations in 2020, having experienced more than a two-year delay.
Although Taiwan does not make big promises to its partners – such as funding for the the Patuca II hydropower project, which Honduras sought – the type of assistance that it gives is more appropriate for the local market of the beneficiary country. “Regarding mainland China, sometimes things work more to the country’s own benefit,” said Ellis, “and so losing those Taiwanese assistance programs would be another hit [to the Honduran economy].”
The Principles at Stake
In relationships with China, smaller countries risk losing “the ability to make rational decisions, have a sustainable policy with regard to the environment and social guarantees, and maintain a sovereign economic policy,” Ricardo Ferrer Picado, an analyst on strategic security and researcher at the Center for a Secure Free Society, told Expediente Público in an interview.
China, ruled by the Chinese Communist Party, “is not a democracy but an autocracy where power is exercised” by fiat, added the Argentinian expert. Beijing does not have a history of healthy relations with partners that have zero negotiation capacity, as is the case for Latin American countries in general.
In the case of Honduras, its relationships are legitimate as long as there is respect for national sovereignty. “Now, if China makes the Honduras legislature comply with its demands or products, to introduce, for example, environmentally damaging batteries that it wants to get rid of, we would be looking at a violation, which would be wrong, and it is very likely that this and similar cases will occur,” Ferrer Picado noted.
Most Western and American states that abide by the principle of non-intervention in the internal affairs of states understand that this does not include violations of democratic systems, human rights, or large acts of corruption, explained Panamanian analyst, Alonso Illueca.
But China advocates for the complete implementation of the non-intervention principle, even regarding sensitive topics, and does not criticize those who commit human rights violations or acts of corruption.
That poses a dangerous temptation for other governments. “If you have a partner who does not criticize you or tell you what to change, and only offers you assistance without any type of requirement on sensitive topics in which the state should improve, the country will unconsciously favor, in one way or another, the partner who does not require a certain criteria of behavior in exchange [for economic benefits],” Illueca said.
“When I look at the tendency of Latin American governments of the left, it seems to me, and surely to U.S. President Joe Biden, that this issue is not about left versus right but rather, is about democracy and the path toward good governance and decisions,” he added.
Why Is Honduras Important for China?
For Ferrer Picado, Honduras is very important to China, just like any other Latin American country, because it is part of what is disparagingly known as the United States’ “backyard.”
China is very interested in interrupting what the U.S. has traditionally considered its zone of influence, Illueca pointed out. A Chinese relationship with Honduras would represent a significant advance in this process of establishing a robust presence in the region.
Moreover, the region is a corridor for massive migrations, which are “many times supported and begun in Latin America, such as the Venezuelan migrations,” as well as the migrant caravans, a perennial concern for the United States.
Honduras could function as an important link for other countries in the region and strengthen Chinese policy in Central America and the Caribbean to disseminate across Latin America, “which will have effects on international votes” in the OAS and the United Nations Security Council.
“Imagine a Honduras that votes in favor of Cuba, Venezuela, or China in the wake of human rights violations, or even one that refuses to vote or abstains from voting,” posited Ferrer Picado.
Taiwan Almost Loses Its Place in Central America
Melendez told Expediente Público that he is not sure what goods Honduras could export to China that were not being exported to Taiwan, and that the decision might have more to do with the need for loans and investments.
“We are in a scenario where what China seeks, is basically to ensure that Central America is free of Taiwan; and what the government of President Xiomara Castro is looking for are loans and investments without any conditions linked to transparency or human rights, as demanded by the United States or multilateral banks,” he said.
Establishing ties with Honduras is one of the last steps in diplomatically isolating Taiwan from Central America, Illueca pointed out. Taiwan’s two remaining allies in Central America are Belize and Guatemala (along with Paraguay in South America and Haiti, St. Kitts and Nevis, Saint Lucia, and St. Vincent and the Grenadines in the Caribbean).
“It is pretty evident that China has invested a considerable amount of political and diplomatic capital” in improving its relationships with other Central American states and in general with different countries across the hemisphere. “The reality is that the People’s Republic of China is an important actor on the global stage,” said Illueca.
“At the same time, China is an actor whose end goals are not completely understood by the world, but that can sometimes be seen as contrary to democratic and humanitarian views favorable to human rights and transparency, which distinguish Honduras in the Western Hemisphere and particularly, in the Central American region,” he said.
Chinese cooperation involves hidden end goals, which “could be detrimental to Central American countries because we are not in a position of equals but rather have the lower hand in terms of negotiations” with China, Illueca added.
This article was first published in Spanish in ReporteAsia.