During his tour of Central America, one of the main topics on U.S. Secretary of State Marco Rubio’s agenda was China’s growing influence in the region. While in Costa Rica, Rubio addressed issues such as the management of the national 5G network – where Chinese companies like Huawei have been excluded by decree of President Rodrigo Chaves. In Panama, the discussion centered on concerns over the effective control of the transoceanic canal, whose ports have historically been operated by the Hong Kong-based company Hutchison Ports.
Following Rubio’s visit, Panamanian President José Raúl Mulino announced that his country would formally withdraw from the Belt and Road Initiative (BRI), which it had joined in 2017. Among hemispheric public opinion, particularly among local analysts and the media, this decision was seen not only as a victory for the Donald Trump administration but also as a step toward risk de-escalation with China.
Even in a private virtual forum I share with Latin American specialists, a senior official from a major foundation remarked: “With all the necessary criticisms of Trump, some things seem to work.” And while Panama’s departure from the BRI is a significant gesture of alignment with U.S. foreign policy, the actual consequences of this decision should be carefully evaluated.
Beyond the Belt and Road
In Central America, the BRI has had a limited impact for two fundamental reasons: the small number of projects promoted under its framework – of which few have been completed – and the fact that Chinese entities develop infrastructure projects without requiring agreements within the BRI framework. Notably, former Costa Rican President Luis Guillermo Solís acknowledged in a recent interview with Expediente Público that the BRI has brought no real benefits to his country. These statements echo those of Mulino when announcing Panama’s withdrawal from the agreement: “I leave it up to you to scrutinize – what has the Belt and Road Initiative actually brought to Panama?”
Although Panama was the first Latin American country to join the BRI through a memorandum of understanding signed in 2017 between former President Juan Carlos Varela and the Xi Jinping administration, the only tangible outcome of this agreement has been feasibility studies for the Panama-Chiriquí railway – with an approximate investment of $14 million.
Moreover, China’s influence in trade, investment, and political exchanges with Central America has been evident since long before the BRI. In 2007, the Chinese government secured Costa Rica as a key diplomatic partner when the country severed ties with Taiwan. Since then, China has launched multiple infrastructure projects in the region that operate outside the BRI framework, yet follow the same underlying logic: centrality of state-owned enterprises, financing through Chinese investment banks, and a broader effort to expand its global influence.
For example, San José’s National Stadium – built by the Chinese state-owned Anhui Foreign Economic Construction (AFEC) – was “donated” to Costa Rica by the Hu Jintao administration following the country’s diplomatic break with Taiwan. The stadium was inaugurated shortly after the China-Costa Rica Free Trade Agreement came into effect in 2010. Other infrastructure projects developed in Central America before the official launch of the BRI include the China-Costa Rica Reconstructive Society (Soresco) oil refinery, initiated in 2008 with support from the state-owned China National Petroleum Corporation International (CNPCI). Although this project was ultimately canceled after a prolonged legal dispute in international courts, it underscores China’s long-standing capacity and willingness to develop strategic infrastructure in Central America.
Additionally, the China-Latin America and Caribbean Business Summit, established in 2007, has become a crucial venue for promoting Chinese state-owned enterprises in Latin America and aligning local business and commercial elites with China’s agenda – entirely independent of the BRI. At the 17th edition of this summit, hosted in Managua, Nicaraguan President Daniel Ortega secured several agreements with Chinese companies for the construction of a deep-water port on Nicaragua’s Caribbean coast, along with infrastructure projects in the energy and commercial sectors.
Ideas Matter
In “China’s Strategic Opportunity,” published in 2022, Professor Yong Deng argued that beyond expanding trade with the Global South, opening markets for China’s industrial overcapacity, and securing access to strategic infrastructure and resources, the BRI also serves a normative function. It is evident that China has successfully used this agreement to promote its one-party economic and political model as a development alternative in regions such as Africa, East Asia, and Latin America. In Central America, however, the dissemination of such narratives has occurred through avenues not necessarily tied to the BRI.
The so-called “party-to-party exchanges,” as labeled in China’s own foreign policy, constitute a key mechanism of authoritarian influence at the ideological level. According to ongoing research by Expediente Abierto, this practice has become widespread across Central American countries, where major political parties have aligned – at least to some extent – with the narratives of the International Liaison Department of the Chinese Communist Party (CCP). This department is responsible for maintaining regular contact with foreign political organizations across all ideological spectrums and government statuses.
By promoting narratives aligned with the Chinese model, China has not only advanced concrete agendas such as state-owned enterprise investments but has also influenced ideas about national and international political order – undermining public support for liberal democracies. In their engagements with the CCP and other Chinese government entities, prominent figures from both ruling and opposition parties in Central America have echoed these narratives.
For example, the former secretary general of Panama’s Revolutionary Democratic Party (PRD), Pedro Miguel González, stated to CGTN, China’s state-owned overseas broadcaster: “In just over 70 years, China has managed to eradicate poverty. We have much to learn from China.”
In Costa Rica, National Liberation Party (PLN) legislator Luis Fernando Mendoza acknowledged the success of the Chinese model in “lifting its population out of poverty with highly specific policies, which we would like to understand better to see if they can be applied in our country.”
Meanwhile, Manuel Flores, leader of El Salvador’s left-wing Farabundo Martí National Liberation Front (FMLN), told Chinese state media: “Due to timely and effective pandemic control, China has demonstrated to the world the great vitality of its system and national governance model through practical actions.”
Broadening the Perspective
In Central America, China’s economic and political objectives under the BRI have advanced through channels independent of the initiative itself. Recognizing China’s influence requires a broader understanding of its more complex and less visible mechanisms, which often escape public and policymaker scrutiny. Chinese diplomatic tools, such as business summits with Latin America and political party exchanges, have played a critical role in embedding China’s agendas and narratives within Central American countries.
Countering this phenomenon requires well-designed and robust strategies capable of informing broad audiences and key stakeholders about China’s activities – many of which occur behind the scenes. The United States must activate mechanisms of engagement with its regional allies, both within politics and civil society, to dismantle utopian perspectives about China and its governance model while simultaneously strengthening local democratic institutions.
Withdrawing from the BRI may be a first step and a symbolic gesture of alignment with the United States, but it is also a potentially ineffective strategy given the initiative’s limited impact in regions like Central America. Dalibor Rohac previously observed this dynamic when analyzing Italy’s departure from the BRI in 2023, noting that such a decision achieves little if diplomatic and commercial ties with Beijing continue to deepen.
Western powers should therefore push for initiatives – some of which already exist, such as the EU’s Global Gateway – that challenge China’s dominance in investment across the region, whether through the BRI, non-reimbursable cooperation, or other mechanisms. These alternatives must ensure development opportunities for Global South societies free from authoritarian influence and the economic and geopolitical risks associated with China.
In this regard, actions like freezing global assistance from the U.S. Agency for International Development (USAID) will prove counterproductive, as they force former beneficiary countries to seek new funding sources – regardless of their origin. As a recently published report by the U.S. Congressional Select Committee on the CCP warned: “When the Communist Party of China is aggressively investing abroad, diverting supply chains, and buying authoritarian favors through elite capture, the United States must double down on USAID’s work – not stifle it.”