Geopolitically, the canal would further strengthen mainland China’s foothold in Latin America. Mainland China is already a major buyer of Venezuelan oil and gas, and its trade with the continent increased from $12 billion (£7.5 billion) in 2000 to $250 billion (£
157 billion) in 2012.68
Telemaco Talavera, spokesman for the government’s Canal Com-mission, told The Telegraph: “The cold war is over. In today’s world, geoeconomics are much more important than geopolitics and the U.S. and mainland China are practically interdependent in financial and business terms. The canal will benefit the world, and transform Nicaragua. Some people have doubts, but once they understand how every Nicaraguan will benefit, they will get behind it.”69
If the Nicaragua Grand Canal is built, the landscape of Central America will be changed dramatically. Not only will the wet canal itself have an impact on the region, but also the dry canals in other parts of Central America will have even greater impact. In the first place, Honduras already has signed an agreement with the China Harbour Engineering Company (CHEC) for a $20 billion railway project, connecting the sea port of Puerto Castilla on the Caribbean Sea with Amapala, located on El Tigre Island in the Gulf of Fonseca – a part of the Pacific Ocean bordering Honduras, Nicaragua, and El Salvador.70This railway system was designed to assist in the
ship- /2014/aug/27/residents-fearful-nicaragua-trans-oceanic-canal-surveys-hknd-gro-up>.
Nina Lakhani, “China’s Nicaragua Canal Could Spark A New Central America Revolution.”
Nina Lakhani, “China’s Nicaragua Canal Could Spark A New Central America Revolution.”
loading of vessels up to 300,000 tonnes, a kind of dry canal comple-mentary to the wet canal.71Another dry canal project in the planning stage is Guatemala’s $10 billion plan, consisting of new ports on the Atlantic and Pacific coasts and a 244-mile dry canal.72It goes without saying that Chinese financial support will be inevitable and critical.
Under these circumstances, mainland China will hold the key position in Central America and severely undermine U.S. supreme status there.
IV. U.S. and Central America: A Challenge to Mainland China?
Strategically speaking, Central America, including major nations in the Caribbean (namely, Cuba, Haiti, and Dominican Republic) is the real backyard of the United States. With rapid economic growth and expansion after the end of the Civil War, U.S. policy toward Central America has been based upon “a combination of economic opportunism and national security.”73One important indicator to de-monstrate this is U.S. military interventions in this region in the 19th and 20thcenturies. The strategic importance of this region includes a canal to communicate both oceans and, as a result, the United States finished the construction of the Panama Canal and solely controlled it almost a hundred years.74
“Honduras and China Sign MOU for Interoceanic Railway,” Resistencia Honduras, October 9, 2013, <http://www.resistenciahonduras.net/index.php?option=com_
content&view=article&id=5882:honduras-and-china-sign-mou-for-interoceanic-railway&catid=101:news&Itemid=349>.
“Honduras and China Sign MOU for Interoceanic Railway.”
Rob Holmes, “China Digs Deep in Central American Canal Race,” World, March 8, 2014, <http://www.worldmag.com/2014/03/china_digs_deep_in_
central_american_canal_race>.
Gregory B. Weeks, U.S. and Latin American Relations, pp. 45-47.
Abraham F. Lowenthal, “United States-Latin American Relations at the Century’s
Take Cuba as an example. The serious intention of the U.S. to take control of Cuba from Spain can be reflected by the 1854 Ostend Manifesto, which “spelled out why the United States should purchase Cuba and, if Spain were not willing to sell, stated that troops should take it by force to maintain order.”75 In the end, the United States forced Spain to allow the independence of Cuba after the Spanish-American War in 1898. With the approval of the Platt Amendment by U.S. Congress, Cuba became an American protectorate.76 In the meantime, the U.S. built up firm control over the Cuban economy, especially the sugar production.77Ever since then, the United States, most of the time, has taken a supreme and dominant position in its relationship with Cuba. This is a microscopic picture of American imperialism in Latin America. It is easy to locate similar foreign policy behavior toward other Central American states, such as Nica-ragua.
As its power has been declining, it is difficult for the U.S. to maintain its leadership in this region and establish new institutions.
Furthermore, quarrels or disputes have emerged with major Latin American powers, including Brazil, Argentina, and Venezuela. As a result, President Obama has been blamed for “spying” in Brazil, ma-liciously described as “a warmonger” by Bolivia, and dismissed as a “lost opportunity” by Argentina.78
Turn,” in Albert Fishlow & James Jones, eds., The United States and theAmericas (New York: W. W. Norton, 1999), pp. 111-113.
Gregory B. Weeks, U.S. and Latin American Relations, p. 20.
Thomas E. Skidmore, Peter H. Smith, & James N. Green, Modern Latin America, 7thEdition, pp. 123-124.
Thomas E. Skidmore, Peter H. Smith, & James N. Green, Modern Latin America, 7thEdition, pp. 124-128.
Simon Romero & William Neuman, “Cuba Thaw Lets Rest of Latin America Warm to Washington,” The New York Times, December 19, 2014, p. A1.
The impatience of Latin American nations toward U.S. policy is quite obvious and, consequently, they have taken an independent position with regard to regional affairs. One of their recent efforts has been the treatment and status of Cuba in the Western Hemisphere.
In the 2009 annual meeting of the Organization of American States (OAS) in Honduras, Latin American nations revoked the 1962 decision to suspend Cuba’s membership in this international regional organi-zation.79This collective action not only challenged but also rebuked outdated U.S. policy toward Cuba. Furthermore, Latin American na-tions have determined to set up their own organization of economic integration as an alternative to OAS. Subsequently, the Community of Latin American and Caribbean States (CELAC) was officially created in December 2011, including all states in the Western Hemis-phere except the United States and Canada.
Moreover, previous Cuba policy of the United States has had negative impact upon its policy in the region. In the 2012 Summit of the Americas in Colombia, leaders spent a lot of time talking about U.S.-Cuba policy, instead of talking what the United States wanted to focus on, such as exports, counternarcotics, and other issues.80 The 2015 Summit will be held in Panama, and Cuba has already ac-cepted the invitation from the Panamanian government and confirmed its participation for the first time.81The thaw of U.S.-Cuba relations will let the U.S. avoid a potentially awkward meeting for American
Arthur Brice, “OAS Lifts 47-year-old Suspension of Cuba,” CNN, June 3, 2009,
<http://www.cnn.com/2009/WORLD/americas/06/03/cuba.oas/index.html?_s=
PM:WORLD>.
Simon Romero &William Neuman, “Cuba Thaw Lets Rest of Latin America Warm to Washington.”
Simon Romero & William Neuman, “Cuba Thaw Lets Rest of Latin America Warm to Washington.”
officials. On the global level, the United Nations General Assembly has passed a resolution annually, requesting the U.S. to lift its economic, commercial, and financial embargo on Cuba of the last twenty-three years. In the final vote, only the United States and an ally, Israel, voted against the declaration and three Pacific island nations, Palau, Marshall Islands, and Micronesia, abstained.82All of thes e highlight the embarrassment of the United States and the ab-surdity of this U.S. policy.
Meanwhile, mainland China’s rise has encroached on American influence and has gained support politically and economically in Latin America. When asking about mainland China’s influence in an international opinion poll by the Pew Research Center, more people hold that mainland China’s influence is good thing and is higher than America’s influence (see Table 5). Except for Mexico, people in other nations (i.e. Venezuela, Chile, Bolivia, Peru, Brazil, and Ar-gentina) expressed that mainland China’s influence is more positive than America’s.
Mirjam Donath & Louis Charbonneau, “For 23rdTime, U.N. Nations Urge End to U.S. Embargo on Cuba,” Reuters, October 28, 2014, <http://www.reuters.
com/article/2014/10/28/us-cuba-un-idUSKBN0IH1RN20141028>.
Table 5: Mainland China’s Influence More Positive than America’s
Mainland China’s influence America’s influence
“Good”
Venezuela 58 28 36 47 +22
Chile 55 20 28 46 +27
Bolivia 42 34 14 64 +28
Peru 36 29 22 46 +14
Brazil 26 54 20 60 +6
Argentina 21 51 5 80 +16
Mexico 20 63 22 60 -2
Source: Pew Research Center, Global Unease with Major World Power (2007).
Facing all these, Obama would like to turn the table on mainland China, win back American support, and return to the dominant position in Latin America. In 2013, Obama made state visits to Mexico and Costa Rica, where he convened all U.S. ambassadors in the region;
Vice President Joe Biden later toured Brazil, Colombia, and Trinidad and Tobago. Their unusual and unprecedented diplomatic travel sweeping the Western Hemisphere revealed the changing policy and behavior but without knowing the direction and scope.
The next surprising maneuver in foreign policy toward Latin America was Obama’s announcement of normalization with Cuba in December 2014. Having sealed an agreement with Cuban President Raul Castro, President Obama personally ordered the restoration of full diplomatic relations with Cuba and the opening of an embassy in Havana for the first time in more than a half-century. What was on his mind was to “cut loose the shackles of the past,” and close the final chapter of the Cold War.83The secret negotiations with Cuba began in June 2013, with eight rounds of talks in Canada and Vatican City.
Obama’s new Latin American policy won praise from leaders in this region.Now, however, Latin American leaders have a new kind of vocabulary to describe him: They are calling him “brave,”
“extraordinary,” and “intelligent.”84Brazil’s president, Dilma Rousseff, called Obama’s agreement with Cuba “a moment which marks a change in civilization”; President Nicolás Maduro of Venezuela de-scribed it as “a brave gesture and historically necessary, perhaps the most important step;” Daniel Ortega, the Nicaraguan president and former Sandinista rebel, thought the United States deserved the top spot in a new list of state sponsors of terrorism.85 All of the afore-mentioned comments are from leaders of leftist regimes and, to a certain extent, represent a breakthrough of Obama’s new diplomatic initiative, which Beijing should not neglect the future development and influence on mainland China’s strategic maneuver there.
Nevertheless, Obama’s effort to reshape policy toward Latin America has been undermined by heavy attacks, mainly from Re-publicans and leaders of Cuban immigrants. Senator Marco Rubio, a Republican hopeful for the 2016 presidential election and son of Cuban immigrants, strongly denounced the normalization with Cube and argued that “this entire policy shift announced today is based on an illusion, on a lie, the lie and the illusion that more commerce and access to money and goods will translate to political freedom for the Cuban people.”86 Of course, his position could affect many of his
Peter Baker, “U.S. to Restore Full Relations With Cuba, Erasing a Last Trace of Cold War Hostility,” The New York Times, December 17, 2014, p. A1.
Simon Romero & William Neuman, “Cuba Thaw Lets Rest of Latin America Warm to Washington.”
Simon Romero & William Neuman, “Cuba Thaw Lets Rest of Latin America Warm to Washington.”
Peter Baker, “U.S. to Restore Full Relations With Cuba, Erasing a Last Trace of Cold War Hostility.”
colleagues in the Congress.
Fortunately, Obama’s diplomatic initiative is shored up by strong support from the U.S people. According to opinion poll conducted by Pew Research Center,8763% of Americans approve of the Obama administration’s decision to normalize ties with Cuba and open its embassy in Havana after more than 50 years and 66% favor the ending the decades-long U.S. trade embargo against Cuba. It is note-worthy that American young people give stronger support for Obama’s new foreign policy.
V. Conclusion
As leader of one of the poorest countries in Latin America, President Daniel Ortega has a dream and high aspirations for the construction of the Nicaragua Grand Canal. The Ortega family initiated the promotion of the canal project and convinced Sandinista party members to work together. Ortega chose partners from China, Wang Jing and his HK Nicaragua Canal Development Investment Company.
With strong support in the government and parliament, the Canal Act was passed and the construction agreement was sealed in June 2014.
Strategically speaking, Central America has no attraction for mainland China. South America is the major target of mainland China’s regional policy because of its abundance in mineral resources and foodstuffs, and major trading partners are in the South and Mexico. Central America seems an exception for current mainland China’s resources diplomacy, because nations in that region lack vital
Pew Research Center, “Most Support Stronger U.S. Ties with Cuba,” Pew Re-search Center, January 16, 2015, <http://www.people-press.org/2015/01/16/
most-support-stronger-u-s-ties-with-cuba/>.
mineral products and their major exports consist of coffee, bananas, and sugar. Costa Rica so far is the only country in Central America to break ties with Taiwan and forge diplomatic relations with Beijing.
In the past, mainland China’s only interest in this region was its diplomatic struggle with Taiwan until the diplomatic truce proposed by President Ma Ying-jeou. Nevertheless, the geographic location connecting the Pacific Ocean and Atlantic Ocean is the most important asset Central America has. Mainland China has become one of the most important and frequent users of the Panama Canal.
Ever since 2013, when President Xi announced it, “One Belt, One Road” initiative has become mainland China’s grand strategy, at least, for the next ten years. Economically speaking, three financial mechanisms are in good positions for the promotion of “One Belt, One Road.” The first one is BRICS’ New Development Bank, which was formally formed with the Contingency Reserve Arrangement at the 2014 annual summit of BRICS in Brazil. During the 2104 APEC summit, President Xi announced establishment of a $40 billion “Silk Road Fund,” and The Silk Road Fund Co. Ltd. officially registered and commenced operation in December 2104 with $10 billion dollars ready for investment. A third key financial institution is the $100 billion Asian Infrastructure Investment Bank, which is going to be operational by the end of 2015. One common objective for these three financial institutions is to support and invest in infrastructure construction.
The construction of the Nicaragua Grand Canal must rely upon foreign capital, technology, and equipment, from mainland China in particular. All policy makers, scholars, and experts have agreed that Beijing is behind the scenes of the canal project. According to recent information, many Chinese state enterprises have participated in this project and forged a partnership with HKND. For example, China
Railway Siyuan Survey and Design Group Company; Changjiang In-stitute of Survey, Planning, Design and Research, CCCC Second Harbor Engineering, Investigation, and Design Institute Limited Com-pany, Civil Aviation Engineering Consulting Company of China, and Shenzhen Layout Urban Design Consulting Limited Company are all on board.
Owing to Central America being the real backyard of the United States, mainland China has to be very careful while designing its grand strategy and, consequently, leaving a leak or a hole there. In other words, mainland China does not mention Latin America in its
“One Belt, One Road” strategy. Mainland China has paid considerable attention to the position of the U.S. and avoided early and open con-frontation and conflicts in Latin America.
From the preceding analysis, a tentative conclusion is that, with the strong support of the Nicaraguan government and mainland China’s grand strategy, the Nicaragua Grand Canal, sooner or later, will be finished. Mainland China will benefit from the completion of the canal and possess geopolitical and geoeconomic superiority, which, in turn, will assure its influence in this region and in the world.
References
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Economic Commission for Latin America and the Caribbean, 2012.
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Zheng, Bingwen, Sun Hongbo, & Yue Yunxia, 2012. “The Present Situation and Prospects of China-Latin American Relations: A Review of the History since 1949,” in Wu Baiyi, Liu Weiguang, He Shuangrong, & Cai Tongchang, ed., China-Latin America Relations: Review and Analysis, Volume 1. Beijing: Social Scien-ces Academic Press. pp. 1-21.
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Beauchamp-Mustafaga, Nathan, 2015/3/6. “The New Silk Road and Latin America: Will They Ever Meet?” China Brief, Vol.15, Issue 5, pp.1-3.
Leverett, Flynt, Hillary Mann Leverett, & Wu Bingbing, 2015/1-2.
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Bahree, Bhushan, 2003/11/14. “China Now Leads in New Demand
fro Oil, IEA Says,” The Wall Street Journal, p. A10.
Baker, Peter, 2014/12/17. “U.S. to Restore Full Relations With Cuba, Erasing a Last Trace of Cold War Hostility,” The New York Times, p. A1.
Perlez, Jane, 2014/10/10. “U.S. Opposing China’s Answer to World Bank,” The New York Times, p. A1.
Romero, Simon & William Neuman, 2014/12/19. “Cuba Thaw Lets Rest of Latin America Warm to Washington,” The New York Times, p. A1.
Samuelson, Robert J., 2004/5/26. “Great Wall of Unknowns,” The Washington Post, p. A27.
Online Resources
2013/10/9. “Honduras and China Sign MOU for Interoceanic Railway,”
Resistencia Honduras, <http://www.resistenciahonduras.net/in- dex.php?option=com_content&view=article&id=5882:honduras-and-china-sign-mou-for-interoceanic-railway&catid=101:news&
Itemid=349>.
2014/6/14. “Nicaragua’s Ortega, Wang Jing Sign Canal Agreement,”
San Jose Mercury News, <http://www.mercurynews.com/
ci_23465932/nicaraguas-ortega-wang-jing-sign-canal-agreemen>.
ci_23465932/nicaraguas-ortega-wang-jing-sign-canal-agreemen>.