CENTRAL AMERICA:
No Going Back on Growing
Trade Ties with China
By Daniel Zueras
SAN JOSE, (IPS) -
China is threatening to
snatch away Taiwan's
last remaining allies in
Central America.
Costa Rica established
diplomatic relations
with the People's
Republic of China on
Jun. 1, 2007, after more
than six decades of ties
with Taiwan, which
Beijing considers a
renegade province,
although it has had an
independent government
since 1949.
The Chinese ambassador
to Costa Rica, Wang
Xiaoyuan, said that in a
meeting last year held
in San José, Honduran
President Manuel Zelaya
told him that his
country's "relations
with China are
irreversible," including
the diplomatic and
political spheres as
well as trade.
The textile industry in
Honduras and Guatemala
has attracted private
investors from China,
but investment in
Nicaragua is lower. In
Panama, on the other
hand, Chinese companies
use the Colón Free Zone
as a base to re-export
their products to other
countries. China is also
the second largest user
of the Panama Canal.
Wang told IPS that
diplomatic contacts had
been established between
China and Panama earlier
than with Costa Rica,
although San José was
the first of the two to
formalise relations.
Contacts with Panama are
being maintained, and
hopefully diplomatic
ties will be established
soon, he said.
In the meantime, China
maintains economic and
trade representatives in
Panama.
Costa Rican President
Oscar Arias first
visited China in 2004,
when he was as yet only
the National Liberation
Party's presidential
candidate.
Bilateral talks led to
the Arias administration
officially recognising
China last year and
simultaneously breaking
off relations with
Taiwan after 63 years.
China has diplomatic
relations with 169
countries while Taiwan
is officially recognised
by only 24, five of
which are in Central
America (Guatemala, El
Salvador, Honduras,
Nicaragua and Panama).
Costa Rica, with a
population of 4.4
million, is one of the
few countries in the
world to have a positive
trade balance with
China, which has 1.3
billion people. From
January to November
2007, bilateral trade
stood at 2.6 billion
dollars, 24 percent more
than for the whole of
2006, when it totalled
2.1 billion dollars.
Of those 2.6 billion
dollars, Costa Rican
exports made up 2.1
billion, while Chinese
sales were worth 500
million dollars. Most of
this trade is in high
technology goods and
services.
Wang said that trade
between the two
countries is growing.
Between January and May
2007, even before
diplomatic relations
were established, it
increased by 60 percent
compared to the
equivalent period in
2006, he said.
When Arias visited
Beijing again in October
2007, a number of
economic, trade and
cultural agreements were
signed. He also invited
Chinese President Hu
Jintao to Costa Rica, a
trip Hu may make this
year.
One of the most
important agreements was
between the China
National Petroleum
Corporation (CNPC) and
the state-owned Costa
Rican Petroleum Refinery
(RECOPE).
The agreement covers
training of Costa Rican
personnel in China,
renovation of the
refinery in Puerto Limón
on the Caribbean sea --
which due to obsolete
technology only refines
20,000 barrels a day,
when its design capacity
was for twice that
amount -- and
exploration for
oilfields in the Central
American country.
Chinese assistance in
modernising the refinery
will be aimed at
doubling its present
capacity and will be
based "on
environmentally friendly
advanced technology, in
order to reduce
greenhouse gas
emissions," according to
Wang.
"China is very concerned
about climate change,
and wishes to make an
effort along with the
other major countries"
to reduce pollution
which causes global
warming, he said.
Meanwhile, preliminary
contacts to discuss a
free trade agreement
between the two
countries began in
August, when Costa Rican
Foreign Trade Minister
Marco Vinicio Ruiz
travelled to China.
Talks are still focused
on the viability of a
free trade deal, and
formal negotiations are
expected "soon," Wang
said.
The ambassador said that
these negotiations take
time: for example, the
bilateral free trade
agreement between China
and Chile, which entered
into force in October
2006, "was reached
quickly, but it still
took a year, and five
rounds of negotiations."
According to Wang,
between 50,000 and
60,000 Chinese or people
of Chinese descent live
in Costa Rica, of whom
only 2,000 have Chinese
passports, many of which
are out of date and are
being renewed.
Ninety-five percent of
the members of the
Chinese community are
originally from the
southern region of
Guangzhou (or Canton),
the capital of Guangdong
province, and the rest
are from Taiwan.
"They all gave us a
wonderful welcome," said
Wang. The embassy opened
on Aug. 23, 2007. The
Costa Rican embassy in
China opened on Oct. 24,
to coincide with Arias'
visit. |
