China and Nicaragua have signed a free trade agreement (FTA), thus deepening their bilateral and economic relations, after the Daniel Ortega-Rosario Murillo regime broke off ties with Taiwan and aligned itself with Beijing.
“We must look carefully at the new political and economic dynamics that China has been presenting for several years now,” Fabián Calle, an Argentine political analyst and International Relations expert, told Diálogo on October 8.
Spanish newspaper El Mundo reported that after breaking ties with Taiwan in December 2021, Managua and Beijing signed a memorandum of understanding to establish a “mechanism for political consultations and an agreement on mutual support, visa exemption, and trade cooperation.” Trade between the two countries — separated by more than 14,000 kilometers — was $760 million in 2022.
However, the balance is in deficit for Nicaragua, since in the first half of 2023 Nicaraguan exports to China were only $6.7 million. A figure that is tiny compared to Nicaragua’s relationship with its main trading partner, the United States, which for the same period reached $1 billion, El Mundo added.
The FTA, signed on August 30 with China, is viewed with much fear and skepticism by Nicaraguan and international political analysts and economists. Mainly because they do not believe that China will really generate significant income to Nicaragua’s economy.
“The Chinese regime wants to position itself by showing its country as developing and that it understands and is in tune with the aspirations and objectives of various relevant states in the underdeveloped world,” Calle said.
According to El Mundo, China will be able to sell to Nicaragua tariff-free insecticides, herbicides, plastics, raw materials for the production of textiles, technologies, and toys, among other products. The list of 78 Chinese products is divided into more than 20 groups including live plants, fresh or refrigerated vegetables, fish preparations and preserves, confectionery, malt extract, pasta, cereals, cookies, mushrooms, sauces, condiments, and much more.
“China is focused on its financial and commercial power,” Calle said. “Its presence is to push a strategic agenda mainly guided by its economic, energy, and geopolitical interests.”
Calle said that Chinese advances in Latin America “are in critical areas such as strategic infrastructure, investments in sensitive technologies, control of chains and logistic points, as well as the search for cooperation in the military and defense fields.”
For his part, Nicaraguan opposition leader Félix Maradiaga, during the forum China in Latin America: Reality and trends in Costa Rica and Central America, held on August 1 in the city of San José, Costa Rica, and organized by Central American think tank Expediente Abierto, considered the Ortega-Murillo regime to be a “cheap partner for China, because it does not have much to offer,” EFE news agency reported.
Another sign of China’s growing interest in Nicaragua is the signing of a memorandum of understanding to promote the teaching of Mandarin in the Central American country’s schools and universities. Yu Tiangi, deputy director general of the Center for Education and Language Cooperation of the Chinese Ministry of Education, and Lilliam Herrera, Nicaragua’s Minister of Education, signed the agreement, Argentine news site Infobae reported on September 23.
For Calle China’s policy “is one of indebtedness, food dependence, and military domination.”