What next for China and El Salvador?

President-elect Nayib Bukele ambiguous about new China ties as he prepares to take office in June

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President-elect Bukele met Taiwan’s President Tsai Ing-Wen in 2017 as Mayor of San Salvador. El Salvador cut diplomatic ties with Taiwan in 2018 (image: Wikicommons/ 總統府)

Salvadorans elected 37-year-old former mayor of San Salvador Nayib Bukele as their new president last Sunday. Bukele, who has an uncertain stance towards the newly-established diplomatic relationship with China, will take office in June.

The Central American nation, whose population is 6.5 million, making it one of the smallest in the region, mainly produces coffee, sugar and corn. Its near 200 miles of Pacific coastline support a bustling fishing industry and waves that attract tourists from all over the world. However, it has struggled to control high homicide rates and rampant gang violence.

Bukele presented himself as the change candidate in El Salvador, whose politics has been marred by corruption scandals in recent years. His campaign slogan: “There is enough money when no one steals,” appeared to resonate with voters.

3,000

tonnes of rice were donated by China to the government of Salvador Sánchez Cerén

His election comes just six months after the country broke diplomatic relations with Taiwan and established ties with China. Bukele has criticised China for attempting to intervene in El Salvador’s domestic politics by agreeing to donate 3,000 tonnes of rice to the government of incumbent Salvador Sánchez Cerén.

Bukele even threatened to cut diplomatic ties with Beijing and restore the El Salvador’s decades-long relationship with Taiwan, which he said had contributed to development projects and offered sponsorships for Salvadoran students to study in the East Asian state.

Seventeen countries currently recognise Taiwan, seven of these are in Central America and the Caribbean. But since 2007, when Costa Rica broke relations with Taiwan, many have flipped allegiance in an effort to access investments in infrastructure projects. El Salvador was the latest to do so, in August 2018.

No clear plan

Bukele lacks significant foreign policy experience and appears to have no clear plan for his incoming administration’s position on China, according to Mauricio Aparicio, international relations professor at Universidad Francisco Gavidia in San Salvador.

“It’s a delicate matter,” said Aparicio, adding that restoring relations with Taiwan would burn bridges with Chinese and Salvadoran diplomats who helped broker the deal. “It’s not that he can’t, but it will have a cost.”

Therefore, restoring relations with Taiwan seems unlikely, Aparicio said. But Bukele, who was previously part of the left-wing Farabundo Martí National Liberation Front (FMLN) party before opting to run for president on a centre-right ticket, is somewhat unpredictable.

In the 40-page foreign policy section of Bukele’s government plan, neither China nor Taiwan is mentioned. His eventual foreign policy stance will depend partially on who he chooses for foreign minister.

If Bukele opts to stick with China, his incoming administration will have a five-year term to shape the relationship.

China offers development in social projects and infrastructure, which appeals to small Latin American countries looking for investment. In November 2018, China pledged US$150 million to El Salvador for 13 joint projects.

While China’s relationship with South American countries has been driven by demand for commodities such as soy beans, metals, and oil, engagement with Central America and the Caribbean is a less straightforward, explains Matt Ferchen, a non-resident scholar at the Carnegie–Tsinghua Center for Global Policy.

Bukele will have to decide what El Salvador brings to the table, be that a new market for Chinese goods, products for export, destination for Chinese tourists, or something different.

El Salvador’s surfing beaches are an important tourist attraction (image: Mike Vondran)

US response

El Salvador will also have to take into account its relationship with the US, a key trade partner and one that met Central American and Caribbean countries severing of Taiwan ties with some discomfort.

“For the geographic proximity and for the historic relationship with Taiwan, from Washington’s perspective, establishing relations with China could be seen as a threat,” said Aparicio. “The US cannot intervene in the sovereign decisions of El Salvador, but it could complicate the relationship.”

While the US has a history of exerting influence in smaller Latin American countries, it is also an important partner in development projects. Since 2015, the US has given more than US$2.6 billion in foreign assistance to Central America’s Northern Triangle – El Salvador, Honduras and Guatemala.

The US cannot intervene in the sovereign decisions of El Salvador, but it could complicate the relationship

A strong mandate from voters could help Bukele advance the diplomatic and commercial relationship with China. He won the presidency with 53 percent of the votes, beating candidates from the country’s two dominant parties in the first-round.

“The crucial factor in determining bilateral relations will be Bukele’s initial hold on power. A landslide victory would allow him considerable leeway in how he governs and allow him to re-establish relations with Taiwan, if he so chooses,” said Ricardo Barrios, program associate at Washington-based think-tank the Inter-American Dialogue.

“Anything short of that would leave him at the mercy of establishment figures and limit his options both domestically and internationally,” Barrios added.

Just because El Salvador is small – its surface area is just 2% that of China’s – it does not mean bilateral relations with China will be imbalanced.

Other countries in Central America, such as Panama and Costa Rica, have positioned themselves as important partners for China by carving out niches for themselves – the former as a regional logistics and banking hub, the latter as an exporter of tropical fruit and other products. El Salvador will look to do the same.

The key going forward is thinking critically about any deal China presents and whether it is sustainable and beneficial to El Salvador, according to Ferchen.

“Getting down to the details is really what matters next,” he said.