NICHOLAS SHUBITZ: Honduras rewarded for pledging allegiance to China

China has been engaging in extensive diplomatic efforts in recent months to improve ties with a wide variety of nations worldwide. While maintaining high-level dialogue with the US amid increasing strategic competition, Beijing has simultaneously reached out to numerous emerging market countries with a particular focus on the Middle East. Perhaps the most important breakthrough for China though, has been the normalisation of ties with Honduras.

Honduras severed diplomatic ties with Taipei in March to improve relations with Beijing and has since been rewarded with a number of bilateral agreements. As one of the few remaining countries that had maintained official ties with Taiwan, this is another example of Beijing’s success in translating China’s economic might into increased political influence after the recent Chinese negotiated rapprochement between Saudi Arabia and Iran.

Honduras has long been one of the poorest country in Latin America. After several years of economic stagnation and a series of devastating hurricanes, Hondurans have become among the largest groups of immigrants crossing the border into the US each year. The Honduran economy is mostly agricultural, relying heavily on exports of coffee, bananas and shrimp. A traditional US ally, Honduras signed a free-trade agreement with the US in 2006, but despite its close ties and proximity to the US, the nation has decided to normalise ties with Beijing.

Within just a few months of the establishment of Honduras-China diplomatic relations, bilateral ties have developed rapidly, with the two countries signing several agreements after the inauguration of the new Honduran embassy in China. At the ceremony, Honduran foreign minister Enrique Reina reiterated his country’s firm support for the One China principle and said he looked forward to the further development of trade and business relations between the two countries.

The South American diplomat emphasised the significance of his visit and mentioned that one of the newly signed agreements would cause Honduras to be included in China’s Belt and Road Initiative. The agreements cover multiple spheres of co-operation from cultural exchanges and trade to educational development. Reina also hinted that a Chinese delegation would visit Honduras to sign a free-trade agreement.

Join Brics

The embassy inauguration ceremony was held during a six-day state visit by Honduran President Xiomara Castro that marked the first visit to China by a Honduran president. While visiting its Shanghai headquarters, Castro formally requested the country’s admission to the Brics-led New Development Bank (NDB). She also toured a Huawei research centre as part of her trip, despite disputes between the tech company and the US in which Huawei executive Meng Wanzhou was detained in Canada for three years before her release in exchange for two Canadian nationals.

After his president’s request to join the NDB, the foreign minister also mentioned that Honduras hoped to join Brics. “I think there is a new opportunity for projects in development, in both the social and economic way that will improve the people’s livelihoods”, said Reina. It is interesting that Brics was mentioned during the visit. This suggests that countries such as Honduras see Brics as a platform for advancing their economic interests beyond their bilateral ties with major economies such as the US and China.

When pressed on the question of the US-China rivalry in light of his country’s recent diplomatic shift, the Honduran foreign minister reiterated that the decision to formerly recognise the government in Beijing and adhere to the One China principle was made in the best interests of Honduras. “We don’t see that this is an issue. We will maintain good relations with the US,” he affirmed.

Yet, the timing of the Honduran shift from Taipei to Beijing is significant, as Washington becomes increasing strategically ambiguous regarding its stance on Taiwan and China seeks to take advantage of a decline in American influence in the Middle East.

After the visit by the Honduran delegation, the tenth edition of the Arab-China summit kicked off in Saudi Arabia for the first time, with $10bn in deals announced on the first day of the meeting in Riyadh. The two-day event brought together more than 3,500 delegates from China and Arab countries. Many of the projects will cause increased Chinese investment in Saudi Arabia. This includes a memorandum of understanding to the value of $5.6bn between the Saudis and Human Horizons, a Chinese company specialising in electric and self-driving vehicles.

Peace plan

The improvement in ties between China and Saudi Arabia is largely based on economic pragmatism, with the oil-rich kingdom seeking to diversify its economy while China looks to cement relations with its primary crude oil supplier. But these moves from Beijing also represent a broader shift in which China has engaged in greater diplomatic efforts after decades of predominantly focusing on the domestic economy.

The latest move of this kind caused China and Palestine to elevate their bilateral relations to a strategic partnership with President Xi Jinping announcing a three-point peace plan to resolve the Israel-Palestine conflict. The plan favours a two-state solution and a return to negotiations with talk of a free-trade agreement between China and Palestine. While the recent outbreak of hostilities in the West Bank could curtail these efforts, it is notable that China is attempting to mediate a solution to a long-running crisis the US has been unable to resolve.

This has taken place amid deteriorating US-China relations. Despite multiple attempts at rescuing faltering ties, including recent trips to Beijing by Janet Yellen, Antony Blinken, Bill Gates and Elon Musk, the world’s largest trade partners have escalated their conflict over microprocessors. In the latest development Beijing has restricted the export of certain rare earth metals in response to bars placed on exports of chipmaking equipment to China.

In light of recent tensions, Beijing’s foreign policy has become more proactive. China has improved ties with a number of smaller nations while giving much attention to the strategically important Middle East. Clearly, enhancing economic co-operation while maintaining the One China principle remains central to Beijing’s foreign policy objectives.     

• Shubitz is an independent Brics analyst.