Honduras Rewarded For Pledging Allegiance to Beijing

In recent months, China has engaged in extensive diplomatic efforts to improve ties with a variety of nations around the world. While maintaining high level dialogue with the United States in a context of increasing strategic competition, Beijing has simultaneously reached out to numerous emerging market countries with a particular focus on the Middle East. Although, perhaps the most important breakthrough for China has been the normalisation of ties with Honduras.

In March of this year, Honduras severed its diplomatic ties with Taipei in order 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 following 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 United States 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 United States 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 see Honduras included within 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 the two countries would negotiate a free trade agreement.

The embassy inauguration ceremony was held during a six-day state visit by Honduran President Xiomara Castro, which 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 which saw Huawei executive, Meng Wenzhou, detained in Canada for three years before her release in exchange for two Canadians nationals.

Following on from his President’s request to join the NDB, the Foreign Minister also mentioned that Honduras hoped to join BRICS. “I think there's 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 like Honduras see BRICS as a platform for advancing their economic interests beyond their bilateral ties with major economies like the United States 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. Nevertheless, the timing of the Honduran shift from Taipei to Beijing is significant, as China seeks to take advantage of a decline in American influence in the Middle East.  

China Invests in Middle East as Relations with US deteriorate  

Following the visit by the Honduran delegation, the 10th edition of the Arab-China summit kicked off in Saudi Arabia for the first time, with $10 billion dollars in deals announced on the very 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 see increased Chinese investment within Saudi Arabia. This includes a memorandum of understanding worth $5.6 billion between the Saudis and Human Horizons, a Chinese company specializing in electric and self-driving vehicles.

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 number one crude oil supplier, and the fact that neither country has accused the other of human rights violations certainly helps. But these moves from Beijing also represent a broader shift which has seen China engage in greater diplomatic efforts after decades of predominantly focussing on its domestic economy.  

The latest move of this kind saw China and Palestine elevate their bilateral relations to a strategic partnership with President Xi announcing a three point peace plan to resolve the Israel-Palestine conflict. The Chinese 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 is yet to fully resolve.

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

In light of recent tensions, Beijing’s foreign policy has certainly become more pronounced with forays into regions usually associated with US diplomatic pre-eminence. China has improved ties with many smaller countries while still giving plenty of attention to the strategically important Middle East. This has seen China enhance economic co-operation with a number of US allies while promoting the One China principle, which clearly remains central to Beijing’s foreign policy objectives.