Central America and the U.S.-China rivalry
- J Hoenderdos
- Dec 27, 2023
- 12 min read
A large difference between the international relations theories of realism and constructivism concerns the position of small states or peripheral regions in dynamics of great-power competition. Realists argue that small states have a limited amount of options in their relationships with rivalling great powers, and their considerations are overwhelmingly oriented towards the balance of power. When a great power is perceived to be too powerful, smaller and thus weaker powers can either join the great power in order to avoid an attack, which is called bandwagoning; or they can decide to do the opposite, by balancing with another power in search for protection (p. 243-44).
In contrast with realists, constructivists attach much more flexibility to the behaviour of smaller states in complex dynamics of great-power conflict. Whereas realists see international relations as a state of anarchy, in which every state attempts to survive and maximize power, constructivists see international relations as the result of social interaction. States do more than waging war: they also engage with each other in many ways, establishing cultural, political, and ideological relationships. These relationships between states are based on the exchange of ideas, ideologies, and culture. Because every idea, no matter its origin, can be extremely powerful and influential, constructivists are less inclined to underestimate the power of the small state.
The 2020s have seen a serious rise of tensions between the world's current two great powers: the United States and China. Of course, international relations (IR) scholars have different opinions on the exact point of beginning of current China–U.S. competition. It makes sense to pinpoint the 2016 U.S. election campaign as the starting point. This is because before the Trump administration, the Obama White House and even his predecessors, Bill Clinton and George W. Bush, saw the potential of China's rise, and they—especially Clinton—thought that China's economic growth would inevitably lead to China's democratization and adoption of Western values. Obama in his second term (2012—2016) began to think differently, and this was a partial explanation for the U.S.' famous pivot to Asia.
Still, Obama obviously pursued a much more constructive relationship with the Chinese than his successor would. Trump's imflammatory rhetoric during his campaign and subsequent early presidency, together with Xi Jinping's consolidation of power in Zhongnanhai and growing Chinese nationalism, shook the relationship between Washington and Beijing to its core. China–U.S. relations have deteriorated significantly and both sides are attempting to score victories against the other, whether it is in technological dominance, economic power, or their relationship with other parts of the world.
While the term 'Cold War' might not be suitable for the current dynamic, worries about an escalation between China and the U.S. is real, especially in smaller or weaker countries that depend a lot on either side, or both. Smaller states are concerned that they have to choose between Washington and Beijing, and worry about the implications of such a choice. Some have already chosen sides; some are hedging any decision; and some are trying to balance both sides in order to benefit from the great powers' ambition to win them over. In any case, the China–U.S. rivalry is a global affair, with consequences for many states, both big and small.
Earlier this year, I did some research on the small states of Central America, examining how the great-power rivalry has been received in their media and political discourse. Following the ideas of constructivism, my goal was to show how the relationship of these small states with both great powers has taken shape in those discourses, and how this related to their ideas about the implications of China–U.S. rivalry for Central America. Below, I explain some main conclusions of this research, which specifically focused on Costa Rica and Honduras.
Note on my research
Central America and the great powers
Before I come to those conclusions, it is good to briefly draw back first, and establish Central America's historical relationship with both great powers. Of course, the relationship with the United States has been especially close. From the perspective of the U.S., the countries of Central America are the closest part of the global South to its borders. The states are admittedly tiny, but relevant, given their role in U.S. national security. Not only can political instability in the region form a breeding ground for hostility towards U.S. territory, but the enormous amount of Central American migrants towards the U.S.–Mexico border in recent years has been defined as a risk to the nation's security. For this reason, the U.S. has always been 'present' in the region, a euphemism for meddling and intervening, both politically and militarily. At the same time, the U.S. has also provided significant development aid and economic investment in the region.
One could argue that Central America has seen continuous foreign intervention ever since the fifteenth century, either through colonialism or neo-colonialism. In this framework, the U.S. (and perhaps to some minor degree, China) is the latest in a row of great powers intervening in the region, after the Spaniards, the British, and the Soviets (together with the Cubans). In the nineteenth and early twentieth century, amidst its increasing power, the U.S. waged an expansionist war against Mexico, occupied Cuba and both Haiti and the Dominican Republic. The American military intervened repeatedly throughout Central America and the Caribbean in what became known as the Banana Wars (1898—1934), begun under the bellicose Teddy Roosevelt. These wars included military intervention in Honduras to safeguard the interests of the United Fruit Company (it was in this period that an American writer coined the term 'banana republic', in reference to Honduras) and the occupation of newly independent Panama in order to control the Panama Canal.
Military presence of the U.S. in the region became perhaps even more dangerous during the Cold War, when a fear that the Soviets could turn the region 'red' held a grip over Washington's foreign policy. Consequently, the U.S. propped up the reactionary, military dictatorships in the region, especially in Honduras and Nicaragua. In Guatemala, the U.S. supported a right-wing military coup, which overthrew the democratically elected left-wing Árbenz government. Since the end of the Cold War, the U.S.' approach towards the region has differed from president to president. Bush's relationship with the region was notoriously bad, while there was much optimism about the relationship with the U.S. during the Obama presidency, especially when he visited Cuba in 2016.
After 2016, relations soured significantly under the leadership of Donald Trump. It was also during this time that China increased its presence in the region. China has historically had a low profile in Central America, most importantly because it did not have many diplomatic partners in the region until the 2010s. During the Cold War, Mao Zedong had supported the Cuban-led rebels in the region (he also received Guatemala's Árbenz in Beijing after his ousting), but the Central American socialist struggle was no large priority for the Chinese government. The geopolitics of the Cold War had also caused a conflict with Castro's Cuba, which endured a long time and further limited China's space in the region. Only after the Cold War did the pragmatic foreign policy of the Deng Xiaoping era lead the Chinese to invest more in the region, both economically and diplomatically. The 2010s were especially important: not only did several states, including Panama and Nicaragua, switch diplomatic recognition from Taipei to Beijing, but also did Xi's government expand the Belt and Road Initiative to Central America. Panama signed up as its first partner in 2018.
The U.S. from a Central American perspective
From the perspective of Central America, the U.S. has always been the big neighbour. As the illustration above indicates, this is reflected in the discourse of both Costa Rica and Honduras. There is a significant difference between the more specific perceptions in the two countries, however. In Costa Rica, the relationship with the U.S. is perceived primarily in economic terms, which is understandable given trade with the U.S. dwarfs all other trade volumes. At the same time, the relationship is also seen as value-based. Costa Ricans pride themselves on their democracy: in Latin America, only in Uruguay was support for democracy slightly higher in 2023 (p. 12). Moreover, Costa Rica has traditionally voiced strong support for human rights. Costa Rica thus sees its relationship with the U.S. also as a partnership in liberal democratic values. For this reason, Costa Rican politics and society have also at times criticized the U.S. government for what it considered violations of democratic values or human rights.
Meanwhile, Honduras' relationship with the U.S. is more complicated. In its media discourse, there is more emphasis on the dominance of the U.S. in bilateral relations. This is in contrast with Costa Rica, where it seems preferred to perceive the relationship as more equal and like-minded. In Honduras, the U.S. is seen as the regional 'sheriff', intervening at will in the country's judicial system. This is not coincidental: for example, countless Honduran politicians and officials have been prosecuted in the U.S., including all its recent presidents. Furthermore, much emphasis is put on the trade relationship: the U.S. dominates as a destination for Honduran exports and imports. There are also clear concerns about overreliance on the U.S. economy: both in media and political discourse, there is a perennial question whether the U.S. is too important for Honduran trade and hurts Honduran sovereignty. This relates also to the remesas, the remittances that Central American workers in the U.S. send back home. An enormous amount of Hondurans has left their country in recent years and now resides in the U.S., often illegally. This further complicates the bilateral relationship and the Honduran perception of the United States.
China from a Central American perspective
As I wrote earlier, there is a tendency to overestimate Chinese presence in the region, and the content analyses reflect this. In Costa Rica, China is largely perceived as a promising partner, especially in trade, but to some degree also in other areas, including environmentalism. Both in Costa Rica's media and politics, there is little discussion about what China is and how it relates to Costa Rica itself. There are exceptions, of course, and these are mostly found in media on the ideological fringes. Semanario Universidad, a leftist medium, tends to consider China an untrustworthy partner and accuse it of human rights violations, especially in Xinjiang and Hong Kong. (But then again, SU is even more critical of the human rights record of the U.S.) The discourse analysis also shows surprisingly little discussion in Costa Rica about the value of having a relationship with Beijing. The ties are fairly new, having been established in 2007, yet there is no real contemplation about what they have brought the Costa Ricans. There are some exceptions to this, of course—for example, the regional investigative platform Expediente Público has critically assessed China's engagement with its new partners—but there certainly is no evident disappointment with the relationship with Beijing.
Meanwhile, the perception of China in Honduras is much more complicated. Honduras, until early 2023, had never recognized the People's Republic of China as 'the China', and had a very strong relationship with Taiwan. Hence, Taiwan in Honduras was, and to a large extent still is considered 'the real China', while the now-recognized mainland China is seen as 'the other China'. President Castro's diplomatic switch, which caused considerable dissatisfaction in Honduras, meant that Honduras had to establish a relationship with China, with which previous relations were minimal. The analysis shows that China in recent years was consistently seen through the prism of Honduras' friendly relationship with Taiwan. Thus, China is frequently considered an aggressor and dangerous great power, and a Communist dictatorship which has hurt the liberal democracy of Taiwan. Interestingly, after the Castro switch, the subsequent debate in Honduras also put emphasis on the limited value of having relations with mainland China. For this, examples of fellow Central American states were used, mostly Costa Rica. Thus, perceptions of having a relationship with China differ within Central America.
Left: former Chinese foreign minister Qin Gang welcomes Honduran foreign minister Eduardo Reina to Beijing (March 2023). Right: U.S. Secretary of State Antony Blinken and former Costa Rican president Alvaro Quesada meet in San José (June 2021).
The great-power rivalry
Based on these meanings attributed to the two great powers, it cannot come as a surprise that the analysis indicated a difference between the perceptions of the China–U.S. rivalry in Costa Rica and Honduras. They share a baseline, though, which likely is the same throughout Central America and the Caribbean: the great-power conflict is a potential risk for the small states' economic security, and both great powers thus have to be engaged cautiously.
Optimism in Costa Rica
In Costa Rica, the discourse analysis showed some concern about the trajectory of the China-U.S. relationship and its implications for smaller states, although it must be noted that the scope of this concern is limited. The main perception is that the great-power rivalry is limited to the trade war that began (or intensified) in 2018; there is little discussion of other aspects of the rivalry, like geopolitics and ideology. Costa Rican media and politics both understand that because of the small size of Costa Rica's small economy and its dependency on U.S. trade, the trade war can have negative consequences for Costa Rican business and subsequently Costa Rican consumers. (The aforementioned Semanario Universidad poses an interesting exception in the Costa Rican mediascape: it takes the explicit position that the U.S.-China conflict is geopolitically and ideologically motivated, and that China was unjustifiably attacked by a U.S. that fears losing its hegemonic position.)
But in Costa Rica, some have also perceived the conflict between the great powers as an opportunity. They focus on a side-effect of the trade war: nearshoring by U.S. companies with manufacturing facilities in mainland China. These firms, concerned about the worsening trade war, increasingly consider moving their facilities from mainland China to the Americas, in order to safeguard their supply chains and avoid potential import and export restrictions. The first destination of these 'nearshorers' has been Mexico, which indeed has seen a significant increase in FDI from U.S. companies. A logical secondary destination would be Central America, which consists of states with fairly low wages, strong ties with the U.S., and relatively stable governments. Costa Rica, specifically, has a well-developed high-tech industry and houses numerous manufacturing facilities by global semiconductor powerhouse Intel. In August 2023, Intel already announced an additional $1.2 billion investment in its Costa Rican facilities. Thus, these developments also contribute to some optimism that Costa Rica may be able to benefit from the economic rivalry between the U.S. and China.
Uncertainty in Honduras
In Honduras, both media and politics began considering the great-power rivalry and its implications in more earnest in early 2023. Before that, there was little consideration of the growing tensions between China and the U.S. and what they meant. The rivalry was perceived as an economic conflict, a trade war that could potentially pose risks for Honduran business and consumers; at the same time, there were also a few mentions of the potential of nearshoring. In March 2023, an editorial in the conservative La Tribunal even proclaimed that the rivalry and subsequent nearshoring by U.S. companies “could be the long-awaited miracle that reverses the agonizing state of the national economy.” Discourse about the great-power rivalry and its implications for Honduras thus was limited and somewhat superficial, not too different from Costa Rica.
But the diplomatic switch from Taiwan to mainland China in March 2023 changed the perception of the U.S.–China rivalry in Honduras. Beyond only an economic perspective, the rivalry now also became to be seen in (geo)political and ideological terms. Analysts and lawmakers criticized Castro's rapprochement with China, as it would risk the political relationship with the U.S. as well as investments from the American private sector. Some, especially critics of the Castro government, warned that Castro had drawn Honduras in a conflict between great powers, which could be catastrophic to its international position. In an editorial, El Heraldo argued that by seeking a closer relationship with mainland China, Honduras “becomes less and less trustworthy to the United States.” In this way, relations with China were directly juxtaposed with relations with the U.S. Even more, a popular perception emerged that before any engagement with China, the preferences of the U.S. should be taken into account, in order to prevent Honduras from becoming an even larger part of great-power competition. This frame further acknowledged Honduras' dependency on its northern neighbour, and showed a growing calculation amongst Honduran elites that as such, engaging with China could be detrimental to the country's prospects.
Shrimp farmers (camaroneras) processing fresh shrimp in a facility in Honduras (2022). The decision to break off the relationship with Taiwan has caused anxiety in the important shrimp industry. Taiwan was the largest importer of Honduran shrimp, and exporting to China will be extremely complicated.
Conclusion
The case studies of Costa Rica and Honduras are interesting for multiple reasons, but most importantly, they illustrate the heterogeneity of small states, even in such a coherent cluster of states as in Central America. The analysis—reconstructing the meaning attributed to both great powers and their rivalry—showed that these two Central American states have different perceptions when it comes to China and the U.S., which are mainly rooted in the small states' economic and political contexts. Furthermore, it demonstrated again the agency of small states and their relevance even in great-power conflict.
The discourse analysis also showed some evidence that narratives about the China–U.S. rivalry and the small state’s position in this rivalry only tend to become more popular and informed when the small state itself becomes part of the great-power conflict. More direct involvement in the rivalry, even when it is unintended, requires more attentive thinking in the small state about the great powers and how to maneuver their rivalry. The case of Honduras is a convincing example of this: when Castro chose a foreign policy of engagement with mainland China and more distance from the U.S., figures in media and politics became alarmed and began contemplating what it might mean for the country's international position.
Honduras can be considered a negative case of small states maneuvering the great-power competition. The Castro administration's relations with Washington are deteriorating, its fruitful friendship with Taiwan is over, and the new relationship with China has brought a lot of headache, but few benefits so far. Disagreements with the White House will make Honduras an unattractive destination for nearshorers; a more hawkish foreign policy in Washington will refrain Beijing from engaging with Honduras more proactively. As such, while Castro's decision to establish ties with China has led to a more salient discourse about the meaning of great-power rivalry, this for now may have been too late.
To some extent, Costa Rica shows the other side of the coin. Whereas in Honduras discourse about the great powers increased significantly in 2023, similar discourse is still quite muted in Costa Rica. This is understandable: unlike Honduras, Costa Rica so far has not become part of a U.S.–China dispute. And so far, Costa Rica's neutrality has provided it with the opportunity to possibly become the semiconductor hub of the Americas, even without abandoning its values and foreign policy strategies. In other words, there is still much space for small states to engage with both great powers and navigate their increasing rivalry.
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