The Washington Post-As China arrives with a splash in Honduras the US wrings its hands

2023-09-07T17:03:01.784Z

TEGUCIGALPA, Honduras — When the leader of this impoverished Central American country visited Beijing in June, China laid out the warmest of welcomes. There was a state dinner in the president’s honor in the Great Hall with Chinese leader Xi Jinping, a 21-gun salute in Tiananmen Square and lengthy bilateral talks over a six-day visit.

For China, the attention granted to Honduras — long among the most docile of U.S. regional partners — was both payment and propaganda. Less than three months before President Xiomara Castro’s arrival, despite energetic appeals and warnings of duplicitous Chinese wooing from the Biden administration, Honduras had established diplomatic relations with China, breaking its decades-long ties with Taiwan.

In the global arena of U.S.-China competition, it was clearly a win for Beijing. But beyond the chagrin at China’s latest foreign policy victory, Biden administration and U.S. military officials see potentially ominous strategic implications.

Honduras hosts an American military base, Soto Cano, with up to 1,500 U.S. troops and a joint task force managing regional U.S. policy priorities such as narcotics trafficking, organized crime and migration, as well as disaster relief and training. Among its several ports on both the Pacific Ocean and the Caribbean, Puerto Cortés, on the northern coast, is the largest and the only deep-water facility in Central America.

While the United States itself recognized the People’s Republic of China 44 years ago, it has continued to urge the dwindling number of countries with diplomatic relations with Taiwan — now down to 13 — not to switch.

As China continues to campaign for diplomatic support, several of its most recent successes have been in Central America — Panama in 2017, El Salvador in 2018, Nicaragua in 2021 and now Honduras. Guatemala’s president-elect has indicated he plans to follow. In South America — where China is now the biggest trading partner — Paraguay is the lone holdout. In the Caribbean, Haiti and three smaller island nations continue to recognize Taiwan.

Castro’s government dismisses U.S. concerns as overwrought and patronizing. “We have a good relationship with the U.S. in defense and security,” Foreign Minister Enrique Reina said in an interview here. “I think that we will not change that at all. Our interest is in cooperation [with China] in general areas — education, health, technology related to civilian use. Transportation, infrastructure. But not anything related to security and defense.”

Like others in the hemisphere, Honduras has moved to the left, and Castro’s “democratic socialist” government is expanding its political and economic alliances in that direction. “For some people,” Reina said, without mentioning names, “I think it’s difficult to see that we’re a government that makes its own decisions.”

Recognition of China, with its huge market for raw material imports and appetite for foreign investment, is about “pragmatism, not ideology,” he said. China may be “a problem for the political interests of the United States. But for us … it’s mainly an opportunity to seek other alternatives for cooperation.”

So far, there is little evidence of China’s presence here. Its new embassy is lodged in temporary quarters at a luxury hotel. The streets are crowded with Dunkin’, Pizza Hut and McDonald’s, and local businesses announce themselves with English-language signs. In one downtown neighborhood, a lone piece of graffiti declares in Spanish, “Honduras is with Taiwan.”

Beijing says it has a lot to offer Honduras. As a “developing country” that has managed rapid growth, China has experience that is “easier to share” than that of some other partners, said Liu Pengyu, spokesman for the Chinese Embassy in Washington. (The Chinese Embassy in Tegucigalpa did not respond to repeated requests for interviews.)

With policies and a financial market that are more “predictable” and “stable,” Liu said, China has provided Latin America with an increasingly attractive alternative to its traditional ties with the United States. “Maybe the West needs a smarter strategy,” he said.

The 20-yard line

U.S. aid and investments throughout the region are historically seen as slow in coming and with significant stipulations on human rights and democracy, along with a preference for the private sector and nongovernmental organizations. Honduras, long known for violence and corruption, has been subject to particular U.S. scrutiny. In contrast, China’s offers of trade and investment, with few strings attached, have increasingly outweighed traditional ties or ideology in the region.

China has often outbid U.S. companies for infrastructure and raw material projects, including mining, in staunch U.S. allies such as Colombia. Even when Brazil’s diplomatic ties with Beijing cooled during the right-wing government of Brazilian President Jair Bolsonaro, Chinese trade and investment continued to grow. In Argentina, a massive space station run by the China Satellite Launch and Tracking Control General, part of the Chinese military’s Strategic Support Force, rises high above Patagonia. China has made significant investments in Chile’s substantial lithium resources.

Central America has gotten little visible payoff for the diplomatic switches, with the exception of Panama, where China now operates ports on both ends of the Panama Canal.

In Costa Rica, which led the way in ditching Taiwan in 2007, China built a new soccer arena — replicating its “soccer diplomacy” across Africa. But while a major Chinese-built road is under construction, a planned oil refinery was canceled, and hopes for increased exports to China have not materialized.

“We got the stadium, 200 Chinese police patrol cars and several infrastructure programs that were going to be developed,” Luis Guillermo Solís, Costa Rica’s president from 2014 to 2018, said in a recent interview.

“I got a review of the troops” during a 2015 visit to China and meeting with Xi, Solís added. “It was January, and it was cold. I didn’t get the golden tents with the dragons.”

In addition to help in restructuring its national debt, Honduras seeks loans and investments for a long list of potential infrastructure projects — at least four dams to improve electricity production; roads; communications; a new hospital; and a proposed new prison for gang members, traffickers and other criminals on an uninhabited Caribbean island about 100 miles off the mainland.

China’s development model “has a lot to teach” this country of 10 million people, Ricardo Salgado, Castro’s strategic planning minister and lead cheerleader for the new relationship, told Chinese television just days after diplomatic ties were established. “In the next four years, we should create at least half a million jobs.”

So far, Beijing has not committed to any of the Honduran proposals, and Reina said that the United States, the European Union, Japan and any other countries are welcome to offer to fund them. “We’ll see which of these countries are interested in investing in these projects.”

Beyond bilateral ties, China has moved to embed itself in regional organizations. In August, the Central American Parliament voted to boot Taiwan and transfer its “permanent observer” status to the People’s Republic of China. “This again shows that the one-China principle represents the unstoppable trend of the times and has the overwhelming support of the people,” the Chinese Foreign Ministry said.

Even if some of the returns envisioned by China’s newest partners in the hemisphere have not yet materialized, officials at both the Pentagon and the State Department have spent years worrying that China’s string of diplomatic victories has laid the groundwork for future threats.

“The PRC is investing in critical infrastructure, including deep-water ports, cyber and space facilities which can have a potential dual use for malign commercial and military activities,” Gen. Laura J. Richardson, commander of the U.S. Southern Command, told Congress in March. “In any potential global conflict, the PRC could leverage strategic regional ports to restrict U.S. naval and commercial ship access. This is a strategic risk that we can’t accept or ignore.”

“They’re on the 20-yard line to our homeland,” Richardson told a forum at the Center for Strategic and International Studies in Washington in August.

A demand for billions

When Castro mentioned plans to establish relations with China during her 2021 presidential campaign, the Biden administration took notice, sending Brian A. Nichols, the assistant secretary of state for Western Hemisphere affairs, to Tegucigalpa, the capital, to meet with the candidate.

“I underscored the importance of really looking at the reality of relationships, what is on offer, having all the information before making a decision,” Nichols said in an interview.

He returned to Honduras for another round as part of a U.S. delegation headed by Vice President Harris to Castro’s January 2022 inauguration. “We want to make sure that they understand that the PRC often has not delivered on the promises that it has made to encourage countries to change recognition” away from Taiwan, Nichols said. “And that the benefits promised often prove to be ephemeral … or nonexistent. That the debt overhang of the projects that they have advocated for … have left buyers’ remorse.”

Taiwan sent its own delegation to the inauguration, headed by Vice President Lai Ching-te. During a meeting with Castro, the Taiwanese president’s office reported, the new Honduran leader “recalled with gratitude Taiwan’s many years of assistance to Honduras and … emphasized her intention to continue deepening friendly ties.”

Castro waited more than a year to make good on her campaign promise. On March 15, she revealed on the platform X, then known as Twitter, that she had instructed Reina to begin negotiations with Beijing, and the deal was done 10 days later. Taiwan did not take the dismissal lightly. At a news conference in Taipei, the capital, Foreign Minister Joseph Wu said Reina wrote to him just before the break demanding $2.45 billion — $90 million for a hospital, $350 million for a dam and about $2 billion to “eat … its national debt.” Wu likened the request to attempted “bribery.”

Reina described the pre-break discussions with Taiwan as “frank” and “pragmatic.” Taiwan, he said, did not respond to Honduran proposals to negotiate new terms for its debt and consider “a loan for building some hydroelectric projects that are important.”

The State Department’s public reaction was terse. It was a sovereign decision that Honduras had every right to make, a statement said, while noting that China “often makes promises in exchange for diplomatic recognition that ultimately remain unfulfilled.”

Castro’s message to the region and the world, said Gustavo Irías, executive director of the nongovernmental Center of Study for Democracy here, was that “we have ceased to be a banana republic, and that we are not necessarily going to follow the dictates of American foreign policy.”

Watchful eyes

The China announcement served as a temporary distraction from the political chaos and stalemate that have ensued since Castro’s coalition took over from years of what she calls a “narco-dictatorship” that left a limping economy, institutional weakness and endemic corruption.

Her predecessor, Juan Orlando Hernández — whose acquiescence to U.S. defense policy and cooperation on migration issues kept him on the good side of both the Obama and Trump administrations — was indicted by the U.S. Justice Department on narcotics trafficking and weapons charges. He was extradited early last year by the Castro government and is awaiting trial in New York.

Castro’s first-round electoral victory, on a platform of social justice, an end to legal impunity for corruption, and economic growth had made clear that Hondurans were enthusiastic about the changes she promised. So was the Biden administration.

But without a legislative majority, Castro has made little progress in moving major proposals to take power away from her political opponents, the private sector and foreign investors — the “corrupt elite,” as her government describes it.

Critics charge that Castro is more interested in ideology than governing, strengthening ties with leftist regimes in Venezuela and Nicaragua and copying the autocratic populism of El Salvador’s Nayib Bukele, who has dealt with gang violence by declaring a state of emergency and throwing tens of thousands into a newly built mega prison.

Just like her predecessors, they say, she has packed her government with relatives and ideological cronies. Her son and her husband, Mel Zelaya — a former president ousted in a 2009 coup supported by some of her current political opponents — are her chief presidential advisers. Her nephew is defense minister. Her daughter, a member of Congress, has figured prominently in the nascent relationship with China.

“The government has managed to create an image of China as a savior,” said Helui Castillo, who is in charge of commercial policy at the Honduran Private Enterprise Council (COHEP), the country’s main business and trade organization.

“Commercially speaking, I see it as there’s not going to be a big change,” she said.

Even without diplomatic relations, China’s trade with Honduras was already second only to that of the United States, albeit far more imbalanced. In addition to coffee and produce, the United States imports Honduran-made knit and woven apparel and small electrical goods — items that China itself exports in quantity. In exchange for a wide range of Chinese communications, technological and manufactured goods, Honduras exports relatively small amounts of agricultural products and raw materials to China.

Although its influence is rarely seen in big projects and investments, the United States is deeply embedded here. The estimated $8.5 billion sent home last year, according to the World Bank — almost entirely by the 1.1 million people of Honduran origin living in the United States — “is the biggest part of our economy,” Castillo said. “We all have family there. It’s two hours away. It’s our main commercial partner. We have a [U.S. military] base here. … There are strong ties. Many people say out loud they don’t like the United States, but deep down … they go to Disney. And they’re still trying to get visas.”

Portraying the new China-Honduras relationship as a happy, mutually beneficial one has been a priority for both governments, with regular promotions here on TikTok and other social media. Xinhua, the Chinese state news agency, has opened a bureau in Tegucigalpa and announced plans to make the Honduran capital a hub for its Central American operations. Shortly after diplomatic relations were first established, a group of 30 Honduran journalists were taken on a 10-day all-expenses-paid tour of China.

“It was very modern,” said one, who spoke on the condition of anonymity to avoid problems with the government. “Driverless cars. Incredible technology. Big buildings. A high level of education. We got all VIP treatment and every day was stuffed” with tours of massive infrastructure and meetings with local and national officials.

All of it was conducted under the watchful eye of Chinese Foreign Ministry minders, the journalist said.

China’s Central Propaganda Department signed an agreement — one of 17 bilateral accords during Castro’s visit — under which Honduras’s telecommunications commission will broadcast and promote products of the state-owned China Media Group. The two countries will also “form a cooperative mechanism in news reporting,” along with technology and personnel exchanges, to “help China-Honduras relations get off to a strong start,” Chinese television reported.

Get over it

As Honduran officials touted the benefits of strong links to Beijing, often with veiled barbs toward Washington, U.S. Ambassador Laura Dogu went on the offensive. “In the year since my arrival, it has become clear to me that many Hondurans don’t fully understand how the people of the United States support the people of Honduras,” she said in an August speech to the Honduran American Chamber of Commerce.

Dogu highlighted that bilateral trade grew by a record 22 percent last year. Since the start of Castro’s government, she said, “the United States government has started programs that will represent an investment of over $800 million.”

“Our requirements are that jobs go to Hondurans and the project follows international environmental and labor standards,” she said. She added that U.S. agencies provide training and support across a wide range of activities and services including entrepreneurship, education, law and governance, human rights, agriculture and combating corruption.

“The bonds between our countries and our people cannot be broken,” Dogu said.

But conversations with a number of officials and others in both countries, many of whom spoke on the condition of anonymity to provide candid assessments and avoid further antagonism, made clear that those bonds are strained. Some believe that Castro and her husband hold a grudge for what they viewed as insufficient U.S. support for reinstating Zelaya after the 2009 coup. As recently as her Sept. 20 speech at the annual United Nations General Assembly, Castro attributed her own election to those who “rose out of the resistance in the streets fighting the coup d’état” that overthrew him.

“I certainly think it’s shaped their view of the world,” Nichols, the State Department assistant secretary, said. “‘Grudge’ is an emotional state, so I’m not in a position to characterize it. What I will say is that we are focused on having a strong relationship.”

But Castro officials see disrespect from Washington — which has yet to invite Castro to a White House meeting with President Biden — and a policy that harps on corruption and human rights over development and supplies nonmilitary aid to civil sectors antagonistic to the government.

Tom Shannon, a longtime senior State Department official in top jobs on Latin America policy, is now at the high-powered Washington law firm Arnold and Porter, where he manages a $90,000-per-month lobbying contract with the Honduran government to improve its relations with the United States. The Biden administration, he said, should just get over its pique.

“If I’m the U.S. government looking at Honduras, I don’t care what they say,” Shannon said in an interview. “What I care about is, does the joint task force get to operate? Do we get to fly at will out of the air base, get to launch our [Drug Enforcement Administration] reconnaissance aircraft, work with Honduras on air and sea intercepts? Because where else are we going to get that kind of help? … Having a secure base of operations to run counterdrug and security operations is hugely important.”

The many roadblocks, restrictions and sensitivities surrounding U.S. assistance and policy “puts us in an almost impossible place” in competing with China, said Shannon, a complaint that many current U.S. diplomats share.

Even strong supporters of the Biden administration worry that its focus on the Ukraine war and the Indo-Pacific has led to lost ground in the region.

“I just struggle to see what this administration is doing in Latin America that has any heft to it,” Sen. Tim Kaine (D-Va.), who chairs the Senate Foreign Relations subcommittee on the Western Hemisphere and took a year off from law school to work with Jesuit missionaries in Honduras, told State and Treasury department officials in a heated July hearing.

“If China’s offer is, ‘We’re not demanding any reform, here’s some money, here’s an investment,’ and our offer is, ‘Once we help you improve all these aspects of yourself, we’re open to more interaction,’ … we will fall farther and farther and farther behind.”

Cade Cadell in Washington contributed to this report.

About this story

Story editing by Peter Finn. Project editing by Courtney Kan. Photo editing by Max Becherer. Graphics by Cate Brown and Samuel Granados. Design and development by Kat Rudell-Brooks and Yutao Chen. Design editing by Joe Moore. Copy editing by Vanessa Larson.