China's Hu to launch trade talks on historic visit to Costa Rica
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SAN JOSE, Costa Rica (AFP) — Chinese President Hu Jintao arrived Sunday in Costa Rica in the highest-level visit by a Chinese official to the country, just over a year after it gave up six decades of ties with Taiwan.
China has increased diplomacy and investment in Latin America in recent years, with an eye on its natural resources and developing markets for manufactured goods and even arms.
Hu and Costa Rican President Oscar Arias, who traveled to China last year, were expected Monday to announce the start of talks for a joint free trade accord, which could be signed in 2010. They were also due to sign 11 cooperation deals.
"Costa Rica is an important country in Central America and a relevant cooperation partner for China in the region," Hu said in a statement released here.
Costa Rica broke off more than 60 years of relations with Taiwan when it became the first Central American country to begin diplomatic ties with China on June 1, 2007.
It would be the third Latin American country to negotiate a free trade deal with China, after Chile and Peru, which has not yet concluded its accord.
Costa Rica, a major exporter of computer components, has dismissed fears of an invasion of Chinese products into the country of some four million people.
The trade balance has favored Costa Rica up until now, with 803 million dollars of exports up to September this year, compared with 671 million dollars of Chinese imports. China, however, deals in a much more diverse range of products.
Both Taiwan -- a democratic self-ruled island that Beijing considers part of its territory awaiting reunification -- and China have been accused of using so-called "dollar diplomacy" to get nations to ally with them.
But Taiwan has seen its allies dwindle over the years.
"It's more than just symbolic that Hu Jintao has decided to come, because it is clearly making the point that it is no longer a Taiwanese stronghold," said Costa Rican analyst Luis Guillermo Solis.
Part of China's incentives for Costa Rica's recognition came from its enormous foreign exchange reserves with an offer to buy 300 million dollars in bonds. It also donated 73 million dollars to build a new national stadium.
As Costa Rica prepares to sign new trade ties with China, analysts wonder if its Central American neighbors will be tempted to follow its diplomatic move.
Hu arrived in San Jose from a G20 summit in Washington, with scores of businessmen and Communist Party officials, and will next travel to Cuba, late Monday, before attending an Asia-Pacific summit in Peru on November 22.
China and Cuba have remained all-weather friends for decades, their Marxist Socialist past a driving force in relations. China was Cuba's second business partner, after Venezuela, in 2007.
Hu visit marks China's growing interest in Latin America
SAN JOSE (AFP) — Chinese President Hu Jintao begins a Latin America tour on Monday, taking in Costa Rica, Cuba and Peru, as China tightens economic ties and the region hopes for help in tougher times.
The Asian giant has increased diplomacy and investment in Latin America in recent years, with an eye on its natural resources and developing markets for manufactured goods and even arms.
Many in Latin America hope for an investment boost to help ride out the economic crisis.
Exports from the continent to China include soya and iron ore from Brazil, soya from Argentina, copper from Chile, tin from Bolivia, and oil from Venezuela.
The trade is still only a small percent of the continent's total, but it is growing.
China's state-run Xinhua news agency reported this month that exports to Latin America grew 52 percent in the first nine months of 2008 to 111.5 billion dollars.
Hu will visit San Jose and Havana between a G-20 meeting on the global crisis in Washington on November 15 and an Asian Pacific Economic Cooperation forum summit in Peru on November 22.
China and Cuba have remained all-weather friends for decades, their Marxist Socialist past a driving force in relations.
The Chinese leader visited Cuba four years ago to sign bilateral deals, and China was Cuba's second business partner, after Venezuela, in 2007.
Hu's visit to Costa Rica, meanwhile, is the highest-level visit by a Chinese official to the first Central American country to break off Taiwan ties in favor of China, in June last year.
Taiwan is now left with only a small circle of 23 international supporters, most of them tiny, poor nations, while Beijing commands the support of 171 nations.
"It's more than just symbolic that Hu Jintao has decided to come, because it is clearly making the point that it is no longer a Taiwanese stronghold," said Costa Rican analyst Luis Guillermo Solis.
Both Taiwan and China have been accused of using so-called "dollar diplomacy" to get nations to ally with them.
But China's economic might is hard to compete with, especially in tough economic times.
Part of China's incentives to Costa Rica came from China's enormous foreign exchange reserves with an offer to buy 300 million dollars in bonds.
Many wonder if Costa Rica's neighbors will be tempted to follow its move.
"I can't see any changes in recognition back from China to Taiwan. Basically it's been bit by bit, countries going from Taiwan to China," said Kerry Brown, a senior fellow at Chatham House thinktank in London.
Costa Rica, a major exporter of computer components, is now prepared to negotiate a free trade deal with China, the foreign trade minister said here this week, dismissing fears of an invasion of Chinese products into the tiny Costa Rican market.
China has expanded its high level missions to the whole continent in recent years, making investments and agreements with such oil producers as Venezuela, Ecuador, Colombia, Argentina, Brazil and Mexico.
"The fact is that China has been locked out of a lot of countries for energy deals" in the past, Brown said. "It's going to be going into these areas more and more."
China has also advanced to economic assistance and direct investment, sometimes taking over from the region's main commercial partner and neighbor, the United States.
The teaching of Chinese in schools and universities and scholarships to China, as in Costa Rica's deal, add to a charm offensive.
And although Latin American economies are in a stronger position to withstand financial setbacks than in the past, a strong economic partner such as China is more attractive than ever.
Source: AFP
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