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El Salvador’s economy: some roads lead to China

The establishment of diplomatic relations with China has been the most important foreign policy decision made by El Salvador not just this year but in its history.


Charly Morales Valido


The President of the Republic, Salvador Sánchez Cerén was this forceful in expressing the country’s courageous split from Taiwan, thereby recognising the People’s Republic as the only legitimate form of the Chinese nation.

On 20 August, Sánchez Cerén informed the nation of the unexpected decision, taken after a series of analyses and consultations, in order to strengthen South-South cooperation.

“In the immediate, short term, we will start a conversation between the two countries about trade, infrastructure, small and medium sized businesses,” the president said, and highlighted the Asian superpower’s economic weight.

Chancellor Carlos Castañeda travelled to Beijing to sign the agreement and was accompanied by Medardo González, leader of the Farabundo Martí National Liberation Front (FMLN).

Thus, the Central American country joined the other 177 countries that have approved the United Nations’ Resolution 2758, which recognises the existence of a single Chinese nation, the People’s Republic, whose territory includes Taiwan.

The process of identifying areas where the countries can work together was immediately begun, including in terms of trade, investment, development of infrastructure and tourism and cooperating on scientific projects, on the economy, technology, health and education.

This step has been called “brave” since it entails a direct confrontation with United States policy. U.S. spokespeople straight away voiced doubts about El Salvador’s sovereign decision.

Criticism was not in short supply at home either, originating in certain extreme right-wing sectors where people have been known to benefit from Taiwan’s policies to buy recognition including some notorious corruption cases.

However, the general consensus is gaining ground over the foolishness that, according to the ambassador in charge of El Salvador’s exports, Sigfrido Reyes, lay behind initial criticism of the measure. Reyes, President of Proesa (El Salvador’s export and investment promotion agency), confirmed that becoming allies with China is the most courageous decision El Salvador has taken in its foreign policy.

“Nobody can avoid the fact that China is a global power in every sense, playing a pivotal role in global affairs,” said Reyes.

He reiterated that the links correspond to the mutual interest in economic growth and go beyond ideology, since China is a market with great potential that has already shown good will with an initial investment of 150 million dollars.

Furthermore, the ‘brand’ of El Salvador as a country, promoted by Proesa, is beginning to be recognised by the Asian powerhouse, which is an important market for sending tourists around the world. Chinese tourists are increasingly showing an interest in Central America as a holiday destination.

For Reyes, El Salvador’s recent participation in the Shanghai Exhibition and the business conference that has just taken place in San Salvador are positive actions that show this long awaited step is correct and courageous.

President Sánchez Cerén attended events in Beijing, during his official visit to China, when he had meetings with important members of the political elite. For her part, Salvadoran Deputy Minister Merlin Barrera claimed that being a commercial partner with China is an honour for her country, whilst statistics prove that it also makes good business sense.

Salvadoran exports to China grew from 45.92 million dollars in October 2017 to 85 million just 12 months later, whilst imports from the new ally reached 179.75 million dollars.

Last October, therefore, China was already the largest supplier to El Salvador, a position it could continue to consolidate thanks to initiatives like the networking event previously mentioned for business people from both countries.

Besides fostering connections between investors, the event concluded with the signing of 14 memorandums of understanding and of purchases to the tune of almost a million dollars in the country’s different markets.

Ou Jianhong, the Chinese ambassador to El Salvador, confirmed that the Chinese market is wide open, in a way that can benefit everyone.

Wang Dongtang, a civil servant in the Ministry for Foreign Trade, underlined the benefits that have come with opening itself up to the world, allowing China to become the main trading partner of 120 world economies.

“In just a few months the relationship between El Salvador and China has bloomed: our economic and commercial cooperation has great potential and the possibilities are endless,” Wang emphasised.

In the same vein, he suggested that Beijing will expand the areas of cooperation, will create an environment even more conducive to trade and will protect the legitimate rights of the participants, amongst other initiatives. For the time being, projected sales from these first meetings confirm that Chinese buyers have shown great interest in Salvadoran products like sugar, coffee, cacao and rum, among others.  (PL)

(Translated by Elizabeth Dann  – Email: – Photos: Pixabay

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