Mainland China’s Diplomatic Maneuver in Central America: The Impact of the Nicaragua Grand Canal

Abstract

The leftist Sandinista government signed an agreement with Hong Kong-based HK Nicaragua Canal Development Investment Company (HKND) to initiate the construction of the Nicaragua Grand Canal within five years. It has been described as a milestone in the history of Central America. This great project will transform not only the landscape of this region but also the geopolitical and geoeconomic power configuration. It has been discussed widely that Beijing is behind the scenes of the canal project, because Wang Jing, the owner of HKND, has no civil engineering background or experience, not to mention the ability to obtain the necessary capital. In this study, the main objective is to gain a comprehensive understanding about the mainland China and Latin American relationship, along with mainland China`s grand strategy and diplomacy in this region. Then, the analysis of the Nicaragua Great Canal project will be done to know the pros and cons of the canal as well as the position of mainland China. In view of Central America traditionally being seen as America`s backyard, the U.S. policy toward Latin America and Central America is examined and observed to see its impact. Although mainland China has not mentioned Latin America and Central America in its ＂One Belt, One Road＂ strategy, the geopolitical and geoeconomic importance of Latin America and Central America cannot be ignored. With the creation of three international financial institutions (i.e., New Development Bank, Asian Infrastructure Investment Bank, and Silk Road Fund Company), mainland China is able to promote critical infrastructure construction projects around the world, the Nicaragua Grand Canal must be one of them. In conclusion, it is predictable that, with the strong support of the Nicaraguan government and mainland China`s grand strategy, the Nicaragua Grand Canal will be finished sooner or later. Mainland China will benefit from the completion of the canal and hold a better geo-strategic position in the region and in the world.