than 20%. It was the only Central American country without official diplomatic relations with the PRC that saw a trade increase over 10% (Jenkins, Peters & Moreira, 2007). Costa Rica officially recognized the PRC in 2007 and started a mutual free trade agreement with the PRC in 2011 (Ministry of Commerce China, 4/7/2012). The significant increase in trade between the PRC and Costa Rica most likely contribute greatly to Costa Rica’s decision to switch recognition. [insert table 1 about here] The PRC can be viewed as an economic ally of Central America, but it can also be viewed as an economic threat to the countries of Central America. There is a fear that as much as the PRC can be a partner in modernization, it can also be a competitor in the world’s market, especially for the U.S. market (Jenkins, Peters & Moreira, 2007). However, Central America’s geographic closeness to the US markets is one of the reasons it is attractive as a trading partner to the PRC. What Central America loses to the PRC in trade with the US and Canada, it may offset with increases in trade to the PRC. Also, because Central America is behind the rest of Latin America on the path to industrialization, much of its exports are in raw materials and food stuff. These are both resources for which the PRC is becoming increasingly hungry. Unfortunately for Central America, increases in the trade of raw materials are not directly beneficial to their industrialization desires. The PRC’s initial interest in Central America may have been specifically to reduce Taiwan’s status as an independent nation. Now, as the PRC has become more resource hungry, those relations have taken on a new parameter, but the One-China goal is still of major importance to the Chinese Communist Party (Sepulveda, 2008). Throughout the 2000s, Taiwan negotiated trade agreements with all the countries of Central America except Mexico, Costa Rica and Belize (Erickson & Chen, 2007). Taiwan’s only remaining free trade
than 20%. It was the only Central American country without official diplomatic relations with the PRC that saw a trade increase over 10% (Jenkins, Peters & Moreira, 2007). Costa Rica officially recognized the PRC in 2007 and started a mutual free trade agreement with the PRC in 2011 (Ministry of Commerce China, 4/7/2012). The significant increase in trade between the PRC and Costa Rica most likely contribute greatly to Costa Rica’s decision to switch recognition. [insert table 1 about here] The PRC can be viewed as an economic ally of Central America, but it can also be viewed as an economic threat to the countries of Central America. There is a fear that as much as the PRC can be a partner in modernization, it can also be a competitor in the world’s market, especially for the U.S. market (Jenkins, Peters & Moreira, 2007). However, Central America’s geographic closeness to the US markets is one of the reasons it is attractive as a trading partner to the PRC. What Central America loses to the PRC in trade with the US and Canada, it may offset with increases in trade to the PRC. Also, because Central America is behind the rest of Latin America on the path to industrialization, much of its exports are in raw materials and food stuff. These are both resources for which the PRC is becoming increasingly hungry. Unfortunately for Central America, increases in the trade of raw materials are not directly beneficial to their industrialization desires. The PRC’s initial interest in Central America may have been specifically to reduce Taiwan’s status as an independent nation. Now, as the PRC has become more resource hungry, those relations have taken on a new parameter, but the One-China goal is still of major importance to the Chinese Communist Party (Sepulveda, 2008). Throughout the 2000s, Taiwan negotiated trade agreements with all the countries of Central America except Mexico, Costa Rica and Belize (Erickson & Chen, 2007). Taiwan’s only remaining free trade