- Category: The Nation
- Published on Saturday, April 30 2011 01:25
- Written by Rod Hughes
- Hits: 957
China's gigantic population and growing economy was the siren call for ex-President Oscar Arias (2006-10) to end this country's decades long diplomatic relations with Taiwan in order to open relations with mainland China.
How is this bold more working out? Not well, according to a study by the Revista de Cepal magazine, which shows that in the last three years, Central America has lost ground with the China trade, no regional nation more than Costa Rica.
Before the world recession, the Arias move looked like a winner. Exports to China increased from $33 million in 2002 to $848 million in 2007, according to foreign trade promotion agency PROCOMER figures.
This was before the economic crisis. Since then, trade has fallen by two-thirds. But China has increased its export of manufactured goods, leaving a net loss in the balance of trade.
But Latin America as a whole has benefited in the past decade by earning between $25 billion and $75 billion -- except in Central America. The business newspaper El Financiero speculates that this is because China's rapid infrastructure growth has resulted in a demand for metals (such as mined in Peru) and petroleum (Venezuela).
In part, this country's loss has been spurred by a reduced export of computer components by Intel.