Since El Salvador opened diplomatic relations with China in 2018, imports from that country have multiplied while exports fell a year later.
El Salvador opened diplomatic relations with China on August 20, 2018. The expectation at that time was for the country to achieve greater trade cooperation, investment and infrastructure development.
But almost three years later, the biggest beneficiary has been China, while El Salvador continues to be subjected to its powerful trade and now faces increasingly fierce trade competition.
SEE: Agreement with China “is the worst business for El Salvador,” say business unions
This is shown by official data from the Central Reserve Bank (BCR): in 2020 Chinese imports were 20 times more than what El Salvador exported to the Asian giant.
By the end of 2020, China had imported a total of $ 1,479.0 million in all types of products, while El Salvador’s exports barely totaled $ 77.5 million, that is, 5% of what they sell to us.
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And of that $ 77.5 million, $ 74. 7 million correspond to the sale of raw sugar that is shipped with zero tariffs.
Quite the opposite occurs with the United States, with which El Salvador has increased its sales year after year.
The latest foreign trade report of the BCR indicates that exports to the American country between January and April 2021 grew by $ 252 million compared to 2020.
In 2019, the American country bought a total of $ 2,481.9 million from El Salvador and the figure dropped only in 2020 to $ 1,976.2 due to the pandemic.
In addition, the United States employs more than three million Salvadorans who last year sent more than $ 5 billion in remittances.
In a recent article published by the United States Center for Strategic and International Studies (CSIS), researcher Evan Ellis assured that “The government of Sánchez Cerén in El Salvador could have hoped that recognition from the People’s Republic of China would facilitate more Salvadoran exports to China, but the opposite happened. In other words, instead of creating new opportunities for El Salvador, the main effect of recognition in trade was to subject its market and producers to greater competition from China ”.
“Arguably, the China-El Salvador relationship did more to expose local producers to Chinese competition than to expand export opportunities for Salvadorans,” adds the professional.
And it has not only happened with El Salvador. El Diario de Hoy has published in recent weeks several examples of countries in which China has gained ground by strangling its public finances and putting the sovereignty of countries such as Montenegro, Djibouti, Somoa, Sri Lanka and others at risk.
Another chinese wink
After a complicated year by the pandemic, China has returned to conquer El Salvador.
A week ago, the Legislative Assembly approved a cooperation agreement with China, to reactivate the promises of infrastructure and financing projects that President Bukele consolidated during his visit to the Asian country in December 2019.
In this agreement, China offers construction projects such as a national library, a new stadium and a water treatment plant. However, it also explains that China will be responsible from the design of the works to the workers, to whom the country will have to give permission to enter.
The new wink once again puts on alert the Salvadoran business unions that consider as “the worst business for El Salvador” a new approach with this country, to the detriment of relations with the United States, where more than 3 million Salvadorans live.
The president of the Salvadoran Association of Industrialists (ASI) Eduardo Cader, believes that despite the fact that commercial relations between private companies and China have been maintained for more than two decades, the United States is the largest commercial partner of its member companies.
“For more than two decades and what concerns us is the fine print under these agreements. We are concerned that this will cause harm to our number one business partner, the United States. The country is open (to a relationship with China) as long as there is transparency, clarity and that El Salvador benefits highly from this type of agreement, ”said the businessman.
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