A potentially disastrous foreign policy situation for the U.S. has arisen: Communist China now appears to have all but purchased the Central nic mapAmerican nation of Nicaragua.

Central America was once considered part of America’s “backyard.”

Wang Jing, the president of Hong Kong-based HKND Group, recently signed an agreement with Nicaraguan president (and former Communist guerrilla) Daniel Ortega to build a canal connecting the Atlantic and Pacific Oceans. The 100 year canal agreement was quickly passed by the Nicaraguan legislature, which is controlled by Ortega’s Marxist Sandinista party.

Wang is also heads the Beijing-based Xinwei Telecom Enterprise Group. In January of 2013 the Xinwei group acquired the right to operate Nicaragua’s cellphone and Internet services.

One of the stated priorities of the canal is to relieve the high level of poverty in Nicaragua, but the terms of the agreement are so favorable to China that Nicaragua appears to have bargained away its sovereignty, and in the process insured that Ortega will stay in power for many years.

If a similar deal was struck with the United States, it would have been branded “Yankee imperialism,” Nicaragua would have been labeled a banana republic and Ortega a “puppet of the Americans.”

An opposition member of the Nicaraguan legislature, Victor Hugo Tinoco, has stated that the canal project gives newly established HKND group the absolute right to decide when, where, and how to construct the canal, according to a recent article in the Spanish language Diario las Americas.

HKND’s control is so complete that all subprojects of the canal’s construction can be given to any entity without the permission of the Nicaraguan government. According to the way law is written, “Al Qaeda could end up buying” into the canal, according to legislative member Eliseo Nunez Morales, also quoted by Diario las Americas.

A former member of Ortega’s ruling Sandinista party, and now an opponent to Ortega and his regime, Edmundo Jarquin, in the same article challenged the entire idea of the proposed 40 billion dollar canal project and questioned if the canal project was meant to give the impression that Ortega was indispensible to the completion of the project and as a result must necessarily remain in office.

The canal project “create the illusion that people will come out of the poverty of the overnight, and finally sell the idea that Ortega is essential, unavoidable and therefore must remain indefinitely in power” Jarquin stated.

“It’s not even remotely serious, Jarquin asserted, who said that the time given over to feasibility studies for the 40 billion dollar canal project is less than that allotted for “a modest road.”

And no exact route for the canal has yet been determined.

The project promises to be an ecological disaster putting in danger Nicaragua’s largest body of fresh water, as angry street protestors have pointed out. There is, at this time, no obvious financing for the costly project, and Wang’s corporate expertise is in telecommunications, not construction. The multi-billion dollar project is being initiated in a slow economy with the commmercial need for a new canal highly uncertain.

The proposed Nicaraguan canal is the latest of Beijing’s projects in the Latin America. A Communist Chinese corporation already operates the Panama Canal, and Beijing has constructed the world’s largest container shipping facility in the Bahamas, 80 miles from U.S. shores.

China has ready cash for Latin American governments, and is involved in a range of projects down to the operation of hotels, resorts, and casinos. China is also propping up the Castro brothers regime in Cuba and is giving aid to the tottering Marxist and Chavez-less government in Venezuela. In early June 2013, China’s new president, Xi Jinping, signed a number of cooperation agreements with Mexico and Costa Rica during his visit to the region.

China’s financial offensive in Latin America is in contrast to its aggressive policy toward its neighbors in Southeast Asia, where Beijing’s claims to most of the South China Sea has put China in conflict particularly with Japan, Philippines, and Taiwan. China’s boldness in its assertion of control of vast areas of South China Sea, which is a vital shipping lane and possibly is rich in oil, is made possible by Beijing’s military buildup.

The question for the United States is this: will Beijing be satisfied with its considerable commercial and financial influence in Latin America, or will China eventually seek to extend its military muscle into what once was “America’s backyard”?


Mr. Westerman is the editor/publisher of International News Analysis Today (www.inatoday.com ) and is author of the recently published monograph, “Putin’s Process: From the ‘New’ Russia to a Reinvigorated Soviet State,” and the book Lies, Terror and the Rise of the New Communist Empire: Origin and Directions.