Chinese investors broke ground on the Nicaragua Canal this week. The hasty opening fulfills chief investor Wang Jing’s promise that construction would start by the close of this year, even though the project’s core problems have not yet been resolved. But observers are already talking up the benefits that Chinese investment will bring to the region, even if the canal never succeeds. From the Wall Street Journal:
“You sell the country a big dream, you get an open door and you score big with real-estate development,” he [Rodriguez] said. “The great majority of the project that has been shown by Chinese developers are real-estate projects. They seem to be using the canal as an excuse to sell real-estate projects, golf courses, and hotels.”While Mr. Rodrigue doesn’t believe the canal will be built, he is more optimistic that new ports, especially on Nicaragua’s Pacific coast, as well as an airport may be constructed as a result of the canal project.
China has a long-term goal to increase its soft power in Latin America and the Caribbean, but that’s not all bad from the American point of view. As we’ve said before, Chinese foreign investment will help a region where governments are sometimes shaky and poverty and crime rates still high; a healthier Latin America, both economically and politically, is very much in our interest. Nicaragua is the second-poorest nation in the Western Hemisphere: the more investment here, the better.