Honduras may turn to Taiwan, learning from the plummeting shrimp exports and the wave of business closures

 Direct translation

Honduras doesn't want to be ripped off by China again! It may turn to Taiwan, learning from the plummeting shrimp exports and the wave of business closures

Financial Channel reports / https://ec.ltn.com.tw/article/breakingnews/521230 / Image : Since Honduras severed diplomatic ties with Taiwan and established diplomatic ties with China in March 2023, its shrimp exports have plummeted and China has repeatedly defaulted on its promised aid and construction projects. (Reuters file photo)

Since Honduras established diplomatic relations with China in March 2023, China's presence in Honduras has been particularly rapid, extending far beyond the commercial sphere. Despite China's rapid penetration of the Honduran economy and its expanded political and economic presence, Honduras has benefited little and suffered far more damage than anticipated.

Honduras' total shrimp exports have plummeted by 67%, leading to the closure of 60 companies and the loss of a significant export target to Taiwan. The expansion of Chinese businesses in Honduras has harmed local businesses and displaced jobs. Promised Chinese construction and aid have also been repeatedly delayed. The American journal The Diplomat reported that Honduras will hold a general election on November 30th. With the ruling and opposition parties currently tied, a change of government could lead Honduras to revert to friendly relations with Taiwan.

Honduras will elect a new president, 128 members of Congress, and approximately 300 mayors on November 30th. Polls indicate a close race in the presidential race between Risi Moncada of the ruling Liberal Party, Nasri Asfula of the National Party, and Salvador Nasralla of the Liberal Party.

This election in Honduras holds strategic significance, determining its future trajectory. The current Honduran government has established diplomatic relations with China, contributing to the rapid growth of Beijing's influence. Both opposition candidates, Asfula and Nasralla, have stated they may switch Honduras' diplomatic ties from China to Taiwan. The current Liberal government abandoned diplomatic relations with Taiwan in March 2023.

This change would represent the largest diplomatic reversal for Beijing since the Violeta Chamorro government of Nicaragua restored diplomatic relations with Taiwan in November 1990. For the United States, it would also present a strategic opportunity to compete with China in its regional region.

Honduran President Xiomara Castro visited China in June 2023, signing 22 agreements promoting cooperation between the two countries in multiple areas. The Chinese government has begun sending large numbers of Honduran journalists to China, including 29 as of April 2023, to strengthen its coverage of China.

China has also stepped up its recruitment of Honduran students. Beijing has established a Confucius Institute at the Francisco Morazán National Normal University of Honduras, which will open in May 2025. As elsewhere in the region, Beijing has begun offering scholarships to Honduran students to study in China, with a total of 27 Honduran students receiving scholarships for the 2025-2026 academic year.

In July 2023, Honduras began negotiations on a free trade agreement (FTA) with China, which would open its market to Chinese companies and products. Honduras hopes the agreement will also boost Honduran exports to China.

China's planned expansion in Honduras has led to a surge in the number of Chinese businesspeople and workers. According to Honduran immigration data, by 2025, China had jumped from ninth to second place among nationalities to whom the Honduran government issued long-term or residency visas.

Despite China's expanded investment and aid to Honduras, it has also sparked public discontent, making Sino-Honduran relations a key issue in the upcoming presidential election.

Shrimp is a key export industry for Honduras. The shift from Taiwan to China has resulted in Honduras losing access to the Taiwanese market, while shrimp exports to China have fallen far short of expectations and at lower prices. Since Honduras recognized China, total shrimp exports have plummeted by 67%, leading to the closure of 60 companies and the loss of 14,000 jobs.

Overall, Honduras' imports from China have surged, while exports have remained low. For example, in 2024, Honduras imported $8.8 billion from China, while exporting only $108 million, about a third of which was coffee.

With the surge in Chinese imports, the number of Chinese retail stores in Honduras has also rapidly increased. This new competition has impacted traditional local retailers, some of which have seen sales drop by 70%. The growing problem of counterfeit Chinese goods has exacerbated public discontent in Honduras.

There has also been friction with Chinese companies engaged in infrastructure development in Honduras. For example, the Chinese company responsible for building the New Del Sur Hospital in Honduras has been criticized for overusing Chinese workers at the expense of local workers. Honduran law requires that 90% of the workforce be local.

Finally, some promised Chinese donations have been delayed, including $97 million in housing for hurricane victims and $285 million for school reconstruction in Honduras.

With Honduras in the midst of an election, candidates are deliberately highlighting public discontent, creating the opportunity for the new government to shift political direction and restore relations with Taiwan.