Sat, Aug 10, 2013 - Page 3 News List

FEATURE: No ties? No problem as China courts Taiwan’s allies

Reuters, BEIJING and MEXICO CITY

Not to be outdone, the president of Honduras, which also has ties with Taiwan, announced that China Harbour Engineering Corp (CHEC) was conducting a feasibility study for a US$20 billion port and rail project, also to cross the isthmus. China Harbour executives said they agreed to do the study, but have not yet received a contract.

Meanwhile, plans for China Railway Group to build a trans-isthmus rail and port project in Colombia, which recognizes Beijing, have seen little progress since they were announced by Colombian President Juan Manuel Santos in 2010, diplomats say.

And Guatemala is trying to tap Taiwan to finance the revival of its national train system, which has not operated for several years. Taiwan, which has ties with Guatemala, has agreed to develop a blueprint.

Beijing’s single Central American ally, Costa Rica, has asked for help developing a special economic zone in impoverished port regions.

Still, in practice, Chinese firms prefer to take less risky roles as cost-effective contractors on projects that range from American-backed power plants in Guatemala to Panamanian port projects.

“In terms of our business development, we can participate in a project regardless of whether there is diplomatic recognition,” CHEC vice president Shi Yingtao said.

His company has worked on Panamanian port projects for Taiwanese shipping firm Evergreen Marine Corp.

While Chinese money might threaten Taiwan’s diplomatic standing, Taiwan’s vibrant business community has not lost out. They continue to operate export-oriented factories in Southeast Asia — despite a lack of diplomatic recognition — and in China, where their investments were a major driving force for the spectacular growth of the past three decades.

In fact, politically driven overseas projects by the Taiwan government have in the past failed to attract significant interest from Taiwan businesses, to Taipei’s embarrassment.

“They spent a lot of money over the years competing for recognition but without much result. There was a very low return on investment,” said Lin Chin-ming (林欽明) of the Graduate Institute of the Americas at Tamkang University in Taiwan.

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