Trade and Investment between Costa Rica and China: Challenges and Opportunities of a Strategic Relationship, 2007–2024
DOI:
https://doi.org/10.15359/4qp6ym88Keywords:
free trade agreement, international competitiveness, international investment, international tradeAbstract
This article analyzes the evolution of bilateral trade relations between Costa Rica and the People's Republic of China, assessing the extent to which Costa Rica has achieved its strategic objectives in terms of trade and investment through this bilateral relationship. To this end, trade and investment flows are examined using the methodology for analyzing international competitiveness developed by the ECLAC used in the Module for Analyzing International Trade (MAGIC) and the International Trade Graphic System (SIGCI), in order to observe their quantitative evolution and to delve deeper into the nature of that trade.
The results show that, although bilateral trade has grown, it has not been accompanied by a significant flow of foreign direct investment from China, whose level in Costa Rica is well below the average for Latin America and the Caribbean. Moreover, the technological content of Costa Rican exports to China has decreased, while Chinese exports to the country have become more sophisticated, leading to a reprimarization of Costa Rican exports, moving away from the expected value chain effect towards higher value-added products.
Among its conclusions, the article highlights how trade disputes could position Costa Rica as an export platform for Chinese products. It also points to the need for a regional approach to take leverage the Belt and Road Initiative, promote integration into Chinese global value chains to improve the technological content of exports, and promote a strategy focused on specific niches. Finally, it underscores the importance of effective coordination within the government, foreign policy, and regional actors to attract Chinese investment and maximize the benefits of the bilateral relationship.
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