“The world is changing at a pace we’ve never seen before. What once seemed impossible is now a tangible reality. And at the center of this transformation is Latin America’s relationship with China.”
This quote, spoken by an international relations analyst, resonates with the current reality of Ecuador, a country that has for many years seen China as one of its major commercial and investment partners. China’s rise on the world stage has not only transformed global trade but also geopolitical alliances. However, under the new leadership of President Daniel Noboa, who took office in 2023, Ecuador’s relationship with China has undergone a significant repositioning. The intensification of cooperation in key areas such as infrastructure, finance, and security, which marked the previous government, has been restricted, but political convenience may reverse this scenario.
The Past of a Strategic Partnership
Over the last 15 years, Ecuador has forged a robust partnership with China, which has become a cornerstone in the country’s infrastructure development. Under Presidents Rafael Correa (2007-2017) and Lenín Moreno (2017-2021), ties with Beijing grew exponentially. China not only solidified its role as a primary source of investment but also became a vital player in crucial sectors such as highway construction, hydroelectric projects, and financing for large infrastructure initiatives.
In 2009, Ecuador was one of the first Latin American countries to formally establish an agreement with China to finance infrastructure projects through favorable loans. This move came in the wake of the global financial crisis of 2008, which left the Ecuadorian economy fragile and searching for alternatives for external financing. China, with its massive trade surplus, was eager to expand its influence in the region, offering not only favorable credit terms but also a market for Ecuador’s natural resources, such as oil and minerals.
One of the landmarks of this partnership was the financing of projects like the Coca Codo Sinclair Hydroelectric Plant, which, despite criticisms over high costs and environmental impacts, demonstrated how Ecuador became dependent on Chinese capital. Furthermore, Chinese loans, often secured with natural resources like oil, created a close economic tie, but also generated a series of challenges, particularly regarding the country’s ability to repay and manage external debt.
China’s presence in Ecuador was facilitated by the country’s urgent need to expand its infrastructure to support population growth and stimulate economic development. But this partnership, at times, was marked by internal distrust and criticism, especially when concerns arose about the sustainability of debt and the impact of Chinese companies in strategic sectors.
Daniel Noboa: A New Course in Foreign Relations
Daniel Noboa took office as Ecuador’s president in 2023, following a campaign focused on promises to improve economic management, promote political stability, and reform the country’s relationships with international partners. However, he inherited a nation burdened with external debt, a slow recovery economy, and a deeply divided society.
Throughout his campaign, Noboa expressed his intention to review, and in some cases, reevaluate Ecuador’s strategic partnerships, with a greater focus on diversifying economic relationships, particularly with the United States and other Latin American countries. This signaled a more cautious approach to China, which, although still an important commercial partner, left behind a legacy of loans and investments that many considered problematic.
Under Noboa’s leadership, there has been a clear movement to reduce Ecuador’s economic dependency on China. The review of loan terms, renegotiation of infrastructure contracts, and a more pragmatic approach to attracting investment have been the main measures adopted so far. The Ecuadorian government has indicated its willingness to negotiate with China, but with more caution and an emphasis on financial sustainability.
The Restriction of Cooperation: A Strategic Step?
The shift in Ecuador’s foreign policy is not just a matter of distrust or an “ideological shift” against China. The country faces a series of internal issues that require a reassessment of external alliances, including public pressure, which, in many cases, views China’s growing influence with caution.
The first critical issue is the external debt. According to data from Ecuador’s Central Bank, nearly 40% of the country’s external debt is tied to loans contracted with Chinese institutions. This exposure to a single creditor — primarily the Chinese government — puts the country in a vulnerable position, especially during global economic crises. Noboa’s government has shown reluctance to take on more financial commitments with China until the country’s fiscal situation stabilizes.
Moreover, the presence of Chinese companies in strategic sectors such as telecommunications and natural resources has also generated internal controversy. There are fears that China’s increasing influence in the Ecuadorian market could lead to a reduction in the country’s economic and political sovereignty. For many Ecuadorians, China is associated with opaque business practices, a lack of transparency, and, in some cases, the exploitation of natural resources without fair compensation.
Thus, the shift in Noboa’s foreign policy can be seen as an attempt to regain economic and political autonomy, while striving for a more balanced relationship with China, without falling into the total dependency that characterized the previous administration.
The Challenge of Diversification: Ecuador and Its New Partners
The desire for economic diversification has been one of the government’s top priorities. However, the path to reducing dependence on China is not simple. As mentioned earlier, Beijing remains one of Ecuador’s primary export destinations, especially regarding oil, one of the country’s main natural resources. In 2023, China was Ecuador’s second-largest export destination, accounting for about 10% of the country’s total exports.
To diversify its partners, Ecuador has turned to the United States, the European Union, and other Latin American economies, such as Brazil and Mexico. The pursuit of new trade agreements, particularly those that could offer more flexible financing that is not tied to massive debt commitments, is a strategic priority for Noboa’s government. This includes negotiations with China’s Belt and Road Initiative, but on a more controlled scale, meaning the Ecuadorian government is making efforts to avoid the “debt trap” that many Latin American countries have faced by engaging deeply with Beijing.
Relations with the United States, for instance, have shown signs of strengthening. Ecuador is already one of the largest exporters of oil to the U.S., and greater collaboration in areas such as security and emerging technologies may open new opportunities. However, while the alternatives are attractive, Ecuador’s economic reality still requires substantial commitment to China, especially regarding investments in infrastructure.
The Future of Ecuador-China Relations: Possible Scenarios
There are two main possibilities for the future of Ecuador’s relationship with China. The first scenario involves balancing closer commercial ties with limiting the negative impacts of excessive dependence. Noboa’s government may seek new ways to diversify its international partnerships while maintaining a pragmatic relationship with China, focusing on areas of mutual benefit without overburdening Ecuador’s economy with unsustainable debt.
The second scenario involves a return to greater engagement with China, at a time when internal challenges demand immediate financial and economic support. The pragmatic logic of “doing business” with China may prevail, regardless of internal criticism, if the government believes this is necessary for the country’s financial and economic stability.
China’s Influence on Ecuador’s Decision-Making
An important variable that may influence the decisions of Noboa’s government is China’s growing presence in Latin America. Over the past few years, Beijing has expanded its influence in the region, either through investments in infrastructure or through bilateral trade agreements. For Ecuador, this presence can be a double-edged sword: on one hand, it offers a crucial economic opportunity; on the other, increasing dependence may make the country vulnerable to Chinese geopolitical and economic interests.
In response, Noboa has demonstrated political sensitivity by attempting to balance China’s interests with Ecuador’s internal needs. At the same time, pressure from business groups and politicians who view Chinese investments as a lifeline for the Ecuadorian economy makes the policy of restriction more challenging than it might appear.
Conclusion: The Dilemma of a Complex Partnership
Ecuador finds itself at a crossroads. The country’s relationship with China, which evolved from a pragmatic partnership to a strategic one, is now in a phase of reassessment under Daniel Noboa’s government. The restrictions on cooperation do not necessarily signal a rupture, but rather an attempt to balance economic dependency with the need for greater political autonomy. The future of this partnership will largely depend on the Ecuadorian government’s ability to negotiate with China while keeping its own interests in mind, as it also seeks to diversify its international alliances.
Meanwhile, political convenience and the pressure for economic growth may ultimately force a reconsideration of this new approach. It remains to be seen whether Ecuador will successfully navigate these complex waters and find a path that not only promotes development but also preserves its sovereignty and financial stability.
