China and Taiwan co-exist in Central America

Panama last year switched diplomatic relations from Taiwan to China, as did Costa Rica in 2007.

But diplomatic distinctions matter less today than they did years ago, when Beijing and Tapei described each other as "bandit regimes".

China's Sinohydro is in the final stage of a $350 million hydroelectric project on the Patuca River in Honduras.

In Nicaragua, Chinese telecommunications company Xinwei has invested $200 million in the construction of 1,000 wireless base stations, while HK Nicaragua Canal Development Investment Company – backed by China - has not abandoned the concept of an interocean canal.

Meanwhile, Chinese companies are reported to be involved in textile and garment production in free zones n El Salvador, Guatemala and Honduras, which, along with Nicaragua, maintain diplomatic ties with Taiwan.

These initiatives are in addition to Chinese projects in Costa Rica and Panama, including a $450 million contract awarded to China Harbour Engineering Company to expand the highway between San José and the Caribbean port of Limón.

Even before the establishment of relations with Beijing, Chinese investments in Panama had been growing, including a $1 billion container and LNG port in Colón.

Last month, a committee was formed to study the feasibility of a freight and passenger train between Panama City and the Costa Rican border.