China to Invest $24 Million in Costa Rica

The President of China, Xi Jinping, recently announced a $24 million donation to Costa Rica. The donation is being granted to assist in funding Costa Rica's National Development Plan over the course of the next five years. Both China and Costa Rica also signed an agreement that will result in the development of special economic zones in Costa Rica. The announcement was issues during a state visit of President Luis Guillermo Solis to China as part of the inaugural summit between the Community of Latin American and Caribbean states and China.

According to President Solis, the SEZs will provide tremendous potential for attracting Chinese investment to his country. Specifically, the special economic zones will establish a platform to make it possible for Chinese firms to produce a variety of products in Costa Rica, including vehicles and solar panels.
What are Special Economic Zones?
Special economic zones exist as territorial pockets that are usually provided with tax breaks in an effort to attract investments from foreign investments. This is an initiative that China first began to make use of in the 1980s.

Before the zones can be established, feasibility studies will first need to be conducted in order to determine which regions in Costa Rica will be best for hosting the zones. Solis has emphasized that the ultimate goal of the zones is to generate more employment via foreign investment.

During their recent visit, the presidents of China and Costa Rica also signed an agreement that will result in the creation of special legislation that will make it easier to export shrimp from Costa Rica to markets in Asia.

This summit is the first of its kind and took place in Beijing. As part of the summit, several regional heads of state attended, including the president of Ecuador, Rafael Correa. While this may be the first such summit, Costa Rica and the People's Republic of China have maintained close relations since mid-2007.