On 26th March 2023 Honduras extended diplomatic recognition to the Peoples’ Republic of China (PRC) thus, ending its ties with the Republic of China (Taiwan). Honduran Foreign Minister Eduardo Reina and his Chinese counterpart Qin Gang issued a joint statement in which Honduras affirmed the ‘One China’ policy citing Taiwan as an “inseparable part of Chinese territory”.[i] The PRC welcomed the decision and while extending its cooperation to the Central American country, invited it to join the Belt and Road Initiative. The events leave Taiwan with a shrinking diplomatic space in Latin America. As of now, Taiwan has diplomatic relations with Paraguay, Belize, Guatemala, Haiti, St. Kitts and Nevis, St. Lucia, and, St. Vincent and the Grenadines[1]. Facing the PRC’s enormous economic clout and aggressive diplomatic posturing, Taiwan has been unable to maintain its diplomatic presence in the region. While Taiwan claims that the PRC is using economic means and assurances to approach its diplomatic allies, Beijing asserts its engagement is based on mutual benefit and partnership. As Latin America takes up the road towards gradual economic recovery, it would require a significant amount of financial capital. Beijing has an economic advantage vis-à-vis Taiwan. With Honduras being the latest Latin American country to recognise the PRC, certain implications follow. This article will explore China’s rationale behind establishing diplomatic relations with countries formerly allied with Taiwan. It will look into the reaction from Taiwan and the United States and explore the broader implications.
The PRC’s approach toward Honduras
Honduran President, Xiomara Castro during her election campaign floated the idea of recognizing the PRC in place of Taiwan in 2021. Diplomatic manoeuvring from Taiwan and the United States temporarily stalled the decision. Taiwanese Vice-President William Lai attended the Presidential inauguration of President Xiomara Castro in 2022[ii] to seek reassurance about its diplomatic status with Honduras. At that time Honduras assured that it would maintain diplomatic ties with Taiwan. Despite Taiwan’s approach, President Castro on 15th March 2023 instructed Foreign Minister Reina to proceed with the opening of official relations with the PRC as part of policy of Honduras to freely expand its ties with the world and explore newer opportunities[iii]. The Government of Honduras released an official statement declaring rupturing of relations with Taiwan[iv]. The PRC welcomed the move and on 26th March 2023 established diplomatic ties with Honduras. In a statement, Chinese Foreign Ministry spokesperson Wang Wenbin, stated, “The fact that 181 countries in the world have established diplomatic relations with China on the basis of the one-China principle fully proves that establishing diplomatic relations with China is a correct choice in line with the general trend of historical development and the trend of the times. China is ready to grow friendly and cooperative relations with all countries including Honduras on the basis of the one-China principle”.[v]The Joint Declaration between both countries included cooperation on various themes such as finance and commerce, infrastructure, energy, technology among others and looked forward to deepening ties[vi].
The Government of Taiwan released a statement that called for termination of diplomatic relations with Honduras citing its negotiations with the PRC. It appreciated the stable Taiwan-Honduras relations in the initial period of the Castro Presidency and its efforts in economic and diplomatic engagement. The statement lamented President Castro’s realignment of relations with the PRC and criticised Beijing’s attempts of using economic enticement to lure away Taiwan’s diplomatic allies while asserting its independent and democratic status.[vii] Meanwhile, the American Institute in Taiwan stated that regardless of the events, the United States will continue to deepen and expand its engagement with Taiwan. It stated, “It is important to note the PRC often makes promises in exchange for diplomatic recognition that ultimately remain unfulfilled”.[viii]
The Rationale behind the PRC’s diplomatic inroads
The PRC has made steady inroads in Latin America, establishing diplomatic relations with former allies of Taiwan. In Central America, Costa Rica was the first country to recognize the PRC in 2007. A decade later in 2017, Panama followed suit and in 2018 El Salvador and the Dominican Republic did the same. In 2021, Nicaragua established ties with the PRC and with Honduras doing the same, Taiwan is left with only a few allies. The PRC has used its economic clout as leverage in doling out generous but opaque loans and aid. Taiwan on the other hand has been unable to match up to the economic prowess of the PRC. In the course of this event, the Taiwanese government alleged that Honduras requested massive amounts of economic aid totalling billions of US dollars[ix] and on the non-fulfilment of such requests, it switched diplomatic relations.
Beijing’s interest in establishing diplomatic ties with allies of Taiwan stems from two reasons. Primarily, it seeks to reduce Taiwan’s international footprint in a bid to delegitimise and isolate it and also to counter the United States in its vicinity. It also seeks to establish a strategic hold in the region by engaging in economic activities. It has invested massively in infrastructure building, natural resource extraction and manufacturing in the region. In terms of offering financial aid, Beijing has left no stone unturned to counter Taiwan.[x] For Honduras, economic reasons are primary in establishing relations with the PRC. There are discussions on formulating a Free-Trade Agreement enabling easier access to markets, larger investments and economic cooperation.
Overall Implications
Taiwanese President Tsai Wen toured Guatemala and Belize in March 2023, reaffirming ties.[xi] The trip was based on the theme, ‘Meeting Democratic Partners, Fostering Shared Prosperity” and focussed on three key areas of standing firm in its defence and values of freedom and democracy, pursuing mutual prosperity and increased engagement with the world. While Taiwan for certain is losing diplomatic space, it hopes to retain its remaining allies. Taiwan’s strategy at the moment is based on engaging in deeper economic cooperation with its remaining Latin American allies while cautioning them about grand overtures from the PRC. It will also try to draw closer cooperation with the United States to retain diplomatic ties with the remaining countries. As Paraguay went to polls, there were speculations of switching diplomatic recognition in favour of the PRC. While the candidate of the ruling Colorado party Santiago Pena reaffirmed Paraguay’s ties with Taiwan, Efrain Alegre the candidate of the Concertacion coalition had stated his intentions to reconsider relations with Taiwan[xii]. Santiago Pena’s victory[xiii] in the elections has meant Taiwan retaining its diplomatic ally for the moment. As in other cases in Latin America, economic factors play a deciding role in determining diplomatic relations with Taiwan and the PRC. Firms and business houses in Paraguay particularly from the agro-exporting sectors have urged the possibility of exploring relations with the PRC keeping in mind the economic factors. Events such as these certainly open up strategic spaces for the PRC, turning it to be a challenge for the United States. It exhibits that Beijing is not merely interested in developing diplomatic relations in Latin America, but seeks to create a deep strategic space for itself. It displays the autonomous choices of countries in the region that seek to diversify their interests and foreign relations with the intention of achieving investments, economic aid thus determining their strategic choices. While the United States does remain a strong power in the region, Beijing’s diplomatic inroads cannot be misconstrued as merely the establishment of diplomatic relations. It is in its truest sense, a well-calculated strategic move to entrench itself firmly as a counter to the United States and as a reciprocal gesture for Washington’s outreach in its own vicinity.
Conclusion
Taiwan’s shrinking diplomatic space in Latin America is the PRC’s gain. Beijing’s attempt to reduce Taiwan’s presence will lead to its international isolation as diplomatic recognition is essential for any sovereign country. For the United States, it turns out to be a strategic challenge, as it is unable to get these countries to maintain relations with Taiwan and its inability to prevent ceding strategic space to the PRC challenges its pre-eminence in the region. It also points to an anomaly that although the United States stands firmly with Taiwan, it is unable to stop its diplomatic losses in Latin America to the PRC. The PRC will obtain more space and a freer hand to engage with these countries while cementing its position in the region through investments and aid. It may be able to lure other regional countries which still accredit diplomatic recognition to Taiwan to change their position.
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*Dr. Arnab Chakrabarty, Research Fellow, Indian Council of World Affairs, New Delhi
Disclaimer: Views expressed are personal.
Endnotes
[1] Out of the 13 remaining diplomatic allies of Taiwan, seven are in the Latin American and Caribbean Regions.
[i] Presidencia de la República, Honduras. (25th March 2023). Comunicado Conjunto entre la República Popular de China y la Republica de Honduras sobre el Establecimiento de Relaciones Diplomáticas. Accessed 13th April 2023. https://twitter.com/GobiernoHN/status/1639851901943422976.
[ii] Reuters. (27th January 2023). New Honduras leader says she hopes to maintain Taiwan ties. Reuters. Accessed 12th April 2023. https://www.reuters.com/world/new-honduras-leader-says-she-hopes-maintain-taiwan-ties-2022-01-27/.
[iii] Xiomara Castro de Zelaya (15th March 2023). He instruido al Canciller Eduardo Reina. Twitter. Accessed 12th April 2023. https://publish.twitter.com/?query=https%3A%2F%2Ftwitter.com%2FXiomaraCastroZ%2Fstatus%2F1635780945096704000&widget=Tweet.
[iv] Secretaria de Relaciones Exteriores y Cooperación Internacional. (25th March 2023). Honduras Anuncia Ruptura de Relaciones Diplomáticas con Taiwán. Gobierno de Honduras. Accessed 15th April 2023. https://twitter.com/CancilleriaHN/status/1639779225828831232.
[v] Ministry of Foreign Affairs of the Peoples’ Republic of China. (15th March 2023). Foreign Ministry Spokesperson Wang Wenbin’s Regular Press Conference on March 15, 2023. Accessed 13th April 2023 https://www.fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/202303/t20230315_11042233.html.
[vi] Presidencia de la República, Honduras. (25th March 2023). La República de Honduras y la República Popular China establecen Relaciones Diplomáticas. Accessed 17th April 2023. https://twitter.com/GobiernoHN/status/1639888328899043328/photo/1.
[vii] Ministry of Foreign Affairs, Republic of China (Taiwan). (26th March 2023). The Republic of China (Taiwan) has terminated diplomatic relations with the Republic of Honduras with immediate effect to uphold national dignity. Accessed 13th April 2023. https://en.mofa.gov.tw/News_Content.aspx?n=1328&sms=273&s=99968.
[viii] Reuters. )25th March 2023). U.S. warns China’s promises often empty as Honduras wavers on Taiwan. Reuters. Accessed 17th April 2023. https://www.reuters.com/world/asia-pacific/us-warns-chinas-promises-often-empty-honduras-wavers-taiwan-2023-03-25/.
[ix] Ministry of Foreign Affairs, Republic of China (Taiwan). (26th March 2023). The Republic of China (Taiwan) has terminated diplomatic relations with the Republic of Honduras with immediate effect to uphold national dignity. Accessed 13th April 2023. https://en.mofa.gov.tw/News_Content.aspx?n=1328&sms=273&s=99968.
[x] Evan Ellis. (7th May 2021). Chinese engagement in the Dominican Republic: An Update. Global Americans. Accessed 14th April 2023. https://theglobalamericans.org/2021/05/chinese-engagement-in-the-dominican-republic-an-update/.
[xi] Associated Press. (30th March 2023). As Taiwan’s Tsai Begins Overseas Tour, China Threatens to Retaliate if She Meets US House Speaker. The Diplomat. Accessed 20th April 2023. https://thediplomat.com/2023/03/as-taiwans-tsai-begins-overseas-tour-china-threatens-to-retaliate-if-she-meets-us-house-speaker/.
[xii] Julieta Heduvan & Juan Manuel Harán. (11th March 2023). How Taiwan Became a Key Issue in Paraguay’s Presidential Election. The Diplomat. Accessed 19th April 2023. https://thediplomat.com/2023/03/how-taiwan-become-a-key-issue-in-paraguays-presidential-election/.
[xiii] Lucinda Elliott & Daniela Desantis. (1st May 2023). Paraguay’s conservatives score big election win, defusing Taiwan fears. Reuters. Accessed 2nd May 2023. https://www.reuters.com/world/americas/paraguayans-head-polls-with-taiwan-ties-stake-2023-04-30/