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China Tightens Central American Grip as Taiwan Loses Another Ally

11 Jan 2022
By Arthur Mac Dowell
President Tsai and President Ortega engage in a bilateral talk.  (Ing-Jie Project: President Tsai visits Nicaragua, 2017/01/10). Source: Office of the President, Republic of China (Taiwan)

China’s influence is expanding in Central America. This has contributed to Taiwan’s isolation from its diplomatic allies in the region, and has significant implications for the geopolitical competition between China and the USA.

Another domino piece has fallen in the ongoing diplomatic dispute between Taipei and Beijing for recognition. Nicaragua, which first established diplomatic relations with Taiwan in 1930, officially ceased ties with Taipei and formally established relations with the People’s Republic of China in December 2021.

In a joint statement released by the People’s Republic of China and the Republic of Nicaragua on 10 December 2021, the strategic bi-oceanic Central American nation stated that it recognises “there is only one China in the world and the Government of the People’s Republic of China is the sole legitimate government to represent the whole of China.” The memorandum also states that “Taiwan is inalienable part of the Chinese territory.”

Nicaragua’s decision to embrace Beijing is only the latest in a series of Central American nations that have ceased diplomatic relations with Taipei. Costa Rica, Panama, and El Salvador have all recently ceased diplomatic relations with Taipei in favour of Beijing, leaving only a handful of nations that still recognise Taiwan’s sovereignty.

This development puts Beijing one step closer to achieving its long-desired goal of being unanimously recognised as the sole sovereign China. Since the CCP’s ascension to power in 1949, Beijing has been confronted with what it perceives as a rebellious insular province, a de facto autonomous region whose recognition as a sovereign territory by other nations is a continuous defiance of the CCP’s “heavenly mandate.”

Following the establishment of the Republic of China in Taiwan by defeated nationalist forces, which also claimed sovereignty over the entire mainland, what we now know as the “One China Policy” came to be. Such policy ensures that nations that officially recognise either the Republic of China or the People’s Republic of China cannot formally maintain diplomatic relations with the other.

Over the last couple of decades, nations in Central America and the Caribbean remained among the few that still neglected Beijing in favour of Taipei. The reason for this can be traced back to recent dictatorial periods in those countries, where military juntas mostly characterised by strong anti-communist agendas preferred to maintain relations with the Republic of China, refusing to formally interact with Beijing’s communist regime.

Even after Washington’s recognition of the People’s Republic of China in 1978 and the subsequent acceptance of Beijing’s sovereignty by most Western nations, many Central American and Caribbean countries remained attached to Taipei. Ideological reasoning aside, this arrangement was largely beneficial as Taiwan remained committed to investing large sums into development projects in these regions, which is not unlike Beijing’s current strategy to change the tide in its favour.

There are now only 14 nations that continue to side with Taipei in the ongoing dispute for recognition. Of those, eight are in the Americas and adjacent insular regions. Guatemala, Belize, Honduras, and Paraguay are the last continental American nations to remain diplomatically engaged with Taiwan. In the Caribbean, the nations of Saint Lucia, Saint Kitts and Nevis, Saint Vincent and the Grenadines, and Haiti also continue to neglect Beijing.

It is likely that this list will soon become even shorter, as Beijing is now fully engaged in isolating Taiwan. Previously, Taipei was able to out-bid its continental adversary by providing resources, technology, aid, and even weaponry as a stimulus for Central American nations to remain engaged with Taiwan. This is no longer the case.

As Beijing seeks to consolidate its influence well beyond its traditional sphere of influence in East Asia, investments in Latin America, where the need for infrastructure is paramount, have been receiving growing attention from Chinese private and state sectors. Reports indicate that Chinese direct investment in Latin America has considerably grown over the last decade. Most of these investments were initially destined for infrastructure projects, but diversification is increasingly driving these investments towards other sectors. However, there is still a long road ahead in solidifying China’s cultural influence in Latin America.

China’s diplomatic engagement in Latin America is no longer limited to bilateral relations, as Beijing is now also engaged in multilateral dialogues in the region, such as with the Community of Latin American and Caribbean States (CELAC). Earlier this month, in the Third Ministerial Meeting of the China-CELAC Forum, State Councillor and Foreign Minister Wang Yi presented plans for future Chinese support initiatives for nations recovering from the COVID-19 pandemic, including plans set up a new China-CELAC Special Loan for Development Cooperation.

There has long been speculation that Beijing is likely to eventually take extraordinary measures to retake Taiwan by force. Considering China’s historical tendencies and the high risk of retaliatory actions on behalf of the United States and its allies in the Pacific, a nonconfrontational approach to retaking the island would certainly be preferable to the politburo. In this scenario, cutting diplomatic ties between Taiwan and foreign nations would be an indispensable step in this isolationist strategy.

Beijing’s deepening ties with Central American nations also have another important aspect that relates less with isolating Taiwan and more with tilting the global geopolitical balance. The strategic importance of this region for the United States is immense. As Chinese companies continue to acquire ports in the region, it is not inconceivable that we may soon witness a growing number of Chinese warships transitioning or docking in the region. This prospect becomes even more concerning if one considers recent reports that China might be developing containers capable of concealing combat missiles in merchant vessels.

Obtaining a strong foothold in Central America would give China an extremely advantageous position from which it could potentially disrupt American maritime trade-routes in the case of conflict. Conveniently enough, this policy also contributes to the desired outcome of further isolating Taiwan.

The long-term implications of the deepening ties between Beijing and Central American nations remains a concerning incognito. In addition to the unpleasant prospect of conflict between China and the US in the Atlantic, there are also many potential economic advantages Beijing could enjoy through this process. The potential for natural resources exploration is unlikely to be ignored. Chinese fishing vessels already conduct a high level of activity along South America’s Pacific coast. With unrestricted access to ports further north, they might soon increase their activity in that region as well. Offshore gas and oil reserves in Central America are also reasonably profitable, and they may prove to be even more so with higher investments in technology.

As for Taiwan, losing yet another of its few diplomatic allies brings to mind a dire prospect where, soon enough, no nation will recognise its sovereignty. Not only would this imply in an undesirable decrease in the legitimacy of its claim for self-governance, but also a severe loss in its ability to engage with the outside world and establish trade agreements, cooperation initiatives, or other projects.

Soon, it is likely that Taiwan will find itself entirely isolated and with a far more limited access to overseas markets, further increasing its already elevated level of economic dependency on Beijing. Once isolated, Taipei may be forced to review the dynamics of its relation with the mainland.

Arthur Mac Dowell is a graduate from the University of Sydney, where he recently concluded a Master of International Security. His previous studies include a Bachelor of Defence and International Strategic Management (cum laude) at the Federal University of Rio de Janeiro. He has worked as a researcher within the Brazilian Ministry of Defence in the Superior War College and the Pandia Calogeras Institute.

This article is published under a Creative Commons License and may be republished with attribution.