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The China-Taiwan Diplomatic War Is More About Politics Than Economics

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Since the Chinese Civil War concluded in 1949, the People’s Republic of China (PRC) and the Republic of China (ROC) have battled endlessly for diplomatic recognition. Due to Beijing’s “One China” principle, states are forced to either pick one side or pick neither. 

The ROC, now colloquially better known as Taiwan, initially enjoyed an advantage in international recognition due to U.S. anti-communist messaging and generous economic assistance programs. After U.N. Resolution 2751 admitted the PRC to the United Nations and expelled the ROC, the battle for international recognition has tilted increasingly in Beijing’s favor.

Nevertheless, Taiwan still holds formal diplomatic relations across the globe. Three Pacific island-nations – the Marshall Islands, Palau, and Tuvalu – recognize the ROC over the PRC, receiving major financial assistance in return. In Europe, Taiwan has one diplomatic ally, the Vatican. In Africa, Taiwan maintains formal relations with Eswatini (where President Lai Ching-te visited in May), and conducts high-level diplomatic exchanges with the partially-recognized East African state, Somaliland. The Americas, meanwhile, hold seven of Taiwan’s 12 remaining embassies. These states challenge Beijing’s extensive efforts to isolate Taiwan diplomatically, demonstrating that Taipei can maintain and strengthen relations with sovereign nations.

Analyzing Taiwan’s relations with Africa and Latin America comparatively, we can see how and under what circumstances Taipei’s Global South engagement has prevailed against Beijing’s diplomatic efforts. Although economic assistance programs have been critical, Taiwan’s formal relations ultimately depend on political leverage drawn from diplomatic recognition rather than purely economic considerations. The recognition of Taiwan will therefore continue to serve as a political tool for smaller countries, independence movements, and breakaway states that find greater gain from Taipei than Beijing.

Africa

Until UNGA Resolution 2758 passed in 1971, Taiwan maintained widespread recognition throughout Africa. During decolonization in the 1950s and 1960s, most newly-independent African states were wary of Beijing’s  communist ideology and optimistic about their inclusion into the international community. Thus, incentivized by Taiwan’s foreign assistance, many African countries recognized the ROC over the PRC as the representative of China between 1960 and 1963. 

By 1971, the year of Resolution 2758, the PRC and Taiwan had an almost equal number of African countries’ recognition (Taiwan’s 20 to the PRC’s 22). Only five African countries recognized the ROC by 1979, highlighting the UNGA Resolution’s devastating impact on Taiwan’s international legitimacy. 

Since African decolonization, Taipei and Beijing have engaged in “dollar diplomacy,” leveraging favorable loans, technical knowledge-sharing, trade, and agricultural assistance to compete for support. Starting in 1960, Taipei began international development programs, trade incentives, and investments throughout Africa to preserve its influence despite being reliant on U.S. aid itself. Taiwan has become increasingly incapable of competing for African countries’ recognition as its economy has become dwarfed by the PRC in recent decades.

Burkina Faso was the latest African country to withdraw its recognition of Taiwan, doing so in 2018. Formerly known as Upper Volta, Burkina Faso first severed relations with Taiwan in 1973, along with much of the rest of the continent. In 1994, under coup-installed former president Blaise Compaoré, Burkina Faso reestablished relations with Taiwan in pursuit of a lucrative economic relationship. 

Due to China’s expanding economy, the Belt and Road Initiative, and chaotic power transfers, Burkina Faso eventually switched its recognition back to the PRC in 2018 after Compaoré lost power. 

Notably, Taiwan’s response solely blamed the PRC. Rather than condemning Burkina Faso’s decision to withdraw recognition of Taiwan, then-President Tsai Ing-wen attacked Beijing for its “serial acts of suppression against Taiwan in the diplomatic sphere” through economic coercion and political interference. 

A series of coups over the past decade has placed Burkina Faso firmly within the PRC’s sphere of influence, with Western counterterrorism forces being expelled and China’s economic and military investment in the country increasing.

Facing dwindling formal relations, Taiwan has adopted a “pragmatic diplomacy” approach, which prioritizes de facto economic influence over political recognition. In Africa, Taiwan operates trade and political representative offices in Nigeria, South Africa, Côte d’Ivoire, and Somaliland. Several quasi-governmental and non-state organizations expand Taiwan’s economic influence on the continent, such as the Taiwan External Trade Development Council, the International Cooperation and Development Fund, and the Taiwan-Africa Business Association. While these organizations have failed  to quell the rapidly expanding PRC influence across Africa, they highlight Taiwan’s capacity to maintain a diplomatic presence.

Eswatini’s continued support for Taiwan has resulted in both diplomatic condemnation and economic exclusion from Beijing. In 2026, the PRC prevented Taiwanese President Lai Ching-te from visiting Eswatini during celebrations of King Mswati III’s 40th year in power by pressuring Seychelles, Mauritius, and Madagascar to revoke flight permits for Taiwan’s delegation. Lai clandestinely visited Eswatini the following month despite Beijing’s efforts to prevent the trip. However the episode illustrated how the PRC can use its political and economic clout against Taiwanese diplomacy.

Additionally, Eswatini’s exclusion from PRC investment through institutions like the Forum on China-Africa Cooperation (FOCAC) introduces an opportunity cost that harms the country’s economic competitiveness. Eswatini’s status as a monarchy, however, reduces the salience of political grievances tied to broader social, political, or economic conditions derivative of its adversarial relationship with the PRC.

Somaliland, the breakaway region of northern Somalia, has developed a unique relationship with Taiwan. Most countries deny Somaliland’s political status. Since declaring independence in 1991, Somaliland has lobbied the international community to recognize it as a fully autonomous state, with Israel being the only U.N. member state to recognize its independence in 2025. In similar states of de facto independence, Taiwan and Somaliland enhanced their bilateral relationship in 2020 to increase shared economic investment in East Africa and cement their political willingness to explore new, Western-aligned friendships.

Taiwan has implemented many development programs there for public health, education, government modernization, democratization, and humanitarian assistance. Taiwan’s ICDF currently facilitates six development programs in Somaliland, while Taiwan benefits from increased political and economic access to East Africa. While Somaliland has not officially established diplomatic recognition of Taiwan, the relationship could prove to be consequential for China-U.S. competition and rising insecurity in the Horn of Africa.

In its pursuit of legitimacy, Taiwan will see more success in diplomatic initiatives targeting smaller, less established, or more politically unique states. Countries that have already carved their places in the international community are less likely to have political environments conducive to recognition of Taiwan over the PRC, as they will prioritize economic opportunity and stability over Taiwan’s aspirations.

The PRC’s rapid economic growth and its “One China” principle” create a geopolitical competition stacked against Taiwan. Moving forward, Taiwan will likely have to leverage future relationships with breakaway movements, global pariahs, and peculiar governments to rebuild its international influence.

Latin America

In Latin America, Taiwan’s diplomatic partnerships date back many decades. Unlike in Africa, where most countries were colonies until the 1960s, Latin American nations have been independent since the 19th century. Most established relations with the ROC before it relocated to Taiwan in 1949. Taipei then consolidated its diplomatic standing by establishing new relations with Haiti, Paraguay, and Uruguay in the mid-1950s. The ROC similarly established relations with newly-independent Grenada, Dominica, St. Kitts and Nevis, St. Vincent and the Grenadines, St. Lucia, and Belize in the 1980s.

The Cold War aided Taiwan, as Latin American governments could signal U.S. alignment by maintaining relations with the anticommunist ROC over the communist PRC. In fact, only Cuba and Chile cut ties with the ROC to establish relations with the PRC before 1971, both under leftist, Marxism-endorsing leaders. Although Mexico and most South American countries switched in the 1970s and 1980s, Taiwan continued commercial and cultural relations with these countries and still holds commercial offices in Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, and Peru.

As in Africa, Taiwan’s agricultural advisory missions significantly improved Latin American food production. One such mission more than doubled Dominican rice yields from 1972-82. Also like in Africa, Taiwan and China’s “dollar diplomacy” took off in the 1990s and 2000s, as Taiwan significantly increased economic donations to its allies, while China gave bountiful gifts in exchange for switching recognition, including stadiums in Dominica, Grenada, the Bahamas, and Costa Rica between 1997 and 2007.

Following the “diplomatic truce” with Beijing during Ma Ying-jeou’s 2008-16 administration, China resumed its diplomatic poaching after Tsai Ing-wen was elected in 2016. In 2017 and 2018, Panama, the Dominican Republic and El Salvador switched to China, reportedly securing hundreds of millions in Chinese funds in exchange.

Notably, the first Trump administration condemned El Salvador’s decision, and Trump signed the 2020 Taiwan Allies International Protection and Enhancement Initiative (TAIPEI) Act, which codifies U.S. support for Taiwan’s remaining diplomatic partnerships. The Biden administration rebuked Nicaragua’s dynastic dictatorship for ditching Taiwan and embracing China in 2021, and attempted to stop Honduras’ leftist government from doing the same two years later. 

Despite Beijing’s best efforts, however, seven countries in the Americas continue opting for relations with Taiwan over China: Belize, Guatemala, Haiti, Paraguay, St. Kitts and Nevis, Saint Lucia, and St. Vincent and the Grenadines.

A country of 15 million, Guatemala has strengthened ties with both Taipei and Washington recently. Taiwan operates six developmental projects in Guatemala, spanning educational programs, medical technology, and agricultural assistance. These projects follow 26 completed ones, all through Taiwan’s ICDF. Taiwan has also signed commercial agreements, helping Guatemala become Taiwan’s fourth-largest coffee supplier. Taiwan boosts Guatemala’s human capital by giving several hundred scholarships to Guatemalan students studying in Taipei. 

U.S. Secretary of State Marco Rubio has commended Guatemala’s president for continuing to recognize Taiwan, and the U.S. and Taiwanese governments have jointly led development initiatives with Guatemala. With the United States being Guatemala’s largest export market and the source of 25 percent of its GDP via migrant remittances, Guatemala has pragmatic reasons to please Washington by recognizing Taipei.

Paraguay – Taiwan’s only remaining South American ally – has similarly maintained loyalty to Taipei. After its 35-year dictatorship fell in 1989, Paraguay maintained deep engagement with Taiwan. Economic engagements have solidified, with Taiwan becoming Paraguay’s second largest beef importer and largest pork importer. As agricultural exports generate 10 percent of Paraguay’s GDP and jobs, this commercial relationship is no trivial matter. 

Paraguayan President Santiago Peña’s visit to Taipei in May cemented this relationship by expanding chicken exports to Taiwan and obtaining pledges for AI computing center investments in Paraguay. Notably, with the exception of the 2008–12 Fernando Lugo administration, Paraguay’s executive has always been a member of the Colorado Party, which holds a multidecade close relationship with Taiwanese officials.

These relations, however, are not set in stone. Paraguay’s last presidential runner-up pledged to switch recognition to the PRC if elected, and China’s government has gifted lavish all-expenses-paid trips to China to dozens of opposition lawmakers, who now lobby for Paraguay to switch. Similarly, in Guatemala, candidates in next year’s election could make the same pledge, especially considering how China canceled Guatemalan coffee and macadamia shipments after its president held a videoconference with Taiwan’s president in 2024.

But for the moment, Taiwan’s Latin American relations remain strong, boosted by the Trump administration’s stated priorities to counter China’s rising influence in the Americas. In fact, in Honduras’ presidential election last year, both opposition candidates pledged to restore relations with Taiwan if elected, citing low transparency and negative results from the 2023 switch under the previous government. One of those candidates, Nasry Asfura, won and became president.

Conclusion

Beijing claims that Taiwan’s diplomacy is merely a “scandal and a farce,” but 12 states continue supporting Taiwanese statehood. Countries have long recognized the ROC for legitimate reasons, most often political ones. Whether a ruling monarchy preserving multidecade relations (Eswatini), a strong U.S. ally aligning with Washington (Guatemala), or a ruling party continuing long-held ties with Taipei (Paraguay), political particularities have created diplomatic opportunities for Taiwan across continents. Somaliland’s contested status facilitating diplomacy with Taiwan proves this point further. 

Due to China’s economic weight, Taipei cannot convince many countries to pick it over Beijing. Still, like David using a slingshot instead of a spear, Taiwan can exploit political circumstances for its diplomatic benefit.

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