Taiwan’s Deepening Diplomatic Predicament

During a transit stop in Hawaii in March, President Tsai views an exhibit commemo-rating the 40th anniversary of U.S. passage of the Taiwan Relations Act. Photo: Wang Yu Ching / Office of the President.

Left with just 15 diplomatic allies, Taiwan now looks to safeguard its most vital remaining relationships while strengthening unofficial ties with key democracies.

Since the election of President Tsai Ing-wen in 2016, China has stepped up efforts to curtail Taiwan’s international space. Luring away Taiwan’s diplomatic allies has been integral to this campaign. In September, both the Solomon Islands and Kiribati – two Pacific Island countries – broke ties with Taipei in favor of Beijing, leaving Taiwan with just 15 official allies.

Taipei is well aware that its ties with small Pacific Island countries have limited economic importance. It also understands that such countries lack the clout to successfully lobby for Taiwan’s interests in key international organizations like the United Nations or World Health Organization.

Nevertheless, the loss of each diplomatic relationship, no matter how small the country, is a symbolic blow. Official diplomatic relationships validate Taiwan’s sovereignty on the world stage. As long as there are countries recognizing the Republic of China (Taiwan’s official name) as a sovereign state, Beijing’s irredentist claims to Taiwan carry less weight. 

For Taiwan, “the risk of having zero diplomatic allies would be a de facto unification in which every country accepts the ‘One-China principle’ as Beijing sees it,” says Alexander Huang, a professor at Tamkang University and senior associate at the Center for International and Strategic Studies (CSIS) in Washington, DC. Huang is currently serving as an advisor to the presidential campaign of Chinese Nationalist Party (KMT) candidate Han Kuo-yu.

The “One-China principle” refers to Beijing’s insistence that there is only one China – the People’s Republic of China – and that Taiwan is a part of it. Acknowledgement or acceptance of this notion is an essential condition for countries that choose to establish diplomatic relations with the PRC. In Taiwan, the KMT asserts that Taiwan is indeed part of China but interprets “China” to mean the Republic of China, not the PRC. The ruling Democratic Progressive Party (DPP) rejects the idea outright.

Having established ties with Kiribati and the Solomon Islands, China has now poached seven of Taiwan’s diplomatic allies over the past three and a half years. The others are El Salvador, Panama, Sao Tome and Principe, the Dominican Republic, and Burkina Faso.

With the exception of the Vatican, Taipei’s sole diplomatic ally in Europe and the most important from a symbolic standpoint, the states involved in the Taipei-Beijing diplomatic tug-of-war are developing countries. Many are impoverished and decide to break ties with Taipei due to the more generous financial incentives offered by Beijing.

The allies in the Latin America and the Caribbean provide a particular benefit to Taiwan: a rationale for Washington to permit the Taiwan President to make stopovers in the U.S. en route to visiting those countries. Without the justification of a transit stop, the U.S. government would have difficulty allowing such visits in the face of Chinese pressure. Every President since Lee Teng-hui has used this opportunity to engage in “transit diplomacy.”

In the game of checkbook diplomacy, Taipei usually cannot compete with deep-pocketed Beijing. However, it can cultivate meaningful substantive ties with the governments of its diplomatic allies. Over time, the strong connections with Taipei have made some allies reluctant to recognize the PRC.

Yet Beijing often counters that strategy by courting the political opposition. Since most of Taiwan’s allies are democracies, China has a new chance to poach one every time there is an election, says Fabrizio Bozzato, a research fellow at the Taiwan Center for International Strategic Studies, whose research areas include Taiwan’s diplomatic relationships.

Former Solomon Islands Prime Minister Rick Nelson Houenipwela was loyal to Taiwan, Bozzato notes. However, his successor Manasseh Sogavare, who assumed leadership in 2019, was open to making the switch in exchange for the right offer from Beijing.

Sogavare had previously pushed for making such a shift for economic reasons. His official statement on severing ties with Taiwan is consistent with that line of thinking. “The Solomon Islands is better served making a decision that reflects our long-term development interests rather than being uncertain over what might happen should one day Taiwan democratically decide to reunite with mainland China,” Sogavare said.

Reportedly, the aid package Beijing was prepared to offer the Solomon Islands in exchange for severing ties with Taipei was worth US$500 million, including funding for infrastructure, education, and professional training, in addition to access to China’s huge market.

“The Taiwanese tried everything to hold onto the Solomon Islands, and the U.S. even got involved on their behalf, but it was to no avail,” Bozzato says.

Hegemonic aspirations

Beijing’s poaching of the Solomon Islands and Kiribati came in the lead-up to the 70th anniversary celebration of the PRC’s founding on October 1. The Chinese Ministry of Foreign Affairs’ successful efforts to persuade the two countries to break ties with Taipei before the celebration kicked off scored the ministry big points with China’s leadership, says Huang of Tamkang University.

Having failed to dissuade Washington from selling Taipei a new US$2.2 billion arms package, including M1A2 Abrams tanks and F-16V fighter jets, China’s foreign ministry was under pressure to retaliate, Huang says.

For Chinese leader Xi Jinping, who has vowed to ensure Taiwan’s union with China, snatching away two more of the island’s allies signals that “Taiwan will be punished for rejecting ‘one country, two systems,’” Huang says, referring to the framework governing Hong Kong and Macau – one that former Chinese leader Deng Xiaoping created with Taiwan in mind.

The Solomon Islands at least gave Taiwan ample notice of its plans to reconsider the two countries’ diplomatic relationship. The switch to Beijing occurred after a somewhat transparent three-month public consultation period.

Kiribati’s severance of diplomatic ties, just four days after the Solomon Islands did the same, was abrupt by comparison. At a September press conference, Taiwanese Foreign Minister Joseph Wu attributed Kiribati’s decision to Taipei’s refusal to provide funds for the purchase of commercial airplanes. Wu noted that Kiribatian President Taneti Mamau and some of his colleagues had been in regular contact with Beijing since 2016, and that China has boosted its presence in Kiribati with fisheries and other investments.

“Kiribati officials may have been gambling on the ‘dollar diplomacy’ of the past to return, where Taiwan would be willing to match or exceed Chinese aid offers, even ones that move beyond infrastructure, agriculture, and humanitarian assistance more broadly,” says Timothy Rich, an associate professor at Western Kentucky University specializing in East Asian politics.

Besides disadvantaging Taiwan, the loss of the two Pacific-island allies to Beijing also worries Australia, analysts say. Canberra has historically been able to exercise considerable influence in the South Pacific, which sits in its maritime backyard. Now China has a strategic foothold at its doorstep.

Just weeks after the Solomon Islands established diplomatic relations with China, international media reported that the Chinese state-backed conglomerate China Sam had obtained a 75-year lease for the island of Tulagi – an island in the Solomons’ Central Province that contains a strategic deepwater port. Tulagi’s port was used by Britain as its South Pacific headquarters during World War II before being briefly occupied by Japan. 

The Solomon Islands and Vanuatu, another South Pacific ally of Beijing, are situated in sea lanes that connect Australia and the United States. If Beijing builds infrastructure with military applications – such as airports and ports – on those countries’ territory, it could use it to track military movements by the U.S. and Australia. Beijing is already building a major seaport in Vanuatu that many analysts believe will be used as a military base.

Beijing has denied any intentions to militarize the South Pacific. “We have no private interests in island countries, and do not seek a so-called ‘sphere of influence,’” the Chinese Ministry of Foreign Affairs said in a May statement.

Bozzato notes that Pacific island countries are integral to China’s 21st Century Maritime Silk Road, the sea-route portion of the country’s grandiose Belt and Road initiative. The Maritime Silk Road seeks to connect China with Africa and Europe via the South China Sea and Indian Ocean. China sees Oceania as an arena for testing the resolve and capabilities of its Western rivals in the Indo-Pacific, Bozzato says.

In the case of Tulagi, however, Beijing’s efforts were ultimately rebuffed. In late October, the Solomon Islands’ attorney general announced that the provincial government lacked the authority to lease Tulagi to China Sam. A statement from the Prime Minister’s office described the deal as “unlawful, unenforceable and must be terminated with immediate effect.”

On Twitter, U.S. Secretary of Defense Mark Esper lauded the move. “Many nations in the Pacific have discovered far too late that Chinese use of economic and military levers to expand their influence often is detrimental to them and their people,” he wrote.

Says Bozzato: “Tulagi would have turned into a national and regional Trojan horse.”

Relationship building

The Taiwanese people reject the “one country, two systems” formula – now more than ever as the model unravels in turmoil-ridden Hong Kong. A new survey by the Mainland Affairs Council found that about 89% of Taiwanese oppose unification with China under “one country, two systems,” up from 75% in January, before the Hong Kong protests began.

President Tsai’s “Oceans of Democracy” tour took her to Nauru and two other Pacific countries last March. Photo: Wang Yu Ching / Office of the President.

Amid icy cross-Strait relations, holding onto diplomatic allies could prove to be a tough task. Tuvalu, which recently held an election, and Saint Kitts and Nevis, scheduled to have an election in 2020, could be at risk, says Ross Darrell Feingold, a Taipei-based political risk analyst. If Tuvalu makes a switch, it also becomes more likely Nauru will do the same, as neither wants to be one of the few remaining countries in Oceania that lacks diplomatic relations with China, Feingold says.

Taiwan was therefore relieved when Tuvalu foreign minister Simon Kofe explicitly expressed support for Taiwan during a visit to Taipei in November and said his country was working to set up a group uniting Taiwan’s remaining four allies in the Pacific.

Haiti, the poorest nation in the Western hemisphere, is also reportedly mulling the establishment of diplomatic ties with Beijing. Wang Xiangyang, who heads China’s office of commercial development in Haiti, met recently with Haitian Tourism Minister Marie Gréta Roy Clément and former prime minister Evans Paul.

For Taipei, there is a growing risk that the Haitian leadership could see relations with Taiwan as unable to materially boost its socio-economic development, a factor implied in the “farewell statements” issued by leaders of the Solomons and Kiribati when they switched diplomatic recognition to Beijing, Feingold says.

In contrast, the Marshall Islands and Palau are unlikely to abandon Taipei because of their close ties with Washington through the Compact of Free Association (COFA). The COFA allows the U.S. to station its military in the member states to provide for their defense.

Other diplomatic allies of Taiwan mulling a switch to Beijing might be dissuaded by U.S. pressure, but that’s far from certain. “My concern would be that cutting off U.S. aid would just lead these countries to be more dependent on Chinese aid,” says Western Kentucky University’s Rich.

However, Beijing may refrain from poaching all of Taiwan’s allies for fear of the potential shock such a scenario could deliver to cross-Strait relations. “It could push deep-green independence-oriented politicians to demand constitutional reform, such as renaming the country (for example, to the Republic of Taiwan). Such a move is certainly not in the interests of the PRC,” Rich says.

In the meantime, Taiwan has been seeking to deepen ties with the world’s leading democracies – the U.S. in particular. In July, President Tsai made a two-day stopover in the United States, despite Beijing’s objections. In an August interview with Voice of America, Foreign Minister Wu described the bilateral relationship as “probably better than at any time before.”

Republican Senator Ted Cruz of Texas, who sits on the Senate’s Foreign Relations Committee, attended this year’s National Day celebrations in Taipei. It was the first time that a sitting U.S. senator had attended the festivities in 35 years. In a joint press conference with Foreign Minister Joseph Wu, Cruz emphasized the importance of the U.S.-Taiwan relationship.

Unofficial ties are flourishing between Taiwan and the European Union as well. Bilateral trade reached a record €51.9 billion (US$58.1 billion) in 2018, according to a July report by the European Economic and Trade Office in Taiwan.

Meanwhile, observers are urging Taiwan to further develop its international business links. Of particular importance are the long-term investments in Taiwan from multinational companies, strengthening the island’s ties to key global supply chains and markets. In the first nine months of the year, foreign direct investment in Taiwan rose 9% year-on-year to reach US$7.9 billion.

“More important than official ties with tiny countries are investments by MNCs that strengthen Taiwan’s connection with the global economy, bring innovation to Taiwan, and create good jobs for young professionals,” says William Foreman, president of the American Chamber of Commerce in Taipei.

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