AS/COA Online | The China-Taiwan Tussle in the Americas

In March 2023, Honduras picked a side. Its government switched diplomatic recognition of Taiwan to China, leaving Taipei with just 13 diplomatic allies worldwide.

Taiwan has had a separate government since 1949, when the Chinese Communist Party took control in Beijing, even though China considers it a renegade province. Over the course of the past 75 years, and particularly since the UN dropped recognition of Taiwan in 1971, Taipei has seen its list of allies dwindle. More than half of those allies—seven in total—are located half a world away in Latin America and the Caribbean, where the two East Asian countries have engaged in bouts of dollar diplomacy to curry favor.

And increasingly, China’s economic might is winning countries over. “Honduras is a perfect example of how, from a lot of Latin American and Caribbean countries’ perspective, there is no economic security versus national security. From their perspective, economic security is national security,” explains Associate Director of Research at Florida International University’s Jack D. Gordon Institute of Public Policy Leland Lazarus.

With Chinese investment in Latin America reaching $130 billion between 2005 and 2020, the country has become South America's top trading partner and 21 Latin American countries have joined Beijing’s Belt and Road Initiative. This year’s elections in Paraguay and Guatemala, which are the two biggest economies that still support Taiwan, have made East Asian relations an unlikely campaign issue in both countries; the top opposition candidate in Paraguay has said he’d switch sides and in Guatemala, the Taiwanese president visited in April to shore up support.

If those two countries opted for China, Taiwan would be left with just Caribbean allies in the region.

Amid a flood of Chinese investment dollars and the promise of access to its huge market, why do countries stick with Taipei? “Part of it is just the affinity between democracies, but another part of it is that in the Caribbean economies, what Taiwan is able to provide is sufficient for the economic growth and needs of those Caribbean countries,” says Lazarus. “I want to caveat that—for now. It’s sufficient for now.”

One reason for the caveat is that wealthy Chinese individuals have been attaining Caribbean citizenship. “It’s not outside the realm of possibility that within maybe five years, 10 years or so, that those new citizens could exert political or economic pressure to have those countries switch diplomatic recognition,” says Leland, who’s held roles in the U.S. Southern Command and the U.S. foreign service, as well as having been based in Barbados, China, and Panama.

Morever, China has undertaken military actions of Taiwan’s shores, sparking tensions between Beijing and Washington, which supports Taiwan while recognizing China. So what is the U.S. role? “Certainly from Taiwan's perspective, the allies that remain…are still so important in advocating for Taiwan's participation in international organizations,” says Lazarus. But he points out that even countries that have switched ties recognition can continue to have strong economic and cultural ties. “[The United States] should continue to show the power of our example in terms of our ironclad commitment to Taiwan,” says Lazarus, adding that, “More and more countries really recognize that if there is some sort of conflict over the Taiwan Strait, that would be absolutely catastrophic for the global economy.”