Americas

Taiwan’s Bad News from the Western Hemisphere


Since the end of the Chinese Civil War, the official “state” of China has been in flux as a result of the One China policy. While Mao Zedong won the Chinese Revolution in 1950, the Chiang Kai-shek’s Nationalists fled to the island of Formosa. Since this time, the country has lived under the One China policy in which both the governments of Beijing (what we typically refer to as China or the People’s Republic of China [PRC]) and Taipei (what we typically refer to as Taiwan or the Republic of China [ROC]) claim to represent the nation of China. However, since the Nixon administration’s détente toward China in the 1970s, the international position of the People’s Republic has improved vis-à-vis Taiwan. While at first glance the Trump administration’s hardline approach to Taiwan may look like a lifeline to Taiwan, this is hardly the case. The administration’s policies do little to support Taiwan and may undercut Taipei on the international stage.

For a number of years, both Beijing and Taipei have been engaged in “Checkbook Diplomacy” with developing countries across the globe. This has meant that the governments located in both Beijing and Taipei have sought to use foreign aid as leverage to ensure that countries recognize their status as the capital of China under the One China policy. Since the turn of the millennium, as mainland China’s economy has accelerated, this contest has become increasingly one-sided as Beijing has provided growing aid and inter-governmental loans to nations across the globe. Today, only 17 nations recognize Taiwan, while all remaining states recognize Beijing as the legitimate seat of authority for China. The most recent country to cut ties with Taipei was El Salvador, the third country in the Latin American and Caribbean region to do so in the last two years. El Salvador’s decision was lambasted by U.S. Senator Marco Rubio, who has taken a hard line on Chinese influence in the Americas. While this is hypocritical given that the United States has recognized Beijing as the seat of the Chinese government under the One China Policy since the 1970s, El Salvador’s decision to shift recognition should not only be seen as a failure of Taipei to compete with Beijing, but also of the shifting realities of U.S. foreign aid to the region in the era of Trump.

Image Courtesy of Wikipedia Commons, © 2017.

El Salvador’s decision to shift recognition from Taipei to Beijing is not only the result of the availability of Chinese aid vis-vis Taiwanese aid, but also over concerns about the future of U.S. aid to Central America. As I have previously discussed on Charged Affairs, U.S. and Chinese aid to Latin America are in competition. The need for development aid across the region encourages nations to seek foreign aid. In cases when this aid is not available from the United States or U.S. relations are frayed, Latin American states seek the aid that Beijing is happy to provide. Given this pattern, the Trump administration’s frequent assertions of its intention to cut foreign aid encourage Latin American states to pursue alternative sources of foreign aid. While the Trump administration, along with U.S. Senators Marco Rubio and Cory Gardner, has announced its intention to cut El Salvador out of the Alliance for Prosperity funding program as a result of its recognition of Beijing. The administration’s regular avowals of cutting aid make this threat seem more like an already foregone conclusion than the result of El Salvador’s policy change.

Forecasted Implications of Cutting U.S. Foreign Aid to Latin America

Source: Calculations by Ratzlaff and Zavala, 2017 based on: Freedom House, 2015; Gallagher and Myers, 2014; Hughes, 2016; USAID, 2016; Wolf et al., 2013 and World Bank, 2016.

In Taiwan’s quest for recognition, Taipei should not only target those countries that either currently recognize the island as the seat of the Chinese government and those that they seek to persuade through Checkbook Diplomacy, but should also focus their energy on urging the United States to increase global foreign aid and pressure. Taiwan cannot compete with Beijing in a spending competition, but by working with its allies in the United States, Taipei may have a better chance of ensuring that some of the 17 nations that still recognize the island continue to do so. As for Republicans in the U.S. Congress, if they are concerned with growing Chinese influence in the Americas, they would be wise to focus their energy on increasing foreign aid to Latin America and encouraging President Trump to stop his rhetoric on cutting aid to the region.

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