The list of its allies continues to shrink and prospects of finding new ones seem to be a non-starter, writes Rajaram Panda
China’s juggernaut continues, be it its assertive stance on South China Sea, or the grandiose Belt and Road Project or other areas of its aggressive posture. In its latest assertive move, it successfully induced Panama to switch diplomatic ties from Taiwan in favour of establishing ties with the People’s Republic of China. Panamanian President Juan Carlos Varela made this significant announcement in a televised address to the people, saying the decision as “correct path for our country”. The joint statement between Varela and Beijing categorically said: “Taiwan is an inalienable part of China’s territory”. Ambassadorial relations commenced the same day as well. With this Taiwan lost another ally, a blow to Taiwan’s ever-shrinking list of diplomatic allies.
Panama’s decision came only months after two tiny island African nations Sao Tome and Principe cut cities with Taiwan in favour of China in December 2016. Now, Taiwan is left with only 20 nations with which it has diplomatic ties. It was quickly seen by analysts as another major success to Beijing in its drive to isolate the self-governing island it claims as its own territory.
Panama’s decision to switch sides was not sudden. Several rounds of private discussions had taken place between Chinese and Panamanian leaders before Panama took the final decision to switch sides. No wonder, Taiwan saw Panama’s decision as an “extremely unfriendly act”.
China toughens stance
What lies behind such development and Chinese designIJ Ever since the Democratic Progressive Party (DPP) won power with Tsai Ing-wen as President of Taiwan with stated policy stance to pursue a more independent policy, China has been making assiduous efforts to poach more of Taiwan allies with a view to isolate Taiwan from international space. China and Taiwan split during civil war in 1949 but Beijing has never reconciled with Taiwan as an independent state as it considers it as an integral part of the mainland and vowed to take control of the island by peaceful means and if needed, by the use of force. Both sides maintained an undeclared diplomatic truce during the past decades but relations started to nosedive after Tsai came to power. Red faced Taiwan could do little other than issuing a statement which read: “We express our deep regret and disappointment at the Republic of Panama’s decision to renounce our long-standing friendship and establish diplomatic relations with the People’s Republic of China”.
China had not hardened its position when Tsai’s predecessor government led by Ma Ying-Jieu, a member of the Kuomintang (KMT), had pursued a pro-China policy, termed as “diplomatic truce”, with the tacit understanding that poaching of diplomatic allies would not cloud Taiwan-China relations. With this understanding, Ma hoped not to lose more diplomatic allies, if not to gain any more allies. In a way Ma succeeded as Taiwan lost only one ally, Gambia in 2013, during his two terms in office. It is a different matter that China did not establish official relations with Gambia until 2016, few months before Ma left office, ostensibly in deference for the “diplomatic truce” under Ma presidency.
With three countries switching ties with China from Taiwan — Sao Tome, Principe and Panama — since Tsai’s assumption to the Presidency in Taiwan in May 2016, China seemed to have upped the ante to warn Taiwan of the consequences of a strong Chinese response. China in fact took strong exception when President Donald Trump took a congratulatory telephone call from Tsai when he was elected to be the new American President. China interpreted this move as if the US was questioning the ‘One China’ policy that the US endorsed many years ago.
This time, Tsai openly expressed her anger on Panama’s move. It was in June 2016, Tsai had visited Panama for the opening ceremony of the newly expanded Panama Canal. That time she donated 3,000 boxes of flu medicine to fight an epidemic in Panama. Tsai’s anger was also because both Taiwan and Panama had good relations and there was no issue that had troubled both the countries to conduct normal business. Tsai’s Panama visit was in fact to improve ties further.
Panama’s Strategic Consideration
There could be strategic reasons for Panama to switch ties. China is its second most important customer and Panama could have considered the strategic value as China can now use the canal without hesitation. Varela felt that upgrading Panama’s commercial ties with China by establishing full diplomatic links could serve his country’s economic interests as well. He observed: “I’m convinced that this is the correct path for our country.” Panama’s move also could call into question the China-backed Nicaragua Canal as Nicaragua still recognises Taiwan and not China. Panama can now expect that China would focus more on Panama Canal and less on the Nicaragua Canal. From China’s perspective, it is another successful move to isolate Taiwan from the rest of the world. So, it seems to be a win-win situation for both. Being the second biggest investor in the Panama Canal after the US, the chief marine shipping link between the Atlantic and Pacific Oceans, China sent 38 million tons of cargo or 19 per cent of the total in fiscal 2016. That could have been a consideration for China too.
A defiant Tsai
Panama’s switch, however, did not deter Tsai from reacting and asserting her country’s stance. Remaining defiant, she asserted that though Taiwan lost another ally, Taiwan’s value and standing in the international community will not change. Further, she said that as a sovereign country, Taiwan’s sovereignty can neither be challenged nor traded. She accused China of manipulating the “One China” principle with a view to put pressure on Taiwan’s international space and threatens the rights of the Taiwanese people.
Hardening its defiance against China and showing no signs of meeting Beijing’s longer-term demands, Tsai also severed formal ties with Panama and all aid. Tsai warned China against inflaming ill will in Taiwan whose consequences could be against China’s interests. Spokesperson for the Taiwan government’s Mainland Affairs Council Chiu Chui-cheng warned: “We would like to severely warn mainland China here against pushing, step-by-step, cross-Strait relations to a dangerous brink from which it cannot turn back”. With a $11.2 trillion economy and with more than 170 diplomatic allies, China has taken a series of measures to pressure Taiwan into negotiations with a pre-condition that each side see itself as part of one country, a condition unacceptable to Tsai.
Voice of Taiwanese People
Having enjoyed the fruits of democracy, peoples in Taiwan prefer democratic self-rule and are unwilling to a tie-up with an authoritarian system such as China. This is demonstrated by opinion polls many times and there is no change to such an opinion. But China continues to put pressure and threaten. After Sao Tome and Principe switch ties in December 2016, China passed an aircraft carrier near Taiwan’s coastlines. In May 2017, China blocked Taipei from observing the World Health Organisation’s annual assembly. Unless China stops such tactics to pressure Taiwan, future governments could be found to have secured public endorsement to adopt tougher stand against Beijing. In order not to turn the situation more complicated China would be well advised to leave the people of Taiwan living with the choice of government they want to have.
Now the relationship between Panama and China would lead to trade, investment and tourism opportunities, in particular “exporting more goods from Panama to China”. In succeeding to further isolating Taiwan, Chinese President Xi Jinping seems to have played well with the domestic audience and hardliners, especially in the lead-up to the Communist party Congress in October 2017. This did not deter Taiwanese people to reject the idea that Taiwan and the mainland belong to one China, demonstrated by a recent poll in which 73 per cent of people endorsed the government position and spurned the idea of being seen as a part of China.
China’s use of money power
China is unlikely however to change its policy to further isolate Taiwan from its international space. The remaining 20 diplomatic allies of Taiwan are mostly poor countries in Africa, Central America, the Caribbean and the South Pacific and China could use its money power to tempt some of them to switch ties. Of the 20 partners, 12 are in latin America and Caribbean and the rest in the South Pacific. It is however unlikely that China would launch a massive move to influence Taiwan’s remaining allies to switch because it could accommodate a friendly government if it comes to power in Taiwan in the future. But if Taiwan finds in future with only five or six allies left, Taiwan’s existence as an independent nation could be problematic for itself. It now transpires that Taiwan has steadily lost ground to China’s economic and diplomatic clout. In the 1990s, China was not so rich and both Taiwan and China had a fair fight. The situation has changed now as China has a lot of money and can make tempting economic incentives to woo countries.
As regards China, it now believes to be in the driver’s seat with regard to cross-strait relations. Patrick M. Cronin, an expert on Asia-Pacific security at the Washington-based Center for a New American Security observes: “China wants President Trump and President Tsai alike to think Taiwan’s future will be determined in Beijing”.
Academics in Taiwan opine that even if Taiwan is left with fewer than 10 allies, Taiwan can still survive as it could look at these allies largely as a voice in the United Nations, which it left in 1971 when the UN admitted China. Moreover, Taiwan maintains strong relations with the US and Japan and could seek help from them if it faces diplomatic crisis in the future. The Taiwan Relations Act with the US also gives confidence to Taiwan for its security. Its economic strength also is quite robust, which would give it added confidence. By offering development aid that it has been using even before 2008, Taiwan could expect to influence its remaining allies who might be coming under China’s influence to switch sides to retain ties with Taiwan.
Though Beijing succeeded in diplomatically isolating Taiwan as a form of punishment, trade and investment relations between the two are unlikely to be affected and therefore expected to continue. Accused Panama of submitting to the Beijing authorities for economic benefits, Taiwan threatened to cease all bilateral cooperation projects and said it would not “engage in competition for money diplomacy with the Beijing authorities”.
For a long time, both Taiwan and China have competed to win diplomatic recognition and enticed small or poor countries with the promise of millions of dollars for public work projects. Taiwan seems to have been losing race in this competition. This time around, Panama recognised that China has emerged as the second-biggest client of the Panama Canal, besides being the leading provider of merchandise to a free-commerce zone in the Panamanian city of Colon, where Beijing has already started construction of a container port with natural gas facilities.
What will happen NextIJ
Despite claims of maintaining an independent posture, Taiwan does fear of China’s military might. It said China’s luring of Panama is an ‘open threat’ and ‘provocation to peace and stability’. As tensions escalate between China and Taiwan, the latter is seeking increased arms import from the US to secure its security. Some American lawmakers are pushing to expedite arm sales. It is believed that President Trump is orchestrating a major arms sale, including advanced rocket systems and anti-ship missiles, which may exceed the $1.8 billion deal former President Barack Obama inked with Taiwanese leadership in December 2015. The US sold $14 billion worth of weapons to the Taiwanese during the Obama administration, compared to about $30 billion under the preceding Bush administration and about $18 billion under Bill Clinton. The US remains committed to a defence relationship with Taiwan.
Taiwan was not much angry with Sao Tome and Principe than it was with Panama over switching sides as the former two African nations asked for $200 million before switch in recognition. Panama case was different and unexpected. Now it seems, Beijing is opening its wallet to Taiwan’s remaining allies to accept a switch in recognition for the prospect or promise of millions of dollars in aid/or investment. Under the circumstance, Taiwan could find it tough to cope with a situation as the list of its allies continues to shrink and prospect for finding new allies virtually becoming a non-starter. Can Tsai cope with the consequences if she continues to defy the ‘One China’ principleIJ That is any body’s guess.
Professor (Dr) Panda is Indian Council for Cultural Relations India Chair Visiting Professor at Reitaku University, Japan. The views expressed are his own and do not represent either of the ICCR or the Government of India