This ARI reviews the current state of the Taiwan-China relationship in light of the current challenges Taiwan faces in keeping its Latin American allies loyal. More opportunities for shifting alliances now exist, especially given the current global economic meltdown which has had an impact on both China and Taiwan’s ability to sustain its assistance to many Latin American states.
Taiwan-China relations in Latin America are at a crossroads. This paper starts with an overview of Taipei’s struggle to ensure the support of its Latin American allies, in face of a fast growing and increasingly appealing Beijing. It then focuses on two case studies, St Lucia and Costa Rica, which have recently switched allegiance. St. Lucia has flipped back and forth; while Costa Rica ended a 63-year relationship with Taiwan in June 2007 and recognised the People’s Republic of China (PRC). Whether other countries follow suit is unclear. However, the risk of a domino effect favouring Beijing is real, as underscored by recent developments in Panama, Haiti, Nicaragua and Paraguay. It seems that economic concerns are shaping Latin American governments’ reactions to Taiwan and China’s struggle for sovereignty. As the PRC’s trade and investment pull increases and Taiwan’s declines, it seems that Taipei is set to lose one of its last strongholds
