The Diplomatic Recognition of Taiwan
By Shaohua Hu

The Diplomatic Recognition of Taiwan

Aug. 17, 2016  |     |  0 comments

Currently, 22 and 172 countries recognize Taipei and Beijing, respectively. Since Tsai Ing-wen assumed the presidency in Taiwan, many have wondered what would happen to Taiwan’s relations with its diplomatic allies. Theoretically, there are three possibilities. One, the number of diplomatic allies may increase. Lee Teng-hui (1988-2000) increased the number from 22 to 28. Two, it may remain at a similar level, as was the case during the Ma Ying-jeou administration (2008-2016). To lessen the budgetary burden, to avoid diplomatic scandals, and to improve cross-strait relations, Ma opted for a “diplomatic truce.” Taipei only lost one diplomatic ally. Three, Taiwan may lose quite a few allies. During the Chen Shui-bian administration (2000-2008), Beijing’s response to his “checkbook diplomacy” reduced the number from 29 to 23.


It is easy to understand Taipei’s interest in seeking diplomatic recognition. The Montevideo Convention defines four criteria of statehood: a permanent population, a defined territory, a government, and the capacity to enter into relations with other states. What Taipei needs is to demonstrate its diplomatic capability. On the other hand, why 22 countries have picked Taipei over Beijing seems puzzling. China is much more powerful than Taiwan, and those countries are small in terms of their economy, area, and population. The Dominican Republic, the largest of the 22 economies, ranks 74th in the world; Paraguay, the largest ally, ranks 60th; and Burkina Faso, the most populous ally, has a population of less than 19 million.


Many factors contribute to the diplomatic recognition of Taiwan. They can be examined at the international, domestic and individual levels. Three factors are at work at the international level. First, Sino-American relations heavily influence the diplomatic recognition of Taiwan. During the Cold War, America’s anti-communism and its military and economic power left many countries with little choice but to follow Washington’s recognition of Taipei as the legitimate government of China. The normalization of Sino-American relations in the 1970s undermined Taipei’s international status.


The second factor relates to the political and economic status of small states in the post-WWII era. All of Taiwan’s allies except the Vatican City experienced colonialism and won political independence. The Westphalia principle of sovereignty serves small countries well, since it recognizes the formal equality of all countries. On the other hand, many have remained economically dependent. Many developing countries have been creative in selling their sovereignty for economic benefits. Each Tuvalu citizen received roughly USD 400 annually over a decade for the sale of its Internet domain name “.tv” to an American firm. Nauru became the fourth country to recognize Abkhazia, a Russian protectorate in Caucasus, allegedly requesting USD 50 million in return.


Finally, the post-Cold War era system affected the diplomatic recognition of Taiwan. While great powers reduced their aid to developing countries, the cross-strait competition presented small states with opportunities. Lee Teng-hui started to push for more international space for Taiwan, mainly through checkbook diplomacy. The bidding war between Taiwan and China benefitted some small states. The Central African Republic and Senegal have switched back and forth between Taipei and Beijing five times since 1962.


At the domestic level, ideational, economic and geographical factors play important roles. It is true that all major democratic countries in the world recognize Beijing, and that economic interests often trump ideological preferences. Central America provides convincing evidence. The leftist Daniel Ortega of Nicaragua intended to recognize Beijing during the 2006 presidential campaign, but did not do so after his election. Taiwan not only invested around USD 127 million during his predecessor’s term, but donated USD 30 million for the construction of a power plant and provided USD 1.1 million to an anti-hunger project initiated by his wife. Costa Rica is the strongest democracy in the region and had diplomatic relations with the ROC for more than six decades, but President Oscar Arias, a Nobel Peace Prize laureate, made the country the first and the only country in the region to abandon Taipei in 2007. Among other incentives, Beijing agreed to buy USD 300 million in bonds and to give USD 130 million in aid (Bowley, 2008). Other things being equal, however, ideologies do matter. In the western hemisphere right-wing military regimes and Catholicism treated communism as anathema. Only Cuba and Chile recognized China before Beijing entered the UN. Along with ideology, colonial experiences and their small size predispose Taiwan’s allies to sympathize with Taiwan.


Distance decreases power. Despite its status as a major nuclear power and a permanent member of the UN Security Council, China has little power over Taiwan’s allies.

Money talks. Let’s take a look at trade and tourism, investments, and aid in turn. Trade is not very important in the diplomatic recognition of Taiwan, because Taiwan’s allies, far away from Taiwan, have little to export. Tourism, which is important to many of Taiwan’s allies, is also affected by their remoteness and smallness. Panama was Taiwan’s largest trading partner in Central America and the first country to conclude a free trade pact with Taiwan in 2004. As Taiwan’s 66th largest trading partner in 2003, Panama suffered a trade deficit. The same geographical and economic factors also make China’s growing market irrelevant to most of Taiwan’s allies, since they have little to export or invest there. Taiwan’s allies covet foreign investment, and Taipei did encourage its citizens to invest in them. However, private investors have been discouraged by many factors, such as poor infrastructure, weak industrial base, and their lack of skilled labor. Foreign aid is the single most important economic reason for the diplomatic recognition of Taiwan. Taipei offers USD 10 million annually to a small ally and USD 20 million to a large one. What distinguishes Taipei’s aid to its allies is that few strings are attached, and its allies can use the aid to meet their domestic shortfalls.


What looms large in the diplomatic recognition of Taiwan are the two geographical characteristics of Taiwan’s allies: their long distance from Taiwan and China, and their small areas. Distance decreases power. Despite its status as a major nuclear power and a permanent member of the UN Security Council, China has little power over Taiwan’s allies. No less important is another fact that almost all of Taiwan’s allies are small in population and area, and that most lack natural resources and are prone to natural disasters. Several even face existential threats. Kiribati, the Marshall Islands, the Solomon Islands, and Tuvalu are threatened by rising sea levels. Owing to the small size of its allies, Taiwan has had little problem exchanging economic benefits for diplomatic recognition. Taiwan is one of the world’s top holders of foreign exchange reserves. According to President Ma, Taiwan’s USD 390 million in international assistance in 2010 accounted for only 0.1 percent of GDP, which was below the average of 0.28 percent among advanced countries, and far below the OECD target of 0.7 percent (Du Toit, 2012).


Last, the individual level should not be ignored. Leaders matter in all countries, and even more so in developing countries. Although most Taiwanese allies are democratic, authoritarian traditions and cultures are not conducive to public participation. The secret nature of diplomacy provides major leaders more leeway. Both Taipei and Beijing have tried to keep their aid secretive. Take Sao Tome. From its independence in 1975 until its first democratic election in 1991, President da Costa forged close ties with communist countries, including China. Miguel Trovoada was the first prime minister after independence, but later was dismissed, detained and exiled. After he won the 1991 election, the country still suffered from political instability and heavy dependence on foreign aid. In exchange for USD 30 million in aid, Trovoada switched recognition to Taipei in 1997. Having reclaimed the presidency in 2011, de Costa did not host Taiwanese President Ma during his 2012 trip to African allies.


National leaders may pick Taiwan over Beijing to serve their national interests, but some may do so for self-interest. Examples of corrupt leaders abound among Taiwan’s allies. Liberian President Charles Taylor (1997-2003) admitted to receiving USD 1 million from Taipei during his presidential elections. After the resumption of diplomatic relations in 2005, according to WikiLeaks, Taipei paid Nauruan ministers and MPs a monthly stipend of USD 5,000 and USD 2,500, respectively. Corruption scandals in Central America were linked to Taiwan. Guatemalan President Alfonso Portillo (2000-2004) was found guilty in New York of money laundering and accepting USD 2.5 million in bribes from Taiwan in exchange for his promise to continue diplomatic recognition (“US court sentences”, 2014).


The above analysis does not give me a crystal ball. But given the cross-strait balance of power, it will be hard for Taipei to have many more diplomatic allies. Since quite a few allies are reported to have shown their willingness to switch diplomatic recognition, Taipei probably stands to lose more. To maintain the status quo may be mutually beneficial. Beijing’s efforts to undercut Taipei will upset the Taiwanese, and if Taipei seeks more allies, Beijing will take counter-measures. It is foolish for Taipei and Beijing to squander their resources on symbolic issues like diplomatic recognition.




Bowley, G. (2008, September 13). Cash helped China win Costa Rica’s recognition. The New York Times, p. A8.


Du Toit, N. (2012, April 15). Ma’s African visit shows value of ROC foreign aid. Taiwan Today. Retrieved from


US court sentences former president of Guatemala to prison for taking bribes. (2014, May 22). Associated Press. Retrieved from


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