China Using ‘Checkbook Diplomacy’ in Latin America to Alienate Taiwan as Invasion Threat Rises: Analysts

FILE - In this file photo released by the Taiwan Presidential Office, then outgoing Honduran President Juan Orlando Hernandez, left, exchanges gifts with Taiwanese President Tsai Ing-wen during a meeting in Taipei, Taiwan on Nov. 13, 2021. Taiwan says it has recalled its ambassador to Honduras on Thursday, March 23, 2023, amid moves by the Central American country to establish formal diplomatic ties with China. Taiwan Presidential Office via AP, File

The list of Taiwan’s diplomatic allies in Latin America continues to shrink as China tightens its grip on the region.

Though beyond trade maneuvers, some analysts believe China’s isolation of Taiwan in the region also aims to secure favorable “votes” before taking aggressive action against the island nation.

The assessment couldn’t be more timely. On April 10, China’s military announced it was “ready to fight” after three days of extensive combat drills that imitated the sealing off of Taiwan.

During the April 11 announcement, the Chinese Communist Party’s (CCP) military said it was ready to “fight at any time to resolutely smash any form of ‘Taiwan independence’ and foreign interference attempts.”

Taiwan's Foreign Minister Joseph Wu speaks during a press conference in Taipei, Taiwan, on March 26, 2023. Sam Yeh/AFP via Getty Images

Meanwhile, another one of the island country’s dwindling allies in Latin America has switched its alliance to Beijing.

On March 25, the leftist-wing Honduran government announced severing official ties with Taiwan. The Honduran Foreign Ministry posted on Twitter there’s “only one China” and that the CCP is the only “legitimate government.”

The move leaves Taiwan with just 13 diplomatic allies in the world. Most of these are in Latin America and the Caribbean.

And with the looming threat of a CCP military invasion that many fear would be shades of Russia’s attack on Ukraine, Taiwan’s diplomatic situation looks bleak.

One China Principle

There’s a common thread in these countries’ defections.

China’s sizeable investments, coupled with high debt loads in Latin America—particularly in socialist-led countries—have prompted a political exodus from Taiwan’s list of allies.

During a March 26 news conference, Taiwan’s Foreign Minister Joseph Wu claimed Honduran President Xiomara Castro planned the switch well before the 2021 presidential election.

China invested $298 million in a dam project in Honduras in January 2021. A year later, the socialist president Castro was sworn into office. Her administration didn’t waste a moment demanding more investment from Taiwan, which was already owed $600 million by the Central American nation.

“These investments have granted China a greater voting bloc in the UN General Assembly and caused more member states of the UN to move away from Taiwan in line with what Beijing calls the ‘One China’ principle,” Dr. Glen Duerr told The Epoch Times.

Duerr is a professor of international studies at Cedarville University and has authored multiple works in the political science arena.

He says the CCP’s heavy investment in Latin America presents an opportunity to achieve multiple goals simply by writing a check.

El Salvador's president Nayib Bukele speaks during a press conference at Rosales Hospital in San Salvador, on May 26, 2020. Yuri Cortez/AFP via Getty Images

Purchasing allegiance to the “One China principle” has been ongoing for the past two decades, with special attention paid to leftist leaders in the region.

The term comes from Beijing’s popularisation of the phrase after the United Nations General Assembly passed Resolution 2758 in 1971. The resolution gave Beijing the official diplomatic seat at the UN and legitimized the CCP government.

Since then, Duerr said China has “targeted various pink tide leaders” in Latin America for its own benefit.

This becomes pivotal if the CCP decides to escalate military aggression with Taiwan. While many heads of state in Western countries would denounce an armed invasion or attack, many expect sympathetic leaders in Latin America to side with China.

Based on the openly vocal support Beijing has from countries like Nicaragua, El Salvador, Venezuela, Cuba, and now, Honduras; support for “One China” is a growing echo in the region.

In the wake of Honduras’ shift in alliance, China’s Foreign Minister Qin Gang said, “We inform sternly the Taiwan authorities that engaging in separatist activities for Taiwan independence is against the will and interests of the Chinese nation ... and is doomed to a dead end.”

Checkbook Diplomacy

China invested nearly $160 billion in Latin American countries between 2000 and 2020. Combined with the rise of CCP-friendly regimes over the past three years, the deck is stacked against Taiwan.

And nowhere has this become more visible than in Paraguay, where the upcoming presidential election has put ties with Taiwan on the chopping block.

Front-runner candidate Efrain Alegre told Reuters in January he would break ties with the island nation to boost agricultural exports if he wins the April 30 election.

Moreover, an ominous statement from the nation’s current president, Mario Abdo Benitez, captures the reality of China versus Taiwan alliance dilemma.

“Last year, Paraguay literally asked Taiwan to invest $1 billion to remain allies, which indicates the country’s relationship is almost entirely pragmatic and transactional,” Irina Tsukerman, regional security analyst and founder of Scarab Rising, told The Epoch Times.

Tsukerman pointed to the notorious interview Benitez gave the Financial Times in September 2022, which triggered an uproar in the international community.

The subsequent media pressure forced the head of state to backpaddle on his comment that a $1 billion investment from Taiwan would ensure Paraguayans felt the “benefits of the strategic alliance.”

Chinese-chartered merchant ship Cosco Shipping Panama crosses the new Agua Clara Locks during the inauguration of the expansion of the Panama Canal. Rodrigo Arangua/AFP/Getty Images

Officials in Taiwan denounced the use of what it called “checkbook diplomacy” in Latin America as a thinly veiled attempt by China to purchase allies.

But despite investing millions in countries throughout the region, Taiwan can’t compete with Beijing’s wallet.

In a region where more than 32 percent of the population lives in poverty, it’s easy to see how China got its foot in the door.

China has also financed billions in loans to countries in Latin America with a long-standing history of defaults, like Argentina, Venezuela, Honduras, and Bolivia.

“China’s influence in Latin America is focused on two issues: off-setting regional impact by the United States, and expanding its political influence on key issues which include Taiwan,” Tsukerman said.

Some have accused China of creating debt traps in economically struggling countries to exert greater influence over regional governments.

Along these lines, Duerr said, “With Beijing defending its action in the region erstwhile decrying the label of debt traps; there are natural questions about what happens if [or] when a country cannot pay China back.”

Lesson In Freedom

While Latin American leaders are distracted by the prospect of a big payday, analyst and author Dr. Orlando Gutierrez-Boronat said they should keep an eye on their freedom.

After spending years tackling the methodical erosion of liberty through communism in Cuba, he urged caution to Latin Americans enamored with China’s big investments.

“I think the goal of the CCP is to eventually be the hegemon of the world system,” Boronat told The Epoch Times.

“The CCP’s goal is to replace the United States as the leading power. However, once on top, the CCP, to prevail as hegemon, would need to change the system to suit their mutant totalitarianism.”

He said that the United States is benign compared to China’s authoritarian approach, especially regarding debt securities. It’s something he says regional leaders need to think hard about when considering the long-term outlook.

Further, Boronat noted the Republic of China, also known as Taiwan, is a role model for holding out against communism.

“Latin Americans have historically been very zealous of their freedoms and culture, even at the cost of their stability. ROC-Taiwan is a far better model of development for Latin America. It is amazing for how long ROC-Taiwan has endured the diplomatic onslaught of the CCP,” he said.