Honduras bids farewell to Taiwan & greets new friend China; why is this important?

On Sunday (March 26, 2023), Honduras formed diplomatic relations with China, ending its decades-long ties with Taiwan. Taiwan has become more isolated and is presently acknowledged as a sovereign state by only 13 countries, which includes Vatican City. The foreign ministers of China and Honduras signed a joint statement in Beijing, which the Chinese Foreign Ministry praised as "the right choice”.

The establishment of new diplomatic relations between China and Honduras coincides with escalating tensions between Beijing and Washington, particularly concerning China's more aggressive stance toward Taiwan, a self-governing territory. This development also signifies an expanding Chinese presence in Latin America. The announcement of the China-Honduras relationship followed separate statements from the Honduran and Taiwanese governments indicating the termination of their diplomatic ties.

(Image: Honduras Foreign Minister Eduardo Enrique Reina Garcia and Chinese Foreign Minister Qin Gang raise a toast following the establishment of diplomatic relations between the two countries, at a ceremony in the Diaoyutai State Guesthouse in Beijing Sunday, March 26, 2023 | AP)

The Honduran Foreign Ministry said in a statement on Twitter that its government recognizes “only one China in the world” and that Beijing “is the only legitimate government that represents all of China.” It added that “Taiwan is an inalienable part of Chinese territory, and as of today, the Honduran government has informed Taiwan of the severance of diplomatic relations, pledging not to have any official relationship or contact with Taiwan.”

Taiwan accuses China of 'dollar diplomacy'

On Sunday, Taiwanese Foreign Minister Joseph Wu stated in a press conference that Taiwan had terminated its diplomatic ties with Honduras in order to "safeguard its sovereignty and dignity." According to Wu, the Honduran President Xiomara Castro and her team had always held an unrealistic view of China and had raised the possibility of switching diplomatic relations even before the presidential election in Honduras in 2021. He added that Taiwan's relationship with Honduras was previously stable, but China continued to entice Honduras.

Wu explained that Honduras had requested billions of dollars in aid from Taiwan and had compared Taiwan's proposals with those of China. He further stated that around two weeks ago, the Honduran government had asked Taiwan for $2.45 billion to construct a hospital and a dam, and to forgive debts. “The Castro government dismissed our nation’s longstanding assistance and relations and carried out talks to form diplomatic ties with China. Our government feels pained and regretful,” he said.

(In this image from video released by Taiwan Ministry of Foreign Affairs Office, Taiwan Foreign Minister Joseph Wu, center, prepares to speak at a press conference after Honduras announced severance of diplomatic ties with Taiwan, in Taipei, Taiwan, Sunday, March 26, 2023.)

The Taiwanese President, Tsai Ing-wen, declared that her administration would not participate in a futile competition of "dollar diplomacy" with China. “Over these past few years, China has persistently used various means to suppress Taiwan’s international participation, escalate military intrusion, and disrupt peace and stability in the region,” she said in a recorded video. In a statement, the spokesperson for her office, Olivia Lin, noted that diplomatic ties between Taiwan and Honduras had been in place for over 80 years.

China and Taiwan have been engaged in a diplomatic recognition struggle since they divided due to a civil war in 1949. Beijing has spent billions in an attempt to secure recognition for its "one China" policy. China considers Taiwan to be an integral part of its territory and asserts that it should be brought under its control by force if necessary. Consequently, it does not maintain formal relations with countries that recognize Taiwan's sovereignty as a democratic state. China also threatens to take retaliatory measures against countries that increase their engagement with Taiwan.

Taiwan's remaining allies

Honduras is the ninth diplomatic partner that Taipei has lost to Beijing since President Tsai Ing-wen, who supports Taiwan's independence, first assumed office in May 2016.

Taiwan currently maintains diplomatic relations with Belize, Paraguay, Haiti, Saint Kitts & Nevis, Saint Lucia, Saint Vincent & the Grenadines, and Guatemala in Latin America; the Pacific island nations of Nauru, Marshall Islands, Palau, and Tuvalu as well as with Vatican City in Europe. The majority of its remaining diplomatic partners are island nations located in the Caribbean and South Pacific regions, along with Eswatini in southern Africa.

Despite China's efforts to isolate Taiwan, the island nation maintains strong informal ties with over 100 other countries, with its most important ally being the United States. Although the U.S. does not have formal diplomatic relations with Taiwan, it recognizes Taipei as a vital partner in the Indo-Pacific region.

On Wednesday, Tsai is scheduled to embark on a 10-day trip to Guatemala and Belize, with her delegation also visiting New York and Los Angeles, according to a statement made by her spokesperson Olivia Lin last week. Taiwan's Vice Foreign Minister, Alexander Yui, had previously stated that the aim of Tsai's visit is to emphasise the island's long standing relationship with the two Latin American countries.

Wu stated that he did not have any concrete evidence to suggest that the timing of the announcement was related to Tsai's upcoming trip, but he did note that "China seems to be doing this intentionally."

China's Latin American 'investment'

Over several decades, China has invested billions of dollars in infrastructure and other projects throughout Latin America, leading to increased influence and support for China in the region. According to Honduran President Xiomara Castro, the decision to cut ties with Taiwan was mainly driven by economic motives.

In Honduras, Chinese investment has taken the form of the construction of a hydroelectric dam project in the central region of the country. This project was carried out by the Chinese company SINOHYDRO, which received approximately $300 million in financing from the Chinese government, reported AP. The country is seeking support from China for another hydroelectric dam project, the Patuca II project. However, it is not clear if Honduras can expect China to significantly improve its economic landscape.

According to Margaret Myers, director of the Asia & Latin America Program at the Inter-American Dialogue who spoke to 'Latin America Advisor': previous decisions by Latin American and Caribbean (LAC) countries to cut ties with Taiwan have resulted in different outcomes, with some countries, like Panama, striking numerous and substantial deals, while others have little to show for making the switch. It is also uncertain whether China's successful efforts to isolate Taiwan diplomatically will prevent a potential military contingency in the Taiwan Strait, which would have significant economic impacts on the LAC region and global supply chains.