Panama cuts diplomatic ties with Taiwan in favor of closer relations with China

Panama announced it would break ties with Taiwan and enter into a diplomatic relationship with China Tuesday. The move is a huge coup for China, and signals increasing pressure on the Taiwanese authorities to bend to Beijing’s “one China” policy. Taiwan has strongly condemned the Panamanian decision as “oppressive,” and fueled by “money diplomacy.”

China views Taiwan as a breakaway province, and insists that the two countries will one day be reunited – by any means necessary. 20 countries still recognize Taiwan as a sovereign state, a fact which has long angered Beijing. Panama was one of the more significant countries to maintain diplomatic relations with Taiwan over china, and the switch will be seen as a sign of the huge influence Beijing now wields on the world stage.

The move was announced Tuesday by Panamanian President Juan Carlos Varela. A joint statement said: “The Government of the Republic of Panama recognizes that there is but one China in the world, that the Government of the People’s Republic of China is the sole legal government representing the whole of China, and that Taiwan is an inalienable part of China’s territory.”

Taipei was quick to condemn the move, accusing Panama of having “submitted to the Beijing authorities for economic benefits,” and claimed they had “lied” to the Taiwanese government.

“We express our strong protest and condemnation over the Beijing authorities luring Panama into breaking ties with us, oppressing our diplomatic space to maneuver and harming the feelings of the Taiwanese people,” the statement continued.

Panama’s decision to switch allegiances is a huge blow for Taipei, which now maintains diplomatic relations with just 20 countries, most of which are in Latin America and the Caribbean. Since Taiwan split from China after a civil war in 1949, Beijing has used its power to try and isolate the tiny island, excluding it from international bodies like the United Nations and limiting its potential for economic growth.

After a decade which saw an unspoken truce of sorts, the election of Taiwanese President Tsai Ing-wen last May sent relations rapidly downhill. The situation came to a head in December when president-elect Donald Trump took a congratulatory phone call from Tsai, the first direct contact between the leaders of the U.S. and Taiwan in nearly four decades.

The phone call angered China, as it made it look as though there were cracks in Washington’s longstanding policy to acknowledge Beijing’s “one China” policy, which asserts that Taiwan is a part of China. Trump subsequently declined to take a second phone from Tsia, claiming he had developed “a very good personal relationship with President Xi.”

As part of China’s renewed efforts to put pressure on Taiwan, Beijing cut off diplomatic relations with several Taiwanese government bodies a year ago, and recently sailed an aircraft carrier strike force around the island in a display of growing Chinese military power.

While Panama did not give any explicit reason for the switch, the country has been cultivating stronger economic ties with China in recent years. The Panama Canal is a vital shipping route in the region and Chinese companies have been developing ports there, while state companies have expressed an interest in developing land adjacent to the canal when the Panamanian government opens it to tender later this year.

With China’s growing economic and political influence, Tsai and Taiwan will be worried that the remaining 20 countries who continue to support its position could be swayed in the same way that Panama has been.