Honduras Switching Ties From Taiwan to China

The Lede: President of Honduras Xiomara Castro has announced that the country would pursue ties with China instead of maintaining its ties with Taiwan.

What We Know:

• Honduras has cited economic factors in its decision to pursue diplomatic relations with China and leave ties with Taiwan. Honduran Foreign Minister Eduardo Enrique Reina said that rising debt and the need for more investments motivated the decision.
• Honduras had asked Taiwan to double the $50 million in assistance it receives each year and consider “realigning” their country’s $600 million debt to them. Taiwan’s unfavorable response sparked the Castro administration to move toward China.

The Background: Honduras is the second poorest country in Central America with nearly 75 percent of the population living in poverty. Honduras ending relations with Taiwan would leave the island with only 13 diplomatic allies. The U.S. has no formal diplomatic ties with Taiwan, but it remains Taiwan's most important international backer and arms supplier with sharply increased military cooperation and high profile state visits in recent years. The U.S. is also Honduras’ largest trading partner. Along with other world regions, China has been increasing efforts to strengthen ties with various countries in Latin America in the areas of diplomacy and economy.

Likely Outcomes:

• The change in relations with China and away from Taiwan would signal an important shift for Taiwan’s diplomatic ties in Central America, leaving only neighboring Belize, Guatemala, and nearby Haiti and small island nations in the Caribbean, as well as Paraguay further south. For Taiwan, diplomatic relations with Honduras mostly represents a political position and not a significant economic benefit. Taiwan will seek to focus its relation-building efforts elsewhere.
• A visit by Chris Dodd, the U.S. special presidential adviser for the Americas from March 17 to 21 will be a chance for Taiwan’s most important supporter to remind Honduras of their trade relationship. The move toward China will have to take into consideration the U.S.-Honduras relationship and the significance of their bilateral economic activity. The U.S. will also continue to encourage other countries to shore up relations with Taiwan, especially as Paraguay and Guatemala have upcoming elections.
• Honduras would likely be another recipient of Chinese development projects and aid money and loans as part of its global push to foster economic and infrastructure ties. China will likely step over Taiwan and deliver on financing for the anticipated Patuca III hydroelectric dam, which would provide much-needed electricity in rural parts of the country. Relations with Honduras would not be so much of an economic win for China, but it would symbolize China peeling away another diplomatic ally to Taiwan.

Quotables:

• “The global situation is complicated. We need to open up. We need investment. We need cooperation.” - Eduardo Enrique Reina, Foreign Minister of Honduras
• "China has been suppressing Taiwan's diplomacy, so it will invest funds related to specific countries in order to block Taiwan's diplomatic development. Therefore, we very much hope that Honduras can recognize the true nature of China and hope they maintain diplomatic relations and not be deceived." - Chen Chien-jen Premier of the Republic of China.

Good Reads:

Taiwan ally Honduras seeks diplomatic switch to China (BBC)

Honduras says economic factors fuelling pursuit of China ties (Al Jazeera)

Senior U.S. envoy to travel to Honduras as it considers China ties (Reuters)

Experts react: Honduras is establishing ties with China. What should Taiwan and the US do? (Atlantic Council)