China Power | Diplomacy | East Asia

The China-Taiwan Diplomatic War Is More About Politics Than Economics

Taiwan’s formal relationships in Africa and Latin America point to the real factors driving recognition decisions – and it’s not “dollar diplomacy.”

An honor guard stands at attention with flags of Taiwan and Paraguay during a welcome ceremony for Paraguayan President Santiago Peña in Taipei, Taiwan, May 8, 2026.

Since the Chinese Civil War concluded in 1949, the People’s Republic of China (PRC) and the Republic of China (ROC) have battled endlessly for diplomatic recognition. Due to Beijing’s “One China” principle, states are forced to either pick one side or pick neither. 

The ROC, now colloquially better known as Taiwan, initially enjoyed an advantage in international recognition due to U.S. anti-communist messaging and generous economic assistance programs. After U.N. Resolution 2758 admitted the PRC to the United Nations and expelled the ROC, the battle for international recognition has tilted increasingly in Beijing’s favor.

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Since the Chinese Civil War concluded in 1949, the People’s Republic of China (PRC) and the Republic of China (ROC) have battled endlessly for diplomatic recognition. Due to Beijing’s “One China” principle, states are forced to either pick one side or pick neither. 

The ROC, now colloquially better known as Taiwan, initially enjoyed an advantage in international recognition due to U.S. anti-communist messaging and generous economic assistance programs. After U.N. Resolution 2758 admitted the PRC to the United Nations and expelled the ROC, the battle for international recognition has tilted increasingly in Beijing’s favor.

Nevertheless, Taiwan still holds formal diplomatic relations across the globe. Three Pacific island-nations – the Marshall Islands, Palau, and Tuvalu – recognize the ROC over the PRC, receiving major financial assistance in return. In Europe, Taiwan has one diplomatic ally, the Vatican. In Africa, Taiwan maintains formal relations with Eswatini (where President Lai Ching-te visited in May), and conducts high-level diplomatic exchanges with the partially-recognized East African state, Somaliland. The Americas, meanwhile, hold seven of Taiwan’s 12 remaining embassies. These states challenge Beijing’s extensive efforts to isolate Taiwan diplomatically, demonstrating that Taipei can maintain and strengthen relations with sovereign nations.

Analyzing Taiwan’s relations with Africa and Latin America comparatively, we can see how and under what circumstances Taipei’s Global South engagement has prevailed against Beijing’s diplomatic efforts. Although economic assistance programs have been critical, Taiwan’s formal relations ultimately depend on political leverage drawn from diplomatic recognition rather than purely economic considerations. The recognition of Taiwan will therefore continue to serve as a political tool for smaller countries, independence movements, and breakaway states that find greater gain from Taipei than Beijing.

Until UNGA Resolution 2758 passed in 1971, Taiwan maintained widespread recognition throughout Africa. During decolonization in the 1950s and 1960s, most newly-independent African states were wary of Beijing’s  communist ideology and optimistic about their inclusion into the international community. Thus, incentivized by Taiwan’s foreign assistance, many African countries recognized the ROC over the PRC as the representative of China between 1960 and 1963. 

By 1971, the year of Resolution 2758, the PRC and Taiwan had an almost equal number of African........

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