EXPLAINER: Why did China woo away Nicaragua from Taiwan?

Most are small, largely poor nations in the Western Pacific, the Caribbean and Latin America, the one exception being the Vatican. At the same time, Taiwan enjoys robust unofficial ties with the United States and dozens of other countries.

Yet, the loss of formal allies further constrains the Taiwanese leadership’s ability to make state visits abroad and feeds into Beijing’s narrative that Taiwan is losing the diplomatic battle and will eventually be forced to accept the inevitable outcome of political union with the People’s Republic of China.

“We believe that sooner or later, these countries will ... establish or restore normal diplomatic relations with China. It is only a matter of time, and moreover, an unstoppable trend of the times,” Chinese Foreign Ministry spokesperson Wang Wenbin said Friday.

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Nicaragua’s authoritarian President Daniel Ortega has increasingly found himself an international pariah, with the United States denouncing last month’s presidential polls as a “pantomime election.” That may have prompted Ortega to take up an offer from China, which has been steadily luring away Taiwan’s remaining allies by promising trade and development assistance while ignoring political controversies.

The fact that Nicaragua maintained ties with Taiwan at all after Ortega’s return to power following the 2006 election was a surprise to many. After taking office for the first time in 1979, the Marxist-Leninist Ortega switched ties to Beijing, only for relations with Taipei to be restored after Violeta Chamorro defeated him in the 1990 presidential election.

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In its announcement, Nicaragua gave no reason for the latest change, but it follows a trend among its Central American neighbors such as Panama and Costa Rica which have switched to Beijing in recent years, prompting concerns in Taiwan and Washington of a potential domino effect. Along with development aid, loans and other incentives, critics allege Beijing uses more underhanded methods such as threats and bribes to win away Taiwan’s allies, although no evidence of that has emerged.

The biggest incentive may simply be China’s massive and growing international economic and political clout. While Taiwan punches above its weight in trade, particularly in key high-tech industries, it is increasingly isolated diplomatically and has no voice in most international forums. Its upholding of democratic values may only have limited appeal among fragile democracies with struggling economies. China, meanwhile, is increasingly influential, making it well-placed to do favors on behalf of its friends.

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The competition for allies dates from the founding of the People’s Republic in 1949. That same year, Chiang Kai-shek, defeated in the Chinese civil war, moved his Nationalist regime, known as the Republic of China, to Taiwan. North Korea, the Soviet Union and countries within its sphere swiftly moved to recognize Beijing, while the U.S. and its allies backed Taiwan. But as support for China held steady, Taiwan gradually lost the backing of major states such as France and the United Kingdom. The biggest blow came in 1979, when the U.S. moved its embassy to Beijing and ended a defense treaty with Taiwan.

Over the course of the rivalry, some countries have changed sides multiple times, depending on which made the best offer. But as China grew in influence, and Taiwan became a democracy answerable to parliament and the public, Beijing got the upper hand. Taiwan’s election of the China-friendly Ma Ying-jeou as president in 2008 brought about a “diplomatic truce,” during which China held off on poaching Taiwan’s allies in exchange for Ma’s recognition of the “one-China principle” stating the island and mainland China were part of a single Chinese nation. That came to a crashing end with the election of popular independence-leaning Tsai Ing-wen in 2016. Tsai refused to endorse the principle and the game was back on.

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China has also worked to shut Taiwan out of most international bodies. That began with Taiwan’s expulsion from the United Nations in 1971 and has intensified in recent years as Beijing seeks to undermine Tsai’s government. Amid the pandemic, Taiwan has been deprived of its observer status at the World Health Assembly and Beijing has used its influence and veiled threats to shut the island out of even obscure groupings such as Birdlife International, a British-based non-governmental ornithological society.

China demands Taiwan recognize the one-China principle before it can participate. Despite that, Taiwan has maintained membership in economic bodies that don’t require statehood, including the World Trade Organization and the Asia-Pacific Economic Cooperation forum. Taiwan has also applied to join the Tokyo-led Comprehensive and Progressive Agreement for Trans-Pacific Partnership. China, which filed its own application a week before Taipei, says it will have to join first. Taiwan has also sought to upgrade its unofficial diplomatic ties, most recently with Lithuania. Beijing responded by slapping a trade embargo on the Baltic state and threatening multinationals that do business with it.

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Despite the lack of formal ties, Washington remains Taiwan’s most important ally and recently opened a new representative office in Taipei that has all the trappings of an embassy. It has continued to sell Taiwan weapons and provide training under the provisions of the Taiwan Relations Act that require that the U.S. ensure the island can maintain a credible defense and regard threats to the island as matters of “grave concern.”