Updating at 2.25 p.m. with statements from the Taiwan Ministry of Foreign Affairs and Foreign Minister Joseph Wu.

El Salvador is the third country this year to break off diplomatic relations with Taiwan, switching recognition to China this morning in what will be viewed as a victory for Beijing in its ongoing campaign to constrict Taiwan's international space.

At a press conference in Taipei, Taiwan's Minister of Foreign Affairs, Joseph Wu (吳釗燮) said Taiwan would immediately evacuate its embassy and close diplomatic channels with its former ally.

Wu's statement followed a televised address earlier in the morning in which El Salvador President Salvador Sanchez Ceren announced his government's decision to cut diplomatic relations with Taiwan and formally recognize China.


Credit: Reuters / TPG

Taiwan's Foreign Minister Joseph Wu addresses a press conference in Taipei following El Salvador's decision to cut diplomatic ties with Taiwan on Aug. 21, 2018.

In a press statement accompanying the news, Taiwan's Ministry of Foreign Affairs (MoFA) said that the government of El Salvador has since last year been demanding Taiwan provide a large amount of funds to assist with the development of Puerto La Unión, a port on the southeast tip of the country's coast.

"After our government dispatched an engineering team to evaluate the port site, it was decided that the development comprised a high degree of debt risk and, as a responsible government, Taiwan naturally could not agree to assist in its development," the statement said.

The foreign ministry has previously highlighted the dangers of being enticed by China's promises of financial largesse, highlighting a US$1-billion-plus oil refinery project backed by Chinese funds that was eventually cancelled in 2016, leaving Costa Roca's national refiner with nothing to show but a multi-million dollar expenses bill.

Costa Rica switched diplomatic recognition from Taiwan to China in 2007.

In his speech, foreign minister Wu also said that the international community is aware of the "debt risk" posed by many of China's overseas development projects, and that Beijing's irresponsible approach to financing will likely result in the Puerto La Unión running into similar difficulties.

He also called attention to the fact that the ruling government in El Salvador had requested Taiwan assist with funding a campaign for the president's re-election in polls set for February next year in a bid to counter a significant dip in support.

"This practice is a serious violation of our country's democratic principles and of course we could not agree," Wu said.

Wu also reiterated the Taiwan could not compete with China when it comes to dollar diplomacy, suggesting that Beijing had presented El Salvador with an offer it could not refuse in terms of economic assistance, and that the government had been aware of El Savaldor's interest in Beijing's overtures since June.

The news will come as a bitter blow to Wu, who personally visited El Salvador's capital, San Salvador, as recently as July this year. At the time, he thanked El Salvador President Salvador Sanchez Ceren for his country's "ongoing support of Taiwan", which began 85 years ago. Taiwan President Tsai Ing-wen (蔡英文) last visited El Salvador, which sits next to Taiwan's remaining allies Honduras and Guatemala, in January 2017.

El Salvador's move leaves Taiwan with just 16 countries and the Holy See as allies after the Dominican Republic and Burkina Faso cut diplomatic ties in May, and São Tomé and Príncipe and Panama switched recognition to Beijing in late 2016 and June 2017, respectively.

While details of El Salvador’s motivation for switching allegiance are as yet unclear, Wu’s statement suggests San Salvador has been tempted by a similar package of investments and cut-price loans as was offered to the Dominican Republic, potentially running into the billions of dollars.

The switch will be portrayed a victory by China, which insists that Taiwan has no right to maintain diplomatic ties with any country, and claims the islands as its territory, even though they have never been ruled by Beijing.

"I want to emphasize China’s unceasing suppression of Taiwan," Wu said in the conclusion to his speech. "We are a democratic and free country. [China's] authoritarian regime cannot tolerate this is fact [but ] such suppression will only make us more determined on the road of democracy, freedom and sovereignty."

The Communist Party government has waged an intense campaign of diplomatic pressure against Tsai’s government since she came to power, driven by its ire over her refusal to accept the so-called "1992 consensus" in her inauguration speech.

China insists that Taiwan acknowledge the existence of the consensus, under which the two sides notionally agreed that there is “one China” though it is currently ruled from different seats of power in Beijing and Taipei, as the foundation of cross-Strait relations.

Tsai’s refusal to accept this agreement, which was undertaken by representative of the opposition Kuomintang party in 1992, reflects her Democratic Progressive Party’s desire to maintain the status quo when it comes to relations between Beijing and Taipei.

The impasse has accelerated Beijing’s efforts to tempt Taiwan’s remaining diplomatic partners to normalize relations, and resulted in debate within Taiwan about the direction of its foreign policy, and whether its remaining allies can be relied upon given the likelihood that China will continue to offer outsized economic incentives.

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