Experts in Taiwan and abroad voiced concern Tuesday that Panama's switch of diplomatic recognition from Taipei to Beijing may not be an isolated case.

Panamanian President Juan Carlos Varela announced on Monday that the Republic of Panama and the People's Republic of China had established diplomatic relations. Taiwan immediately ended all cooperation with Panama and has called home its embassy personnel.

Jou Jyh-bang (周治邦), a professor of National Taiwan University's Graduate Institute of National Development, said "it's a big loss for Taiwan." Jou said Panama was an important diplomatic ally of Taiwan because of its strategic position and its Panama Canal, the world's busiest transportation route.

"The severance of ties between Panama and Taiwan was due to the lack of a breakthrough in cross-Taiwan Strait relations since the coming to power of the new government," Jou said, referring to President Tsai Ing-wen's (蔡英文) administration that took office on May 20, 2016.

Critics say the Tsai government has adopted a less conciliatory attitude toward China than that of the previous administration, and Jou warned that if there is no breakthrough in relations with Beijing, Taiwan's other diplomatic allies may follow Panama's example.

Noting that Panama's decision has left Taiwan with only 20 diplomatic allies, Jou said Taiwan's diplomatic ties are mostly based on strategic investment and helping allies develop agricultural and medical care systems. Taiwanese businessmen are also encouraged to invest in allied countries, but after the cutting of ties, Taiwanese businessmen in Panama are now like orphans without protection, he lamented.

Another political scientist said it was "not surprising" that Panama established ties with China. Diplomacy is closely related to trade, and, in continuing to invest in Panama, China had gained the upper hand on Taiwan, said Chen Chih-chieh (陳至潔), an associate professor of National Sun Yat-sen University. The severance of ties with two influential countries in Central America - Costa Rica (in 2007) and now Panama — underscores the fact that Taiwan's diplomatic foundation has been hollowed out, Chen said.

Carl Thayer is an emeritus professor of politics at the The University of New South Wales, Australia. He told AFP while Panama is the latest country to cut ties with Taiwan it is unlikely to be the last.

"That change is representing a longer term trend of atomic decay where the circle of countries that recognize Taiwan one by one seem to be shifting to the Mainland," Thayer said. "It's about who can give the most [...] Taiwan has resources but it can't match China."

The other side of the coin

Liao I-ming (廖義銘), a professor at National University of Kaohsiung, said Taiwan has ties linked to "checkbook diplomacy" with most of its allies except for the Vatican. Based on Taiwan's current economic strength, however, it can no longer offer its allies a large amount of financial support, he said.

Liao said he was not worried about a domino effect among Taiwan's allies and instead urged the government to put more resources into maintaining the conveniences Taiwanese passport holders have around the world, saying that would be the most meaningful result of diplomacy for most Taiwanese.

Last year, Timothy Rich, an assistant professor of political science at Western Kentucky University and an expert on East Asian politics, had a different view when he was interviewed by Taiwan Business TOPICS Magazine.

The magazine quoted Rich as saying that it is not the number of diplomatic allies Taiwan has that is most important, but rather that the island-nations “unofficial relations with more powerful countries endure."

“To be blunt, formal relations with a microstate may be consistent with Taiwan’s claims of sovereignty, but it does little to prevent conflict with China in the future. Unofficial support from countries like the U.S. provide such assurance," Rich said at the time.

Similarly, Andrew Nathan, a political science professor at Columbia University, told Taiwan Business TOPICS Magazine that "the importance of the allies is very much in the eye of the beholder."

"If the people of Taiwan don’t care about maintaining them then they become a much less useful carrot/stick for Beijing.”

Response from Taiwan's Presidential Office:

On the decision by the Republic of Panama to end diplomatic relations with the Republic of China (Taiwan), the Office of the President released the following statement:

1. We express our deep regret and disappointment at the Republic of Panama's decision to renounce our long-standing friendship and establish diplomatic relations with the People's Republic of China.

Over the years, Taiwan's government and people have fully supported Taiwan's diplomatic allies through experience-sharing and development projects. We are able and willing to continue supporting such efforts. But we will not engage in a diplomatic bidding war.

2. Over the past few months, China has used various methods to manipulate the "one China principle" and pressure Taiwan's international space. This not only threatens the rights of the Taiwanese people, it is also a dangerous provocation to the peace and stability of the Taiwan Strait and the region at large. We strongly condemn such behavior.

3. As a member of the international community, the government has a responsibility to maintain cross-strait peace and regional stability. Our commitment to this will not change. However, Beijing's actions have challenged the status quo, driving cross-strait relations away from peace and towards confrontation. With this in mind, the government will reassess the cross-strait situation.

We call on China, as a responsible major country in the region, to immediately cease activities that further damage the stability of this region and hurt the people of Taiwan. We hope that China can return cross-strait relations to the right path forward.

4. Regardless of political party or cross-strait policy, Taiwan has always faced external challenges and coercion from Beijing. We should look past our political differences and stand together on difficult cross-strait issues.

5. The government has a responsibility to safeguard freedom and democracy, as well as the public's security and welfare. Faced with various difficulties and challenges, the public should rest assured that the government will continue to uphold our national interest with the utmost effort.

The remaining allies

Taiwan now has 20 official diplomatic allies worldwide, most are developing countries across the South Pacific, Africa, Latin America and the Caribbean. China does not have formal diplomatic relations with countries that recognize Taiwan.

In Latin America and the Caribbean: Belize; the Dominican Republic; El Salvador; the Republic of Guatemala; Haiti; the Republic of Honduras; Nicaragua; Paraguay; the Federation of Saint Christopher and Nevis; St. Lucia; and, Saint Vincent and the Grenadines. In the Pacific Islands: Kiribati; the Republic of the Marshall Islands; Nauru; the Republic of Palau; Solomon Islands; and, Tuvalu. In Africa: Burkina Faso; and, the Kingdom of Swaziland. And in Europe, the Vatican.

Additional reporting: AFP, The News Lens, Taiwan Business TOPICS Magazine.