Jonah Patel
Checkbook diplomacy is a foreign policy in which countries offer economic aid and investment to achieve diplomatic favour. Taiwan has been engaged in checkbook diplomacy with China for decades, with both countries vying for diplomatic recognition and influence in the Pacific region. Taiwan has used checkbook diplomacy to gain diplomatic recognition from developing island nations in the Pacific, offering aid and investment in exchange for support in international forums such as the UN. While Taiwan has maintained that it will not compete with China through checkbook diplomacy, it has continued to offer economic aid and investment to countries in the Pacific and other regions, such as Latin America.
| Characteristics | Values |
|---|---|
| Taiwan's goal with checkbook diplomacy | To gain diplomatic recognition and support from island nations in the Pacific region |
| Taiwan's approach | Providing economic aid and investments to benefit both the government and the people of the recipient nations |
| Taiwan's focus areas for aid | Agriculture, healthcare, transportation, and technology |
| Taiwan's recent agreements | A $3 million agreement with the Pacific Islands Forum Secretariat for climate change projects and scholarships; Agriculture teams sent to Kiribati to help with vegetable farming |
| Taiwan's stance on competing with China | Not inclined to engage in a "meaningless contest of dollar diplomacy"; Taiwan's president Tsai Ing-wen stated that they will not try to "buy" countries with monetary incentives |
| Number of countries recognizing Taiwan's sovereignty | 12, including the Vatican, and some Latin American and Pacific nations |
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What You'll Learn
- Taiwan's government has sealed a $3 million agreement with the Pacific Islands Forum Secretariat
- Taiwan's humanitarian assistance to Pacific island states caters to the general welfare of citizens
- Taiwan's aid policy is to get diplomatic recognition from aid-dependent island nations
- Taiwan's agricultural teams help Pacific nations grow vegetables as part of Australia's Pacific Step-Up initiative
- Taiwan maintains ties with small countries through generous development programs and investments in healthcare, transportation and technology
Taiwan's government has sealed a $3 million agreement with the Pacific Islands Forum Secretariat
Taiwan has long been engaged in checkbook diplomacy with Pacific Island nations, competing with China for diplomatic recognition. In 2022, the Taiwanese government sealed a $3 million agreement with the Pacific Islands Forum Secretariat. The agreement was signed by the acting PIFS Secretary General, Filimon Manoni, and the Representative of the Taipei Trade Office in Fiji, Joseph Chow. The funds are to be used over three years for development projects and scholarship programs related to climate change.
This agreement is part of Taiwan's efforts to secure diplomatic recognition and support from Pacific Island nations, which are aid-dependent and face challenges such as climate change. Taiwan's approach to checkbook diplomacy in the Pacific has been described as pursuing "diplomacy with any country not by trying to buy them. We want to win them over by benefiting both the government and the people," by Chung-Kuwang Tien, deputy minister of Taiwan's Ministry of Foreign Affairs. Taiwan's humanitarian assistance to the Pacific island states aims to cater to the general welfare of the citizens rather than "greasing local politicians."
Taiwan's engagement in the Pacific has resulted in formal diplomatic relations with a few countries in the region, including the Marshall Islands, Palau, Tuvalu, and Nauru, which are the last four countries in the Pacific island region that maintain loyalty to Taiwan despite increasing pressure from China. However, Taiwan's diplomatic allies in the Pacific have been decreasing in recent years as China has increased its offers of development funding and infrastructure projects.
The competition between Taiwan and China for influence in the Pacific has intensified, with China pledging billions of dollars in aid and investment in the region. This rivalry goes back to the 1950s when the US prevented the complete Chinese takeover of Taiwan. China considers Taiwan as its renegade province and has been working to coerce the island nation to join the mainland.
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Taiwan's humanitarian assistance to Pacific island states caters to the general welfare of citizens
Taiwan's humanitarian assistance to Pacific island states is aimed at improving the general welfare of citizens, rather than gaining diplomatic favour through "checkbook diplomacy". Taiwan's efforts to support Pacific island nations set it apart from China's economic incentives for recognition, which have triggered regional tensions.
Taiwan's assistance to Pacific island states focuses on improving the lives of citizens through initiatives such as agricultural support and climate change mitigation. For example, Taiwan has sent agricultural teams to Kiribati to help them grow vegetables, as part of Australia's Pacific Step-Up initiative. This initiative aims to address the health of citizens by improving their diets.
In addition, Taiwan has provided high-tech early warning systems and green energy infrastructure to its allies, including the Marshall Islands, Palau, and Tuvalu. These systems are designed to enhance disaster preparedness and mitigate the impacts of climate change, which poses a critical issue for Pacific Islands.
Taiwan has also contributed to COVID-19 assistance in the Pacific through the "Taiwan model", which has successfully combated the spread of the virus. In 2020, representatives from Taiwan and the United States convened a virtual dialogue to discuss strengthening coordination and exploring ways to increase cooperation to meet the development needs of Taiwan's diplomatic partners in the Pacific.
Furthermore, Taiwan sealed a $3 million agreement with the Pacific Islands Forum Secretariat in 2022. The donation is to be used over three years for climate change-related projects and scholarship programs.
Taiwan's approach to humanitarian assistance in the Pacific island states prioritises the welfare of citizens and fostering mutual benefits. By doing so, Taiwan aims to strengthen its international presence and diplomatic relations without engaging in "checkbook diplomacy".
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Taiwan's aid policy is to get diplomatic recognition from aid-dependent island nations
Taiwan's aid policy has been described as "checkbook diplomacy", a foreign policy in which countries offer economic aid and investment to achieve diplomatic favour. Taiwan has been engaged in a lengthy process of strengthening diplomatic recognition in the Pacific region since 1970, competing with China for influence.
Taiwan's policy has been to gain diplomatic recognition from aid-dependent island nations and secure their support in international forums such as the UN. This has been described as a "diplomatic tug-of-war" between China and Taiwan, with China seeking to coerce Taiwan to join the mainland. Taiwan has sought to maintain ties with small countries through generous development programs and investments in recipient nations' healthcare, transportation, and technology sectors.
Taiwan's approach has been described as focusing on "meaningful development assistance", with the aim of benefiting both the government and the people of recipient nations. For example, Taiwan has sent agriculture teams to Kiribati to help them grow vegetables as part of Australia's Pacific Step-Up initiative. In 2022, Taiwan also sealed a $3 million agreement with the Pacific Islands Forum Secretariat for climate change-related projects and scholarship programs.
However, Taiwan has faced increasing pressure from China, which has sought to buy out the competition with large-scale investments. China has also used loans and contracts as tools to entice countries with formal ties to Taiwan to switch allegiance. As a result, Taiwan has been left with just over a dozen countries that recognize its sovereignty, and it has become clear that Taipei cannot outspend Beijing. In response, Taiwan has signaled that it will not engage in "checkbook diplomacy" and will instead focus on a more pragmatic global strategy.
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Taiwan's agricultural teams help Pacific nations grow vegetables as part of Australia's Pacific Step-Up initiative
Taiwan has been engaged in checkbook diplomacy in the Pacific region, competing with China for diplomatic recognition from island nations. While China has focused on high-visibility infrastructure projects, Taiwan has sought to gain recognition through aid diplomacy. In 2022, a Taiwanese official stated that the country would not compete with China through checkbook diplomacy, but rather by benefiting both the governments and the people of the Pacific island nations.
As part of this approach, Taiwan has sent agricultural teams to Pacific nations, such as Kiribati, to help them grow vegetables as part of Australia's Pacific Step-Up initiative. This initiative aims to improve the health of the local population by changing their dietary habits. Taiwan's involvement in this initiative is significant as it has no diplomatic relations in the area.
Taiwan has a strong agricultural sector, with over 100 kinds of vegetables grown in the country. The nation has large reserves of rice and fruits, and its vertical vegetable farms are some of the most advanced in the world. Taiwan is also home to the headquarters of the World Vegetable Center and is a member of various world organizations related to agriculture, including the Afro-Asian Rural Development Organization, Asia-Pacific Economic Cooperation, and the World Trade Organization.
In addition to its agricultural expertise, Taiwan has a trade-based economy with strengths in ICT manufacturing, petrochemical refining, plastics, metal refining, and consumer products manufacturing. Services account for over 60% of Taiwan's GDP, and the country was Australia's sixth-largest goods and services export market in 2023. Taiwan and Australia share interests in a rules-based, open, inclusive, and stable Indo-Pacific region, collaborating in areas such as education, green energy innovation, biotechnology, and smart cities.
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Taiwan maintains ties with small countries through generous development programs and investments in healthcare, transportation and technology
Taiwan has been engaged in checkbook diplomacy in the Pacific region, competing with China for diplomatic recognition from island nations. While China has focused on high-status infrastructure projects, Taiwan has pursued diplomatic recognition through generous development programs and investments in healthcare, transportation, and technology.
Taiwan has formal diplomatic relations with only 14 states, including the Vatican, Palau, the Marshall Islands, Nauru, and Tuvalu. These countries maintain loyalty to Taiwan despite increasing pressure from China. Taiwan has emphasized that its humanitarian assistance to the Pacific island states caters to the general welfare of the citizens rather than seeking to influence local politicians. For example, Taiwan has sent agriculture teams to Kiribati to help them grow vegetables and improve their diet, benefiting both the government and the people.
In addition to its engagement in the Pacific, Taiwan has cultivated relations with countries in other regions through economic and cultural exchanges. For instance, Taiwan has positive relations with Latvia and Estonia, with established economic ties and cultural exchanges. Taiwan has also strengthened its ties with Israel, driven by their shared assertions as isolated democracies. Taiwan and Japan have maintained non-governmental working-level relations guided by the 1972 Japan-China Joint Communiqué.
Taiwan is also a key U.S. partner in the Indo-Pacific, with strong economic, commercial, and people-to-people ties. The two countries have longstanding and deep investment ties, particularly in critical supply chains, semiconductors, and other technologies. They also collaborate in various scientific fields, including meteorology, nuclear science, environmental protection, and public health. Taiwan's direct investment in the United States is significant, with FDI from Taiwan supporting an estimated 22,100 jobs and $2.4 billion in exports in 2021.
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Frequently asked questions
Checkbook diplomacy is a foreign policy in which countries offer economic aid and investment to achieve diplomatic favour.
In the Pacific, checkbook diplomacy has been used to describe the competition between the People's Republic of China (on Mainland China) and the Republic of China (Taiwan) to gain recognition.
China has been investing in high-status infrastructure projects in the Pacific region. These investments have raised concerns among the US and its allies, who believe there may be a potential military advantage for China.
Taiwan has been persistent in its pursuit of diplomatic recognition in the Pacific through aid diplomacy. For example, Taiwan has sent agriculture teams to Kiribati to help them grow vegetables. Taiwan has also sealed a $3 million agreement with the Pacific Islands Forum Secretariat for climate change-related projects and scholarship programs.
Taiwan has stated that it will not compete with China through checkbook diplomacy. Instead, it aims to win over countries by benefiting both the government and the people.
