Honduras ditching Taiwan for China raises larger geopolitical concerns

For decades the Asian superpower funnelled billions of dollars into investment and infrastructure projects across the region.

Now, as geopolitical tensions simmer between China and the Biden administration, that spending has paid off.

Honduras’ decision was the second foreign policy coup in a week for China, which brokered an agreement between Iran and Saudi Arabia to reestablish diplomatic relations last week.

Honduras’ minister of foreign relations, Enrique Reina, told The Associated Press on Wednesday that Hondurans “are grateful” for their past relationship with Taiwan, but that their economic links to China ultimately pushed their government to cut diplomatic ties.

“These are political decisions. The world has been moving in this direction,” Reina said.

“It is a complex decision, we understand, but Honduras’ foreign policy should seek to benefit the people. We believe that this step will benefit the country.”

The Central American nation follows the steps of El Salvador, Nicaragua, Panama and the Dominican Republic in turning their backs on Taiwan.

Honduras’ Tuesday announcement acts as a blow to the Biden administration, which has rather fruitlessly tried to convince countries in the region to stick with Taiwan.

In that sense, Tuesday’s announcement also exemplifies the American government is “losing its grasp on” Latin America, said David Castrillon-Kerrigan, research-professor on China-related issues at Colombia’s Externado University.

“For countries like Honduras, not recognising the government in Beijing meant missing opportunities,” Castrillon-Kerrigan said.

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The US “is definitely losing influence on every front, especially the economic front, but also diplomatically, politically and culturally”.

It’s left the island left with a dwindling number of allies.

Reina told AP that the Biden administration “must understand and respect” Honduras’ needs and decisions.

But some, like Paraguay and Guatemala, remained steadfast in their support for Taiwan.

Guatemalan officials reiterated the government’s “recognition of Taiwan as an independent nation that shares democratic values”.

Over the past two decades, China has slowly carved out a space for itself in Latin America by pouring money into the region, investing in major infrastructure, energy and space projects.

Between 2005 and 2020, the Chinese have invested more than $US130 billion ($196 billion) in Latin America, according to the United States Institute of Peace.

Trade between China and the region has also shot up, expected to reach more than $US700 billion ($1 trillion) by 2035.

That investment has translated to rising power for China and a growing number of allies.