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https://en.wikipedia.org/wiki/Foreign_relations_of_Taiwan

Why does Paraguay maintain a relationship with Taiwan if they can't compete against China in terms of checkbook diplomacy?

https://en.wikipedia.org/wiki/Sino-Latin_America_relations

Many of the nations that continue to have official diplomatic relations with Taiwan are in Central America and the Caribbean. Taiwan has previously offered military exchanges and training as well as economic aid in return but has more recently had difficulty competing with China's economic incentives and in 2008 officially abandoned this "checkbook diplomacy". The remaining pro-Taiwan nations have been seen as waiting for better Chinese offers.[2]

China can give more economic incentives than Taiwan, which forced it to officially abandon their checkbook diplomacy. As a result, there are very few states that recognize Taiwan, let alone have a diplomatic relation with Taiwan, so I was wondering why Paraguay maintains a relationship with Taiwan if it has very little economic incentives to do so.

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Taiwan has provided economic assistance to Paraguay, but this has been a drop in the bucket for Paraguay's main trading partner, the United States. As a small South American country, Paraguay is far more influenced by the United States than by China. Due to limited own strength, it is also difficult to achieve true autonomy.

The United States established diplomacy with Paraguay in 1861 and has maintained close cooperation in the economic, political and military fields. The U.S.'s attitude towards Taiwan has always been two-faced, so it is not surprising that Paraguay, a small country with close ties to the United States, would fully support Taiwan's independence, which is inconvenient for the United States to show. Another example of a small country being one-sided on the issue of Taiwan independence is Lithuania.

Small countries do not need to maintain seemingly good relations with every country. As long as they are not close to the target country, they will lose almost nothing and they can also please the "suzerain" more.

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    The reasons in this answer sound plausible but what seems to be problematic is the low number of diplomatic relations that Taiwan still has. Either the power of the "suzerain" mentioned here isn't that big or the power of China is even bigger or there are other factors at play. Feb 22 at 10:23
  • @NoDataDumpNoContribution China is a more significant economic power than the US. But some of the smaller US client states can still afford to ignore relations with China, since they don't have any to lose to begin with.
    – Therac
    Feb 22 at 12:27

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