While the US-Taiwan relationship is crucial to US-China relations, US relations with Taiwan’s allies are also extremely important and often overlooked in countering the People Republic of China’s (PRC) aspirations of global dominance in diplomatic, economic and military realms.
Recognition of Taiwan serves as a proxy for a nation being within the US sphere of influence. Consequently, Beijing’s attempts to convince nations to switch recognition aim not only to isolate Taiwan, but also to gain an advantage over the US, making prevention of such shifts a crucial national security concern for the US.
Earlier this month, US Representative John Moolenaar, chairman of the House Select Committee on the Chinese Communist Party (CCP), and US Representive Raja Krishnamoorthi, the committee’s ranking member, introduced bipartisan legislation, the Taiwan Allies Fund Act, aimed at maintaining Taiwan’s presence in the international arena and countering CCP coercion.
The act authorizes the US Department of State and US Agency for International Development to allocate US$120 million in foreign assistance over three years to nations maintaining diplomatic relations with Taiwan.
Since 2013, Beijing has successfully persuaded 11 countries to switch recognition from Taiwan to the PRC, leaving Taiwan with only 12 remaining allies. Beijing retaliates against nations attempting to strengthen ties with Taiwan, even if they fall short of official recognition. Moolenaar said that the legislation aims to assist Taipei’s diplomatic allies in resisting CCP coercion.
The Taiwan Allies Fund holds significant importance as Taiwan’s remaining allies are predominantly small, economically disadvantaged nations with limited political influence, making them susceptible to CCP coercion.
With the fund, the US can provide greater economic incentives to counter Beijing’s trade and investment offers to these vulnerable nations. While the fund is crucial for Taiwan’s security, it also holds strategic importance for the US. With the possible exception of the Holy See, all of Taiwan’s remaining allies hold political, geographical and military significance for US interests.
The Indo-Pacific region is a battleground for influence and naval dominance between the US and China.
Beijing seeks closer ties with regional nations to establish overseas naval bases, mirroring the US’ presence, and to enhance its control over the region. Taiwan’s allies, the Marshall Islands, Palau and Tuvalu are pivotal to Beijing’s Indo-Pacific aspirations.
The Marshall Islands, operating as an independent nation in free association with the US under the Compact of Free Association (COFA), enjoys sovereignty while the US assumes defense responsibilities and provides substantial financial assistance. Beijing aims to assume both roles, seeking to expand its influence in the region.
Marshall Islanders can work and live in the US without a visa, demonstrating the closeness of the bilateral relationship. Beijing’s interest in the Marshall Islands is not only motivated by wanting to eliminate a Taiwan ally, but also extends to undermining US influence.
The nation also plays a crucial role in China’s broader Indo-Pacific strategy. Recognizing this, US President Joe Biden nominated a China specialist as the US ambassador to the Marshall Islands.
Palau, another Taiwan ally, is an Indo-Pacific island nation governed by a COFA, akin to the agreements with the Marshall Islands. Earlier this year, Palau notified Washington of Beijing’s attempts to persuade the country to switch recognition and sever ties with the US.
In exchange, China offered to “fill every hotel room” in the nation and pay US$20 million per year to lease land for a “call center.”
The Latin America and Caribbean (LAC) nations that still maintain relations with Taiwan are Belize, Guatemala, Haiti, Paraguay, St Kitts and Nevis, Saint Lucia, and St Vincent and the Grenadines.
Keeping these countries aligned with Taiwan is a proxy for keeping them within the US orbit. Paraguay, in particular, has symbolic significance as it is the last remaining ally of Taiwan in South America.
The US seeks to maintain and strengthen its influence in Latin America and the Caribbean, historically regarded as its sphere of influence. Supporting these nations’ recognition of Taiwan enables the US to counterbalance China’s expanding presence in the Western Hemisphere.
This encompasses strategic military concerns, as the US seeks to prevent the Chinese People’s Liberation Army (PLA) from operating in the LAC region. Allowing Beijing to establish a foothold could make it easier for the CCP to spy on or infiltrate the US through its southern border.
US interest in Eswatini, a small country in southern Africa, is less direct than many of Taiwan’s other allies. However, it is significant as the last nation in Africa to maintain diplomatic relations with Taiwan. This makes it a focal point in the geopolitical competition between China and the US. If Eswatini were to switch recognition to China, it would be a significant diplomatic victory for China and a loss for Taiwan and, by extension, US interests in Africa.
Beijing’s response to the Taiwan Allies Fund is bewildering. The CCP mouthpiece Global Times accused US lawmakers of “leveraging the Taiwan question for personal gains” because the bill was co-authored by Krishnamoorthi, who accompanied then-US House of Representatives speaker Nancy Pelosi on her visit to Taipei in 2022.
The article also said: “The latest bill sponsored by individual US congressman shows that some US politicians have been treating ‘Taiwan independence’ as a business opportunity.” However, it fails to explain how US lawmakers would benefit from this legislation.
Despite Beijing’s accusations, the real intent behind the Taiwan Allies Fund is exactly as publicly stated: To provide financial assistance to countries that support Taiwan so that they can withstand PRC coercion.
The benefit to Taiwan is that it maintains diplomatic recognition. The benefit to the US is that it prevents the PLA Navy from taking over the Indo-Pacific and LAC regions, suppresses CCP dominance of entire continents and helps keep PLA and Chinese spy bases at a greater distance from the US.
Antonio Graceffo, a China economic analyst who holds a China MBA from Shanghai Jiaotong University, studies national defense at the American Military University in West Virginia.
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