China Cheers as Taiwan Splits With One of Last Few Friends

(Bloomberg) -- Taiwan’s loss of one of its few remaining diplomatic partners highlights President Tsai Ing-wen’s growing risk of isolation amid an escalating spat with China.

The split between Taiwan and the West African island nation of Sao Tome and Principe cuts to 21 the number of nations that recognize the government in Taipei, rather than Beijing. The falling out was welcomed by China’s foreign ministry Wednesday as Taiwan accused Sao Tome of making “astronomical” demands for fiscal aid to maintain ties.

The country sought more than $100 million, Taiwan’s Central News Agency reported, citing an unidentified foreign ministry official. Phone calls to Sao Tome and Principe’s foreign ministry during normal business hours on Wednesday went unanswered.

“Because we weren’t able to fulfill its needs, the Sao Tome government put nearly 20 years of friendship up to the highest bidder between the two sides of the strait,” the Taiwanese Ministry of Foreign Affairs said in a statement. “We deeply regret and condemn this reckless and unfriendly decision.”

China has shown a willingness to use its growing economic and military might to put pressure on Tsai’s Democratic Progressive Party, which swept the more Beijing-friendly Kuomintang from power in January. The Communist Party considers the self-governed island a province and has criticized Tsai’s refusal to accept that both sides belong to “One China,” its precondition for ties.

“There is a flavor of a tit-for-tat retaliation,” said Jean-Pierre Cabestan, who studies China-Taiwan relations at Hong Kong Baptist University. “At the same time, it’s part of a broader strategy which is aimed at giving a hard time to, or isolating, Tsai Ing-wen and DPP. China’s objective is to make sure she is defeated in four years.”

In March, Beijing formally reestablished relations with Gambia -- another former Taiwanese partner in West Africa -- and has stepped up communications with others, such as Panama and the Vatican. China had refrained from actively wooing away any of Taiwan’s diplomatic partners during the eight-year tenure of Tsai’s predecessor, Ma Ying-jeou, who advocated increased ties with the world’s second-largest economy.

“China appreciates and welcomes Sao Tome and Principe’s return to the right track of the One-China principle,” the Ministry of Foreign Affairs in Beijing said Wednesday. The ministry didn’t say when it would reestablish ties with the former Portuguese colony. It recognized China after achieving independence in 1975 only to switch back to Taiwan in 1997.

Sao Tome and Principe has a population of about 197,500 and consists of two archipelagos about 200 miles (320 kilometers) off the coast of Gabon. On Monday, Prime Minister Patrice Trovoada told parliament that the cocoa-bean exporter faced dire prospects for foreign aid as traditional African donors struggle with depressed oil revenues.

The country announced the decision to cut ties on Tuesday in a statement that acknowledged the “existence of a single China” with its government in Beijing. The statement cited “tensions prevailing at the international level” and a “change in internal political and economic circumstances.”

Why Trump raising doubts about ‘One-China’ is a big deal: Q&A

The split deals a blow to Tsai’s effort to raise Taiwan’s profile and expand trade ties beyond China, which accounts for 40 percent of its exports. Taiwanese Foreign Minister David Lee said in July that relationships with the island’s 22 allies were “not quite” stable, with some even in “crisis.”

Tsai visited Panama and Paraguay two months after taking office and plans a similar Central American tour next month, including Guatemala and Honduras. That could provide an opportunity for a transit stop in the U.S., where the incoming president, Donald Trump, has expressed a willingness to reconsider long-standing U.S. policy toward China.

Trump’s protocol-breaking phone call with Tsai and his attacks on China on Twitter, have sparked friction between the world’s two biggest economies before he even takes office. After the call, China flew a bomber around Taiwan in what it called a normal flight operation.

--With assistance from Ting Shi Adela Lin Pauline Bax and Ana Monteiro To contact the reporters on this story: David Tweed in Hong Kong at dtweed@bloomberg.net, Debra Mao in Taipei at dmao5@bloomberg.net. To contact the editors responsible for this story: Daniel Ten Kate at dtenkate@bloomberg.net, Brendan Scott