Paraguay Says Chinese Vaccine Offers Tied to Dumping Taiwan

(Bloomberg) -- Like many nations, Paraguay faces an uphill battle to procure coronavirus vaccines. But its quest is being complicated by fraught relations between China on one side, and Taiwan and the U.S. on the other.

The Paraguayan government has been approached with offers of Chinese-made vaccines in exchange for breaking ties with Taiwan, the country’s foreign ministry said in a statement earlier this week. The ministry said that the offers were made by individuals “whose legitimacy and ties to the government of the People’s Republic of China are not proven.”

Foreign Minister Euclides Acevedo vowed in a radio interview Monday to not bow to pressure, according to local news site Hoy. “We are not going to accept them telling us, ‘We sell the vaccines, but they break relations with Taiwan,’” Acevedo said.

Paraguay’s Foreign Ministry didn’t immediately respond to phone calls and an email seeking comment.

Chinese Foreign Ministry spokeswoman Hua Chunying said Wednesday that she wasn’t aware of the source of the allegations, but said the country was “always honorable and above board” with its offers for vaccine support. “On the specific incident you mentioned, I think it is a typical malicious piece of disinformation,” Hua told a regular news briefing in Beijing.

The episode is the latest example of how geopolitics is infecting the global race for vaccines, with major powers dominating production and hoarding supplies. It also caused street protests against the government’s handling of the health crisis and led to opposition lawmakers unsuccessfully pushing for an impeachment last week.

Paraguay belongs to a shrinking club of 15 countries including Guatemala and Honduras that still recognize Taiwan’s government, officially known as the Republic of China, over Beijing. The 63-year-old relationship dates back to when anti-communist dictators Alfredo Stroessner and Chiang Kei-shek ruled in Asuncion and Taipei. Stroessner’s personal secretary and father of current Paraguayan President, Mario Abdo Benitez, accompanied the strongman on his visit to Taiwan in 1975.

Taiwan has provided hundreds of millions of dollars in loans and aid over the years, but Paraguay’s dogged support of Taipei has sidelined it from public works financing under China’s so-called Belt and Road initiative. While Chinese factories flood Paraguay with manufactured goods, Paraguay can’t directly sell its beef and soy to China.

China’s Communist Party claims Taiwan as its territory, despite having never ruled it, and has stepped up efforts to poach the island’s diplomatic allies since Taiwanese President Tsai Ing-wen’s election in 2016. Tsai, who maintains that Taiwan is already a sovereign nation, and has sought to defend such relationships while pursing greater economic and security ties with the U.S.

‘Political Manipulation’

“Vaccines should not be used as a tool for political manipulation,” Alexander Yui, director-general of Taiwan’s Department of Latin American and Caribbean Affairs, told a news briefing Tuesday. “We strongly oppose attempts by some parties to use the cutting of Taiwan-Paraguay relations as a precondition for receiving the Covid-19 vaccine from China.”

Hua, the Chinese Foreign Ministry spokeswoman, sought to blame Taiwan for the dispute. “We urge certain people in Taiwan to stop making petty moves or create rumors or engage in political manipulation,” she said.

Paraguay has struggled to secure vaccines for its population of more than 7 million. The South American country has received just 63,000 doses since February, although it recently announced that India and Qatar had promised to supply a total of 600,000 shots. The government has reported more than 198,000 cases of Covid-19 and more than 3,800 deaths.

Paraguay’s desperate search for shots has attracted dozens of middlemen including a real estate company offering to broker vaccine deals. Many of the 35 intermediaries that have approached the health ministry have demanded multi million dollar down payments, Health Minister Julio Borba said in a radio interview.

After Panama, El Salvador and the Dominican Republic switched ties to China, the U.S. has sought to prevent further diplomatic gains for Beijing in its own backyard. U.S. Secretary of State Antony Blinken discussed relations with Taipei during a March 14 call with Abdo Benitez, stressing “the importance of continuing to work with democratic regional and global partners, including Taiwan, to overcome this global pandemic, combat corruption, and increase transparency and accountability.”

Ricardo Chiu, an official at Taiwan’s embassy in Asuncion, told Paraguayan media earlier this month that Taiwan would not interfere in any discussions regarding vaccines produced in China. Chiu rejected politicization of the fight against the pandemic, which he called “a human matter,” while also noting that Taiwan expected its own vaccine to be ready by June.

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