During Tsai Ing-wen’s presidency, Taiwan lost ten official diplomatic partners to China, which utilized its economic power to peel away the democracy’s allies. Since President Lai Ching-te took office in May 2024, however, Taiwan has managed to prevent any further defections. By holding the diplomatic line, Lai has demonstrated that Taiwan could punch above its weight and fend off Beijing’s relentless pressure to isolate Taipei.
Taiwan’s Strategies to Retain Diplomatic Allies
High-level diplomacy has been central to shoring up Taiwan’s small circle of allies. During his first year and a half, Lai visited the Marshall Islands, Tuvalu, and Palau, while Foreign Minister Lin Chia-lung made a whirlwind tour across Central America and the Caribbean. The traffic has gone both ways: Taiwan welcomed the presidents of Eswatini, Guatemala, the Marshall Islands, and Palau, along with senior envoys from Haiti, Saint Kitts and Nevis, Saint Lucia, Eswatini, Belize, Tuvalu, and Guatemala.
Under Lai, Taiwan has shifted from short-term aid toward long-lasting partnerships. In October 2024, Lin unveiled a sweeping plan to support allies, focusing on seven priority areas: semiconductor and supply chain resilience; trustworthy digital governance; new energy and carbon credits; smart science park development; smart healthcare; new agricultural innovation; and artificial intelligence (AI). The foreign minister underlined that Taiwan would not rely on “checkbook diplomacy” but instead draw on its “successful model or experience” to help allies grow.
At its core, the initiative sought to create real value by aligning Taiwan’s interests with the development priorities of its allies. Lai has often touted Taiwan’s values-based diplomacy: “working closely with like-minded countries on global challenges” by leaning on shared principles and values of freedom, democracy, human rights, and rule of law. In practice, Taiwan has pursued practical programs of cooperation across all seven areas of cooperation.
In Eswatini, Taiwan is backing the construction of a Strategic Oil Reserve Facility project, scheduled for completion within three years. Once operational, it will allow Eswatini to store a 60-day fuel reserve, crucial for a country that depends almost entirely on South Africa for imports and is vulnerable to global price fluctuations. In Central America, Taiwan has also pledged to help Guatemala develop its semiconductor industry.
In Saint Lucia, Taiwan launched a $5 million Small Infrastructure Projects Initiative, covering more than 250 items such as community roads, bridges, walkways, drainage systems, and housing. The effort is expected to create at least 700 new jobs, improve workers’ skills, and promote community-based economic activities.
Taiwan is backing Palau’s push for digital governance through the OEK National Congress Digital Transformation Project, which upgrades audio-visual systems, strengthens cybersecurity, and introduces an electronic voting system to improve the legislature’s efficiency, transparency, and accessibility. Taiwan has also pledged to help Guatemala strengthen its cybersecurity capacity by building specialized operation centers and training its information-security workforces.
Taiwan’s push into renewable energy and carbon credits has centered on the Americas. The Organization of Eastern Caribbean States received a $200,000 investment to install solar power systems on public buildings in Saint Lucia, Saint Vincent and the Grenadines, and Saint Kitts and Nevis. Further south, Taiwan has partnered with Paraguay on carbon credits; in July, Taiwan Carbon Solution Exchange listed the Paraguay Afforestation, Reforestation, and Revegetation Project, creating a mechanism for businesses to offset their emissions.
Paraguay has also received Taiwan’s support on a smart science park development. In February, the Taiwan-Paraguay Smart Technology Park was inaugurated with a $6.3 million investment. The park is designed to become a hub for logistics and industry, while promoting Paraguay’s high-tech development.
Taiwan’s medical diplomacy has also been visible on the ground. In April, Taiwan donated advanced medical equipment, including a computed tomography scanner, fundus cameras, and patient simulators, to enhance Eswatini’s diagnostic capacity. In Saint Lucia, Taiwan contributed $1 million to improve care services for the elderly.
Agricultural innovation has become a centerpiece of Taiwan’s outreach. In Tuvalu, a new European Union-backed project led by the Taiwan Technical Mission will establish a vertical farming demonstration zone at Friendship Farm, featuring Taiwanese technologies such as smart irrigation, vertical tube cultivation, organic inputs, and small-scale poultry models.
Likewise, Taiwan has stepped up agricultural support for its Caribbean allies. In Saint Vincent and the Grenadines, the Ministry of Agriculture got new equipment, including chilling rooms, washing and grading machines, chamber vacuum sealers, and tractors. Meanwhile, Saint Lucia received a $1 million grant to upgrade the Vieux-Fort Fisheries Complex; and improvements aimed at hygiene, infrastructure, and overall facilities to better serve the local fishing community.
In Belize, Lin has promoted the seafood trade, leading to Taiwan’s approval in August of frozen whiteleg shrimp imports. Food aid programs continued too, with rice shipments of 40 tons to the Marshall Islands and 10,000 bags of rice to Saint Vincent and the Grenadines. In Paraguay, Taiwan has granted preferential tariffs on 19 products – 17 of which are tax-free – while phasing its cuts on rice crackers and natural honey.
Healthcare is a noteworthy area of cooperation too. Taiwan has trained 20 medical staff from Eswatini in the use of advanced diagnostic equipment and AI integration, aiming to build a core team to operate these systems across six secondary and tertiary hospitals. Similarly, the Taiwan-Palau Smart Hospital Project was launched, using AI to provide real-time, cost-effective diagnostic services.
Beyond healthcare, Taiwan is applying AI to agriculture through cooperation with Paraguay on aquaculture and orchid cultivation. In May, 28 Paraguayan students traveled to Taiwan for an intensive training course on AI applications in daily life.
The seven areas of cooperation benefit all of Taiwan’s diplomatic allies, with the exception of the Vatican, whose limited economic activity reflects its focus on religious missions. Nevertheless, ties with the Holy See – Taiwan’s lone diplomatic ally in Europe – remain stable, helped by China’s repeated breaches of the 2018 Vatican-China agreement by appointing bishops without Vatican consent.
Can Lai’s Diplomatic Success Endure?
China is playing the long game in poaching Taiwan’s allies, and there is no guarantee Lai can hold on to all of the current diplomatic allies until his term ends. Eswatini illustrates the risk, given its negligible economic size and the fact that “Chinese interests are present” in the country. Despite its long-standing ties with Taiwan, the African nation turned to a state-owned Chinese company contractor for the Mpakeni Dam. Small as the project seems, it could be the very first step toward a diplomatic “U-turn” in the years ahead, considering the uncertainty caused by the opacity of Eswatini’s decision-making. Taiwan’s cordial ties with the royal family, particularly King Mswati III, have so far buffered Eswatini against Chinese influence. Yet this safeguard likely lasts only as long as the King remains in power.
Saint Lucia is another worrisome case. The country has a history of oscillating between China and Taiwan, switching recognition to China in 1997 before restoring ties with Taiwan a decade later. In May, it sent a representative to the China-CELAC (Community of Latin American and Caribbean States) Forum in Beijing, an olive branch that China “welcomed and supported.” Lin said that Saint Lucia had its own reasons to attend the Beijing forum, but such a move could not help but induce unease in Taipei.
Though the risk appears lower, Taiwan should also monitor developments in Haiti. Last year, China backed United Nations Resolution 2743, which extended the mandate of the U.N. Integrated Office in Haiti, thereby sustaining the international presence needed for maintaining security for the Haitian people. Port-au-Prince responded with gratitude and willingness to maintain communication with China. As the Western Hemisphere’s poorest country, plagued by rampant armed gangs, weapon trafficking, and a lack of state capacity, Haiti is highly vulnerable to economic and political coercion. This is when international backing carries weight. Consequently, should China step up its economic support and political interventions, Haiti might well opt for a diplomatic switch.
For a government under relentless pressure from Beijing, retaining 12 diplomatic allies is no small feat, particularly as Lai is facing domestic political turmoil and obstruction from the Kuomintang, Taiwan’s largest opposition party. His administration’s success so far has underscored the value of forging mutual development gains and people-to-people ties rather than trying to match Beijing dollar-for-dollar. Competing with China economically is futile, as the world’s second-largest economy can easily outspend Taiwan.
Looking ahead, the Taiwanese administration under Lai should continue to hold its ground through strengthening ties across key development areas while bolstering high-level engagement. Ultimately, Taiwan’s ability to keep its allies hinges on the strength of their bonds and the long-lasting benefits perceived by its allied countries. But only time can tell whether Taiwan’s support and engagement could deter allies from succumbing to Beijing’s temptations.