China has been putting all kinds of pressure on Taiwan politically and economically as well as issuing threatening statements frequently. It claims the island nation is a part of China and must therefore be reunified with the mainland.

China has been sending naval vessels frequently into Taiwan’s territorial waters and violating its airspace in order to intimidate its smaller neighbour by displaying its military power.

Any direct Chinese action on Taiwan shall have escalating consequences as geopolitical and geostrategic considerations affecting the region shall draw in many countries if a conflict breaks out.

The United States, which is bound by the Taiwan Relations Act, shall be the first responder. Many countries in the region are in a race to beef up their military and combat capabilities by acquiring lethal weapons, resulting in a veritable arms race.

Another strategy of China has been to diplomatically isolate Taiwan in order to strangulate its economy and weaken its profile. The latest in this narrative is to lure away the Central American country, Honduras from Taiwan and establish diplomatic ties at the ambassadorial level.

This severs Honduras’ decades-long ties with Taiwan and ends relations dating back to the 1940s. In fact, relations between Honduras and Taiwan date back to 1941 when the government of the Republic of China, which remains Taiwan’s official name, was still in China before it fled to the island in 1949 after losing a civil war with Mao Zedong’s communists.

A joint communiqué formalising establishment of diplomatic ties with China was signed on 26 March 2023 at a ceremony in the Diaoyutai State Guesthouse in Beijing between Honduras Foreign Minister Eduardo Enrique Reina and Chinese Foreign Minister Qin Gang. Now Honduras has joined 181 countries that maintain official diplomatic relations with China.

Taiwan’s Foreign Minister lost no time in decrying Honduras’s demand of exorbitant sums before being lured away by Beijing. Taiwan’s President Tsai Ing-wen said the switch was a part of China’s “coercion and intimidation” of Taipei’s allies. The Xiomara Castro government asked Taiwan for billions of dollars in economic assistance and compared prices of assistance programmes provided by Taiwan and China.

It now transpires that Reina wrote to Taiwan on 13 March demanding a total of $2.45 billion in aid, including the construction of a hospital and a dam, and to write off debt. Reina justified the demand of $2.45 billion by saying it was not “not a donation”, but rather “a negotiated refinancing mechanism”.

It may be noted that Honduras is one of the poorest countries in the region, with almost 74 per cent of its nearly 10 million people living in poverty. Honduras President Castro sent Reina to Beijing to open relations and start ties. By switching allegiance,

Honduras now recognises the People’s Republic of China as the only legitimate government that represents all of China and also that Taiwan is an “inseparable part of Chinese territory”.

China claims democratically ruled Taiwan as its own territory with no right to state-to-state ties, a position Taipei strongly rejects. China demands that countries with which it has ties recognise its position.

Since no mention of aid was made in the joint statement, it is suspected that Honduras just wanted money from Taiwan, not a hospital.

Taiwan President Tsai Ingwen had already announced her plan to visit Guatemala and Belize and also meet US House Speaker Kevin McCarthy in Los Angeles at the end of the trip and therefore the timing of the Honduran decision close to Tsai’s overseas tour was suspicious. Tsai departed Taiwan on 29 March for the 10-day trip.

The US has been watching the developments with concern as China expands its footprint in its backyard by taking away Taiwan’s Central American allies, and has repeatedly warned countries not to believe China’s promises of aid as such promises in exchange of diplomatic recognition are often not fulfilled.

The US however cannot do anything to alter Honduras’s decision as it is one taken by a sovereign nation. After Honduras’ switch of allegiance, Taiwan is now left with only 13 countries, mostly poor and developing countries in Central America, the Caribbean and the Pacific, which still diplomatically recognise it. Taiwan has lost several Latin American allies in recent years.

Honduras now follows the trend in the region and joins Nicaragua, El Salvador, Panama, the Dominican Republic and Costa Rica, as countries which have switched diplomatic recognition to Beijing in recent years. The communiqué stated that China and Honduras agreed to develop friendly relations on the basis of the principles of mutual respect for sovereignty and territorial integrity, mutual non-aggression, non-interference in each other’s internal affairs, equality, mutual benefit and peaceful coexistence.

With this development, Taiwan’s Ambassador to Honduras, Vivia Chang returned home. China said it highly appreciates Honduras’ clear attitude and firm determination to establish diplomatic relations between the two countries. Beijing claimed that the establishment of diplomatic relations between China and Honduras was fair and square, and part of a historical trend that no person or force can stop. As a part of this change in diplomatic ties,

Beijing is likely to push several important bilateral agreements and cooperation mechanisms, including Honduras’s participation in its Belt and Road Initiative, the Global Development Initiative, the Global Security Initiative and Global Civilization Initiative. With this, China’s imports of Honduran speciality products are likely to increase.

Chinese companies are also likely to increase their investment in large-scale infrastructure construction and implement on-going projects to help benefit the people of Honduras.

Honduras hopes that deepening economic ties with China would result in a win-win situation for both. This would include strengthening cooperation with China on finance, trade, infrastructure, science and technology, culture and tourism.

Honduras hopes bilateral ties would receive a heft based on the Five Principles of Peaceful Coexistence.

But ultimately, this is another step in China’s long-term game plan to annex Taiwan by both military intimidation and diplomatic isolation. It is premature to hazard a guess what the world would be if Beijing becomes too adventurous and takes military action as the likely consequences would be too perilous for the region and the world.

(The writer is Senior Fellow at the Nehru Memorial Museum and Library, New Delhi)