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One of Taiwan's last remaining diplomatic allies, Honduras, has officially cut diplomatic ties with Taiwan, Reuters reported.

In a statement on Mar. 25 local time, the foreign ministry of Honduras said that it “recognises the existence of one China in the world and that the government of the People’s Republic of China represents China as a whole,” according to CNN.

📌| COMUNICADO: Honduras Anuncia Ruptura de Relaciones Diplomáticas con Taiwán pic.twitter.com/kaaBearpcM

— Cancillería Honduras (@CancilleriaHN) March 26, 2023

It also said that “Taiwan is an inalienable part of Chinese territory”.

Calling the move "the right choice", China's foreign ministry has also confirmed in a statement that a joint communique on establishing of diplomatic relations between China and Honduras has been signed on Mar. 26.

Taiwan and Honduras established diplomatic relations in 1941 but their ties have been shaky ever since Honduras' President Xiomara Castro took office, according to Focus Taiwan.

In her then-foreign policy manifesto, she had said that Honduras was looking to forge diplomatic relations with Beijing, CNN reported.

Visit to China by Honduran foreign minister

Earlier last week, Castro tweeted that she had instructed Honduras' foreign minister, Eduardo Enrique Reina, to head to China to promote the establishment of diplomatic ties.

He instruido al Canciller Eduardo Reina, para que gestione la apertura de relaciones oficiales con la República Popular China, como muestra de mi determinación para cumplir el Plan de Gobierno y expandir las fronteras con libertad en el concierto de las naciones del mundo.

— Xiomara Castro de Zelaya (@XiomaraCastroZ) March 14, 2023

The visit happened on Mar. 22 and was carried out to promote efforts of establishing diplomatic ties with China, according to a presidential spokesperson cited by Reuters.

Taiwan then recalled its ambassador to Honduras and expressed their “strong dissatisfaction” towards the move, according to a statement (Mar. 23) by its foreign ministry.

Deeply regrettable

In the ministry’s latest statement dated Mar. 26, Taiwan had decided to officially terminate diplomatic relations with Honduras “with immediate effect” in order to “uphold national sovereignty and dignity”.

All ongoing bilateral projects will be ended and staff at its Honduran missions, consulate general and embassy will be recalled.

Taiwan’s foreign minister Joseph Wu said in a press conference that it was “deeply regrettable” that Honduras chose to disregard the decades-long relationship between their countries, according to FocusTaiwan.

He said that Taiwan will not “succumb to the pressure and coercion of the Chinese authoritarian government” and would continue to unite with like-minded allies to achieve its due international status.

Taiwan is now left with 13 diplomatic allies consisting of mostly countries in the Pacific, Latin America and the Caribbean.

Demands for aid

Prior to the diplomatic rupture, Honduras had reportedly made demands for US$2.5 billion (S$3.33 billion) worth of aid from Taiwan which they later denied and said that it had asked Taiwan to buy their public debt.

The Honduran foreign minister said that the sum was “not a donation” but a “negotiated refinancing mechanism”.

Taiwan’s foreign ministry stated that the Honduran government “demanded massive amounts of economic aid” and “weighed Taiwan’s assistance proposals against those submitted by China”.

During Wu's press conference, he disclosed that Honduras made several financial demands in a letter dated Mar. 13, Focus Taiwan reported.

This included US$90 million (S$120 million) for a hospital and US$350 million (S$466 million) for a dam, on top of US$2 billion (S$2.67 billion) to help Honduras offset its national debt.

Dollar diplomacy?

Dubbed by experts as “dollar diplomacy”, China has apparently been using its economic prowess to “peel” away Taiwan’s remaining allies, according to CNN.

In a video statement on Mar. 26, Taiwan's president Tsai Ing-wen said that Taiwan would not "engage in a meaningless contest of dollar diplomacy with China".

Referring to the diplomatic and military pressure from China, Tsai reiterated that Taiwan and China are not subordinated to each other and that the Taiwanese people will not give in to threats.

Rising tensions

The diplomatic crisis happened ahead of Tsai’s planned visit to the American continent.

She is expected to stopover in the U.S. during the trip, though her administration has not confirmed whether she would be meeting U.S. House Speaker Kevin McCarthy, according to Taipei Times.

She will be visiting Guatemala and Belize who are still Taiwan’s diplomatic allies.

China had expressed its serious concern over Tsai’s upcoming transit plans, reiterating their strong opposition towards any form of official interaction between Taiwan and the U.S.

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Top image via YouTube of Taiwan's Ministry of Foreign Affairs