İlknur Şebnem Öztemel-TDO-14.06.2017-Panama has established diplomatic ties with China and naturally cut off its diplomatic ties with Taiwan.
Panama’s government declared in a statement that it recognises there is ‘’only one China and Taiwan belongs to it’’. It is announced by local officers as "The Panamanian government is today breaking its 'diplomatic ties' with Taiwan, and pledges to end all relations or official contact with Taiwan". Moreover, Panamanian President Juan Carlos Varela addressed that Panama was upgrading its commercial ties with China and establishing full diplomatic links with the second most important customer of its shipping canal. He added, "I'm convinced that this is the correct path for our country".
Furthermore, Chinese Foreign Minister, Wang Yi, stated "This is a historic moment. China-Panama relations have opened a new chapter". In the website of Chinese Foreign Ministry, it is said that ‘’ the two governments agreed to develop friendly relations on the basis of mutual respect, sovereignty, territorial integrity, non-aggression, non-interference in internal affairs, mutual benefit and peaceful coexistence’’. It is revealed that Yi will meet with his Panamanian counterpart, Isabel de Saint Malo, in Beijing in order to sign a joint communiqué.
In response to the move, Taiwanese government said it was sorry and angry over Panama's decision and it would not compete with China in this "diplomatic money game". It was also disclosed that Taiwan would immediately end cooperation with Panamanian government and providing assistance to it. Additionally, it will evacuate embassy and technical personnel to safeguard their ‘’national sovereignty and dignity".
Similar to many Western states, Taiwan was trying to enhance its diplomatic relations with other states by giving them money. Nevertheless, rising economic power of Chinese dragon made it hard to battle with China. Lastly, in December, Panama's deputy foreign minister had said he did not expect any change in Panama's relations with Taiwan or China.
There is no doubt that Panama’s decision to leave Taiwan alone will be beneficial for it to increase its trade income. Nevertheless, there are still some questions about the forthcoming period likewise the future of the Chinese-backed project to build another Central American waterway to rival the Panama Canal in Nicaragua. It is significant to remind that the cost of the new canal is about 50 billion dollars. Previously, critics raised questions about the feasibility of the project.
Panama is the second country that switched its recognition to Beijing, following Sao Tome and Principe in December. The number of states that formally recognise Taiwan trimmed to 20 which are mostly smaller and poorer nations in Latin America and the Pacific.