On Tuesday, Panama dropped its diplomatic links to Taiwan and opened formal relations with China, further isolating the island of 23 million people that China considers a breakaway province. Panamanian President Juan Carlos Varela announced the change on television, saying it is the "correct path for our country." Taiwan's Ministry of Foreign Affairs said that Varela had disregarded decades of friendship and economic development, accusing Panama of having "submitted to the Beijing authorities for economic benefits" and "lied" to Taiwan, whose president, Tsai Ing-wen, also denounced the move.
Panama was one of the largest economies that still recognized Taiwan over China, and now only 20 countries have diplomatic relations with Taiwan, including the Holy See and 11 nations in Latin America and the Caribbean.
Beijing's pressure on Panama and other countries is regarded as a show of strength against Tsai, who has refused to endorse the "one China" policy. In recent months, for example, China drove an aircraft carrier strike force aground into Taiwan. "Panama was one of the more significant countries that still maintained diplomatic relations with Taiwan," says Zhang Baohui at Lingnan University in Hong Kong. "By taking away Panama, it once again teaches Tsai's government the lesson that if she doesn't accept the 'one China' principle ... there will be consequences."