Panama has severed ties with Taiwan and has established diplomatic relations with China, as Beijing intensifies its efforts to isolate the autonomous island, which it considers to be Chinese territory.
Panama's foreign minister Isabel Saint Malo signed a communique with her Chinese counterpart Wang Yi on Tuesday in Beijing to formalize the change, leaving Taiwan with only 20 diplomatic allies.
Juan Carlos Varela, president of the Central American nation, said adhering to Beijing's one-China principle would generate "great potential in all areas," including investment and job creation.
Beijing has tightened its grip on Taiwan since last year's election of President Tsai Ing-wen and his pro-independence Democratic Progressive Party.
The Chinese government has renewed its battle to acquire diplomatic allies by winning the support of the small African nation of Sao Tome and Principe in December, hampering Taiwan's participation in international forums and reducing the number of Chinese tourists visiting Taiwan.
Diplomats warned that other allies may follow Panama's example by abandoning Taiwan in search of better political and economic ties with China.
"There will be a waterfall," said Jorge Guajardo, Mexico's former ambassador to China, now based in Washington. "The Dominican Republic, Nicaragua and Paraguay could try to do the same and the big prize for Beijing would be the Vatican."
The desertion of Panama is the latest diplomatic success in Beijing, which is taking advantage of the uncertainty surrounding President Donald Trump's foreign policy to exert his influence from Southeast Asia to South Korea.
"China is exercising smart power more often, while the US is withdrawing from the mainstream of international politics," said Huang Kwei-bo, a professor of diplomacy at Chengchi National University in Taipei.
Most of the countries that recognize Taiwan are small and poor countries in Africa, the Pacific, Latin America and the Caribbean. But they play an important role in supporting the legitimacy of Taiwan and speak on their behalf in international organizations such as the United Nations, which does not recognize the government of Taiwan.
Panama was one of its most important partners, for its position as the third largest economy among Taiwan's diplomatic allies and because of its control of the Panama Canal, a strategic maritime route.
Taiwan still has extensive political and economic relations with many countries that do not officially recognize it, including the US, Japan and China itself, which consumes about 40 percent of Taiwan's exports.
Taiwan's presidential office condemned China's attempts to restrict its international relations. "This is not only a threat to the rights of the Taiwanese people, it is also a dangerous provocation for peace and stability in the Taiwan Strait and the region as a whole," he said.
Jonathan Sullivan, the director of the Institute of Politics of China at the University of Nottingham, said that the desertion of Panama was "a blow to foreign policy" for the government of Ms. Tsai, who is already suffering from declining Approval due to domestic problems.
He added that while Beijing would continue efforts to diplomatically isolate Taiwan, it was unlikely that the policy would reverse the growing sense of Taiwan's independent Taiwan identity.
In the decades after China was admitted to the UN in 1971, most countries established diplomatic relations with Beijing and withdrew recognition of the Republic of China, as formally known to Taiwan.
But Taipei and Beijing have fought for the support of a handful of nations, mainly developing nations.
This diplomatic war was interrupted during the administration of Ma Ying-jeou, the former Taiwanese president, who tried to strengthen ties with Beijing. But China ended the apparent truce after Ms. Tsai was elected.
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