El Salvador became the fifth country which, within the last two years, has broken off diplomatic relations with Taiwan at the expense of co-operation with Beijing. The President of the central American country Sanchez Serra announced in a speech aired on television that his government has suspended diplomatic relations with Taiwan and has established diplomatic relations with the People’s Republic of China.

Taipei reacted immediately with acts reciprocally – Taiwan also announced that it has broken off diplomatic relations with El Salvador because the central American country has prepared to establish relations with Beijing. The authorities in Taiwan did not forget to use the corresponding rhetoric and spoke about China’s “brutal action”. Taipei has also expressed regret with what is happening.

So far, the politically isolated Taiwan has only 17 official diplomatic allies in the world. Taiwan has a government since 1949 when Chinese nationalists flee the island after losing the civil war against communists in China. Beijing, however, considers Taiwan as part of the Chinese territory.

A document establishing diplomatic relations was signed by the Foreign Ministers of China and El Salvador in Beijing. Although it is the smallest central American country, Salvador has the third largest national economy in the region. Gross domestic product is growing steadily since 2000. In 2001 the US dollar started to be into heavy circulation as a preferred currency and at the end of 2003 the national currency was removed from use.

In the last two years, China has taken from Taiwan four allies – Gambia, Sao Tomé and Principe, Panama and Burkina Faso. Although Taiwan is officially recognised by only 18 UN Member States, Taipei has practically maintained relations with most countries around the world through its representations. The countries that have officially recognised Taiwan are mostly Pacific and Caribbean.

Taipei has maintained non-diplomatic informal relations with the European Union. Links are based on open support through economic assistance, loans and investments from Taiwan, but this policy can only have a limited long-term success. Taipei therefore seeks credit of trust through participation in international investment and donor programmes, cultural diplomacy, as well as internal political reforms and social modernisation.