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Experts tell Senate subcommittee China’s push in Latin America is eroding Taiwan’s diplomatic ties and posing strategic risks
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Summary
Witnesses at a Senate Foreign Relations subcommittee hearing said Beijing’s economic, political and information campaigns in Latin America and the Caribbean are pressuring countries to sever ties with Taiwan, and urged U.S. policy responses ranging from targeted finance to deeper diplomatic engagement with Taiwan’s allies.
WASHINGTON — Experts told a Senate Foreign Relations subcommittee that China’s growing economic, political and information campaigns across Latin America and the Caribbean are pressuring countries to cut diplomatic ties with Taiwan and raise strategic risks for the United States.
The testimony, delivered by Evan Ellis, research professor of Latin American studies at the U.S. Army War College Strategic Studies Institute, and Samantha Custer, director of policy analysis for AidData, outlined the scale and mechanics of Beijing’s regional outreach and proposed a mix of economic, diplomatic and security measures to preserve Taiwan’s remaining diplomatic partners.
Why it matters: Witnesses argued the diplomatic losses increase the risk that the People’s Republic of China could isolate Taiwan internationally, which they said would raise strategic pressure in the Indo‑Pacific and create political and economic exposure for the U.S. in its hemisphere. ‘‘If Taiwan is lost as an autonomous democratic ally in Asia, that geographically allows the PLA and PLA Navy to project itself out beyond Guam into the Pacific,’’ Ellis testified.
Ellis and Custer described a suite of PRC tools: large bilateral investments and trade, development finance, paid exchanges for officials and journalists, Confucius Institutes and contracts in strategic sectors such as telecommunications, ports and energy. Ellis summarized one set of figures in his testimony: ‘‘Since 02/2005, PRC‑based companies have invested $203,000,000,000 in Latin America, and its bilateral trade with the region has reached $500,000,000,000.’’ Custer added that Beijing has bankrolled roughly 2,500 development projects in the region worth about $300,000,000,000 over two decades.
The witnesses said those flows frequently come with strings or create dependency. Custer said Beijing’s development finance tends to favor projects expected to generate commercial returns and can be deployed to ‘‘crowd in Chinese trade and FDI in similar sectors and geographies.’’ Ellis testified that in several cases governments that switched recognition to Beijing did not see the promised economic gains and that some projects later produced environmental or governance problems.
Both witnesses framed the diplomatic battle over Taiwan as central to China’s regional strategy. Ellis noted a marked decline in the number of states recognizing Taiwan—‘‘a decade ago, 22 countries worldwide maintained full diplomatic relations with Taiwan. Today, this number is down to 12,’’ he said—and warned that defections in the Western Hemisphere have been followed by PRC trade and infrastructure offers. Custer said seven of Taiwan’s remaining diplomatic partners are in Latin America.
Committee members focused questions on concrete vulnerabilities and policy responses. Senators asked about Panama’s recent move away from the Belt and Road Initiative and the sale of Panamanian port assets, the use of Chinese firms such as Huawei in regional telecommunications, and tactics Beijing uses in countries including Paraguay and Guatemala. Ellis described a mix of ‘‘whispering’’ to local elites, paid trips for officials and journalists, and economic pressure—at times including threats to restrict exports—to encourage switches in recognition.
Recommendations from the witnesses centered on strengthening partner capacity to evaluate contracts and fight corruption, expanding U.S. development finance and private‑sector alternatives, coordinating with Taiwan and allied democracies, and stepped‑up defense and intelligence planning. Ellis told the panel he supports ‘‘privileged treatment’’ for states that continue to recognize Taiwan, in economic and diplomatic fora, and suggested Congress consider targeted funding such as a Taiwan Allies Fund that would allocate part of existing counter‑PRC appropriations to shore up Taiwan’s diplomatic partners.
Several senators pressed for clarity on U.S. foreign assistance and program continuity, warning that abrupt reductions in aid or the curtailment of democracy and anticorruption programs could create openings for PRC influence. Witnesses and lawmakers repeatedly stressed that any effective U.S. approach should be framed as a durable Latin America strategy—focused on shared prosperity and stability—rather than only a China‑countering posture.
The hearing included both strategic warnings and practical examples. Ellis cited cases he described as problematic projects or unfulfilled promises after countries shifted recognition; Custer described public‑opinion dynamics and cautionary lessons from other regions where, she said, initial enthusiasm for Chinese projects has sometimes given way to disappointment once projects were completed.
The subcommittee record will remain open for additional written responses and materials, and senators said they plan follow‑up work to evaluate tools such as the U.S. International Development Finance Corporation and programmatic options aimed at preserving Taiwan’s diplomatic partners.
