Gambia is the first nation to cease its recognition of Taiwan since President Ma Ying-jeou took power in 2008. Though it was unexpected, the move follows a series of similar decisions among Taiwan's 22 other allies at a time when Taipei has been rebalancing its relations with China. Earlier in November, Sao Tome and Principe announced it would establish a trade mission to China to boost bilateral economic cooperation. This follows several requests believed to have been made by some Central American nations to re-establish diplomatic ties with China. Beijing supposedly turned down their offers because it did not want to disrupt what progress it had made in improving cross-strait relations with Taiwan. It also wanted to retain some leverage over Taipei in case the current detente falls apart.
The loss comes at a bad time for Taipei. The ruling Kuomintang has steadily lost popularity over the years, but losing diplomatic ties with an ally almost certainly will polarize the political landscape further. It will also weaken Ma's presidency and his foreign policy agenda, known as "flexible diplomacy."
Flexible diplomacy differs from other strategies, such as the one put forth by the pro-independence Democratic Progressive Party, which rested largely on independence and zero-sum diplomacy with Beijing. This left Taiwan isolated and adversely affected Taiwan's international status. Under the Kuomintang, Taipei has been able to act on the international stage through a truce of sorts with Beijing, whereby it could bolster economic ties with other countries, including China, without establishing direct diplomatic contact and thus avoiding politically sensitive issues.
The strategy proved quite successful. A diplomatic truce with the mainland has enabled Taiwan to keep its allies without competing with China financially in those countries. Moreover, Taipei was able to establish informal relations with many other countries and participate in a number of international organizations such as the World Health Assembly and some regional groups such as the Asia-Pacific Economic Cooperation forum. Taipei also signed the Economic Cooperation Framework Agreement with the mainland. The agreement helped revive the Taiwanese economy amid the global financial crisis and enabled the ruling party to pursue other trade agreements, including one with Singapore — a country that has no diplomatic relations with Taiwan — Japan and some other countries. The truce was deemed beneficial for China because it enhanced economic cooperation and helped keep Taiwan dependent on the mainland.
International Status and National Identity
In this context, the withdrawal of diplomatic relations with Gambia — or with other marginally important allies — may have little material impact on Taiwan. Taipei's problem is that with each ally it loses, it has a harder time maintaining its international position. Given that China is constantly expanding its own influence, this could jeopardize the progress that has been made in balancing Taiwan's foreign status and its national identity.
The dilemma for the Kuomintang — indeed, for any Taiwanese party — is balancing the advantages of economic interaction and warm political relations with China with self-determination and political identity. While the present challenge may put the Kuomintang's flexible diplomacy at risk, it is not only confined to the ruling party. In fact, China's cooperation with the Kuomintang, as well as its economic ties with the Taiwanese public, particularly business groups, has also forced Taiwan's opposition to reassess its China policies, which were built on a legacy of complete disengagement with Beijing. The Democratic Progressive Party has been forced to soften its stance against Beijing and seek a more pragmatic approach for engaging China, particularly ahead of the 2016 elections.
Taipei will have few options as it balances diplomatic imperatives with its national identity: It can pursue independence, which would further isolate it internationally, or it can cooperate further with China, which would compromise its sovereignty and national identity. In any case, with Beijing's efforts to further integrate economically with Taiwan, and with China's expanding influence elsewhere, Taipei's struggle for international space may be another step in China's path toward a long-term rapprochement with Taipei.