PANAMA CITY: China delivered another diplomatic punch to Taiwan on Tuesday (Jun 13) by establishing relations with Panama at the expense of Taipei, further isolating the island's Beijing-skeptic government.
China, which considers self-ruled Taiwan a renegade province waiting to be reunited with the mainland, has been infuriated by President Tsai Ing-wen's refusal to acknowledge the island as part of "one China", unlike her predecessor Ma Ying-jeou.
Panama is the third country to switch allegiance to China since Tsai's Democratic Progressive Party was swept to power last year, China's nationalistic Global Times reported, warning more would follow in a "domino effect".
"This is the cost the Tsai administration needs to pay," the newspaper said in an editorial.
Chinese Foreign Minister Wang Yi and his Panamanian counterpart Isabel Saint Malo de Alvarado toasted with champagne in Beijing after signing a communique formalizing the establishment of diplomatic relations while angering Taiwan.
"This is a historic moment, China-Panama relations have opened a new chapter," Wang said, adding that Panama's decision was in "complete accordance" with its people's interests and "in keeping with the times".
Saint Malo said Panama and China had made an "important step" and started a "new page in our strategic relations."
"It is just the beginning of a roadmap that we are establishing now to broaden our bilateral agenda."
After decades of siding with Taiwan, Panama now "recognizes that there is only one China in the world" and that Taiwan is part of Chinese territory, said the joint communique.
'TEACH A LESSON'
The Panama move infuriated Taiwan, which is still recognised by around 20 mostly small and economically weak countries, including Haiti, Tuvalu and Burkina Faso.
"Beijing's action has impacted the stable cross-strait status quo. This is unacceptable for the Taiwanese people and we will not sit back and watch our country's interests being repeatedly threatened and challenged," Tsai told reporters in Taipei.
"As the president, maintaining national sovereignty is my biggest responsibility. Greater challenge will bring stronger will. Taiwanese people's faith should not and will not be defeated easily. We will not be shaken."
Diplomatic tussles between Taiwan and Beijing eased under the island's previous Beijing-friendly government, but relations have deteriorated since Tsai took office.
China "is seeking to undermine President Tsai while intimidating Taiwan by narrowing its international space," said Michael Cole, Taipei-based senior fellow with the China Policy Institute at the University of Nottingham.
Cross-strait tensions have been further exacerbated by a highly unusual call from Tsai to congratulate then US President-elect Donald Trump.
Trump questioned Washington's policy towards the island but later reiterated Washington's One China policy.
"I think the phone call has reinforced Beijing's determination to teach Taiwan a lesson," said Willy Lam, an expert on politics at the Chinese University of Hong Kong.
Panamanian President Juan Carlos Varela announced his decision in a nationally televised address.
"The People's Republic of China has always played a relevant role in Panama's economy," he said.
He said the announcement heralded "a new era of opportunities."
Chinese ships, after those from the United States, are the number two users of the Panama Canal, a crucial gateway for global trade between the Pacific and Atlantic oceans.
Beijing began construction last week of a container port, with natural gas facilities, in Panama's northern province of Colon.
"It's about who can give the most," said Carl Thayer, an emeritus professor of politics at the UNSW Canberra college in Australia. "Taiwan has resources but it can't match China."
Panama's deputy foreign minister Luis Miguel Hincapie, said on television on Tuesday that Panama hoped to open commercial offices in Panama and Taiwan to maintain their trade ties.
Through diplomatic ties with China meanwhile, "Panama can become a bridge for Asia to the whole of Latin America," said Trade and Industry Minister Augusto Arosemena on television channel Telemetro.