Literature Review

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14 Independent Variable: Cross Strait relations (China and Taiwan) and their economic performance in the global arena.

Dependent Variable: Their relations with Costa Rica and El Salvador respectively

1.3 Literature Review

In general, some approaches to this topic have been found in several documents; however, there is no information available about a comparison between El Salvador-ROC and Costa Rica-PRC relations, which makes it an innovative contribution, not only for the academic world, but also for the East Asia and Central America relations arena.

According to Ambar Arias, Karin Palma & William Aquino (2008) in their thesis “Análisis de la Cooperación e Inversión de la República de China (Taiwán) y su Impacto en la República de El Salvador, 1997-2007”, Taiwan's interest in its Central and Caribbean allies responds to their proximity to the United States, the world's largest market, and it can serve as a platform to enter the US market. Also, the ROC has as a primary interest to secure diplomatic and political support from the Salvadoran government, regarding the international community, additionally to ensure the supply of raw materials and natural resources. The content of their thesis is similar to one part of the subject to be analyzed in this paper: the relations between Taiwan and El Salvador.

Joel Atkinson argues in “Aid in Taiwan’s foreign policy: putting Ma Ying-jeou’s aid reforms in historical Perspective” (2014), that the ROC’s foreign aid can be viewed as a result of three challenging and persistent pressures: preserving the number of diplomatic ties, enhancing its global reputation, and encompassing aid expenditure. The tacit “diplomatic truce” promoted by Ma Ying-jeou with China has diminished meaningfully the pressure between these three constrains on Taipei’s foreign aid policy.

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15 On the other hand, for the Círculo de Copán; Centro Internacional para el Desarrollo Humano (CIDH); Instituto Centroamericano de Políticas para el Desarrollo (2009) in their report

“Relaciones Centroamérica y El Caribe con Potencias Extranjeras: Costa Rica – China”, they concluded that the interest of the PRC in Central America, is a political interest for taking space from Taiwan in the diplomatic battle, with the promises of trade and development aid to decrease the presence of Taiwan in that region.

The “Policy Paper on Latin America and the Caribbean” (2008), stated that “As the largest developing country in the world, China is committed to the path of peaceful development and the win-win strategy of opening-up. It is ready to carry out friendly cooperation with all countries on the basis of the Five Principles of Peaceful Coexistence and build a harmonious world of durable peace and common prosperity”. However, based on the “One China” principle, which is the political foundation on which China develops relations with Latin American and Caribbean countries and regional organizations, Chinese government has the willingness to establish relations with the countries in the region which abstain to have relations with Taiwan, in consonance with the One China Principle.

Yopo, Mladen (2011) in “América Latina en la Mira Estratégica de la República Popular China”; argues that PRC aims to reduce Washington's influence globally, especially in Latin America, through their relationship with the countries in the region. In Latin America, this desire is significantly remarkable in countries like Cuba, Venezuela, and in a lesser extent in Bolivia, Brazil, Ecuador and Nicaragua. However, this situation has not diminished the role of the US as the main reference of Latin America and has not ended totally a "restrictive" presence of China.

Nevertheless, there is a US concern for the strengthening of China, in accordance with the U.S. Congressional Research Service (2008), “China’s Foreign Policy and ‘‘Soft Power’’ In South America, Asia, and Africa”; In this report, the authors point out that it seems that China

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16 wants to convey soft power by demonstrating its own system as an alternative model for economic growth, one based on authoritarian governance and elite rule without the restrictions and demands that political liberalization has. Additionally, it seems that a part of China’s soft power is intended to reduce Taiwan’s international space.

Furthermore, Mendelson, J. & Moreira, S. (2009) in their paper “Taiwan-China Balancing Act in Latin America” explains that Taiwanese authorities were concerned about a possible domino effect prompted by Costa Rica’s decision to establish diplomatic ties with the PRC.

Taipei is aware that the more China’s role in the global economy grows, the more pressure there is on its allies to split ties with the ROC.

On the other hand, as stated by the Department of Economic and Social Affairs (2010) in their international development cooperation report “Development Cooperation for the MDGs:

Maximizing Results”, a key advantage of South-South Cooperation, as seen from a recipient countries’ perspective, is that it carries little, if any, economic or governance requirements or policy conditionalities, and is not aligned to policy arrangements with multilateral organizations.

Hence, bilateral Southern contributors highlight that development aid should not interfere in their internal affairs. Southern multilateral organizations also do not usually impose any macroeconomic conditionalities - making faster the mobilization of aid - , and disbursements are only interrupted if a beneficiary falls into debts.

Also, the same document argues that the largest Southern aid providers are China, Saudi Arabia and Venezuela (each one provides over US$2 billion a year), followed by Arab Agencies (over US$1 billion) and India (over US$ 750 million). In 2008, top 3 providers (Saudi Arabia, China and Venezuela) together accounted for 75% of total Southern development cooperation, compared with 60% in 2006 (UN, 2010).

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17 Regarding the North-South Cooperation, Chien, Yang & Wu argue in their study about

“Taiwan’s Foreign Aid and Technical Assistance in the Marshall Islands” that scholars coincide that northern countries focus their foreign assistance in three major sectors: their former colonies;

strategic geo-politically/geo-economically weak sectors; or areas where they are able to advocate human rights, democracy, and proper governance corresponding to their own political systems and principles.

Finally, in accordance with the information collected, the interest of China in Central America is basically to squeeze Taiwan’s international space (Círculo de Copán, Centro Internacional para el Desarrollo Humano, Instituto Centroamericano de Políticas para el Desarrollo, 2009; Committee on Foreign Relations United States Senate, 2008); and Taiwan’s interest is to secure diplomatic and political support, and because of their proximity to the USA (Arias, A., Palma, K. & Aquino, W., 2008). Additionally, Taiwan is concerned about the rising of China’s role in the global economy, due to the pressure it can put on Taiwan’s allies to cut their ties (Mendelson, J. & Moreira, S., 2009).