Diplomacy With The Dragon

June 2007 | Economic Analysis

BMI View: Costa Rica's decision to dissolve its diplomatic ties with Taiwan has heightened speculation that other Central American and Caribbean allies may follow suit. In our view, the immediate risk to Taiwan's pre-eminence in the region remains low-key. However, as China's geo-political influence continues to rise, and an election season kicks off in Central America next year, the issue of allegiance and 'dollar diplomacy' could become a key risk to regional integration.

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