Paraguay declares intention to uphold relations with Taiwan
Paraguay, the last South American country to maintain formal diplomatic relations with Taiwan, has continued to stand by its ally despite significant pressure from China. This unwavering alliance, dating back to 1957, has evolved into a robust partnership grounded in political alignment, shared democratic values, and extensive economic cooperation.
Over the decades, Paraguay has consistently reaffirmed its diplomatic support for Taiwan, even expelling a Chinese envoy in late 2024 for lobbying efforts. This allegiance was underscored in 2025 by high-level diplomatic celebrations marking 68 years of partnership, with both countries emphasizing mutual support in defending democracy and cooperation within multilateral systems.
The economic and investment cooperation between the two nations is extensive. Taiwan has invested heavily in Paraguay’s health, education, agriculture, technology, and sustainable development sectors. Projects include digitizing health information systems in over 1,000 Paraguayan clinics, donating medical equipment, and establishing the Taiwan-Paraguay Polytechnic University. Recent talks during parliamentary visits and business forums have expanded cooperation into strategic industries such as semiconductors, ICT, smart transportation, and agriculture, with plans for AI data centers to modernize Paraguay’s economy.
Paraguay's strategic regional significance lies in its position within Mercosur, a trade bloc where it holds veto power. China seeks economic access and influence in South America, and Paraguay’s ability to block or facilitate China’s trade ambitions within Mercosur adds considerable leverage to its diplomatic decisions.
Recent developments include Taiwan’s President Lai Ching-te's planned visit to Paraguay to reinforce bilateral ties and showcase ongoing investments and projects, signaling Taiwan’s commitment amid heightened diplomatic pressure from Beijing. High-level Paraguayan delegations have reciprocated visits, reflecting a continuous and reciprocal dialogue at the political and business levels.
President Santiago Pena expressed gratitude towards Taiwan for its investments in Paraguay, stating that they have been "tremendously generous." He also noted that the relationship between Paraguay and Taiwan is based on democratic principles and values. The Paraguayan leader further stated that Paraguay is ready to defend its 68-year relationship with Taiwan, a self-governing democracy claimed by China.
As Taiwan is a global leader in chip production, producing more than half of the world’s semiconductors, the cooperation in strategic industries such as semiconductors is of particular importance. The upcoming visit of Taiwan’s President Lai Ching-te to Paraguay is expected to further strengthen this partnership.
- Despite the political tensions between China and Taiwan, Paraguay continues to strengthen its partnership with Taiwan in strategic industries such as semiconductors and technology, highlighting the importance of these sectors in modernizing Paraguay's economy.
- The ongoing diplomatic relations between Paraguay and Taiwan, rooted in political alignment, shared democratic values, and extensive economic cooperation, have expanded into discussions about AI data centers and smart transportation, reflecting a mutual commitment to mutual support and cooperation within multilateral systems.
