The Trade Impact of Diplomatic Relations in Developing Countries: The Choice between China or Taiwan
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Date
2024-01-09
Authors
Kamanga, Promise
Journal Title
Journal ISSN
Volume Title
Publisher
University of Oregon
Abstract
China is using the policy of diplomacy to increase its global influence, especially among developing countries. From 1995 to 2019, twenty-two developing countries from various parts of the world switched diplomatic allegiances from Taiwan to China. This dissertation evaluates how this diplomatic policy change affected various trade outcomes of the countries that switched allegiances. In summary, it finds that trade with Taiwan decreased, especially imports from there. For trade with China, the value of imports increased but that of exports decreased. This decrease in the value of exports spared the sectors for which the switching countries enjoyed comparative advantages.
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Keywords
China, Developing countries, Diplomatic relation, Taiwan, Trade outcomes