Taiwan promised on Friday to provide $250 million in subsidies to Taiwanese entrepreneurs in Paraguay to help stimulate investment in the South American country and strengthen friendly bilateral ties.
In an official visit to Paraguay, Taiwan President Chen Shui-bian also said Taiwan would resume imports of Paraguayan beef after closing its doors due to foot-and-mouth disease and would double its import quota to 440 tonnes in December.
Taiwan's only ally in South America, Paraguay has received millions of dollars in donations and loans from the self-ruled island. Many countries, including the United States, refuse official visits from Taiwan and consider authorities in Beijing to be China's legitimate government.
China contends that Taiwan must accept reunification with the mainland after more than half a century of separation, and its government views any country that plays host to Chen as encouraging his vision of a separate Taiwanese identity.
But Paraguay has benefited financially from its ties to Taiwan. In 2000, two Taiwanese banks bought up $400 million worth of Paraguayan Treasury bonds that local analysts considered unappealing under normal market conditions.
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