The foreign relations between “Taiwan” i.e. Republic of China and Paraguay are the Republic of China-Paraguay relations.

The governments of both the countries establish a diplomatic relation between them. In absolute terms, not specifically the largest country but Paraguay is the largest country that maintains an official diplomatic relation with the Republic of China.

Rather than recognizing the People’s Republic of China, Paraguay is one of the 23 countries that recognize the Republic of China. The diplomatic relation between the government of Paraguay and Republic of China was established on 8th July, 1957. Till date, the government of both the countries signed a Treaty of Friendship, Cultural Convention and Conventions of Tourism and Investments. For Paraguay, more advantageous thing was to keep Taiwan’s development assistance and access to markets in Taiwan.

Paraguay was provided assistance by Taiwan, on a number of economic development projects and in early 2009 it provided large loans to Paraguay. The Paraguayan diplomats regularly proposed the UN General Assembly Session for the returning of the Republic of China back into the United Nations Organization. A free trade agreement was attempted to negotiate by Taiwan and Paraguay but it was difficult to approve it from the Paraguay’s MERCOSUR’s partners.

There are many political, social and economic issues of MERCOSUR to which Paraguay is closely aligned. Paraguay is the only South American country that recognizes Taiwan and has good diplomatic relations with the Republic of China.