In an interview with AFP Monday in Panama, Siew said that the improving relations between Taipei and Beijing have brought a "diplomatic truce" between the two sides that have sparred for years to be seen as China's government.

Siew acknowledged China's burgeoning economic role in Central America and said: "We would in no way interfere or oppose our allies' economic and trade relations with mainland China."

Most countries recognize Beijing as China's sole government but 23 -- mostly in the developing world -- maintain ties with Taiwan. Central America is a key bloc for Taiwan, although Costa Rica switched sides in 2007 after which China lavished assistance on it.

Siew, who was visiting Panama where he donated $25 million for a hospital, said he did not think that other Central American countries would follow the example of Costa Rica.

"Central America does not choose its friends solely on the basis of economic and trade interests," he said.

He added: "Central American countries know that their official diplomatic relations with the Republic of China (Taiwan) results in benefits."

Taiwan's President Ma Ying-jeou took office in 2008 with a mission to repair relations with Beijing, which considers the island -- where China's defeated nationalists fled in 1949 -- a province awaiting reunification.

As he seeks re-election next year, Ma has argued that improved relations with China have yielded dividends for the island both economically and diplomatically.

Taiwan's economic growth climbed to a 23-year high last year and Taiwan has not lost any diplomatic allies under Ma. His critics counter that he has sacrificed Taiwan's de facto independence, particularly through a sweeping free trade pact with China.

Siew, who was also prime minister from 1997-2000, rejected criticism that Taiwan pursued "checkbook diplomacy" in Central America, where some former officials have been accused of receiving illegal payments from Taipei.

"It's an erroneous image," said Siew, who blamed the notion on the tensions that existed with China.

Taiwanese aid "must comply with principles of transparency" and is subject to review by its Congress, the press and auditors.

"So this is in no way a checkbook diplomacy," said Siew.

But he said his government will continue to provide help to "further improve the quality of life of the peoples of Central America."

China has promised assistance to countries that reject Taiwan. After Costa Rica severed ties to Taipei, China quickly reached a free trade pact with the country and donated a new national stadium valued at $100 million.

China refuses diplomatic ties with countries that recognize Taiwan but has maintained other relations with the island's allies. China has offered credit to Honduras and earthquake relief to Haiti, even though both recognize Taipei.

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