Tag Archives: Donald Trump

U.S. Senate approves measure launching Obamacare repeal process

The federal government forms for applying for health coverage are seen at a rally held by supporters of the Affordable Care Act, widely referred to as "Obamacare", outside the Jackson-Hinds Comprehensive Health Center in Jackson, Mississippi, U.S

By Susan Cornwell

WASHINGTON (Reuters) – The U.S. Senate on Thursday took a first concrete step toward dismantling Obamacare, voting to instruct key committees to draft legislation repealing President Barack Obama’s signature health insurance program.

The resolution, passed in the early hours of Thursday in a 51-48 vote, now goes to the House of Representatives, which is expected to vote on it this week. Scrapping Obamacare is a top priority for Republican President-elect Donald Trump and the Republican majorities in both chambers.

Republicans have said the process of repealing Obamacare could take months, and developing a replacement plan could take longer. But they are under pressure from Trump to act fast after he said on Wednesday that the repeal and replacement should happen “essentially simultaneously.”

Some 20 million previously uninsured Americans gained health coverage through the Affordable Care Act, as Obamacare is officially called. Coverage was extended by expanding Medicaid and through online exchanges where consumers can receive income-based subsidies.

Republicans have launched repeated legal and legislative efforts to unravel the law, criticizing it as government overreach. They say they want to replace it by giving states, not the federal government, more control.

But in recent days some Republicans have expressed concern about the party’s current strategy of voting for a repeal without having a consensus replacement plan ready.

House Speaker Paul Ryan said this week he wants to pack as many replacement provisions as possible into the legislation repealing Obamacare. But Senate Finance Committee Chairman Orrin Hatch, also a Republican, said that could be difficult under Senate rules.

The resolution approved Thursday instructs committees of the House and Senate to draft repeal legislation by Jan. 27. Both chambers will then need to approve the resulting legislation before any repeal goes into effect.

Senate Republicans are using special budget procedures that allow them to repeal Obamacare by a simple majority so that they will not need Democratic votes. Republicans have 52 votes in the 100-seat Senate. One Republican, Senator Rand Paul, voted no on Thursday.

Democrats mocked the Republican effort, saying Republicans have never united around an alternative to Obamacare. “They want to kill ACA but they have no idea how they are going to bring forth a substitute proposal,” said Senator Bernie Sanders of Vermont, an independent who caucuses with the Democrats.

On Wednesday, Trump said he would submit a replacement plan as soon as his nominee to lead the Health and Human Services Department, Representative Tom Price, is approved by the Senate. Trump gave no details.

Trump senior adviser Kellyanne Conway praised lawmakers for clearing the way for repeal and said the replacement effort will likely tackle medication costs.

“To repeal and replace Obamacare and not have a conversation about drug pricing seems not like a very reasonable prospect and not (a) responsible prospect,” Conway told Bloomberg Television on Thursday, one day after Trump targeted the pharmaceutical industry, a traditional Republican ally.

Democrats passed the Affordable Care Act in 2010 over united Republican opposition. Democrats say the act is insuring more Americans and helping to slow the growth in healthcare spending.

But Republicans say the system is not working. The average Obamacare premium is set to rise 25 percent in 2017.

(Reporting by Susan Cornwell; Additional reporting by Susan Heavey; Editing by Nick Macfie and Bill Trott)

Global stocks and dollar firmer as Trump news conference approaches

London Stock Exchange

By Vikram Subhedar

LONDON (Reuters) – World stocks and the dollar rose before a news conference by U.S. President-elect Donald Trump in which he is expected to give more details about his plans for the U.S. economy.

Trump’s campaign calls for tax cuts and more infrastructure spending have boosted U.S. shares and the dollar, but his protectionist statements and a flurry of off-the-cuff Tweets have kept many investors from adding to risky positions.

The UK’s FTSE 100 was poised for a record twelfth straight day of gains while European shares rose 0.2 percent.

Stock futures on Wall Street were 0.1 percent firmer though the post-U.S. election rally is showing signs of running out of steam.

Trump has vowed to label China a currency manipulator on his first day in office on Jan. 20 and has threatened to slap huge tariffs on imports from China.

U.S. House of Representatives Speaker Paul Ryan and top members of Trump’s transition team are discussing a controversial plan to tax imports.

Economists have warned that protectionist measures could stifle international trade and hurt global growth.

That brings Trump’s press conference, scheduled for 11:00 EST, into sharp focus.

“From a currency perspective, markets will aim to get a clearer picture on trade, fiscal stimulus and the new administration’s relationship to the Fed,” Morgan Stanley strategists wrote in a note to clients.

The dollar inched higher against the yen on Wednesday but was 0.4 percent firmer against the basket of currencies used to measure its broader strength.

The dollar has gained broadly since Trump’s election in November as investors bet he would boost public spending and spur repatriation of overseas funds by U.S. companies as well as higher inflation and interest rates.

But more doubts have emerged in recent weeks about that narrative, and investors will have a close eye on what the new president says about trade and relations with China.

Bank of America-Merrill Lynch strategists warned on Wednesday that a worrying consensus has developed in financial markets with analysts and investors overwhelmingly bearish on bonds and positive on developed market stocks, financials and the U.S. dollar.

Sterling meanwhile edged towards a 10-week low against the dollar on Wednesday, kept under pressure by fears that Britain will undergo a “hard” exit from the EU in which access to the single market will play second fiddle to immigration controls.

The Turkish lira fell to new lows despite efforts by the country’s central bank to support it with pressures piling on the economy.

An auction of German debt was expected to go down well with investors looking for safe havens. Portuguese yields held near 11-month highs as the country prepared for its toughest bond sale in years.

In commodity markets, oil rose, lifted by reports of Saudi supply cuts to Asia, but gains were capped by a lack of detail about the reductions and because of signs of rising supplies from other producers.

Prices for Brent futures LCOc1, the international benchmark for oil prices, were trading at $53.94 per barrel at 1200 GMT, up 30 cents from their previous close.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $51.11 a barrel, up 29 cents.

(Editing by Hugh Lawson and Toby Chopra)

Chinese bomber flies round contested Spratlys in show of force: U.S. official

Chinese vessels in South China Sea

WASHINGTON (Reuters) – A Chinese H-6 strategic bomber flew around the Spratly Islands at the weekend in a new show of force in the contested South China Sea, a U.S. official said on Tuesday.

It was the second such flight by a Chinese bomber in the South China Sea this year. The first was on Jan. 1, said the official, who spoke on condition of anonymity.

The flight could be seen as a show of “strategic force” by the Chinese, the official said.

It comes after U.S. President-elect Donald Trump has signaled a tougher approach to China when he takes office on Jan. 20, with tweets criticizing Beijing for its trade practices and accusing it of failing to help rein in nuclear-armed North Korea.

Commander Gary Ross, a Pentagon spokesman, said he had no specific comment on China’s recent bomber activities, but added: “we continue to observe a range of ongoing Chinese military activity in the region‎.”

In December, China flew an H-6 bomber along the “nine-dash line” it uses to map its claim to nearly all of the South China Sea, a strategic global trade route. That flight also went around Taiwan, which China views as a renegade province.

In August, China conducted “combat patrols” near contested islands in the South China Sea.

Trump has enraged Beijing by breaking with decades of U.S. policy and speaking to the Taiwanese president by telephone.

A state-run Chinese newspaper warned Donald Trump on Sunday that China would “take revenge” if he reneged on the U.S. one-China policy, only hours after Taiwan’s president made a controversial stopover in Houston.

Last week China said that a group of Chinese warships led by its sole aircraft carrier was testing weapons and equipment in exercises this week in the South China Sea, where territory is claimed by several regional states.

U.S. warships conducted what they call “freedom of navigation” patrols through the South China Sea over the past year amid growing concern about Chinese construction of air strips and docks on disputed reefs and islands.

(Reporting by Idrees Ali and David Brunnstrom; Editing by James Dalgleish)

Chinese state tabloid warns Trump, end one China policy and China will take revenge

Taiwan President Tsai Ingwen visiting Texas

By Brenda Goh and J.R. Wu

SHANGHAI/TAIPEI (Reuters) – State-run Chinese tabloid Global Times warned U.S. President-elect Donald Trump that China would “take revenge” if he reneged on the one-China policy, only hours after Taiwan’s president made a controversial stopover in Houston.

Taiwan President Tsai Ing-wen met senior U.S. Republican lawmakers during her stopover in Houston on Sunday en route to Central America, where she will visit Honduras, Nicaragua, Guatemala and El Salvador. Tsai will stop in San Francisco on Jan. 13, her way back to Taiwan.

China had asked the United States not to allow Tsai to enter or have formal government meetings under the one China policy.

Beijing considers self-governing Taiwan a renegade province ineligible for state-to-state relations. The subject is a sensitive one for China.

A photograph tweeted by Texas Governor Greg Abbott shows him meeting Tsai, with a small table between them adorned with the U.S., Texas and Taiwanese flags. Tsai’s office said on Monday she also spoke by telephone with U.S. senator John McCain, head of the powerful Senate Committee on Armed Services. Tsai also met Texas Senator Ted Cruz.

“Sticking to (the one China) principle is not a capricious request by China upon U.S. presidents, but an obligation of U.S. presidents to maintain China-U.S. relations and respect the existing order of the Asia-Pacific,” said the Global Times editorial on Sunday. The influential tabloid is published by the ruling Communist Party’s official People’s Daily.

Trump triggered protests from Beijing last month by accepting a congratulatory telephone call from Tsai and questioning the U.S. commitment to China’s position that Taiwan is part of one China.

“If Trump reneges on the one-China policy after taking office, the Chinese people will demand the government to take revenge. There is no room for bargaining,” said the Global Times.

Cruz said some members of Congress had received a letter from the Chinese consulate asking them not to meet Tsai during her stopovers.

“The People’s Republic of China needs to understand that in America we make decisions about meeting with visitors for ourselves,” Cruz said in a statement. “This is not about the PRC. This is about the U.S. relationship with Taiwan, an ally we are legally bound to defend.”

Cruz said he and Tsai discussed upgrading bilateral relations and furthering economic cooperation between their countries, including increased access to Taiwan markets that would benefit Texas ranchers, farmers and small businesses.

Chinese Foreign Ministry spokesman Lu Kang on Monday urged “relevant U.S. officials” to handle the Taiwan issue appropriately to avoid harming China-U.S. ties.

“We firmly oppose leaders of the Taiwan region, on the so-called basis of a transit visit, having any form of contact with U.S. officials and engaging in activities that interfere with and damage China-U.S. relations,” Lu said.

In a dinner speech Saturday to hundreds of overseas Taiwanese, Tsai said the United States holds a “special place in the hearts of the people of Taiwan” and that the island via bilateral exchanges has provided more than 320,000 jobs directly and indirectly to the American people, her office said on Monday.

Tsai said Taiwan looked to create more U.S. jobs through deeper investment, trade and procurement.

Tsai’s office said James Moriarty, chairman of the American Institute in Taiwan, which handles U.S.-Taiwan affairs in the absence of formal ties, told the Taiwan president in Houston that the United States was continuing efforts to persuade China to resume dialogue with Taiwan.

China is deeply suspicious of Tsai, who it thinks wants to push for the formal independence of the island.

The Global Times, whose stance does not equate with government policy, also targeted Tsai in the editorial, saying that the mainland would likely impose further diplomatic, economic and military pressure on Taiwan, warning that “Tsai needs to face the consequences for every provocative step she takes”.

“It should also impose military pressure on Taiwan and push it to the edge of being reunified by force, so as to effectively affect the approval rating of the Tsai administration.”

(Reporting by Brenda Goh in Shanghai, J.R. Wu in Taipei, and Michael Martina in Beijing; Editing by Michael Perry, Robert Birsel)

After U.S. intel report on Putin, British government launches cyber security review

Man typing on keyboard representing cyber security threats

LONDON (Reuters) – The British government said on Monday it is launching a national inquiry into cyber security to assess the extent to which the UK is protected from an ever-increasing tide of attacks worldwide.

The inquiry comes only two days after U.S. intelligence agencies said Russian president Vladimir Putin ordered an effort to help U.S president-elect Donald Trump’s electoral chances by discrediting Hillary Clinton in the 2016 U.S. presidential campaign.

“Attention has recently focused on the potential exploitation of the cyber domain by other states and associated actors for political purposes,” said Margaret Beckett, chair of parliament’s joint committee on national security strategy.

“But this is just one source of threat that the government must address,” she added, in a statement.

Cyber attacks in the UK have been on the rise, with businesses such as banks and retailers increasingly becoming targets for hackers.

Reported attacks on financial institutions in Britain rose from just five in 2014 to 75 in the year to October 2016, data from Britain’s Financial Conduct Authority (FCA) show. Last year, retailer Tesco’s banking arm suffered an attack which saw some 2.5 million pounds stolen from 9,000 current accounts.

The inquiry will look at issues including the types of cyber threats faced by the UK, the extent of human, financial and technical capital committed to address threats, and the development of offensive cyber capabilities.

The inquiry forms part of the second National Cyber Security Strategy launched in November last year, which has a total budget of 1.9 billion pounds running from 2016 to 2021.

(Reporting by Ritvik Carvalho; editing by Stephen Addison)

U.S. says Navy ship fired warning shots at Iranian vessels

By Idrees Ali

WASHINGTON (Reuters) – A U.S. Navy destroyer fired three warning shots at four Iranian fast-attack vessels after they closed in at a high rate of speed near the Strait of Hormuz, two U.S. defense officials told Reuters on Monday.

The incident, which occurred Sunday and was first reported by Reuters, comes as U.S. President-elect Donald Trump prepares to take office on Jan. 20. In September, Trump vowed that any Iranian vessels that harass the U.S. Navy in the Gulf would be “shot out of the water.”

The officials, speaking on the condition of anonymity, said the USS Mahan established radio communication with the Islamic Revolutionary Guard Corps boats but they did not respond to requests to slow down and continued asking the Mahan questions.

The Navy destroyer fired warning flares and a U.S. Navy helicopter also dropped a smoke float before the warning shots were fired.

The Iranian vessels came within 900 yards (800 meters) of the Mahan, which was escorting two other U.S. military ships, they said.

The IRGC and Trump transition team were not immediately available for comment.

Years of mutual animosity eased when Washington lifted sanctions on Tehran last year after a deal to curb Iran’s nuclear ambitions. But serious differences still remain over Iran’s ballistic missile program as well as conflicts in Syria and Iraq.

One official said similar incidents occur occasionally.

Most recently in August, another U.S. Navy ship fired warning shots towards an Iranian fast-attack craft that approached two U.S. ships.

In January 2016, Iran freed 10 U.S. sailors after briefly detaining them in the Gulf.

The official added that the warning shots fired on Sunday were just one of seven interactions the Mahan had with Iranian vessels over the weekend, but the others were judged to be safe.

(Reporting by Idrees Ali; Editing by Mohammad Zargham, Chizu Nomiyama and Paul Simao)

U.S. intelligence study warns of growing conflict risk

US Soldier walks in front of tank in Iraq

By Jonathan Landay

WASHINGTON (Reuters) – The risk of conflicts between and within nations will increase over the next five years to levels not seen since the Cold War as global growth slows, the post-World War Two order erodes and anti-globalization fuels nationalism, said a U.S. intelligence report released on Monday.

“These trends will converge at an unprecedented pace to make governing and cooperation harder and to change the nature of power – fundamentally altering the global landscape,” said “Global Trends: Paradox of Progress,” the sixth in a series of quadrennial studies by the U.S. National Intelligence Council.

The findings, published less than two weeks before U.S. President-elect Donald Trump takes office on Jan. 20, outlined factors shaping a “dark and difficult near future,” including a more assertive Russia and China, regional conflicts, terrorism, rising income inequality, climate change and sluggish economic growth.

Global Trends reports deliberately avoid analyzing U.S. policies or choices, but the latest study underscored the complex difficulties Trump must address in order to fulfill his vows to improve relations with Russia, level the economic playing field with China, return jobs to the United States and defeat terrorism.

The National Intelligence Council comprises the senior U.S. regional and subject-matter intelligence analysts. It oversees the drafting of National Intelligence Estimates, which often synthesize work by all 17 intelligence agencies and are the most comprehensive analytic products of U.S intelligence.

The study, which included interviews with academic experts as well as financial and political leaders worldwide, examined political, social, economic and technological trends that the authors project will shape the world from the present to 2035, and their potential impact.

‘INWARD-LOOKING WEST’

It said the threat of terrorism would grow in coming decades as small groups and individuals harnessed “new technologies, ideas and relationships.”

Uncertainty about the United States, coupled with an “inward-looking West” and the weakening of international human rights and conflict prevention standards, will encourage China and Russia to challenge American influence, the study added.

Those challenges “will stay below the threshold of hot war but bring profound risks of miscalculation,” the study warned. “Overconfidence that material strength can manage escalation will increase the risks of interstate conflict to levels not seen since the Cold War.”

While “hot war” may be avoided, differences in values and interests among states and drives for regional dominance “are leading to a spheres of influence world,” it said,

The latest Global Trends, the subject of a Washington conference, added that the situation also offered opportunities to governments, societies, groups and individuals to make choices that could bring “more hopeful, secure futures.”

“As the paradox of progress implies, the same trends generating near-term risks also can create opportunities for better outcomes over the long term,” the study said.

THE HOME FRONT

The report also said that while globalization and technological advances had “enriched the richest” and raised billions from poverty, they had also “hollowed out” Western middle classes and ignited backlashes against globalization. Those trends have been compounded by the largest migrant flows in seven decades, which are stoking “nativist, anti-elite impulses.”

“Slow growth plus technology-induced disruptions in job markets will threaten poverty reduction and drive tensions within countries in the years to come, fueling the very nationalism that contributes to tension between counties,” it said.

The trends shaping the future include contractions in the working-age populations of wealthy countries and expansions in the same group in poorer nations, especially in Africa and South Asia, increasing economic, employment, urbanization and welfare pressures, the study said.

The world will also continue to experience weak near-term growth as governments, institutions and businesses struggle to overcome fallout from the Great Recession, the study said.

“Major economies will confront shrinking workforces and diminishing productivity gains while recovering from the 2008-09 financial crisis with high debt, weak demand, and doubts about globalization,” said the study.

“China will attempt to shift to a consumer-driven economy from its longstanding export and investment focus. Lower growth will threaten poverty reduction in developing counties.”

Governance will become more difficult as issues, including global climate change, environmental degradation and health threats demand collective action, the study added, while such cooperation becomes harder.

(Reporting by Jonathan Landay; Editing by John Walcott and Peter Cooney)

California lawmakers hire Holder for fights with Trump

Harold Pratt

LOS ANGELES (Reuters) – Democratic lawmakers in the California legislature said on Wednesday they retained former U.S. Attorney General Eric Holder to help in any legal battles with President-elect Donald Trump’s administration.

The move is more evidence that lawmakers in the nation’s most populous state, where Democrats hold two-thirds majorities in both houses of the legislature, are girding for possible court battles after Trump takes office on Jan. 20.

Last month, leaders of both houses introduced bills to protect undocumented immigrants from anticipated efforts by a Trump administration to increase deportations.

In addition, Democratic Governor Jerry Brown has made combating climate change a priority for the state.

“Mr. Holder and his team will serve as outside counsel to the Legislature, advising us in our efforts to resist any attempts to roll back the progress California has made,” Kevin de León, the Democratic leader of the state Senate, said in a statement.

A representative from de León’s office could not immediately be reached for comment.

Holder served as attorney general under President Barack Obama from 2009 to 2015. He is a partner in the law firm of Covington & Burling, which represents companies and helps them navigate government regulations.

“I am honored that the Legislature chose Covington to serve as its legal adviser as it considers how to respond to potential changes in federal law that could impact California’s residents and policy priorities,” Holder said in a statement.

California voted decisively for Democrat Hillary Clinton in the Nov. 8 presidential election, choosing the former first lady over Trump by 28 percentage points.

The hiring of Holder was reported earlier by the New York Times.

(Reporting by Alex Dobuzinskis and Dan Levine, editing by Larry King and Dan Grebler)

Kremlin says almost all dialogue with U.S. frozen: RIA

Kremlin spokesman

MOSCOW/WASHINGTON (Reuters) – The Kremlin said on Wednesday almost all communications channels between Russia and the United States have been frozen but the U.S. State Department disputed that statement.

Kremlin spokesman Dmitry Peskov said Russia did not expect the incoming U.S. administration to quickly reject enlargement of the North Atlantic Treaty Organization and that almost all communication with the United States had ceased, according to Russia’s RIA news agency.

U.S. President-elect Donald Trump questioned during his election campaign whether the U.S. should protect allies seen as spending too little on defense, raising fears he could withdraw funding for NATO at a time of heightened tensions with Moscow. Russia has said it would take countermeasures in response to any expansion of the 28-member military alliance.

“Almost every level of dialogue with the United States is frozen,” RIA quoted Peskov as saying. “We don’t communicate with one another, or (if we do) we do so minimally.”

State Department spokesman John Kirby quickly rejected Peskov’s statement.

‎”It’s difficult to know exactly what is meant by this comment, but diplomatic engagement with Russia continues across a wide range of issues,” Kirby said in an emailed statement to Reuters. “That we have significant differences with Moscow on some of these issues is well known, but there hasn’t been a break in dialogue.”

U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov spoke by phone on Tuesday regarding the situation in Syria, Kirby said.

Separately, the Pentagon said it had held a video conference with counterparts at the Russian defense ministry to ensure the two sides’ air operations do not come into conflict with each other in Syria. Such discussions with Russia are held regularly as U.S. warplanes conduct daily air strikes against Islamic State in Syria.

RIA, citing an interview it said Peskov gave to Russia’s Mir TV station, quoted him as saying he did not know whether President Vladimir Putin would seek re-election in 2018.

“Everyone’s heads are aching because of work and with projects and nobody is thinking or talking about elections,” Peskov said.

Most Kremlin-watchers expect Putin to run for the presidency again.

(Reporting by Peter Hobson in Moscow and Yeganeh Torbati and Lesley Wroughton in Washington; Editing by Andrew Osborn and Richard Chang)

Taiwan loses another ally, says won’t help China ties

Taiwan diplomats

By J.R. Wu and Ben Blanchard

TAIPEI/BEIJING (Reuters) – Taiwan accused China on Wednesday of using Sao Tome and Principe’s financial woes to push its “one China” policy after the West African state ended ties with the self-ruled island, with Taiwan saying China’s action would not help relations across the Taiwan Strait.

China’s claim to Taiwan have shot back into the spotlight since U.S. President-elect Donald Trump broke diplomatic protocol and spoke with Taiwan President Tsai Ing-wen this month, angering Beijing.

Trump has also questioned the “one China” policy which the United States has followed since establishing relations with Beijing in 1979, under which the United States acknowledges that Taiwan is part of China.

The election of Tsai from the pro-independence Democratic Progressive Party this year infuriated Beijing, which suspects she wants to push for the island’s formal independence, though she says she wants to maintain peace with China.

Taiwan Foreign Minister David Lee said Taipei would not engage in “dollar diplomacy” after Sao Tome’s decision.

“We think the Beijing government should not use Sao Tome’s financing black hole … as an opportunity to push its ‘one China’ principle,” Lee told a news conference in Taipei on Wednesday.

“This behavior is not helpful to a smooth cross-Strait relationship.”

Tsai held emergency meetings with cabinet officials and security advisers on Wednesday, and told her ministers:

“Foreign diplomacy is not a zero-sum game,” according to her office spokesman, Alex Huang.

Tsai’s office said in a statement China’s use of Sao Tome’s financial woes to push its “one China” policy would harm stability across the Taiwan Strait.

“This is absolutely not beneficial to the long-term development of cross-Strait relations,” it said.

China says Taiwan has no right to diplomatic recognition as it is part of China, and the issue is an extremely sensitive one for Beijing.

In Beijing, China welcomed Sao Tome’s decision, without explicitly saying it had established formal relations with the former Portuguese colony or making any mention of a request for financial aid.

“We have noted the statement from the government of Sao Tome and Principe on the 20th to break so-called ‘diplomatic’ ties with Taiwan. China expresses appreciation of this, and welcomes Sao Tome back onto the correct path of the ‘one China’ principle,” the foreign ministry said in a statement.

Ministry spokeswoman Hua Chunying declined to comment when asked when the two countries may exchange ambassadors, and dismissed a question on how much China may have offered Sao Tome to switch ties as being “very imaginative”.

Defeated Nationalist forces fled to Taiwan at the end of a civil war in 1949 and Beijing has never renounced the use of force to bring Taiwan under its control.

In Africa, only Burkina Faso and Swaziland now maintain formal ties with Taiwan. President Tsai will visit Central American allies Honduras, Nicaragua, Guatemala and El Salvador next month.

“We now have 21 allies left. We must cherish them,” Lee said.

China and Taiwan had for years tried to poach each other’s allies, often dangling generous aid packages in front of developing nations.

But they began an unofficial diplomatic truce after signing a series of landmark trade and economic agreements in 2008 following the election of the China-friendly Ma Ying-jeou as Taiwan’s president.

Sao Tome and Principe’s tiny island economy is heavily dependent on cocoa exports but its position in the middle of the oil-rich Gulf of Guinea has raised interest in its potential as a possible oil and gas producer.

Diplomatic sources in Beijing have previously said Sao Tome was likely high on China’s list of countries to lure away from Taiwan.

In 2013, Sao Tome said China planned to open a trade mission to promote projects there, 16 years after it broke off relations over Sao Tome’s diplomatic recognition of Taiwan.

(Editing by Lincoln Feast, Robert Birsel)