Taiwan's Master Bus plans $30M electric-bus plant in Paraguay

Paraguay remains Taiwan’s only South American diplomatic ally

Taiwanese electric-bus manufacturer Master Bus is planning a roughly $30 million factory at the Taiwan-Paraguay Smart Technology Park in Minga Guazú, Paraguay’s Ministry of Industry and Commerce says. The ministry estimates the project could create 2,000 to 2,500 direct jobs, with Master Bus representatives having traveled to Paraguay in early September to advance the plans, according to a UPI opinion column by Thomas R. Field, regional representative for Latin America at the Global Peace Foundation.

The project comes as Paraguay faces renewed debate over whether to maintain diplomatic relations with Taiwan or switch recognition to Beijing. Paraguay is Taiwan’s only formal diplomatic partner in South America, yet some observers argue Asunción would benefit economically by recognizing China instead. Field wrote that he recently debated a Paraguayan economist who makes that case and that the argument deserves to be taken seriously.

Field outlined the core of the pro-recognition argument as advocates present it. At its heart is China’s sheer economic size: advocates say Paraguay denies its producers direct access to a vast market while already importing heavily from China. As Field summarized the advocates’ challenge, “Why recognize Taiwan, they ask, when nearly every major Latin American economy recognizes Beijing?”

Market size alone, Field wrote, is not the answer. He pointed to soybeans as evidence: China is the world’s largest importer, yet Paraguay has sold record volumes without diplomatic relations with Beijing. Through August, soybean exports reached 7.4 million tons, 2 million more than a year earlier. Field wrote that none of this makes the Chinese market irrelevant. The more useful question, he said, is what direct access would add and what Paraguay might surrender to obtain it — and that second part receives far less attention.

Taiwan, meanwhile, remains a major buyer of Paraguayan meat. In 2025, it was the third-largest beef market and the dominant pork destination, according to Field. In the first half of 2026, Taiwan took 12% of beef exports and 86% of pork exports, and opened to Paraguayan poultry in May.

Field also challenged the size argument on its own terms. “There is also a question of size,” he wrote. “The strongest argument for China is that it is enormous while Taiwan is small. But that asymmetry cuts both ways. Paraguay matters to Taiwan in a way it could never matter to China. For Taipei, Paraguay is its only formal diplomatic partner in South America. For Beijing, Paraguay would become one among many Latin American partners pursuing trade, investment and market access.”

Field pointed to Costa Rica as offering useful evidence, though he noted no two cases are identical. Costa Rica provides the longest-running example among countries that switched this century. It recognized Beijing in June 2007 and signed a free-trade agreement that took effect in 2011. Costa Rican exports to China stood at roughly $835 million in 2007 but fell to about $300 million by 2021, though part of that decline reflected Intel’s relocation of manufacturing operations. A proposed Chinese-backed oil refinery was abandoned, and the expansion of Route 32 accumulated years of delays. Costa Rica’s minister of foreign trade said publicly in April that he was dissatisfied with the country’s export performance in China under the free-trade agreement. Field concluded that diplomatic recognition does not by itself guarantee transformative investment or market access.

Chinese state-backed finance in Latin America has shifted. Lending by China’s two major policy banks fell sharply from earlier peaks before rebounding to $2.8 billion in 2024, the highest level in five years, Field wrote. Chinese commercial investment has increasingly targeted sectors such as electric vehicles, renewable energy and critical minerals. The picture, Field wrote, is not one of Chinese economic withdrawal but of a changing model of engagement.

The strategic dimension is equally important, Field argued. At a forum he convened in San José last year on Latin America’s place in the changing global order, China specialist Evan Ellis placed Beijing’s growing regional presence in a broader geopolitical context. The forum brought together former presidents, diplomats, and regional specialists to consider how Latin America should navigate intensifying competition among major powers.

Washington is watching that competition closely. U.S. Secretary of State Marco Rubio chose Latin America for his first overseas trip in February 2025, making Chinese influence a significant theme — particularly in Panama over the canal and in Costa Rica over 5G technology. Rubio publicly praised Costa Rican President Rodrigo Chaves’ government for restricting telecommunications procurement to trusted vendors, effectively excluding Chinese suppliers. Guatemala, another of Taiwan’s remaining diplomatic allies in the region, was also on the itinerary.

For Washington, Paraguay’s relationship with Taiwan gives the country strategic importance beyond its size, according to Field. A switch to Beijing would therefore be unlikely to be seen as a purely commercial decision, but rather as part of the wider competition over China’s political, technological and economic presence in the Western Hemisphere, he wrote.

Field also argued that none of this means Paraguay has reason to be satisfied with the economic side of its relationship with Taiwan. Taipei has often delivered cooperation more readily than large-scale private investment, he wrote, and Paraguayan producers are entitled to ask whether a partnership of such strategic importance is yielding enough in return. That question, he wrote, belongs in Taipei with the same seriousness that the China question is put to Asunción.

On May 8, Paraguayan President Santiago Peña and Taiwanese President Lai Ching-te signed seven agreements spanning technology, cybersecurity, trade, finance and other areas. The package included a memorandum for a sovereign artificial-intelligence computing center intended to combine Taiwanese technological expertise with Paraguay’s abundant energy resources. The Master Bus project adds an industrial component, while ongoing construction of the Taiwan-Paraguay Polytechnic University represents another substantial commitment to technology and human capital.

Field noted that these remain works in progress, with their ultimate value depending on implementation and the private investment they generate. That is precisely why Paraguay’s debate, he wrote, “cannot be reduced to sentiment on one side and market size on the other.”

China offers economic possibilities and Taiwan offers commercial ties, technological cooperation and strategic importance, Field concluded. The central question, he wrote, is not which economy is larger — that answer is obvious — but the harder question of what each can actually deliver.

Field has lived and worked in Latin America for more than four decades, including almost 20 years in Paraguay, and serves as president of the Latin America and Caribbean Presidential Mission.