The defection of Panama on Tuesday leaves Taiwan with just 20 countries that formerly recognize it.

Most of these are small, impoverished nations like Palau in the South Pacific and Haiti in the Caribbean.

Panama's switch is a blow to the pro-independence government of Tsai Ing-wen.

And it highlights how China is deploying a mix of carrots and sticks to exploit the diplomatic vacuum left by president Donald Trump.

China has worked hard to neutralize oppositions to the military bases it built in the South China Sea.

Meanwhile, South Korea has suspended the deployment of the US-backed missile shield after an economic boycott by Beijing.

China claims that Taiwan is its territory.

Under threat of sanction from Beijing, most countries refuse to recognize Taiwan's government.

Diplomats expect more of Taiwan's allies to follow Panama's lead.

Taiwan is not likely to bend to Beijing's will anytime soon, but the pressure is increasing.

While Asian nations fret over President Trump's lack of commitment to the region,

China is exploiting the uncertainty to maximum advantage.

Ben Bland, Financial Times, Hong Kong.