The COUNTRY of Sao Tome and Principe is little known to most people on the Chinese mainland and Taiwan.

Economically, the tiny West African nation, ranked 186th among the world’s top 191 economies in gross domestic product, has little in common with either China, the world’s second largest economy or Taiwan, an Asian economic miracle that ranks 22nd in the world according to the International Monetary Fund.

Politically, the island country with a population of less than 200,000 has little influence on the international stage except for its voting rights at the United Nations and other international organisations.

But the former Portuguese colony recently switched its ties from Taipei to Beijing, a move that might denote a bomb at the heart of a diplomatic battlefield across the Taiwan Strait.

Often small nations try to weigh the economic pros and cons of maintaining diplomatic ties with either Beijing or Taipei. In this case, the switch was an apparent result of Taipei’s rejection of Sao Tome and Principe’s request for US$215 million in aid to help tackle its financial woes.

Any strategy by Beijing to leave Taiwan stripped of allies may well backfire

For decades, Beijing and Taipei competed for recognition as the country named “China”, but when the United States switched its support and formally established diplomatic relations with Beijing in 1979, it triggered a worldwide scramble for diplomatic recognition. Beijing and Taipei then engaged in a kind of money diplomacy, renting recognition from economically fragile nations in the Caribbean, Central America, Pacific and Africa. The heated competition continued until 2009, when Ma Ying-jeou, of the unification-leaning Kuomintang, or KMT, took office.

Many analysts now fear this latest incident may trigger another such domino effect, signalling an end to an eight-year diplomatic truce between the political rivals across the strait.

Speculation is rife that the Vatican, Panama, or one of the South American countries that President Tsai Ing-wen is visiting next month may become the next of Taiwan’s 21 allies to sever diplomatic ties.

The contest might also serve as a prelude to an intensifying rivalry between US and China, as a more combative new US administration takes office.

The diplomatic establishment in Beijing fears President-elect Donald Trump might alter Washington’s longstanding China policy, following his telephone chat with Tsai and his public questioning of Beijing’s cherished “one-China” policy.

Also last week, President Barack Obama signed the National Defence Authorisation Act for next year, which for the first time included a section on senior military exchanges with Taiwan.

Taiwan warns of rising threat as PLA warships conduct drill

Beijing has ratcheted up the pressure on all fronts – economically, diplomatically, politically and militarily – on Taiwan since Tsai, a member of the independence-leaning Democratic Progressive Party, took office in May. Her administration refuses to endorse Beijing’s “one-China” policy. Beijing has cut off official channels of communication, reduced the number of mainland tourists to Taiwan and shut Taipei out of international health, police and aviation meetings. Beijing also stepped up military intimidation, sending a series of fighter jets close to Taiwan and warships to sail around the island recently.

It seems legitimate for Beijing to blame Tsai for her administration’s refusal to accept a policy that had helped improve ties in recent years.

With superior resources at its disposal, Beijing would likely win any war against Taiwan, cold or hot. However, such fights would destabilise the Taiwan Strait and run counter to Beijing’s often-stated goal of pushing for the peaceful development of cross-strait relations.

Even worse, to suppress Taiwan’s international presence and make its people feel humiliated would harm China’s own stated strategy, making its goal of national unification even more remote.

Cary Huang, a senior writer with the South China Morning Post, has been a China affairs columnist since the 1990s