The Minister of Foreign Affairs of the Dominican Republic, Miguel Vargas, met with Chinese Vice President Wang Qishan this week. According to the Dominican Ministry of Foreign Affairs, Vargas and Qishan discussed an agreement to establish diplomatic relations between their two countries.

During their meeting, the two men also discussed opportunities for investment as well as trade, education, and tourism, among other topics.

“Our country recognizes the important role played by the People’s Republic of China in international and regional affairs,” said Vargas.

The decision to recognize the People’s Republic of China means that Taiwan, also known as the Republic of China, now only has formal relations with 19 countries. Panama switched recognition from Taiwan to China last November.

Taiwan’s government quickly condemned the Dominican Republic for its decision.

President Danilo Medina of the Dominican Republic has ignored our long-term partnership, the wishes of the people of the Dominican Republic, and the years of development assistance provided by Taiwan, to accept false promises of investment and aid by China,” said Taiwan’s minister of foreign affairs, Joseph Wu.

The decision appears to be in part driven by economic considerations, according to the Australian Broadcasting Corporation. An unnamed official in Taiwan’s Ministry of Foreign Affairs said that China offered $4.1 billion in investments, financial assistance, and low-interest loans to the Dominican Republic.

Using economic incentives to gain political recognition has been a common tactic used by both Chinas. For much of the 20th century, the government in Taipei was able to maintain recognition in the international community through “dollar diplomacy.”

However, the pendulum swings both ways. As the People’s Republic of China grew into an economic giant, it was able to offer better economic incentives than its rival.