[5] [6] When Paraguay and Taiwan began relations, Alfredo Stroessner ordered the construction of a statue of Taiwanese leader Chiang Kai-Shek as a showing of friendship.

[7] The ouster of Stroessner in 1989, and his successor Andrés Rodríguez's reinventing himself as a democratically elected president, were immediately followed by invitations from the People's Republic of China to switch diplomatic recognition.

"While commercial ties increase, China may be gaining other forms of leverage over Paraguay; pro-China rumblings surfaced in late 2019 largely from meat producers whose market can be curtailed through phytosanitary regulations.

[11] However, in the fall of 2008, the recently elected Paraguayan president Fernando Lugo (whose inauguration, just a few days previously, had been attended by Taiwan's Ma Ying-jeou[12]) announced that his country would not do so at the 63rd annuals session of the General Assembly.

[4] Under President Mario Abdo Benítez, in office since August 2018, Paraguay has emphasized a pro-Taiwan policy while also seeking commercial opportunities with the PRC.

Long and Urdinez note that the PRC's growth increased Paraguay's opportunity costs, especially in the form of lost loans and investments from mainland China during the commodities boom.

In response to arguments that recognizing the People's Republic was economically necessary, "Key Paraguayan elites have proactively pushed back against the idea that a change in recognition is inevitable or beneficial.

"[24] On April 17, 2020, in the midst of the COVID-19 pandemic, a group of Paraguayan senators advanced a bill to urge the president to shift Paraguay's recognition of China from Taipei to Beijing.

Proponents argued that the PRC would provide greater medical aid to Paraguay, something the ROC contested by increasing its own provision of assistance after declaring that they would suspend relations between the countries.