China hopes the Paraguayan government will "stand on the right side of history," Foreign Ministry spokeswoman Mao Ning said at a press conference on Thursday.
Paraguayan President Santiago Peña said this week that he is "totally open" to trade deals with China through the Mercosur trade bloc, despite his country's diplomatic ties with Taiwan.
Paraguay's long-standing diplomatic support for Taiwan has hampered local farmers' grain exports to China, which claims sovereignty over the democratically ruled island. Paraguay is the only South American country with formal relations with Taiwan, which opposes China's sovereignty claims.
Mercosur, which includes Brazil, Argentina and Uruguay, is in negotiations to finalize a trade agreement with the European Union, but is also discussing a possible trade deal with China.
"Our position with China is one of total openness," said Peña regarding Paraguay's position in Mercosur, adding that the obstacle was that China did not accept the recognition of Taiwan.
"We are in favour of moving forward on trade agreements," he added in an interview with Reuters.
China hopes the Paraguayan government will "stand on the right side of history," Foreign Ministry spokeswoman Mao Ning said at a press conference on Thursday.
Mao said China considers trade and economic cooperation with Mercosur nations and other Latin American countries to be important.
Taiwan's Foreign Ministry countered that Pena has repeatedly and publicly expressed his support for relations between the two countries, and that his consistent support for Taiwan cannot be questioned.
"Given China's habit of unfairly dumping products in other countries, we believe that Mercosur member countries will carefully evaluate their economic and trade relations with China," it said in a statement.
Mercosur authorities held talks with their Chinese counterparts on August 12 in the capital of Uruguay.
"I see caution on the part of Brazil," Peña said of a possible agreement with China, which he said he supports. "I think that the most interested party is Uruguay and we are continuing this effort to speak as a bloc."
