Paraguay’s democratization process has been consolidated since the leader of Patriotic Alliance for Change （Alianza Patriótica para el Cambio） Fernando Lugo became the president. The continuing economic growth during past 6 consecutive years suspended in 2009 due to the impacts of financial crisis. Uruguay’s GDP experienced a negative growth rate of -3.5%. Exports shrank，inflation dropped as a symptom of recession，poverty and unemployment rates stood high. The sealed agreement on sharing the benefits of Itaipu power station with Brazil is supposed to be a stabilizer of bilateral ties. Paraguay does not support Taiwan’s efforts of returning to international organizations.