Less than 20 nations have formal diplomatic relations with Taiwan, owi

Magoosh Official Explanation:

A complicated question about the status of Taiwan and the One-China policy.

(A) First, there’s a mistake concerning countable/uncountable nouns. We can count nations and would ask “how many nations?”, not “how much nations?”, so we need to use “fewer,” as in “Fewer than 20 nation do not have . . .” Also, there’s a pronoun mistake: in the section saying that the PRC “claims it as part of its,” we have the same pronoun used for two different antecedents, a classic pronoun trap. The first “it” refers to Taiwan, and the second refers to the PRC. Because of these reasons, (A) is incorrect.

(B) This one has a glaring pronoun error. In the phrase “as a result of this,” the pronoun “this” refers to the entire action of the previous clause. That’s illegal: a pronoun is supposed to have a noun as an antecedent. A pronoun is not allowed to refer to the action of an entire clause. Such use of pronouns may be rampant in American colloquial speech, but it is forbidden on the GMAT. (B) is incorrect.

(C) This choice repeats the double pronoun mistake in (A): the PRC “claims it as part of its”—again, the same pronoun referring to two different antecedents. That’s wrong 100% of the time. (C) is incorrect.

(D) In the phrase “any nation that recognizes it,” the “it” is ambiguous. It has a different antecedent from that of the “its” earlier in the sentence. This is a pronoun problem. There’s also a misplaced modifier. The modifier “by refusing” grammatically suggests that the “fewer than 20 nations” are doing the refusing, but we can tell that the the sentence means to say that the PCR is doing this refusing. (D) is incorrect.

(E) This choice avoids pronouns for Taiwan, repeating the name instead. Everything is grammatically and logically clear.

Choice (E) is the best answer.