Taiwan’s Response to Growing East Asian Regionalism
Introduction
Taiwan shone on the international stage in 2020, with a particularly exemplary handling of COVID-19, leading to only 7 deaths in a population of 24 million without having to impose lockdown measures[1]. This has attracted sympathy for its attempts to secure observer status at the WHO; however, its international status is far from secure. Its ambiguous international position and lack of diplomatic recognition derives from the PRC’s insistence on the ‘One China Policy’- that Taiwan is a province and not a sovereign nation-state, a view forced upon the large majority of governments and international organisations.[2]
This paper addresses Taiwan’s response to increasing East Asian regionalism and Chinese hostility in light of the precarious position of its ‘contested statehood’.
From Regionalisation To Regionalism
At the same time, the ideational forces that dictate the East Asian political economy equilibrium are changing as it transitions from a process of regionalisation to regionalism. Regionalisation is described as the growth of intra-regional economic linkages at a market level, where private sector activities are concentrated and help develop regional integration.[3] Regionalism describes integration and cooperation which is driven by public policy initiatives that originate with inter-government agreements and treaties.[4] It is likely that from the development of these international policy networks, common values, shared ideas and beliefs are formulated and provide fertile ground for a cooperative regional community.[5]
The 1997/8 Asian Financial Crisis acted as the catalyst for this evolution, as it led to the recognition that growing regional economic integration, the need for greater bargaining power with Western countries and the rise of China were best responded to with multilateral coordination between states, culminating in the linking of Northeast Asian and Southeast Asian countries as ASEAN plus three.[6] This has been extended to the ASEAN+6, the RCEP and the recent TPP agreement, which potentially lays important foundations for regional community-building in East Asia through coalesced regional policy networks, a more focused common regional economic interest and new region-wide organizational or institutional arrangements for managing relations more generally.[7]
What is particularly noteworthy is that the increasing regionalism of the East Asian communities is marked by an unusually high volume of preferential agreements. Although conventional wisdom assumes that they are driven by business interests; Ravenhill (2010) finds little evidence of such export-oriented interests and argues that political considerations have been the dominant driver of the observed evolution. This is supported by China’s proactive approach in crafting international agreements, as it would allow China to craft the economic direction of the region, enabling China to be a rule-maker not rule-taker in regional affairs. This is in line with its wider ability to use geoeconomic instruments to influence the balance of power and achieve its geopolitical objectives.
Although Taiwan’s economic relations with Southeast Asia were previously developed on bilateral terms, the more recently multilateral interactions are now the cornerstone of regional economic integration. Taiwan increasingly faces regional marginalisation by the significant external constraints placed upon it by the limited diplomatic space in which it has to administer its foreign relations.[8]
Chinese Hostility
Throughout Tsai Ing Wen’s first term in office, she continued a “de facto 92 Consensus” to manage cross-strait relations although she fundamentally rejects the one country, two systems principle; however this has done little to appease the Mainland. This is demonstrated by Beijing’s ‘wolf warrior’ approach to diplomacy, through acts such as continuous poaching of Taiwan’s diplomatic allies (7 of Taiwan’s 15 diplomatic allies have been eliminated since her inauguration 2016)[9], continued exclusion from international organisations and agreements, using China’s economic clout as a political tool and increasingly dispatching military aircrafts and vessels across the median line of the Taiwan strait, the de-facto border.[10] In response to President Tsai’s election, China has used a mixture of intimidation, pressure and coercion to constrain Taiwan, and it is likely that Taiwan will face greater diplomatic isolation and economic marginalisation in light of China’s growing presence and influence in global affairs[11].
Taiwan’s Coping Mechanisms + Contrast with China
For the reasons aforementioned and in order to reduce its economic dependence on the Mainland, Taiwan has had to look to other ways to integrate into the South and South-East Asian economies. Although the previous two presidents also called for businesses to diversify away from China and “go South”, Tsai Ing Wen’s flagship foreign policy, the New Southbound Policy also aims to enhance coordination in trade, technology, agriculture, medicine, education, and tourism.
The policy looks to strengthen the connection between Taiwan and the region by transitioning from a primarily business-focused enterprise to a “people-centred” relationship based on mutual understanding, with an emphasis on the joint development of human capital and resources.[12] It is designed to strengthen Taiwan’s multi-faceted relations and build sustainable relationships. By doing so, the policy also highlights areas that are often overlooked in traditional political-economic discussions by focusing on ‘softer’ and more people centred areas of collaboration as well by strengthening cultural, social and other non-economic forms of cooperation as well.[13]
Firstly, it gives prominence to a bilateral relationship rather than simply Taiwanese investment abroad. [14] This is in direct contrast with the Chinese tactics, with sections of the media describing Beijing’s tactics as “tantrum diplomacy” through pressuring hosts, walk-outs and other forms of aggressive negotiation.[15] Furthermore, the emphasis on projects that build personal working relationships with the recipient island states, as opposed to the PRC’s approach of investing in large construction projects (usually employing imported Chinese workers and materials) and resource extraction, will have a stronger economic benefit to the local economy and highlight the growing fear of excessive indebtness from Chinese ‘aid’.[16]
As the president and CEO of the Taiwan External Trade Development Council noted, the New Southbound Policy could only work if Taiwanese companies “develop multifaceted economic ties with their Southeast Asian partners, rather than just treating them as production and export platforms as they had in the past.”[17] For example, the ‘New Southbound Policy Promotion Plan’ includes the easing of visa restrictions for visitors from Southeast Asian nations, more scholarships for students, a point-based system to extend residency permits for professional and technical workers, as well as the creation of a parallel supervisory body, the ‘New Southbound Policy Office’; and the President has also affirmed Taiwan’s continued desire to assist Southeast Asian countries infrastructure projects and development programmes by setting up a $3.5 billion fund.[18] The graph below uses the number of foreign visitor arrivals by residence as in indicator of the increasingly ‘people-centred’ relationship.
Conclusion
Taiwan’s interest in East and South Asia is focused on mitigating Chinese pressure and leveraging the region’s support to win global recognition as well as reducing the economic dependence on China.[19] Under Tsai, for the first time, economic and social considerations have matched the political purpose of a Taiwanese “Go South” strategy; however there considerable challenges to overcome. Taiwan cannot have its politico-economic interests marginalised and face East Asia’s new regional political economy in isolation. It will have to consistently look for and capitalise on new opportunities in the region, as well as engaging India, Japan, the US and others with parallel interests in the region to relive the predicaments its ‘contested statehood’ brings.[20]
Bibliography
Black, Lindsay (2019) “Evaluating Taiwan’s New Southbound Policy : Going South or Going Sour?” Asian Survey 59 (2): 246–271.
Bush, Richard (2019) “From persuasion to coercion: Beijing’s approach to Taiwan and Taiwan’s response” Report for Brookings
Chen, Juliana W. (2007) “Achieving Supreme Excellence: How China is Using Agreements with ASEAN to Overcome Obstacles to Its Leadership in Asian Regional Economic Integration,” Chicago Journal of International Law: Vol. 7: No. 2, Article 16.
Chen, Tan-sun (April 2018)The New Southbound Policy and Taiwan’s Role in Facilitating Grassroots Connections in the Indo-Pacific Region “Prospect Journal No.19
Dent, C. (2005). Taiwan and the New Regional Political Economy of East Asia. The China Quarterly,182, 385-406. doi:10.1017/S030574100500024X
https://international.thenewslens.com/article/83571
https://www.aljazeera.com/news/2021/1/2/cheap-trick-china-rebuffs-taiwans-latest-offer-for-talkshttps://www.economist.com/the-economist-explains/2020/05/17/why-taiwan-is-not-recognised-on-the-international-stage
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Kim, S. (2004). Regionalization and Regionalism in East Asia. Journal of East Asian Studies,4(1), 39-67. doi:10.1017/S1598240800004380
Roy, Dennis (2019) “Taiwan’s Potential Role in the Free and Open Indo-Pacific Strategy
Convergence in the South Pacific” NBR Special Report no. 77
Footnotes
[1] https://www.ft.com/content/72b3f67b-c5a4-44b4-897e-96121b94c825
[2] https://www.economist.com/the-economist-explains/2020/05/17/why-taiwan-is-not-recognised-on-the-international-stage
[3] Dent, C. (2005). Taiwan and the New Regional Political Economy of East Asia
[4] Dent, C. (2005). Taiwan and the New Regional Political Economy of East Asia
[5] Dent, C. (2005). Taiwan and the New Regional Political Economy of East Asia
[6] Kim, S. (2004). Regionalization and Regionalism in East Asia
[7] Dent, C. (2005). Taiwan and the New Regional Political Economy of East Asia
[8] Dent, C. (2005). Taiwan and the New Regional Political Economy of East Asia
[9] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7102519/
[10]https://www.aljazeera.com/news/2021/1/2/cheap-trick-china-rebuffs-taiwans-latest-offer-for-talks
[11] Bush, Richard (2019) “From persuasion to coercion: Beijing’s approach to Taiwan and Taiwan’s response” Report for Brookings
[12] Chen, Tan-sun (April 2018)The New Southbound Policy and Taiwan’s Role in Facilitating Grassroots Connections in the Indo-Pacific Region “Prospect Journal No.19
[13] Chen, Tan-sun (April 2018)The New Southbound Policy and Taiwan’s Role in Facilitating Grassroots Connections in the Indo-Pacific Region “Prospect Journal No.19
[14] Black, Lindsay (2019) “Evaluating Taiwan’s New Southbound Policy : Going South or Going Sour?”
[15] Roy, Dennis (2019) “Taiwan’s Potential Role in the Free and Open Indo-Pacific Strategy Convergence in the South Pacific” NBR Special Report no. 77
[16] Roy, Dennis (2019) “Taiwan’s Potential Role in the Free and Open Indo-Pacific Strategy Convergence in the South Pacific” NBR Special Report no. 77
[17] Black, Lindsay (2019) “Evaluating Taiwan’s New Southbound Policy : Going South or Going Sour?”
[18] https://international.thenewslens.com/article/83571
[19] Roy, Dennis (2019) “Taiwan’s Potential Role in the Free and Open Indo-Pacific Strategy Convergence in the South Pacific” NBR Special Report no. 77
[20] Dent, C. (2005). Taiwan and the New Regional Political Economy of East Asia
