Strategically Taiwan is a part of the West Pacific community. But we are usually limited in our perspective to the antagonism between Taiwan and China, which leads us to see Taiwan as an politically isolated island. This political antagonism has covered up Taiwan's true role in this region.
Since Taiwan is an integral part of the chain of islands in the Western Pacific, her geographic status must be considered like the other islands in Southeast Asia. When the Western colonial powers penetrated Asia in the 16th century, Taiwan was thought of, like the other islands, as a commercial stop on the way to do business with China.
The Western powers couldn't easily directly access gain access to China's coast, because China suspected their intentions, worried that they would seek control Chinese markets and commercial interests, even threaten the dynastic system. Therefore Western merchants and soldiers established a series of bridgehead ports they could use to conduct the China trade.
These ports stretched from the Malay peninsula along the coast of Indo-China to the Indonesian archipelago, the Philippines archipelago and the southeast coast of China.
They included ports such as Malacca, Singapore, Palembang, Jakarta, Sulu, Cebu, Manila, Tourane (now Da Nang), Hong Kong, Macau, Makung (in Pescadores) and Keelung (in Taiwan). All were also important commercial stations for the trade between Southeast Asian countries and China.
So, from a geopolitical perspective, Taiwan has been utilized since the 17th century as a commercial bridgehead port -- first by Holland, then Spain and then England -- for commerce with China. Southeast Asian countries shared this experience. Most were occupied, sometimes successively, by either Portugal, Holland, Spain, England and France -- and were intentionally developed as a raw materials export-oriented economies by the colonial powers.
Thus, the pattern of Taiwan's colonial development thus resembles that of Southeast Asia from the 17th century to World War II.
`go SOUTH' POLICY
Nowadays, Taiwan has established very close economic relations with the Southeast Asian countries. Since 1994, under the "Go South" policy, Taiwan has encouraged investment in Southeast Asia, especially the creation of industrial parks in the Philippines, Indo-nesia, and Vietnam. Even though this policy suffered from the Asian financial crisis of 1997, Taiwanese investors have regained their confidence in Malaysia, Thailand and Vietnam.
According to statistics provided by Southeast Asian countries, the cumulative total of investment by Taiwanese businesses in Southeast Asia reached US$40 billion in 1999. In that year, the amount of bilateral trade between Taiwan and Southeast Asia was US$26.59 billion.
In 1981, Malaysian Prime Minister Mahathir Mohamad advocated a "Look East" policy as a way of securing capital and technology from Japan, South Korea and Taiwan. Malaysia also wanted to encourage its people to develop new techniques and management skills for the industrial sector and strengthen its workers' work ethics.
Two decades later, Taiwan, under the "Go South" policy, is returning capital and the skill for managing small and medium enterprises to Southeast Asia. Such reciprocal exchange will continue into the coming decades, quite conceivably contributing indirectly to the projected realization of the Asian Free Trade Association (AFTA) by 2002.



