The nation’s economy has suffered from a strong pro-China bias. Changing this means cutting down on dependence on China. The “new southbound policy” is one of the Democratic Progressive Party (DPP) administration’s antidotes, but because it is based on breaking away from a China-centric trade network, it was strongly criticized by Chinese academics at this month’s Boao Forum for Asia in China’s Hainan Province. According to the criticism, following the “new southbound policy” is a deviation from Asian trade, which is turning toward a focus on China.
Has the “new southbound policy” brought any results? What are the government’s policy planning and implementation skills like? These questions cannot be ignored and require serious study. One thing is certain: If Taiwan is to change the situation, it must recognize that 20 to 30 years of leaning toward China has showed that it just invites trouble.
Perhaps the “new southbound policy” will encourage manufacturing businesses to return to Taiwan, although that remains disputed. If it does turn out to be a mistake and proves to have been an exercise in futility, at least it will not have invited disaster. However, if it is effective, it could revive the nation’s economy, which is why it is worth going through a trial-and-error process to find a feasible solution.
The view of Chinese academics that Asian trade is turning toward a focus on China does not stand up to the test. China might be the world’s second-largest economy and its trade with Taiwan, Japan, South Korea and Southeast Asian nations is huge, while the “One Belt, One Road” initiative, the Asian Infrastructure Investment Bank (AIIB) and the Regional Comprehensive Economic Partnership highlight China’s ambitions to build an Asia-Pacific network centered around itself.
However, opposition is quickly growing stronger, and former US president Barack Obama’s policy of rebalancing toward the Asia-Pacific was not only a matter of military security, it also involved fighting back at an economic level. In particular, the Trans-Pacific Partnership was intended to create a regional economic framework with a high entry threshold and a high level of transparency, including labor rights, environmental resources, customs tariffs, market deregulation and international integration of laws and systems in order to avoid a situation in which China gets to direct the reshaping of world trade regulations and prevent global trade from tipping in its own favor.
Unfortunately, US President Donald Trump quickly announced the US’ withdrawal from the agreement, although China is the main target of his calls for fair trade. In other words, the US’ trade policy toward China remains unchanged, the only thing that has changed is the methodology applied by different governments.
China is trying to place itself at the center of Asian trade and even become the unofficial center of global trade. However, its trading volume is not sufficient to become the global trade center. That would require a qualitative breakthrough and improvements: policies, systems, laws and regulations must be integrated with those of developed nations and free market values must be adopted. Nevertheless, China’s actions in trade are a study in authoritarianism.
First, it is using economy and trade to intimidate trading partners to gain political and military benefits. For example, it has been reducing the number of tourists it allows to visit Taiwan and agricultural imports to force Taiwan to accept the so-called “1992 consensus.”
When it comes to South Korea, China has issued harsh restrictions on contact with the nation, restricting the number of tourists that can travel there and the presence of South Korean entertainment ventures, as well as establishing tax and food safety reviews of Lotte Group, forcing it to close a large number of Chinese outlets. These are just some examples of how the economy is taking a backseat to political concerns in China.
Furthermore, the “One Belt, One Road” initiative, the AIIB and huge investments in Africa are not only aimed at economic benefits, but also geopolitical goals. China is using economic means to become a political hegemon.
Second, although China claims to be moving toward capitalism, the economy is not founded on free trade, but rather on state capitalism, or “capitalism with socialist characteristics,” as Beijing likes to call it.
China uses policy to cultivate local companies and state resources — such as land and tax benefits — to offer subsidies and invest in strategic industries. This creates production surpluses that cause dumping on overseas markets, destroys the orderly functioning of markets and leads to cutthroat competition. In particular, hidden behind state resources are index companies that make lots of international high-tech or national defense-related acquisitions, such as semiconductor, biotech and automation companies, which no doubt provide a powerful source of technological support for the rise of China’s military.
In short, the vicious Chinese economic dragon is a tool for achieving its political, military and geopolitical goals that violate free market rules. It has next to no positive influence on global economic growth, instead spewing toxic fumes in an attempt to eliminate competitors that do not agree with it. How long will Taiwan survive if it does not quickly distance itself from this evil economic Chinese empire?
Translated by Perry Svensson
The cancelation this week of President William Lai’s (賴清德) state visit to Eswatini, after the Seychelles, Madagascar and Mauritius revoked overflight permits under Chinese pressure, is one more measure of Taiwan’s shrinking executive diplomatic space. Another channel that deserves attention keeps growing while the first contracts. For several years now, Taipei has been one of Europe’s busiest legislative destinations. Where presidents and foreign ministers cannot land, parliamentarians do — and they do it in rising numbers. The Italian parliament opened the year with its largest bipartisan delegation to Taiwan to date: six Italian deputies and one senator, drawn from six
Recently, Taipei’s streets have been plagued by the bizarre sight of rats running rampant and the city government’s countermeasures have devolved into an anti-intellectual farce. The Taipei Parks and Street Lights Office has attempted to eradicate rats by filling their burrows with polyurethane foam, seeming to believe that rats could not simply dig another path out. Meanwhile, as the nation’s capital slowly deteriorates into a rat hive, the Taipei Department of Environmental Protection has proudly pointed to the increase in the number of poisoned rats reported in February and March as a sign of success. When confronted with public concerns over young
Taiwan and India are important partners, yet this reality is increasingly being overshadowed in current debates. At a time when Taiwan-India relations are at a crossroads, with clear potential for deeper engagement and cooperation, the labor agreement signed in February 2024 has become a source of friction. The proposal to bring in 1,000 migrant workers from India is already facing significant resistance, with a petition calling for its “indefinite suspension” garnering more than 40,000 signatures. What should have been a straightforward and practical step forward has instead become controversial. The agreement had the potential to serve as a milestone in
China has long given assurances that it would not interfere in free access to the global commons. As one Ministry of Defense spokesperson put it in 2024, “the Chinese side always respects the freedom of navigation and overflight entitled to countries under international law.” Although these reassurances have always been disingenuous, China’s recent actions display a blatant disregard for these principles. Countries that care about civilian air safety should take note. In April, President Lai Ching-te (賴清德) canceled a planned trip to Eswatini for the 40th anniversary of King Mswati III’s coronation and the 58th anniversary of bilateral diplomatic
RSS