Since the change of government in 2016 that demanded a new departure, President Tsai Ing-wen (蔡英文) has adopted as her signature external policy to build Taiwan’s strong relations with 18 countries in Southeast Asia, South Asia and Oceania. The New Southbound Policy is designed, ambitiously enough, as a grand strategy that covers not only economic, but also political and sociocultural dimensions.
The policy is well-contrasted with the southbound policies of former presidents Lee Teng-hui (李登輝), Chen Shui-bian (陳水扁) and Ma Ying-jeou (馬英九) that focused almost exclusively on trade and overseas direct investment to deepen economic interdependence and de facto integration in the regions, particularly Southeast Asia.
Lee’s effort miscarried amid aftermaths of the Asian financial crisis of 1997, while Chen and Ma were unenthusiastic due to their respective priority narrowly on the cross-strait relations.
Tsai has centralized the policymaking to enable top-down decisions, rather than continuing to rely on economic bureaucracies to catalogue policy packages.
Nonetheless, Tsai’s policy has failed to significantly expand trade and investment. More specifically, it has been unable to guide Taiwan’s private sector along the line, except state-owned enterprises, which is essential to lower Taiwan’s dependency on the Chinese economy.
Some increase in trade and investment is not attributable to policy guidance, but to changing market conditions, particularly a sharp rise in labor costs in China.
Therefore, in economic terms, the policy is no more than a catchphrase for the existing realities consequent on the implementation of the existing measures. This was anticipated, because Taiwan’s economic power and influence is too limited to compete with China.
The policy is by no means an effective countermeasure against China’s Belt and Road Initiative that is mobilizing huge financial and human resources to invest in infrastructure building for growth and development.
On the other hand, the policy has seen steady progress in non-governmental cultural, educational and intellectual exchanges, which widens the very limited international space of Taiwan, which is largely derecognized.
The policy includes exchanges between Taiwanese and overseas Chinese in the regions and between second-generation Southeast Asian immigrants in Taiwan and the peoples of their origins. The exchanges will surely develop people-to-people ties and then a sense of community with ASEAN and, possibly, the wider mega-region.
Taiwanese need such an alternative identity compared with the overpowering Chinese identity imposed by the communist dictatorship so that they can stand firm against irredentist China, which is bent on annexing Taiwan. Unfortunately, substantial Taiwanese identity is elusive due to significant ethnic commonalities with Chinese.
Therefore, in political and sociocultural dimension, the New Southbound Policy is based on a cost-effective approach that requires few major additional fiscal inputs. It primarily calls for rhetorical maneuvering and policy articulation within existing systems and resources.
The Tsai government has kept itself busy by producing a series of specific policy planning documents and implementation reports on educational exchange, conferences, tourism and medical cooperation.
Moreover, Tsai is unable to make a high-profile tour abroad, especially one with a large high-ranking business delegation, because a semi-official presidential visit is no longer welcome after Chen antagonized Southeast Asian governments with strong pro-independence remarks that invited China’s pressure on them to adhere to the “one China” principle.
The Tsai government has contributed to establishing the non-governmental Taiwan-Asia Exchange Foundation as a major vehicle for international intellectual exchange. Yet, the government has not given the foundation a major operating fund, which has necessitated it financing itself with voluntary contributions from the private sector.
Therefore, Tsai’s trademark foreign policy openly aspires to be a comprehensive grand strategy, but places a main focus on political and sociocultural dimension. More specifically, it is geared to create an alternative Asian identity for Taiwanese as a psychological safeguard against Beijing’s pressure to impose the Chinese identity on Taiwanese, which would facilitate unifying Taiwan with China. The policy effectively constitutes a major countermeasure against China’s psychological and public opinion warfare.
It is unclear if the New Southbound Policy has shifted its focus through practice. However, judging from the official documents and remarks, the Tsai government seemingly had a genuine aspiration by default to formulate a grand strategy, at least initially.
Given Taiwan’s limited resources, it is high time to make a low-profile, yet open policy fine-tuning toward countering psychological and public opinion warfare.
Masahiro Matsumura is a professor of international politics at Saint Andrew’s University in Osaka, Japan.
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