SINGAPORE – Many people watched the inauguration of Taiwan President Tsai Ing-wen with great interest. Millions of Taiwanese who had decisively voted her and the Democratic Progressive Party (DPP) into power listened out of hope for significant change under a new leader. Across the strait and elsewhere, officials and analysts scrutinized her speech, but with different intentions.
Beijing closely watches what Tsai says and does to see if she might seek to unravel the closer cross-straits ties that developed during the presidency of her predecessor, Ma Ying-jeou. Washington, too, needs to balance its historical links to Taiwan with bigger issues at stake in the Sino-American relationship.
Other Asians should also rightly observe the new administration. The last DPP presidency under Chen Shui-bian from 2000 to 2008 seemed to set a course for pro-independence. Mainland China’s strong opposition to that course sent tensions rippling across the region.
In this context, Tsai’s inauguration speech can be especially noted for what she did and did not do.
There was expectation in Beijing that Tsai would clarify her views and expressly adopt the “1992 Consensus,” which has been a touchstone used by the two sides to stabilize ties. This basis had been acceptable for Ma, who warmed ties with Beijing to new levels.
But Tsai’s noncommittal one-China policy stance failed to appease those in Beijing. Choosing to walk the line of ambiguity in her official remarks, Tsai acknowledged that cross-strait relations have become an integral part of building regional peace and collective security, and that she will “work to maintain the existing mechanisms for dialogue and communication across the Taiwan Strait.” She did, however, add that as president she is responsible for “safeguarding the sovereignty and territory of the Republic of China”.
Following her speech, China’s Taiwan Affairs Office released a statement reaffirming, among other things, that Beijing will “resolutely contain any Taiwan independence separatist acts or plots.”
Tsai has avoided directly addressing this issue. She has made no express push for independence or separatism. But neither has she explicitly accepted the one-China principle nor laid out her plans to ensure the peaceful and stable development of cross-straits relations.
While quiet on the mainland, Tsai announced during her swearing-in ceremony Taiwan’s intention to pivot to Southeast Asia through a “new southbound policy”. Announcing her intention to “elevate the scope and diversity of Taiwan’s external economy,” Tsai wants to court the region to provide Taiwanese businesses with an alternative investment destination to China. It is also part of the new government’s effort to overhaul and stimulate the island’s stagnating economy by reaching actively out to the Association of Southeast Asian Nations (ASEAN).
This is not the first effort in this direction by Taipei leaders. Indeed, it is the third time. The first attempt was made in the 1990s by then-Kuomintang (KMT) President Lee Teng-hui, whose push toward the south saw investments gain momentum but dip in the wake of the Asian financial crisis. Thereafter, China, offering abundant labor, low-cost manufacturing and a huge market, soaked up the attention and investment from Taiwanese businesses. The next attempt was made in 2002 during the first DPP presidency of Chen Shui-bian. This got nowhere because more than 60 percent of Taiwanese foreign investments had roots in China by that time.
Tsai seems serious about her commitment toward re-engaging Southeast Asia. Her administration has established a special task force called the “New Southbound Office.” This will set the tone and direction of Taiwan’s overall strategy for Southeast Asia.
While the policy cannot be prejudged, there are economic and political factors that could buoy or hinder Tsai’s latest push south. There is more economic logic than before. Given that China’s growth is relatively slowing and costs have increased considerably, especially in the coastal areas, Taiwanese businesses will be more willing to push southward. Reciprocally, a number of ASEAN countries will welcome Taiwanese investment.
However, ASEAN countries do not wish to be caught in the middle when Taiwan and China squabble as ASEAN’s economic interdependence with China has deepened and grown significantly since the early 2000s. The launch of China’s One Belt, One Road policy and its Asian Infrastructure Investment Bank initiative also focus attention on keeping win-win ties with Beijing. The key therefore is for Taiwan to pursue a southbound policy in tandem with stable, cross-strait ties with Beijing. If China is discomforted, it is unlikely that ties with ASEAN members will prosper.
Whenever Taipei appears to be seeking recognition as a state, Beijing counters. As such, rather than over emphasizing government-to-government relations in its ties with Taiwan, ASEAN should pursue a multi-pronged approach that prioritizes the promotion of business ties and people-to-people exchanges.
Two-way research, business and investment links should be re-established and strengthened. Such networks will be important in helping the Taiwanese understand more about the region’s political and economic nuances, and in so doing, carve out a niche economic strategy on how best to engage with the region without going head to head with China. For example, instead of dealing with central governments, Taiwanese construction and heavy machinery businesses can engage with ASEAN’s regional governments to carve out industrial or economic zones for smaller scale investment and development.
The Taiwanese private sector can also play a key role in Taiwan’s new southbound initiative and should be encouraged to establish business-to-business partnerships with local companies. For example, Foxconn Technology Group has managed to establish a presence and local business partnerships in Vietnam, and is seen as a key investor in the country.
Closer ties between ASEAN and Taiwan will be contingent on the nature of cross-strait relations, which will be the cornerstone that determines whether Tsai’s new southbound policy can make real headway.
Simon Tay is chairman the Singapore Institute of International Affairs. Cheryl Tan is deputy director of the institute in charge of matters related to ASEAN.
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