The need to alleviate the strain of great-power competition and navigate uncertainties in international politics has prompted many countries to broaden their partnerships and establish new avenues of cooperation. Taiwan is no exception.
Since the official launch of the New Southbound Policy (NSP) in 2016, the Tsai Ing-wen administration has made great strides to strengthen the cultural, diplomatic, and economic ties between Taiwan and 18 of its southern neighbors, encompassing ASEAN countries, South Asia, Australia, and New Zealand. Economic collaboration, talent exchange, people-to-people ties, and resource sharing are the backbone of the NSP, as they are essential to the development of mutually beneficial cooperation models. It should be noted, however, that Tsai’s NSP is people-oriented, in sharp contrast to Chinese President Xi Jinping’s profit-driven Belt and Road initiative unveiled in 2013.
With President-elect Lai Ching-te set to take office in May, the NSP and its future direction deserve attention as a topic of policy discussions. It is widely known that Lai, Democratic Progressive Party (DPP) chair and current vice president of Taiwan, is a strong advocate for the democratic self-ruled island’s maneuvers to broaden diplomatic space. This adds to a strong impetus for Lai to bolster the NSP during his forthcoming four-year tenure, given his cordial ties with the incumbent president (who has often lauded Lai for his performance and responsibility), his familiarity with Tsai’s diplomatic line through the NSP, and the mainstream society’s desire to see Tsai’s foreign policy continued, as evinced by Lai’s presidential victory in January.
During his foreign-policy platform address at the DPP Diplomatic Reception in October of last year, Lai stated unequivocally that “there will be a continuation of the NSP,” suggesting that the policy would continue to stand at the nucleus of his upcoming administration’s diplomatic agenda. While serving as Taiwan’s premier (from September 2017 to January 2019), Lai oversaw the implementation of the NSP and steered the Executive Yuan in “strengthening links and cooperation with target countries,” adding credence to this prospect.
During his premiership, Lai approved the formation of the NSP task force and directed government agencies to step up efforts to forge ties with NSP-target countries. These included programs tailored to help small and medium-sized enterprises (SMEs), which were eyeing stronger involvement in New Southbound markets; proper measures to help foreign students in Taiwan with technical training, language acquisition, and cultural adaptation; and initiatives to use Taiwan’s medical soft power to integrate Taiwan’s healthcare ecosystem and biotechnology supply chains into key emerging regional markets.
Amid China’s continued rivalry with democracies across the globe, Taiwan stands to gain from continued endeavors, such as forging informal commercial ties and pushing outward investments in countries within the NSP. But for a grand strategy to be resilient and yield fruitful outcomes, it should be bolstered by recalibrated elements or updated measures. Apart from determination and commitments, Lai needs to steer the NSP with fresh inputs.
In the current era of global supply chain restructuring prompted by the intensifying strategic competition between the United States and China, the NSP has the potential to contribute to Taiwan’s de-risking strategy. In July 2023, Lai underlined Taiwan’s commitment to pursuing trade diversification and securing strategic supply chains – those aimed at reducing Taiwan’s reliance on the mainland market and safeguarding its economy from Beijing’s mounting economic pressure. In October of the same year, Lai vowed to strengthen Taiwan’s economic resiliency, focusing on supply chain security to better protect the country against China’s economic coercion.
There is some overlap between the two messages; both stress the imperative of bolstering Taiwan’s economic security. But where exactly should the focus be?
Cooperation in the semiconductor industry serves as a motivating new frontier. In early April, the Semiconductor Cooperation Promotion Committee and the Semiconductor Promotion Talent Committee were established by business associations from Taiwan, Japan, and Vietnam to assist Taiwanese and Japanese semiconductor companies in building ties with the Vietnamese government. Thanks to these collaborative mechanisms, Taiwanese semiconductor firms could obtain first-hand information on investment opportunities and address regulatory hurdles in Vietnam. Streamlining paperwork procedures and enhancing confidence among all stakeholders are two additional crucial functions of these platforms. These minilateral models have the potential to become crucial components of the elevated NSP, as they showcase Taiwan’s competitive advantage in the semiconductor supply chain and help boost Taiwan’s high-tech engagement with New Southbound partners.
Along with economic policies, Lai’s new government should make it a priority to foster mutual understanding between Taiwan and New Southbound countries. At the 2023 Yushan Forum – a platform initiated by Taiwan to facilitate Track Two diplomacy and encourage policy dialogues between Taiwan and like-minded partners – Lai underlined that the people constitute the NSP’s primary goal and pledged to create a blueprint for mutual development between Taiwan and neighboring countries.
Under Lai’s incoming leadership, people-to-people exchanges should become the flagship of the upgraded NSP that embodies the spirit of mutual engagement. Lai’s concrete actions should prioritize cross-cultural understanding and language exchanges, particularly from Southeast Asian partners.
There are now more than 1 million students, migrant workers, and new residents in Taiwan coming from Southeast Asia. They have contributed to the reinvigoration of Taiwan’s political and social landscape and even have a crucial impact on Taiwan’s engagement with the region. Yet, the general population in Taiwan still has a limited grasp of migrant workers; these overseas laborers are routinely shunned and seen as “outsiders” who are part of an underground society, subject to prejudice and at high-risk of human rights violations.
The Tsai administration has taken steps to help migrant workers, but shortfalls remain, and those who call Taiwan home are still susceptible to discrimination and racism. Hence, only with the inclusion of migrant workers in the upgraded NSP can Taiwan bolster its international position as a robust democracy while securing its strong foothold in ASEAN countries. Ultimately, Taiwanese society could benefit from a better understanding of and respect for the cultural diversity among Southeast Asian countries.
In the spirit of “Taiwan Can Help,” Lai previously pledged to spur Taiwan’s contributions in several fields, including public health, agriculture, infrastructure, and international humanitarian assistance. Lai’s foreign policy commitments leave ample opportunities for leveraging the NSP on nontraditional security collaboration between Taiwan and its partners. Since Southeast Asian states are wary of becoming embroiled in the China-U.S. rivalry due to their distrustful perception of the two superpowers, Taiwan would do well to present itself as a reliable partner, free of hegemonic ambitions and with candid pledges to make.
For instance, the incoming Taiwanese president could reinforce the practical dimensions of the NSP by supporting New Southbound countries with Taiwan’s strengths and hand-on experience in fast-growing industries including healthcare, high-tech, sustainable energy, and language education. All of these will aid in Taiwan’s regional integration and fortify the democratic island’s standing in the Indo-Pacific.
However, Lai’s efforts to give new strength to the NSP are likely to encounter pushback. Lai may run across executive roadblocks while attempting to distribute funding for the NSP, given that the ruling DPP was unable to secure a parliamentary majority. Hence, during his first year in office, Lai should take a measured approach to rally both political and financial support for the NSP and other policy goals. Consequently, Lai’s statecraft as a leader would hinge on his capacity to advocate for national unity while mindfully weighing the concerns of the two opposition parties, the Kuomintang (KMT) and the Taiwan People’s Party (TPP).