Taiwan’s government is seeking to use a push to restructure global supply chains away from China to build more substantive ties with fellow democracies and counter Beijing’s attempts to isolate it internationally.
President Tsai Ing-wen is eyeing what she calls a “new blue ocean” strategy for Taiwan’s international relations, which will require a more agile foreign policy focusing on areas such as technology and investment partnerships rather than only on more traditional diplomatic channels such as opening representative offices, according to three senior officials.
“The president believes that we need to sharpen our focus on specific opportunities and develop deep ties there,” one of them said. The person said this could be in the areas of business and culture or “a strategic opportunity with a particular region”.
Taiwan has been fighting for space in the international diplomatic arena ever since most large nations switched recognition from Taipei to Beijing in the 1970s. China claims Taiwan as part of its territory and threatens to invade it if Taipei refuses unification indefinitely. While Taiwan has full diplomatic relations with only 14 countries today, it retains representative offices which often function as quasi-embassies in 60 nations.
Past Taiwanese governments have tried to stem the tide of isolation through various strategies such as seeking compromise with China or by buying loyalty. Still, the country remains reliant on the US for its security and on China for a large portion of its trade. Meanwhile, Beijing has increasingly blocked Taiwan’s participation in international organisations and forced companies and non-governmental groups to engage with Taiwan only on Beijing’s terms.
Tsai pledged on Monday in her Lunar New Year message that Taiwan would “continue to deepen exchanges with all countries [and] go out into the world with large steps”.
Taipei believes that making itself indispensable in as many economic and political partnerships with foreign countries as possible will be more effective given Chinese pressure than its conventional diplomatic approaches.
“It looks like the tech war will continue. And due to Covid-19, everyone will also want to make some changes. In the past, the majority of global supply chains were in China. Now a part of that will be spread out elsewhere,” Kung Ming-hsin, minister of the National Development Council, said in an interview.
“We believe that this is a crucial moment for Taiwan because its companies have the richest experience with supply chains. Maybe there is nobody other than Taiwan who can do this [as] well,” said Kung, who is in charge of the economic part of Tsai’s new foreign policy concept.
Taiwan was taking its companies and researchers to countries seeking to diversify their supply chains and integrating them with partners in those locations. “It is a foreign policy relationship in which the public and private sector are working together. This is a new development opportunity,” he said.
“In the past, governments would negotiate the framework conditions for free trade, but after that, companies would just look for the cheapest price, and governments’ role would be very small. Such a relationship could easily be cut off,” Kung said.
Now, the focus of western governments on supply chain security and trust had created the need for a continuous exchange of talent and the involvement of research institutes from both sides. “The relationships built in the process will be much closer,” he argued.
Taiwan’s immediate focus is on central and eastern Europe. Following a business delegation Kung led to the region late last year, various companies are negotiating partnerships, such as for a planned electric bus for Lithuania.
As countries including Lithuania, the Czech Republic and Slovakia seek to tap into Taiwan’s strength in semiconductors, Taipei also envisions partnerships between research institutes that could spawn new technology companies that Taiwan would back through a US$200m investment fund and a US$1bn loan facility announced last month.
Next, Tsai has called for a plan for strengthening links with Europe more broadly — a blueprint that Kung plans to work out over the coming six months.
However, there are doubts over whether Taiwan’s bureaucratic apparatus is fit for the task. A senior official said Taiwan’s diplomats abroad often failed to spot new opportunities for co-operation as they were too focused on formal achievements, such as the opening of new representative offices.
“We are overstretched already in terms of offices, and so frequently our diplomatic staff gets tied up with administrative tasks,” said Lo Chih-cheng, a lawmaker from the ruling Democratic Progressive party and a former international relations scholar.
A senior foreign ministry official said: “We recognise that business appears to be playing a much bigger role in our relations with Europe, but any adjustment of our office structures there is going to be very small in number and very slow in pace.”