Vol. 2, Issue 8
Global Taiwan Brief – Volume 2, Issue 8
Former State Councilor Becomes Chairman of PRC’s National Society of Taiwan Studies
By: Russell Hsiao
Why China Should Feel Good About Taiwan
By: Derek Grossman
Taiwan in Trump World: The Jury is Out
By: Dennis Halpin
Southeast Asia’s Energy Sector: An Opportunity to Strategically Apply Taiwan’s New Southbound Policy
By: Courtney Weatherby
Former State Councilor Becomes Chairman of PRC’s National Society of Taiwan Studies
Russell Hsiao is the Executive Director of the Global Taiwan Institute and the Editor-in-Chief of the Global Taiwan Brief.
In the latest among a raft of personnel changes within the People’s Republic of China (PRC) Taiwan-policy apparatuses, senior Chinese statesmen Dai Bingguo (戴秉國) has been confirmed as the new chairman of the National Society of Taiwan Studies (全國台灣研究會). The National Society of Taiwan Studies (NSTS), which held a senior council meeting on February 17, unveiled its new chairman and leadership team, which further suggests that changes are in the offing in how the PRC approaches its policy towards Taiwan.
Dai (b. 1941), a former State Councilor and senior foreign policy as well as national security adviser to Hu Jintao, is currently 75 years old. He is a product of the Chinese Communist Party (CCP)’s International Liaison Department (ILD), which serves both a foreign policy and intelligence function for the Party leadership. Dai spent 8 years of this career in the ILD system, first as the deputy director of the department in 1995 then as director of the department from 1997-2003.
According to its website:
[The ILD’s] main responsibilities are threefold: to implement the principles and policies of the Central Committee over its external work, follow closely in its research work the developments and changes of the world situation and key global issues and provide briefing and policy proposals to the Central Committee; to carry out the Party’s exchanges and communications with foreign political parties and organizations entrusted by the Central Committee; to coordinate in administering international exchanges of departments directly under the Central Committee and Party committees of provinces, autonomous regions and municipalities under direct jurisdiction of the central government.
As a declassified study conducted by the Central Intelligence Agency notes: “the ILD performed the task of finding, investigating and eventually supporting pro-Chinese splinter groups and malcontents, encouraging them to form so-called “Marxist-Leninist” parties ….” The current minister of the CCP-ILD is Song Tao (宋涛).
Among his many senior party-government posts, Dai served as the director of the General Office of the Foreign Affairs Leading Small Group (FALSG) of the CCP Central Committee, an office that acts as the primary policy coordination organ for foreign affairs, and director of the General Office of the National Security Leadership Group of the CCP Central Committee, in which he serves in the capacity of national security advisor to Hu. Dai also served as vice minister of the Ministry of Foreign Affairs as well as PRC ambassador to Hungary.
According to its website, NSTS was formed in 1988 as a “civilian” platform comprised of academics, professionals, and organizations researching Taiwan and cross-Strait relations. As a clear indication of its united front function, the association states that it conducts research and organizes academic conferences and exchanges for the explicit purpose of “advancing peaceful development in cross-Strait relations and peaceful unification of the motherland” (促進兩岸關係和平發展與祖國的和平統一). Other organizations reportedly operating in an intelligence function for the CCP’s United Front system include the Alumni Association of the Huangpu Military Academy (黃埔軍校同學會), China Council for the Promotion of Peaceful National Reunification (中國和平統一促進會), and the All-China Federation of Taiwan Compatriots (中華全國台灣同胞聯誼會), among others.
According to its website, NSTS has more than 40 organizational members, 1,000 individual members, 40 executive council members, and 180 councilors including senior representatives from state-run media, central government offices, various government agencies under the State Council (the Ministries of Foreign Affairs, Commerce, and Public Security, and university research centers), the Academy of Military Science, and government research centers.
Stacked with government officials—which belies its supposedly civilian (民間) status—the leadership structure consists of four deputy chairmen: Li Yafei (李亞飛), Cai Fang (蔡昉), Zheng Jianbang (鄭建邦), and Sun Yafu (孫亞夫). Indeed, Li serves as the deputy director of the CCP Central Committee’s Taiwan Office, the State Council’s Taiwan Affairs Office, and as vice president of the Association for Relations Across the Taiwan Strait (ARATS); Cai serves as vice chairman of the premier government research institution, the Chinese Academy of Social Sciences; Zheng serves as the vice chairman of the Chinese Kuomintang Revolutionary Committee; and Sun serves as the vice president of ARATS.
Other senior officers include the executive deputy secretary-general Yang Youyan (楊幽燕); five deputy secretary generals: Li Peng(李鵬), Li Zhigang (李志剛) (who serves as the secretary to Dai), Yan Jun (嚴峻), Zheng Qingyong (鄭慶勇), and Ni Yongjie (倪永傑); and 25 executive council members (常務理事): Wang Sheng (王升), Wang Lei (王鐳), Zhu Weidong (朱衛東), Zhu Youbao (朱慶葆), Sun Yafu (孫亞夫), Liu Guoshen (劉國深), Liu Jiayu (劉傢裕), Su Ge （蘇格）, Wu Shicun (吳士存), Li Peng (李鵬), Li Yafei (李亞飛), Yan Anlin (嚴安林), Zhang Guanhua (張冠華), Yang Youyan (楊幽燕), Yang Yizhou (楊毅周), Zhou Yezhong (周叶中), Zhou Zhihuai (周志懷), Zheng Jianbang (鄭建邦), Yuan Peng (袁鵬), Jia Qingguo (賈慶國), Ni Yongjie (倪永傑), Huang Renwei (黃仁偉), Huang Jialu (黃嘉樹), Cai Fang (蔡昉), and Dai Bingguo (戴秉國).
In his remarks at the executive council meeting, the incoming NSTS Chairman emphasized five priorities: 1) strengthen understanding about Xi Jinping’s thought on Taiwan work; 2) comprehensively strengthen Taiwan research; 3) further strengthen exchanges with different sectors of Taiwanese people to deepen understanding about public opinion, with an emphasis on promoting activities related to youth exchange; 4) further consider the external factors such as regional and global events influencing the Taiwan issue; and 5) strengthen NSTS’ organizational development (台研會自身建設).
Contrary to prior reporting that Zhou Zhihuai, the director of the MSS-affiliated Institute of Taiwan Studies at the Chinese Academy of Social Sciences, was retaining his position as vice chairman of NSTS, Zhou will serve as an executive council member in the new configuration of NSTS leadership.
In the final analysis, the increased number of appointments of senior cadres in the new NSTS leadership suggests the elevation of the NSTS’ status. Some experts from Taiwan believe that the appointments are related to President Trump’s administration. Considering Dai’s background as an international statesman, well known in the United States for serving as the Chinese representative to the Strategic & Economic Dialogue, it stands to reason that the shift in focus may be an orientation towards external actors affecting cross-Strait relations.
The main point: The appointment of a new chairman and leadership structure at NSTS, which is a part of the United Front system, further suggests that there may be changes in how the PRC approaches its policy towards Taiwan. Specifically, these developments indicate an emphasis on the external factors influencing cross-Strait relations.
Correction: A previous article translated 全國台灣研究會 as National Taiwan Research Association.
Why China Should Feel Good About Taiwan
Derek Grossman is a senior defense analyst at the nonprofit, nonpartisan RAND Corporation. He formerly served at the Defense Intelligence Agency as the daily intelligence briefer to the Assistant Secretary of Defense for Asian and Pacific Security Affairs at the Pentagon. The views expressed in this article are those of the author and do not reflect the official policy or position of the Defense Intelligence Agency, Department of Defense, or the US government.
Recent developments in relations between Taiwan and China should bolster the confidence of Chinese leaders that Taiwan under President Tsai Ing-wen will eschew provocation in favor of pragmatism and accommodation with Beijing. Indeed, Tsai’s handling of the December 2nd congratulatory call to then President-elect Donald Trump, her administration’s reaction to Trump’s questioning of the “One-China” policy, Tsai’s end of year speech, and her administration’s treatment of her US transit all demonstrate that she seeks stability and predictability in cross-Strait relations. More significantly, these developments suggest that Tsai may even plan to keep Washington at arm’s-length to avoid unnecessarily antagonizing Beijing.
Tsai’s phone call to Trump probably occurred because she thought Taiwan needed, as one recent article put it, “symbolic gains” to “push back” against Chinese pressure on the island. Nevertheless, the call was treated with the utmost care by Tsai’s government, both in its execution and aftermath. According to the official Taiwanese readout of the meeting, the two leaders discussed “domestic economic development and national defense” as well as “views on conditions in the Asian region.” There was no discussion of Taiwan’s status vis-à-vis China, which certainly would have alarmed leaders in Beijing. Tsai later informed visiting US journalists that the call was “not a policy shift of the United States” in order to downplay the significance of the call. It is also important to note that Tsai astutely contacted Trump while he retained the status of President-elect, knowing full well that Chinese leaders would interpret a call to a sitting US president—which has never happened—as being far more provocative. And once Trump became president, Tsai was sure to keep her distance, opting to reestablish her Twitter account to offer a congratulatory tweet instead of making another call.
The Tsai administration was especially cautious after Trump noted on December 11th, in a Fox News interview, that the “One-China” policy might be up for renegotiation. Declining to directly address Trump’s comments, Tsai’s spokesman, Alex Huang, stated that Taiwan only seeks enhanced freedom and international space throughout its relationship with the United States. Huang further stated that Taiwan seeks to maintain positive and stable cross-Strait relations. To be sure, Taiwanese public opinion polling has consistently shown that the vast majority of citizens prefer to maintain the status quo in cross-Strait relations. Tsai probably recognizes this sentiment and worries that Trump’s comments might inadvertently provoke Beijing.
Tsai’s end of the year speech came on the heels of two separate Chinese bomber flights that circumnavigated Taiwan as well as Beijing’s decision to recognize the small West African nation of Sao Tome and Principe, which represented the second time in under a year that China broke the tacit moratorium on such behavior. These actions, coupled with Beijing’s quiet policy of sabotaging Taiwan’s economy by reducing the number of tourists it sends to the island, prompted Tsai to note that “Beijing is going back to the old path of dividing, coercing, and even threatening and intimidating Taiwan.” At the same time, however, Tsai continued to stress her desire for peace and stability by stating,
For the sake of safeguarding regional peace and prosperity, I want to once again reiterate that our commitments will not change, and our goodwill will not change. But we will not bow to pressure, and we will of course not revert to the old path of confrontation.
By eschewing the “old path of confrontation,” Tsai signaled her desire not to repeat Taiwan President Chen Shui-bian’s decision to push an independence agenda.
In response to a Chinese-language Apple Daily report that Tsai was attempting to meet with Trump or one of his advisers in New York during her mid-January transit through the United States, the president’s office quickly characterized the report as “wild speculation.” In doing so, Tsai sought to limit controversy during her stopover in the US, which is considered a routine activity for Taiwanese presidents. To further sideline the rumor, a few weeks later Tsai disclosed that the transit cities would be Houston and San Francisco, i.e. purposefully not New York City, to avoid speculation that she might show up at Trump Tower. Her administration assiduously kept to this agenda even though Trump, when asked whether he might meet with Tsai in person, said “we’ll see.”
Chinese leaders are curiously either overlooking Tsai’s extraordinarily cautious handling of sensitive cross-Strait issues and Taipei’s relationship with Washington, or they are intentionally disregarding it to serve their own domestic political interests. Indeed, since Tsai’s election last year, Chinese President Xi Jinping has pressured her to agree to the so-called “1992 Consensus”—a tacit accord reached between the Chinese Communist Party (CCP) and Tsai’s predecessor—that acknowledges the existence of only “one China” but grants each its own interpretation. In his own end of year speech, Xi noted that the “Chinese people will never allow anyone to get away with making a great fuss about it [territorial integrity and maritime rights]”—a message certainly aimed at both Trump and Tsai. Ten days later, the Chinese navy sailed its carrier, the Liaoning, through the Taiwan Strait to send yet another unambiguous signal of Chinese resolve. There are now rumors that Beijing is considering a modification to its “Anti-Secession Law” that might seek an explicit acknowledgment of the “1992 Consensus” from Tsai in order to avoid invasion.
China’s strategy to deter Tsai from even contemplating independence—a concern grounded in some reality, given her past rejection of the “1992 Consensus” in 2012 and assistance to President Lee Teng-hui in crafting the “state-to-state” formulation for cross-Strait ties in the late 1990s—has been quite successful in the short-run. In particular, Beijing’s relentless pressure on the “1992 consensus” may be a contributing factor to Tsai’s sinking approval rating, which recently reached its lowest point of 33.8 percent—perhaps only half of the approval she benefited from upon taking office in May. Beijing’s goal of delegitimizing Tsai and making her feel like she must walk on eggshells in conducting Taiwan’s relationship with the mainland and the US has proven successful.
Nevertheless, Beijing’s strategy is bound to fail in the long-term. Younger generations already overwhelmingly identify themselves as Taiwanese and not Chinese. Chinese pressure tactics will only serve to stiffen resistance to China in the future. Beijing would be better served by acknowledging that, in spite of her political party’s Taiwan-centric agenda, Tsai has repeatedly and earnestly expressed an interest in maintaining peace and stability in the Strait. A careful reading of her actions in the run-up to and aftermath of key moments in the US-Taiwan and China-Taiwan relationship over the past few months reveal her intention to use this approach. And, if Beijing is not careful, Tsai could change her approach to something more provocative. Indeed, in early February, Tsai announced that she plans to unveil a new cross-Strait policy, perhaps in the latter half of 2017. This policy might not be as accommodative of Beijing’s wishes.
By not adjusting its calculus, Beijing runs the risk of alienating future generations of Taiwanese against it. Instead, Chinese leaders should seek to engage in good faith discussions with Taiwanese counterparts, meaning that the cross-Strait status quo should be fully honored. Beijing should also recognize that Tsai’s apparent tentativeness about the new US administration would rapidly change if cross-Strait military tensions were to severely escalate. For their part, Taiwanese and US policymakers should work to enhance the island’s security, while avoiding needless provocations in the Strait. Tsai has certainly held up her end of the bargain, and only time will tell whether Washington plans to do the same. Trump’s acknowledgement of the “One-China” policy in his February phone call with Xi is a good start.
The main point: Chinese leaders should seek to engage in good faith discussions with Taiwanese counterparts. Beijing should also recognize that Tsai’s apparent tentativeness about the new US administration would rapidly change if cross-Strait military tensions were to severely escalate.
Taiwan in Trump World: The Jury is Out
Dennis Halpin is a visiting scholar at the US-Korea Institute at SAIS (Johns Hopkins University). He previously served as an analyst in the INR Bureau at the State Department and on the Foreign Affairs Committee of the House of Representatives as an adviser on Asian issues, from 2000 to 2013.
The emergence in Washington of a fledgling administration, featuring a President with no administrative or legislative track record on Asia, and a shortage of familiar Asia hands—who usually set the policy parameters—has been unsettling for America’s regional security partners. In this, Taiwan is no exception. While the decision of Secretary of Defense Jim Mattis to prioritize Asian alliances during his first official trip to Seoul and Tokyo was reassuring, as was Japanese Prime Minister Abe’s seemingly successful Washington and Florida summits, questions about past campaign rhetoric remain. This includes then-candidate Trump’s admonition that Asian allies take on greater cost-sharing for the stationing of US forces (Taiwan has always paid 100 percent of the cost for defensive weapons provided by the United States under the stipulations of the 1979 Taiwan Relations Act.)
Then there was the criticism of trade partners who are seen as “stealers” of American manufacturing jobs. At a campaign rally last October in Warren, Michigan, candidate Trump singled out Taiwan as well when he said, “The sheet metal parts and dyes they used to make right here … now come from China, South Korea and Taiwan.” Further, the decision by President Trump on his first full business day to sign an executive order withdrawing the United States from the negotiating process of the Trans-Pacific Partnership (TPP), has widespread trade repercussions for all of the United States’ major Pacific trading partners. Taiwan is the United States’ ninth-largest trading partner and had hoped to join the TPP.
The threat by candidate Trump to impose a 45 percent punitive import tariff on Chinese-origin goods, as opposed to the current average of about 3 percent, due to Beijing’s “currency manipulation and illegal export subsidies,” as discussed by White House National Trade Council Director Peter Navarro, could have an adverse impact on Taiwan’s economy. A large number of mainland Chinese factories, including Foxconn’s production facilities in and around Kunshan, Zhengzhou, and Shenzhen, make use of Taiwanese capital and management while using a Chinese labor force. A Sino-American tariff war, therefore, would have severe repercussions for the Taiwanese economy, as well as on Japan and South Korea.
Clarification on the Trump Administration’s Taiwan security policy is needed. Then President-elect Trump’s congratulatory phone call from Taiwan’s President Tsai Ing-wen broke with post-1979 diplomatic precedent and seemed to point to a possible new direction in Taiwan policy. Of course, at the same time, the appearance of Dr. Henry Kissinger at Trump Tower immediately after the Tsai phone call was an indication that Beijing was also weighing in on cross-Strait policy with the incoming Administration. Kissinger, who reportedly has won the admiration of Trump, renewed his famous 1970s “shuttle diplomacy” by traveling, as a “lao pengyou” (老朋友, old friend), to see Xi Jinping in Beijing before his meeting with then President-elect Trump. Around that same time, Kissinger made an appearance on CBS’s “Face the Nation,” where he opined that Donald Trump could accomplish “something remarkable” in US foreign policy, filling the “partial vacuum” left by President Barack Obama, who “basically withdrew” America from international politics. Kissinger, of course, is widely remembered as the facilitator for Richard Nixon’s opening and historic 1972 trip to China. He recorded in his memoir, On China, the famous line from a conversation he had with Chairman Mao where Mao said, “I say that we can do without Taiwan for the time being, and let it come after one hundred years.”
It was Kissinger who also negotiated the language of the 1972 Shanghai Communiqué with then Premier Zhou Enlai on the “One- China” policy. This policy was recently again the focus of much press attention surrounding the February 9th phone conversation between Donald Trump and Chinese leader Xi Jinping. Some clarification on the “One-China “policy, however, seems to be required. The Washington Post, for example, reported on February 10th that “The White House said Trump reaffirmed his administration would honor Beijing’s ‘One China’ policy that stipulates Taiwan is officially part of China despite the island having a separate government.” The White House press release actually stated that “President Trump agreed, at the request of President Xi, to honor our (that is, the US’s) ‘One-China’ policy.” For the Trump Administration to “honor Beijing’s ‘One China’ policy,” as the Post reported, would indeed represent a fundamental change in US policy.
In the language related to Taiwan in the original Shanghai Communiqué in 1972, the two sides agreed to disagree on the subject of “One-China.” While Beijing asserted that “Taiwan is a province of China” and that “the liberation of Taiwan is China’s internal affair in which no other country has the right to interfere,” the US position is quite different. The US side declared, “The United States acknowledges that all Chinese on either side of the Taiwan Strait maintain there is but one China and that Taiwan is a part of China. The United States Government does not challenge that position. It reaffirms its interest in a peaceful settlement of the Taiwan question by the Chinese themselves.”
The US “One-China” policy therefore differs fundamentally from Beijing’s “One-China” position, referred to as the “One-China” principle, in that it recognizes China as a geographic entity but NOT the assertion that Taiwan is a part of the PRC political regime. It further asserts that the people of Taiwan, as well as those in the PRC, have a legitimate interest in the settlement of the Taiwan question and that the United States has a legitimate interest in a peaceful outcome. In addition to the three communiqués with Beijing, US policy towards Taiwan is further clarified in the congressionally mandated Taiwan Relations Act (TRA) and President Ronald Reagan’s Six Assurances, as Secretary of State Tillerson recently reaffirmed at his Senate confirmation hearing. In fact, if Washington did accept Beijing’s “One-China” principle there would be no reasonable basis for the 35-plus years of defensive arms sales to Taiwan as mandated in the TRA.
Thus, a further clarification of the new Administration’s views on what constitutes the “One-China” policy may be in order, especially since the White House readout of the Trump-Xi call used the word “honor,” which may have a different implication than the original 1972 language of “acknowledge.”
Finally, the new Administration has adopted more robust rhetoric with regard to regional flashpoints, such as the South China Sea, Senkaku/Diaoyutai territory, and the Korean peninsula—although the new Secretary of State has walked back his earlier suggestion of preventing Chinese access to its fortified islands in the South China Sea. A potential military confrontation between the PRC and the United States in any of these areas would naturally have a direct and adverse impact on Taiwan’s security. Also, the suggestion that Taiwan and its interests could be used as a “bargaining chip” with the PRC in negotiations on trade or other issues has raised some concern.
The forceful statement of the new Secretary of State on this issue at his confirmation hearing, however, was reassuring. Mr. Tillerson stated that, “The people of Taiwan are friends of the United States and should not be treated as a bargaining chip. The US commitment to Taiwan is both a legal commitment and a moral imperative.” The best means of clarifying Taiwan policy in Trump’s Administration would be to allow Secretary Tillerson to rapidly get his Asia team in place, for General Mattis to do the same, and for a new National Security Advisor to expeditiously reorganize the National Security Council.
The first concrete indication of the approach the Trump Administration will take with regard to Taiwan will be signaled by the provision of a robust new arms sale package. Such a package should seek to address, through sales or assistance with indigenous production, the long-stalled diesel-electric submarine question in order to meet the maritime threat posed by Beijing’s current naval build-up in the waters surrounding Taiwan.
The main point: The delays in the new Trump Administration’s assembling of a national security team, plus past protectionist and isolationist campaign rhetoric, have caused angst among America’s Asian security partners, including Taiwan. Mixed signals on increased engagement with Taiwan versus less than clear statements on the “One China” policy indicate that the jury is still out on the Trump Administration’s Taiwan policy. The expeditious provision of a robust arms sale package, including diesel-electric submarines, would go a long way in clarifying Trump Administration policy on Taiwan.
Southeast Asia’s Energy Sector: An Opportunity to Strategically Apply Taiwan’s New Southbound Policy
Courtney Weatherby is the Research Analyst for the Southeast Asia Program at the Stimson Center.
Tsai Ing-wen has clearly marked the New Southbound Policy of improving business and social linkages between Taiwan and Southeast Asia as a foreign policy priority for her administration, with investment expos and student exchanges playing a central role. While these activities help improve broad linkages between Taiwan and the region, targeting activities that explicitly address development needs in ASEAN will contribute to the policy’s long-term success in fostering a sense of regional community. One potential avenue for this is through prioritizing investment and exchange in the energy sector, which underpins the industrialization, urbanization, and rising living standards that are vital aspects of economic growth throughout the region.
Electricity Demand in Southeast Asia
Southeast Asia’s future will be characterized by rapid rises in electricity demand: the region’s electricity needs are expected to rise 80 percent through 2040, which is approximately 400 GW of additional installed energy capacity. While there is significant variation between countries—Vietnam’s projected demand growth is between 8 – 10 percent per annum, while more mature economies like Malaysia and Thailand will grow at relatively sedate rates—the overall picture is one of rapid expansion of electricity sources and the grid.
Given the sheer amount of capacity that must be added in the coming decades, most ASEAN countries are adopting an “all hands on deck” approach towards energy development that includes significant buildout of coal, natural gas, and oil despite concerns over potentially significant impact on climate change. While renewables such as solar and wind are increasingly affordable, current power development plans indicate that coal will make up 40 percent of the added capacity through 2040.
There are two main factors for the relatively slow adoption of renewables: the first is a focus on energy security, which for many countries in the region is characterized as access to sufficient and reliable electricity production rather than concerns over import dependence. Brownouts threaten the industrial and foreign investments that drive economic growth as well as raise questions about the government’s ability to effectively address the urban, middle-class population’s expectations for better living standards. The intermittent nature of both wind and solar is therefore viewed by many policy-makers as an impassable obstacle to wide-scale adoption of renewables. As a result, power planners often prioritize older but proven fossil fuel and hydropower technologies, despite pressures over climate change emissions and growing domestic concerns over the environmental impacts from large-scale coal and hydropower plants.
The second factor inhibiting the adoption of new and emerging technologies is a lack of local expertise and financing, particularly in the least developed countries of Laos, Cambodia, Myanmar, and Timor-Leste. This includes not only renewables but also clean coal, deep sea oil extraction, and energy efficiency technologies and standards. Renewables and energy efficiency in particular are viewed as technologically challenging and too expensive compared to traditional fuels such as coal, natural gas, or hydropower. This viewpoint increasingly fails to reflect the reality of pricing, particularly for solar power: prices have been on a continuous downward trend, falling 12 percent in 2015 alone for commercial scale solar. American power purchase agreements commonly reach an agreed rate of 5 cents per kilowatt hour, with unsubsidized rates often reaching between six and eight cents per kilowatt hour. This reflects a global downward trend, and within the next few years will put solar close enough to traditional power sources in Southeast Asia that it will likely start to compete on pricing terms. For countries like Singapore or Cambodia, where the current market rate is upwards of 20 cents per kilowatt hour, commercial solar would already be competitive.
Opportunities for Taiwan
There are clear foreign policy opportunities for Taiwan to utilize its own recent and ongoing experience balancing energy development, environmental protection, and economic development to engage more effectively with ASEAN countries. There are two avenues, which are already identified in the New Southbound Policy, through which Taiwan can engage on these issues with Southeast Asia: investment and educational exchanges.
Investment and trade already form key elements of Taiwan’s New Southbound Policy, and regional needs mean that there will be significant opportunities for Taiwan’s energy companies to expand in Southeast Asia in the coming years. ASEAN countries’ comparatively low wages, strong economic growth, and emerging partnership in the form of the ASEAN Economic Community have already led it to play an integral role in the regional supply chain. Many Taiwanese companies already take advantage of this—Taiwanese investment in ASEAN made up approximately 15 percent of ODI from 2010-2015, more than double the amount from 2006-2010.
Taiwan is already a key producer in the solar panel market, and the administration’s ambitious goal to build out renewables to 20 percent of its domestic energy capacity by 2025 will require a further buildout in both the wind and solar sectors. There would be clear knock-on benefits if Taiwanese companies and officials seriously explore the further integration of ASEAN countries into Taiwan’s renewables supply chain and manufacturing. Doing so would provide benefits to both Taiwan and ASEAN: it would support economic ties, grow familiarity with and consideration of renewables in Southeast Asian nations, and provide opportunities for Taiwanese energy companies to diversify their production base in lower-cost manufacturing centers. As price shifts, anticipated improvements in battery storage, and grid buildout make renewables more feasible for domestic deployment in Southeast Asia in the coming decade, Taiwan would be well placed to pursue joint ventures.
Taiwan’s advanced education system, ongoing domestic efforts to integrate renewables, and national reputation for technological expertise make it an attractive partner for educational exchanges. Many Southeast Asian students and officials choose to go abroad for advanced educational degrees due to a lack of respected educational facilities at home, with Singapore, Australia, and China as the prime beneficiaries. Within this context, both long and short-term study-tours can play a crucial role in advancing mid-level officials’ careers while simultaneously supporting an understanding of other countries’ experiences balancing economic development with environmental protection.
Strategically targeting students, officials, and private sector representatives who work on energy issues to take part in Taiwan’s educational exchange programs that have been laid out in the New Southbound Policy would effectively set Taiwan up for long-term engagement with Southeast Asia on an issue that will remain key to each country’s national interests in the coming decades.
These tweaks to the New Southbound Policy would not require a significant departure from Taiwan’s previous approach, but could reap significant benefits for Taiwan’s long-term relationship with ASEAN members. Doing so could also provide opportunities for Taiwan to coordinate these efforts with Australia, New Zealand, the United States, and other development partners.
The main point: In order for Taiwan’s New Southbound Policy to succeed, initiatives must address high-priority development needs in the ASEAN countries, including support for energy development that underpins the region’s economic development. Taiwan has a great deal to offer in this arena, not only in terms of investment but through supporting technical and human resource capacity building and training exchanges with students and policy-makers in ASEAN countries.