The Global Taiwan Brief Volume 3, Issue 8
Fortnightly Review
By: Russell Hsiao
Saga of Submarines: Licenses in the Newest Episode
By: Shirley Kan
Taiwan-Europe Engagement: Reaching Across Eurasia
By: Marzia Borsoi-Kelly and David An
Can Taiwan be a “Natural Partner” in Advancing Japan’s Indo-Pacific Strategy?
By: Emily S. Chen
Fortnightly Review
Russell Hsiao is the executive director of the Global Taiwan Institute and the editor-in-chief of the Global Taiwan Brief.
Siew-Xi Meeting: Beijing Draws Taiwan’s Business Community Closer as US-China Trade Tensions Simmers
On the sidelines of the 17th annual Boao Forum for Asia held on Hainan Island from April 8-11, Chinese Communist Party (CCP) General Secretary and President Xi Jinping met with the former vice president of Taiwan and honorary chairman of the Cross-Straits Common Market Foundation (兩岸共同市場基金會), Vincent Siew (蕭萬長). The significance of the meeting is not lost on close observers since it is the first meeting that Xi has had with a prominent political figure from Taiwan since the 19th CCP Congress last October—and as Beijing continues its freeze on high-level dialogues with the Tsai Ing-wen government.
Before the opening of the Boao Forum, Xi met with Siew’s delegation composed of business leaders from Taiwan. This was the third meeting between Siew and Xi at the Boao Forum, which has been held since 2002. In the meeting, Xi noted that “only if we insist on the 1992 Consensus, oppose Taiwan independence, the road ahead for cross-Strait [relations] will become wider, and prospects [for cross-Strait relations] will be very good.”
The Chinese media reportedly covered the meeting between Xi and Siew in its entirety. This is rare for the state-run Chinese media when it comes to Taiwan-related coverage, which suggested that Xi and the CCP’s propaganda apparatuses wanted to highlight the meeting.
Business leaders accompanying the former vice president included, but were not limited to, President of TPV Technology Limited, Jason Hsuan (宣建生), HTC Corporation Chairperson Cher Wang (王雪紅), and TSMC General Counsel Sylvia Fang (方淑華), among others. In his comments, Xi noted that many entrepreneurs from Taiwan flocked to China in the early stages of Deng Xiaoping’s “reform and opening-up.” At the time of opening, Xi was in Xiamen, Fujian, and then went to Fuzhou. Between 1991-1992, Xi reminisced how he convinced the president of TPV Technology, Jason Huan, to invest in Fuqing, a county-level city in Fuzhou. Xi pointed out that as this year marks the 40th anniversary of China’s “reform and opening up” and the 30th anniversary for when Hainan became a province, it is imperative to give credit to the Taiwanese and Taiwanese companies for China’s development. Moreover, Xi also emphasized that the prospects for cross-Strait relations is bright.
The former vice president of Taiwan attended the Boao Forum as the honorary chairman of the Cross-Straits Common Market Foundation, which he established in 2001 to promote a common market between China and Taiwan. In remarks to the press, the former vice president described the atmosphere in his meeting with Xi as warm, and expressed hope that the 31 measures that Beijing government announced in late February will be implemented as soon as possible.
In late February, the PRC State Council announced 31 broad measures to entice Taiwan businesses and persons to invest, live, and work in China. The measures are now being executed at the provincial and local level. According to the spokesperson for the State Council’s Taiwan Affairs Office (TAO), Ma Xiaoguang, the 31 measures were reportedly being fully implemented in Xiamen City, Fujian province, and in Wenzhou City, Zhejiang Province. On April 10, Xiamen City introduced 60 measures in accordance with the 31 measures, which, among other things, set a target of offering people from Taiwan up to 5,000 jobs and internships each year, and allowing them to enjoy the same benefits of employment and training subsidies as the local people. For instance, a master’s degree candidate who has worked in the locality for a year can also receive a subsidy of NT$140,000 (US$4,774.25).
The 60 measures introduced by Xiamen were divided into five major parts, which complement and enhance the 31 measures announced by the TAO, with a focus on youth, primary and secondary schools, scientific research institutes, higher education, and enterprises in order cultivate talents on both sides of the Taiwan Strait. The measures include opportunities for students to: study, find internships, seek jobs, and start businesses. Moreover, the measures allow for the provision of medical insurance, waived fees for funeral services, subsidies for vocational training, living rent subsidies, transportation subsidies, as well as significant monetary subsidies for people with exceptional talents to work in China.
The meeting between Siew and Xi took place against the backdrop of a brewing “trade war” between the United States and China. In early April, the Trump administration announced that it will levy 25 percent tariff on more than 1,300 imported goods from China. Beijing responded by announcing its own tariffs on American products worth around $50 billion, including soybeans and pork. As Washington and Beijing raise the stakes in a potential trade war, Beijing appears to be deliberately drawing Taiwan and, in particular, its business community and youth closer into its economic orbit. This will present a unique challenge to Taiwan’s current government as it tries to navigate the increasingly complex strategic environment. According to analyst Alexander Huang who was quoted in the South China Morning Post, “I think the [Taiwan’s business community] will welcome the further improvement and integration of the so-called cross-Strait common market, but the government will raise the alarm and probably remind people that there are potential risks.”
The main point: Against the backdrop of a brewing “trade war” between the United States, Beijing appears to be deliberately drawing Taiwan closer into its economic orbit.
Taiwan: Next Stop, Super-Aged Society by 2025
Taiwan is officially an “aged society.” According to the country’s Ministry of Interior (內政部)—a cabinet level policy-making body responsible for population, land, construction, military service administration, national emergency services, local administration systems, law enforcement and social welfare—Taiwan’s elderly population, 65 years and older, has exceeded 14 percent of the total population in March.
According to the World Health Organization, when a country’s population is composed of 7 percent of people 65 years or older, that society is by definition an “ageing society.” When that ratio reaches 14 percent of the total population, then that society is an “aged society;” when it reaches 20 percent then it is a “super-aged society.” Taiwan became an ageing society in 1993. After 2011, ageing on the island began to accelerate. At the end of 2014, elderly people composed 12 percent of the population, and exceeded the young population in 2017. In March, people aged over 65 accounted for 14.05 percent of the population.
The national trend in ageing is reflected at the county and city levels, according to the Ministry of Interior. Between 2011 and 2018, the number of aged counties and cities increased five-fold, from three to 15. The elderly population in Chiayi County in southwestern Taiwan is the highest at 18.61 percent. With 16.58 percent of elderly people, Taipei City is among the six major cities with the highest ratio of elderly people.
Compared to other major Asian countries, the elderly population in Taiwan is second only to Japan, and comparable to South Korea. Taiwan’s National Development Council’s forecasts that Taiwan will become a “super-aged society” by 2025. Japan has been a super-aged society since 2013 with more than 25 percent of its population 65 years or older. By comparison, “in the 1950s, at the height of the US manufacturing supremacy, less than 10 percent of the country was older than 65. That share will double to 20 percent by 2050.” The pace of its transition, however, sets Taiwan apart. Taiwan’s transition from an aged society to a super-aged society (est. eight years) will be faster than the 11 years it took Japan, 14 years for the United States, 29 years for France, and 51 years for England, but comparable with the estimated time horizons for South Korea (8 years) and Singapore (7 years.)
Ageing, however, is a not a new problem for Taiwan’s leaders. As early as 2011, Taiwan’s officials have warned about a demographic “time bomb.”
In order to deal with the challenges associated with an ageing population, such as retirements, elderly care, reduction in the work force, and the low fertility rate, the Ministry of Interior began implementing the “Long-term care 10 year plan 2.0” (長期照顧十年計畫二．○). The “Foreign Professionals Appropriation and Employment Act” (外國專業人才延攬及雇用法), which was passed last November, also aim to enhance employment competitiveness by loosening the restrictions for foreign professionals to work in Taiwan. The Ministry of Interior has also developed the “Countermeasures for Responding to Ageing Population Shocks” (內政部因應人口結構老化衝擊之對策) to retain and support talents, foster a safe home environment, and provide safety nets for new families and pregnancies that involve minors through rent subsidies and other measures.
While the challenges facing Taiwan as its society ages is attributed in large part by the country’s low fertility rate and high-life expectancy, the problem for Taiwan is made more complex by other factors, such as a brain drain in which many of the country’s talents are being lured by Beijing to work and hence live in China, and further exacerbated by the military threat it faces from across the Strait.
In the 1950s, Taiwan’s birth rate was at 7.05 births per woman, but today Taiwan’s birth rate is below 1 birth per woman (2011). According to Sinclaire Prowse, “Taiwan currently has the third lowest fertility rate in the world. If the situation does not improve, the projected overall fertility rate will drop back down to 0.9 by 2060. This is an unsustainable drop that could have potentially devastating economic and security implications for Taiwan.” Immigration will serve as a crucial mean of addressing the problems associated with the demographic challenge of a shrinking workforce in Taiwan, according to Prowse.
Yet, that’s not all. On the military implications of this demographic trend, analyst Mike Mazza observed:
First, with an aging and shrinking population, government tax revenues are almost certain to contract … The national budget pie is likely to shrink in the coming decades. Even if defense spending does not shrink relative to other line items, it will shrink in absolute terms … Taiwan’s demographic trends also have a more direct effect on the island’s defense. As Taiwan’s 2017 Quadrennial Defense Review noted, “the impact of our social and economic environment, along with a low birth rate, has been to reduce available manpower, negatively impacting our troop replenishment and operational strength.””
These challenges are compounded with the trend of how “hundreds of thousands of Taiwanese flooding to their booming neighbor to find work,” and this is “fueling fears of a brain drain on the island.” As astutely noted in the Washington Post article, “it is a brain drain that China appears to be gleefully exploiting.”
The main point: Taiwan is officially an “aged society” and accelerating to a “super-aged society” with serious implications for economic and national security. Taiwan’s government is taking steps to respond to this reality, but questions remain whether it will be enough.
Saga of Submarines: Licenses in the Newest Episode
Shirley Kan is Retired Specialist in Asian Security Affairs who worked for Congress at the non-partisan Congressional Research Service (CRS) and a Member of GTI’s Advisory Board.
The Trump Administration’s approval of marketing licenses for US companies to discuss potential technical assistance for Taiwan’s Indigenous Defense Submarine (IDS) program was overdue. As I wrote in last December’s GTB on a conceivable “second Trump-Tsai phone call,” the State Department conveyed conflicting decisions concerning assistance for Taiwan’s IDS program thereby undermining US credibility with incoherent messages. Now that the Administration has resolved the reversals for the pending licenses and has allowed defense companies to brief Taiwan’s Navy, what are some implications in this newest episode in the saga of submarines since at least 2001? What does this starting step mean and what does it not mean?
Marketing Licenses for Submarines
On April 7, Taiwan’s Ministry of National Defense (MND) announced that the US Department of State approved marketing licenses for US companies to talk to Taiwan about its domestic submarine program. MND asserted that Taiwan will become more “self-sufficient” in defense. A spokesperson for the State Department implicitly confirmed the step, asserting to Taiwan’s media that US sales of defense articles and defense services are guided by the Taiwan Relations Act (TRA) and based on assessments of Taiwan’s defense needs.
On the other side of the Taiwan Strait, the Ministry of Defense of the People’s Republic of China (PRC) responded on April 9 that the PRC strongly opposed the US licenses and urged the United States to stop military contact with and arms sales to Taiwan. The PRC also demanded that the United States abide by the three US-PRC Joint Communiques, stressing that the “one China principle” is the political foundation for bilateral ties. The PRC also threatened a possible use of force against Taiwan, warning that the PRC’s military “has the ability and determination to defeat all attempts to separate our country, and will adopt all necessary measures to resolutely defend national sovereignty, security, and territorial integrity.” The PRC did not name any specific steps.
On April 16, President Tsai Ing-wen (蔡英文) stated that the US licenses will not only help Taiwan to defend itself but also help maintain cross-strait peace and prosperity.
Overdue Decision for a Starting Step
In June 2014, Taiwan’s MND decided to seek US Direct Commercial Sales (DCS) for an IDS program to build diesel-electric submarines to supplement two Hai Lung-class (former Zwaardvis-class) submarines. The new issuance of pending marketing licenses to allow US defense companies to discuss potential technical assistance for the IDS program is an overdue step and could have been issued a year ago without reversals. Last year, the State Department’s inconsistency undermined US reliability, coherent decision-making, and progress in assistance for Taiwan’s stronger defense. The licenses are required for US companies to brief Taiwan’s Navy on potential technical assistance, which would still require additional approvals, inter-agency decisions, and reviews by Congress.
Now, the White House effectively is directing inter-agency decisions and lifting a counter-productive ban on talks about Taiwan’s IDS program. The White House is fixing problems that obstructed credible, coordinated policymaking. The Administration’s approach is in adherence to the TRA, informed about defense matters, and strong in not conceding to the dictates of the regime in Beijing threatening Taiwan. The TRA requires decisions on defense articles and defense services to be based solely on the judgments of the President and Congress about Taiwan’s needs along with the US military’s professional reviews.
As an overdue resolution of twisting and turning for a decision that could have been conveyed in a straight-forward way last year, the licenses are not timed now to provoke tension in the Taiwan Strait or in US-PRC ties. However, some media reports are hyping Taiwan as a “flashpoint” and the Trump Administration’s and Congressional efforts as part of “tension” with the PRC along with “trade wars,” differences over North Korea’s threats, and legislation to support a stronger Taiwan, despite long-overdue measures to counter China’s economic, political, and security challenges.
US security assistance is carefully considered for substantive effects to strengthen Taiwan’s deterrence and defense of its island against the PRC’s threats to use force. The licenses do not warrant the shrill charges by PRC Ambassador Cui Tiankai (崔天凱) in Washington that US policy seeks to stop China’s so-called “reunification.” Indeed, Cui vindicated Taiwan’s need for self-defense, warning that China will achieve “reunification” through “whatever means necessary.“
Taiwan never was a part of the PRC, so its goal would not be really “reunification.” US policy (as considered in the Legislative and Executive Branches) promotes the interests of stability for a peaceful resolution of the Taiwan question, not any set outcome.
Thus, in the short term, the Administration’s new decision means that the United States is starting to help Taiwan to build diesel-electric submarines through its IDS program. Initial briefings still require the licenses. This step releases long-awaited licenses for US firms to talk to Taiwan’s Navy about potential assistance, not for the exports of submarines or technical assistance of software, components, combat systems, or systems integration.
Significance for Saga of Submarines
In the long-term context, however, the release of the licenses is significant. The initial decision by President George W. Bush in April 2001 to sell Taiwan eight diesel-electric submarines entailed options for either a government-to-government Foreign Military Sales (FMS) program or a DCS program with US companies providing technical assistance. Taiwan first opted for an FMS program. Since then, despite discussions for years by legislators, other officials, and companies of the United States and Taiwan, that initial endeavor did not reach results. Political problems obstructed progress on both sides, particularly the partisan disagreements in Taiwan.
Facing Taiwan’s increasing challenges in defense and determination to develop domestic defense industries, the licenses signal support for assisting Taiwan at least to conceptualize wisely the options for its IDS program. Also, the licenses indicate continuation of the trend of transitioning from selling major weapons systems to technical assistance. Overall, this Administration is willing to make difficult decisions that previous Administrations put off.
The Administration is signaling some resolution of a long-standing debate about whether it is in the US interest to assist Taiwan to acquire submarines. There have been legitimate concerns about whether Taiwan can afford the time and limited defense budgets to urgently upgrade defense in an effective manner, as well as whether Taiwan has adequate technical capability and protection of technology and secrets. Moreover, undersea warfare presents a complicated challenge, including for the US Navy. Still, some advocates, such as former Pentagon official Mark Stokes, have stressed submarines for Taiwan’s survivable, credible deterrence, as well as asymmetrical advantages.
However, uninformed opinions distracted deliberations, arguing unwisely whether Taiwan’s submarines are “offensive” or “defensive.” Now, the Administration’s decision on the licenses is consistent with the understandings that weapons systems cannot be simplistically labeled one way or the other and that Taiwan’s military strategy is inherently defensive.
For Taiwan, the acquisition of submarines is moving in the direction of domestic industry and away from the past goal to procure foreign submarines. Taiwan will need to show a sufficient capability to build submarines. Taiwan’s MND describes the IDS program as the first priority in domestic naval shipbuilding. The program seeks to integrate industrial, governmental, and academic resources to develop domestic design and construction, improve domestic equipment, and build up critical technology. The design phase is planned for 2016-2020.
The marketing licenses to allow US commercial briefings is only a starting step. As a legislator, Wang Ding-yu (王定宇), stated in Taiwan, its military “needs to improve its underwater combat capabilities, which it should have done 10 years ago.” Wang added that, “the nation’s development of submarines is already 20 years behind schedule, but better late than never.”
Thus, the main lesson for Taiwan in this saga of submarines is that Taiwan has lost time that it cannot afford in building up its deterrence and defense. Taiwan needs to strengthen its military to focus on the self-defense of the island while wisely applying its limited defense resources and technical capability. Also, Taiwan needs to do more to demonstrate its trustworthiness in safeguarding secrets and sensitive technology. Taiwan has urgent needs to raise the budget and strengthen deterrence and defense by focusing substantively on priorities that include its volunteer force, doctrine, reserves, veterans, security clearance process, protection of technology, cyber security, realistic training, and asymmetric warfare.
The main point: The release of marketing licenses to allow talks about Taiwan’s IDS program was overdue and not meant to provoke tensions. The licenses are a starting step. Taiwan needs to show seriousness about its submarine capability, self-defense, and safeguarding secrets and technology.
Taiwan-Europe Engagement: Reaching Across Eurasia
By: Marzia Borsoi-Kelly and David An
Marzia Borsoi-Kelly is a program associate at the Global Taiwan Institute, and she was previously a research analyst and co-editor of the book U.S. Counterterrorism: From Nixon to Trump. David An is a senior research fellow at the Global Taiwan Institute and was previously a political military officer at the US Department of State.
Taiwan officially held its first Human Rights Consultation with the European Union (EU) in Taipei on March 22. At the joint press release of the Human Rights Consultation, the EU stated that “Taiwan is an established, pluralistic democracy that shares the universal values of human rights and rule of law with the EU, which was confirmed in these Consultations.” The EU congratulated “Taiwan’s far-reaching human rights agenda and encouraged Taiwan to actively communicate internationally about its human rights model.” At the meeting, Taiwanese and European officials discussed the abolition of capital punishment, the promotion of equal rights for LGBTQ communities, and rights of migrant workers. Delegates from the EU and Taiwan also met with civil society, and agreed to hold a second Human Rights Consultation next year in Brussels. The meeting on March 22 represents a promising start for strengthening Taiwan-EU relations as it seems to signal the EU’s political will to increase ties with Taiwan. As leaders in Taiwan and the EU consider ways to enhance their relationship, it is worth taking a broad view of Taiwan’s relations with Europe and look beyond to political dialogues, people-to-people exchanges, trade, and other potential for multilateral exchange.
Trade
While the EU engages with Taiwan in a number of different areas, trade is among the most prominent. According to 2017 data from the European Commission, trade flows between Taiwan and Europe are among the highest in the world. The EU is Taiwan’s fourth trade partner, just after the People’s Republic of China, the United States, and Japan. Vice versa, Taiwan is the EU’s 18-largest partner, and the seventh-largest in Asia. Considering the smaller size of Taiwan compared to the 28 member states that constitute the EU, the ranking is quite impressive. Trade has also been institutionalized, as in 2003 the European Economic and Trade Office (EETO) was created and since then 16 members of the EU have established representations in Taiwan. In turn, Taiwan has opened representative offices in 19 EU member countries. On a more international level, the EU and Taiwan work closely together on trade in the World Trade Organization.
Strengthening trade and investment relations with the EU is a smart move by Taiwan, since it allows Taiwan to diversify its own economy through imports and find a market for its exports. Germany, the Netherlands, the UK, France, Italy, Spain, and Belgium are the main seven trade partners that Taiwan has in the EU. However, deeper ties with the EU and its member states is also crucial for Taiwan considering the impending loss of the United Kingdom through “Brexit.” Brexit will be challenging for Taiwan since the UK is among the strongest voices that promote Taiwan ties within the EU. Therefore, it is in Taiwan’s best interest to cultivate deeper friendship with the other European countries, and vice versa, considering the shared democratic values, belief in human rights, open trade, and transparency.
In October 2015, the European Trade Commission announced the willingness to consider a Bilateral Investment Agreement (BIA) with Taiwan. However, after almost three years from the announcement, the BIA has still not been reached. Part of the reason could be that European companies view the Chinese market as providing more possibilities than the Taiwanese one, and Europeans may think they need to choose one or the other. Nevertheless, Taiwan should continue to pursue the BIA with the EU due to the promise of creating greater trade flows through that mechanism.
Diplomatic and political cooperation
Taiwan’s one official diplomatic partner in Europe—the Holy See—belie the wide scope of Taiwan-Europe engagement far beyond formal partnerships. Nonetheless, for now, the Taiwan-Holy See relationship seems more resilient than many observers had expected despite rumors that the Vatican is inching closer to establishing formal relations with the PRC, which necessarily mean that it would have to end its diplomatic ties with Taiwan. Beyond the Holy See, Taiwan has a number of dialogues with the EU and other European countries. The European Parliament Taiwan Friendship Group was founded in 1991 and it is a major venue of cooperation. It is notable since many countries have joined this friendship group and made it one of the largest within the European Parliament. Other specific bilateral groups include the Germany-Taiwan Parliamentary Friendship Group, the France-Taiwan Parliamentary Friendship Group, and the Belgium-Taiwan Parliamentary Friendship Group. Therefore, there are abundant informal institutional linkages beyond official country-to-country diplomatic relations.
Among the main bodies that form the EU, the European Parliament is the strongest advocate for continuing relations between Brussels and Taipei. Within the EU Parliament, the aforementioned European Parliament Taiwan Friendship Group has supported Taiwan’s participation in international organizations, including in the International Civil Aviation Organization (ICAO). Moreover, in 2011 the EU Parliament Taiwan Friendship Group was a key force that allowed Taiwan to become part of the visa-free travel within the Schengen Area. This allows Taiwan nationals to travel across 26 European countries without the need for a visa to enter each one of them. However, the EU officially recognizes the “One-China” Policy, and therefore keeps much of the relationship with Taiwan on an informal basis.
The EU Parliament has pledged its “strong support for Taiwan’s democratic values” and “strong opposition to the use of force in the Taiwan strait.” There are many dialogues between the EU and Taiwan, and cooperation especially in trade. On an institutional level Taiwan and the EU cooperate on many issues that range from education, to climate change, cultural exchanges, science and research. A delegation of EU and Taiwan members have also discussed the possibility of “cooperating in developing industries of the future” and also focus on AI, green energy, and establishing a circular economy. However, more needs to be done to strengthen cooperation between the EU and Taiwan, especially as a number of European member states are focusing more on China and starting to view their Taiwan relations as a subset of their China relations. This is further augmented by the fact that some European countries look favorably to China’s Belt and Road Initiative (BRI). Taiwan needs to keep an eye on possible competition over Europe steaming from China’s BRI, which is a topic we will explore in a future article.
Security cooperation
Taiwan and EU’s relation is further strengthened by membership in the Global Coalition against ISIS, in which Taiwan provides “humanitarian aid to victims of ISIL [ISIS, Daesh] attacks.” Since 2003, Taiwan is also a part of the Major non-NATO allies (MNNA), which stipulates that “[a]ccording to the Defense Security Cooperation Agency, MNNA status makes Taiwan eligible for stockpiling of U.S. defense articles; purchase of depleted uranium anti-tank rounds; with a reciprocity agreement, exemption from indirect costs, administrative charges, and billeting costs for training; and use of any allocated foreign military financing programs (FMFP) funding for commercial leasing of defense articles.” Taiwan works with the US and its European partners through this mechanism.
While there is much trade and informal institutional engagement between Taiwan and Europe, both sides would continue to benefit by developing greater awareness of each other. It feels like events and news about Taiwan are currently rarely reported in the media of the EU member states, but they should be more widely reported. It is necessary to promote a better understanding of Taiwan’s issues, the democratic values it shares with the EU, its open economy which is beneficial for the EU, in order to promote further cooperation not only on an economic, but also political, and cultural level. This understanding of Taiwan should be among officials in the EU, but also cultivated among the citizens of each EU member state. Though Taiwan already maintains its official diplomatic partnership with the Holy See in Europe, the EU and Taiwan enjoy abundant trade, and there are strong institutional ties, but there is potential for an even closer relationship.
The main point: There is an abundance of dialogues between the EU and Taiwan, especially in trade cooperation. However, both sides could do more to strengthen cooperation with one another through international security collaboration, news media coverage, and increasing the number of formal diplomatic relationships.
Can Taiwan be a “Natural Partner” in Advancing Japan’s Indo-Pacific Strategy?
Emily S. Chen is a Ph.D. student at the University of Tokyo focusing on international relations and comparative politics in East Asia. Previously, she was a fellow with the Hoover Institution and the Center for the National Interest. She holds a Master’s degree in East Asian Studies from Stanford University.
While US President Donald Trump’s articulation of a “free and open Indo-Pacific” since his first Asia tour last November has garnered a good deal of notice, the geopolitical concept of Indo-Pacific in the twenty-first century had been given a head start on the other side of the world. More recently, in August 2016, Japanese Prime Minister Shinzo Abe declared a “free and open Indo-Pacific Strategy.” To promote global stability and prosperity, Japan sees a need to enhance connectivity between the “two continents” of vast population and economic potential, Asia and Africa, through a free and open maritime order between the “two oceans,” the Pacific and Indian Oceans. While this geostrategic term “Indo-Pacific” is nothing new to Japan—with the idea dating back to Prime Minister Abe’s speech titled “The Confluence of the Two Seas” delivered to the Indian parliament in August 2007—the most recent articulation of the concept has drawn more attention, as the idea was echoed by the United States, India, and Australia.
Taiwan, given its geographical location between the Indian and Pacific Oceans, is an inalienable part of the Indo-Pacific region. As a free and democratic society, Taiwan seems to be a natural partner—or a “natural stakeholder,” in the words of Taiwan President Tsai Ing-wen—in Japan’s Indo-Pacific Strategy. Furthermore, Taiwan President Tsai Ing-wen has also expressed Taiwan’s intention to work to promote the “free and open Indo-Pacific Strategy” in a meeting with Chairman James Moriarty of the American Institute in Taiwan (AIT) last December. Taken together, will Taiwan’s strategically important location, the values of freedom and democracy it shares with Japan, and its intention to cooperate make it a partner in promoting Japan’s free and open Indo-Pacific Strategy? And how can Taiwan and Japan cooperate in promoting the strategy?
The China factor
Despite frequent exchanges and the deep affinity between the Taiwanese and Japanese societies, when it comes to official interactions with Taiwan, Japan has to proceed with caution and take a balanced approach in consideration of its relations with China. It has been especially cautious because 2018 marks the 40th anniversary of the conclusion of the Treaty of Peace and Friendship between Japan and China, and both countries seem intent on capitalizing on the anniversary to seek a rapprochement. In his speech delivered at a New Year’s event in Tokyo on January 5, Japanese Prime Minister Shinzo Abe declared his intention “to make this year one for people in both countries able to recognize a major improvement in Japan-China relations.” Likewise, at a meeting with his Japanese counterpart Taro Kono later that month, Chinese Foreign Minister Wang Yi stressed the importance of “improving and developing” bilateral relations, and expressed his hope to work with Japan to establish more cordial ties.
Despite a consensual willingness to improve strained relations, this momentum for improving bilateral ties between Japan and China remains fragile. As Wang Yi pointed out in the January meeting with his counterpart, while there has been positive progress, there are also many “disturbances and obstacles” in the China-Japan relations. In particular, as with its suspicion toward Abe’s persistent attempts to revise Japan’s postwar pacifist Constitution, China has not taken well to Japan’s Indo-Pacific Strategy. Chinese official media have often portrayed the Indo-Pacific Strategy as a joint attempt by the United States, India, and Australia to “compete with and contain” China, and to “counterbalance” China’s growing influence and presence in Eurasia and Africa under China’s Belt and Road Initiative.
It is undeniable that Taiwan, as a free and democratic society in the Indo-Pacific region, seems to be a natural player in Japan’s Indo-Pacific Strategy. However, considering the nascent momentum for a Sino-Japanese rapprochement, coupled with China’s suspicion regarding the intent of Japan’s Strategy, Japan is unlikely to risk touching a nerve in China by officially inviting or recognizing Taiwan to be a partner in promoting the Indo-Pacific Strategy. From China’s perspective, an explicit partnership between Japan and Taiwan challenges its core territorial and political interest in Taiwan. However, that does not mean that Taiwan will be left out of the picture.
Joint work is what matters
While Japan may not openly identify Taiwan as an official partner in promoting a free and open maritime order in the Indo-Pacific region, this does not suggest that a bilateral cooperation under the framework of the Indo-Pacific Strategy is impossible. At a February forum in Tokyo on Northeast Asia’s security, one panelist suggested looking at Japan’s Indo-Pacific Strategy as an abstract concept that “only exists in the minds of the beholder” and reminded us of the importance of the concrete actions taken under the umbrella of the strategy. Indeed, as a concept, the strategy can be political and strategic, but what matters are the actions that are tangible and real. This idea is especially helpful in positioning Taiwan in Japan’s Indo-Pacific Strategy and finding a leeway for bilateral cooperation between Taipei and Tokyo, given official cooperation between the two sides is limited by both institutional constraints—the absence of formal diplomatic relations—and China’s sensitivity to Taiwan’s external relationships.
So, where can bilateral cooperation be fostered? According to the Special Advisor to Prime Minister Abe, Kentaro Sonoura, Japan’s Indo-Pacific Strategy has three main courses of action: 1) to promote the freedom of navigation and the rule of law in the Indo-Pacific region; 2) to seek economic prosperity by expanding infrastructure development and trade and investment from a rapidly growing Asia to a developing Africa; and 3) to secure peace and stability through providing capacity building assistance for maritime law enforcement and disaster prevention. How can Taiwan take part in these three approaches? Unlike what can be achieved between the governments of Japan and some ASEAN countries (like Malaysia), the institutional limitation and the China factor have made it hard for Taipei and Tokyo to jointly work in such areas as maritime security capacity building and defense cooperation. However, there is room for Taiwan and Japan to work together in the areas of business and developmental assistance, with a starting focus on countries in Southeast Asia and South Asia.
The two areas reflect the overlapping interests and policy alignment between Japan’s Indo-Pacific Strategy and Taiwan’s New Southbound Policy (NSP), a concerted effort to expand Taiwan’s presence through economic and people-to-people exchanges in countries of ASEAN, South Asia, as well as Australia, and New Zealand. Similar to Japan’s attempt to expand infrastructure development and business opportunities in the Indo-Pacific region, Taiwan has signaled that commerce, tourism, and infrastructure are the “three potential-laden fields of cooperation” with the targeted countries under the NSP. Taiwan has also created a series of funds to expand business investments and infrastructure developments under the NSP framework, including President Tsai’s pledge last October to establish an investment fund of US$3.5 billion to assist NSP targeted countries with infrastructure and development projects. In fact, there are signs of budding cooperation between Japan and Taiwan on jointly exploring business opportunities. Sources from the Taiwan government have indicated that Tokyo has expressed interest in cooperating with Taipei on helping small and medium-sized enterprises (SMEs) of both countries to venture into Southeast Asian markets.
Conclusion
Given Taiwan’s location, its values of freedom and democracy, and its intention to promote peace and stability in the Indo-Pacific region, it is not an overstatement to say that Taiwan is a natural partner in Japan’s Indo-Pacific Strategy. But the absence of diplomatic ties and Japan’s concerns about China will likely limit Taiwan’s role in Japan’s Indo-Pacific Strategy. However, rather than fixating on the political and strategic aspects of the Strategy, Japan and Taiwan can find opportunities for cooperation by focusing on the tangible work that can be done, starting in the areas of business and developmental assistance in Southeast Asia and South Asia.
The main point: While the absence of diplomatic ties and Japan’s concerns about China will likely limit Taiwan’s role in Japan’s Indo-Pacific Strategy, there are many opportunities for cooperation in areas such as business and developmental assistance.
