Taiwan’s Advantages over China in Engaging Europe

Taiwan’s Advantages over China in Engaging Europe

Taiwan’s Advantages over China in Engaging Europe

While China’s Belt and Road Initiative (BRI) is strongly supported by Russia’s President Vladimir Putin and many of China’s continental Asian neighbors, European countries have mostly distanced themselves from this initiative. Europe is the primary market for China’s goods in its BRI scheme and it is telling that UK Prime Minister Theresa May declined to endorse China’s BRI ahead of her state visit to the People’s Republic of China (PRC) months ago on January 30, much to Beijing’s chagrin. Furthermore, Germany and France have also been wary of endorsing China’s BRI, especially considering the growing backlash in Europe over bilateral trade and investment imbalances with China. This phenomenon creates greater space for Taiwan to work with Europe, free from the skepticism that Europe has towards China. Taiwan has a stronger foundation with Europe, which is based on shared democratic values, liberal constitutional political regimes, rule of law, and mutual trust. Focusing on Taiwan’s engagement with Europe is a more pertinent comparison to China’s BRI—while there are major differences in Taiwan’s versus China’s types of cooperation and scale—than the typical discussion of Taiwan’s New Southbound Policy (NSP) as a corollary.

Taiwan looking beyond the China partnership

For Taiwan, “diversification” away from China is a “free form of insurance”—to borrow a well-known economics concept. After all, China’s Minister of Industry and Information Technology Miao Wei (苗圩) said, “industry on both sides of the Taiwan Strait can join hands to develop, which is good for both economies, and is also extremely helpful for promoting the unification of our two sides and achieving the aim of one China.” As China clearly articulates its political intentions of economic cooperation with Taiwan, it makes sense for Taiwan to strengthen its ties with Europe and other regions to keep its options open. It is not surprising that Taiwan’s investment in China has been dropping for the third straight year.

As the government and people of Taiwan are increasingly wary of looking west across the Strait to China, it is continuing to look in every other direction to keep its economic options open. Taiwan looks north toward Japan and South Korea, east across the Pacific to the United States and Latin America, and south with its New Southbound Policy directed at Southeast Asia and South Asia.

Taiwan’s total trade with Europe is valued in the order of magnitude of $50 billion US dollars per year, which is dwarfed by Taiwan’s cross-Strait trade with China at around $250 billion US dollars per year. Taiwan’s efforts toward China and Europe are both dwarfed by China’s trade with Europe, at $667 billion US dollars per year. However, in Europe, Taiwan’s engagement surpasses simple trade to include people-to-people exchanges, political institutional cooperation such as the European Parliament Taiwan Friendship Group, and many other areas mentioned in our previous co-authored Global Taiwan Brief article on Taiwan-Europe cooperation.

Taiwan’s recent festivities and growing focus on Europe

The people in Taipei have recently celebrated several festivities that symbolize and reflect its growing ties with Europe. The Europe Fair held in Taipei on May 5—days ahead of the annual Europe Day celebration on May 9—showcased European food, culture, and performances. The May 9 celebration in Taipei was a significant event since that date marks the anniversary of the Schuman Declaration of 1950 that led to the formation of what is now the European Union.

President Tsai attended the Europe Day dinner banquet and made remarks emphasizing the strength and future of the Taiwan-Europe relationship. She mentioned that Taiwan will boost its robust economic ties with Europe especially in emerging areas such as green energy and smart machinery. Tsai recapped how two-way trade between Taiwan and Europe rose 9 percent a year to a record high of $53 billion US dollars in 2017. Aside from trade, a large number of European officials and parliamentarians visit Taiwan each year, which firms up informal diplomatic and political ties. In addition, the first-ever Taiwan-EU Human Rights Consultation was also held recently in Taipei on March 22.

At the Europe Fair festival in Taipei, “Moomoo” the blue buffalo mascot represented features of both Taiwan and Europe. The cartoonish and friendly life-sized blue buffalo was selected by Taiwan’s 2018 Europe Fair organizers as the symbol designed to “bring the EU and Taiwan together,” as explained by the event hosts. The local Taiwan university student who won the design context explained that the mascot brought together two important motifs for both Europe and Taiwan: the Greek myth that the continent of Europe originated from a bull and a princess named Europa, and the water buffalo, which represents the friendly and hardworking spirit of the Taiwan population.

Taiwan also holds key political comparative advantages in its approach with Europe. Like Europe, Taiwan values the free flow of information and ideas. Furthermore, Taiwan is a liberal constitutional democracy with rule of law and respect for universal human rights. These are important features that Taiwan shares with its European partners, making Taiwan an even more attractive partner. Also, these very features that bring together Europe and Taiwan, are the ones that China lacks in its engagement with Europe.

Juxtaposing Taiwan’s Engagement with Europe with China’s BRI and Taiwan’s NSP

Through BRI, China has also been targeting Europe as a final destination for its goods. China continues to build infrastructure through Central Asia, South Asia, and the Middle East as part of its six corridors to connect China to Europe. This is one key difference from Taiwan: China’s focus is on building infrastructure and involves large cash infusions with individual projects in the order of magnitude of hundreds of millions of US dollars. Instead, Taiwan is not targeting large infrastructure works such as building commercial ports, railways, roads, and stadiums.

Though China’s BRI is focused on Europe, many of China’s partners are wary of a trade imbalance and China’s growing economic and political influence in Europe. Furthermore, a recent title on a Foreign Policy publication captures the sentiment: “China’s Global Dreams Give Its Neighbors Nightmares.” The article continues, “[f]rom Russia to Central Asia, Beijing’s Belt and Road Initiative triggers bad memories of Chinese imperialism.”

In contrast to BRI, Taiwan’s NSP toward Southeast Asia emphasizes collaborative regional relationships rather than BRI’s vision in “lead[ing] a new regional order.” In contrast to China’s project, Taiwan takes an open-minded attitude, appears for bilateral and multilateral cooperation, and strives to promote economic prosperity and robust societies. Taiwan does not aim to forcibly seize resources and production bases overseas, nor does it want to expand its domestic market without limits, according to Taiwan’s National Chengchi University Professor Alan Yang.

However, it is hard to compare BRI with NSP because of a major difference in geographical scale. Previous reports that tie China’s efforts to reach Europe through the BRI with Taiwan’s NSP overlook the fundamental difference in the two strategies’ geographical scope and scale, with the former spanning the entire Eurasia continent and the latter confined to the Indo-Pacific. Therefore, though at a smaller magnitude of investment and far less focused on infrastructure development, Taiwan’s diplomatic and trade ties with Europe are more comparable with China’s BRI.

In the final analysis, Taiwan’s engagement with Europe is a better comparison with China’s BRI than the traditional comparison with Taiwan’s NSP. After all, Europe is the trade destination that drives China’s BRI, which is far from the goal of the NSP, which instead is focused on the Indo-Pacific region. Indeed, there are major differences between Taiwan’s engagement with Europe compared to China’s endeavors. Taiwan is neither creating land and sea trade routes through Southeast Asia, South Asia, Central Asia, and the Middle East. Nor is Taiwan focused on local infrastructure investment in the magnitude of tens or hundreds of millions of dollars per project. Nonetheless, Taiwan shares essential common traits with Europe that China lacks, such as democratic governance, liberal values, commitment to open information and other important freedoms that China lacks. It explains why Taiwan is already doing much in Europe, and why President Tsai explained weeks ago at the Europe Day dinner event that there is potential to do much more together.

The main point: Taiwan’s trade and political institutional engagement with Europe is a better comparison with China’s Belt and Road Initiative than the traditional comparison with Taiwan’s New Southbound Policy. While Taiwan enjoys many advantages, there are major differences between Taiwan’s engagement with Europe compared to China’s endeavors in terms of scale and types of cooperation.