How Taiwan's New Southbound Policy can succeed: The China Post

Motorcyclists ride past a Taiwanese national flag.
Motorcyclists ride past a Taiwanese national flag. PHOTO: REUTERS

Since its launch, the Tsai administration's "New Southbound Policy" has been under the media spotlight.

However, the policy has yet to gain traction and many still doubt whether the government's attempt to pivot away from mainland China will bear fruit.

One barrier to the policy's success is an inability to explain its benefits to prospective partners in Southeast Asia.

Saying we want to reduce our dependence on Beijing may not be reason enough.

Indeed, given the size of the mainland Chinese market, many nations in Southeast Asia may be averse to engaging with a policy that seeks to bypass a major trading partner.

Regardless, closer commercial ties mean not only selling more products and services to Southeast Asia but also welcoming countries into the Taiwanese market.

With regards to the latter, Taiwan still has much work to do.

While over 10,000 Taiwanese companies have set up in Thailand, only three Thai businesses have done the reverse.

Stringent local regulations have turned Taiwan into a closed market, with barriers to entry high for foreign firms.

Another challenge lies in Taiwan's position on the South China Sea territorial dispute.

Taiwan has been assertive on the maritime claim, appearing to support the claims of mainland China. If Taiwan is trying to build a friendly rapport with countries in Southeast Asia, such a hostile stance will not help.

If the Tsai administration wants to see the "New Southbound Policy" meet its targets, a change in attitude is needed. Just like making friends in real life, Taiwan ought to do more to show its sincerity and strive harder to understand the partners it wishes to build relationships with.

Doing business in Southeast Asia - with its linguistic, ethnic and religious diversity - requires in-depth knowledge of local cultures. But on this front, the exchanges between Taiwan and Southeast Asian countries have been limited.

Despite the fact that higher education institutions in Thailand have many programs taught in English, and that hundreds of thousands of international students study there, very few from Taiwan have enrolled.

It may also have been a lack of cultural sensitivity that resulted in the heavy fine imposed by the Vietnam government on Taiwanese business Formosa Plastics Group.

Tran Duy Hai, the head of the Vietnam Economic and Cultural Office in Taipei, said in a recent interview with local media that foreign firms should respect and have a better understanding of Vietnam's culture, adding that monetary payments do not free a company from its social responsibilities.

For the "New Southbound Policy" to succeed, Taiwan has to make a win-win proposition to countries in Southeast Asia.

This means keeping not only its own, but also its partners' interest in mind.

A good example to follow is Japan's establishment of a university with a focus on industry in Thailand.

The institution provides students with valuable skills, while also supplying Japan's manufacturing sector with much needed labor.

At the same time, the university provides a destination for Japan's surplus of teachers.

This experience shows that the signing of free trade agreements is not the only means of promoting trade.

Taiwan must do more than just "doing business."

Humanitarian assistance, volunteer work and donations to partner countries in times of crisis may be a good start for demonstrating our sincerity.

* The China Post is a member of The Straits Times media partner Asia News Network, an alliance of 21 newspaper.