Taiwan's 'New Southbound Policy' resembles empty promise: The China Post

Mr James Huang, who is in charge of Taiwan’s New Southbound Policy.
Mr James Huang, who is in charge of Taiwan’s New Southbound Policy.PHOTO: NEW SOUTHBOUND POLICY OFFICE

In its editorial on July 29, the paper urges policy makers to introduce clear strategies and concrete action plans to encourage trade with South Asia and Asean.

Two months have passed since the new administration took office, but the touted "New Southbound Policy" — one of the key policies of President Tsai Ing-wen's campaign — is starting to resemble an empty promise.

As opposed to the more Westward-oriented former President Ma, Tsai proposed to add weight on six South Asian countries in addition to Asean partners, particularly extending Taiwan's influence in the Indian market.

James Huang, former foreign minister and head of the New Southbound Policy office, has been careful not to make the policy seem like a provocation to mainland China, weary that its goals would not pan out if Beijing takes offense.

Huang stressed the policy does not mean relinquishing the mainland Chinese market, but it is searching for a larger driving force for Taiwan's economy.

"The reason for pushing for this policy is simple — because every other country is investing in Southeast Asia. Of course we should take action. In fact, we still have to catch up with the U.S., Japan, India, even mainland China," Huang told Singapore's The Straits Times last month.

Huang is not wrong in emphasising the urgency of quickly expanding Taiwan's influence in Southeast Asia, warning that Taiwan's advantages in Asean will gradually erode in the next five years. 

He was also stating the facts when he told the media Asean countries have a combined population of 650 million people, many of whom are young and willing to spend. 

Analysts have forecast a growing middle-class in "the world's next factory," as the number of people categorized as middle-income or up in 2014 is set to more than double within five years. Its 10-member GDP now totals more than US$2.5 trillion (S$3.38 trillion)  .

"The crux of the 'New Southbound Policy' is to see Asean as an extension of Taiwan's domestic market," said Huang.

On one hand, they are using facts to threaten and unsettle people, pushing them to support the southbound cause on one hand, and pulling Taiwanese business owners with promising market potentials on the other. 

But a closer look at the policy reveals empty promises.

The policy is well-intended, but ill-defined. 

The policy lacks oversight and is more of a wild goose chase than a thought-through strategic plan. 

With plenty of talk, but a handful of questions unanswered and no concrete measures, the hopes of Tsai "lighting up Taiwan" will soon give way to a burning drop of confidence.

Such is the case with India. 

India's economy is booming, with growth rates of 7.6 per cent last year, surpassing mainland China's 6.9 per cent, according to the World Bank. 

Its industry advantages in telecommunications software, biomedicine and automobiles make the country an appealing partner for Taiwan — a good match both economically and politically. 

But so far the only time Tsai's administration has mentioned any substantial action in regard to India was to recruit thousands of Taiwanese teachers to teach Chinese in the country. 

Nothing was uttered about any of the other Southeast Asian countries.

One may argue that Taiwan is not familiar with the long-neglected market, so it is inevitable to begin by building mutual understanding between cultures, education, tourism and technology. 

But is that an excuse to neglect laying out a comprehensive development strategic blueprint?

Taiwanese business owners in Southeast Asia continue to bemoan a lack of top-down support, and they are left to their own devices when it comes to running business and familiarising themselves with local regulations. 

A haunting fear strikes them when reminded of how politicians took flight when past southbound policies failed to pan out, leaving businesses in bankruptcy and debt.

A free-trade agreement (FTA) between South Korea and Asean went into effect in 2007, prompting a staggering 28 percent surge in year-on-year exports to Asean one year later. 

The same year, Taiwan's had only increased 1.3 per cent. 

In 2006, Taiwan's exports to Asean were only US$2 billion behind major rival Korea, but by 2013, the gap had widened to US$26 billion, statistics from U.N. Comtrade show.

As other nations are aggressively dismantling trade barriers and forming blocs, the government is choosing to stand by as Taiwan is left out, national competitiveness diminishes, and businesses become orphans in the global arena.

This paper urges Tsai's administration to be careful not to turn the "New Southbound Policy" into a mere political stunt, but to introduce clear strategies and concrete action plans.

The Japan External Trade Organization (JETRO), Cool Japan Overseas Strategic Projects, the Korean Trade-Investment Promotion Agency (KOTRA), and the Korea Creative Content Agency (KOCCA) all conduct surveys to analyse consumer demands in Southeast Asia, and devise comprehensive plans to reach goals.

Taiwan is already one step behind, with no time to waste.

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