Kaohsiung's efforts to make itself a springboard for Taiwan to do more business with South-east Asia have paid off.

Taiwan's President Tsai Ing-wen announced last week that the southern port city will be the operations base for her government's New Southbound Policy, aimed at boosting the island's trade and investment links with South-east Asian countries.

Kaohsiung, Taiwan's second-biggest city, has been positioning itself to serve as a base for the new policy. As part of the effort, Kaohsiung mayor Chen Chu hosted more than 100 delegates from 49 cities in 25 countries during the Global Harbour Cities Forum in September.

To make Kaohsiung more South-east Asia-friendly, Ms Chen said the city government was providing subsidies for schools to hold classes in Thai and Vietnamese languages and culture to cater to its growing population of immigrants from the region.

While the New Southbound Policy office did not elaborate on why Kaohsiung was chosen, analysts and politicians noted some benefits.

First, the southern port city's proximity will give Taiwanese businesses easier and quicker access to South-east Asian markets compared to Taipei in the north, 90 minutes by train from Kaohsiung.

Second, having Kaohsiung as a base will potentially open more direct air and sea links to the region.

There are currently only four airlines that have direct flights between Kaohsiung and Singapore, Bangkok, Manila and cities in Vietnam and Malaysia.

Some observers also pointed to a political factor. Professor Chen Been-lon, a research fellow at Academia Sinica's Institute of Economics, said Kaohsiung is a stronghold for Ms Tsai's Democratic Progressive Party. This will mean easier coordination between the central and local governments.

"Everyone is on the same page, minimising politicking and conflicts," said Prof Chen.

But some have said that a base is not always necessary when modern trade goes beyond the flow of goods and services to include human talent, knowledge and skills.

Dr Alex Lee, vice-chairman of the opposition Kuomintang party's central administration committee, said choosing Kaohsiung may be a short-sighted move, given that Taipei is still the financial and economic centre.

"Most of the official communication and planning still take place in Taipei. How useful can an operations base be when it is still far away from where the important decisions are being made?" he said.

Jermyn Chow