Taiwan’s New Southbound Policy Meets the US Free and Open Indo-Pacific Strategy

On May 11, Taiwan’s Ministry of Foreign Affairs launched the “Indo-Pacific Affairs Section” as a component of its New Southbound Policy (NSP). This section aims to help Taiwan form meaningful relationships with countries in the Indo-Pacific that are predicated on arenas in which Taipei has a comparative advantage over Beijing, ultimately aiming to foster and preserve favorable geopolitical relationships at a time when China appears to be ever-expanding and increasingly bellicose.

Taiwan’s NSP has potential convergences with the United States’ Free and Open Indo Pacific (FOIP) strategy. By aligning with FOIP, Taiwan has an opportunity to gain an important seat at the multilateral and international table, one that may help to preserve its autonomy and territorial sovereignty, but may also lead to the island functioning as a bargaining chip for U.S. counterbalances against China.

Why the NSP?

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With President Xi Jinping asserting in March that China will not cede “a single inch of land” in regard to Taiwan and formal cross-strait relations being on hold since Tsai Ing-wen became president in May 2016, Taiwan’s self-determination has become increasingly threatened. At the same time, as both the Dominican Republic and Burkina Faso broke off formal diplomatic relations with Taiwan in May, it appears as Taiwan is losing international support and China is becoming more and more in command of the island’s future.

Taiwan’s future is even more fraught given China’s increasingly expansionist foreign policy, including a Belt and Road-inspired predilection to ensnare countries in debt trap diplomacy and recurring maritime escalations in the South China Sea. Taiwan may know the “China Threat” best, bearing the brunt of a unique brand of Beijing’s realpolitik intimidation.

As a means to counter burgeoning Chinese aggression, the United States has increasingly pushed for FOIP as a means of bolstering a regional network that runs counter to Beijing’s consensus-building aspirations. As Taiwan plays a key role in FOIP, Washington has increased U.S.-Taiwan defense cooperation since the Trump administration took office and has sought to establish legislative measures that directly serve to benefit Taiwan’s self-defense capabilities.

The most recent U.S. National Security Strategy refers to FOIP as a strategy to bring about “a networked security architecture capable of deterring aggression, maintaining stability, and ensuring free access to common domains.” However, Taiwan, despite its contentious relationship with Beijing, is not able to directly contribute to these goals as laid out in the NSS without catalyzing a cross-strait controversy. As Chinese Minister Li Kexin warned in December of last year, “the day that a U.S. Navy vessel arrives in Kaohsiung is the day that our People’s Liberation Army unites Taiwan with military force.” Instead, Taiwan has heretofore relied on its security cooperation with the United States to safeguard its sovereignty.

In late April, the United States signed the Asia Reassurance Initiative Act, which included a “[c]ommitment to Taiwan,” reaffirming enforcement of the Taiwan Relations Act and Reagan’s Six Assurances, alongside a flexibly expansive promise to sell arms to Taiwan so as to protect against “existing and likely future threats.” While this renewed commitment to arm Taiwan with weapons — including asymmetrical capabilities such as undersea warfare and air defense — may help to counterbalance presumed increases in Chinese militancy toward Taiwan, Washington’s commitment to Taiwan is more focused on protecting its own geopolitical interests and does not serve to help Taiwan maintain or develop political alliances.

Many Taiwanese scholars believe that Beijing would never engage in full-out military engagement against its autonomous island state, but would rather engage in a “war of paralysis” that employs electromagnetic pulse weapons — scrambling internet and radio and affecting technological infrastructure — or impose more detrimental economic sanctions against Taiwan, such as incentivizing Taiwanese brain drain to Shenzhen or limiting travel so as to hurt tourism.

In Taiwan’s perspective, one of the ways to minimize threats of Chinese retaliation is to diversify its portfolio of friends in the region. As a central initiative in Tsai’s foreign policy, the NSP may be the most apt means to help Taiwan maintain important friendships, pivoting away from traditional alliances to cooperative, soft power relationships. At the same time, the NSP allows for Taiwan to pursue strengthening bilateral and regional relationships without posing any distinct security threats to the mainland.

How NSP Can Converge With FOIP

Taiwan’s NSP has been referred to as ‘”old wine in a new bottle,” similar to previous Go South policies. But Tsai’s NSP differs from former Presidents Lee Teng-hui and Chen Shui-bian’s previous Go South policies, in that NSP emphasizes a “people-centered” approach to bilateral cooperation, rather than focusing on traditionally “hard” priorities such as free trade, open investment, and infrastructure development. On August 2017, the Taiwanese government delineated five flagship NSP projects: promoting innovative industries, medical cooperation and industrial supply chains, policy forums and youth exchange platforms, regional agriculture development, and talent cultivation. The NSP is pragmatically structured in that it focuses solely on areas where Taiwan has a comparative advantage over China, promoting solutions and amicable ties that states in the Asia-Pacific do not seek from Beijing. By pushing these comparative advantages, Taiwan stands to sustain economic self-sufficiency and maintain relative political self-determination, which thereby benefits FOIP.

One such case is educational exchange. People from NSP countries are increasingly choosing to study in Taiwan instead of mainland China: from 2015 to 2017, Taiwan saw a 32 percent increase in the number of foreign students from NSP countries, whereas mainland China saw a 20 percent decrease. In fact, last year the volume of students hailing from NSP member states studying in Taiwan (28,700) exceeded the number of those students studying in China (25,824) for the first time. These exchanges go both ways though: for example, the Philippines has expressed interest in functioning as a main destination for Taiwanese students.

While this exchange appears benign, establishing a formal agreement with the Philippines would help legitimize Taipei’s foreign policy independent of Beijing. With the Philippines and other NSP states recognizing Taiwan as an actor among actors, Taipei may incrementally gain justification for striking agreements surrounding harder security issues. Consider the December 2017 case of a revitalized Taiwan-Philippines investment cooperation plan: Beijing at that time contested that Taipei pursuing independent deals threatened its “one-China” policy. If Taipei possessed more thoroughgoing soft power relations with the Philippines, China would still contest such a deal, but Taiwan would have a stronger justification for its pursuits.

By developing the connection between the NSP and FOIP, Taiwan is able to form robust relationships with key actors in the region, netting three distinct wins for itself and for Washington. First, Taiwan would be able to remain relevant and involved in the regional political landscape without having to rely on hard power pressure. Second, Taiwan would likely get more support from relevant stakeholders that could serve to prevent against Chinese unifying or constraining ambitions. Finally, the convergence between the two plans would allow for Taiwan to have greater access to relationships that would lend to future political and economic collaboration, further helping to safeguard Taiwan’s autonomy and U.S. interests in the region.

If Taipei does indeed move towards converging with the FOIP, however, Taiwan also runs the risk of becoming a pawn in a larger U.S.-China competition for control in the region. Identifying prospective convergences with FOIP may help Taiwan form important relationships that lend themselves to economic self-sustainability and political self-determination, but Taipei should focus its diplomacy on capitalizing on its comparative advantages and seeking a broader network of friends and allies that extend beyond just the United States.

Chen-Sheng Hong is a Research Scholar in the Southeast Asia program at the Stimson Center, a think tank in Washington D.C.

Logan Pauley is a Herbert Scoville Jr. Peace Fellow with the East Asia Program at the Stimson Center.