Foreign Minister Lin Chia-lung (林佳龍 ) discusses New Southbound Policy achievements and future direction.
The New Southbound Policy [NSP] is a key part of the government’s national development strategy that aims to deepen links with South and Southeast Asia, as well as Australia and New Zealand. What results have been achieved and are any new approaches being adopted?
Lin Chia-lung: Government expansion of ties with NSP target countries is paying off, as reflected by increased trade, investment and personnel exchange. Total trade volume surged from US$95.8 billion in 2016 to US$180.3 billion in 2022, representing a rise of 88.2 percent, which is significantly greater growth than that seen in trade with other parts of the world in the same period. As for investment, the accumulated total funding from Taiwan to these destinations rose from US$32.7 billion in 2016 to US$57.6 billion by June 2023, posting an increase of 76.2 percent.
Taiwan has updated bilateral investment agreements [BIAs] with India, the Philippines and Vietnam, and signed an investment promotion and protection agreement with Thailand in June this year. This will accelerate the signing of updated BIAs with both Indonesia and Malaysia, as well as the implementation of a double taxation avoidance pact with the Philippines intended to achieve tax equality.
Meanwhile, the NSP takes a people-centric approach focusing on personnel cultivation and exchange. The number of students from NSP countries enrolled in Taiwan institutions more than doubled to 66,000 in 2022 from 32,000 in 2016, representing 63.8 percent of all overseas students. Taiwan passport holders can enjoy travel to Malaysia, New Zealand, Singapore and Thailand without a visa, as well as Australia, the Philippines and Vietnam with an electronic visa. These privileges have increased Taiwan’s business and tourism exchanges with those countries.
Looking ahead, the government is expanding the NSP to encompass a focus on Taiwan’s strengths in both digital technology and information and communications technology [ICT], known as the “digital NSP.” This will add momentum and open further avenues for development, particularly combined with the integration of public and private sector resources.
What is the role of economic and trade diplomacy in promoting the NSP?
Lin: Expanding trade and economic relations is a major component of the NSP and helps Taiwan businesses strengthen their global deployment by reducing reliance on China. As foreign trade and investment is central to Taiwan’s economic growth, the government actively implements specific policies and measures to create an environment conducive to global trade and economic development.
Our investments in NSP countries surpassed those in China for the first time in 2022 to reach US$5.27 billion and continued an upward trend in 2023, reflecting the effectiveness of the diversification strategy since its launch in 2016. NSP countries are both Taiwan’s main export markets and important suppliers of energy, industrial and mineral raw materials, and semifinished products. These developments demonstrate Taiwan’s robust and vibrant economic, trade and investment ties with NSP nations.
Economy, trade and advanced technology are Taiwan’s competitive strengths and are the Ministry of Foreign Affairs’ [MOFA] strategic focus areas in promotion of the digital NSP. Accordingly, Taiwan offers smart solutions related to city development, health care, manufacturing and transportation. We can share our dual-axis experience in digital transformation and net-zero carbon emissions to promote sustainable and inclusive economic growth and consequently, create more jobs in the region to achieve shared prosperity.
The digital NSP is key to consolidating Taiwan’s strategic position in the Indo-Pacific. How does the MOFA promote this initiative?
Lin: The digital NSP will follow the integrated diplomacy approach of the three-in-one foreign policy. We will deepen links with like-minded countries through values-based diplomacy: upholding shared values of freedom, democracy and respect for human rights and the rule of law. We aim to strengthen regional stability through allied diplomacy in both bilateral and multilateral cooperation and expand economic diplomacy based on Taiwan’s specific industrial and economic strengths by driving investment through funds, technology and personnel exchanges. These diplomatic practices correspond to the core elements of President Lai Ching-te’s [賴清德] foreign policy strategy—democracy, peace and prosperity.
Furthermore, the government plans to launch the New Southbound Fund, which is similar to the Central and Eastern Europe Investment Fund and Central and Eastern Europe Credit Fund. It will offer funding or financing to fast-growing industries and sectors with potential for entrepreneurship in the region. The fund will also help Taiwan companies export high-quality products and expand business.
Economic and technological cooperation can contribute to interdependence. The digital NSP’s strategic objective is to enhance Taiwan’s intelligence and military capabilities to strengthen national security. Economic integration, in particular, plays a critical role in promoting peace and security. Taiwan is striving for membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership [CPTPP] and is eager to participate in the Indo-Pacific Economic Framework [IPEF]. The MOFA believes that Taiwan’s participation in these multilateral platforms can deliver significant benefits to all member states.
The NSP’s achievements thus far have created a strong foundation for a democratic, prosperous and sustainable future for Taiwan and its partner countries. The MOFA continues to strengthen cooperation and people-to-people connections with NSP countries to advance peace, stability and prosperity in the region.
—interview by Kelly Her
Write to Kelly Her at kher@mofa.gov.tw