The Taiwan Banker

Preface:The international situation is in a constant state of change. Recently, both France and South Korea elected new presidents. At the same time, U.S.-Russia relations are somewhat mercurial, which will affect Taiwan's economy from the standpoint of global trade. Deputy Minister ofForeign Affairs Wu Chih-chung believes that Taiwan should borrow power to use power and flight for more space. Content: In May, both France and South Korea elected new presidents. These nations are important players in Europe and Asia, respectively. Centrist Emmanuel Macron won the French presidency in the second round of voting. In South Korea, Moon Jae-in of the Democratic Party won the presidency, ending nearly a decade of Conservative Party rule. The world is watching these two leaders closely to see what their future policies will be. Deputy Minister of Foreign Affairs Wu Chih Chung holds a PhD in Political Science from Pantheon-Sorbonne University and is an expert on both Europe and France, one of the most important nations in the Eurozone. This interview is the first exclusive he has done since taking office, and the first time he has spoken with Taiwan Banker. Deputy Minister Wu offers deep insights in plain language on the international situation and its impact on Taiwan. During his conversation with Taiwan Banker, he also discussed the government's intentions to expand the New Southbound Policy and the importance of Taiwan going its own way. A stable Europe will be good for Taiwan internationally Given election results and other factors in Austria, the Netherlands, France and Germany from last December through May, the European Union is growing increasingly stable, and will avoid any major crises, Wu Chih-chung says. In Wu's view, stability in the European Union is integral to Taiwan's global position. Wu notes that European parliaments have passed the most pro-Taiwan resolutions globally, which in central and Eastern Europe is linked to historic antipathy towards communism. A strong EU is definitely a good thing for Taiwan, he says. To be sure, Europe has encountered significant challenges in recent years, including the European debt crisis and tense relations among the members of the Eurozone. However, the situation has been steadily improving since December 2016. For instance, the populist candidate failed to win the 2016 presidential election in Austria. Meanwhile, the ruling party prevailed in the Netherlands' March election. In the France presidential election also held in May, centrist Emmanuel Macron won with 66% of the vote. Further, the party of German Chancellor Angela Merkel has won three recent local elections. From this, we can see that the populist surge in Europe is fading, while moderate political leaders are ascendant. Emmanuel Macron will soon visit Germany to shore up relations between continental Europe's two most important economies. The 5+2 Industrial Innovation Plan: Industry should look for ways to boost Taiwan-EU cooperationIn addition to noting how the EU has been supportive of Taiwan internationally, Wu pointed out how European countries could be important partners in the government's new initiatives that fall under the 5 + 2 Industrial Innovation Plan. Those include Asia Silicon Valley, biomedicine, green energy, smart machinery and defense as well as high-value agriculture and the circular economy. European countries, Germany and France in particular, will be important partners in Taiwan's efforts to denuclearize by 2025. With this in mind, Wu explained that a healthy EU yields both political and economic benefits for Taiwan. Thus it is doubly important for the EU to be healthy, he said. Take wind power as an example, he said. Globally, there are ten top locations for wind power, of which seven are in Taiwan. As such, there is ample opportunity for Taiwan and European countries (many which have deep experience in wind power and other types of green energy) to cooperate in this sector. Europe has much valuable experience from which Taiwan can learn, he said. Strengthen overall exchanges with ASEAN With regards to Asian politics, it is notable that President Tsai Ing-wen is actively promoting the New Southbound Policy. Yet many people are only familiar with the name and not what the actual policy entails. To explain the policy's true meaning, Wu uses just two words: "people-oriented." Many observers may think that the New Southbound Policy is platform for the government to use its influence to lead a southward expansion of Taiwanese industry into South Asia and Asean. This is incorrect. Wu pointed out that in 2016, China remained Taiwan's largest trading partner, as two-way trade reached 117.8 billion New Taiwan dollars, accounting for 23.1% of Taiwan's overall trade volume. But Taiwan's No. 2 trading partner is not, as many people would guess, the United States, but in fact Asean. Two-way trade between Taiwan and Asean last year hit 78.5 billion New Taiwan dollars, accounting for 15.4% of Taiwan's overall trade. The U.S. was Taiwan's No. 3 trading partner, accounting for 12.2% of Taiwan's overall trade, while the EU, at 9.6%, was No. 4. While Taiwan's trade volume with Asean is high - not significantly smaller than trade with China - Taiwan's understanding of Asean is less comprehensive than its understanding of the U.S. and Europe. According to Wu, Taiwan's relationship with Asean to date is confined to trade. In contrast, Taiwan has a more well-rounded relationship with both the United States and Europe, which includes two-way investment and educational exchanges. With this in mind, there is considerable room to deepen exchanges between Taiwan and Asean. Further, Wu notes that there are many Taiwanese with expertise on China, the US and EU, but few who are deeply knowledgeable about Asean countries (of which there are many). Thus, while Taiwan is becoming more deeply entwined with Asean economically, it is still slow to understand the culture of Asean countries. With regards to the nations with which Taiwan has diplomatic relations, this is even more correct. There are 21 countries that recognize Taiwan. 12 of them are in the Americas, 6 in Oceania, 2 in Africa and 1 in Europe. Taiwan has no diplomatic allies in Asia. Wu is frank about the fact that Taiwan is not familiar with a number of its neighbors in Asia. Yet given Taiwan's geographic position and the rising importance of its economic ties with Asean nations, it should turn its attention to better understanding those countries, and improve government-to-government exchanges. He believes that these ideas are what President Tsai was referring to when she spoke of the "people-oriented" New Southbound Policy. To boost ties with Asean in line with the New Southbound Policy, Wu suggests Taiwan start from tourism and educational exchanges (both between academics and students). In this manner, Asean countries and Taiwan can become more familiar with each other. Wu suggests that Taiwan treat Asean countries as it does those nations with which it has diplomatic relations: That means offering visa-free entry for tourism and providing scholarships to encourage students from Southeast Asian countries to study in Taiwan. Such policies can deepen exchanges between Taiwan and Southeast Asia, moving Taiwan's relations with Asean countries beyond economics. This will ultimately help Taiwan raise its profile in Asia. In Wu's view, Taiwan must allow itself to play an important role in Asia. Once Taiwan has established a role as a key regional player, it can then become a larger global actor. In the meantime, people-oriented exchanges with Southeast Asian countries are a must at present. Such exchanges will help Taiwan to find more common ground - especially shared values - with those nations. Increase openness to Asean markets In the past, anti-Chinese riots in some Southeast Asian countries caused concern that Taiwan's bid to increase its presence in Asean could be stymied. However, Wu notes that ties between Taiwan and Southeast Asian countries have grown despite the anti-Chinese sentiments. Those sentiments are not specifically targeting Taiwan, Wu says. He notes that Taiwanese get along well with local people in Vietnam, Indonesia and Malaysia. Compared to China, Taiwan doesn't put pressure on Asean countries. Further, in the Chinese-speaking world, Taiwan is a leader in terms of its economic development, social justice, free society and electoral democracy. This can be a very important starting point from which Taiwan can interact with Southeast Asian countries. However, Wu points out that the interaction between Taiwan and Asean countries must be a two-way street. The Asean market is large and it is an ideal place for Taiwanese industry to expand, but Taiwan should also increase its openness to Asean, such as by providing visa-free entry to tourists. This will create a win-win situation. Wu further notes that Taiwan has signed bilateral investment agreements with several European countries, which has helped deepen Taiwan's ties with those nations. Taiwan should endeavor to do the same with countries in Southeast Asia and elsewhere. Taiwan should develop relevant policies to further open its markets to these countries. Taiwan's strength in medical technology and its medical expertise can play an important role in boosting the nation's global profile - especially in Asean, Wu said. Given that that the healthcare systems of Southeast Asian countries (with the exception of Singapore) are generally less advanced than Taiwan's, there is a good opportunity for Taiwan to support their medical development. Some countries in Southeast Asia have specifically asked Taiwan for assistance in health and medicine. With this in mind, Taiwan's health and medicine expertise can serve to represent the nation overseas. This will help Taiwan's medical sector expand and deepen ties between Taiwan and Asean. Overall, within the framework of the 5 + 2 Industrial Innovation Plan, Taiwan can deepen cooperation with the advanced economies of Europe and become an important base. Taiwan and Asean also can increase exchanges in several areas. Using this model, Taiwan can raise its profile on the international stage.