OBOR AND THE ROLE OF TAIWAN IN SOUTHEAST ASIA

Transcription

1 OBOR AND THE ROLE OF TAIWAN IN SOUTHEAST ASIA Mag.Dr. Alfred Gerstl, MIR Department of East Asian Studies/ East Asian Economy and Society (EcoS)

2 SINGAPORE, NOVEMBER 2015

3 TAIWANESE-PHILIPPINE TENSIONS May 2013: Philippine navy kills Taiwanese fisherman in disputed waters Taipei: threat of expulsion of Filipino guestworkes; trade negatively impacted August: Manila s official apology

4 OVERVIEW Introduction: The context (1) Taiwan s relations with SEA and ASEAN (1): The context (2): ASEAN s relations with China Taiwan s relations with SEA and ASEAN (2) Lee Chen Ma Tsai OBOR and South China Sea Whose norms? Case Study: Taiwan s relations with Singapore Conclusion: Taiwan s future relations with SEA

5 THE CONTEXT (1): ENGAGING WITH SOUTHEAST ASIA Japan, Russia, EU No comprehensive strategy Australia: Asia Pacific Century India: Look => Act East Policy USA: (previously?) Pivot to Asia China: One Belt, One Road Taiwan: Go South => New Southbound Policy

6 Strategic Gaming I: The South China Sea Strategic Gaming II: The East China Sea

7 REGIONAL ORDER: INCENTIVES & CONSTRAINTS FOR TAIWAN Sino-US relations Quality of Cross-Strait relations One China principle Pan-Blue vs Pan-Green Sino-ASEAN relations Security and economic needs and opportunities in EA South China Sea OBOR

8 TAIWAN & SEA (1) Only brief period of autonomy for Taiwan-SEA relations (Leifer 2001) Decolonialization Cold War *1967 ASEAN Indo, Mal, Phil, SG, Thai Strict anti-communist US relations logic Vietnam War Taiwan s relations formal Until mid-1970s: diplomatic relations with Philippines, Thailand South Vietnam; consular relations Malaysia Informal Non-official SEA offices in Taipei Links to Chinese (business) communities in SEA 1971 PRC UNSC seat 1978 reform policy 1979 Sino-US diplomatic relations 1980s democratization process in Taiwan 1989/91 end of Cold War

9 . TAIWAN & SEA 1959 first FDI in SEA (X. Chen 1996) Cement factory Mal : SEA major FDI spot Mal, Thai 1960s, 1970s labor-intensive cluster-oriented Food, beverages, textiles, rubber, electronics KL, Penang, BK, Jakarta, Bandung, Manila : US$ 16.1 in total similar to FDI in China Politically: quasi-diplomatic relations with ASEAN-5

10 TAIWAN & SEA 1980s closer and upgraded economic cooperation Tai: FDI, know how Technology, agriculture Political relations improved SEA: economic logic Wish to upgrade economy and infrastructure, market liberal reforms, closer ASEAN cooperation 1992 AFTA Risks: Indo, Phil, Mal, Thai, SG Capital-intensive: Petrochemicals, electrical and microelectronics manufacturing Smaller cities, Subic Bay, Batam island, HCMC export processing zones 1988 trade mission in Hanoi Leading investor early 1990s 1990s small FDI Laos, Cambodia, Burma Only with SG, Indo security relations Increasing number of Taiwanese companies in SEA, China part of regional production, divison of labor networks Overseas Taiwanese/Chinese in SEA Authoritarian regimes shift to capital-intensive production base higher wages infrastructure deficits cultural, language barriers

11 THE CONTEXT (2): CHINA S RISE 1989 Tiananmen: Isolation in Western world 1990/91 normalisation with East Asia Indonesia, Singapore, South Korea Deng: low profile in international politics 1992 Southern tour Early 1990s China s rise and China threat Economic strategic rivalries J. Mearsheimer: Offensiv Realism Mid-1990s: Multilateralism ARF, APT Harmonious society Soft power 1992 Consensus HOWEVER unilateralism in SCS, upgrade navy 1995 Mischief Reef First confrontation with ASEAN member 1995/96 Cross-Strait crisis 2001 WTO membership

12 . RELATIONS CHINA-ASEAN Cold War Split Moscow Beijing Vietnam War 1979 border war China - Vietnam Chinese minorities in SEA Fifth column Indo After 1989/91 socializing and befriending China Integration in ASEAN structures: comprehensive 1994 ARF 1997 ASEAN East Asia Summit 2002/2010 CAFTA 2002 ASEAN-China Declaration on SCS Acceptance of ASEAN Way, norms, institutions and ASEAN s centrality Rule based, open, cooperative order, dialogue, consensus South China Sea? OBOR? New China threat debate

13 TAIWAN & SEA (2): LEE TENG-HUI High growth rates, major investor 1994 Go South Policy Pragmatic, economically oriented foreign policy Bilateral approach Reducing dependency on China 1992 huge FDI increase at SEA expense peak: US$4 bio/year 1993: Top investor in VN, no. 2 Mal, no. 3 Indo, no. 4 Thai, no. 5 Phil 1994 Tai Exports to China: US$ 12.6 bio SEA: 11.4 bio. Political contacts intensified 1989 in SG President from Taiwan Personal relationship with Lee Kuan Yew 1993/94 inspection tour of Minister for Economics Indo, Phil 1994 vacation diplomacy: Lee meetings with King Bhumibol, Ramos (Phil), Suharto, Habibie (Indo) 1997 clashes in Cambodia 1000 Taiwanese to be evacuated Difficult logistic situation limits SEA guestworkers Since 2000 more FDI in China than SEA

14 . LEE TENG-HUI Key events: 1994 Go South June 1995 Lee s speech at Cornell Uni 1995/96 Taiwan Straits Crisis 1997/98 AFC Economic crisis in SEA 2000 election Ma

15 1997 AFC: turning point Since then decline of Taiwan s influence in SEA Taipei: US$1.2 bio. deposit in SEA Central Banks, support for Taiwanese banks in SEA 11/1997 Goh, Mahathir in Taipei ASEAN plus Three: Institutionalization without Taiwan TAIWAN & SEA 1999 AMM: re-affirmation of One China No ASEAN observer status for Taiwan => more uniform SEA pattern towards Taipei Today: significant differences towards PRC Taiwanese FDI => PRC

16 CHEN SHUI-BIAN Confrontational, pro-independence stance but initially China FDI focus Beijing critical of Taiwanese influence in SEA Decline of economic relations with and political influence in SEA Criticism from business Lack of committment from government, less information on SEA, cultural, language barriers (M. Chen 2004) 2007: SEA second largest export destination Taiwan-SEA restricted to economics Criticism on scorched earth diplomacy, even from SG No FTA ( Taiwan ) 2002: revival of Go South 2002 VP Lu in Indo, Brunei Trade and Tourism Office in Taipei, 2002/03 Minister of Economics in SEA, SEA politicians in Taiwan 2003 FDI in Thai, Mal, Phil, Indo, SG, VN, Camb only US$937 mio. To China US$7.7 bio SEA perspective: Unwillingness to accept high-ranking politicians Deeper cooperation with China Regionalism => EAS 2005/06 two Chen trips to Indo

17 MA YING-JEOU Better relations with China: viable diplomacy 2008 SEF - ARATS, travel agreement 2010 Economic Cooperation Framework Agreement (ECFA) Global economic crisis also in Tai, SEA Initially ASEAN focus ASEAN: economics, no politics, security => bilateralism But TPP, RCEP Production chains Exports to ASEAN: 14 => 18% (2015) 3 rd FDI in Thai, 4 th Mal, VN Vietnam increasingly attractive Lower wages than China Foxconn, Compal Trade, development offices in Myanmar 2013 FTA with SG and NZ Visit to SG 2015 after Lee Kuan Yew s death Visa waiver with SG, Indo, Mal 10% tourists SEA PRC: 41% ASEAN Department within MOFA 2009 Taiwan ASEAN Studies Center 2014 Sunflower Movement: obstacle for trade agreements

18 SCS Territorial Claims Same arguments as Beijing History: discovery, navigation, contacts, maps 90% of SCS U-line Concrete claims: Nansha (Spratlys) Hsisha (Paracels) Chungsha, Pratas First nation that occupied islands, notably Taiping (Itu Aba) Also claimed by China, Phil, VN Navy (600), radar station, small power station 1932 seized by France WWII: Japan 1946 China 1956 occupied by Taiwan Patterns: Low key actor since 1990s Track two diplomacy 2015 SCS Peace Initiative Resource sharing, cooperation 2012 East China Sea Peace Initiative KMT: Good relations with Beijing, Washington and ASEAN Senkaku/Diaoyu Islands: int. arbitration but not for SCS Taiping Island is an island

19 TSAI ING-WEN 2016 New Southbound Policy Announced prior to campaign Strengthening of economic, cultural ties with SEA, South Asia, Aus, NZ New Southbound Policy ( ) is similar but more strategic than the policies of Lee and Chen. Like its forerunners, Tsai s policy seeks to lessen the mainland s dominance of Taiwan s trade, but it is more comprehensive and emphasizes building an extensive network of cultural and interpersonal relationships throughout the region (Glaser, Funaiole and Jin 2017) In the end, any policy that facilitates people-to-people exchanges will promote mutual understanding between Asean and Taiwan - a necessary step for Taiwan to effectively "go south" and join the regional integration (Bao-chiun 2016) Growing consumer markets middle classes in India, Indo, Phil, VN China, Jap, South Korea trade agreements with ASEAN ASEAN 2 nd largest trade partner Tai 3 rd largest investor in Thai, 4 th in Mal, VN Tourism: 13% SEA 41% China

20 NEW SOUTHBOUND POLICY Key goals 1) Long-term New cooperation mode Mutual benefits and win-win situations Sense of economic community 2) Short- to mid-term goals Two-way exchanges economics, trade, investment, tourism, culture, talent promotion Grantships, job training, internships, integration Foster support among citizens Overseas Taiwanese networks Implementation Strategic partnerships Institutionalized bi-, multilateral economic cooperation Soft power (Economic) role model Medical care, education, technology, and agricultural cooperation and small and medium enterprises Supply chains Coordination, internet-of-things Infrastructure Linking regional markets People-to-peole Tourism, culture, education

21 NEW SOUTHBOUND POLICY Self-description: comprehensive Very, very vague Old Southbound Policy: commerce, business and investments oriented Including South Asia, Oceania OBOR infrastructure focused Realistic??? Obstacles: One China ASEAN s centrality

22 ASSOCIATION OF SOUTHEAST ASIAN NATIONS (ASEAN)

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24 OBOR Silk Road Economic Belt concept 9/2013: Xi Jingping (Kaz) 21 st Century Maritime Silk Road Asian Infrastructure Investment Bank (AIIB) 10/2013 Xi (Indo) Silk Road Development Fund November 2014 Xi (APEC) 40 bio. USD For-profit entity ( ) work in progress rather than a fully drawn up master plan (Arase 2015: 26) Official aims: Policy coordination Trust building => economic collaboration Interconnectivity between Northeast, Southeast and South Asia, the Middle East and Europe Interconnectivity within these subregions Trade facilitation Monetary cooperation Yuan-Renminbi People-to-people contacts Development of Chinese (inland) provinces Win-win partnership: community of common destiny Neighbours

25 CHINESE MOTIVES Import of resources Export of products New export markets Steel Money to finance large infrastructure 2014: Xi in Africa, Europe, SEA 140 bio USD Nairobi Mombassa: high-speed railway (3.8 bio. USD) Thessaloniki, Piraeus (5 bio. USD) Germany (18.1 bio. USD) Russia (10 bio. USD) Myanmar (8 bio. USD) ASEAN (10 bio. USD) Source: EY (2015) 2015 c. 150 bio. USD FDI 3 trio. foreign exchange reserves Know how: highways, railways, ports, airports construction and management Workforce Security

26 ASEAN COMMUNITY *1967 ASEAN 1990s: Enlargement and deepening 10 members 650 mio. inhabitants Globally 3rd biggest labor force 2,5 bio. USD GDP and trade 7th largest economy 136 bio. FDI

27 MAGIC TERM CONNECTIVITY Infrastructure requirements 60 bio. USD/year ADB-ASEAN Fund: 485 mio. USD China: Silk Road Development Fund: 40 bio. USD AIIB: 100 bio. USD (26% China) PRC-ASEAN Investment Fund: 10 bio. USD

28 STREETS AND PORTS ASEAN Single Shipping Market (ASSM)

29 OBOR A MASTERPLAN? Current problems Different institutions,, e.g. ASEAN, ADB, UNESCAP Difficult coordination routes, standards Infrastructure gaps South- - Southeast Asia Within SEA Lack of investments, loans

30 .

31 ..

32 OBOR AND TAIWAN FDI IN SEA Role as regional hub Investment, trade, finance But competition with SG, HK Sub-contractors Low wages in Vietnam, Myanmar Social, environmental Formosa Plastics in Vietnam: toxic waste Political issues 2010 CAFTA in force RCEP?

33 TRADE

34 . TRADE

35 . OBOR AND TAIWAN Excluded from trans-regional infrastructure, trade project Norms and rules based order No TPP but RCEP? Who sets rules? Policies of other actors US, Japan, India Niches? Competition China Japan India Citizens concern: impact on national security and use of force (Hsueh 2016) OBOR: 3/2015 Ma: participation in AIIB as founding member China s aims??? Lack of consensus Pan-Blue vs Pan-Green Better relations with China, Asia Dependency, Taiwan PRC: via own Finance Ministry Global manufacturing supply chains, FDI, knowledge

36 JAPAN Security Pact USA Re-interpretation Art. 9 Taiwan collective self-defense Strategic partner ASEAN ODA, loans, FDI Close cooperation Vietnam, Philippines Australia, India Source: MOFA (2015)

37 JAPANESE-CHINESE COMPETITION

38 STRUGGLE FOR INFLUENCE IN SEA. Hedging??

39 WHY SINGAPORE? April 1993: Meeting heads of SEF and ARATS Chinese country Logistics No demonstrations Close relations with both and US Taiwan: economics, security 1975 Operation Starlight 1990s: up to 15,000 SG soldiers China: economics Critical of Beijing s ambitions

40 SINGAPORE: TAIWAN & CHINA (1) Diplomatic relations with China: 1990 FDI in PRC initial negative experiences Beijing: SG neutral, facilitator Now: viewed closer to US 2000: after Chen s election PM Goh, Lee Kuan Yew in PRC and Tai: pragmatism, moderation 2002 designated PM Lee in Taiwan strong criticism from Beijing Lee: peaceful relations PRC-Tai key for stability in AP Against Tai independence Pragmatic (opportunistic) foreign policy E.g. military facilities US: P8 Open for China? Increased pressure SCS

41 SINGAPORE: TAIWAN & CHINA (2) Political, economic, security relations with Taiwan Lee Kuan Yew close with both Presidents Chiang 1975 Project Starlight 2013 FTA Cultural Hokkien dialect Armed vehicles in HK demonstration of Beijing s will to isolate Tsai Pressure on SG: end of honest broker role?

42 CONCLUSION OBOR comprehensive global strategic, political, economic and security impacts Infrastructure, trade: win-win But: economic political dependency on China? OBOR: Masterplan for new Chinese regionalism/ hegemony or acceptance of existing order? Complementary or competitive regionalisms? ASEAN s centrality? Mediator or forced to sideline with China or US? Reactions of US, Japan, India? Reality check: SCS

43 CONCLUSION Neorealist explanation of Taiwan s, ASEAN s, member states behavior Taiwan: niche player in SEA Limited autonomy in Taiwanese-SEA relations (Leifer 2001) What can it offer ASEAN and members? Economic Security: very limited, practical, e.g. SG collaboration ASEAN: no security benefits for Taiwan (excluded in ARF) Soft power Education, technology, culture, tourism Engage with international society (Leifer 2001: 173) China defines explicitly and implicitly ASEAN s leeway towards Taiwan Fear in SEA: being instrumentalized by Taipei against Beijing (or vice versa)