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Why the EU Should Pay More Attention to Taiwan

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Why the EU Should Pay More Attention to Taiwan JANUARY 2020 Why the EU should pay more Alert Clingendael attention to Taiwan Norms, technological supremacy and elections Brigitte Dekker President Tsai Ing-wen (DDP) attended the “People’s Republic of China New Year’s Day Flag Raising Ceremony, by Wang Yu Ching / Office of the President, Flickr As Sino-American rivalry starts to its presidential and legislative elections shift from a trade war to full-fledged on 11 January. The 2020 elections will competition for technological leadership most likely be a three-way race between and geopolitical hegemony, tensions are the incumbent Tsai Ing-Wen of the ruling manifesting themselves in various ways. Democratic Progressive Party (DPP), Taiwan, considered a renegade province Han Kuo-yu of the Kuomintang (KMT) by the Chinese government, is increasingly and James Soong of the minority People affected by this rivalry as it prepares for First Party (PFP). Clingendael Alert The DPP and KMT increasingly portray economy. It controls a 74 per cent market themselves respectively as Washington share in chip manufacturing.2 Amid the and Beijing-friendly. This trend is the result fourth industrial revolution – focused on of increased Chinese influence globally, digitalisation, emerging technologies and especially diplomatically, at the expense of technology hubs – this a quite extraordinary Taiwan. Persuaded by China’s (financial) position, which sparks the interest of other promises and opportunities under the Belt economies such as the EU, the US and China. and Road Initiative, seven countries have Simultaneously, a Taiwanese national identity recently switched their diplomatic allegiance has been slowly but steadily taking root since from Taipei to Beijing.1 This has been a huge the 1980s. The electoral victory of the DPP setback for the international stature of the in the first fully free Taiwanese elections Taiwanese government, making Taiwan’s in 2000, and again in 2004, amplified this future relationship with China a prominent process and pushed the KMT to cooperate subject for the 2020 elections. more closely with the Chinese Communist Party (CCP) to counter the DPP’s rise. Mainland China’s diplomatic victories also This proved to be successful, as the KMT raised eyebrows in Brussels and Washington, won the 2008 elections and stayed in power especially amid increasing Sino-American until 2016. rivalry. Beijing is a global power and an important economic partner to both the This cooperation, however, is now United States and the European Union. backfiring amid the trade war. The KMT, At the same time, it has become apparent once ‘pro-American’, has emphasised its that China is not willing to change its political Beijing-friendly orientation by choosing system. Still, neither the EU nor the US have the pro-China populist Han Kuo-yu as formal diplomatic ties with Taiwan, although its frontman in the elections. The DPP the island has been a close economic partner and KMT both reject the ‘One Country, (the EU is Taiwan’s biggest source of foreign Two Systems’ concept that is currently investments) and a like-minded partner on applied to Hong Kong. However, the KMT values such as human rights, democracy emphasises restoring the cross-strait and the rule of law. As the trade war shifts relationship and rejects the idea of a fully towards a more ideological and high-tech independent Taiwan. Han Kuo-yu also race, questions are being raised about triggered controversy and emphasised the whether growing European and US criticism KMT’s China-friendly approach by meeting of China will translate into strengthened ties with Hong Kong’s leader Carrie Lam and connecting Brussels, Washington and Taipei; other high-level Chinese officials in 2019. and about how the outcome of the Taiwanese The DPP has made use of the KMT’s election will influence China’s relationship China-focused campaign to strengthen with the West. its relationship with the Western world, especially against the backdrop of the Hong Kong protests, emphasising the DPP’s Asian Tiger Taiwan and democratic, anti-communist credentials and its elections its focus on human rights and environmental issues. The Taiwanese elections are hence increasingly characterised by Western- Taiwan has been a prototype for fast Chinese rivalry, labelling parties as either economic growth, modernisation and pro-Washington or pro-Beijing, and while digitalisation during the last two decades the origins of the US, EU and Chinese and it holds a strong position in the world interests in Taiwan differ greatly, they all coalesce in the 2020 elections. 1 South China Morning Post, ‘Taipei down to 15 allies 2 Austin Carr, ‘What chipmakers tell us about the as Kiribati announces switch of diplomatic ties to great global unwinding’, Bloomberg BusinessWeek, Beijing’, September 2019. 21 October 2019. 2 Clingendael Alert City center of Taipei The European Union’s are growing and EU exports to Taiwan hit economic interests a historic high of €51.9 billion in 2018.4 The intensified economic relationship might be a response to growing dissatisfaction The EU’s interests in Taiwan are mainly with the EU’s terms of trade with China. informed by the island’s liberal democratic Frustrations over the limited reciprocity in credentials. In its search for like-minded terms of market access, China’s use of state- ideological and economic partners as backed enterprises to gain a competitive China’s global power increases, European advantage and disappointment about the Commissioner Christos Stylianides false expectation that Beijing would adopt a – on behalf of High Representative/Vice- liberal social path similar to the West might President Frederica Mogherini – stated in push the EU closer to like-minded ideological January 2019 that cooperation and dialogue and economic partners such as Taiwan. between Taiwan and the EU are intensifying.3 For Brussels, China is still a partner in some Without disdaining the ‘One China’ policy, specific areas, such as combating climate economic ties between the EU and Taiwan 3 Speech on behalf of High Representative/Vice- President Federica Mogherini at the Plenary debate on the latest developments in cross-strait relations between mainland China and Taiwan, Strasbourg, 30 January 2019, available online. 4 EEAS report, July 2019, available online. 3 Clingendael Alert change and strengthening the multilateral The cross-strait relationship rules-based order. However, the need to engage with normative, like-minded powers, Cross-strait relations are characterised such as Taiwan, is growing if the EU wants to by intertwined economic and security profile itself as a normative power globally. issues. Both sides of the Taiwan Strait are economically dependent on each other, as 40 per cent of Taiwanese investments The US security dimension go to mainland China and many high-tech Chinese companies rely on chips produced The US underwrites Taiwan’s security not by Taiwanese firms. Taiwan’s dependence on only to ensure its own geopolitical influence China is now also dominating the election in the region but also to protect its eleventh campaign. The DPP government has strongly largest trading partner and crucial link in promoted its New Southbound Policy, Silicon Valley’s supply chain. Historically, which encourages high-tech companies to the US has always been consistent in using move from China to Taiwan but also aims to strategic ambiguity and sending mixed expand ties with South and Southeast Asia signals to both Beijing and Taipei. The to diversify its economic base.7 However, ultimate goal is to deter both sides from with elections looming, discussions on the upsetting the rather vague status quo, policy have been deliberately muted by the characterised by both sides interpreting DPP. The KMT has raised concerns about the ‘One China’ policy to their liking. The Southeast Asian migration to Taiwan and Trump administration, however, has been supports moderate ties with China to expand more favourable towards Taiwan and more Taiwanese exports to China. The deliberate sceptical of China. The most remarkable silence on the New Southbound Policy example was the telephone call between during the election season therefore seems Taiwan’s President Tsai and US President to be an opportunistic move by incumbent Trump – the first such conversation since President Tsai.8 Washington broke its diplomatic relations with Taiwan in 1979. This new tactic may be In November 2019, China responded to a response to Beijing’s successful campaign Taiwan’s desire for decreased economic to persuade countries to drop diplomatic dependence by publishing 26 incentives to support for Taiwan at the UN in favour lure Taiwanese businesses and people to of China. Among them, Kiribati and the mainland China.9 In order to retain peace Solomon Islands are the latest countries to – especially as the centenary celebration of switch. While this action might be aimed the CCP’s foundation is coming up in 2021 – at influencing the Taiwanese elections, Beijing thus embarked on a charm offensive signalling Taiwan’s growing diplomatic to persuade Taiwan to stop pressuring isolation, Washington was not light-hearted companies to return to Taiwan. Not about these developments.5 Both Kiribati and surprisingly, Beijing supports Han Kuo-yu the Solomon Islands are located in strategic – as his KMT party strongly supports waters that have been dominated by the US and its allies since the Second World War.6 ‘Losing’ these islands, even when the US does not officially recognise Taiwan, means 7 Debby Wu and Miaojung Lin, ‘Taiwan bid to lure a success for China’s influence in US firms from China paying off, government says’, strategic territory. Bloomberg, 18 November 2019. 8 Jeremy Huai-Che Chiang, ‘Taiwan’s New Southbound Policy and the looming elections’, The Diplomat, 25 October 2019. 9 These include equal participation in investment in and construction of China’s major technical 5 Kathrin Hille, ‘Taiwan loses second diplomatic ally equipment, 5G, circular economy, civil aviation, in a week’, Financial Times, 20 September 2019.
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