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manifesting themselves in various ways. ways. in various themselves manifesting are hegemony, tensions and geopolitical leadership for technological competition full-fledged to war atrade from shift to starts rivalry Sino-American As President, the of /Office Yu Wang Ching by Ceremony, Raising Flag Day Year’s New of Republic “People’s the attended (DDP) Tsai Ing-wen President affected by this rivalry as it prepares for prepares it as rivalry this by affected increasingly is government, Chinese the by province arenegade , considered Norms, technological supremacy and elections and supremacy technological Norms, Taiwan to attention Why the EU should pay more JANUARY 2020 Flickr Party (PFP). Party First People minority of the Soong and James (KMT) of the Kuo-yu Han (DPP), Party Progressive Democratic Tsai incumbent the ruling of the Ing-Wen between race athree-way be likely most will 11on elections 2020 The January. elections and legislative presidential its

Brigitte Dekker Clingendael Alert 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 -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 (CCP) to counter the DPP’s rise. ’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 . 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 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.

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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.

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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 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. theme parks and new types of financial 6 Michael Martina and Ben Blanchard, ‘China sees institutions for Taiwan-funded companies and Kiribati ties soon, no word on space tracking support for cross-strait youth employment and station’, 23 September 2019. ‘entrepreneurship’ hubs.

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peaceful cooperation with China. In order to If the KMT regains power, cross-strait promote Han during his election campaign, relations may improve, which might trigger the CCP has spread misinformation in US action if it feels that its influence in his favour and pro-China tycoons have a strategic part of the Indo-Pacific is bought Taiwanese media outlets, which are eroding. This could be reflected in either collaborating with the CCP and the Chinese a strengthened US military presence in the government’s Taiwan Affairs Office.10 area or favourable economic incentives to strengthen the Taiwanese economy – and to secure the high-tech supply chain. For the What should Europe do? EU, a KMT government could be positive, as it would likely avert a dichotomous choice Arguments favouring or opposing less between China and Taiwan as trading dependence on China are hence dominating partners. One condition for fruitful future Taiwan’s election campaign. As such, it EU-Taiwan cooperation would be that the has all the features of being a ‘US versus KMT can maintain its distance from the CCP, China’ election and Taiwan’s politics seem even if the CCP tries to gain more influence to be yet another theatre of Sino-American over the KMT. It might otherwise impact geopolitical and economic competition. debates on technological cooperation with For the EU, the election outcome will likely Taiwan, decoupling, intellectual property influence its relationship with Taiwan in the rights (IPR) and forced technology transfers, years to come. As a normative, like-minded which would be detrimental to EU-Taiwan partner with a strong high-tech industry, trade relations. Taiwan might be a crucial player in the global race for technological supremacy and in Taiwan has long been a political chess piece writing the norms and values underpinning in the ongoing political game between the this technology. US and China. This time, however, more is at stake. In the last 40 years, Taiwan If the DPP remains in power, as the latest has adopted a crucial place in the world polls suggest, the relationship between economy as a high-tech powerhouse. Taiwan, China and Taiwan will most likely deteriorate it seems, is now also a theatre for ideological and the United States’ military influence competition between the West and China. in Taiwan will probably be strengthened Hence, for the EU, a strictly business-focused to protect Taiwan as well as American relationship will likely not suffice in the strategic access in the region. The Trump coming years. administration has already made some bold gestures, such as frequent manoeuvres by The US has already taken crucial steps by US ships in the Taiwan Strait. Ultimately, organising a high-level visit to Taiwan to China’s increased pressure on Taiwan could open the updated US representation in the push the EU – as a defender of human rights American Institute of Taiwan (AIT), from and democratic values – to make a statement a low-key military structure to a new $250m about the status of Taiwan. It will most building, and hailing the new building as likely not lead to the EU’s ‘One China’ policy ‘a symbol of strength and vibrancy of the being revisited, but it could include more US-Taiwanese relationship’.11 The EU took a outspoken international support for Taiwan’s first step by formally acknowledging Taiwan system and values. as a ‘like-minded partner’ in January 2019. Now, the EU’s new ‘geopolitical Commission’ has to continue this line if it is serious about presenting itself as a normative and economic power globally. Practical initiatives

10 Joshua Kurlantzich, ‘How China is interfering in 11 Nick Aspinwall, ‘High-level US visits to Taiwan Taiwan’s elections’, Council on Foreign Relations, mark 40 years of unofficial ties’,The Diplomat, 7 November 2019. 13 April 2019.

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are needed, such as support for Taiwanese technological innovations or market access participation, albeit in an observatory role, from both sides. This is feasible regardless in international organisations. Geopolitically, of the Taiwanese government in power, can the EU and Taiwan are in the same boat – be underpinned by the norms and values both should maintain their impartiality as the the shared by the EU and Taiwan share and big giants face off. Picking a side, especially will mainly be established through existing in the context of technological spheres of economic ties between the EU and Taiwan. influence, would eventually mean losing By developing policies that seek neutrality access to the resources of either the US and encouraging strategic partnerships or China. Therefore, the EU can also opt to between industries, Taiwan might have an focus on a strategic economic partnership opportunity to be an innovation hub in the with Taiwan in the long run. This might entail Asia-Pacific, where partners can make the carving out a neutral space between the US most of Taiwan’s position to interact and and China, and thereby not missing out on trade in the region.

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About the author

Brigitte Dekker is Junior Researcher at the Netherlands Institute of International Relations ‘Clingendael’ in The Hague. Her research focuses on various dimensions of EU-Asia relations, with a specific interest in South-East Asia and China

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