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The new southbound policy

The ECCT hosted a Premium Event lunch with guest speaker John Deng (Cheng-chung), Minister Without Portfolio (鄧振中 行政院政務委員) on the subject of the government's southbound policy.

Minister Deng said that the main aim of the government's southbound policy is to build better relations and "make friends" with Taiwan's neighbouring countries. He made the point that Taiwanese students have traditionally chosen to study in North America or Europe and the government's external diplomatic efforts have also tended to focus on the west. As a result, not enough effort was spent on learning to understand Taiwan's neighbours, even though most regions of Southeast Asia are within a four-hour flight from Taiwan.

Under the New Southbound policy initiative the government aims to bridge the gap, build on trade ties and engage in a wide range of negotiations and dialogue with 18 countries in Southeast Asia, South Asia and Australasia.

Launched officially in September 2016 the policy seeks to forge mutually-beneficial ties in areas ranging from agriculture, culture, education, trade and tourism, to generate economic growth and improve the welfare of people in the region. Unlike China's "belt and road" policy, which focuses on large infrastructure, the various projects under the initiative aim to strengthen international collaboration in innovative industries, medical cooperation and industrial supply chains, policy forums and youth exchange platforms, regional agriculture and talent cultivation, cross-border e-commerce, tourism and infrastructure.

Minister Deng believes that the policy is producing results. This is borne out by trade and investment figures as well as daily news in the local media on business and other exchanges between Taiwan and countries in the region.

Taiwan's trade ties with ASEAN countries have risen rapidly in recent years. In the first 10 months of 2017, trade between Taiwan and ASEAN countries exceeded US$91 billion, an increase of 17.5% over the previous year.

The number of tourists from the region who visited Taiwan between January and October rose by 32% to 1.76 million from the same period in 2016.

There were also 31,531 students from the New Southbound Policy Countries studying in Taiwan in the 2016 academic year, an increase of 9.7%.

In addition, Taiwanese firms have made significant investments in the region. About 25,000 Taiwanese firms have established business entities in ASEAN markets with Taiwanese direct investments adding up to US$100 billion, according to official government figures. Minister Deng said that these figures understate actual investments since they only count investments over certain amounts that require government approval. From January to October 2017 alone, a total of 107 investment cases worth over US$3.5 billion were processed, an increase of 114% in terms of value compared to the same period of 2016. According to the minister, these investments have also resulted in the creation of four million jobs in these countries. There has also been an increase of over 20% in investment from South-east Asian countries into Taiwan this year, which, while small, help to strengthen bilateral ties. In addition, more than a million people from Southeast Asian countries live and work in Taiwan.

The government is supporting the southbound shift by providing credit guarantee funds, official development assistance and funding for education. The amount of guarantee funds provided by the government to support SMEs investing in the region increased by US$1.7 billion. Approximately US$3.5 billion in official development assistance has been provided to support the engagement of the Taiwanese construction industry in partner countries. In terms of education, an additional US$23 million has been provided for educational programmes, including scholarships.

A major project focus under the policy is regional agricultural development. The policy aims to attract young people from the new southbound countries who are interested in agricultural production coming to Taiwan to study and intern on the agricultural sites. In addition the government is sharing agricultural know-how in the region. For example, it has set up a demonstration site for Taiwan's agricultural technology in Indonesia to use as a production base. It aims to assist partner countries to improve agricultural operations (such as farmland irrigation technologies and facilities) and thereby increase farmers' incomes.

Another area is medical and public health cooperation and the development of industrial chains. Medical staff from partner countries are trained in Taiwan. The government wants to establish a network of contacts and build a joint prevention and control network to ensure the health and safety in the region and cooperate with partner countries to enhance medical standards.

In terms of skills development, the plan is to provide internships and on-the-job training for foreign students, so that they gain real-world experience relevant to their careers. In addition, the government will assist young Taiwanese to study or intern in Southeast Asian countries and encourage universities and colleges to establish strategic alliances with their counterparts in Southeast Asian countries.

Other areas of focus include industrial innovation and cooperation and infrastructure, such as assisting the engineering industry and construction companies to compete for overseas projects.

Tourism is another area with great potential. Much has already been done to boost inbound tourism, such as relaxing visa policies for citizens of countries in the region. In addition, the policy aims to cultivate tourism-related human resources (such as tour guides with language capability), create a Muslim-friendly and overall welcoming tourism environment in Taiwan.

The minister concluded that several major international economic forecasts indicate that Southeast Asian countries will enjoy robust economic performance in the foreseeable future and that, through better cooperation, the region offers great potential for all.