Taiwan Authorities' 'Southbound' Policy Goes Awry

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Last updated at: (Beijing Time) Sunday, January 19, 2003

Taiwan Authorities' 'Southbound' Policy Goes Awry

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The Taiwan authorities are forging ahead with the so-called "southbound" policy, encouraging the island's entrepreneurs to invest more in Southeast Asian nations rather than the Chinese mainland. This has aroused the concern of people from both on the island and outside, said an article in the Beijing-based Cross-Straits Relations magazine.

The policy, reiterated by Taiwan "President" Chen Shui-bian last July, is the same as that proposed in 1994 by Lee Teng-hui, the then leader of Taiwan. At that time, there was a new wave of investment in the mainland by Taiwan entrepreneurs.

Attempting to split China and put a brake on the booming cross-Strait relations, Lee came up with the so-called "southbound" policy to push Taiwan business people to invest in Southeast Asian nations.

With this policy, Lee wished to curb westward-bound investment for fear of Taiwan being economically overdependent on the mainland. At the same time, he also meant to enhance Taiwan's influence in Southeast Asia and upgrade relations with those nations by making use of Taiwanese capital, something that is in line with the Taiwan authorities' "pragmatic diplomacy." Chen's "southbound" policy differs little from Lee's policy.

The last few years have witnessed rapid economic development, political stability and enhanced comprehensive national strength on the Chinese mainland. The sustained economic growth and increasing market opportunities of the mainland have enabled Taiwan business people to reap abundant profits and thus attracted even more investment to the mainland from Taiwan.

The vigorous non-governmental exchanges across the Straits have put heavy pressure on Taipei's mainland policy, particularly on the issue of the "three direct links" - trade, transport and postal links.

The separatist forces in Taiwan think Taiwan is facing a very severe situation with regard to both its diplomacy and economic dependence on the mainland.

Therefore, the resurfacing of the "southbound" policy is mainly aimed at countering the so-called "international blocking" by the mainland and the increasing investment in the mainland by Taiwan's enterprises.

Annette Lu, Taiwan's "vice-president," said her trip to Indonesia last August was the "maiden southbound voyage" and a "diplomatic breakthrough" for the purpose of promoting the "southbound" policy.

But this policy in fact aims to expand Taiwan's so-called "international space for existence" by supporting "pragmatic diplomacy."

Due to the rigid separatist stance of the Taiwan side, the cross-Straits relationship has been for a long time in a stalemate. This has aroused indignation among Taiwan's public, opposition parties and various political and economic organizations.

The Taiwan authorities have also realized that the stalemate in cross-Straits relations has brought tremendous turbulence to their quest for legitimacy.

In this sense, the proposal of the "southbound" policy more or less reflects the sense of frustration of the Taiwan authorities regarding their mainland policy.

Chen wanted to encourage Taiwan business people to transfer their capital to Southeast Asia after his fallacy of "one country on each side" suffered widespread criticism from Chinese people all over the world as well as other world opinion.

The "southbound" policy is no different from digging a grave for oneself.

Ironically, Chen has raised the "southbound" policy at a time when the mainland's economy is growing rapidly. This demonstrates that his policy is against the tide of economic development and therefore is merely for political purposes.

Many experts think the "southbound" policy lacks economic foundation and the Taiwan authorities will have to pay a heavy price for it.

The Taiwan authorities should not make economic development - which is closely related to the interests of the Taiwan people - an excuse for taking political risks.

The Taiwan public and some parties on the island are pessimistic about the newly proposed "southbound" policy.

The Kuomintang party said that this policy fully demonstrated that Chen had "got lost."

The People First Party claimed that Chen was ruling Taiwan only with empty slogans.

Even Wang Tuo, a high-ranking official in Chen's Democratic Progressive Party said that, from the viewpoint of economic globalization, the "southbound" policy would not be able to alter the westward-bound trend of Taiwan enterprises.

Therefore, making efforts to improve cross-Straits relations is the only way out for the Taiwan authorities.

Jeffrey L. S. Koo, chairman of the board of directors of the Taiwan-based China Trust Commercial Bank, said that, although Southeast Asia is a promising market, the mainland's market is important as well. If Taiwan gave up on the mainland market because of political factors, it would probably pay a bigger price in the future.

Chen Kun-huang, president of the Council of Taiwanese Chambers of Commerce in Asia, said that, since the "southbound" policy was being used to contain the "westward-bound" policy, it was probably not in the interests of Taiwan business people.

The trend towards cross-Straits economic and trade exchanges is irresistible and has already become an undisputed fact.

Whenever cross-Straits ties deteriorate, the Taiwan authorities try to use Taiwan's entrepreneurs to counter the mainland.

The Taiwan authorities should seriously think about political reconciliation with the mainland to create a peaceful and stable environment for Taiwan's business people.

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