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Taiwan's newSouthbound Policy

Taiwan's newSouthbound Policy

Deepening Taiwan’s Regional Integration
Published July 2019

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In a concerted effort to expand Taiwan’s presence across the Indo-Pacific, President Tsai Ing-wen introduced the New Southbound Policy (NSP) in 2016. The NSP is designed to strengthen Taipei’s relationships with the ten countries of the Association of Southeast Asian Nations (ASEAN), six states in South Asia, Australia, and New Zealand. The policy aims to leverage Taiwan’s cultural, educational, technological, agricultural, and economic assets to enhance Taiwan’s regional integration and promote the broader development of the Indo-Pacific region.

Countries included in the Southbound Policy: the ten countries of ASEAN, six states in South Asia (Bangladesh, Bhutan, India, Nepal, Pakistan, and Sri Lanka), Australia, and New Zealand.
Countries included in the Southbound Policy: the ten countries of ASEAN, six states in South Asia (Bangladesh, Bhutan, India, Nepal, Pakistan, and Sri Lanka), Australia, and New Zealand.

The plan hinges upon forging a “sense of economic community” and forming “a consensus for cooperation” with the 18 nations identified by Taipei as potential partners. Since Taiwan lacks formal diplomatic ties with the countries targeted by the NSP, Taipei must creatively foster bilateral collaboration. To this end, the Tsai administration has rallied local governments and civil society organizations to collaborate with the central government’s implementation efforts.

The NSP consists of four pillars, five flagship projects, and three innovative fields.

The NSP’s Four Pillars

01 Promote Economic Collaboration

Cooperate with partner countries on supply chains, market demand, and infrastructure projects.

  • Supply Chains: Integrate Taiwan’s competitive industries with the supply chains of other economies, including not only NSP partners but also Japan and the United States.

    The Asia Silicon Valley Development Plan is designed to strengthen industrial links between Taiwan and its economic partners.

  • Market Demand: Promote Taiwan’s industrial brand abroad by increasing exports.

    The Taiwan External Trade Development Council is promoting Taiwan’s image abroad by organizing fairs and exhibitions in partner countries.

  • Infrastructure Projects: Create a collaborative platform for exporting infrastructure construction services and turnkey projects.

    Companies from Taiwan, Japan, and Indonesia collaborated to construct Jakarta’s first mass rapid transit line.

Created with Highcharts 12.1.2US$ (Billions)ASEANSouth AsiaAUS & NZ2000200520102015020406080

Taiwan’s Exports to NSP Partner Countries

Source: Bureau of Trade, Ministry of Economic Affairs, ROC (Taiwan)

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02 Conduct People-to-People Exchanges

Deepen bilateral exchanges through the cultivation of scholars, students, and industry professionals.

  • Education Ties: Deepen educational ties by offering scholarships to students from partner countries. Enhance domestic cooperation between academia and industry. Provide enhanced youth technical training.

  • Industry Talent: Promote a two-way flow of professionals and help match foreign workers with local companies.

    Taiwan has streamlined the process for applying for work visas and created a new visa for job seekers from overseas.

  • New Immigrants: Help first-generation immigrants secure job opportunities. Connect second-generation immigrants with their ancestral countries through academic and cultural exchanges.

Created with Highcharts 12.1.2Mainland ChinaHong Kong & MacauJapanSouth KoreaUnited StatesNSP PartnersOthers

Sources of Inbound Students to Taiwan, 2018

Source: Ministry of Education, ROC (Taiwan)

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03 Enhance Resource Sharing

Promote bilateral and multilateral cooperation in culture, tourism, medical care, technology, agriculture, and small and medium-sized enterprises.

  • Health Care: Boost bilateral pharmaceutical certifications and new drug and medical equipment development. Support the development of medical care and training of public health workers overseas.

    Taiwan boasts a highly developed public health care system and one of the world’s most technologically advanced medical equipment industries.

  • Culture: Use film, broadcasting, and online games to promote Taiwan’s culture. Encourage exchanges between cities in Taiwan and cities elsewhere in the region.

    The Taiwan-Asia Exchange Foundation and the Vietnam National Institute of Culture and Arts Studies have partnered to create art programs, artist-in-residence projects, and various workshops.

  • Tourism: Ease visa requirements to increase inbound tourism to Taiwan. Make Taiwan’s tourism more inclusive by expanding the language-training of tour guides and creating a Muslim-friendly travel environment.

  • Technology: Strengthen the connections between Taiwan’s science parks and research institutes and counterparts abroad. Engage in technology sharing.

  • Agriculture: Provide agricultural technology assistance and increase business exchanges with partner countries.

    The total value of Taiwan’s agricultural exports hit US$5.47 billion in 2018, marking a 20-year high.

Created with Highcharts 12.1.2Tourists (Millions)Mainland ChinaNSP PartnersJapanHong Kong & MacauSouth KoreaRest of World201620172018024681012

Top Sources of Tourists to Taiwan

Source: Tourism Bureau, ROC (Taiwan)

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04 Forge Regional Links

Systematize bilateral and multilateral cooperation with partner countries while strengthening negotiations and dialogues.

  • Regional Integration: Actively pursue economic cooperation agreements. Update and strengthen current bilateral investment and taxation treaties.

    In 2018, Taiwan and Indonesia signed an MOU that opened the possibility of creating special economic zones and cooperating on infrastructure development.

  • Negotiations and Dialogues: Promote multilevel and all-encompassing negotiations and dialogues with partner countries, and other countries across the Indo-Pacific.

  • Strategic Alliances: Build a comprehensive foreign aid mechanism and encourage Taiwan businesses to participate in overseas development projects. Strengthen official and nonofficial cooperation between Taiwan and foreign partners.

    Taiwan has established a US$3.5 billion fund to assist partner countries with development projects.

  • Overseas Network: Connect with overseas ethnic Chinese and overseas Taiwan business networks and strengthen their links with corporations in Taiwan.

Created with Highcharts 12.1.2US$ (Billions)Mainland ChinaNSP Partners200020052010201505101520

Taiwan’s FDI to Mainland China and to NSP Partner Countries

Source: Investment Commission, Ministry of Economic Affairs, ROC (Taiwan)

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Flagship Projects and Innovative Fields

Taiwan’s Office of Trade Negotiations has laid out five flagship projects and three innovative fields for collaboration. These programs are designed to capitalize on the pillars of the NSP and enhance mutually beneficial ties with countries across the Indo-Pacific.

Five Flagship Programs

  • Agricultural development

    Increase cooperation and innovation between Taiwan and partner countries.

    In partnership with the Indonesian Ministry of Agriculture, Taiwan has set up a Modern Agriculture Demo Farm in Karawang. The project is designed to assist Indonesia’s development through technology and knowledge sharing.

  • Medical and Public Health Cooperation

    Bolster medical capacity in partner countries and create regional supply chains.

    Under the “One Country, One Center” framework, the Ministry of Health and Welfare is working with hospitals in partner countries to bolster health care and medical cooperation. Projects have been launched in India, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam.

  • Talent Cultivation

    Provide partner countries with the necessary resources to improve the skills of their workers. Offer opportunities for foreign workers and students to live and work in Taiwan.

    Taiwan is working on revising its immigration laws to make it easier for skilled professionals and foreign students to live and work in Taiwan.

  • Innovative Industries

    Strengthen regional collaboration and increase innovative output in key industries through promoting R&D and capacity building.

    Collaboration in areas such as green energy, smart machinery, and biotechnology provides Taiwan with an opportunity to not only assist developing countries, but also enhance its ties with R&D leaders such as Japan and the United States.

  • Youth Exchanges and Policy Forums

    Promote student and youth exchanges to enhance regional cooperation and support the next generation of leaders. Encourage civil society engagement with regional counterparts.

    The Taiwan-Asia Exchange Foundation was established in August 2018 to strengthen ties with NSP partner countries. The Yushan Forum is a Taiwan-initiated annual forum designed to foster dialogue, cooperation, and cultural exchange throughout the region. Areas of focus include economic prosperity, technology, innovation, and public health.

Three Innovative Fields

  • E-commerce

    Help local firms expand their business abroad and aid the development of e-commerce platforms in regional markets.

  • Infrastructure

    Provide financial support to help Taiwan companies work on infrastructure development projects in partner countries.

  • Tourism

    Expand domestic tourism services, promote Taiwan as a tourist destination overseas, and ease visa entry requirements.

    The Tourism Bureau has focused on marketing Taiwan as a Muslim-friendly destination by opening prayer rooms and certifying halal restaurants and hotels.

Given the multidimensional nature of the NSP, its success should be evaluated incrementally. We encourage you to visit our Data Repository, which tracks several of the key performance benchmarks for the policy. More details regarding the NSP can be found in our longer publication.

Further Reading