New Southern Policy and the Great Game of Nations

New Southern Policy and the Great Game of Nations
China Times Editorial (Taipei, Taiwan, ROC)
A Translation
October 7, 2015

Executive Summary: Two images compete for our attention. On the 4th of this month, the 12 member states of the US-led TPP (Trans-Pacific Partnership) announced the conclusion of substantive negotiations. On the 6th of this month, Democratic Progressive Party Chairman Tsai Ing-wen, who may well become president next year, left for Japan, to increase her International capital, strengthen Taiwan-Japan relations, and kick off her "New Southern Policy". Within the Great Game of Nations, Tsai Ing-wen's New Southern Policy offers both visible opportunities and hidden risks.

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Two images compete for our attention. On the 4th of this month, the 12 member states of the US-led TPP (Trans-Pacific Partnership) announced the conclusion of substantive negotiations. On the 6th of this month, Democratic Progressive Party Chairman Tsai Ing-wen, who may well become president next year, left for Japan, to increase her International capital, strengthen Taiwan-Japan relations, and kick off her "New Southern Policy". Within the Great Game of Nations, Tsai Ing-wen's New Southern Policy offers both visible opportunities and hidden risks.

The TPP required 10 years to complete. It is the most closely watched regional free trade organization in recent memory. It is an important chess piece in the global geopolitical struggle. The 12 Member States of the TPP account for 36% of global GDP, and 30% of global trade volume. When it was established in 2006, the TPP included only four small nations, among them Singapore and Brunei. The United States joined later, then took control. Backdoor listing enabled Obama to "return to Asia", to keep Asian countries on a short leash, to be used as pawns countering the rise of Mainland China. TPP member nations include Japan, the world's third largest economy, as well as Canada, Chile, Mexico, Peru, Australia, Brunei, Malaysia, New Zealand, Singapore, and Vietnam. Mainland China is excluded.

Mainland China however, has adopted countermeasures. In 2010, the ASEAN plus One free trade zone was established. More importantly, this year Mainland China established the Asian Infrastructure Investment Bank (AIIB). Mainland China's One Belt, One Road offers a wealth of business opportunities. Central Asia, the Middle East, Europe, Southeast Asia, and India in South Asia, all fall within the One Belt, One Road. Mainland China dominates. The RCEP (Regional Comprehensive Economic Partnership Agreement), currently being negotiated, is another Mainland China-led regional economic and trade organization intended to counter the US. Needless to say, the United States has been excluded from these.

The 10 ASEAN nations include 600 million people. Their overall share of global GDP is less than 4%. But over the past 10 years, the share has grown steadily. Traditionally, by means of the Asian Development Bank, Japan has maintained total control over ASEAN. Since the establishment of the Mainland China and ASEAN Free Trade Area Zone however, bilateral economic and trade relations have bloomed. Mainland China is ASEAN's largest trading partner. It is the region's largest source of foreign investment. In response to the AIIB, Japan has added 100 billion USD to Asian Development Bank accounts. Obviously it seeks to dominate ASEAN and South Asia economic and trade relations.

Taiwan is caught within this Great Game of Nations, which presents both risks and opportunities. For Taiwan, its best strategy is the one adopted by the Southeast Asian nations, New Zealand, and Australia. It is to seek the best of both worlds, avoid offending either side, and to join every economic and trade organization it can, in order to maximize its economic benefits. If one cannot have it both ways, then at least one should avoid offending either side. Otherwise, one will have to bet the farm on one side. Bet wrong and suffer the consequences.

Tsai's New Southern Policy Tsai seeks to hitch a ride with Japan and the United States, to jointly develop ASEAN, South Asian, and other markets. Taiwan High Speed Rail may join forces with Japan to help other Asian nations build high-speed rail systems. Chen era Foreign Minister James Huang is the director of the DPP International Department. Huang says that previous Southern Policy programs focused on investor relations. The New Southern Policy is more diverse. It addresses industry, tourism, youth entrepreneurship, culture, agriculture, medicine, and fisheries. It is more policy-oriented. It seeks to introduce regional talent to Taiwan, in two-way exchanges. James Huang believes these are "promising". He believes the prospects are limitless.

This is a pretty picture. But let us not forget the hidden risks. Taiwan has already tried the Southern Policy three times. The only time the results were anywhere near satisfactory, was the first time. The Asian financial crisis, coupled with Mainland China's economic rise, eventually rendered the Southern Policy unsustainable. Tsai proposes a New Southern Policy. True, it coincides with Mainland China's economic slowdown. The economic situation in Southeast Asia and South Asia, mainly India, may look better. It may promise opportunities. But Mainland China's economy is likely to get back on track next year, Southeast Asian nations face another wave of emerging economy shocks. Whether India's growth is sustainable remains to be seen. If Taiwan bets the farm on the New Southern Policy, the results could disappoint. That is the first risk.

The first Southern Policy was implemented over 20 years ago. Since then, international trade has undergone major changes. Mainland China is already the world's second largest economy. Its trade and economic power within ASEAN has tripled. Whether alone or with Japan, can Taiwan really compete with the Mainland? No one knows. That is the second risk.

What the New Southern Policy most needs is entrepreneurial will and competitiveness. The government can exert little influence, let alone lead. Consider linguistic differences, cultural differences, market size, and market prospects, as well as one's existing network of people. How companies respond to the New Southern Policy remains to be seen. That is the third risk.

Finally, a bird in the hand is worth ten in the bush. Taiwan is highly dependent upon exports to the Mainland. It should explore other markets and diversify. The New Southern Policy presents a few opportunities. It may be worth a try. But developing new markets is risky. They can easily fail. At times like these, one must first protect existing markets. No matter who comes to power, cross-Strait economic and trade relations must come first. They account for the largest share of Taiwan's exports. Taiwan will not be able to join the TPP for several years. Realistically it has no alternative. Only the MTA can prevent Taiwan's trade marginalization. Under the Great Game of Nations, the New Southern Policy seeks new opportunities. But we must also avoid the risks. Otherwise they could easily outweigh any benefits.

TPP大國博弈下的新南向政策

2015年10月07日 中國時報

兩個場景，交替而過。以美國為首的12個TPP（跨太平洋戰略經濟夥伴關係協議）會員國，4日在美國宣布完成實質談判；明年執政希望濃厚的民進黨主席蔡英文，6日上午啟程訪日，既為其增加「國際資本」，也為加強台日未來關係、啟動其新南向政策作準備。在大國博弈中，蔡英文的新南向政策既有機會又潛藏著風險。

TPP堪稱近10年來完成、最受矚目的區域自由貿易組織，同時也是全球地緣政治爭奪中的一步重要棋子。TPP12個會員國涵蓋全球GDP（國內生產毛額）的36%，貿易額占全球的30%以上；2006年成立時只是星、汶萊等4個小國的自由貿易組織。後來美國以「借殼上市」方式加入且強勢主導，作為歐巴馬「重返亞太」，拉緊亞洲國家、抗衡中國勢力崛起的重要棋子。TPP成員國包含全球第三大經濟體日本，及加拿大、智利、墨西哥、秘魯、澳大利亞、汶萊、馬來西亞、紐西蘭、新加坡、越南等國家，中國則被排除在外。

中國的抗衡之道，除了2010已上路的「東協加一」自由貿易區外，更重要的是今年中國主導的亞投行創立，及因之而來的「一帶一路」商機，不僅把從中亞、中東到歐洲都納入，東南亞、印度南亞大陸也在「一帶一路」範圍。而中國主導、仍在談判中的RCEP（區域全面經濟伙伴關係協議），則是另一個中國抗衡美國的區域經貿組織─當然，美國全部都被排除在外。

東協10國人口超過6億，雖然總體GDP占全球的比重仍不到4%，但近10年來穩定成長。傳統上日本透過亞洲開發銀行，在東協擁有舉足輕重的影響力；但在中國與東協的自由貿易區上路後，雙方經貿關係快速成長，中國已是東協最大的貿易夥伴，更是區內多個國家最大的外資投資來源。不過，受亞投行事件刺激，日本5月宣布對亞銀增資千億美元，明顯要搶回在東協與南亞的經貿主導權。

處在此大國博弈夾縫中的台灣，既有風險，又是機會。對台灣而言，上上之策當然是如東南亞國家、紐澳等國一樣「左右逢源」，兩邊都不得罪、全部經貿組織都能加入，獲取最大的經濟利益；如果作不到左右逢源，至少也要不開罪任何一邊，甚至把賭注全押一邊，一旦押錯則全盤皆輸。

因此，蔡英文提出的新南向政策，確實可乘著這股上揚之風，與日、美聯手開拓東協、南亞等市場─例如台灣高鐵與日本準備聯手幫助亞洲其他國家建高鐵。扁政府時期的外交部長、現任民進黨國際部主任的黃志芳說，以往南向政策只著重在投資關係，新的南向政策是多元的，從產業、觀光、年輕人創業，到文化、農漁醫療等，是多面向的政策；此外，還希望能吸引當地人才來台工作，是雙向交流。黃志芳認為這些地區都「大有可為」，似乎前景無限。

但在擘畫美景的同時，也別忘了其中潛藏的風險。台灣曾先後啟動過3次南向政策，只有第1次的效益較佳，之後因亞洲金融風暴，加上中國經濟崛起，南向即無以為繼。蔡英文提出新南向政策，雖然正逢中國經濟放緩，東南亞與南亞（主要是印度）的經濟相對似乎較佳，而顯得有可為之際；不過，中國經濟仍有可能在明年逐漸回到穩定增長的軌道，東南亞國家也正面臨另一波「新興國家震盪」中，印度的增長是否能持續亦待觀察。台灣如強押新南向，未必能如意，此為第一個風險。

此外，距離第1次南向政策已超過20年，國際經貿版圖早已大變，中國已是全球第二大經濟體，在東協的經貿勢力呈三級跳。台灣不論是獨力或與日本攜手，要與大陸在此的勢力競爭，成敗勝負仍在未知之數，此為風險之二。

再者，新南向最重要的還是企業的意願及競爭力，政府很難影響更別談主導，在考慮到語言、文化、市場規模與前景，以及原有的人脈後，企業響應新南向的意願也有待觀察，此為風險之三。

最後，我們要強調的是：十鳥在林不如一鳥在手。台灣對大陸出口依存度偏高，確實應開拓其他市場以分散市場，新南向有可能是一個機會，可以嘗試；但新市場的開展既要時間又有風險，更未必成功，這時就該注意、也要先顧好原先的市場。未來無論誰執政，仍要優先顧好占台灣出口份額最高的兩岸經貿關係；而在台灣幾年內都不可能加入TPP、亦無其他替代方案的現實情況下，完成兩岸貨貿協議才是化解台灣經貿邊緣化之道。在大國博弈中，新南向既要開拓機會，更要注意並迴避其風險，否則最後可能得不償失。