Interview: Does the “New Go South Policy” of Tsai Ing-wen come true?

This action implies that for the 8 years under the leadership of Democratic Progressive Party Government, Taiwan’s economic reliance on the mainland will be changed. The new government of Tsai stressed the independence of New Go South Policy that: “Southeast Asia is an emerging market which we cannot give up and is not an alternative for mainland market”.

What is the view of Taiwan businesses and experts regarding New Go South Policy of Tsai Ing-wen? BBC interviewed Mr. Mr. Hsieh Ming Hui – Chairman of Taiwan Business Association, who has more than 20 years living and working in Vietnam, to see the views of and listen to the opinions of experts and scholars regarding this new policy.

Effectiveness expected and concurrent multi-task required

Interviewed by BBC, Mr. Hsieh Ming Hui, Chairman of Taiwan Business Association in Vietnam said, if the new government of Tsai Ing-wen determined to properly implement New Go South Policy, it should firstly tackle the issues of “policies” and “talents”. “Chinese, Vietnamese and a certain understanding of policies and laws may be required along with good remuneration and incentives, but it is not easy to find a person meeting these requirements.” In the point of Mr. Hsieh Ming Hui, talent fostering is a prerequisite to implement this policy; so, Vietnam and Taiwan educational cooperation is extremely important. He said: “Attracting Vietnamese elites to study in Taiwan and even making a policy “working while studying” will solve the problem of scarcity of medical students in the long past time in Taiwan”.

When these students return to serve their country, Taiwanese businesses can recruit and employ such high-quality labors as same as Chinese government does. Anyway, Taiwan has a major of couples “Taiwanese husband – Vietnamese wife” whose generation is aim at “go south” policy of Taiwan.

Mr. Hsieh Ming Hui also said that Vietnam was in fast and strong economic growth stage, so its investment policies became more stringent. It was supposed that the new government should sign with Southeast Asian nations formal commitments on investment and quickly execute the negotiations of TPP and RCEP so that the New Go South Policy of Taiwan could have enough dynamics to succeed.

Can Taiwan reduce its over-reliance on China trade?

Mr. Hsieh Ming Hui succeeds and goes up thanks to footwear industry. He is now Chairman of Taiwan Business Association in Vietnam. For the success of the New Go South Policy, he proposed Taiwan Government to concurrently perform both of formal negotiation and high-quality workforce training in host countries. (Photo provided by Mr. Hsieh Ming Hui)

Under 8 years of the leadership of Ma Ying-jeou with pro-China policy, Taiwan’s economy have been greatly affected by mainland economy. From now on, the government under the leadership of Tsai Ing-wen seems to attempt to get rid of close ties with mainland economy.

China’s position as the “world’s workshop” is gradually being unseated by Southeast Asian countries, mainly for the reason that labor costs and workshop costs are constantly rising due to China’s economic boom. “In fact, there are now several Chinese investors transferring their project from China’s mainland into Vietnam that also makes us face stiff competition”, Mr. Hsieh Ming Hui commented. Looking to the distant future, the economic growth will be gradually shifted from China to Southeast Asia. Mr. Hsieh Ming Hui made the point of “30-year golden period” which can be understood as a 30-year period of economic boom in emerging markets. The first countries undergoing “golden period” include Japan, Taiwan, followed by China and Southeast Asian countries. Mainland China emerged in world economy at the early of 1990s in the 20th century and is in a period of stabilization by 2020. Southeast Asia emerged after 2000 and still remains 15 years more of “golden period”.

At the present, Southeast Asian countries certainly welcomed any investment project provided that it could contribute to “increase tax revenue and develop working market”. In contrast, Southeast Asia should think more of environmental protection and competition between native and foreign labors, avoiding anti-Chinese sentiment “especially when differences of language and culture always exist”, Mr. Hsieh Ming Hui said.

From unsympathetic look towards cooperation

Investing into Southeast Asian market does not mean giving up mainland Chinese market. Taiwan has no intention to compete with mainland China in Southeast Asia. In contrast, the sides have their own strengths, so we should promote our own advantages to cooperate together (Photo: Cheng Chung Lan – BBC)

The Taiwan Affairs Office of China has no “optimistic and sympathetic” look to New Go South Policy.  Huang Chih Fang, Head of Go South Policy Office, said “Mainland China is taking political language to explain New Go South Policy. Hope that the Mainland can comprehend this policy by the language of Economy – Industry.”

Mr. Huang Chih Fang also said that Taiwan would not completely abandon the Mainland market although Asean countries are emerging markets which all the countries wished to invest in. Ms Tsai Ing-wen keeps good relations between the two sides at the same time with grasps the trend of investment in Southeast Asia which can bring opportunities for cooperation with the Mainland.

A few days ago, a BBC journalist attended the conference held by Taiwan Institute for Policy Studies. Discussion on “New Go South Policy”, Mr. Lai I Chung, Deputy Director of Taiwan Institute for Policy Studies, said that Taiwan certainly maintained economic cooperation with the Mainland and “New Go South Policy” did not mean abandoning the mainland market. He also cited the statement of Mrs. Tsai Ing-wen: “Aside from multimedia development with Southeast Asia, Taiwan will expand exchange and dialogue on economic development with the Mainland.

In the opinion of Mr. Lai I Chung, Taiwan and the Mainland can cooperate to jointly develop in Southeast Asia. “Mainland has advantages of capital, economic power and infrastructure meanwhile Taiwan can provide technology and experiences of industry development”, Mr. Lai I Chung said. He also said that the two sides did not only compete, but also support and complement each other.

Mr. Wu Jung I, Director of Taiwan Institute for Policy Studies said that the Mainland has a big ambition in the market of Southeast Asia and Middle East and different advantages from Taiwan’s those. Taiwan is constantly improving technical standards for Southeast Asian market which is an advantage of Taiwan.