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13 August 2020, Gateway House

The importance of being Taiwan

Taiwan’s stellar response in containing the spread of the virus has been appreciated globally. Taipei is now in the spotlight, as it seeks global political equality and prepares its economy to become self-sufficient in everything from artificial intelligence to defence technology. Its changing global positioning has awakened its bilateral relationships, and India-Taiwan is one of them, with significant potential. In this episode of the Gateway House Weekly Webcast, Sameer Patil, Fellow, International Security Studies Programme, Gateway House is in conversation with Dr. I-Chung Lai, President, Prospect Foundation and Prof. M.D. Nalapat, Editorial Director, The Sunday Guardian and Vice-Chair of the Manipal Advanced Research Group to discuss Taiwan’s emerging global role.

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SameerPatil (SP): Good Evening and welcome to the Gateway House Weekly Webcast. This is Sameer Patil, Fellow for International Security studies at Gateway House. Our topic for discussion this evening is: The Importance of Being Taiwan.

As a relatively young democracy, Taiwan has established itself as a hub of technological innovation. It has also been a preferred destination for investment by many technology giants. But, global industrial dependence on mainland China meant that Taiwan played a restricted role in global politics.

The onset of the COVID19 pandemic has changed all equations. Taiwan’s stellar response in containing the spread of the virus has been appreciated globally. Under the charismatic leadership of President Tsai Ing-wen, Taipei is now in the spotlight, as it seeks global political equality, and prepares its economy to become self-sufficient in everything from artificial intelligence to defence technology. So, this evening we will discuss Taiwan’s emerging global role, its changing bilateral relationships, and the potential for India-Taiwan ties.

With me today are two distinguished guests:Dr I-Chung Lai, President, Prospect Foundation- a think tank based in Taipei, and Prof. M. D. Nalapat, Editorial Director, The Sunday Guardian and Vice-Chair of the Manipal Advanced Research Group. Thank you both for joining us this evening. So without any delay, let us start the discussion.

My first question is to you, Prof Nalapat. Taiwan is not a member of the WHO and a global pandemic would have been an appropriate occasion to join. But clearly it’s not the case. In your view, what are Taiwan’s options to share its COVID19 expertise with other countries?

M.D. Nalapat (MN): I do believe the WHO is severely failing in its duty of promoting world health by excluding Taiwan. A result of that, you have now got a black hole within the WHO system and that is a very dangerous thing in any system, be it the financial system, health or defense. If there is a gap in that system, then it represents a security threat and thanks to WHO excluding Taiwan and its views, a massive security threat has developed which has created a lot of problems for the rest of the world. So I hope that the WHO, now that India is playing a more important role, ensures that Taiwan comes back to it because the reality of Taiwan cannot be ignored. We can’t talk in a formalistic and legalistic way. We have to talk in a realistic and practical way because this is a practical and real world and not a world that is in the abstract.

SP: Dr Lai, what did Taiwan do right in its handling of COVID 19 and what are the main lessons that the world can learn?

DrI-Chung Lai (IL): The way in which we handled COVID 19 drew a lot from the lesson that we learnt from our dealing with SARS over 17 years ago and in both cases, Taiwan was excluded from the WHO and not really helped by the WHO. During the year 2003 when SARS broke out, we learnt a very tragic lesson when we lost over 70 lives in Taiwan, that we need to be vigilant and confrontational. After SARS that took place 17 years ago, Taiwan established a public health emergency early warning system where the hospitals and health clinics have been practicing emergency drills almost every year and it has been on the highest examination priority on the government review. If the hospital fails to pass a test, then the hospital will be fined or forced to close down within a few years. So before COVID really happened, Taiwan had been practicing and trying to meet this challenge since many years. It is still not enough, we have also been observing very closely what has been happening in China and on any signal that came out as a result of the public health crisis. One of the examples was that we have been following the Wuhan cases for several months and then, in December, things started to accumulate until one day when one of our health officials drew findings from either reports from Taiwanese businessmen in Wuhan, or his Chinese colleagues working in Wuhan and with some knowledge, he discovered something that is very problematic, and very quickly with some meetings, our health officials decided that they need to notify the WHO, but unfortunately the WHO just ignored their notifications. But, at the same time, the health officials also started the process on how we should deal with COVID 19 and so we started the whole drill right on Jan 1st 2020. The whole thing really came down not only to the process but also making sure that we have enough Personal Protection Equipment (PPE) kits, which is critical and very important in ensuring our national’s health. In the second week of January, we started mass production of the kits, and focused on the public health drills and mass sanitization programs for every citizen in Taiwan.

The third thing that is also very important in addition to the health professionals, our early waring health systems and the PPE kits, is that the government made a declaration and an emergency notification to ensure the messages are transparent and that the people are all being informed. This is very important in ensuring social cohesiveness and trust amongst each other. Because a pandemic like this requires every citizen to stay calm and have confidence in their safety, it is important for them to work together. The third lesson is that the public trust through the government was ensured via message sharing and ensuring that the whole process was transparent. It was this process that allowed the citizens to have full confidence in the government and ensure their own safety.

SP: Congratulations on the remarkable success of Taiwan. Now, moving on from COVID19 to the foreign policy domain. Taiwan has been able to balance its relationship with both the U.S. and China for many years primarily because bilateral ties were good between both countries during the years. But, now that the U.S. has a pushback on China, what will Taiwan do?

IL: What we see now is that we have very good relations with the U.S. and relations with China are not very good. The electoral victory of Tsai Ing-wen made China very upset. China, seeing the progressiveness of Taiwan, and also its relations with other countries, has not taken it well. They are sending fighter jets to harass Taiwan in a more frequent and portent way and are also sending carriers or other battleships to harass Taiwan in the nearby waters. So, right now we do not have a good relationship with China, but I think that the issue is that we need to maintain our favor of freedom and democracy, and in this case it’s the U.S. that will ensure the balance of power is in Taiwan’s favor. It is important for China to know that although they are big and strong, Taiwan will stand their ground and strengthen themselves, and let China know their position. This way the Beijing government won’t believe that they can push Taiwan in a certain direction. This is also very important in my opinion.

SP: Thank you Dr Lai. Professor Nalapat, for years you have advocated for a very close relationship between India and Taiwan. In fact, you had also brought madam Tsai, before she became President, to India, and in fact, Gateway House was the only Indian think tank to host her during that time. So, what can we do to promote this relationship in the context of trade and technology and what can India do to increase the Taiwanese stake in tech investment?

MN: I’d like to say that Dr Tsai is a strong believer in democracy and liberal values and she believes in that globally. Now, a Chinese ambassador warned India against decoupling. I would like to say that a large part of the world has now started decoupling from China for very obvious geopolitical reasons. I have written quite some time ago that this is going to happen and that it is inevitable. The Taiwanese started their decoupling around four years ago due to the Chinese policy of trying to restrict the Taiwanese by narrowing the contacts and creating as many problems as possible. So, Taiwan in a sense had the obvious option of reaching out to the rest of the world including South East India, which the Tsai government has done. The reality is therefore that you are going to see the businesses deciding whether they are Taiwanese businesses or Chinese businesses and if they are the former, then they will have to decouple. You are seeing Foxconn and other very important manufacturers that are concerned. Going forward, if you’re manufacturing in China then you’ll have to go ahead and sell in China. Given the trajectory of the decoupling and Taiwan, if you’re selling in China, then you’ll have to go ahead and relocate to China. I don’t think more than about 20% of existing Taiwanese businesses will make that kind of a transition. Therefore, there is a very talented group of people and a large part of the China dream was a boost given by Taiwanese brains, investment, marketing skills and financial clout, all to the Chinese.

Now that skill and brainpower will obviously have to look at all options. India can be an option if we have a proper policy structure and more importantly we are very clear as to whose side we are on. Today, I can tell you that it’s no longer to be on both sides. With regards to Non Alignment between the U.S. and the U.S.S.R., in effect, we were aligned with the U.S.S.R. Today, if India goes on talking about Non Alignment, then they are living in the past. Either one can choose China or one can choose those who are reacting against China. The Taiwanese made their choice electorally more than 4 years ago and now they have repeated that choice. Over the next 4 years, that decoupling is going to continue.

India is going to be a very important partner of Taiwan. I think you can see a significant degree of investment and brainpower. I am also talking about Indian brainpower going to Taiwan. Just as techies are flooding San Jose and Silicon Valley, they can also flood Taiwan. Just as Taiwan has relocated themselves in the, if I may say so the ‘democratic world’, then the Indian brains are an obvious corollary of that. I only want to say that we need a policy framework and above all we need to give up an ambivalent system and mental attitude, and we need to understand who are our foes and friends, and then join hands with our friends to resist the foes.

SP: Thank you, professor Nalapat. Dr Lai, as professor Nalapat said, Taiwan has great technology strengths, one that China officially covets. How will Taiwan now compete on this front with China along with the rest of the world?

IL: You are correct that we have certain tech strengths in both Taiwan and India. There is a famous phrase in Taiwan, that Taiwan produces a lot of engineers but India is able to export a lot of CEOs. What happens is Taiwanese engineers end up working for Indian CEOs. If we join hands, we will be able to create great strength for these two nations.

Jokes aside, the way in which we are working and trying to compete against China, it’s not that we are trying to move against them in terms of the forces. But, we tried to compete in a healthy way that involved being innovative and trying to respect democracy as well as respect human rights. So, most elements are very important for technology, production and especially for the technology that is useful for human development, rather than technology that will be used to dominate against other humans. That is why we believe that a good technology is one that has to be built upon a democracy and that will respect human rights.

Also, as Dr Nalapat mentioned on the decoupling of the companies, I have to say that the way the Chinese government is doing this is in order to create a pushback for other companies to lessen their footprint in China. So the companies in China are not decoupling but rather it is China that is decoupling from the rest of the world. It’s just that some of the companies still believe that they can harness their last amount of wealth before they exit.

SP: Okay. Thank you. A question from Ambassador Gautam Bambawale who says that if India gives immediate permission to Taiwan to open a Taipei Economic and Cultural Center office in Mumbai, then what message will Taiwan take away from this decision?

IL: This is a question regarding Taiwan India relations. Yes. Right now we have an office in New Delhi as well as in Chennai, because Chennai is a site that many Taiwanese businessmen believe has a lot of potential for the manufacturers. Yes, the government is thinking about opening an office in Mumbai.

Compared to India, Taiwan is small in size, but they are very different and one office in Taipei probably won’t be able to cover the full strengths about Taiwan. Just as America and Japan have their office set up in Kaohsiung that is in the Southern part of Taiwan, India could also do the same. Another thing about the Taiwan-India relation, from my conversations with important Taiwanese businessman, is that they all say that there will be something big in India not just that, their upstream supplier also asked them to think about investing in India. So I have to say that, although right now we have a bilateral trade of about the $7 billion, probably much less in comparison with India and China, but the number will definitely increase and investment from Taiwan will also increase. So this is something that I know for sure.

SP: We spoke about the tech sector but, can you tell us the ways in which India can partner with Taiwan in manufacturing in the tech sector?

MN: Well, I’d like to say that getting involved in supply chains is a very important component even for foreign policy. Frankly, when I meet some Taiwanese leaders I think that they are very carefully ensuring that they become part of the democratic supply chain, so far as defense and security is concerned, be it is the cybersecurity or it is defense production. And slowly, one will see Taiwan playing an important role in that.

I believe that India can be a very important global player in the supply chain of the democracies in different sectors. And, that is an important point to mention – Kaohsiung. I would fully say that Kaohsiung is the ideal location, because I believe that it’s only a matter of time before the Taiwanese realized that Hong Kong is in serious trouble as a global financial centre. Macau, frankly can never reach that level of being a global financial centre. Hong Kong in my view is slipping because of the greater control exercised by the mainland. Therefore, Kaohsiung in my view is going to come as an alternative to Hong Kong and it is going to come as a global financial centre. Hence it is important for India to go there and be there before this happens. You know, the problem with us is that we should not be reactive and instead as the Prime Minister Narendra Modi correctly says, we should be active. And one way of being active is to be present in Kaohsiung. I think that’s a very good idea.

The reality is that the potentialities for India-China tech cooperation are immense. The reality is, so far as Asia is concerned, that there is no country other than India that can replicate the benefits of what China gave them in the 1980s, in terms of labor, in terms of costs, in terms of sheer size of the country and its market and very importantly, as a logistics hub. So I would say what Taiwan did in China in the 1980s, they can repeat it India during this particular decade, coming 2021 onwards. And I think that needs as I said, smart policy and skilful diplomacy.

SP: Thank you. Dr Lai, how confident is Taiwan is that U.S.A. will come to Taipei’s aid should there be an action across the Taiwan Strait, or if China attacks Taiwan?

IL: Yes, right now we have fairly good confidence about the U.S.-Taiwan relations and the commitment to the security across the Taiwan Strait or the security in East Asia. But, I think the fundamental importance of the Taiwan strait security is that China is big and has a nuclear weapon and, especially in the last several years, seems to be able to develop fairly advanced ships, fighter jets and missiles.

But I have to say that even with that, for China, to want to take Taiwan, is not just a cake walk. They can’t just come over with weapons and take what’s ours. No, there’s no way. And we have complete confidence in that.

We’ll compete against China, ship by ship, plane by plane. We will ensure that they will incur tremendous costs if they wanted to conquer Taiwan or should they want to have a war in the Taiwan strait, and we believe that this is unique about our nation and, the determination of our citizens to save our country. The determination to safeguard our democracy is the biggest strength. The Beijing government fears its own people and so they have to rely on weapons, but in Taiwan we believe in our people and we believe that our people can fight.

SP: What are the three sectors in which India and Taiwan can create long-term synergies?

IL: I think Taiwan and India cooperation can happen in both the IT sector and on semiconductors. When we talk about TSMC, who have set up trends in the United States, this tells the whole world about how the U.S. believed in TSMC to be safe and now they treasure it.

Similarly, in Taiwan and India, there is a complimentary cooperation that we can have in terms of high tech centres and also in semiconductors. But in terms of semiconductors, one of the big issues is the way in which Taiwan was able to do it by segregating some of the different production chains. For example, the upstream, the design, the lower string relating to the testing and packaging, they are sent to different companies and then at the final stage we see a congregation, unlike other countries, where they have the one company trying to do everything all by itself. I think in India, if we want it to work, the important thing is to do something similar of being able to join together a congregation, so that some Indian companies can code into their own strengths and can participate in testing packaging or the IC design or others fields.

I think this is probably the better way to move forward. I know that there is technology corporation and also the Space sector because Taiwan, right now, is really working on trying to look at how to develop our own satellite as well as our, rocket, technologies.

I think looking forward at technology advancement, India can teach us so much. And the third is biomedicine. Taiwan has good investment in biotechnology and India is famous for its own medicine production.

So, I do see a lot of potential that Taiwan and India can work together in bio related technological cooperation.

SP: Dr.Lai, one more question. Is the status quo of not formally declaring independence yet, removing reference to Republic of China the way forward for Taiwan? Or is there another scenario that you foresee.

IL: I believe right now we face a lot of challenges including the Chinese military threat and that threat is growing even stronger by the day. Yes, there are a lot of people in Taiwan who believe that it is important to declare independence in order to really achieve so-called statehood, in the face of the Chinese aggression, but I see right now the government, as well as the majority of the people believe that the most important goal is to strengthen Taiwan’s institution as well as our defense and our economic capabilities, so that we could lay down a foundation for the survivability and sustainability of Taiwan, before we decide to call for independence.

Another thing is that China has many reasons to want to attack Taiwan. The so called declaration of independence is just one of them and right now China even advanced to the notion that Taiwan’s rejection to unify with is equal to declaring independence.

So, even though we are not declaring independence, China has already decided that we have declared independence. This isn’t as big an issue as one might think it is.

SP: Taiwan makes the equipment for the 5G. Given that the banning of Huawei 5G from the markets, where do you see Taiwan playing its role in this unveiling of the 5G game?

IL: When we talk about 5G, we need to know that Taiwan already rejected Huawei for its 4G. In other countries, people want clean 5G and 6G equipment and they are trying to manoeuvre this with 5G. For Taiwan, this is simple since we blocked out Huawei over 6 years back. The real question now is not Huawei specific but, how are we going to develop new standards that are safe and secure? 5G is basically going to connect the whole world in a way that we can never imagine. And, we need something that’s more advanced than the current notion about cyber security. It is not merely about the way in which we prevent burglars from entering the house, it is basically the cyber health and cyber hygiene that should be of high priority.

The issue is just like health insurance, and that becomes a necessity for everyone in the current society. I have to say that cyber insurance or cyber health probably will be a requirement for every citizen in a 5G or 6G world. Huawei is this first virus we need to get rid of, but even after we take it out, we still have to face other issues. We need to ask real questions and for that we need to have democratic countries come together to discuss what the future of cyber will be and whether there will be someone to ensure the cyber hygiene for everyone.

SP: Thank you very much Dr Lai and Professor Nalapat for these unique insights into the India-Taiwan relationship. Thanks to the audience, for joining us this evening. We will see you again soon for the next episode of the Gateway House Webcast.

This is the transcript of the fifteenth episode of Gateway House Weekly Webcast hosted on 6 August, 2020.

This interview was exclusively conducted for Gateway House: Indian Council on Global Relations. You can read more exclusive content here.

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