Taiwan has long relied on its companies like Foxconn to perform initiatives via incorporation in other countries. (Photo : Getty Images)
Taiwan looks to close more deals on trade and investment in Southeast Asia, as the island country aims to free itself bit by bit from the reins of China, which serves as its most important economic partner amid diplomatic pressures over the refusal to recognize its independent sovereignty.
With Chinese soft power bent on imposing the universal recognition of the "one China policy" worldwide, Taiwan has long faced an uphill battle in terms of forging trade and investment ties in other countries, many of which recognize the government in Beijing as the legitimate one over that in Taipei.
China's expanding influence has led to the point where Taiwan has lost one of its last 22 formal allies, Sao Tome and Principe, after the election of new President Tsai Ing-Wen last year. Nonetheless, the election of U.S. President Donald Trump, known for his fierce anti-China rhetoric, is an episode to watch out for.
With tensions brewing--Trump's telephone call with Tsai being a source of outrage--China's propensity to pressure its allies against doing business with Taiwan is set to advance. The government in Taipei has long been excluded from various trade, tax, and investment agreements because of those pressures.
To remedy that situation, Taiwan has long relied on its companies to perform initiatives via incorporation in other countries, effectively making the private sector its unofficial gateway to forge trade and investment deals overseas, particularly those in Southeast Asia.
Surely, Taiwan cannot simply rely on any of its last formal allies as substitutes to China, given that several of them lack economic promise to sustain its otherwise-sophisticated trade and investment portfolio in electrical and electronics production.
Thus, emerging markets in Southeast Asia, specifically Indonesia, has served as Taiwan's sanctuaries for foreign trade and investment arrangements. Cheap but skilled labor has made Indonesians among the choice partners of Taiwanese companies like Asus and HTC for production.
Then again, Taiwan must be wary of China's ever-increasing diplomatic clout, as it uses its growing economic might to form and cultivate strategic relations with the likes of Malaysia, the Philippines, and Thailand, among many others in Southeast Asia.
