Syaru Lin
Jun 2, 202122 min
Although it is under constant threat from Beijing, Taiwan has four major structural issues that urgently require solutions, including population decline, power generation, political polarization, and parochialism. If they are not successfully addressed, a marginalized and divided Taiwan may find itself falling deeper into China’s orbit. While remaining within America’s one-China policy, the U.S. can help by increasing exchanges of students, faculty, and professionals, reaching a bilateral trade agreement, and assisting Taiwan to restructure its current manufacturing economy by creating new greener industries and higher value-added services. It can also facilitate Taiwan’s efforts to work with like-minded partners on the global stage. More immediately, Taiwan’s early successes and more recent challenges during the COVID-19 pandemic highlight how isolated it is even when Taiwan and the world need each other. Here the U.S. can help Taiwan acquire more vaccines and then share its experiences with the rest of the world.
To many observers, Taiwan has become the most dangerous place on earth. Bombers and fighters from the Chinese air force cross the Taiwan Strait and enter Taiwan’s air defense identification zone on an almost daily basis. The Chinese navy regularly sends warships around the island in a show of force and to collect intelligence. Taiwan is seen as the hotspot where a conflict between the two superpowers is most likely to break out, as depicted on the cover of the Economist’s May 1, 2021 issue.[1] In addition to these visible threats, Taiwan is also the target of Chinese disinformation campaigns, economic sanctions, hybrid warfare, and gray zone activities.[2] Yet, despite the increasing concerns about such pressures, Taiwan’s government and residents are going about their business with as much intensity and commitment as ever.[3]
Indeed, some might add, if only the Chinese were not threatening the island, Taiwan would be the textbook case of a wealthy, progressive, and diverse democracy. Taiwan’s per capita income is about to exceed $30,000, making it a developed country as well as the world’s first Chinese democracy.[4] It is the first society in Asia to legalize gay marriage, and one of the first governments in the world to appoint a transgender cabinet member. Taiwan is the global leader in producing semiconductor chips that power everything from cars to smartphones and advanced military equipment. Its flagship Taiwan Semiconductor Manufacturing Corporation makes more than 90 percent of the world’s most advanced chips, and other Taiwanese foundries produce legacy chips that are in great demand.[5] Taiwan manufactures a substantial portion of the world’s information and communications technology (ICT) equipment, the need for which greatly increased during the COVID-19 pandemic as more people worked from home. Accordingly, Taiwan’s 2021 first quarter growth exceeded 8 percent, the highest in ten years and outpacing that of most of its neighbors and other advanced economies. Having learned difficult lessons from fighting the 2003 SARS virus, in 2020 Taiwan also compiled one of the best public health records in combatting COVID-19, with fewer than ten deaths among its nearly 24 million people. Given this record of achievement, Taiwan is seen as a remarkable success story both politically and economically. For three years running, it has topped a list of the best places for expats to live and work.[6] Thus, conventional wisdom suggests that the only threat to Taiwan’s health and well-being comes from China’s irredentist claims to the island.
China certainly does pose a serious, existential threat to Taiwan. However, of equal if not greater concern is a series of severe domestic challenges and the lack of consensus on a long-term strategy to build resilience against them. To meet these challenges, Taiwan will need both determination at home and close cooperation with the rest of the world, even as it continues to resist Chinese intimidation.
Taiwan’s Domestic Challenges Are Long-term Structural Issues
Having spent the past year in Taiwan, I see a real difference between the rest of the world’s focus on the increasing military threat from China and the growing strategic competition between China and the United States, and the anxiety Taiwanese feel about their ability to address their domestic problems. The threat from Beijing is real, but it has been a constant in Taiwanese life ever since 1949, whether the world was watching or not. To Taiwanese who lived through those years, the crises in the Taiwan Strait in 1949–50, 1953–55, 1958, and 1995–96 seemed just as serious as the situation is today. Some Taiwanese and American scholars believe that an emphasis on the threat from China is actually playing into Beijing’s hands by demoralizing Taiwanese and diverting their attention from addressing their equally pressing domestic problems.[7] These issues, which are just as important as the threat from China, include population decline, the dilemmas surrounding electric-power generation and distribution, the political polarization of Taiwan’s vibrant democracy, and a level of parochialism that is surprising for a country that is so highly integrated into the world economy.
1. Population Decline
Among these challenges, the easiest to measure but the most difficult to address is demographic: the rapidly aging of the population as longevity increases and the island’s population shrinks. In the CIA’s 2021 report on fertility rates, Taiwan is ranked last out of 227 countries and regions, at 1.07 children per woman, far below the replacement rate for couples.[8] Some of the effects triggered by the population decline are already apparent, as schools all over Taiwan are closing for lack of students and universities are bracing for a decline in the number of domestic enrollments.[9] But the larger long-term implications are even more threatening.
Taiwan’s workforce is projected to decline by one-half to 8.6 million people by 2065, less than half of its total population.[10] This will not only dampen economic growth but also put pressure on a pension system that is already unsustainable. Presently, 4.4 workers support each retiree; by 2040, this figure will decline to 2.0 workers.[11] Furthermore, the single-payer universal healthcare system in Taiwan, which has been widely admired for providing patients with excellent care on an equitable basis and at a reasonable cost, is also at risk. The system has been underfunded for years. It needs more investments to improve the quality and scope of long-term care for the elderly, just when there are fewer younger people to pay for it. Hospitals provide limited nursing services beyond medicine, food, and monitoring, leaving family members responsible for assisting their loved ones in terms of physical mobility and personal hygiene, as I know well from my own experience.[12] As the population becomes super aged, there will be fewer younger people to fund pensions and healthcare for the older population, not to mention the actual caretaking required by aging parents and relatives. Taiwan need look no farther than Japan for the implications of such a dramatic population decline, including rural communities depopulating and urban areas aging rapidly due to a lack of young people moving to the cities.[13]
Reversing a population decline through government policies to increase birth rates is extremely difficult, and there have been few if any examples of success. The easier solution, especially for wealthy societies like Taiwan, is to allow greater immigration. But this raises the question of whether those societies want to become more demographically diverse or whether they prefer a higher degree of ethnic and cultural homogeneity. So far, Taiwan has opted for only temporary immigration to meet particular labor force needs. Whether as household workers or skilled professionals, foreigners are welcome to come to Taiwan but they are expected to leave once their employment contracts have ended. Increasing immigration runs counter to Taiwan’s parochialism, to be discussed in more detail below.
2. The Dilemmas Surrounding Power Generation
Despite Taiwan’s attempts to promote itself as a “green” island and its relatively successful efforts at reducing air and water pollution in recent decades, Taiwan is the eighth highest carbon emitter on a per capita basis among all countries with a population of over 10 million, and it uses more energy per capita than Germany, France, Japan, and the United Kingdom.[14] Coal, oil, and natural gas still produce more than 80 percent of the island’s power output, and renewables supply only a bit over 5 percent of its total energy needs.[15] Even though a growing number of advanced economies have pledged to achieve carbon neutrality by 2050, until recently Taiwan’s government was only committed to halve carbon emissions by that year. Many other countries have reduced their carbon emissions while continuing to grow, but Taiwan’s carbon emissions are growing faster than those in most advanced countries. This is because Taiwan remains wedded to a model of economic growth that views environmental sustainability as a cost and a tradeoff rather than as an opportunity or an imperative.[16] This is despite the fact that the severe consequences of climate change for Taiwan have become evident in the current drought afflicting the island due to the lack of any typhoons during the past twelve months.[17]
Taiwan’s economy still relies heavily on what has made it rich: the production of petrochemicals and electronics, including semiconductors and information and communications technology products. These industries are also the main sources of energy consumption and carbon emissions and a large drain on water supplies.[18] As a result, Taiwan’s economy is more brown than green. It is sustained by artificially low electricity and water prices, and it is growing at the expense of the environment. Therefore, it is depriving the next generation of a sustainable future.[19] Furthermore, Taiwan’s poorly managed electricity grid led to several island-wide blackouts in May 2021, when energy production could not be ramped up quickly enough to meet a surge in demand during an early summer heat wave. The outages reveal the inflexibility of Taiwan’s energy supply, and they have renewed discussions of the priorities that should shape the island’s energy policy.[20] Given the government’s recent commitment to achieve carbon neutrality by 2050, replacing the earlier more modest goals that left it lagging behind other advanced economies, private companies that have been reluctant to embrace renewable energy are now facing painful adjustments.[21] The government’s plan to transition to more renewable energy has been controversial, not only because of opposition from a private sector concerned by the costs but also from environmentalists who want to see a faster transition away from fossil fuels, an anti-nuclear movement demanding the closure of existing nuclear power plants, and traditional conservationists who oppose any form of power generation that would harm the environment. These divisions are evident in the controversy surrounding an upcoming referendum on reef preservation (see below). Overall, Taiwan’s enviable growth during the first quarter of 2021 at 8 percent will eventually experience a steady decline unless new, more highly value-added, and more sustainable industries transform its traditional economic model.
3. Political Polarization
Third, Taiwan’s democratic “way of life” is being tested every day by a high level of political polarization. This includes not only the familiar schism between the supporters of the two major parties, the ruling Democratic Progressive Party (DPP, known as the “greens”) and the opposition Kuomintang (KMT, known as the “blues”), but also increasing factionalism within each of those two camps. In August 2021, the country will conduct four referenda that will test the system’s ability to reach a consensus on key issues in this divisive environment.[22] Importantly, unlike previous referenda, none of these referenda is directly connected to China or to Taiwan’s China policy.[23] As my book Taiwan’s China Dilemma anticipates, with Taiwanese identity increasingly consolidated, domestic policy issues are becoming more important than the earlier divisions over national identity and future national status, or even over Taiwan’s relations with China.[24] In fact, this change has led the two major parties, in their quest for votes, to abandon their previous positions on most of the issues addressed in these four referenda. And in a year without any major elections, the referenda are becoming a proxy for the public to express how well they think the DPP administration is managing domestic affairs. It is conceivable that the referenda will foster an informed national discussion on important issues, help reach a consensus on some of them, and even contribute to improving policy outcomes. But sceptics predict that now that the DPP has succeeded in lowering the threshold for passage of any referendum or recall, they are simply becoming a set of partisan tools to throw the leaders of another party out of office. or to discredit the policies with which they are associated, rather than serving as occasions for rational debate and decisions on critical domestic issues.[25]
Moreover, both the greens and the blues are becoming more fragmented. As the KMT becomes marginalized, its leadership is ever more divided between the party’s old guard and its younger members who see the need to appeal to Taiwan’s youth. Similarly, there is also increasing factionalism within the pan-green coalition.
The upcoming referendum on constructing a new LNG terminal on Taoyuan’s Datan Algal Reef illustrates how divided supporters of the DPP are and how controversial policies on energy, conservation, and climate have become. The referendum pits traditionally DPP-leaning conservationists who oppose the project against the DPP leadership and some environmentalists and climate activists who view it as a necessary step toward cleaner energy. The fragile 27-kilometer reef along Taiwan’s northwest coast has been a point of contention for decades, and the DPP, seeking to establish its reputation as Taiwan’s “green” party, had originally opposed the KMT’s plans to build a liquified natural gas terminal next to the reef in the 1990s. But today, trying to fulfill its commitment to move away from nuclear energy (the subject of another referendum), the DPP government sees LNG as safer than nuclear, greener and cleaner than coal and oil, more reliable than solar or hydro, and thus an important step in the transformation of the island’s energy mix.[26] But the government is opposed by some climate activists who are critical of its slow progress in reducing the use of both nuclear and fossil fuels, including natural gas. Caught in the middle are environmentalists who want to save the reef but who also are concerned about growing air pollution from coal- and oil-fired power plants and see LNG as a lesser evil. The referendum highlights the tradeoffs involved in environmental and energy policy, and the long-needed discussion about the issue has become highly partisan and divisive.[27] The debate also shows how traditional government expert panels on energy policy have been unable to produce a consensus on energy policy. As elsewhere, appeals to “trust the science” do not persuade activists who mistrust the government, and the experts the government appoints, to examine controversial subjects. Even less are expert panels able to resolve debates over the inevitable tradeoffs raised by complex energy and climate issues, since those tradeoffs are inherently political and cannot be decided by experts alone.[28]
Another controversial referendum concerns Taiwan’s relations with the United States and the concessions the DPP government has felt pressured to make to improve relations with Washington. The referendum challenges the government’s decision to allow the import of American pork injected with ractopamine, an additive that promotes leanness in animals but has been banned by 160 countries, including by Taiwan in the past, on public health grounds. This had long been one of Washington’s most important demands in its trade negotiations with Taipei.[29] Once again, the issue illustrates the opportunistic change of positions by the two major parties. The KMT allowed import of American beef in 2012 despite protests by the DPP, and now the DPP is permitting the import of American pork in the hope that it will lead to a U.S.-Taiwan free trade agreement (FTA), despite the fact that it is widely opposed by health-conscious Taiwanese consumers.[30] The lack of progress by the USTR in reaching such an agreement has emboldened the KMT, now in opposition, to work with consumer rights groups to hold a referendum that would reintroduce the ban on American pork injected with the additive, creating problems for the DPP government and the free traders who desperately want an FTA.[31] Because of objections from Beijing, Taiwan has no significant bilateral preferential trade agreements, and it has been unable to join any additional multilateral trade agreements beyond the World Trade Organization (WTO). President Tsai used significant political capital to lift the ban in 2020 in hopes that the U.S. would sign an FTA with Taiwan and that this would then encourage some of Taiwan’s other trading copartners to negotiate their own FTAs with Taipei. But the Biden administration appears intent on delaying any further trade agreements until it has increased the willingness of the American middle class, which it sees as its main constituency, to support such an FTA.[32]
In short, the polarization of Taiwan’s domestic politics has moved beyond Taiwanese versus Mainlanders, or even the DPP versus the KMT, and it now involves personalized factions within each of the parties. All parties and factions calculate the electoral advantages and disadvantages associated with every policy option. As a result, polarization has degenerated into fragmentation, and policy consensus based on rational, disinterested analysis has become elusive, whether the issue is food safety, energy policy, or environmental protection.
4. Parochialism
Finally, a paradoxical feature of Taiwanese society is that even though Taiwan is very wealthy in per capita terms, critically important to the global economy, extremely progressive in terms of political and social values, and diverse in ethno-cultural composition, it is not highly international. One symbolic indicator of Taiwan’s parochial character is that while trains and mass transit usually offer announcements to riders in at least four languages, only one is a foreign language, English; the other languages are Mandarin, Hokkien, and Hakka, and sometimes an aboriginal language is added for rural routes. Similarly, local movies and television programs have subtitles, but the subtitles are in Chinese, again reflecting the historical fact that many older viewers might not understand Mandarin programs but they may read Chinese characters. With a few exceptions, Taiwanese companies operate totally in Chinese, schools teach mainly in Chinese, and the mass media are almost entirely in Chinese, except for those few aimed primarily at expats.
Part of the reason for the island’s recent parochialism may be the desire of many Taiwanese to consolidate a local identity, distinct from that in China. As a result, there is a great interest in developing and sustaining local culture, as was highlighted by several excellent productions I saw last month: a modern dance performance by Taiwan’s world-renowned Cloud Gate Dance company portraying the local culture of Taipei’s old Wanhua neighborhood from where my family hails,[33] a play based on a book by award-winning author and environmentalist Wu Ming-yi about conserving nature and protecting the welfare of aboriginal people along Taiwan’s east coast,[34] and a movie about an aboriginal children’s chorus rediscovering their identity against pressures to win a national competition by singing like cosmopolitan city kids.[35] These themes are deeply local and are competing against mainland Chinese media products that are entering Taiwan. Taiwanese are drawn to local and mainland films rather than to Hollywood movies because of their greater familiarity with Chinese rather than with English.
The government has encouraged students to become multilingual, but again this includes not only instruction in Chinese and English but also in Mandarin and a local language. As a native Hokkien and Hakka speaker growing up in Taipei who was not allowed to speak either of my mother tongues in school at the risk of a good beating, I applaud this long overdue policy. But I also appreciate the importance of learning English in order to know about the world beyond China, and how this goal will inevitably compete with teaching both Mandarin and Taiwan’s local languages.[36]
As a result, Taiwan’s ambitious goals to become bilingual and international are facing serious obstacles. The government has announced a number of specific policies intended to make high school and college students more articulate in English, persuade Taiwanese faculty trained abroad to teach in English, and encourage Taiwanese civil servants to be fluent in English. But the success of these policies is hampered by the absence of a broader internationalized ecosystem that on a daily basis will show Taiwanese that these objectives are possible, necessary for Taiwan’s security and prosperity, and personally beneficial.[37] Since Taipei was displaced by Beijing as the sole international representative of “one China” in the 1970s, Taiwan has been marginalized by the international community, and now it does not belong to any international organization that requires statehood for membership, has few enduring opportunities to participate as an observer in others, and retains memberships only in economic organizations, such as the Asian Development Bank and the Asia-Pacific Economic Cooperation forum (APEC), that it can join as a separate “customs territory.”[38] Taiwan is not seen as the gateway to China and the rest of Asia, as it once hoped to be, as that role has been taken over by other more cosmopolitan cities along the Chinese coast. As a result, Taiwan does not provide many opportunities for young people to work in international organizations, or even in private companies or NGOs where English is required, and therefore it is offering them few incentives to become bilingual or to develop other skills for engaging in international affairs.
All these trends are extremely unfortunate because Taiwan needs to become more internationalized in order to connect better with the rest of the world. Paradoxically, internationalization will also help Taiwan maintain and develop its own culture and resist the pressures to be drawn more deeply into the Sinosphere. Having learned Cantonese while living in Hong Kong, I can see how Hong Kong’s autonomy has not only diminished but also how its distinctively Cantonese culture is being eroded by Beijing’s effort to make it part of a homogenized national culture.[39] In response, Hong Kongers are working both to promote Hong Kong’s local culture and to retain the use of English as ways of simultaneously resisting Sinification and preserving its international status. If Taiwan remains a parochial society, it will find it has no natural connections to the world except through China. Hong Kong is being transformed from what was once officially branded as “Asia’s World City “ to just another first-tier Chinese city, and from the financial and commercial heart of East Asia to merely the heart of China’s Greater Bay Area, and even then sharing center stage with Shenzhen.[40] Similarly, Taiwan once hoped to be an “Asia-Pacific Regional Operating Center,” helping the world connect to the rest of the region including what was then a still isolated China.[41] But without deeper internationalization, Taiwanese will come to see an increasingly cosmopolitan China as the global operating center for Taiwan and the main way of connecting their parochial island to outside opportunities.
In summary, Taiwanese face a daunting policy agenda. They are focused on preserving their freedom and diversity while trying to reach a policy consensus on how to meet the many challenges – environmental, economic, and demographic – they share with other high-income societies. All this is made difficult by a democratic political system that is not only polarized but increasingly fragmented, and by a society that remains inward-looking. At the same time, China is making constant efforts to use its growing economic, military, and diplomatic power to make unification appear unavoidable. And yet, the rise of Taiwanese identity, and the examples of Beijing’s policies in Xinjiang and Hong Kong, are making China’s demands for unification increasingly unattractive to most Taiwanese, leading Beijing to double down on its policies of pressure and international isolation.[42] Taiwan therefore faces the conundrum of trying to fend off China while also coming up with a strategy to deal with these serious long-term structural challenges.
Why U.S. Policy Is Essential for Taiwan to Survive Long Term Without Leaning on China
To address its long-term challenges, the easy solution – and the one Beijing prefers – would be for Taiwan to turn to China. Unless Taiwan is willing to become a more multi-ethnic society, it can only reverse its demographic decline by relying on immigrants from China, whose students and professionals will find Taiwan attractive not only for its Chinese culture but also for its greater personal liberties and academic freedom, its more independent legal system, and its excellent healthcare. In turn, as the Taiwanese economy begins to slow and the unemployment rate among younger Taiwanese increases, Taiwanese technology professionals will look for jobs in China where their advanced skills are lucrative and urgently needed.[43] Taiwanese doctoral students, many of whom publish their research primarily in Chinese, will see that the academic market in China offers far more opportunities than Taiwan or the West, where college enrollments and demand for faculty are declining and faculty are expected both to teach and publish in English.[44] In short, unless sustained and targeted efforts are made to help Taiwan remain part of a broader international community, it will steadily fall into China’s orbit. These efforts must come both from Taiwan itself and from the U.S. and the rest of the world.
1. Help Taiwan Fight the Pandemic
The most urgent need is to help Taiwan fight the pandemic. Through a combination of tight border controls, stringent quarantine requirements for all arrivals, and effective public health measures to halt community spread, Taiwan appeared to have created a safe haven for residents. But more recently Taiwan’s complacency has led to a shortage of vaccines, low demand for vaccinations, and serious gaps in its quarantine system. In addition, Taiwan eschewed testing because it seemed to have few cases, and it feared false results that might overload its hospital system and sully its admirable record.[45] Since May 13, 2021, this has allowed new forms of COVID-19 to surge unexpectedly, and the government has been unable to trace the sources of infection.[46] As of this writing, Taiwan is struggling to cope, resorting to stricter measures than those previously imposed.[47]
What makes matters worse is that until the recent surge, Taiwan received only limited amounts of vaccine from Astra Zeneca. and none from China or Russia. It also appeared to have neither the commercial muscle, the political clout, or the sense of urgency to acquire sufficient vaccines from Pfizer or Moderna in time for the surge.[48] Nor is Taiwan capable of producing its own COVID-19 vaccines in the short term or to manufacture them under contract from foreign companies in the manner that South Korea and Singapore have committed.[49] This means that, even under the best of circumstances, the largely unvaccinated Taiwanese population will face an uncertain future and may remain locked up far longer than other countries.[50] In a worst-case scenario, Taiwan will continue to experience high levels of infection as new variants spread.
Despite its early successes, therefore, Taiwan is now one of the countries struggling the most to cope as new strains of the virus jump over previously effective border controls and evade national quarantine measures. And yet, Taiwan has a limited ability to share its experiences internationally or to get help from others because it is not a member of the WHO, and it was not invited to join the World Health Assembly (WHA) held in May 2021, despite the support expressed by fifty countries and the G-7. Taking advantage of the pandemic, China has also been trying to use vaccine diplomacy to convince some of Taiwan’s small number of diplomatic allies to switch their diplomatic recognition from Taipei to Beijing, again an example of China’s persistent efforts to marginalize Taiwan until Taipei recommits to eventual unification.[51] Stronger U.S. support for Taiwan to be an observer in the WHA does not violate the one-China policy, since two other states that are not UN members, the Palestinian Authority and the Vatican, are also observers, and this could open the door for Taiwan to rejoin international society in areas where its involvement is both desirable and necessary. In addition, it may salvage the eroding credibility of the WHO, which has been criticized as ineffective because of political intervention by leading members, such as China.[52]
2. Help Taiwan Connect with the World
Working together, the U.S. can facilitate Taiwan’s efforts to internationalize by opening doors in both directions to exchange students, scholars, and young professionals. The absence of official diplomatic relations should not mean that international opportunities are unavailable or out of reach to Taiwanese. The American Institute in Taiwan is already working with the Taiwan government on a Talent Circulation Alliance to encourage Taiwanese to go abroad, for Americans to study and work in Taiwan, and for overseas Taiwanese to bring their knowledge and experience back to the island.[53] The State Department has moved its Mandarin Chinese-language training programs from mainland China to Taiwan, and efforts are being made to bring more American government officials to work in Taiwan through a program that has been incorporated into the new Strategic Competition Act.[54]
In return, Taiwan should also open its doors wider to international students, not only from the United States and the West but also from the Southeast Asian countries. There are several programs that have been extremely successful in attracting students to Taiwan, in fields such as public health, science and technology, and international affairs.[55] Equally importantly, Taiwan should allow students and professionals to stay in Taiwan and become permanent residents once they have completed their studies or training. The more open Taiwan is, the more professionals and aspirational young people will migrate to the island and will help populate the internationalized ecosystem Taiwan needs. And finally, young Taiwanese interested in studying in America, especially those not from affluent backgrounds, often need financial support, given the higher cost of education and living. This can be provided by a combination of generous donors, scholarships from both the Taiwanese and American governments, and student exchange programs between Taiwanese and American universities that are funded by mutual tuition waivers.
3. Help Taiwan Diversify Its Economy
While Taiwan is benefiting from the unprecedented global shortage of chips and ICT equipment, over the longer term it must diversify and broaden its economic foundation by embracing innovation and sustainability.[56] Taiwan has already achieved success in incentivizing Taiwanese businesses to move their legacy factories and businesses from China back to Taiwan, but it should work with the U.S. and its allies to upgrade its economic structure to transition from its carbon-intensive economy to focus on high value-added services. Furthermore, by encouraging U.S.-Taiwan talent circulation and nurturing entrepreneurs, as noted above, Taiwan’s Hsinchu Science Park needs to be even more connected to Silicon Valley to develop new industries.[57] Otherwise, China will leapfrog the U.S. and Taiwan to become a clean economy and will become Taiwan’s most convenient partner by offering Taiwan capital, technology, and a market to restructure its economy.[58] To promote its technological innovation and industrial transformation, Taiwan urgently needs to reach a bilateral trade agreement with the U.S., and then to join a revived Trans-Pacific Partnership.[59] Otherwise, the Chinese market, or the multilateral trade agreements centered on China such as the Regional Comprehensive Economic Partnership, will become Taiwan’s only option as Beijing seeks to expand interdependence with Taiwan to achieve its political objectives.[60] If Taiwan finds all other options shrinking, its economy will become trapped in a China-centered environment.
4. Help Taiwan Consolidate Its Democratic Institutions
Politically, as a vibrant democracy, Taiwanese want to compare their domestic and foreign policies and their long-term security and development strategies with other democratic countries. The Biden administration should continue to work closely with Taiwan through a wide range of initiatives, including the Global Cooperation Training Framework, to allow Taiwan to share its experiences with like-minded countries and to encourage its allies to work with Taiwan on common problems.[61] Taiwan has gained much support in this regard, as seen in the joint statement issued by the G-7 foreign ministers in London this year.[62]Ahead of Biden’s global summit for democracy, the Copenhagen Democracy Summit in May 2021 invited Taiwan’s President Tsai to speak, along with several heads of state and governments from other democratic societies.[63] In addition, integrating Taiwan into the Free and Open Indo-Pacific Strategy will not only enhance Taiwan’s defense but will also allow Taiwan to work with those democracies that have shared values and goals.[64]
As already noted, an important political transformation may be underway in Taiwan, from the polarization of the past to a more pluralistic distribution of opinion and hopefully to a more rational consideration of the dilemmas inherent in complex issues of public policy. Alongside the growing commitment to a common Taiwanese identity and a democratic way of life, there are also understandable differences about how to manage the tradeoffs involved in energy, sustainability, education, and immigration policies.[65] Taiwan is not alone when it comes to managing the difficulties of building a consensus on conflicting priorities through a democratic process. The unique challenge that Taiwan faces today is that its political process appears to be subject to intensive infiltration from China. Working with like-minded democracies may help the Taiwanese government and civil society strengthen and deepen democratic practices and share experiences about how to defend democracy when managing the complex issues that are affecting so many high-income economies.[66]
Conclusion
There has been a real change in America’s China policy, from comprehensive engagement to strategic competition during the Trump administration.[67] Surprising to some and disappointing to others, this change has persisted for at least the first 100 days of Biden’s presidency. But there is an intense debate about whether strategic clarity, in the form of a clearer commitment to Taiwan’s defense, should replace the traditional U.S. policy of strategic ambiguity.[68] Whatever the outcome of that debate, it is also important for the U.S. to help Taiwan improve its long-term environmental sustainability and its political and economic vitality; increasing arms sales and bolstering Taiwan’s defense are important but insufficient. Helping Taiwan become more international, exchanging experiences in the many problems of a high-income society, concluding a U.S.-Taiwan trade agreement, cooperating in areas such as clean energy, helping Taiwan join multilateral forums with like-minded states, and increasing Taiwan’s participation in international organizations where its voice and experience would be useful, even vital, are all essential if Taiwan is to manage its cross-Strait relationship and improve its resilience in public health, national security, the economy, and the environment.
About the Contributor
Syaru Shirley Lin is Compton Visiting Professor in World Politics at the Miller Center of Public Affairs at the University of Virginia and Non-Resident Senior Fellow in the Foreign Policy Program at the Brookings Institution. She is also Adjunct Professor of Global Political Economy at the Chinese University of Hong Kong and Chair of the Asia-Pacific Hub of the London-based Commission on Reform for Resilience, which seeks to strengthen global health and economic resilience after the COVID-19 pandemic. Her book, Taiwan’s China Dilemma, was published in English in 2016 and in Chinese in 2019. She is now researching five East Asian economies caught in the high-income trap. Her analysis and commentary frequently appear in English and Chinese media. Previously a partner at Goldman Sachs, she specialized in the privatization of state-owned enterprises in Asia and spearheaded the firm’s investments in technology start-ups, including Alibaba and Semiconductor Manufacturing International Corporation. She currently serves on the boards of Goldman Sachs Asia Bank, Langham Hospitality Investments, and the Focused Ultrasound Foundation. She is also a member of the Hong Kong Committee for Pacific Economic Cooperation and an advisor to Taiwan’s Talent Circulation Alliance. A graduate of Harvard College, she earned her master’s and doctorate degrees from the University of Hong Kong after retiring from Goldman Sachs.
Photo credit: CEphoto, Uwe Aranas or alternatively © CEphoto, Uwe Aranas, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=33408905