-By Kevin Tan Wei Rong

Understanding the New Southbound Policy and Its Purposes   

     In order to enhance mutual understanding, the cooperation between think tanks to have better understanding about each country's social, economic, political, and policy information. In order to increase the potential and the capability of the NSP, the ROC Government put a lot of emphasis on the second-generations immigrants as common social interaction are the best way to connect with the countries and people. To make this objective to be realised, the ROC Government allocated an education budget of NT$1 billion, which aims to expand the scholarship programme for ASEAN students to study in Taiwan and increases the number of students who study in ASEAN countries on the public dime. The policy also encourages Taiwanese youths to volunteer and work in ASEAN countries. Hopefully the plan can bring people together and the foundations of long-lasting friendships will be laid.

    For the second objective, the goal of stable expansion of two-way exchanges will be carried out by the public and the private sector. In the public sector, the ROC Government will strengthen its interaction with the ASEAN countries and by promoting close exchange of visits of high-level officials, creating new forms of partnership through bilateral and multilateral exchanges in culture, tourism, healthcare, technology, and agriculture. Since September 2016, the ROC government has simplified visa procedures for the ASEAN countries in terms of societal exchanges, which the number of tourists from ASEAN countries to Taiwan has exceeded 120,000 (2016 Data).

    With the goal of strengthening comprehensive partnership, the ROC Government will assist local Taiwanese industry in their overall Southbound layout, strengthening the connection with regional markets, and expand partner relations with ASEAN countries, especially in infrastructure construction and financial services. At the same time, the ROC government will also strengthen regional connections, through negotiation and signatory of Economic Cooperation Agreements (ECAs) with major trading partners, and actively promote the renewal of Bilateral Investment Protection and Tax Agreements, to enable competent investment environment among NSP partners.

    Overall, the NSP is intended to utilise Taiwan's cultural, educational, technological, agricultural, and economic strengths to deepen Taiwan's regional integration and promote the advancement of the Indo-Pacific region in its entirety, decreasing the dependency of PRC’s commercial and economic power. As mentioned by President Tsai in the Dialogue, ASEAN is Taiwan's second largest trading partner and also formed the 40% of the international students who pursued higher education in Taiwan in 2015.

Impacts of the New Southbound Policy towards Malaysia

  Based on the analysis by Centre for Strategic & International Studies (CSIS), the NSP consists of four pillars, five flagship projects, and three innovative fields. The four NSP pillars are to promote economic collaboration, conduct community exchanges, enhance resource sharing, and forge regional links. The ROC Office of Trade Negotiations has set up five flagship projects (agricultural development, medical & public health cooperation, talent cultivation, innovative industries, and youth exchanges & policy forums) and three innovative approach (e-commerce, infrastructure, and tourism) for collaboration, which meant to build on the NSP's pillars and strengthen relationships with countries in the Indo-Pacific that are mutually beneficial.

    As the centre of manufacturing in East Asia, Taiwan has a lot of resources, but it can't meet the huge demand because it doesn't have the right skills. In contrast, Malaysia is a country with a high level of openness to international trade. More than 70% of its GDP comes from exports, of which three quarters are manufactured goods and about 14% are oil and gas which allows the Taiwanese to step up their efforts to find natural resources in Malaysia. Currently, diesel and oil-related products were among the trade items between Malaysia and Taiwan, for example like acrylonitrile-butadiene rubber.

    According to the commercial trade report by the Bureau of Foreign Trade, Ministry of Economic Affairs (ROC), the digital technology compound were the major trade elements, like the integrated circuits, memory, processors and etc., which these elements were vital to the tech industry, creating the life necessity products of 21st Century, like smart phone, computers and operating systems. With these statements and general understanding, Taiwan is also considered as the one of the major tech suppliers of the world, which most researchers are afraid of the decline of the world tech economy if Cross-Straits Relations reached critical level of tension.

    With the combination of Malaysian resources and Taiwan's booming economy provide these industries a leg up in expanding their international customer bases and brand recognition. The introduction of a free trade area in ASEAN implies that Taiwanese investments in Malaysia can obtain the same benefits as investments in other ASEAN nations, and the relocation of some companies' manufacturing to Malaysia allows them to sell on the ASEAN markets through the Malaysian sales networks. Thus, Malaysia is a good fit for the New Southbound Policy's plan to promote regional ties, the goals of which are to systematise bilateral and multilateral cooperation with partner countries, to strengthen negotiations and dialogue, to alter traditional methods of individual effort, and to draw on the combined might of private groups, overseas Taiwanese networks, and third countries.

    On 14 March 2022, Malaysian Friendship & Trade Centre (MFTC) has organised the launching ceremony of Flavours of Malaysia Promotion 2022, which intends to promote Malaysian food & beverages (F&B) and cuisine culture to Taiwan community and give impetus to Malaysian F&B industries to expand their brand and increase their influences in the ASEAN and global market. For the education initiatives, the ROC Ministry of Foreign Affairs collaborated with National Quemoy University of Taiwan organised a New Southbound Policy Short-term Study Program (September 2022 till January 2023) to promote academic exchange between Taiwan and NSP countries. The program is provided for the ASEAN scholars who studied in the fields of social sciences and humanities, such as literature and history, cross-strait and regional security, as well as courses in the fields of agriculture, biotechnology, medical and public health, artificial intelligence, information security, marine resources and other natural sciences. 


    Recent remarks and events have demonstrated the favourable trajectory of Taiwan-Malaysia relations under the NSP, supported by robust bilateral ties in all spheres of exchange, from the economic to the societal and cultural, which have persisted despite the absence of diplomatic ties. There is a robust relationship between economics and culture. As was also seen earlier, the primary goal of the NSP is to lessen Taiwan's reliance on Mainland China’s economy by finding alternative drivers for economic growth. One such alternative is Malaysia, which benefits from open markets and has a sizeable ethnic Chinese population that shares many cultural traits with Taiwan's. Investing in the retail sector, the food industry, academic institutions, and factories may all benefit from this. For Taiwanese businesses, the country of Malaysia, with its diverse population and large Muslim population, presents an ideal environment in which to experiment with and perfect Islamic financial products and services for use in the booming Islamic market. Given the new push provided by the NSP, there is much to gain by further deepening such bilateral links, both economically and in terms of society and culture.


© 2019 MiDAS, All Rights Reserved