High stakes in Southeast Asia with regard to Beijing, Taipei rivalry

Kavi Chongkittavorn, The Nation, Asia News Network, Bangkok

For the first time since 1972, Southeast Asian countries are facing a serious dilemma in juggling their relations with China and Taiwan. The reasons are obvious. As its political and economic clout grows, Beijing is trying to enforce the one-China policy the region professes to adhere to. It has sent strong signals that it will no longer tolerate mere lip service. On the other hand, Taiwan's diminishing diplomatic recognition has forced the island to pursue a "go south" policy and concentrate on key Southeast Asian "friends".

These friends are Indonesia, the Philippines and Thailand, which share many similarities: They have received huge mounts of Taiwanese investment, are close allies of the U.S. and Japan and are emerging democratic and civil societies. More importantly, their nationals form the crux of foreign workers in Taiwan. Thai workers, the island's largest group of foreign workers, have reached an all-time high of 130,000 out of 350,000 foreign workers, followed by Indonesians and the Filipinos.

Vice President Annette Lu's trip to Indonesia is a good example of Taiwan's latest moves. Indonesia was chosen because of its long history of animosity towards China. Taiwan has US$12.8 billion of investment in 914 projects in the archipelago and is a major importer of Indonesian natural gas. It was no surprise that Lu pushed the trip through despite Beijing's attempt to stop it. Taiwan said it was a huge success while Beijing called it an absolute farce.

After Lu's trip, Taiwanese analysts and editorials urged the government to put more resources into Southeast Asia. Last weekend, Lu called on the international community to normalize ties with the island by employing "dual diplomacy" like the U.S. did by passing the Taiwan Relations Act after switching diplomatic recognition from Taipei to Beijing in 1979.

However, her initiative will unlikely take off. Apart from Indonesia, the Philippines and Thailand, Southeast Asian countries are either extremely cautious in their ties with Taiwan, as is the case with Singapore and Malaysia, or pro-China like Burma, Cambodia and Laos. They know well the implications of a falling out from the China-Taiwan diplomatic duel.

Of all the region's nations, Vietnam, once China's enemy, stands out as Taiwan's new strategic partner. During the first half of this year, Taiwan invested $131 million in 88 projects in Vietnam, its highest investment in any Southeast Asian nation for the period. Taiwan's policy-makers view Vietnam's 3,200-kilometer-long coastline as a strategic area "for potential military activities in the South China Sea" and "a vital terminus for trade".

Taipei has realized that meaningful relations with the region are crucial to halt China's diplomatic offensive. Taiwan has missed unique opportunities to cement ties beyond investment. The island was slow to react during the Asian financial crisis and did not offer much help either. Now in an economic slump, Taiwan's investment has dwindled and along with its once powerful cheque-book diplomacy. Taipei has been considering new initiatives, such as a possible free trade agreement (FTA) with Southeast Asian countries to counter China's planned FTA. It has pitched its future mainly on support from the U.S. and Japan.

Taiwan needs to cultivate new, comprehensive relations with Southeast Asia. Networking and building ties between non- governmental and civil society organizations in Taiwan and the region's emerging democracies should be a new priority. The island urgently needs more Southeast Asian experts and people who understand and can spread the word about the region. Taiwan has hundreds of scholars on China, the U.S. and Japan but only a few on this region. Moreover, its image in Southeast Asia is poor. Taiwanese investors are often portrayed as selfish and insensitive to the local environment.

But what would President Chen Shui-bien achieve by looking southward? Is he just trying to make China lose face or does he have something else in mind? Does he want to score the same coup his predecessor Lee Teng Hui did during his "vacation diplomacy" in 1994 and meet with the top Filipino, Indonesian and Thai leaders? Will the same approach work again given improved Chinese-Southeast Asian ties?

Bangkok so far has managed the dilemma through diplomatic somersaults. However, as Thai-Chinese stakes increase and their relations become more entrenched, such flip-flops will be harder to execute. China wants to erode Taiwan's longstanding influence here. But it will not be easy. Past bilateral ties were narrowly focused on investment and trade. Taiwan still has a huge edge with $10.5 billion of accumulated investment here, while China still has a lot of catching up to do. But the potential is there. The recent establishment of the Chinese-Thai Business Enterprises Association by 50 Chinese companies signals Beijing's seriousness about increasing investment in Thailand.

China and Taiwan share one common characteristic -- respect for and close contact with the Thai royal family. Royals have visited the mainland frequently.

Thailand is planning a series of events at the end of December to commemorate the 30th anniversary of Taiwan's technical and financial assistance to the Royal Project. Taiwan has been assisting uninterrupted since 1972, three years after the project was launched in Doi Aung Kang, Chiang Mai. Last month, Prince Bhisatej Rajani, director of the Royal Project, was given a red- carpet welcome in Taiwan.

Strange but true, Thai affinity for things Chinese is a new battleground. Taiwan used to dominate the scene in culture and language, including youth exchange programs. That is no longer the case. The proliferation of pu-tong-hua, standard Chinese, has led to an influx of Chinese teachers. Thousands of Thai students go to China to study the language every year. Learning to play a Chinese musical instrument is now in vogue.

Despite the Chinese Embassy's strong protest, Lin Fen-shi, a member of Taiwan's parliament, known as the Legislative Yuan, met Thai officials including Deputy Prime Minister and Labour Minister Dej Boonlong during his three-day visit last week. Although the issue of Thai workers in Taiwan has not yet been politicized, unlike the Indonesian and Filipino workers, but the Thai government must not be complacent.

Taiwanese dignitaries, by their attendance or absence, at the year-end celebrations will be the weather vane of success for Taiwan's "go-south" policy. Or, when push comes to shove, will China's weight trump all?