In January 2024, the Pacific island nation of Nauru announced it would sever diplomatic ties with Taiwan and recognize China, reducing Taiwan’s number of formal diplomatic allies to 12. Nonetheless, given Taiwan's critical geostrategic position, its situation in the Taiwan Strait remains a focal point of major power competition, directly influencing regional security and stability. Every development in Taiwan draws global and regional attention. The inauguration of Lai Ching-te has sparked significant discussions about the future of cross-strait relations, U.S.-Taiwan interactions, and Taipei’s policy adjustments.
U.S.-Taiwan Relations Continue to Thrive
In his inaugural speech, Lai Ching-te addressed the complex global landscape, notably the ongoing Russia-Ukraine conflict and the Israel-Hamas war, which continue to impact global security and stability. Amid these global challenges, Lai highlighted a ray of hope for Taiwan, namely “efforts by countries to maintain peace and stability in the region,” underscoring that “peace and stability in the Taiwan Strait are essential for global security and development.” A key example of this support, mentioned by Lai, was the U.S. passing the “Defense Authorization Act for the Indo-Pacific Security” in April, which commits to providing security assistance to ensure peace and stability in the Taiwan Strait. This reference signals an early message that U.S.-Taiwan relations will likely continue their current trajectory during Lai's presidency.
Indeed, the U.S. has long adhered to the "One China" policy, established through the three joint communiques of 1972, 1979, and 1982. In addition, since 1982, President Ronald Reagan outlined the “Six Assurances”, which include: (a) no set date for ending arms sales to Taiwan; (b) no consultation with China on U.S. arms sales to Taiwan; (c) no mediated negotiations between Taiwan and China; (d) no changes to the Taiwan Relations Act; (e) no change in U.S. stance on Taiwan’s sovereignty; and (f) no pressure on Taiwan to negotiate with China [1]. Despite some internal signals of possible policy adjustments, the U.S. has generally adhered to these major policy directions.
Looking back at history, although formal diplomatic relations have not been maintained, since January 2017, in the context of intensifying U.S.-China strategic competition, the U.S. has increasingly utilized the "Taiwan card". Under the Trump administration, the U.S. has actively promoted Taiwan's role within the "Free and Open Indo-Pacific" strategy. Many U.S. officials with a "hardline" stance toward China have sought to advance arms sales to Taiwan. In December 2016, shortly after his election, President Trump made a historic phone call to Taiwanese President Tsai Ing-wen, becoming the first U.S. president to do so since 1979 [2]. In 2018, the U.S. passed the Taiwan Travel Act and the Taiwan Assurance Act, which facilitated easier visits between senior officials from both sides [3]. During President Trump's four-year term, the U.S. also approved record-breaking arms sales to Taiwan, totaling more than $18 billion [4].
Under President Joe Biden, U.S. policy has largely continued Trump’s course, maintaining military presence in the Taiwan Strait, enhancing U.S. naval operations in the region, and further promoting the Indo-Pacific strategy, with Taiwan as a critical linchpin.
At the inauguration ceremony of Lai Ching-te on May 20, similar to the information provided in the May 13 press briefing by the Biden administration, the U.S. delegation to Taiwan was led by Brian Deese, Director of the National Economic Council (NEC), and former Deputy Secretary of State Richard Armitage. The delegation included former Chairman of the American Institute in Taiwan (AIT) Richard C. Bush and the current AIT President, Laura Rosenberger [5]. Prior to this, immediately after Lai Ching-te's election, on January 15, 2024, the U.S. sent former National Security Advisor Stephen J. Hadley and former Deputy Secretary of State James B. Steinberg to meet with Lai and his Lai Ching-te's running mate, William Lai [6]. U.S. Secretary of State Antony Blinken also extended his congratulations following Lai’s inauguration, expressing the U.S.' commitment to working with Taiwan to advance shared values and interests, as well as to maintain peace and stability across the Taiwan Strait [7].
While the U.S. has maintained a consistent commitment to supporting Taiwan's security, Taiwan has adjusted its foreign policy under President Tsai Ing-wen, shifting from a more balanced approach among great powers to a closer alignment with the U.S. This shift has effectively created room for the U.S. to utilize Taiwan as a "card" in the great power competition. President Tsai established the Indo-Pacific Bureau within the Ministry of Foreign Affairs and declared Taiwan to be an indispensable link in the U.S.' Indo-Pacific strategy. Taiwan has even ambiguously left open the possibility of allowing the U.S. to access Ba Binh Island (referred to as "Tai Ping Island" by Taiwan) in the Spratly Islands, which are claimed by Vietnam. After Lai Ching-te assumed office, continuing the policies of the Democratic Progressive Party, it is highly likely that he will maintain the same trajectory in Taiwan's relations with the U.S. as under Tsai Ing-wen.
Maintaining the Status Quo Is Prioritized, With Dialogue and Cooperation at the Core of Cross-Strait Relations
In his speech on May 20, Lai Ching-te addressed two key points that implied the future prospects of cross-strait relations.
First, Lai affirmed the principles that Taiwan upholds in maintaining relations across the Strait, which include: 1) Taiwan's commitment to the "four persistences": i. adherence to the system of a free and democratic constitution; ii. the principle that the Republic of China (Taiwan) and the People's Republic of China are not mutually dependent; iii. ensuring the inviolable right to sovereignty and opposition to reunification through force; iv. following the will of the entire Taiwanese population; 2) behaving with propriety and moderation; and 3) maintaining the current status quo [8].
Secondly, Lai Ching-te mentioned four key messages directed at China including: 1) an urge for China to cease all forms of aggression, including "psychological warfare," "public opinion warfare," and "military attacks"; 2) a commitment to shoulder global responsibilities; 3) a pledge to maintain peace and stability across the Taiwan Strait and in the region; and 4) a guarantee that the world will not fall into the fear of war. To achieve this, Taipei urges Beijing to prioritize dialogue over confrontation, exchanges over obstruction, and to promote cooperation in areas such as tourism and education [9].
Importantly, Lai Ching-te also acknowledged that “China has not abandoned the use of force to seize Taiwan, and even if Taiwan accepts all of China’s proposals, Beijing’s ambitions of annexation will never disappear.” He further asserted that Taiwan faces various security threats from China.
This statement has sparked a debate about the future of cross-strait relations. Scholars like Hoo Chiew Ping (Researcher, Taiwan International Relations Institute) argue that Lai’s speech contained a more hardline tone, diverging from the more cautious language of his DPP predecessors, who typically referred to the PRC as “Beijing” or “the other side.”
Scholar Lin Zhengyi (Researcher, Institute of American Studies, Academia Sinica) argues that the Lai administration is facing the most significant security challenges. For this reason, in his inauguration speech, Lai mentioned China a total of seven times, all in reference to the threats posed by China. Lin also points out that, in light of the growing threats from China, Taiwan's defense budget for 2024 will increase for the seventh consecutive year, reaching approximately $19 billion, or 2.5% of Taiwan's GDP [10].
From the opposite perspective, under President Xi Jinping’s leadership, there are clear indications of policy adjustments toward a more hardline stance on Taiwan.
China’s Taiwan policy today continues to retain several fundamental elements from the leadership of previous generations, including Deng Xiaoping, Jiang Zemin, and Hu Jintao. Core concepts such as "peaceful reunification" and "one country, two systems" remain central to China’s approach towards Taiwan. The principles established during Deng Xiaoping's era, such as opposition to Taiwan's independence, the continuation of the 1992 Consensus, promoting increased cross-strait exchanges, and the refusal to renounce the use of force, remain in place.
However, under Xi Jinping’s leadership, China's determination to achieve reunification has become more pronounced than in previous periods. During the 100th Anniversary Celebration of the Founding of the Communist Party of China on July 1, 2021, Xi stated, "No one should underestimate the strong determination, firm will, and capability of the Chinese people in safeguarding national sovereignty and territorial integrity." In his speech at the 20th Party Congress, Xi further emphasized, "The complete reunification of the motherland must be realized, and it will surely be achieved." Additionally, in the White Paper on the Taiwan Issue, released in August 2022 after Nancy Pelosi’s visit to Taiwan, Xi’s rhetoric became notably more forceful. In the document, Xi declared the need to "grasp the advantage and initiative in cross-strait relations... and resolutely promote the process of national reunification." [11]
In fact, under Xi Jinping, China has established a "new normal" in the Taiwan Strait by increasing the frequency of People's Liberation Army (PLA) aircraft and naval vessels entering Taiwan's Air Defense Identification Zone (ADIZ). A prominent example is the military drills held in August 2022, which were aimed at protesting the visit of U.S. House Speaker Nancy Pelosi to Taiwan. These drills marked an unprecedented escalation, including the expansion of the operational area to encircle the entire island of Taiwan; broadening the scope of the military exercise methods to include "blockade" and "control" operations; and mobilizing military forces with unprecedented intensity, signaling the strongest deterrence China has ever demonstrated. Furthermore, China has built a three-dimensional operational framework in the Taiwan Strait, encompassing air, sea, and underwater capabilities, while deploying previously unseen equipment such as unmanned aerial vehicles (UAVs).
Although many assessments predict an increase in tensions across the Taiwan Strait under Lai Ching-te's leadership, Taipei and Beijing continue to maintain long-established communication and exchange mechanisms. These include channels such as the Mainland Affairs Council (MAC), the Straits Exchange Foundation (SEF), the Taiwan Affairs Office (TAO), and the Central Leading Group on Taiwan Affairs. These mechanisms have proven effective in managing and controlling issues that could negatively impact cross-strait relations.
Will the New Southbound Policy Continue?
The New Southbound Policy (NSP) is an economic and investment strategy introduced by Taiwan in the 1990s, aimed at shifting the island's economic focus toward Southeast Asia. Under President Tsai Ing-wen's administration, she emphasized Taiwan's economic transformation and the continuation of the NSP in her inaugural address. The policy originally focused on four key areas: "economic and trade cooperation," "talent exchange," "resource sharing," and "regional connectivity." Taiwan sought to strengthen ties in areas such as economics, trade, technology, and culture with countries in ASEAN, South Asia, New Zealand, Australia, and other regions. The aim was to facilitate the sharing of resources, talent, and markets, while creating mutually beneficial cooperative models.
To implement the NSP, the Tsai administration established several key institutions, including the "New Southbound Policy Office" and a national-level think tank for ASEAN and South Asian studies. Additionally, Taiwan promoted exchanges at various levels with ASEAN countries and set up "Taiwan Desk" offices in select Southeast Asian nations. These desks offered advisory services on investment, industries, legal issues, and customs, facilitating Taiwanese businesses' operations in the region.
Under President Tsai, the NSP achieved notable success. For instance, in 2022, Taiwan's total exports to the countries targeted by the policy reached USD 96.9 billion, marking a 17.3% increase from 2021. The share of exports to these countries rose from 17.7% in 2020 to 20.2% in 2022, while Taiwan’s export share to China decreased from 43.9% in 2020 to 38.8% in 2022.
However, in the inaugural speech of President Lai Ching-te, Southeast Asia was not highlighted as a priority for Taiwan's future policy. This omission raises questions about potential adjustments to Taiwan's strategy toward the region under his leadership. Despite this, unofficial relations between Taipei and Southeast Asian countries have continued to develop positively, particularly in the areas of economic exchange, investment, and trade.
Given the continuing positive development of these unofficial relations and the prior success of the NSP, it is likely that the Lai administration will continue to prioritize Taiwan's relations with the "Southward" nations. The direction of Taiwan’s policy toward Southeast Asia remains to be seen, but the existing momentum in economic and trade exchanges suggests that the NSP's focus on Southeast Asia is likely to persist, even if it does not feature prominently in Lai's formal policy statements.
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In the coming period, the future of U.S.-Taiwan relations, cross-strait dynamics, and Taiwan's relationships with Southeast Asian nations will depend on a range of factors, among which the shifting policies of major countries, particularly the U.S., will play a significant role. Depending on the course of great power competition, political fluctuations, and the possibility of a 'compromise,' these factors will directly influence the policy directions of U.S. allies and partners, including Taiwan.
Hoang Lan*East Sea Insititute, Diplomatic Academy of Vietnam
*The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the position of the East Sea InstituteAn original version of the article was published here
Translated and edited by HC, DH
References
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