TAIPEI (Taiwan News) — Taipei School of Economics and Political Science hosted a panel conference “Asia Visions and Voices: Geopolitical Consequences of US-China Tensions” on Friday (Oct. 11). 

As US-China tensions heat up, Asian nations are considering innovative approaches to protect their economies and societies. This includes derisking and strengthening supply chain resilience, government intervention, and different approaches to multilateralism.

The speakers conveyed the idea that these countries are more than just reactive or recipients of foreign policy but actively engaging and affecting the global outcome.

South Korea  

First, Korea University Professor Lee Shin-wha spoke about the strategic direction of South Korea as influenced by US-China tensions. She has previously spoken about how the international community has faced an unprecedented social and economic shock due to three “big bangs” — US-China strategic competition, the fourth industrial revolution, and the COVID-19 pandemic. 

First, Lee said the US-China strategic competition and the resulting trade conflicts surged in 2018 due to the Trump administration’s trade war. The US became increasingly alarmed by what it viewed as unfair trade practices by China and industrial espionage, as well as Beijing’s economic growth, technological development, and military power.

Countries rushed to reorganize their supply chains to strengthen security, as the “big bangs” exposed vulnerabilities in the global supply chain. The US, South Korea, and other developed nations are abandoning offshoring and moving value chains away from China, believing that advanced technology control allows them to retain power. 

In addition, Lee said South Korea aims to improve its supply chain resiliency due to its heavy dependence on Chinese exports. China has been South Korea’s number one trading partner for the last two decades, accounting for a quarter of trade.

South Korea has been on the front line of the supply chain shift in the region. Seoul has passed legislation, including establishing a Supply Chain Stabilization Committee and funds to support businesses in diversifying import sources and alternative technologies. It has also looked to international cooperation through the Indo-Pacific Economic Framework (IPEF). 

Lee pointed out that South Korea is dependent on the US for security. She said there are over 20,000 US military personnel in South Korea to help deter potential aggression from North Korea.

Lee also pointed to the growing Russia-North Korea relationship, which she said endangers South Korea and also affects the Ukraine war. She said this phenomenon also concerns China, and it could allow Washington to engage with Beijing, as neither the US, China, or South Korea want to see an expansion of North Korea’s nuclear capabilities.

Third nations 

Next, Professor Danny Quah of the National University of Singapore (NUS) Lee Kuan Yew School of Public Policy discussed “third nation” strategies for navigating great power rivalry. Quah said third nations, or those outside China and the US, make up “80% of humanity.” 

Third nations are more than “passive recipients of foreign policy,”  Quah said. “I want to think of third nations as having the power to affect the global outcome.” 

Quah said third nations have agency through three strategies: inadvertent cooperation, nudging great powers out of gridlock, and pathfinder multilateralism. First, for finding solutions, Quah said cooperation is not only contractual. 

He said cooperation goes beyond contracts or getting parties to sign a treaty and is about “aligning incentives.” This includes making big countries “feel uncomfortable” with their bad behavior, such as how they are contributing to climate change or damaging the global environment. 

Second, Quah said third nations can help nudge great powers out of gridlock by applying small amounts of pressure. Third, these powers can exercise this agency through what he called “pathfinder multilateralism.” 

Multilateralism matters, as it goes beyond individual countries and cultures to foster a common, global understanding or approach to secure a better future. However, as some countries fail to meaningfully engage with others or uphold values in a rules-based order, Quah pointed to different forms of multilateralism that can be employed. 

For example, Quah mentioned “restricted multilateralism,” “plurilateralism,” and “regionalism.” Countries with a shared interest among a limited number of governments can work together to achieve their goals. 

Globalization trends 

Heiwai Tang of the University of Hong Kong spoke about new globalization trends with geopolitical and technical shocks. He highlighted signals that since 2008 appear to show the era of globalization has been slowing or coming to an end. 

He said one of the main reasons behind deglobalization was the US-China rivalry. He named other important reasons including labor displacing technologies, the aging population, the 2008 global financial crisis and sluggish economic recovery, the rise of inequality, and nationalism leading to protectionist policies. 

In response to the COVID-19 pandemic, the Russia-Ukraine war, and climate change, governments and companies are seeking security and resilience over the benefits of global value chains.

Examining the US-China trade war, Tang concluded the US-led effort to diversify Indo-Pacific supply chains did not work. He said the trade war led by the Trump administration created unintended negative consequences geopolitically. 

Tang said China’s value-added exports to the US have been rising, not declining. He said the major reason is due to “rerouted” or “indirect” trade exports through third nations, such as Mexico, Vietnam, Taiwan, Canada, South Korea, and Indonesia. 

He said ASEAN economies are now more connected with China and each other. He also said that import sources are less diverse, especially for lower-income countries. 

Tang said the future of globalization is digital trade. He said that economic exchange is more fragmented, digitized, and regionalized. Governments are more focused on ISEG (inclusive secure economic growth), and there is a rising incidence of industrial policy interventions from wealthy countries. 

Lastly, moving beyond great power competition, Tang highlighted new rising powers in Asia: India, Indonesia, and Malaysia. India is turning into a strategic actor in Southeast Asia, amid a flurry of regional diplomacy, and to reshape global trade and counter China's influence. Furthermore, Indonesia and Malaysia are positioned to potentially achieve significant economic success as global investors seek to boost investments in markets. 

Tang said that, “Taiwan needs to hedge with rising geopolitical tensions.”

Taiwan’s strategic ambiguity

Hans H. Tung, professor of political science at National Taiwan University, Taipei School of Economics and Political Science, and National Tsing Hua University, spoke about Taiwan's domestic politics and its position in great power rivalry. He said China has been strategically clear about its endgame in wishing to annex Taiwan, but showed the ways Taiwan’s stance has evolved. 

Under former President Ma Ying-jeou (馬英九), Taiwan’s “strategic ambiguity” in its relationship with China included the “three no’s”: No unification with the PRC in the short term, no declaration of independence, and no use of force.

In addition, under the “1992 consensus,” the KMT’s understanding was "one China, different interpretations.” The ROC and PRC "agreed" that there is “one China” but disagreed about what "China" means (ROC versus PRC).

When President Tsai Ing-wen (蔡英文) came to power from 2016 to 2024, she criticized Ma’s “three no’s” and view of the “1992 consensus.” She said they hurt Taiwan’s sovereignty and sent the wrong message to the international community that Taiwan would yield to Chinese suppression. 

However, despite Taiwan’s “strategic ambiguity” shifting under Tsai, Tung said the former president remained “reserved in tone.” He said she rejected the “1992 consensus” but “tried to be moderate by suggesting a ‘92 spirit’ at the beginning of her term.” 

Hoping to revitalize the economy and society, Tsai adopted new policies for Taiwan’s “de facto economy.” This included the New Southbound Policy, National Security Law, and military reforms. 

However, Chinese leader Xi Jinping (習近平) became tougher after finishing his power consolidation in China. Tung said that as time went on, Tsai’s “strategic ambiguity” started shifting more toward an independence mindset. 

In May after Lai Ching-te (賴清德) won the presidency, Tung pointed out that Lai more strongly emphasized the idea of “statehood” for the ROC as a distinct entity from the PRC. He said Lai further deviated from Tsai’s “strategic ambiguity” by “rejecting outright” the “1992 consensus.”

In addition, Tung pointed out that Lai took a “whole of society approach” to national security. He said his purpose in building this “whole-of-society” defense resilience is to enable every individual to protect themselves and contribute to society “to deter an approaching enemy.” 

“We want to enable all our citizens to feel utterly confident in the continuity and future of Taiwan’s society,” Lai once said. 

At the same time, Tung added Lai has a much weaker mandate than Ma or Tsai. His DPP does not have a majority in the legislature.