as a partner for the security and stability of Europe, its neighbourhood, and other regions of the world
01 — The key questions for the Partner-Atlas
RELEVANCE: What is Taiwan’s relevance to Germany in terms of achieving our interest in safeguarding our prosperity via free trade and innovation?
Taiwan has developed into a leading market-economy power for prosperity and innovation in the Indo-Pacific region. Taiwan’s semiconductor manufacturers, led by global market leader Taiwan Semiconductor Manufacturing Company (TSMC), have a global market share in the foundry market of and are irreplaceable as chip suppliers for German industry in the medium term. Taiwan’s added value, like Germany’s, is driven by foreign trade. It therefore very strongly advocates for free trade, regional economic integration, and the bolstering of a rules-based world order. Taiwan’s expertise in biotechnology, healthcare, agricultural sciences and artificial intelligence sets standards worldwide, and is an important support for German developments in these areas. It is encouraging substantial improvements in international standards in the form of a transparent, open source-based digital policy. It is in this connection that Taiwan’s government is focusing on general industry policy conditions that will support the market and directly benefit public service providers, science and enterprise, even if it is through the rigorous promotion of developments in the area of Industrie 4.0 (known in Taiwan as Smart Machinery) and the creation of an agile public administration. In many respects, Taiwan can serve as a role model for the transformation processes that are also needed in Germany. The industries of both countries, which are predominantly SME-driven, offer technological benefits that . And in the context of the geopolitical distortions caused by Russia’s invasion of Ukraine, the shared regulatory convictions advocated by Taiwan and Germany in their respective regions, and worldwide, form an important basis for taking their relations to a deeper level.
WILLINGNESS: To what extent is Taiwan willing to work with Germany in realising this interest?
Taiwan is on the search for partners worldwide, and in recent years has offered incentives for Taiwanese companies to further diversify the focus of their supply and value chains. With its New Southbound Policy, Taiwan introduced a re-calibration of its foreign policy in 2016, which made collaboration with partners in the Indo-Pacific region a key consideration. The principal intention here is to bolster trading relationships, encourage cooperation between different societies, share expertise and resources, and create a broad foundation for Taiwan’s regional integration. Taiwan’s global perspective is, above all, an urgent response to the strong economic dependence of many Taiwanese businesses on the Chinese market. In 2020, 43.9 percent of Taiwanese exports (mainly electronics) went to China and the . Taiwan is also seeking close cooperation with European partners, among which Germany is considered a key player. Negotiations regarding a bilateral investment agreement (BIA) with the EU are right at the top of the agenda of the Taiwanese government.
STATUS QUO: How close is Germany and Taiwan’s current cooperation in this area?
Taiwan is Germany’s fifth-largest trading partner in Asia, and Germany is Taiwan’s most important trading . In 2021, the bilateral trade volume between Germany and Taiwan exceeded the for the first time. Forming the core of this trading relationship is the supply of valuable technologies and machines, and the consolidation of their innovation partnership in the areas of biotechnology, artificial intelligence and Industrie 4.0.
In 2016, the then newly elected government under President Tsai Ing-wen introduced a transformation of the energy industry, including an exit from nuclear power. German expertise in the areas of energy and environmental technology, and also policy implementation, is particularly strongly sought after in this regard. The establishment of wind farms and the expansion of other renewable energy sources have led to an increase in German investment in Taiwan. The strong orientation toward UN sustainability targets and the establishment and expansion of a “green economy” underline Taiwan’s interest in putting its relations with Germany and other European partners on a permanent footing.
POTENTIAL: What is the potential for strengthening the partnership between Germany and Taiwan in this area?
Taiwan takes a much more urgent view compared to Germany of the challenge to diversify its supply and value chains and become less dependent on individual procurement markets. There is major potential in this area to develop shared positions and implement joint cooperation projects, including those in third-party markets. This applies in particular to the high-tech and healthcare sectors. In the high-tech field, there is a close relationship between Taiwanese and German wafer and chip manufacturers. Taiwan welcomes the announcement of the European Chips Act and the undertaking by the EU to invest more strongly in its own . A stronger presence by Taiwanese semiconductor manufacturers on the German and European market is also being considered because Covid-19 and global political tensions have revealed the extreme vulnerability of the supply chains in the semiconductor industry.
There is also strong potential for more in-depth collaboration between Taiwan and Germany in the context of Germany’s Indo-Pacific Guidelines and Taiwan’s own commitment in the region, which it is already exercising more strongly in the form of its New Southbound Policy. The areas of action under both strategies are aimed at a closer foreign economic and foreign policy orientation toward partners in the region, a broader trading and development commitment in neighbouring states and bolstering multilateral forums. In this connection, Taiwan is calling on international partners to commit collectively to third-party markets, and regularly issues invitations to its own formats with a focus on professional interaction to build up skills in areas such as global healthcare, cyber security, .
POLICY RECOMMENDATION: What in German foreign policy has to change in order to fully exploit this potential?
On account of the complex political conditions arising from the One-China Policy, which is accepted by Germany, as well as the majority of the international community of nations, bilateral relations between Germany and Taiwan are characterised mainly by exchanges and cooperation in the areas of science, culture, education and trade. Taiwan’s economic and innovation model is based on the rule of law, democratic values and the consolidation of global trade structures based on market economic principles. Its interests are thus formulated very clearly, and form the cornerstones of Taiwan’s global activity. Relations with Taiwan should therefore follow the example of a strategic partnership on the basis of clearly formulated shared interests, and in particular should encourage formats that allow for building on close coordination with other European partners.
- In the context of the One-China Policy, Germany should not hold back from assertively maintaining its political relations with Taiwan. At a national level, this may include closer coordination on questions of aligning trade policy commitment on both sides, including on third-party markets, and should make the themes of trade and innovation partnerships the object of regular exchange formats between the economic and trade ministries and practitioners in both countries. German companies benefit from a growth-oriented, robust investment climate in Taiwan, and should go to greater lengths to include Taiwan in the context of Germany’s Indo-Pacific Guidelines.
- Taiwan, in the form of an economic area, is a member of the WTO. Germany should actively engage in the negotiations regarding a bilateral investment agreement between the EU and Taiwan, and in its dealings with partners should also support Taiwan’s wishes to become a member of regional trade initiatives such as the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive Agreement for Trans-Pacific Partnership (CPTPP).
- Taiwan and Germany share the conviction that social innovations and long-term competitiveness are the foundation for establishing a basic democratic, liberal order in both countries, and that this can form the basis on which to help bolster the international order. That’s why it’s particularly important to encourage initiatives that will create a more powerful link between the start-up ecosystems in both countries. In the context of the Indo-Pacific Guidelines and research initiatives at a federal state level and by municipal partnerships, Germany’s federal government, federal states and municipalities should initiate exchange and investment programmes that will sponsor R&D cooperation projects by young businesses. Connections must also be established with players from other countries in Europe and in the Indo-Pacific region in order to test and anchor the scope of development of technology products and services and their applications.
- Especially in the field of semiconductor and chip manufacture, and also in other future-oriented areas (such as data-based development of artificial intelligence, technologies to bolster cyber security and protect critical infrastructures, innovations in life sciences and in healthcare), Taiwan sets standards that are also central to Germany’s competitiveness. Taiwan and Germany should therefore enter into a comprehensive dialogue to establish technological and industrial standards to overcome technical barriers to trade, maintain the high quality of products and services, and pursue the strengthening of the WTO-based global trading system.
David Merkle is policy advisor for China at the Department of European and International Cooperation.
02 — Foreign Office
Office C 813, Beijing Lufthansa Center No. 50, Liangmaqiao Road, Chaoyang District
03 — The region
Asia and the Pacific
Taiwan has developed into a leading market-economy power for prosperity and innovation in the Indo-Pacific region. Taiwan’s semiconductor manufacturers, led by global market leader Taiwan Semiconductor Manufacturing Company (TSMC), have a global market share in the foundry market of 67 percent (2020) and are irreplaceable as chip suppliers for German industry in the medium term. Taiwan’s added value, like Germany’s, is driven by foreign trade.
- Population: 23.900.000
- Capital: Taipeh
Today, climate protection is an integral part of German foreign policy. In this context, Germany considers China’s role in international climate policy to be particularly important. China is both the world’s largest emitter of CO2 and largest consumer of coal. On the other hand, China’s expansion of renewable energies is unrivalled anywhere else in the world. If China succeeds in rapidly driving forward the energy transition it has already initiated, this will not only directly impact the global CO2 balance sheet but will also have a signal effect on other countries. Cooperation with China on environmental and climate policy thus helps protect global public assets.
- Population: 1.450.233.966
- Capital: Peking
For Germany, Japan is one of the most important partners in Asia, in terms of economic relations and common values. In addition to the determination to maintain and enhance the multilateral order together, there is also the desire for closer cooperation in future technologies. Japan and Germany face similar challenges, particularly with regard to the future of manufacturing and the demographic development of their societies.
- Population: 126.476.461
- Capital: Tokyo
Since the end of 2016, Uzbekistan has been pursuing a course of liberalisation and opening. Comprehensive five-year development strategies are being implemented, including reform plans for security policy and foreign policy. Uzbekistan pursues a multilateral and proactive foreign policy.
- Population: 34.437.655
- Capital: Taschkent
Pakistan is a country of origin, a destination, and a transit country for those fleeing or migrating. In its region, Pakistan is one of the largest countries of origin for migrant workers, the great majority of whom (96 percent) are concentrated in the countries of the Gulf Cooperation Council, especially Saudi Arabia and the United Arab Emirates.
- Population: 229.545.115
- Capital: Islamabad
Japan is one of Germany’s most important partners in values in the Asia-Pacific region. The two countries are closely linked, politically, economically and societally. In addition to their desire to work together to maintain and refine the multilateral, rule-based order, they hope to work even more closely together at a security policy level.
- Population: 126,476,461
- Capital: Tokyo
Germany has a vital interest in maintaining and consolidating a world order based on the values of liberal democracy and on the centrality of the United Nations (UN). Given the USA’s global withdrawal, which the coronavirus pandemic has made even more evident, Germany needs to pursue this goal together with other international partners. With the Indo-Pacific Guidelines that were released in September 2020, the Federal Government expressly commits itself to this task in the region that is taking centre stage in the 21st century. India’s importance can hardly be overestimated in this respect: India is already the largest democracy in the world, and within the 2020s, it will replace China as the most populous country. Like Germany, the subcontinent at the Indo-Pacific interface is dependent on a solid security structure, an open trading system, and free navigation in international waters. India is especially severely affected by the consequences of global warming due to its vulnerable ecosystems and is reliant on multilateral approaches to solve this global problem.
- Population: 1,380,004,385
- Capital: New Delhi
When the Partner Atlas was first developed (2019), Afghanistan was chosen as the fifth country of the region Asia and Pacific. The seizure of power by the Taliban in the summer of 2021, however, makes it currently impossible to think about deepening cooperation with the new government in the area of migration.
The Konrad-Adenauer-Foundation will keep working on Afghanistan within the framework of its regional programme on Southwest Asia. Please visit the website of the Department Asia and Pacific (Konrad-Adenauer-Stiftung – Europäische und Internationale Zusammenarbeit (kas.de)) as well as our social media accounts on Facebook, Twitter, YouTube and Instagram for the latest information and analyses.
- Population: 38,928,346
- Capital: Kabul
Pursuing a multi-vector policy, the country’s leadership has built close economic and political ties to its big neighbours Russia and China, but also to the US and the European Union as well as to the Arab world, Turkey, South Corea, Iran and others. By now, Kazakhstan has also established diplomatic relations to many countries in Africa and South America. For Kazakhstan, there is no alternative to its multi-vector policy, especially in light of the current war in Ukraine.
- Population: appr. 19 million
- Capital: Nur-Sultan
Vietnam is one of the few communist countries. A “socialist-oriented market economy” determines the country’s economic status, the communist party vigorously enforces its claim to total power, and the country is subject to fierce criticism in reports on human rights. At the same time, more than three decades of economic growth and political stability have led to Vietnam establishing itself as an influential player in Southeast Asia.
- Population: 95,529,003
- Capital: Hanoi