Why India must look east at Taiwan

As far again as December 2019, Taiwan’s surveillance of Chinese web chat conversations found that there was a mysterious viral outbreak in Wuhan. Its public illness management equipment was thus primed to shortly put in place strict journey restrictions and in addition rigorously monitor quarantines, which included monitoring through cell phones. Through its “Taiwan Can Help” programme, the country’s health professionals then started to advise other countries. When the world was short of masks, the country’s renowned factories shifted gears quickly and donated 10 million surgical masks. The irony is that while Taiwan might have been best-in-class in responding to covid-19 and in helping the global community, it is not a member of the World Health Organisation—because China objects to Taiwan being recognised as a sovereign nation. Even the New York Times shrinks from referring to it as a country, bizarrely calling it an “island”. However, 2020 marks a shift within the international temper towards Beijing, which has helped Taiwan’s worldwide standing. Continuing controversy about whether or not the WHO is ready to work successfully in China undermined the probe into the origins of the virus (Beijing, in flip, has demanded an inquiry into whether or not its origin was within the US). “It’s essential for nations with outbreaks to tell different nations,” says C Jason Wang, a professor of paediatrics at Stanford University. “Currently, the WHO has to be invited into a country to get the process going. The entire world has suffered for more than a year. There has to be a better way.” For far too lengthy, a Cinderella pushed to the sidelines of geopolitics and international boards, Taiwan’s success in managing covid and alerting the world to its virulence has out of the blue raised the nation’s profile. If there’s one nation India ought to be utilizing as a task mannequin for pandemic administration, in addition to for placing its Make in India initiatives on a stronger basis, it’s Taiwan. On two key counts which have been self-identified by India as key priorities within the decade forward—constructing a stellar public well being system and making certain that native factories are embedded within the international provide chain—the east Asian nation with a inhabitants of 24 million affords a viable mannequin. The China+1 pivot Alan Hao Yang, a professor on the Institute of East Asian Studies at National Chengchi University and government director of the Taiwan-Asia Exchange Foundation, observes that the pandemic has given “Taiwan a possibility to show its functionality to be a accountable member of the worldwide group. Its practices in sharing medical sources and pandemic governance” highlighted the differences between Taiwan and China. In stark contrast, he says, China “took advantage of the strategic window when other major powers were preoccupied with controlling the virus.” This evaluation is shared by Indian analysts attempting to post-facto perceive China’s incursions alongside the Ladakh border final 12 months. Recently, the Financial Times revealed particulars of a letter despatched to Taiwan’s financial system minister from a Joe Biden administration official during which he expressed gratitude for the Taiwan authorities’s “clear dedication to work with producers in Taiwan” to alleviate the semiconductor shortage. In the midst of a global semiconductor chip shortage for automobiles, Taiwan’s global leadership in the industry gives it yet another reason for prominence. Trade in goods between the US and Taiwan has increased three-fold since 2000 and is now close to $150bn. “This is all music to Taipei’s ears. Taiwan has been pursuing a trade deal with the US for at least 15 years,” the FT noticed. Similarly, India too ought to be working in direction of widening contact with Taiwan by exploring a free commerce settlement, says former nationwide safety adviser Shivshankar Menon, who’s a former ambassador to China. Given Taiwan’s manufacturing prowess, particularly in high-end cell phone elements, this could instantly reinforce the Narendra Modi authorities’s production-linked incentive (PLI) schemes. Many Taiwanese giants resembling Hon Hai’s Foxconn and Pegatron are already taking part. As with most import substitution-led industrial insurance policies dreamt up in New Delhi, nonetheless, the chance is that the complexity of managing uncooked materials prices inflated by duties on imported elements will handicap India’s probabilities to be a worldwide provider. The aggressive international cell phone manufacturing enterprise is already dominated by China and Vietnam. In a way, the PLI scheme encapsulates each the promise and the pitfalls within the days forward as India and Taiwan search to work extra carefully. It builds on a rising curiosity for India amidst Taiwanese corporations, arguably the best provide chain managers on the planet. Professor Yang factors to a Taiwanese authorities survey that confirmed that over the previous few years, Taiwanese corporations have invested $2 billion in India, creating tens of hundreds of jobs (This is only a fraction of the $14 billion of outbound FDI from Taiwan in 2018 alone). “Having invested in Southeast Asia for over 40 years, Taiwanese corporations are skilled in assessing areas for his or her provide chain,” he says. But there are plenty of pitfalls ahead too. For one thing, the PLI schemes are skewed towards large companies, whereas most of the Taiwanese companies that played a critical role in making communist China the world’s largest exporter over the past few decades are small and medium-sized enterprises. India’s unique difficulties with bureaucratic red tape also make it difficult for smaller exporters from Taiwan to use India as a base. Recent data shows small and medium-sized exporters in Britain have lost market share as the costs of processing exports rose post-Brexit. The Modi government’s partiality for raising duties on thousands of manufacturing inputs will also prove to be a hurdle for labour-intensive industries, which typically have razor-thin margins. Lo Chih-Cheng, a Taiwanese parliamentarian and member of the country’s foreign affairs and defense committee, feels India ought to be the prime beneficiary of Taiwan’s south-bound policy of the past few years: “It includes not just south east Asian countries, but India and Australia. Logically, India would be the most important country.” Now, with Taipei financially supporting its corporations to facilitate a transfer out of China, he underlines the significance of its SMEs shifting to India. Lo factors out that 98% of corporations in Taiwan are SMEs and 70% of the roles are produced by them. Lo says that Taiwan’s funding has disproportionately gone to Vietnam, Thailand and Cambodia, however observes, “Taiwan and India are pure companions not simply in safety elements, but additionally in constructing a political relationship.” Nicest country in Asia Analysts in Taiwan feel that the two countries have shown that they can cooperate in the transfer of skills when it comes to earthquake-preparedness management or in large-scale manufacturing, but there is more to be done on public healthcare management. Stanford University’s Wang points to the success that Taiwan had in using chips in mobile phones to track people who were under quarantine and ensuring that they stayed at home. He attributes its success to 17 years of preparation following the outbreak of SARS in east Asia in 2003. In countries like the UK, using private companies employing teams of callers to contact people by phone failed spectacularly, in part, because rising infections tend to quickly overwhelm the public health system’s ability to track people’s movements and health using human contact tracers. In a vivid example of Taiwan’s technological prowess, its response to a visit from the Diamond Princess cruise liner was exemplary. Three thousand passengers disembarked from the cruise liner for a one-day tour in Keelung, Taiwan, on 31 January. Wang notes that 627,000 potential contacts from that fateful visit were notified via text messages and asked to self-quarantine or call health authorities if they had any symptoms; 67 Taiwanese were tested, and all were negative. This incident also reflects a digitally-savvy governance set up. Taiwan has often been called the nicest country in Asia by veteran foreign correspondents in the region. Its efficiency and team spirit on display in combatting covid is a classic case of nice guys finishing first. Covid has shown once again that the world has much to learn from democracies in Asia such as Korea and Taiwan—and, indeed, India, which has stepped in to manufacture vaccines at scale. Vaccine diplomacy As India pursues its vaccine diplomacy, Taiwan should ideally be high on its list. Last month, Taiwan’s health minister accused China of pressuring BioNTech just as it was on the verge of signing a contract with a German pharma company to deliver 5 million vaccine doses to Taiwan. The Serum Institute’s head start in global production of the vaccine makes India an obvious partner. Indo-Taiwanese relations are hamstrung in part because of New Delhi’s sensitivity to what Beijing’s bellicose response would be to deeper engagement with Taiwan. On 7 March, China’s foreign minister Wang Yi warned the US that “the Chinese government has no room for compromise or concessions on the Taiwan issue”. Given the tensions on India’s northern border, these are already particularly tough instances for New Delhi to navigate a secure relationship with China. Still, Lo, the Taiwanese MP, argues that on condition that China has grow to be “extra assertive in creating its sphere of affect” in Asia, all the countries neighbouring China should work together. “For now, there is no official track 1 strategic dialogue. There is a need for that sort of discussion. We are facing a strategic threat from China… (India’s unofficial) office in Taipei focuses (only) on economy and trade,” Lo says. Menon cautions that whereas the federal government of India has a a lot greater stake in China, it ought to nonetheless be pursuing nearer ties with Taipei, together with utilizing it as a listening submit to China. Taiwan has been locked out of the Regional Comprehensive Economic Partnership (RCEP) as a result of China is a outstanding member. A bilateral commerce deal as a substitute might improve Taiwan and India’s complementary nature in manufacturing, with Taiwan offering international know-how prowess and information of worldwide provide chains whereas India steps up with its massive workforce and mid-level managerial expertise. There is thus a lot to play for in nearer relations between the 2 nations. Sana Hashmi, a visiting fellow on the Taiwan-Asia Exchange Foundation, says, “In the sphere of science and know-how, cooperation is in depth, however primarily on the observe II degree. However, different elements of the relations have been sidelined because of the lack of a framework or a rule e-book on easy methods to govern India-Taiwan ties.” Lo, the Taiwanese MP, remains optimistic. He admits that he has heard “complaints” from Taiwanese SMEs with regard to their dealings with India’s paperwork. “Any enormous market has dangers and prices, and it’s important to settle for that… In 1979, China was tough,” observes Lo. “Our SMEs are very courageous and willing to go anywhere.” The Quad assembly earlier this month renewed India’s partnership with the US, Australia and Japan. But India has by no means taken smaller East Asian nations as severely because it ought to. Given Taiwan’s pre-eminent position in semiconductor chips and computer systems, and its place as a liberal Asian democracy threatened by Beijing, that shift is already overdue. Despite nearly every day intrusions into Taiwanese airspace by China final 12 months, Taiwan’s exports to the mainland and Hong Kong totalled $151 billion in 2020, underlining how essential China stays as a producing base for Taiwanese corporations. It is one other reminder that for 4 a long time, Taiwan has served because the speedy tugboat that has pulled China into its pre-eminent place in international commerce at this time. Rahul Jacob was the Financial Times’ South China correspondent between 2010 and 2013 Subscribe to Mint Newsletters * Enter a legitimate electronic mail * Thank you for subscribing to our publication. Topics