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A New Era for Taiwan-Pacific Relations?

Lily Vu

President Tsai attends a state banquet hosted by Tuvalu Prime Minister Sopoaga. Image credit: Enele Sosene Sopoaga via Flickr.

Lai Ching-te emerged victorious by capturing over 40 per cent of the vote when Taiwanese citizens flocked to the presidential polls on 13 January. Just two days later, Nauru announced that it would cut diplomatic ties with Taiwan in favour of China, dwindling the island’s official diplomatic allies to twelve. Described as “ambush-like” and a “blatant attack on democracy”, Taiwanese officials considered this move as directly influenced by China’s dissatisfaction with the election of Taiwan’s incoming president from the independence-leaning Democratic Progressive Party (DPP).


As one of the most aid-dependent regions in the world, the Pacific has become an arena for geopolitical rivals to compete for influence in exchange for development assistance – and Taiwan is no small player. Taiwan’s official links in the region began from the 1970s when several Pacific countries gained independence, with Tuvalu being the first to establish diplomatic ties in 1979. However, with more countries recognising China’s influence, the region has increasingly become a heated battlefield for diplomatic recognition, causing several Pacific nations to switch alliances repeatedly.


Taiwan-Pacific relations under different presidencies

From 2000 to 2008, competition was particularly fierce under Taiwan’s first DPP president Chen Shui-bian whose tense relationship with mainland China sparked a contest in checkbook diplomacy. In response to Chen’s ‘one country on each side’ policy, China offered Nauru USD$137 million in financial aid which drove Nauru to end 22 years of diplomatic relations with Taiwan. It later switched its allegiance back in 2005 with leaked diplomatic cables revealing that Taiwan had been paying a monthly stipend to Nauruan government ministers in exchange for their continued support. Similarly in Vanuatu, the shortest-lived diplomatic switch on record saw Prime Minister Serge Vohor sign a communiqué recognising Taiwan in 2004, only to be withdrawn seven days later. He was consequently ousted through a no-confidence vote. His successor Ham Lini later apologised and acknowledged the One China policy, prompting China to immediately release USD$2 million for education.

With Taiwan and China fielding criticism for promoting corruption and poor governance in the Pacific, the election of Ma Ying-jeou in 2008 saw the recalibration of Taiwan’s strategy in the region. Leading the China-friendly party KMT, Ma criticised the previous administration’s checkbook diplomacy that had branded Taiwan as a “troublemaker”. Instead, he introduced a ‘viable diplomacy’ approach that emphasised the importance of cross-strait relations in conducting foreign affairs. This focus on improving relations between Taiwan and mainland China, which Ma described as at its “most stable” since their separation in 1949, allowed Taiwan to concentrate on maintaining diplomatic ties, while also improving unofficial links with non-diplomatic allies including the US.

The re-election of the DPP from 2016 saw a similar iteration of this diplomatic approach, or ‘steadfast diplomacy’. Tsai’s assertion that Taiwan would abstain from a “meaningless contest of dollar diplomacy with China” indicated a recognition that it could not compete with China’s economic prowess – prompting it to seek alternative means of influence. Described as "unwavering” and “firm in purpose”, the Tsai administration’s foreign policy aimed to deepen cooperation with countries based on common values, to uphold freedom and democracy, and generate mutual benefits. However, Taiwan suffered diplomatic blows when Solomon Islands and Kiribati switched diplomatic ties only days apart in 2019. The Tsai administration’s New Southbound Policy (NSP) looked southward for partners in economic cooperation, people-to-people links, and resource sharing. Under the NSP, two-way trade and exchange with ASEAN and South Asian partners skyrocketed, cushioning the effects of reduced Chinese trade. Notably, the Pacific Islands are absent in Tsai’s NSP.


Looking ahead

As the first party to secure a consecutive third term in Taiwan’s history, the DPP can only speculate China’s next move – either way guaranteed to influence the direction of Taiwan-Pacific relations. Thus, Taiwan must proactively reassess and modify its Pacific strategy in the face of increasing diplomatic isolation.


Taiwan’s journey from an impoverished island post-World War II to its current status as a vibrant democracy with strong industry and high environmental, social and governance standards positions it as a valuable partner for meaningful engagement with the Pacific. Taiwan can offer a wealth of experience and wisdom to Pacific development, rooted in its value-based, human-centric soft power approach. This offers an attractive alternative to China’s preference for state-centred foreign policy, yet Taiwan has struggled to competitively carve out a name for itself.


Though the Pacific may not be as well-resourced as other NSP partner markets, building greater people-to-people links through indigenous diplomacy presents an opportunity for Taiwan. Many Pacific societies trace their linguistic and genealogical roots back to Taiwan, considered the origin of Austronesian languages. In 2019, Marshall Islands signed an agreement with the Taiwanese Council of Indigenous Peoples to increase Austronesian exchanges, focused on preserving indigenous knowledge, language, and customs. In 2021, Tsai revived the Austronesian Forum in Taipei, a multilateral platform with Pacific allies that had lay dormant for over a decade. Utilising indigeneity to cast political distinction from China is not a new page in Taiwan’s playbook; however, leveraging shared cultural heritage with the Pacific – if genuine and done properly – could significantly enhance Taiwan’s Pacific relations and, ultimately, its global standing.


Whether Lai will herald a new era of Taiwan-Pacific relations is yet to be seen, as the world waits for his inauguration speech in May to firmly establish his administration’s policy goals. What is sure, however, is that Taiwan cannot afford to neglect the Pacific Islands in its foreign policy strategy. This is key to keeping its last Pacific allies, including Marshall Islands, Palau, and Tuvalu by its side.


Lily Vu is a New Colombo Plan Scholar for Vietnam and Taiwan and completed her Bachelor of International Studies at RMIT University. She studied abroad at National Sun Yat-sen University in Kaohsiung and interned at Democratic Progressive Party’s international affairs division in Taipei.


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