Dec 7, 2012

Thailand - How China is affecting Thailand-Taiwan relations

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Three decades ago Thailand was the main destination for Taiwan's exports and investments. That era has long gone, because Thailand has since 1975 steadily strengthened its ties with the Chinese mainland.

Taiwan seldom makes any headlines here these days. So it was heart-warming news when Thailand and Taiwan finally signed a bilateral taxation agreement on December 4 in Taipei. The agreement has been almost 13 years in the making, delayed because of the fear ingrained in the minds of Thai politicians. They have always been afraid that any close ties with Taiwan would aggravate Beijing and thus affect our relations. This fear is unfounded, but still they kept the deal on the backburner, with Parliament vetting it for as long as possible.

Now our politicians have finally realised that Thailand can benefit from this agreement, and that signing it will incur no wrath from the Chinese government. After all, Taiwan has concluded similar agreements with nearly three dozen countries. At this juncture even Taiwanese-Chinese relations have improved, and indeed are far better than at any time since the island broke away in 1949.

Good diplomatic ties across the Taiwan Strait will allow more room for Southeast Asian countries to explore and expand their own ties with Taiwan. Over the past few years, Taiwan has also expanded its diplomatic outreach as never before.

Thailand has all along pursued a one-China policy, far more strictly than other Asean countries. Indonesia, the Philippines, Malaysia and Vietnam have their own approaches to the one-China policy. These countries are wiser when it comes to dealing with China. They are not afraid to stand tall against China, especially when bilateral issues have to do with their national interests. They have also benefited from close ties with Taiwan, especially in the field of investment and migrant labour quotas.

During the heyday, Taiwan was one of the top three investors in Thailand, and it seemed that every week a new factory was being opened by Taiwanese investors. More than 30,000 Taiwanese used to live here. Now, only half that number remains. Back then, Thai workers comprised the largest contingent of Southeast Asian workers in Taiwan, their numbers reaching as high as 250,000. That has been reduced to just 50,000. Workers from Indonesia and Vietnam now form the majority. Little known to other Thais, there are more than 5 million experienced Thai workers who used to work in Taiwan, most of them from the Northeast.

Now that Taiwanese entrepreneurs have left Thailand, they are looking to Vietnam and Indonesia as investment havens, leaving Thailand behind.

At the moment, Taiwan ranks as Thailand's fifth key trading partner, with bilateral trade amounting to US$8.71 billion for the first 10 months of this year, down 4.89 per cent from the same period last year. The prospects for next year are not so good.

Thai leaders should reconsider the overall relationship with Taiwan instead of focusing merely on whether that relationship will offend mainland China.

What is there to fear? Further development of Thai-Taiwanese relations will not jeopardise or tarnish Thai-Chinese relations, as our officials are so often fearful of. Indeed, the two relationships can be complimentary to each other. There are many areas in which Thailand and Taiwan can cooperate. After all, with the example of Hong Kong and Macau, we already see China working under two systems.

From now on, Thailand should not be "more Catholic than the Pope". Just be Thai and deal with the two Chinas.

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