The New Southbound Policy (NSP) is a timely push by Taiwan to foster business with countries on its southern corridor. Officially launched in 2016 under President Tsai Ing-wen’s leadership, the policy aims to enhance cooperation and exchange between Taiwan and 18 countries in Southeast Asia, South Asia and Australasia.
As expected, semiconductors, Taiwan’s primary product, have consistently topped the export list. Nonetheless, over the years, the demand for ICT products has fast occupied a considerable part of that list showing everyone how digital transformation is top of the agenda of the country’s immediate neighbours.
According to the country’s cabinet-level Office of Trade Negotiations (OTN), Taiwan’s exports to the 18 countries covered under the government’s New Southbound Policy recently hit a record high. This reflected the effectiveness of the diversification strategy in the five years since its launch. While Integrated Circuits carve the biggest portion, ICT products contribute a significant portion of the export list.
As detailed, exports to NSP target countries grew 35.2% to US$ 82.58 billion in 2021, up from US$ 63.31 billion in 2019, the OTN said. Integrated circuits were the leading export, comprising nearly 40% of all outgoing shipments to the region, followed by ICT products and components as well as semiconductor devices and manufacturing equipment, the OTN added.
The business has been brisk between Taiwan and the NSP countries indicating that the policy to move southwards has been enjoying success. Further statistics released by the OTN revealed inbound investment climbed 162.32% year on year to US$ 1 billion, while Taiwan investment in the region surged 105.97% to US$ 5.82 billion.
A key plank in the government’s national development strategy, the NSP seeks to deepen the country’s agricultural, business, cultural, education, tourism and trade ties with:
- the 10 Association of Southeast Asian Nations (ASEAN) member states
- 6 South Asian countries
- Australia
- New Zealand
Amid accelerated restructuring of global supply chains due to the pandemic, increased investment in and from NSP target countries will help diversify Taiwan’s logistics networks, the OTN said. Doing so will continue to promote the NSP to expand economic and trade relations and further boost regional prosperity and stability.
Taiwan has time and again provided the region with timely answers. The NSP is bound to translate to bigger numbers. Already, the country is set to play a central role in the adoption of ADAS for automobiles in the near future. Its semiconductor business is key to such a digital transformation.
Moreover, it’s not just cars. The island nation is set to be a manufacturing hub for smart machines that utilise machine learning to solve production issues. Plus, it’s also building a humongous AI data centre that could make it a regional player for Artificial Intelligence as reported on OpenGov Asia.
