Thursday, 29 Oct 2020

US aims to boost Taiwan's role in funding infrastructure across Asia, Latin America

NEW YORK (BLOOMBERG) – The US unveiled a plan to help Taiwan gain greater clout across Asia and Latin America by addressing needs for infrastructure funding in both regions.

Washington plans to cooperate with Taiwan to help arrange funding to build projects in the Indo-Pacific region and Latin America, Taiwanese finance minister Su Jain-rong said at a briefing in Taipei on Wednesday (Sept 30), flanked by other Cabinet officials and Brent Christensen, director of the American Institute in Taiwan, the de facto US embassy in Taipei.

Su hailed the plan as a “new model to deepen ties” between Taipei and Washington.

It comes years into both Beijing’s infrastructure push across Asia and its campaign to further diplomatically isolate Taiwan – which it claims as Chinese territory – by luring away Taipei’s few remaining allies.

The project is the United States’ latest effort to help Taiwan break out of its diplomatic isolation.

Two senior American officials have travelled to Taiwan in the last two months, the highest-level contact between Washington and Taipei in more than four decades.

The US has also established what it calls the Global Cooperation and Training Framework to help Taiwan share its expertise in areas such as cybersecurity, public health and women’s empowerment with countries around the world.

China regularly protests any formal contact between the governments of other countries and Taiwan, which it regards as a renegade province to be reunited with the mainland, by force if necessary.

Su said the US and Taiwan signed an agreement this month to establish a framework for energy and infrastructure projects in Asia and Latin America.

Taiwan has extensive business interactions with South-east Asian countries such as Vietnam and Thailand. Nine of the remaining 15 countries to officially recognise Taiwan’s government are in Latin America and the Caribbean.

Developing economies in Asia will need to invest about US$26 trillion (S$36 trillion) in infrastructure projects until 2030, or US$1.7 trillion a year, according to a 2017 report from the Asian Development Bank.

China has taken a leading role in meeting those needs through President Xi Jinping’s Belt and Road Initiative, whose contributions Morgan Stanley has said may total US$1.3 trillion by 2027 – dwarfing the funds mobilised by the US and its allies.

Christensen said a group of experts would meet this fall to discuss how to promote the restructuring of regional supply chains.

American clients have been a driving force in the relocation of supply chains composed of Taiwanese-owned technology and household appliance businesses back to Taiwan from China.

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