An Evaluation of the Trade Outcomes between Taiwan and Malaysia under the New Southbound Policy (NSP)

Abstract

Upon assuming office in 2016, Taiwan President Tsai Ing-wen’s
administration revitalized the Southbound Policy (SP), rebranding it as the
New Southbound Policy (NSP). While both the SP and NSP share a common
objective — to reduce Taiwan’s heavy reliance on the Chinese market — the
NSP, unlike its predecessor, places a dual emphasis on enhancing economic
ties and concurrently spreading Taiwan’s soft power across the designated
markets. Despite being one of the target markets under the NSP, Malaysia
did not consistently experience a surge in the proportion of Taiwan’s
total trade volume as a result of the policy. This paper aims to assess the
performance of Taiwan-Malaysia trades in the context of NSP initiatives and
elucidate how the soft power that Taiwan has implemented in Malaysia since
the 1950s contributed to such an outcome. The trading outcomes between
Taiwan and Malaysia indicate that Taiwan did not receive substantial support
from the entities it targeted with its soft power initiatives. This suggests
that the China complex within the Chinese ethnic population in Malaysia
is challenging to uproot due to their historical and cultural ties with China.