The Boiling Moat: Urgent Steps to Defend Taiwan

by Matt Pottinger

A decade ago, the then ruling Nationalist Party, or Kuomintang (KMT), quietly negotiated a services trade agreement with Beijing. The agreement would have opened large sectors of Taiwan’s economy to the PRC. The KMT government, knowing the agreement would prove unpopular, attempted to push it through the legislature without public review. This incited the Sunflower Movement, when student protesters occupied the legislative building for twenty-four days, delivering knockout blows to both the mooted agreement and the KMT’s popular support. Since 2016, Taiwan has pursued a different path. Under the New Southbound Policy (NSP), Taiwan’s government has enacted policies to economically diversify away from China by incentivizing Taiwanese investment in South and Southeast Asia while putting curbs on business with the mainland, especially in the prized semiconductor industry.