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. Keywords: New Southbound Policy, Malaysia, Taiwan, China, soft power