Taiwan’s Perspective: Charting Diplomatic Currents at the 2024 Peru APEC Summit

In the intricate world of international economic diplomacy, Taiwan is a unique player—simultaneously nimble and strategic, constrained yet remarkably adaptive—especially in recent years. The 2024 APEC Summit in Peru is a critical backdrop to understanding Taiwan’s complex role in regional economic integration, revealing a narrative far more nuanced than traditional geopolitical discourse suggests.

Taiwan’s participation in APEC is not a mere formality but a carefully choreographed diplomatic dance. As one of the member “economies” of APEC but designated as “Chinese Taipei” according to organizational protocols, Taiwan navigates a complex international framework. As an economic entity constrained by complex international dynamics, Taiwan has developed a unique capability to leverage its irreplaceable economic strengths within tight diplomatic frameworks. This year’s summit in Peru underscores the island’s ability to maintain strategic economic relevance in an increasingly fragmented global economic landscape.

Reimagining Economic Cooperation in a Post-Pandemic World

The post-pandemic era has fundamentally transformed global economic dynamics. Taiwan has positioned itself at the forefront of this transformation, proactively addressing three critical trends:

1. Supply Chain Resilience: In the wake of global disruptions, Taiwan has emerged as a key architect of supply chain reconfiguration. Its semiconductor industry isn’t just an economic asset but a strategic instrument of diplomatic influence.
2. De-risking Strategy: Unlike simple decoupling, Taiwan advocates for a sophisticated de-risking approach. This involves diversifying economic partnerships, strengthening technological collaborations, and creating more robust, flexible economic networks.
3. Digital and Green Economy Transitions: Taiwan is actively shaping international dialogues around digital transformation and sustainable economic development, positioning itself as a trustworthy economic partner, especially in the Asia Pacific region.

In US Secretary of State Anthony Blinken’s address at the 2024 APEC CEO Summit, the United States’ emphasis on coordinating strategies to ensure economic and technological relationships are characterized by interdependence rather than fragility was evident. Moreover, Blinken highlighted that beyond the Indo-Pacific Economic Framework (IPEF) where the US collaborates with Japan, South Korea, Vietnam, and Indonesia, the United States is also working with Australia, New Zealand, and Taiwan on submarine cable infrastructure in the Pacific island region. This underscores Taiwan’s critical role in Asia-Pacific technological development, which extends far beyond the well-known semiconductor industry and encompasses numerous dimensions often obscured by geopolitical constraints imposed by China.

Structural Challenges and International Expectations for Taiwan

Despite its strategic capabilities, Taiwan faces significant challenges or concerns from members within the APEC framework:

1. Semiconductor Dependency Risks: The world’s overwhelming reliance on Taiwan’s semiconductor ecosystem has become a strategic vulnerability. International partners are aggressively pursuing diversification strategies, seeking to develop robust semiconductor capabilities in alternative geographies to reduce the systemic risk posed by Taiwan’s current market dominance.
2. Geopolitical Uncertainties: The persistent tensions in the Taiwan Strait create an underlying current of uncertainty. APEC members are cautious about potential regional instability that could disrupt economic cooperation. This global effort aims to create a more resilient and distributed semiconductor supply chain, mitigating potential disruptions from geopolitical tensions or regional instabilities.

Paradoxically, these very challenges have transformed Taiwan into a critical economic partner. The global market increasingly acknowledges Taiwan as an essential node in high-tech innovation, particularly in semiconductor and emerging technologies. As a stable democratic economy, Taiwan has become a predictable and strategically aligned partner for APEC members seeking reliable alternatives in the technological supply chain. This unique positioning stems from Taiwan’s ability to navigate complex international dynamics while maintaining technological leadership, effectively turning potential vulnerabilities into strategic strengths.

APEC remains a crucial channel for maintaining Taiwan’s economic and trade interests. Even though high-level interactions are constrained by cross-strait factors, staff-level cooperation and other interactions remain possible due to APEC’s openness. For instance, Taiwanese business representatives’ participation in the APEC Business Advisory Council (ABAC) helps maintain long-term contact and understanding with Asia-Pacific business professionals.

Besides continuously showcasing and promoting Taiwan’s digital advantages, this also facilitates ongoing efforts to sign bilateral economic cooperation agreements with important APEC trade partners, ultimately maximizing Taiwan’s interests within the APEC framework.

Changing Landscape of APEC Under the new Cold War

Xi specially noted at the 2024 APEC CEO Summit that APEC was born near the end of the Cold War, which was also during the gradual rise of a new round of economic globalization. Therefore, APEC is consistently committed to promoting economic globalization. This undoubtedly hits back at the continuing trade barriers under  US-China competition.

In fact, this highlights one of APEC’s fundamental principles: implementing non-discriminatory treatment under the guidance of “open regionalism”. This means no discrimination is practiced against either internal members or non-members.

Currently, APEC members generally accept regional trade agreements on the belief that as long as the content of these agreements supports APEC’s principles and goals, even if they do not have a positive influence on regional cooperation and globalism, they nevertheless also do not produce negative effects. Therefore, APEC members  do not oppose members signing trade agreements, given they are compatible with APEC.

However, contractual bilateral trade agreements allow the two signatories to legitimately “hitchhike” on APEC’s platform, while other APEC members are excluded from  the same treatment. This is one of the reasons why the Taiwan government is actively participating in APEC while simultaneously accelerating bilateral trade negotiations with various countries.

Taiwan’s Strategic Technological Diplomacy

By strategically positioning itself as a hub of technological innovation as well as  economic security, Taiwan is demonstrating that economic resilience is not just about technological prowess, but about creating robust, trustworthy networks that can withstand geopolitical pressures and maintain stable international economic relationships.

In particular, the concept of economic security is a novel step in Taiwan’s approach. It goes beyond mere technological capabilities to create a more comprehensive and resilient economic ecosystem that can provide stability and trust in an increasingly complex global economic landscape.

Even though China is set to host the 2026 APEC summit, member economies are increasingly apprehensive about the potential implications of its national security legislation. Therefore Taiwan will likely be able to continue to wield its advantages within the APEC framework.

Official data analysis from APEC shows that Taiwan leads nearly one-tenth of APEC activities, with technology-related events or plans constituting the majority. This demonstrates the significant attention Taiwan receives from APEC member economies in the technological domain.

Moving forward, Taiwan should balance domestic and diplomatic development while paying attention to the various considerations APEC members have regarding Taiwan’s advantages. While Taiwan cannot independently sway great power confrontations, it can still maintain its technological leadership. After all, actively promoting its own advantages and contributions to the Asia-Pacific region are not mutually exclusive.

(Featured photo by APEC website)