Technology is the new Priority in Central and Eastern Europe’s Accelerating Relations with Taiwan

Written by Richard Q. Turcsanyi and David Hutt.

Image credit: Zdeněk Hřib a ministr Wu by Pirátská strana/Flickr, license: public domain 1.0

For the European post-communist countries, Taiwan has always been a political symbol of their own dealings with the past. Besides, as a successful economy, Taiwan has also acted as a source of capital to rebuild the industrial base which suffered after the collapse of communist regimes. Most recently, however, technology promises to come at the forefront of relations with Taiwan, and it will be interesting to observe its economic and (geo)political implications.

On October 20-30, Slovakia, the Czech Republic, and Lithuania will receive a large business delegation from Taiwan led by National Development Council Minister Kung Ming-hsin. This will include the Minister of Science and Technology, Wu Tsung-tsong, and the new Director-General of Taiwan’s National Space Organization (NSPO), Wu Jong-shinn. In the meantime, foreign minister Joseph Wu will also visit Slovakia and the Czech Republic during the same time. 

The Taiwanese delegation arrives as part of Taiwan’s greater efforts to boost cooperation in Central and Eastern Europe (CEE). It is no coincidence that these countries have recently experienced the cooling of their relations with China. Most visibly, Lithuania earlier this year left the PRC-led “17+1 platform” and symbolically renamed Taiwan’s local representative office in Vilnius to “Taiwan” instead of “Taipei” – a departure from standard diplomatic practice. Also, the Czech President of the Senate (upper house of the Czech parliament) visited Taiwan last year in an unprecedented visit for a European official, while Slovakia was among the countries donating Covid-19 vaccines to Taiwan.

The Ups and Downs of Relations with Taiwan (and China)

The CEE countries have a history of ups and downs in their relations with Taiwan – and China. In 1949, when ruled by Communist parties, they were among the first countries to recognise the People’s Republic of China and thus cut links with the Republic of China. As a result, there were basically no contacts with the Taiwanese authorities for the next few decades.

After 1989, in turn, the anti-communist governments who got into power swiftly established contacts with Taiwan. Although they stayed short of formal diplomatic recognition, they sometimes challenged the general international practice of keeping relations with Taiwan non-controversial. The Czech Republic, for instance, hosted the Taiwanese prime minister in 1995, being the most senior Taiwanese officially visiting Europe for decades. Czech President Havel also called the UN for Taiwan to be admitted as a full member.

Besides apparent political sympathy stemming from the shared anti-communism, Taiwan also offered a promise of foreign direct investment, which was desperately needed around the region. Following significant investments by Taiwanese firms Foxconn and Acer in recent years, for instance, the Czech Republic was, according to the Taiwanese Ministry of Economic Affairs, the fourth-largest recipient of Taiwanese investment in Europe, behind Germany, the Netherlands, and the UK. Hungary, in turn, received a staggering 90 % of the Taiwanese investments entering the EU in 2019. According to EU statistics, this is now the second-largest host of Taiwanese investments in the EU, after the Netherlands. Slovakia and Poland, too, host significant Taiwanese investments.

Although exact numbers on investment are notoriously difficult to get, it is apparent that Taiwan has become a relevant economic actor in the region – and that the CEE countries play a role in the overall EU-Taiwan political and economic relations.

New Opening in the CEE-Taiwan Relations

During the 2010s, many CEE countries attempted to develop “pragmatic” relations with China, which sometimes led to a cool approach towards Taiwan. However, the mood in 2021 seems to have shifted in another direction. The Czech elections have elevated politicians who are again critical of China, and they will likely engage Taiwan significantly more in the future.

Hungary is waiting for its own elections next year, which might oust Viktor Orban for the first time in a decade. If that happens, that could result in a significant shift in Hungarian attitudes towards China and, in turn, Taiwan. 

Poland and Slovakia will likely remain a bit more cautious and would try to preserve working relations with China, but would almost certainly engage Taiwan in various ways, as visible from recent donations of vaccines. 

Lithuania’s example of colling relations with China and engaging Taiwan might be followed at least to some extent by other Baltic countries – Latvia and Estonia.

Technology as the New Priority

In short, the pendulum is now again moving to the era when at least some of the CEE countries would belong to those most ‘daring’ in Europe in terms of developing relations with Taiwan. The Taiwanese delegation visit is just the most recent example, following interestingly active exchanges during the Covid-19 pandemic.

During the visit to Slovakia, seven Memorandums were signed on issues that included electric vehicles, space development, the digitalisation of small- and medium-enterprises and smart cities. In the Czech Republic, five Memorandums were concluded on cybersecurity, space industry, catalyst technology, green energy, and smart machinery.

It is no secret that the CEE countries now eye the cooperation in the technology sector rather than hope for capital coming from Taiwan.

Earlier this year, for instance, a webinar on Space Industry between the Czech Republic and Taiwan was organised. During this event, several Taiwanese agencies met with relevant Czech companies engaged in the Czech Space Alliance. In addition, there have also been long-standing research exchanges between the institutes of the two countries.

A Slovak company, Decent, is cooperating with Taiwan on blockchain technology in space development, bringing in the experience of cooperation with the European Space Agency.

When the economic relations – particularly concerning the role of technology – between Taiwan and the CEE countries are compared with those of China-CEE, the contrast cannot be more visible. Indeed, China-CEE relations failed to deliver relevant investments to the CEE countries, leading to growing frustrations around the region. More recently, most of the region has started to be very cautious about the potential security implications of Chinese presence in its critical infrastructure. For example, various CEE countries belonged to the first European countries declaring that they would not allow Chinese companies to participate in constructing its 5G network.

Tangible Results: This Time, It’s Real?

As such, technology seems to be a promising sector for Taiwan-CEE relations. At least there is a political preference to present it as such. Yet, some caution should be applied before the actual tangible results are visible. Nevertheless, experience already shows what can happen.

Czeslaw Tubilewicz, in his highly relevant book on Taiwan’s relations with the CEE countries during the 1990s and 2000s, describes how the CEE countries initially after 1989 expected much more (and quicker) material benefit than actually materialised. In fact, Taiwanese investments really kicked off only after the CEE countries entered the EU in 2004.

In this regard, we may already see something similar going on today. The Taiwanese visit to the three countries has generated quite some excitement about potential new sophisticated factories producing highly demanded semiconductors and chips (which are currently in short supply, for instance, in the car manufacturing in the region).

It is, however, telling how the Taiwanese minister responded to the question of whether Taiwan considers opening such a factory in Lithuania. First, they should focus on talent development, so Lithuanian youths will study and receive training in Taiwan. After this, technological cooperation takes place as the second step. Afterwards, Lithuania and Taiwan will form a team of experts, who will talk about Lithuania’s role in the entire semiconductor supply chain next year.

Thus, it remains apparent how real the prospects are for ‘tangible’ results stemming from the technological cooperation between Taiwan and the CEE countries. These would be results such as Taiwan opening the sophisticated manufacturing of semiconductors or chips in the region. Still, joint research initiatives and other cooperation in technology development may be less visible at first sight. Still, it can create relevant economic dynamics that can even have important (geo)political implications.

Richard Q. Turcsányi is a program director at Central European Institute of Asian Studies, Palacky University Olomouc, Czech Republic, and an assistant professor at Mendel University in Brno.

David Hutt is a journalist based in the Czech Republic focusing on Europe-Asia relations. He previously reported from Southeast Asia. He is the Southeast Asia Columnist at the Diplomat and a correspondent for Asia Times. He also writes the newsletter Watching Europe In Southeast Asia, which provides analysis and forecasts on EU-ASEAN relations.

This article was published as part of a special issue on Science and Technology.

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