US-Taiwan infrastructure investment deal aims to reduce dependence on China, experts say

Agreement will focus on infrastructure investment in Southeast Asia and Latin America to ‘help secure supply chains of the future’, US’s de facto embassy in Taipei says

Deal will also benefit Taiwan’s ‘New Southbound Policy’, Wang Ting-yu, a member of ruling Democratic Progressive Party, says

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Washington and Taipei have signed a number of deals to work more closely together. Photo: Reuters

Published: 11:00pm, 1 Oct 2020Updated: 12:11am, 2 Oct 2020

A new deal signed by the US and Taiwan to cooperate on infrastructure development in Southeast Asia and Latin America will help them to reshape the global supply chain and reduce their dependence on mainland China, analysts say.

The American Institute in Taiwan (AIT) – the United States’ de facto embassy on the island – and the Taipei Economic and Cultural Representative Office in the US, signed the “Framework to Strengthen Infrastructure Finance and Market Building Cooperation” on Wednesday.

The AIT said areas of cooperation would include “infrastructure finance and market building, and joint collaboration to facilitate infrastructure investment in third countries, which will also help secure supply chains of the future”.

Observers said the deal would also help to increase Taiwan’s investment opportunities and expand its ties with countries that diplomatically recognise Beijing rather than Taipei.

“The framework is part of the US scheme to work with Taiwan and other like-minded countries to re-establish a new global supply chain so that they don’t need to rely on China,” said Wang Kung-yi, chairman of the Taiwan International Strategic Study Society.

Both the US and Taiwan are keen to reduce their dependence on mainland China. Photo: Reuters