 Right, welcome to tonight's Centre of Taiwan Studies seminar. Tonight we have a very, very special lecture. Tonight, Joe Caracatou, who is our first SOA Centenary Visiting Fellow, will talk about his book project on Taiwan-India relations. He's the first person to look at this topic in book length. Joe, I first met Joe I think in March of this year. He was over in the UK to give a paper in Oxford. And I was really impressed with the conversations. I think the reason was because he was looking at a topic that very few of us look at, China, Taiwan-India relations. He's also studied China-India relations in some detail. And then a couple of months later, SOA announced that they were going to have these four centenary visiting fellows. So they would invite scholars from all over the world to spend a term at SOA. So they interact with the SOA's academic community. And it was a competitive bid. And when this announcement came out, I suddenly had about five or six people who wanted to work on Taiwan to be based at SOA's for that term. But I decided, and Joe was one of those five to six scholars, but I was really so impressed with that first time we'd met about the kind of work he was doing, the enthusiasm he had for these topics. So I opted to propose Joe for this scheme. And it was a very competitive scheme. A number of other departments also applied for this. So we were really delighted that SOA decided to award this fellowship to Joe. So Joe's been here this term. And it's been a real joy for us to work with Joe. He's been a constant. He's been appearing at all our seminars, being very involved in the debate. And unfortunately, we only have Joe for two more weeks. And I think Joe's really going to be missed. But I'm sure he's going to have a really exceptional academic career based on what he's published so far. He's got the book on Taiwan-India relations. He's published quite extensively on things like cross-strait relations, China-India relations. But I'm really delighted that today he's chosen to talk about his book project on Taiwan-India relations. So Joe, over to you. Good evening to all of you. I'd like to thank Professor Fell for the very kind words of introduction. It has been a learning experience for me as well to be part of the center of Taiwan studies. And for me and my wife to actually spend some time in London for the duration of this fellowship. So thank you very much. A study on India and Taiwan is an interesting avenue as it outrightly challenges our assumptions on parameters of size. If India and Taiwan are examined beyond the ostensible characteristics of geography or overall economic size, it becomes clear that Taiwan has a larger per capita GDP. It has a clear distinction in science and technology, ranking amongst the top five in the world in terms of the number of patents granted by the U.S. Patent and Trademark Office, in effect making it on a per capita basis a holder of more patents than the United States itself. And while India remains in stage one, which is a group of 37 economies which are factor-driven, fairly unskilled labor and natural resource-driven, Taiwan is part of stage three economies, which is the highest tier group of 35 innovation-driven economies worldwide. So clearly the perception of big and small gets altered. However, it was not always the case. If we look at 1904, the period under which both countries were experiencing colonial rule, we find that Taiwan's per capita GDP was roughly about $700 and India's was about $640 U.S. While Taiwan was under Japanese rule for a period of roughly 50 years, India was a British colony from the mid-19th century to the mid-20th century. And interestingly, compared to Taiwan, India was relatively industrialized. It had a modern textile and steel industry. It had a robust rail network. While Taiwan got its first rail network in 1893, a short line from Chilung to Shinchu, India got its railway network half a century earlier. However, following Indian independence in 1947 and the success of the Communist Revolution, which forced the KMT to move to Taiwan in 1949, we see that the subsequent decades see the fast-paced growth of Taiwan as one of the first tier Asian Tigers, along with Singapore, Hong Kong and Korea. One of the reasons identified for this fast-paced trajectory of growth was the self-sufficiency that Taiwan was able to achieve during colonial rule and primarily through the development of agriculture, which in turn developed industry in Taiwan. British colonial rule in India was about industrialization, but at the neglect of the agricultural sector. Now, other social and economic and cultural industries, which are used to support this argument, relate to educational attainment. For instance, 71% of Taiwanese school-aged children were enrolled in elementary schools as early as 1944, but India was able to achieve a primary enrollment ratio of 77% as late as 1997. The point I'm trying to bring to your consideration is that clearly the quality and quantity of human capital accumulation that are reflected in these select indices reveal that India and Taiwan were clearly on different trajectories as far as their economic pathways, following from colonial rule, was concerned. If we look at the history of political interaction, an interesting starting point is Pandit Joharlal Nehru's appreciation for China and its people, and it predated his interaction with communist China. It's interesting to note that in his first major book, Glimpses of World History in 1935, Nehru made 134 index references to China, with references such as the other great country of Asia and India's old-time friend. But it was basically during the interwar period that the mass political organizations, the Indian National Congress in India and the Kuomintang, in China, they really forged some sort of a common understanding. The Brussels meeting of 1927 is especially noted for a meeting between Joharlal Nehru and a 16-member strong Chinese delegation, which also led to the issuance of a joint declaration, and it was agreed that Nationalist China would open an information bureau in India, and also that the Congress, the Indian National Congress, would pressurize the British to withdraw Indian forces from China and not to use them against the Chinese. The next major interaction between India and Nationalist China happens during Nehru's visit, which is very important in 1939, even though it lasted for two weeks. It comprised interaction with the senior KMT leadership, Chiang Kai-shek and other senior leaders, as well as with the Communist Party, though on that occasion he did not meet with Mao Zedong. The brief two weeks were described subsequently by Nehru as memorable ones, both personally for me and for the future relations of India and China. I found to my joy that my desire that China and India should draw ever closer to each other was fully reciprocated by China's leaders. I returned to India an even greater admirer of China and the Chinese people that I had been previously, and I could not imagine that any adverse fate could break the spirit of these ancient people who had grown so young again. Now interestingly, Chiang Kai-shek and Madam Chiang Kai-shek enjoyed personal friendships with the Indian leadership, especially with Nehru. In this regard, it's even noted in British Foreign Office documents that Madam Chiang Kai-shek had actually approached Sir Cripps, who was the British ambassador to Moscow then, on the issue of Nehru's release from prison. Nehru was in prison after he returned from China 1939 to early 1942. The Chiang's visit happens in 1942, February 1942, and these are some of the archival images of that visit. It came at a very important time as Nationalist China wanted, on the one hand, to put pressure on the British, on the matter of India's right to self-determination, and at the same time it wanted to find support in India in the anti-Japanese war struggle. One of the interesting aspects of this visit was their visit to Shantiniketan, which is again a temple of learning founded by Rabindranath Tagore, and Chiang Kai-shek's message there, and I quote, I have brought nothing from China to offer you but the warmth of my heart and the good wishes of our people. May you achieve the great work that has been left as a trust to the entire nation by the great leader of your land, referring to Rabindranath Tagore, whom incidentally he did not have a chance to meet. These are again some more pictures of the visit. This is Pandit Nehru, Mahatma Gandhi, again Chiang Taufan, the member of the Central Executive Committee of the Kuomintang, and also China's Council General, CJ Pao, is seen in the picture. Again further pictures of Chiang Kai-shek and Madam Chiang Kai-shek in Calcutta, again their visit to the Birla House. They also subsequently visited New Delhi, and in this picture you can see Madam Chiang Kai-shek with the voice-roy, and in the backdrop you can see Chiang Kai-shek with Lady Linlind Kao. One of the interesting aspects of this Delhi visit, the Delhi leg of their journey after they had arrived in Calcutta, was Madam Chiang Kai-shek's message to the Indian press, and I quote, War has to be fought not only with bullets and with artillery and aeroplanes, it has to be fought by the press. You have tremendous influence over the people. Voices die out, but the printed word seems to live on in the mind of the reader. I hope you will not take the easy way of writing the sensational, but the more fundamental and honest way of writing what you think the people should know in order to educate the mass opinion. That is my message to you. On the eve of his departure, again it was fascinating, even for me when I perused these documents, Chiang Kai-shek's message, there is a message by Chiang Kai-shek to the Indian people from the government house in Calcutta, and there is an English rendering of the same by Madam Chiang Kai-shek which was broadcast from the Calcutta station of all India Radio. And again, I'd like to quote, it clearly reveals the nationalist support for the Indian freedom movement, and this is Chiang Kai-shek's message. I sincerely hope and I confidently believe that our ally Great Britain, without waiting for any demands on the part of the people of India, will as speedily possible give them the real political power so that they may be in a position further to develop their spiritual and material strength and thus realize that their participation in the war is not merely an aid to the anti-aggression nations for securing victory, but also a turning point in their struggle for India's freedom. From an objective point of view, I'm of the opinion that this would be the wisest policy which will be down to the credit of the British Empire. India's support to the nationalist party against Japanese forces again can be gleaned from this very interesting letter from Mahatma Gandhi to Chiang Kai-shek which was published in 1942. And I'm quoting passages from that, hence the single quotes, where he, this is there for your perusal on the screen, where Gandhi clearly establishes India's position that whatever action I may recommend will be governed by the consideration that it should not injure China or encourage Japanese aggression in India or China, unquote. The ousted of the British in 1947 and the success of the Communist Revolution which forced the KMT to move to Taiwan, it changed the geopolitical circumstances which went on to shape the future, not just of India, China and Taiwan, but also the relationship between them. One of the factors was pure geography. So now you had a KMT which was farther by thousands of kilometers and the other factor is attributed by some of the scholars as a widening schism in the thought processes of the KMT leadership and the Indian National Congress, basically referring to the variance in Chiang Kai-shek's ambition to be the leader of the new post-war Asia versus Pandit Nehru's dream of an Asian federation. India's recognition of the PRC and subsequent support of its membership to the UN Security Council and India's position on that basically reflected this further widening of this schism and this is captured best in one of the editorials archived in Taiwan Review from 1954 which is quite acerbic on Nehru and describes him as and I'm again quoting passages from there as for the neutralists of whom Nehru is indisputably the most outstanding representative, they have always been laboring under the illusion that their national security can be ensured by humoring the Chinese communists as far as possible. Hence Nehru's fan-sitting attitude and the policy of appeasement pursued by Indian diplomats in the United Nations and at other international conferences. Nehru on his part unquestionably calculates that by fraternizing with the Chinese communists he will be able to earn Beijing's goodwill, increase India's security from communist aggression and continue his imaginary role as the leader or at least one of the leaders of the Asian peoples. India continues to adhere to the one China policy ever since and it is in this spirit that relations between India and Taiwan are actually conducted through the India Taipei Association based in Taipei. This is in the absence of formal diplomatic relations and the mandate as per the website is to promote bilateral economic, commercial, cultural, scientific and people-to-people exchanges and also provide counsellor and passport services. The counterpart in New Delhi is the Taipei Economic and Cultural Centre again which shares a similar mandate but which refers to the fact that TECC was created to provide counsellor services and a host of other functions similar to an embassy but that the current thrust is on trade, investment, scientific and cultural exchanges. So clearly you would appreciate that the partnership between India and Taiwan is situated in a maze of complex political factors. Given the core contestation of Taiwan's status in world affairs and given India's adherence to the one China policy it remains a more fragile partnership to pursue. However if you look at the bilateral economic interaction and I'll go into some detail into that trade remains in a band of 7 to 8 billion dollars annually and investment is a minuscule 1 to 1.5 billion dollars in a cumulative sense. So clearly their bilateral relationship belies the extraordinary position that both these economies actually occupy in world economic affairs. You would appreciate that Taiwan is the world's 12th largest trader in merchandise trade and India is the world's 4th largest exporter in commercial services. So clearly this sort of a partnership in the present economic indices belies the sort of extraordinary position that they occupy. It is here that I briefly want to bring your attention to the ECFA and the Economic Cooperation Framework Agreement that Taiwan signed with China in 2010. One of the first things is that this framework agreement it brought about a normalization in the ties between Taiwan and mainland China and it reflected what in IR theory falls into the securitization framework of the Copenhagen School. Basically under Li Tanghui and Chen Shui-Pien you had a series of economic policies which dissuaded over dependence on China whether it related to trade or whether it related to investment investment in high-tech sectors punitive action in case the Taishang circumvented restrictions and a series of other measures wherein the issue could be securitized if it was labeled as an existential threat to a designated reference object. In this case, economic interdependence and over dependence was designated as a threat to Taiwan. This clearly moves towards a phase of desecuritization when you move issues from emergency politics back to normal politics which is what happened why Ma Ying-jeou was vindicated in 2008 and 2012 so we clearly see a shift from securitization to desecuritization happening with the signing of the ECFA. There were real compulsions for Taiwan to actually sign the ECFA and we've gone into this in detail in the last talk but for the benefit of some of our friends who are here there were serious economic compulsions facing Taiwan at that time. You had a situation where Taiwan from the mid-1990s underwent a reorganization of its production structures such that its exports to China roughly 70-80% was all intermediate goods they were assembled and processed and then they would move on to their final outward destinations which was the US and Europe. With the 2008 financial crisis and subsequently the Eurozone debt crisis export demand tanked. Unemployment breached the 5% mark in Taiwan so this was clearly a situation which actually led to a severe contraction of Taiwanese trade. Parallel to this was the phenomenon of regional trading agreements being negotiated so you had a China ASEAN FTA you had a Korea ASEAN FTA you had a situation where competitors could now bring in their products for a zero tariff entry level into China but here was Taiwan which still continued to face a tariff barrier between 12 and 17%. So there was an economic exigency towards signing the ECFA that's the first point. There are several economic gains which are projected for the ECFA that Taiwan's GDP is set to rise between 1.7 and 1.85% on the optimistic side that it would generate employment to the tune of about 260,000 and that it would benefit some of the sunset industries like petrochemicals, machinery, transport and textiles but here I would like to focus more on the problem areas that could be identified with the way the post ECFA ecosystem seems to be shaping up and the first point is again vindicated in the reports which have been released by the Budget Centre Division of Taiwan's Legislature which points that post 2012 there seems to have been a reverse effect that seems to be emerging. Now if you look at the red line the topmost red line which indicates the trade surplus with China it is interesting to note that after 2010 after the ECFA was signed there is essentially a plateauing trend if not a downward trend post 2012 even the Budget Centre Division calls as a reverse effect which seems to emerge from the fact that wages are rising in China which is why if you look at the yellow line which is Taiwan's trade surplus with ASEAN seems to indicate that with or without the ECFA Taiwanese decision making as far as their exports is concerned seems to be moving to ASEAN and in no particular way seems to be related to any gains that are accruing from its trade with mainland China if at all the surplus seems to have gone down over time the other problem area which comes to mind is that accession to the WTO by both China and Taiwan with that it was assumed that that sort of conferred on China and Taiwan a bona fide equal status if you look at this map which as of 2013 reflects Taiwan's usage of the dispute settlement understanding under the WTO so Taiwan is party to 79 cases either as third party or as a respondent or in this case as a complainant and despite this you find that within the ECFA that political status of equality seems to have been downgraded with the Cross-Trade Economic Cooperation Committee or the CSEC which would now be responsible for negotiating conflicts that arise from the ECFA so instead of resorting to the WTO dispute settlement which Taiwan is doing now the focus of dispute settlement would move to the CSEC interestingly the notification of ECFA to the WTO as reported in the WTO's annual report of 2012 happens under the very curious category of preferential trading agreements which offer preferential treatment to the products of LDCs least developed countries and when I raised this matter with Dr. Tsai Ing-wen when she visited New Delhi in 2012 September she too noted that this was not a normal notification since neither China or Taiwan had exceeded to the WTO on the basis of LDC status the other aspect relating to the ECFA is about FDI flows again it was promoted that the ECFA would encourage investors to use Taiwan as a platform for further trade with China but interestingly if you look at the statistics relating to FDI inflows clearly post 2010 there is a drop in 2011 while it does pick up the outright trend is for FDI outflows from Taiwan so there has been no major inflow of FDI which has occurred in Taiwan post ECFA which could actually give some sort of evidence that Taiwan is being increasingly used by the Koreans or Japanese because the Taiwanese know China better more than anyone else that doesn't seem to be happening even with regard to employment generation it's interesting to note that while the arrival of about 1.7 million Chinese tourists and investment of about 300 million dollars from China has boosted economic growth to an extent and in some of the sectors which I mentioned machinery, transportation and textiles but it's interesting to note that most of the employment generation has been due to the key engine of Taiwan's own economic growth which is the services sector and again it's interesting that post 2010 there is no drastic improvement in the unemployment rates which have remained between 4.1% to 4.25% throughout the period that we examine and again the employment generation for 2013 the additional employment generation in the services sector was 83,000 compared to employment generation in manufacturing which was 35,000 and in agriculture actually employment declined by 2,000 and clearly employment generation in services cannot be directly linked to the ECFA because services was clearly not the piece de résistance of the ECFA agreement it was mostly goods and primarily 800 products 540-year-old products from Taiwan and 270-year-old products from China so this is again an interesting problem area that one is able to pick up from the post ECFA ecosystem and the way it is developing if we were to operationalize this normalization of ties between China and Taiwan as it is happening under the mind you'll let KMT the game in IR theory that best reflects the payoffs for both mainland China and Taiwan is the game of stag hunt now stag hunt is the game where there are two hunters if they cooperate they could actually hunt the bigger meat which gives them the bigger payoff which is the stag and if anyone chooses to break away and act alone they would end up hunting the hair which is the lower payoff of mainland China-Taiwan relations we can define it in terms of two main strategies the managing status quo strategy which is the equivalent of hunting for the stag since it yields a bigger payoff and it comes from the complicated task of managing peace and the other which came to hunting for the hair is the changing status quo outcome which yields a lower payoff eventually though there are two Nash Equilibrium the one with the risk ends up with a lower payoff eventually now interestingly the changing status quo outcome or strategy is not just attributable to the red lines that the DPP or the Taiwan Solidarity Union are accused of breaching if we study the schema on securitization further we find that increasingly if the narrative of cross-strait relations moves towards a security a security being defined as conceptualization of cross-strait ties wherein even the question of survival is incontested that is when the status quo changing outcome attributable to the KMT would be evident clearly then one of the important dimensions clearly then one of the important dimensions of this managing status quo strategy is the expectation the projected expectation that the ECFA will actually allow Taiwan to sign other economic cooperation agreements with different partners now it is here precisely using this particular policy space that we find that the economic partnership between India and Taiwan is an excellent test case avenue to actually evaluate the promised gains from the ECFA if we look at bilateral trade between India and Taiwan again as I mentioned it remains in a band of 7 to 8 billion dollars for the last fiscal year the interesting thing to observe is that it's actually in the DPP regime that the trade between India and Taiwan actually picks up sharply post-2000 if we look at the salience of India-Taiwan trade in India's overall trade again the vertical bars they reflect the percentage that India-Taiwan trade comprises in India's overall trade so in India's overall trade which as a last fiscal was about 700 billion dollars India-Taiwan trade is roughly 1% similar is the case for Taiwan so the salience is not that impressive if we look at India's top exports again the composition of exports is mineral fuels iron and steel, organic chemicals cotton and zinc and Taiwanese exports comprise electrical machinery nuclear reactors, mechanical appliances culture at pearls semi-precious stones pretty much in line with Taiwan's comparative advantage in high tech manufacturing if we look at the investment patterns again there are about 80 Taiwanese companies which are invested in India 90% of Taiwanese investment if we look at the black dots 90% of Taiwanese investment has been concentrated in these four states Tamil Nadu to your which is on India's south east coast Maharashtra, further up Gujarat Midwest and Delhi up north these are the four states 90% of Taiwan's investment is located you are looking at a cumulative investment size of 800 million to 1.5 billion dollars which is extremely minuscule companies like Honhai, Kompal, Vintek are major suppliers to Nokia and Motorola in India and the assortment of companies also includes companies like Apache and Fanzai which are basically suppliers to footwear manufacturers like Adidas and Nike there is also an interesting collaboration between Taiwan's 3C's retail chains the computer communication and consumer electronics retail chains who operate in collaboration with Indian retail chains like Chroma which is a huge retail giant in India two recent, the green dots they indicate recent big ticket big ticket investments and of these the two big ticket investments have been China's synthetic rubber which invested about 330 million US dollars in Andhra Pradesh and China's steel which invested about 200 million in Gujarat overlapping with the black dot and this is interesting because this picture is from the foundation laying ceremony of the Taiwan Formosa industrial park which is again a property earmarked in Andhra Pradesh which would bring over around 70 new Taiwanese companies for them to set shop in India and the Taiwanese have also been offered two sites in Karnataka which is the green dot on the southwest again where property has been offered to them where 30% of the township would be reserved for electronics industries and the rest would be for residential purposes in terms of important Taiwanese brands which are recognized instantly in India Acer, ASUS, D-Link and HTC are the major brands and one of the last entrants in India was Chaatime which brought bubble tea to India for half a pound if we look at industrial distribution of investment again the Taiwanese seem to be investing more in resource seeking so the investment seems to be in the fabricated and metal manufacturing sector mining and quarrying, real estate followed then by a market seeking model where they look at computer electronics and optical manufacturing and Indian investment which is extremely miniscule of about 45 million US dollars remains in Taiwan's key area of strength which is information and communication technology and split equally roughly equally between wholesale trade and professional services FDI equity flows over the last decade again much of the equity flow has been in the service sector the Taiwanese do not seem to be investing that much in real manufacturing in India and the service sector is again dominated by China Airlines for instance the China Trust Bank the computer software industry of course has a competitive advantage an area of India's competitive advantage the construction and infrastructure industry again where companies like the Continental Engineering Corporation they have participated in a reasonable way in India so basically the sum and substance is that the investment levels have not picked up in the last decade of all cumulated FDI inflow, Taiwanese investment 0.04% this is as of February 2013 cumulated for the last decade and India's outgoing investment remains miniscule at 0.03% in terms of the kind of institutional arrangements in place to promote this economic partnership one of the main agencies for promoting this is the Taiwan External Trade Development Council the TITRA which is a non-profit trade organization under the Ministry of Economic Affairs and one of the flagship initiatives pursued by TITRA in India has been the MR Expo which is into its sixth year which basically looks at bringing electronics, machinery, molds and auto-part manufacturers into touch with other businesses Indian, it's a B2B platform business to business platform apart from this there are trade missions which regularly visit India particularly in the last few years and in October this year the World Chamber of Commerce in India was constituted by integrating the three existing chambers of commerce in New Delhi, Mumbai and Chennai there are two nodal agencies the Chumhua Institution for Economic Research in Taipei and the Indian Council for Research on International Economic Relations IKRI in New Delhi which have been assigned with the task of bringing out a joint study on the feasibility of an FTA between the two countries based on my again interviews in Taipei the key challenges that the Taiwanese face in India the first relates to differences in culture and language the cultural gap it was pointed out had led to many Taiwanese companies recruiting middle level Chinese managers and sending them from China to India this was an interesting observation that due to the cultural gap they would rather send middle level managers from China to take care of their Taiwan operations in India since relocation by Taiwanese managers was proving challenging the other factor was the other challenge was the absence of an accompanying ecosystem which is available to Korean and Japanese companies basically these companies which tend to cluster together that sort of an ecosystem primarily they were referring to the absence of karaoke and food the third challenge again was interesting was that they faced the challenge of higher cost for services especially skilled labor this was interesting for me because they pointed out that Taiwanese companies do have an experience in operating in difficult circumstances difficult circumstances according to them was citing the availability of Myanmar where they use low cost labor but they said that the cost of business consulting in India was actually even more in terms of man hour charges in India compared to even Taiwan so that was one challenge that they faced the other challenge was corruption again it was fascinating because the argument was that corruption not only is it unpredictable but they don't know how much it's related to whom but also it could go unproductive so whoever takes it maybe does not even perform which incidentally in China Guanxi works very well for them the last challenge was again related to complicated taxation rules between states in India which raises operational costs while operating in India now some of the challenges and you would appreciate that for instance those related to food or even karaoke and basically relating to the social environment some of these are actually excellent business propositions for the Taiwanese themselves in the food and hospitality industry which services is what drives the Taiwanese economy and if pursued by the Taiwanese government as an active strategy of clustering in India I think some of these challenges are not that insurmountable but of course many of the challenges relating to corruption and the complicated taxation rules and in general the lack of openness and transparency of course India needs to do a lot to address those challenges what are the areas of fitment in terms of a natural complementarity again as we noted in the beginning India accounts for roughly one fifth amongst the world's major exporters of computer and information services now this is interesting because what this directly means is that as far as its manufacture of electronic goods and hardware is concerned India actually does not do that well it actually relies up to about 60% for up to about 60% of its demand for electronic components especially in integrated circuits chip components and LEDs primarily on China Taiwan, South Korea, Japan and a few European countries manufacturing electronics is extremely weak which is Taiwan's basic strong point added to this is the fact that again an important point relating to projected demand the projected demand in India for 2020 is about 400 billion and based on the current domestic production capacity India will only be able to meet one fourth of it so that actually means market size of 300 billion US dollars which actually offers a complimentary fit to Taiwan's areas of comparative advantage added to this is the incremental and exponential demand in India which is expected by the rolling out of 3G services, Ymax, 4G bringing broadband services to rural areas digitization of public television the internet based growing to about 200 million subscribers by 2014 which means that there would be further demand for more personal computers, notebook computers smartphones, laptops so clearly this is one area which offers an excellent complimentary fit another interesting aspect of India's advantage in the IT services sector is that in the electronic sector the small and medium enterprises in India you would appreciate that only 20% of the 50 million small and medium enterprises actually have a technology ready status even for basic computing machines so it's only about 20% of India's small scale and medium enterprises which are actually technology ready that further gives more exponential business opportunities for the for the Taiwanese if electronics and IT manufacturing is brought into focus clearly that stands out as an excellent avenue this is also supported by the policy environment and the two policies in this regard is the national policy on electronics which again envisages investment of about 100 billion and a national manufacturing policy which aims to raise the share of manufacturing in India to about 25% by 2025 and in a process create 100 million new jobs now what is interesting is that not just this is an opportunity for Taiwan in terms of market size but also the lack of brands that Taiwanese companies face in terms of their export model of being original equipment manufacturers in China as part of the global value chain India offers a fertile market for them of actually building brands because that's an excellent market which they haven't yet explored added to this is the other dimension that 60% of India's working age population between 15 and 59 years actually India needs to create jobs over 200 million jobs and because manufacturing is not particularly strong this is actually a manufacturing of electronics and IT hardware is an area which offers the perfect complementarity for both economies to cooperate again these two policies are dealt in greater detail in my book so the next aspect that I'd like to bring your attention to is the avenues for cultural and social exchange between both countries again the picture above was the celebration of Diwali a festival at National Qinghua University and again Bollywood is also quite popular in Taipei and it was brought to my notice that there were about 200 Indian families which were settled in Taiwan in the 1970s and these were basically Sindhi traders the Sindhi trading community which used to procure materials from the greater China region and then trade with China but after the 1990s it was again even in my discussion with Professor Thien Hung Mao he said that after the mid 1990s the trend of relocation of Taiwanese manufacturing to China meant that most of these families also relocated to Guangzhou so there are about 40 or 50 of these families left the main category is of professionals industrial and academic research in biotechnology, chemistry and materials technology and the other group is of Indian precious stone traders who supply to Taiwanese jewelers and again there are some JN families also which are based in Taiwan, basically the Indians are located in Taipei Shinchu, Thainan and Taoyuan and going by the National Immigration Agency statistics on long-term Indian residents which is basically the visa category of 6 months and above there are about 1900 long-term Indian residents which fails according to about 2.9 million foreigners so the level of social and cultural interaction is also not much, there are about 500 Indian students who are studying in Taiwan and the number of Taiwanese studying in India I could not put an exact figure to it based on the sources available in terms of tourism again based on Taiwan's per capita outcomes there is a great number of outbound tourism which happens from Taiwan and out of the 8.6 million Taiwanese only 23,900 of them chose to actually go to India which is very dismal, only 0.2% of them choose India as a destination, similarly of all the Indian outbound departures roughly about 11 million only about 18,000 end up in Taiwan so clearly the level of social and cultural exchange even in the area of tourism performs poorly as far as their government's initiative is concerned on the subject of Taiwan studies India studies in Taiwan again there is an India studies group at the Institute of International Relations at Chengchua Tashway which is the campus when you go further up on Wan Shou Lu opposite to Chengchua Tashway's main gate there you have an India studies group you also have an India studies group at Qinghua Tashway and then India studies then remains largely dependent on the availability of academic supervisors so at Chengchua Tashway in Taichung like Chen Moomin who actually take an active interest in India studies the subject matter of Taiwan's political system or cross-strait relations in India is largely subsumed under the China studies departments at top universities like Javaharlal Nehru University or Delhi University and more recently there is an encouraging trend of Taiwan education centers being set up so there are four Taiwan education centers which have been set up one is at Jamia University in New Delhi and at two other universities on the outskirts of New Delhi Amity University and Jindal University and the most recent Taiwan education center was set up at my university the IIT which brings the number of Taiwan education centers to four in India again this education again I mentioned this is because with over 160 universities in Taiwan so for actually I assume that on a per square kilometer basis this must be the highest density of universities in Taiwan and with an increasingly aging population it would make even business sense for a greater collaboration between both countries because roughly about half a million Indians travel abroad annually for education they travel basically to Australia for deep education for UK and the US are the other destinations so this is also an interesting business proposition that remains to be explored and then in terms of another sort of future policy re-alignment it was interesting to note that Taiwan Japanese joint ventures they actually show a higher survival rate in China when you compare it to Japanese companies operating on a wholly owned basis it has been pointed out in several studies that the efficiency of Taiwanese managers A is noted and B of course the Japanese they want to protect intellectual property so they would rather let the networks remain in closed clusters comprising Taiwanese and Koreans and Professor Tian Hu Ma pointed out that this was due to the complex psychology what he calls the complex psychology of the Chinese worker who may work much more efficiently under the Taiwanese manager than compared to a Japanese management line so this he said was being increasingly used by Japanese companies to actually forge collaborations with Taiwanese companies and operate in China and the argument for role reversal assumes that because Japan has been a participant in the Indian economic growth story over a longer period of time and contributes over 10% of the accumulated FDI that comes into India there is a very strong case for such a role reversal where Taiwanese companies could make inroads into India by co-partnering with Japanese companies because they already do it in the case of Singapore International Enterprise IE is the government agency in Singapore which actually drives Singapore's external trade and TITRA and IE already have co-organized forums to actually operate in India so clearly co-partnering and a role reversal as far as Taiwan Japanese collaborations is concerned would be a useful strategy and I have referred to some of the case studies in the book dealing with supply of liquefied natural gas in Kerala the Delhi Metro project where China Engineering Consultants in Cooperation has actually constructed several metro stations in New Delhi and they've also won contracts for one segment of Bangalore metro rail and as well as the Delhi Mumbai industrial corridor which is a huge project where the Japanese have picked up a 26% equity so different sectors have been discussed in detail where such co-partnering the major point is that such co-partnering should increasingly be encouraged between Taiwanese and Japanese companies development of infrastructure is one point where India is set to leapfrog in the coming years the government allocation for this between 2012 and 2017 is one trillion US dollars so this is an area which again offers an excellent avenue for huge Taiwanese engineering firms to actually participate in the Indian growth story this contrasts extremely poorly when you look at 80,000 Taiwanese companies invested in mainland China and 80 companies invested in India an investment size of 100 billion this is the official figure of Taiwanese investment the unofficial figure could be as much as three times the amount and accumulated investment of roughly around 1 billion dollars in India so clearly there is a huge amount of huge distance to be covered but the complementarity in its natural form does exist in this partnership for India the caveat lies in the maintenance of a fine balance between articulation and practice of its one China policy because its partnership with China is equally important and the policy space which is available to India between its articulation of the one China policy is primarily the space that emerges from the lack of a one China consensus so as long as there is a lack of consensus on what one China means there is some policy space for India to actually sincerely pursue this partnership further and in many ways like I mentioned in the beginning the India-Taiwan partnership would be a test case avenue for the expected gains from the ECFA because ECFA allows ostensibly Taiwan to sign economic cooperation framework agreements with other countries so in a way the success of Taiwan's partnership with India as also its success with New Zealand or Singapore would ultimately I believe shape the evolution within Taiwan of the kind of consensus that emerges from a desecuritized conceptualization of cross-strait ties so with this I would rest my case and thank you for your time and attention there were many things that crossed my mind as I was listening to your presentation one of them of course is to what extent has the mainland China, the PRC has it been uncomfortable with this closer Taiwan India relations because of course as we know China-India relations there is quite severe tension on a number of issues and we have had a number of quite important high level visits in ancient Taiwan visiting with Delhi in 2011 or after the election and of course mind you I think made a visit to India in 2012 or 2011 2011 right ok so that was one thing that crossed my mind and the second one was to what extent does do the overseas Chinese in India play a role in Taiwan-India relations I think there is a significant overseas Chinese population in India do they tend to have closer allegiance to Taiwan or to Beijing and do they play an important role in these international relations there were a couple of things that crossed my mind right India makes a deliberate effort to stress on its adherence to the one China policy again it is because of that that we do not have diplomatic relations with Taiwan and yet it appears that whenever there are these visits by Taiwanese leaders the matter of protocol becomes extremely important so you find a situation for instance during Dr. Tsai Ing-Wen's visit you had the instance where the venue for the talk was initially designated as Indian Council of World Affairs which is again considered to be a think tank of the Ministry of External Affairs and just a day before the talk the talk venue was actually shifted to another neutral venue so the issues of protocol keep coming up it's been a recurrent theme that India surely does not want to upset its largest trading partner which is China so the delegation visits whenever they happen the issue of protocol is where most of this irritability comes up between both countries and as for the overseas Chinese this is an area which I personally am not based on my current work but I haven't actually looked at the sort of perceptions they carry in terms of their movement largely from such one and Yunnan historically so this is an area I would sort of reserve my comment yeah Charles for your presentation which was very fascinating and I have two questions first one I will follow there is a question about the visibility of the FTA between Taiwan and India and I agree with you that that would be a good example for us to to examine the economic strategy that Mein Joe has taken since his first presidency and for your presentation we can wow it's very persuasive for me at least lots of opportunities and very poor performance so far and lots of potentials for Taiwanese companies to to take so my first question is how long it would take if you in your expectation that's for Taiwan and India to sign this FTA this Beijing Chinese government has ever do any substantial action to to protest or to stop this progress that's my first question and the second question is about also the topic you mentioned the one China policy and I also in earlier this year I think it's about in May Chinese premier visit India and they were supposed to well of course they made a joint statement according to the history it's supposed to contain the one China policy as a term in that joint statement but this time they failed to do so so that's very unique case and so people will wonder why for the first time for the India government reject to put one China policy in its joint statement with China and we know there is a territorial dispute between India and China and one China policy is is a leverage it looks like a leverage which concerns about the Taiwan issue so is there any potential links between these behind India's one China policy thank you this feasibility study which you mentioned between India and Taiwan this was actually thank you this was actually assigned by the nodal agencies which I mentioned the Chunhua Institution for Economic Research and Ikhria in New Delhi this was assigned in 2010 they were supposed to bring out a report which they brought out in September this year and interestingly again would it you mentioned that would it actually irritate China the publisher is a neutral publisher it is not being published by the government agency it is something called the academy press which brought out this report so clearly as I mentioned the relationship between India and Taiwan is again situated in this maze of complex political factors so you have a joint study report but which is not published by a government agency but with a neutral sort of academic publisher so that's as far as the feasibility study is concerned because this does not involve any government agency neither the ministry of commerce so the Chinese reaction as yet on the feasibility study the first question that you raised has not been forecoming and again the publisher as I said is not a government publisher so I just think that there is no protest so far so far on the joint study on the joint study there has been no protest and if you ask me what is the content of the joint study again the content of the joint study is that Taiwan has not been investing in core manufacturing in India the other side Indian manufacturers can they sell to Taiwan they actually feel I'm quoting now from the parts of the report which I refer to this particular joint study which came out in September the Indian manufacturers feel that the Taiwanese market is already saturated so there is nothing more that they could actually export to Taiwan but they hope that Taiwan like it uses China to export to third destinations like it uses ASEAN to export to third destinations Taiwan can actually start using India to export to third destinations so my question is so far it is a feasibility research so it is okay and it is not published by an official institution but for the next step potential critical obstacles for this in the future that's a good question and the reason that this question has to be answered by the KMT is that the ECFA has actually promised that Taiwan would be in a position to sign economic cooperation agreements with other countries now the economic logic of this partnership has been established fairly well both through the economic indices the joint study report does not negate any of the complementarity which has been drawn out but the political will which is required to sign the economic cooperation agreement whether Taiwan would be willing not only just internal reform but actually the political will to sign the agreement and take it to the extent of an economic cooperation agreement if not an FDA an FDA maybe in terms of the protocol may not be viable but whether it actually takes it to an economic cooperation agreement is something that the Taiwanese government equally has to take a call on whether the economic logic exists I established a brief point that yes the economic logic strongly exists given India's weaknesses and the demand that exists and the strengths that India offers the economic logic exists but will the political process follow through that's something we need to wait and why was the last part of your question why was the one China policy not reiterated I think that has more to do with the visa issues which kept coming up for participants from Arunachal Pradesh whenever leaders or officials or sports person from Arunachal Pradesh required to travel to China China issues them visas which are not pasted inside the passport but which are stapled onto the black back flap the back flap of the passport indicating that it is a disputed territory which India does not consider it as a disputed territory that is an outstanding issue on which I do not have to take. That's very interesting part because the dispute is between India and China but you refuse to reiterate the one China policy which concerns about Taiwan so that's where comes my question one China policy also is applicable with respect to Tibet so the Indian position of reiterating or not part of one China policy in most of the MOUs which are signed and the declarations which are made the initial focus of the Chinese as well on India reiterating Tibet being a part of China that was the major requirement but I think it's also a nuanced stand by India that does not require reiteration because of what we call constant pinpricking along the line of control by the Chinese on the other side that's more or less related to the Tibet issue and not just confined to the one issue but it's so open-ended that it does not require reiteration that's a diplomatic position that India wants to take so that's as far as the one China policy is concerned