World Economic Forum (WEF), Geneva, Switzerland, released The Global Competitiveness Report 2018 on October 17, 2018.  This report surveyed 140 global economies.  The ranking are calculated from both publicly available data and the Executive Opinion Survey.  The United States, Singapore, Germany, Switzerland, Japan, Netherlands, Hong Kong, United Kingdom, Sweden, and Denmark are the top ten of the world’s most competitive economies.    In Asia, Taiwan ranked 13 (15 last year), behind Singapore, Japan, and Hong Kong; while South Korea and China ranked 15 and 28 respectively.   Ranking is based on the score of GCI.  This year WEF introduced the new Global Competitiveness Index 4.0, a much-needed economic compass, building on 40years of experience in benchmarking the drivers of long-term competitiveness. According to WEF, the index integrates well-established aspects with new and emerging levers that drive productivity and growth.    GCI is the average score of four general categories (Enabling Environment, Human Capital, Markets and Innovation Ecosystem).   It consists of 12 pillars (Institutions, Infrastructure, ICT adoption, Macroeconomic stability, Health, Skills, Product market, Labor market, Financial system, Market size, Business dynamism and Innovation capability). Taiwan received high ranking in macro-economic stability (1), innovation capability (4) and financial system (7).    Two worst rankings are health (27) and institutions (25).  There are a total of 98 items to be considered for evaluation.  WEF also provided scores and ranking for all 98 items.  In addition to scores, WEF showed  five selected contextual indicators: Population: 23.6 millions, GDP (PPP)% world GDP: 0.93, GDP per capita US$ 24,576.7, 5-year average FDI inward flow % GDP: 0.8, 10-year average annual GDP growth %: 2.6.

Institute for Taiwanese Studies (ITS) will host a symposium titled “A review of current vital Taiwan-US relation issues & midterm elections in Taiwan and US” on November 3, 2018. The afternoon events will feature four speakers with in-depth analysis of different topics. Dr. Kharis Ali Templeman, research scholar from Stanford University, will present his view on Tsai Administration’s performance.  The topic is “Up. Down, or Out? : Evaluating the Tsai Administration’s accomplishments at midterm”.  “What is the US role in the Taiwan Strait?” will be the topic of Derek Grossman, senior defense analyst, Rand Corp..  The second part of the event will focus on midterm elections.  The analysis of upcoming Taiwan’s midterm elections will be presented by Dr. Simon Lin, former chairman, The Great Los Angeles Taiwan Center.  The fourth speaker will be Adolf Huang, president, ITS.  He will touch on November US midterm elections.   Wencheng Lin, chairman, ITS, will moderate the discussion.  The event is open to the public from 1:30pm to 5pm at LA Taiwan Center, 3001 Walnut Grove Ave. , Rosemead, CA.

President Tsai Ing-wen delivered her address toward the crowd during the ceremony of Taiwan’s national day on October 10, 2018. Tsai emphasized the government will continue to safeguard Taiwan, maintain stability across the Taiwan Strait and ensure the country’s sustainability. The following is the highlight of her speech, titled ‘Democratic Taiwan lights up the world”.

In the past year, all countries have been tested by the changing international landscape, and Taiwan is no exception. The government is constantly looking for opportunities within these challenges, and our country’s optimal strategic position and path to the future in a changing world.   The US-China trade dispute has led to a restructuring of the global industrial division of labor, with repercussion for the existing economic and trade war.  For some time now, China’s unilateral diplomatic offensive and military coercion have not only harmed cross-strait relations.  They have also seriously challenged the status quo of peace and stability in the Taiwan Strait.  The more dramatically things change, the more Taiwan has to maintain stability, remain composed to reduce pressure, and calmly find our survival niche.   The people of Taiwan will never accept any attempt by external forces to unilaterally change the cross-strait status quo.  And the international community will never approve of and support the violation of universal values.  Son once again, I am calling on the authorities in Beijing, as a responsible major power, to play a positive role in the region and the world, instead of being a source of conflict.  In a world of dramatic change, we will continue to make Taiwan stronger, and irreplaceable in the global community.  

Current challenges to our national security go beyond traditional defense and military security.   Diplomatic pressure, social infiltration, and economic security are all potential threats.  Our current priority is to formulate an overall strategy, and bolster our national security.   The first element in fortifying our national security is to strengthen value-based diplomatic links.    The second is to upgrade our national defense capabilities.  The third is to prevent foreign powers from infiltrating and subverting our society.  The fourth is to realign and rearrange our global economic and trade strategy.  We have always believed that our distinctive resilience allows Taiwanese to respond to never-ending internal and external challenges by coming together to make this country better.

Senators Cory Gardner (R-CO), Ed Markey (D-MA), Marco Rubio (R-FL), and Bob Menendez (R-NJ) introduced the “Taiwan Allies International Protection and Enhancement Initiative (Taipei) Act” on September 3, 2018.  According to the press release from Gardner’s office, this legislation (Taipei Act) is intended to strengthen Taiwan’s standing around the world and comes in response to several nations breaking official diplomatic ties with Taiwan, due to Chinese pressure and bullying tactics.  The Taipei Act requires a U.S. strategy to engage with governments around the world to support Taiwan’s diplomatic recognition or strengthening unofficial ties with Taiwan.   Since president Tsai took office in May 2016, several countries have switched diplomatic recognition to Beijing.  These countries are Sao Tome and Principe, Panama, Dominican, Burkina Faso and El Salvador.   China’s actions clearly violated the so called “Status Quote”, an unofficial agreement of cease-fire on independent movement, unificationthreat, no military attack and no changes of diplomatic partners.    The Taipei Act authorizes US Department of State to downgrade US relations with any government that takes adverse action regarding Taiwan, including suspending or altering foreign assistance, such as military financing.   Senator Gardner said “The United States will use every tool to support Taiwan’s standing on the international stage.   This bipartisan legislation demands a whole-of-government approach to stand up to China’s bullying tactics against Taiwan, and will send a strong message to those nations considering siding with China over Taiwan that there will be consequences for such actions”.    Senator Markey said “Beijing is promising paydays to governments to entice them to cut diplomatic relations with Taiwan.  Without a coherent U.S. strategy to push back, Taiwan’s official partners might drop from 17 to zero.  We must stand up for our friends in Taiwan”.    Senator Rubio said “China’s insidious agenda to isolate Taiwan cannot go unanswered, and I call on my colleagues to quickly pass this bill”.   Senator Menendez said “As Taiwan’s closest international partner, the United States must not waiver on our enduring commitment to the wellbeing of the people of Taiwan, to their security through diplomacy, and to their ability to defend and protect their future”.  In response to the legislation, Taiwan’s Ministry of Foreign Affairs and Presidential Office expressed gratitude for the senators’ long-term support.

The USC US-China Institute hosted a panel discussion “A time of uncertainty in US-Taiwan-China relations” on August 24.  Panel I had three speakers: Tom Hollihan on “Chaos and Disorder: Foreign Policy in the Trump Era”; Charles I-hsin Chen “The Last Link in the Cross-Strait Chain” and Stanley Rosen on “China’s Soft Power Efforts toward Taiwan”.   Derek Grossman and Kwei-bo Huang joined the second panel.   Grossman’s topic is “How serious are Beijing’s threat?’, while Chen talked about “Love from the US: How should Taiwan understand the support of the US?”   Clayton Dube moderated the sessions.

On August 1, the U.S. Senate passed its final version of the National Defense Authorization Act (NDAA) for the fiscal year of 2019, which includes several provisions to improve Taiwan's defense capabilities to counter China's increasing military muscle.  The NDAA sailed through the Senate 87-10, a week after the House passed an identical version of the bill on July 26.  On August 13, U.S. President Trump signed the US$716 billion National Defense Authorization Act (NDAA) for the fiscal year of 2019.  The NDAA, officially now known as the John S. McCain National Defense Authorization Act for fiscal 2019, for ailing Senator John McCain.  The final version of bill contains two sections (Section 1257 and Section 1258) requiring a strengthening of Taiwan’s defense and expanding cooperation between US and Taiwan..

The followings are the full texts of Section 1257 and Section 1258:

SEC. 1257. STRENGTHENING TAIWAN’S FORCE READINESS.

(a) Defense Assessment.—The Secretary of Defense shall, in consultation with appropriate counterparts of Taiwan, conduct a comprehensive assessment of Taiwan’s military forces, particularly Taiwan’s reserves. The assessment shall provide recommendations to improve the efficiency, effectiveness, readiness, and resilience of Taiwan’s self-defense capability in the following areas:

(1) Personnel management and force development, particularly reserve forces.

(2) Recruitment, training, and military programs.

(3) Command, control, communications and intelligence.

(4) Technology research and development.

(5) Defense article procurement and logistics.

(6) Strategic planning and resource management.

(b) Report Required.—

(1) IN GENERAL.—Not later than 1 year after the date of the enactment of this Act, the Secretary of Defense, in consultation with the Secretary of State, shall submit to the appropriate congressional committees a report containing each of the following:

(A) A summary of the assessment conducted pursuant to subsection (a).

(B) A list of any recommendations resulting from such assessment.

(C) A plan for the United States, including by using appropriate security cooperation authorities, to—

(i) facilitate any relevant recommendations from such list;

(ii) expand senior military-to-military engagement and joint training by the United States Armed Forces with the military of Taiwan; and

(iii) support United States foreign military sales and other equipment transfers to Taiwan, particularly for developing asymmetric warfare capabilities.

(2) APPROPRIATE SECURITY COOPERATION AUTHORITIES.—For purposes of the plan described in paragraph (1)(C), the term “appropriate security cooperation authorities” means—

(A) section 311 of title 10, United States Code (relating to exchange of defense personnel);

(B) section 332 such title (relating to defense institution building); and

(C) other security cooperation authorities under chapter 16 of such title.

(3) APPROPRIATE CONGRESSIONAL COMMITTEES.—In this subsection, the term “appropriate congressional committees” means—

(A) the congressional defense committees; and

(B) the Committee on Foreign Relations of the Senate and the Committee on Foreign Affairs of the House of Representatives

SEC. 1258. SENSE OF CONGRESS ON TAIWAN.

It is the sense of Congress that—

(1) the Taiwan Relations Act (22 U.S.C. 3301 et seq.) and the “Six Assurances” are both cornerstones of United States relations with Taiwan;

(2) the United States should strengthen defense and security cooperation with Taiwan to support the development of capable, ready, and modern defense forces necessary for Taiwan to maintain a sufficient self-defense capability;

(3) the United States should strongly support the acquisition by Taiwan of defensive weapons through foreign military sales, direct commercial sales, and industrial cooperation, with a particular emphasis on asymmetric warfare and undersea warfare capabilities, consistent with the Taiwan Relations Act;

(4) the United States should improve the predictability of arms sales to Taiwan by ensuring timely review of and response to requests of Taiwan for defense articles and defense services;

(5) the Secretary of Defense should promote Department of Defense policies concerning exchanges that enhance the security of Taiwan, including—

(A) opportunities for practical training and military exercises with Taiwan; and

(B) exchanges between senior defense officials and general officers of the United States and Taiwan consistent with the Taiwan Travel Act (Public Law 115–135);

(6) the United States and Taiwan should expand cooperation in humanitarian assistance and disaster relief; and

(7) the Secretary of Defense should consider supporting the visit of a United States hospital ship to Taiwan as part of the annual “Pacific Partnership” mission in order to improve disaster response planning and preparedness as well as to strengthen cooperation between the United States and Taiwan.

The American Enterprise Institute (AEI) held an event to celebrate the release of Michal Mazza’s report “Am American Strategy for Southeast Asia” on August 7, 2018.     The organizer invited three panelists (Cara Abercrombie, Walter Lohman, and Michael Mazza) to discuss how the US can implement a new vision for a free and prosperous indo-Pacific.    The panel was moderated by Dan Blumenthal.  Before panel discussion, Randall Schriver, Assistant Secretary of Defense for Asian and Pacific Security, delivered a keynote speech.     The following is an event description provided by AEI: “In the wake of the “trade war” with China and drama on the Korean Peninsula, Southeast Asia often escapes notice.  But this vital corner of the world cannot become a sideshow.   Certainly, Southeast Asia’s tremendous economic and strategic potential is not lost on China, which has tried to bring the region under its influence.  And Chinese aggression is only the start; terrorism and democratic backsliding also threaten the region.  The need for strong partnership in Southeast Asia has never been greater.”    Shriver opened with an overview of the United States’ strategy in the Indo-Pacific region and how the Department of Defense’ efforts were crucial to a “free and open” region.   Mazza emphasized the importance of an open, peaceful, and prosperous Southeast Asia that demonstrates good governance.     Blumenthal said that ultimately, the United States will need to compete with Chine4se influence in the region.

The Heritage Foundation held a one-day conference titled “Opportunities and Challenges of Cross-Strait Relations” on July 18, 2018.   The conference was co-hosted by Taiwan Foundation for Democracy.     As described by the organizer, “Relations between Taiwan and China over the last couple of years have been very challenging.   China is very actively challenging Taiwan across the range of its national power, conducting military exercises off its coasts, pulling away its diplomatic allies, barring its meaningful participation in international organizations.  What is the impetus behind this new aggressive approach and where is it headed?  What can Taiwan and its friends and allies due to mitigate the pressure on it?”  During the full-day session, the organizer invited 18 experts (7 from Taiwan) to present their views in three panels and roundtable.  In addition, the morning keynote was presented by Chen ming-tong. Mainland Affairs Council Minister, Taiwan; Luncheon keynote by Representative Ted Yoho, Chairman, Subcommittee on Asia and the Pacific, House Committee on Foreign Affairs, and the afternoon keynote by Randy Schriver, Assistant Secretary of Defense for Asia and Pacific Security Affairs.  The topics for each panel are: Panel I “China under Xi Jinping”; Panel II “US-China Relations: Implications for Taiwan’s Security and Democr5acy”; and Panel III: “Cross-Strait Relations and Strategic Impact”.

The Center for Strategic and International Studies (CSIS) hosted the Eighth Annual South China Sea Conference on July 26, 2018.   This full-day conference included four pane discussions: Panel I: State of Play in the South China Sea over the past year; Panel II : Dispute Resolution in the South China Sea and Beyond; Panel III: Environmental Issues in the South China Sea: Panel IV: The Military Balance in the South China Sea.   The speakers for the first panel are Bill Hayton, Colin Willett, Sumathy Permal, Feng Zhang and Amy Searight (moderator, CSIS).  The second panel include Commodore Lalit Kapur, Charles I-Hsin Chen, Bec Strating, and Thanh Hai Do as panelists; and was moderated by Gregory Poling (CSIS). Brain Harding (CSIS) moderated the third panel with 4 panelists (Vo Si Tuan, Carmen Ablan Lagman, Rashid Sumaila and Mark Powell).   Andrew Shearer (CSIS) moderated the last panel with 4 speakers: Collin Koh Swee Lean, Hideshi Tokuchi, Richard Heydarian, and Bonnie Glaser.   The high lights of the conference were the morning Keynote delivered by Representative Ted Yoho and lunch Keynote by Randall G. Schriver, Assistant Secretary for Asian and Pacific Security Affairs, DOD.  The conference provided opportunities for in-depth discussion and analysis of developments in the South China Sea over the past year.

The Stimson Center hosted a seminar to commemorate the late Alan D. Romberg, Distinguished Fellow and Director of East Asia Program, on June 25, 2018.   “Across the Taiwan Strait: From Cooperation to Confrontation?” is the title of seminar. Throughout his career spanning several decades, Romberg made significant contributions toward improving our understanding of the US-Taiwan, US-China and cross-Strait relationships for US policy toward East Asia.  The organizer invited Professor Thomas Christensen, Princeton University, and Steve Goldstein, Harvard University, to discuss the current status of Taiwan Strait.  Yuki Tatsumi, Co-Director, East Asia Program, Stimson Center, was the moderator for the event.  Christenson said “China has applied military, economic and diplomatic pressure against Taiwan.  China realized they have failed miserably in one persistent fashion, and it is that they have failed miserably to win over the hearts and minds of the Taiwan public.”  He said that President Tsai has been a very moderate advocate of DPP’s position and on cross-strait relations she has avoided provocations.   Christensen further said “I personally think Tsai has been a very fine leader.  She taken a very careful road, a very prudent road in forwarding Taiwan’s interests.”    Goldstein said Taiwan and China remain in deadlock with few signs that either side will make a concession any time soon.  Under such circumstance, Taiwan should remain cautious and China should have patience to maintain the status quo.