Taiwan must look to democracies, not China, for trade cooperation, president says

By Yimou Lee and Ben Blanchard

TAIPEI, Feb 3 (Reuters) – Taiwan must look to fellow democracies, not China, for trade and economic cooperation, President Lai Ching-te said on Tuesday, as his government mapped out how the island plans to work with the United States on areas like AI and critical minerals.

Senior Taiwanese and U.S. officials last week discussed cooperation in artificial intelligence, tech and drones at a high-level forum launched during the first Trump administration, with the U.S. State Department praising Taipei as a “vital partner.”

The two sides signed statements on cooperation on economic security and on the Pax Silica Declaration – a U.S.-led initiative aimed at securing AI and semiconductor supply chains amid intense competition from Beijing, Washington’s main strategic rival and which claims Taiwan as its own territory.

Speaking at a news conference at the presidential office about the U.S.-Taiwan Economic Prosperity Partnership Dialogue, Lai lauded the outcome of those talks.

“Taiwan is on the right economic path and is striding confidently onto the world stage. Taiwan has both the capability and the confidence to work with its democratic partners to lead the next generation of prosperity,” he said.

Lai was speaking as the deputy chairman of Taiwan’s main opposition party the Kuomintang (KMT), Hsiao Hsu-tsen, was in Beijing for a think-tank exchange with China’s Communist Party on ostensibly non-political issues like AI and tourism.

Lai said Taiwan’s opposition “had their own positions”, and pointed to the differences of Taiwan’s slower economic growth under the previous KMT government, which signed a landmark trade deal with China, or the much faster growth since the Democratic Progressive Party took office in 2016.

“Do we want to continue collaborating with the U.S., Japan, Europe and other allied nations, or again lock ourselves into China?” he added.

BEIJING MEETING

Hsiao told the opening of the forum in Beijing that “peaceful development” serves the interests of both sides, according to a read out of his remarks provided by the party.

“We should cooperate across the Taiwan Strait to earn money from the world, rather than oppose each other across the strait and let foreign countries reap the benefits, exploiting Taiwan and hollowing it out,” he said.

China refuses to speak to Lai, calling him a “separatist”. He says only Taiwan’s people can decide their future.

Speaking to reporters, Lai reiterated an offer to speak to Beijing, based on parity and equality.

Taiwan’s opposition has also blocked Lai’s $40-billion special defence budget, instead pushing their own proposal that provides funding only for certain U.S. arms, not the full package Lai wants.

On Monday, U.S. Senator Roger Wicker, chairman of the Armed Services Committee and one of the strongest advocates for Taiwan in the U.S. Congress, wrote on X that he was “disappointed” to see Taiwan’s opposition parties slash Lai’s defence budget.

“The original proposal funded urgently needed weapons systems. Taiwan’s parliament should reconsider – especially with rising Chinese threats,” added Wicker, who met Lai in Taipei last August.

In response, the KMT said it had always supported the defence budget, and regretted Wicker’s remarks “made without sufficient information”.

It asked, “Would the U.S. Congress ever pass a blank-cheque budget for eight years with no specifics?” renewing previous criticism of the government that the party could not blindly pass spending without having more details.

(Reporting by Yimou Lee and Ben Blanchard; Editing by Raju Gopalakrishnan and Clarence Fernandez)