Europe's Widening Case for Taiwan, From Chips to Information War【Taiwanology Ep. 62】

This is the Taiwanology Podcast from Commonwealth Magazine, where we discussed Taiwan matters and why they matter to you. Coming to you from Taipei, the capital of the freest nation in Asia. Welcome to another episode of the Taiwanology Podcast. This is your host, Liu Guangying, from Taiwan's Commonwealth Magazine. Being significant is happening between the EU and Taiwan, and its moving past diplomatic pleasantries. We're now seeing things that would have been unthinkable just a decade ago, including TSMC's fab manufacturing facilities in Dresden, Germany, or Foxconn's latest joint venture with French companies Talis and Radio to have a 250 million Euros, advanced chip packaging facility in Bordeaux. So these movements all signal a shift, a growing interdependence between Taiwan and Europe in advanced manufacturing and critical technologies. Also we're seeing a lot of political engagement from European delegations visiting Taiwan. They're all trying to understand Taiwan's industrial ecosystem firsthand. Meanwhile Europe is also rewriting its industrial playbook. And today we have the perfect guest to shed light on how the EU-Taiwan relations have evolved, why they matter, and also how can we scale these relations and find mutual benefits for all sites involved. We do have the perfect guest today here, Lutz Gürner. He is the head of the European Economic and Trade Office, or in short, EETO, in Taipei. It is the EU's de facto embassy in Taiwan. Welcome to the studio, Lutz. Thank you so much for inviting me. Thank you. I feel like this is a long overdue. And this is your first podcast with Commonwealth Magazine, I believe. And I think you are very familiar with the audience here in the podcast. Absolutely, absolutely. That's great. So could you tell us a little bit about yourself, how long you have been Taiwan and what brought you here as a diplomat for the European Union and also to Taiwan? Good. So I'm here now exactly two years, actually nearly on the day, came here in my post in summer 24. And the most important kind of, I need to say, in the very beginning, this was the post where I really wanted to go. This was the post where I wanted to be posted. And I'm really, really happy that I was appointed this post. And I tell you why, because I did in my career a lot of a crossover between economic issues and security issues kind of changed a little bit back and forth in the European institutions. I'm actually what we call a typical European official, which means I have a German passport, but my career is with the European Union institutions. So I worked on very different issues for many years. And as I said, on economic relations, then I crossed over, became the first spokesperson of the first high representative. So the EU foreign minister in 2009, actually, was a Kathy Ashton. I don't know if people still remember that name. And that was quite a new chapter also for the European Union in developing foreign policy identity also. So were you saying that before 2009, there was no diplomatic identity with the EU? Not really. There was a bit of hybrid structure. It was called it like this. You always have to be very careful as European official, not to fall into all our, you know, our terminology and all our abbreviations that are so important in our complicated system. Exactly. But I will not use them. Don't worry for the listeners. It is very, very boring. But there was not a, let's say, a distinct foreign policy representation of the European Union. We of course have the member states. And then you wonder, kind of, what is it that the EU is also doing? I'm sure that we come back here. But this is since 2009, since another of our treaties, this is pretty clear. And this is to represent the European Union as a whole. And that doesn't mean to replace the member states. But basically to do what the European Union is mandated to do. So trade policy, for example, is a classic EU policy issue only where the member states are not doing that much, where the EU is really in the lead. Anyway, to come back to your question, after this time, kind of in this back and forth between economic and security issues, the last six years, I worked on a very, very interesting issue, which is related to how disinformation or the information space, the informational kind of environment is used as a foreign policy tool, either as a part of strategic communications or worse as a part of using disinformation as a hybrid threat or as a gray zone activity as we would call it. And of course, in Europe, we are very close to one major player in this field. And I would say a major threat, which is Russia, which has deployed a lot of these activities against the European Union. And we only needed to develop our own understanding and then our own toolbox in this field. And soon our later brought me, of course, to many other kind of players, including, and I think we can be very clear in China in this field, which has become also an actor in Europe in this field. And that brought us closer together with Taiwanese authorities, with Taiwanese civil society actors. I've been here a couple of times before I was posted here and really, really enjoyed not only Taiwan as a fantastic place, but also as an extremely interesting place that also has not only economic opportunities, but a new chapter also in how we can engage beyond the economic field. And that was the reason why I wanted to be here and that brought me here. Wow. It's really perfectly summed up. So it seems like an EU Taiwan relations have also evolved because I remember when I started covering international relations for Commonwealth magazine back in the days, Taiwan was barely on the map or the mind map for a lot of people. So for a lot of European, they would say Taiwan, Thailand, they cannot really tell the difference. But I think it's really converging also a few years ago. I think it was during COVID that Taiwan was really making a name as a place that's really good in technology, semi-conductors, and also it's a democracy and it's really made some name for itself. And what do you think where EU and Taiwan relations are at now compared to before I think some people would even argue that EU-Taw and relations are at its best ever? I would agree. Depends how you define at its best, at its most intense in any case, if we compare it to the past. But I think there were three catalysts over the past few years. You mentioned COVID, the whole experience, which brought all of a sudden kind of the small island far away, back into the spotlight. Also European started to look, wow, how did Taiwan manage also the crisis which produced a lot of admiration. Then this slightly more problematic situation with a visit of Speaker Pelosi and the reactions from the PRC, the threat 2022, which was a bit a call for attention, I think also in Europe. And actually that was a moment when for the first time ever, the European Council, which is all our heads of state and government, come together. So the most important political, let's say, forum of the European Union, issued a statement or in our jargon conclusions, which put Taiwan clearly on the map, which put also our approach to the straits pretty clearly on the map, and to which all 27 member states agreed. Very important moment where we realized that any destabilization, conflict, whatever it is in the straits also matters to the European Union as a whole. And then of course, a couple of other things that came afterwards like the Indo-Pacific strategy for us, something very important. We discovered that this part of the world is so crucial to us, that this is a, we cannot be indifferent to what is happening here. And last but not least, the most important driver of all of this is Taiwan's amazing journey into becoming an indispensable partner, not in the semiconductor business, but I would say even in the AI business as a whole. We're not only talking about the supplier of chips, we're also talking about really AI integrated solutions, AI hardware, etc. And that is what is driving. use actually much stronger here and much more present than many people think. as European Union, so our 27 member states have actually invested more in Taiwan than the United States and Japan taken together. It is many years. Absolutely. Absolutely. And for that, kind of sometimes I believe, you know, it's not so well known and it's a good basis to intensify. I do, I do a lot, I use it obviously in every speech, but I think it's on both sides, you know, Taiwan, Taiwanese, the companies, the ecosystem, etc. Still needs to discover a lot about Europe and European still need to discover a lot about Taiwan. And I think the opportunities are there. They are there economically. And I believe also there is a very clear spillover into, let's call it non-economic issues can be nearly related to the stability of the region, can be other issues, people to people issues. We talk about, for example, an area that is very important to us is resilience. How do we strengthen a resilience of our society against the background of Russian threats about a destabilized international order? Let's call it like this with many, many new challenges. Something where we have a lot in common. And this is exactly where I focus all my energy on at the moment in building these relations. Right. So I feel like we are in this circle for a long time. So we are familiar with a lot of the collaboration between Taiwan and Europe in terms of commercial cooperation or investment. Could you just name one recent example in the past few years that the Taiwan and the EU have worked very closely something that could exemplify the growing importance of this relation? Yeah, I want to give you a very tangible issue, not a diplomatic thing because it anyway is quite difficult in the absence of formal diplomatic ties. We sometimes need to focus a little bit more on the business side. But everybody speaks about the TSMC investment in Dresden. And you mentioned it in your intro or now we see an acceleration and a multiplication not only of TSMC of Honhaio, Foxconn, many others, global waivers, a lot of Taiwanese companies are investing. But what is less known is that European companies and big European companies are not only investing in Taiwan in very, let's say, traditional areas to sell cars or machinery, but actually to support the Taiwanese semiconductor ecosystem. And I'll give you a very tangible example. The German company, Merck, which used to be a pharmaceutical company and more and more a specialty chemicals company, has invested half a billion euros, 500 million euros in Gaoshong and a big, big factory and a big, big plant to supply TSMC with specialty chemicals or specialty foil that is needed. So what is really interesting is that Taiwan is not only an interesting partner for the European Union in the downstream in the output in the chips, you know, this is not just a black box that is producing some chips that we need or not. But this is also a partner where you want to engage with or with whom you want to engage with in terms of the entire ecosystem, including in the upstream, in the delivering the components, the raw materials sometimes even or at least the processed materials that you need to move upwards, you know, in this production chain. Let's call it like this. So I think these linkages between Taiwan and European businesses and companies in particular is getting stronger and stronger. And it is of course even more so driven by the AI. I don't want to use the word revolution because it's such a kind of a term that we need to interpret, you know, in any case in this very quick development and not only on semiconductors, but in AI solutions, AI hardware, in data center modules, etc. This is also what Europe is looking at. And my conviction is that we have a case on both sides to work much closer together. Yes, I think lots of people didn't know how very close European companies or institutions. For example, there's one institution called IMAG in Belgium. The IMAG institution was actually very central to cutting edge technology related to semiconductor and also ASML and TSMC are all among the shareholders that established IMAG. I also. Sorry, you mentioned kind of the iconic names, you know, like ASML. TSMC wouldn't be able to produce what they're producing without ASML. And this is exactly what I want to point at. It's this interconnection, this kind of closer relation is actually in the interest of both sides. And I fully understand, if of course there's a lot of focus on the United States traditionally in Taiwanese, economic and of course also in political and security aspects. But what I'm pleading for is saying also for a Taiwanese perspective, you know, look at the other interesting partners as well. You need to look at all these opportunities because it's in your interest, but it's also an hour interest. And this is what we want to focus on. Yes. And that's a perfect segue to my next question, because we know that this year there's actually a lot of movement from on the EU level. So there is the Industrial Acceleration Act. Also, we have the EU Chips Act 2.0. So I'm just wondering what kind of opportunities do you see for Taiwan businesses or institutions to have more maybe a footprint in the EU? Yeah, the EU's facing challenges like many others in the world. And they don't only have to do with the geopolitical situation, but we are very, very specifically targeted because we have a hot war ongoing in Europe with Russia's invasion in Ukraine, which is destabilizing enormously. I mean, first of all, it's Ukraine that is suffering, but the knock-on effects are enormous on energy, on many, many other things. So we are a little bit at the crossroads in the European Union to think about how do we actually move forward with all these challenges. And that is the idea of bringing together very new elements and combine them with some of our strategic aims. And let's not forget, one of the big issues is still how do we deal with climate issues? We see it over and over again, how important it is. Absolutely. And if you speak to Europeans, I haven't been back to Europe for a couple of months, but you know, the moment that you have 40 degrees, 41 degrees in Paris, you really think about maybe we should do something. And I'm clearly saying this a little bit kind of colloquial here. So there's a whole focus on net zero, which is an absolute priority for us, but also with competitiveness and bringing back all these challenges of, let's say, integrating kind of new ways of producing energy, of looking at energy sources, which is of course, that are renewable side. And the AI development at the same time, this is where kind of all these different initiatives come from. And I believe they will produce or they have produced very good opportunities also for Taiwanese, not only Taiwanese companies, Taiwanese business and Taiwanese people. And at large, in terms of partnerships, we spoke about semiconductors, we speak about the next generation, about AI centers, hardware, and it goes further. Europe is very strong in areas like industrial applications, for example. You know, Europe is, I think, still not only I think I know it's the leading player in, let's say, machinery solutions, you know, high precision, precision machinery. I come from a country Germany, which is proud of this kind of precision in machinery. But machinery without the artificial intelligence element will be problematic. So you need to integrate these things. And in my view, these are the classic kind of areas where we can, we should and we have to work together in the future, where we need to create these linkages, not only kind of between authorities or in some declarations, but really between the businesses, the companies, you know, and this is where together with my 16 colleagues from the, who represent the European member states here, we work very hard on making this happen and we're quite proud of what we have achieved already in there. Yeah, I think Taiwanese companies are really one of the pioneers in doing smart manufacturing on a very ground up level. So maybe these are the experiences we can share. So another thing I would like to ask you about is, so with the chipset 2.0, what would be the difference between this version with the last version and including the strategic difference or the kind of subsidies that, for example, the Taiwanese companies will be able to access? We, I mean, would go into a lot of details now, but the big difference between the first chips act and now the second part, the 2.0 as we call it is a very simple one. In the first one, we focused very much on the supply side on production. We said, okay, if only we have more TSMCs in Europe producing a lot of output that will solve our challenge for the future. But we have realized that the key issue is of course also the demand. So where is the industry solutions? Where do we need these chips? How do we build this? How do we grow also this part? And that's why you need to see the chips act as only a piece of the puzzle of a bigger picture that we're putting together also in the AI growth in Europe. And we do not want to duplicate what the United States are doing and we have a very different ecosystem, but especially on industrial solutions, where we are so strong. But also in other areas, you know? And it's not only the car industry, it's many other areas. So the whole idea is to bring AI solutions, AI components much more into this industrial field. That will create the demand and that will then of course, then bring also the opportunities. But the opportunities for Taiwanese companies, as you asked, is not only at the end of this chain, I think it's now as well. It's planning together. It's going into partnerships. It's exactly what Foxconn is doing in Poland, for example, going into a joint venture on electric vehicles production. Foxconn brings enormous knowledge into from this field. You mentioned in your intro also, Foxconn investing on packaging, but also with talus on satellites, for example. So we need to think much broader than just semiconductor in itself. Semiconductor will always be the centerpiece, but this goes goes beyond. And for me, chips act is of course a framework. It does not give these subsidies already. It doesn't say, look, there is so and so much money yet. But it gives the clusters. And of course, as a next step, this needs to be filled with clear projects, with clear figures, but it's already clear now. This is worthwhile looking at also from a Taiwanese perspective. Right. Yeah. So I agree very much with not just thinking about subsidies, but strategic partnership. And that's exactly what Foxconn is doing. And also know for a fact that many other Taiwanese companies are also partnering or setting up shop in Europe to have access to very important market and very qualified talents. So Lutz, something in your CV also really caught my eye besides the economic side. Also, you are an expert in Femi. So we think we have to spill it out. So it's called foreign information, manipulation, and interference. So this is a really interesting jargon. So what was your experience in combating misinformation in EU and what have you seen in Taiwan that you think we could collaborate on? You gave me the perfect hint because you used the word misinformation. And this is all what it is all about. Is this about misinformation? Is this about how a society deals with a very quickly changing information landscape where some of the things are right, some of them are not right, where we have new channels, new ways of people consuming news, et cetera. But this is not the real problem. The real problem that I see, that we see, and that is encapsulated in this abbreviation, this foreign information manipulation and interference, is actually that the information space, the information environment has become an area that is being more and more, I think, an English term is weaponized. It's actually used as another tool of interfering into the, let's say, societal, but also political areas of an adversary. And Russia in Europe, in any case, has been very active on this one, has used this for years. We have seen this already since a long time, but very clearly since 2014, when Russia invaded for the first time for me. So what would be an example of that of Fimi? It is exactly this, what do we call as disinformation, to destabilize governments, or to mislead the public opinion, or to create confusion about the facts. So just give you a very tangible example, which dates back exactly to this Crimea time. So what Russia has done at the time is not to deploy its army, but to deploy what is called the little green man to start with. So these were soldiers without insignia that all of a sudden appeared in Crimea. And there was a hole, and this is where the Fimi part comes from. The whole operation on the information side was, well, this has nothing to do with Russia. This is what the people of Crimea want, and this is how it works, et cetera. So it's part and parcel of a broader strategy sometimes to implement and to fulfill your political aims. And these aims might be takeover, there might be destabilization, might be influence, might be shaping the discourse as well. And it's a very delicate way of dealing, or at least a very delicate challenge also, for democracies to deal with, because we believe in free speech. And we do not want to regulate neither in the European Union nor in Taiwan, by the way. What people can say and what they should say, but at the same time, we need to find tools and ways to deal with these activities, because they are not opinions of people. This is a state activity that is being organized, which is coordinated, which is financed with a very clear political aim sometimes. And that should not happen, you know? So this is in a nutshell, why this abbreviation Fimi, F-I-M-I, works much better than disinformation, because it has nothing to do with our, let's say, this complicated information environment that we are now dealing with, but more what a foreign power is sometimes doing in this field. And we came a long way. It's still a lot of work to be done, how we deal with this, how we can deal with this as a democracy as well. How do we work with the media, how do we work with social media? But I'll spare you all the details, but it is one of the key challenges, I think, of our society. So you've been here in Taiwan for around two years. What have you seen are the good ways to respond to Fimi? So could you give us an example? Yeah, Taiwan is, of course, also prone, you know, from different players, but first of all, of course, from the other sides of the straits, you know, where there's a very clear activity, it's measurable, it's a fact, it's very objective as well. The question is only, how much does it influence? How much is the imprint? How much is it really a source of specific political decisions or not? But since you asked me, what is the most important element that Taiwan has in this field? I think it's very vibrant and strong civil society actors in this field. They're excellent NGOs, civil society players that are dedicated to analysis, to uncovering, to showing what it is, or even beyond in engaging with different parts of the population. And I think it's something that Taiwan should be and can be proud of. The challenges, of course, how do you connect all this kind of at authority side, at civil society side? It's also, and every place is very different because of history, structures, because of the challenge as well. And there's no easy fix, that is for sure. But something that democracies really should work together, we really need to exchange experience, we really need to show also what is the problem. Because even there, I think a lot of people don't even agree to what is the problem. Right, yeah, they probably say, "Does no problem is just personal opinions, right?" But there's a clear line between personal opinion and viny, that is the state sponsorship and connection. So I think more and more people in Taiwan are becoming aware of that. Thanks to the NGOs you mentioned. So there are a lot of people who are actively fact checking information online. And I can only hope with AI's help, we could check those facts even more efficiently. But on a flip side, AI information warfare is also very, very rampant. It's a new challenge that we have to come back together. And so Lucy, you strike me as someone who is very down to earth and very in touch with the Taiwanese society. Honestly, I haven't seen your predecessors in the EETO. And we were just chatting, you have paid a lot of visits to the local governments in Taiwan. What can you tell us about that? And why do you think it's important to go outside of Taipei? I think it's crucially important to understand domestic Taiwanese politics, in order to understand what Taiwan's choices are that we see from the outside. Because sometimes there is this perception, there is an island, in the Pacific Ocean, let's call it like this, from a European perspective, they have an opinion and they meaning there is a unique kind of clear opinion. There's only one opinion. And there's only one opinion. And of course it's not the case. That's a misconception. And in particular, in a very vibrant democracy, society with absolutely free media and a good debate and a very high level of debate and very high level of scrutiny, of course, and which I think every Taiwanese rightly so cherishes. But you need to understand more and more how a, unfortunately, more polarized society is working, a more politicized society is also working. I say I'm. Unfortunately, because it creates, of course, a lot of tensions also. You could also say this is part of democracy. We need to have the competition of good ideas. I leave this to the judgment of every listener where they see it. But for us, as I don't want to say observer, because I hope we are a bit more than just observers, but at least somebody who is not part of the Taiwanese society, it's extremely important to understand how it works, not only in the parliament, in the LY, but also what is the discussion? What are people busy with in outside of Taipei as well? So as you said, I spend a lot of time going to each and every county to speak to county commissioners, to mayors, etc. Although my Chinese is really, really bad, so I feel very inhibited. But nevertheless, I get a lot out of this in terms of understanding what it is that keeps them busy, what is their worry. And sometimes it's very mundane things in life. And sometimes it's a very, very interesting combination of world politics and local issues that go together hand in hand. And I think this is exactly where you need to know more. What's an example? Where did you go yesterday and who did you talk with? So yesterday I went to Chai. I've been through Chai, of course, on my way to Alisan, like many other people, but to spend a bit of time also in the county and speak to farmers, speak to politicians and see, and here is a, is a genuine example of where these things come together. Chai is now the hub of Taiwanese drone research and development and let's say manufacturing to a certain extent in any case, to see what is behind this. And where are let's say world politics, if I can call it like this, and very local issues about who certifying kind of the drones, how does it work? How does Jong-Wah telecom kind of deal with an overload of the system, et cetera, of the net of the 5G or 16 net is dealing with this in the future is extremely interesting. But the point is, of course, first of all, to learn about this, but also to see how the debate is then kind of in the region or even locally. I make a point always to see both sides of the ale if you want to use an American expression, always to see opposition and governing kind of party in the, and this is not just a token, but I find it very interesting to hear kind of what is the one, what is the other looking at. I find it quite amazing how often the views are actually converging. So even if we have the feeling that Taiwanese politics is highly, highly polarized, politicized, if you look at debates in the parliament or even to a certain extent kind of how kind of the political culture has developed. And it's true. I cannot compare. I only have the two years, but even in these two years, I've seen a bit of a harsh tone, a bit more rougher kind of way of, let's say, of this debate. But at the same time, I see how many things are still very much in common that might be politicized on a, maybe a short term or a medium term level, but where Taiwan as a whole, the Taiwanese people, if I can call it like this, have really an interest in moving ahead. And you see it in those moments. And that's why I find it super interesting. Right. Yeah. So it really resonates with my own experience as well. So you speak with both sides, all sides, some might want to describe it like that. They actually have more in common than we imagined. I think we all agree that Taiwan is a democracy and people cherish our way of life. And I really think that's the really the biggest common denominator that people enjoy. Absolutely. And I think this comes also out very clearly in these discussions. And as I said before, if you only look at Taiwan from a Taipei political perspective, well, this is maybe you don't get the full picture. And that's why I also, I know many of my colleagues are very present also in other parts in Taiwan, make a point also in seeing mayors and people engaging. And last but not least, what I'm also doing a lot is investing a lot in people to people contacts, looking at how we can promote culture also as a way, as a connector. And it might look a little bit like soft kind of politics or soft power. It's usually important. I, for example, personally, I'm a great fan of classical music. And I see how even this field can be a connector, can be really a facilitator to build bridges. And because we are geographically very far away from Europe and Taiwan, so 9,000 miles, I think, but if we look a little bit closer, there's a lot we have in common. And this is what we want to build on. Right. Thank you, Loots, for a very heartwarming and refreshing look, EU and Taiwan relations. And I think you ended on a very positive note. So thank you for your time today and coming into the studio. Thank you so much. So, and thank you all so much for listening to Taiwanology. I'll be back on August 25th with a new episode. For more on how Taiwan and EU industry are converging and maybe more collaboration between EU and Taiwan, not just semiconductor or tech, please visit Commonwealth Magazine's English website. See you next time and you can find Taiwanology wherever you listen to your podcasts. Talk to you soon. [Music]