A Conversation With Representative Alexander Tah-Ray Yui

>> Larry Diamond: Well, good morning, everyone. I am Larry Diamond, Senior Fellow here at Hoover, and I'm joined by my co chair of the Project Taiwan in the Indo-Pacific Region, Admiral James Ellis. And it is our great pleasure this morning for the Hoover Institution and the Project to welcome here to Hoover, and to Stanford one of Taiwan's most distinguished diplomats of recent decades.

He is Representative Alexander Ta Ray Yu, who assumed his position as head of the Taipei Economic, and Cultural Representative Office, otherwise known as Tecro in Washington, D.C. in December 2023. He previously served in a similar role as Representative to the European Union and Belgium. I wish we could just dispense with this representative stuff and call you, Mr. Ambassador.

>> Alexander Tah-Ray Yui: Thank you sir.
>> Larry Diamond: But in fact I will note he has the rank of Ambassador, so I may refer to him from time to time as Ambassador. And I hope I won't cause a diplomatic crisis by doing that. His 35 year career in Taiwan's Foreign service has included appointments to post in New York, San Salvador and Geneva, and most recently a three year term as Ambassador to Paraguay.

And from 2021 to 2023 he served as Vice Minister of Foreign Affairs. Mr. Ambassador, before we begin, if I may, I would like to thank TECO in San Francisco, and your colleagues for your generous support of our program. I'd like to welcome the Director General of TECO San Francisco, Mr. Scott Lai.

Thank you for all your support and partnership. And the Deputy Director, our closest partner, Yuling Hong, for her support, and her assistance in arranging this. I think this is now something like the 17th or 18th year of a program at Stanford, one part of the campus or another, but for a number of years now, based at Hoover, focused on Taiwan, its democracy, its security, and many of the issues you're going to address us with.

So Representative Yu, thank you very much.
>> Alexander Tah-Ray Yui: Pleasure. Thank you Dr.Clement for your very kind words for introduction. And Admiral Ellis, very honored to honor your presence, especially someone who has been involved personally in the affairs of our peace stability in the Taiwan Straits under your command. And today for me, it's like going to an oral, oral exam because you are the experts on the area in the Pacific as Doctor, as you said, you've been devoting a lot of time and over almost 20 years on the subject.

So who am I to tell you what the state of affairs are between Taiwan? I think you probably know more than I do. I may know a few things about what's happening currently, but, yeah, but it's a pleasure to be a Stanford Silver Institute for the first time and.

But one of the things I've been trying to do since I arrived December 2023 is also doing some reaching out. My work is very heavy in Washington D.C. especially now. So, we're waiting our turn to get our terms settled down with the current administration. President Trump has called out Taiwan by name several times, probably once a couple of weeks.

And obviously, we're trying to make sure that the strong bonds that exist between Taiwan and United States continues to be, and I'm sure it will be. It's a matter of, you know, getting to terms, and reaching a consensus on how we will proceed from the years ahead, but I prepared a very, very layman's terms introduction.

I showed this to the West Point cadets last week, and so it's a very simple thing. You know, pictures, you are basically easy to understand concepts of what
>> James Ellis: you're talking to army folks. So that makes sense.
>> Alexander Tah-Ray Yui: Yes, well, yeah, sorry, I couldn't resist.
>> Larry Diamond: Just remember who sailed into the Taiwan Strait in 1990.

>> James Ellis: My son is a graduate of Western. So, it's all in the family.
>> Alexander Tah-Ray Yui: So, the United States, you know, I'd be very impressed with you because reading the history, I went actually I went to a, I wore your uniform once. I went to high school at the Panama Canal Zone at the Dodds High School, which is right for army brats.

And I joined JROTC, and learned everything about leadership and command and initiative. But I've been very impressed with United States, you know, role in the world ever since you were a young republic. You know, you started to deal with things overseas on your own terms. You know, earlier 1800s, you already sent the USS Constitution to fight the pirates in Northern Africa to make sure that they wouldn't, you know, ask you for bribery in your ships, merchant ships, or enslave your sailors.

And you did it on your own terms. But since, then you've been very active in world affairs, be it, you know, World War I, War II. But also, you've been also very involved in with us with the pre, Pre-World War II when we were defending ourselves against the invasion from the Japanese Empire.

You had sent volunteers led by then Colonel, and later General Claire Chennault. So this, under this period, we've been together working tirelessly to keep the way of life that we both cherish. But PRC, again, there's been periods of different way United States approached mainland the People's Republic of China, or CCP particularly, there were some times when United States thought that you could get them to your side to counter the Russians, or the Soviets and think that by embracing them into your way of doing things.

For example, allowing them to join WTO 25 years ago or so, that they will learn the way of trading under clear rules and order, et cetera. But fundamentally They won't change. And fundamentally their final objective of toppling democracy, capitalism, that won't change. And their final objective of getting Taiwan into their realm will not change.

We have some periods of times that we were in good terms calling, we're all family during President Ma's, eight years of government and things look very rosy. There were a thousand flights a week between Taiwan and China, mainland China. And there were a lot of investments between our two sides or specifically from Taiwan to mainland China.

But they were as many, explain it is, was slow cooking the frog. They were in good terms with Taiwan, but they were their final objective getting us eventually into their realm never changed. So, you've all experienced maybe say five years ago this very obnoxious Chinese diplomats, but now they start to charm you again from World Warrior Diplomacy.

And last year they introduced a couple of pandas. And all of a sudden Xie Feng, the ambassador who was not very loved in Washington now he's a very popular figure because he brought a couple of pandas. But again, don't be fooled. They're still the same people. They're just changing their tactics.

Smiley and accessible. But they're the same people. And I say that, okay, gray zone tactics again, we've been under their threats constantly. Whenever we do something they don't like, they stop importing pineapples. Or when Australia wanted to create a commission to investigate the source of COVID which was pointing towards mainland China, they stopped importing lobsters, wine from Australia and coal and etc.

So we will call it, for example, the pineapples, we will call it Freedom Pineapples because once they stopped buying pineapples, the Japanese started buying our pineapples. And once China stopped importing Australian wine, we started buying in large quantities Australian wine, at the foreign industry, we would always serve only Australian red Freedom Wine.

But also in Lithuania when they establish offices, mutually established offices between Taiwan and Lithuania, they stopped importing everything on Lithuania and this type, of course, but it's not limited on Taiwan issues. They do that with Argentina, Brazil. Whenever they don't like the terms, they stop or whatever, they stop buying soybean or beef, etc.

So that's one of the things they do. Drills, I think I don't have to say much about this, but they're constant, especially after Speaker Pelosi's visit to Taiwan. They've been very actively encroaching on Taiwan's space around Taiwan military ships, planes, no longer recognizing the medium line that exists on the Taiwan Straits.

And it's a daily occurrence. Sometimes, at one point, there were like 90 Navy Surface Ships around Taiwan. That was happening in December of last year around Taiwan, near Japan and near the Philippines. But this ambitious is not only about Taiwan, it's about the whole region, about Indo-Pacific. They've been holding military drills around Taiwan unannounced recently.

But they also had this flash live fire maneuvers near the coast, off the coast of Australia recently. So again, their ambitions goes way beyond just coastal defense or Taiwan Straits, which in itself is very important. As over 50% of world trade goes through Taiwan Strait. But I want to appreciate your efforts to maintain the Taiwan Straits, international navigation by way of foreign ops, and I'm sure you've commanded many of those.

But it is very important. Coercion, my 35 plus years at the Foreign Ministry has been countering diplomatic coercion, especially trying to safeguard our increasingly lower number of diplomatic allies. We're down to 12 diplomatic allies, but at the same time we've earned a lot of friends who recognize us, who we are.

United States has been constant, but the recognition of who we are has increased conservatively the last few years. Same with Europe, European Union, many of the countries that say five years ago will not talk. In Europe, you wouldn't talk about Taiwan at all, say five years ago, even if it was mentioned, it was because had to do something with Mainland China.

But nowadays, when I was in EU 2023, it was easy to talk about bilateral issues between Taiwan and Euro border particular country without even mentioning PRC. So that has changed considerably in the last few years. Cyber attacks. It's part of the gray zone tactics that Meung Chan does, as you also are very aware of this getting into your critical infrastructure, messing with your cyber world and maybe stealing data and all of that.

So you are also very aware of what's happening. I think there is a Netflix movie on that recently. It's called Zero Day-
>> Larry Diamond: Zero Day, yeah.
>> Alexander Tah-Ray Yui: I think somebody's filming a movie called Zero Day also something about Chinese invasion of Taiwan. But anyways, but these are the things that the PRC is devoting massive amounts of resources in trying to mess with us if there is ever a full scale conflict between our two sides to render, immobilize how you move in your country.

And disinformation, lots of that. During our elections in 2024, last year, before and after then during we had plenty of disinformation going campaign on our election, trying to dissuade our electorate on who they should vote for but also invading us with messages of we call it doubt America theory.

The United States, that it was an election about choosing sides between choosing United States or choosing PRC. And the ruling party was basically siding with United States which was a very unreliable partner. Look at Vietnam, look at Afghanistan. The United States was willing just to sell us very expensive weapons that don't arrive.

But once conflict starts you will nowhere see the Americans nearby because all they want to do is just make some profit and run to the other market, etc. So there were lots of that to it. But obviously, we've also countered that with lots of whenever the debunking this information is One way that we learned this very important as quickly as possible once we get, we notice there's some information that is fake or not correct to publicly tell the audience, the public that this is not.

Or you have President Tsai on video speaking on something that she has never done. So we educate our public. If you see something something that's not right, they're probably not real. But, but that has been a constant thing. And now, especially now also with what's happening in the United States, with very active happenings with the United States and Europe and, and other parts of the world.

And then the Chinese PRC are seeding us with this disinformation about US, so they take advantage of every occasion to see this doubts about who our friends really are. And this is just a picture of any other day in Taiwan where the Chinese military's presence around Taiwan is constant.

They have basically are surrounding Taiwan and as Admiral Haro has said maybe last week, that these are not military exercises. These are rehearsals for an eventual. If they do so obviously, therefore, we have to be very firm in our determination to counter any possibility of attacks against Taiwan.

We've learned a lot about different ways of doing the doctrines of war. We basically are changing our way of doing things in the military, particularly military, very strong on tradition. And our military that came with Chiang Kai Shek from mainland China, from the Huangpu Academy, we've been trying to reform and bring some new ideas on island defense instead of continental warfare that they were used to in the past.

And we're doing that quite effective, especially with now with our first truly civilian Minister of Defense, Wellington Ku, which I think you've met.
>> Larry Diamond: We did meet him very recently.
>> Alexander Tah-Ray Yui: And it's a fundamental change in how Taiwan is dealing with the threats, asymmetric warfare, grazing tactics. And also reserves, especially our reserves.

We're revamping our reserves very seriously. Used to be just a formality, but now we want to make them a credible and a good supplemental defense force against any eventual attacks. And, again, I went to high school in the US Territory, I went to school in the United States.

So I grew up watching serious Star Trek, then when I'm watching Star Trek, you relate to Captain Kirk and Spock and this character is about spreading the human values in the universe, rationale and some good values. So you would identify with them in, in this series. But as I think if Xi Jinping is watching this, this series, who, who, who would he identify with?

Which is basically these characters are the symbolize what United States is, says was Xi Jinping's identified with these characters? I think he identifies with this guy, the cyborgs because he's trying to assimilate the world into his realm on his, his way of think, thinking, you know. And then if you, if you don't assimilate then, then he'll destroy you.

That's exactly what the cyborgs do and the series. So, so that's, that's my, my thought of. So what I always say is don't be fooled. We think differently. We're not the same. So just this very simple TV series when you're hooraying for Captain Kirk, he's hooraying for the cyborg.

So we're totally different people. And again, for those of you who didn't recognize Captain Kirk, the younger ones, this is Captain Kirk and Spock, Zachary Quinto and what's his name? But again, these are just in a very simple comparison of we're very different, you know, we're not the same.

So. So, so yeah, so what, what do we matter again? You are celebrating this year 250 years of democracy as republic and we are celebrating Taiwan 25 years of our first transition of power between two political parties via direct elections. So we're ten times behind you. But, but democracy is a thing that once you taste it and you grab it as, as your own, as part of your life, it's very hard to turn back and look at.

So we are really devoted and determined to keep our democracy alive. And we're ready to do whatever it takes to counter the Chinese aggression into turning us into something like Hong Kong, which is unfortunate. But again, Taiwan, again this may not look, you know, I wouldn't show this to President Trump, but we are a formidable economic power.

I think in terms of economic progress, I think we already surpass South Korea. So we should be part of the G20. But we're humble. What we do, we maintain a large share of specifically the semiconductor manufacturing and not only in the chip manufacturer, but also we're not doing bad in design, although most of the design is done by US companies, but we're also getting to the design field, as well.

As you know, about 70% of the regular chips are made in Taiwan, mostly for American companies, but also over 95% of the superchips, the advanced chips are also physically made in Taiwan. But at the same time we've been explaining to officials and relay message that we are not competitors with you because we basically manufacture for US companies, US designed chips by Nvidia, by AMD, by Intel.

And we make them in Taiwan and then ship it back to the companies for them to assemble it in Apple phones or Tesla cars, etc. So actually we're part of the supply chain and for every dollar that a chip is sold, US companies earn 38 cents while Taiwanese companies, we earn 11 cents actually.

So it's a good chain supply chain. Wait, see and this is just more, more, more data. One thing I can say, 10 years ago, 80 plus percent of Taiwan's outbound investment went to mainland China. Last year 2024, it was less than 8% going to China. And now last year about 40% of our outbound investment came to the United States.

So this shift away from mainland China towards other places, particularly to the United States, has been occurring for the last few years. And it'll be incrementally more prevalent as we go ahead. And one thing that I've been pushing very hard in Washington, DC, is for the swift, or hopefully, passage of the avoidance of Double-Taxation Bill between Taiwan and United States.

I think we're the only major trading partner with the United States that does not enjoy this facility. And that's obviously a disadvantage for companies. And also a disadvantage for US companies to have their investments in Taiwan, which is also increasing, especially on the data centers and research centers.

So while President Trump is using tariffs as a stick, I think the ADTA passage will be a very hefty carrot to entice our companies to come to the United States. They're already doing, so with the passage of ADTA, you can see they will come. You're also leveling the playing field with Canada, particularly Mexico.

We have over 300 companies, manufacturing companies in Mexico. And, for example, I think 80% of the world's AI servers and these big servers are assembled by Taiwanese companies in Mexico. And many of those will probably come to United States once the conditions are right. For example, the adta.

And again, Taiwan is the size of Maryland, but we are big in terms of trade. We are your seventh largest trading partner. You know, we do more trade with you than what, what that you do trade with, you know, countries, such large countries such as India, Brazil or, or you know, very close allies such as Netherlands, France, Italy, etc.

So we are formidable in terms of trading prowess. But also, we're a small country, but we're one of your main importers of agriculture products, we're seventh largest. And these are just more data, what we do with the United States. Your services are also increasing in terms of exporting to Taiwan.

And most of our trade is mainly on electronics. And we are increasingly buying also more energy from the United States. We talk about asymmetric warfare defense, but also we talk a lot about the whole society resiliency. It's not just about the military but also about how the society can endure an aggression from outside.

And for example, energy resiliency is an important thing, and we are increasing more. And you'll be reading more about Taiwan's commitment to get their source of energy from the United States. And again, jobs, we are actually partners. And the message I wanna send to people is that Taiwan is an asset, not a liability.

We're not Afghanistan where you have to, everything you know, you have to do to, to keep that country alive and running, you have to, you have to put troops there, you have to keep their economy alive. You have to put a lot of money, spend billions a day just, just keep this country running.

You don't have to do it with Taiwan. Obviously you know, we are and also we can work together in other places. I've been telling people in DC that wherever there's Taiwan, especially embassies, there is no PRC. So, so you know, so it works with, to your advantage also for us to keep our embassies in these countries or have more presence in other countries because we, we sort of are.

It's like the soap, when you put it in water it just, just keeps the things away. So that's Taiwan's role that we can play with the United States. And well, the plant in Arizona has made its largest green fuel investment in US history, $65 billion US. The first plant, I think the one in the front, so it's already up and running producing I think five nano, five or six nano chips.

And the second plant has been in construction. And the third plant, the groundbreaking will happen or occur sometime this year, and they'll be making the three nanos and eventually two nanos. So these are the highest end chips available so far today. And so TSMC is happily putting a part of the manufacturing in US soil.

And there's been a debate called the silicon shield, even in Taiwan, whether we should concentrate most of the manufacturing in Taiwan. Because that way, US and other countries are compelled to defend Taiwan with the Chinese because we have a whole of the production of these very needed chips around the world, especially for AI.

But having presence in the United States and Japan, in Kumamoto, for example, and also in Dresden, in my opinion, in our opinion, the government's opinion, it's actually not bad because we become part of the chain, production part of this supply chain. And there is a large explosion of needs for these chips anyways.

And we can't make it all in Taiwan, so eventually having factories placed near where our main clients are, it just makes sense. But obviously Taiwan will still be the hub, the headquarters where the newest chips will be developed. I think we're going down to the 1.5 nanos and beyond.

And it will always be generated in Taiwan, obviously, collaborating with US companies. So, and also we are determined to do whatever is necessary to defend ourselves. Again, we're not Afghanistan. Actually, we've been defending against the mainland Chinese aggression for 75 years, since Mao Tse Tung created the PRC in October of 49.

But we appreciate the help that we get from you in terms of selling arms, providing training, changing our doctrine, and in preparing ourselves for this aggression from mainland China. So the defense budget has been increasing steadily. And President Lai last week also announced publicly our intention to put our defense budget beyond 3% of our GDP.

That's a commitment that we've made.
>> Larry Diamond: New Taiwan dollars?
>> Alexander Tah-Ray Yui: That's New Taiwan dollars, so yeah, yeah.
>> Larry Diamond: What would 3% represent, how much is that?
>> Alexander Tah-Ray Yui: I haven't done all that.
>> Larry Diamond: Okay, I'm just wondering, yeah.
>> Alexander Tah-Ray Yui: But I think one thing that also is worth mentioning is that our military budget does not count many things that other countries put into their defense budget.

For example, in Japan they don't count, or in Japan they do count, I think, Coast Guard as part of the defense Budget and we don't a lot of things that. So if we add a larger sense of what defense budget is currently, we'd probably already have over 3%, but we're determined to do more.

Yeah, we've had 80% growth since President Tsai became President. Basically, that's what it's saying. We almost double our defense budget since President Tsai.
>> Larry Diamond: It's about $20 billion.
>> Alexander Tah-Ray Yui: Yeah, that's what it is. And this current, obviously, we've been also developing our own arms. It's difficult for us to procure arms.

You are our main arms provider. But, for example, on the submarines, President Bush had announced that you will sell us or help us acquire submarines. But since you don't you, you don't build diesel submarines anymore. And we've been having trouble getting, buying you know, submarines from, from, from other countries.

So we decided to build our own with the help again from many, many partners including United States. And I think it's already launched, but it will go on testing SAT called sometime next month. No, probably April, we'll start underwater test, etc. But also, we build our own fighter planes, and this is the advanced jet training plane, again, with assistance from United States, and also the very fast or call it hypersonic missiles, etc.

And obviously, now there's no battlefield without UAV. And actually, we're collaborating with US and European countries and partners to try to have what we call a non-red UAV supply chain. Because nowadays Most of the UAVs in the world are, you know, dominated by Chinese manufacturers. And it's very hard to have a UAV that has no Chinese components.

So we are doing this clean red or no red supply chain for UAVs. And that's what we're doing now. But at the same time, there's been some talks that Taiwan should concentrate to procure arms that are good for the asymmetric warfare, UAVs and counter electronic warfare elements, etc.

And it's a waste to get large platforms because they will not survive the first wave of attacks. But these platforms in my opinion do serve a purpose. You know, again you can win the war or at least end the war by by using these small, small items itself.

You still need some firepower deterrence, or even having these large platforms will probably in itself is a deterrence against them coming into Taiwan. But also, it has a morale effect when these tanks arrived, which is the picture you see, arrived in December of last year into Taiwan. The people of Taiwan were very excited to see M1 tanks which are currently used by you arriving in being part of our military.

Part of our military. So I'm sure that military recruitment for the army probably increased considerably. And I'm looking forward to be in Greenville, South Carolina. This is where the F-16 Block 70s are being built. Right. We'll probably finally have the first rollout of our F-16, which was sold by President Trump during his first administration.

The first F16 will probably roll out sometime this year and that when it comes out again it will bring a lot of excitement to the Taiwanese people, a lot of confidence building. And I was telling my US Friends, can we get Tom Cruise over there? Although he didn't fly an F-16.

He flew what? Tomcats and Hornets. Yeah, but again it's the symbolism that will help it and that in itself, obviously we hope we will never use it, but it brings a psychological effect to the people which is important and obviously the whole of society resiliency, which is again not only about the military but how the society will perform or maintain the daily lives as normal as possible under duress.

And we've learned this a lot from Ukraine, but also learning from other countries, ignored countries which are very good at civil defense and other best practices from other partners. The United States have been helping us a lot also on this area. But also energy. There's been talk about obviously buying more energy from United States, but also the current government is against nuclear energy.

But, but obviously we're open to the, the new type of nuclear generations which I think the smaller and cleaner ones. But also other transportation or links, the satellite, our telecommunications. You may have read or heard about the Chinese as being, well, someone suspiciously. But we obviously would suspect that the Chinese are doing this.

They've been cutting our cables on the ground, undersea cable between Taiwan and our allying islands. And one had just happened a couple of days ago always Chinese man ships. And they have this very similar occurrences in Northern Europe, where also similar things are happening, just cable being cut by.

And we tracked one of the ships which was loitering outside of Keelung Harbor in the north. And this ship was just loitering. Every time the ship turned there was a cable underneath. And then finally, he reached one point and he cut one of the cables and ran away towards China.

So this is part of the gray zone area that we're working and that we hopefully will strengthen with, again, help and assistance, advice from friends such as the United States. So that's basically my PowerPoint and happy to entertain any questions that you have. Thank you.
>> Larry Diamond: Great. Well, thank you so much.

This was very comprehensive, very lucid, and with many elements of encouragement for the future. Jim, do you have any questions you want to pose? I think.
>> James Ellis: Well, I do. It's interesting we talk in terms of gray zone, it's getting a little less gray here. With the most recent seizure of the ship and the crew that you found cutting cables, how much can you tell us about the dialogue with the mainland over return or how do you see that being resolved going forward?

Is there a conversation underway? I mean, I know perhaps you can't share all that.
>> Alexander Tah-Ray Yui: It's difficult because PRC, actually ever since President Tsai assumed her role as president, the communications, at least at high levels between Taiwan and PRC, has basically stopped. Obviously, at the working level between the police, between Coast Guard, there's still communications because.

Cuz they're still, again, we share the same seas and we have islands that are very near their coast such as Matsu and Kinmen, and then things happen and they have to sort it out. People stray into our islands or people stray to their coast, etc. So there's some form of communications at the working level that at the higher levels it isn't happening.

My assumption is because PRC has never acknowledged Taiwan as obviously as an independent sovereign entity. But rather that Taiwan is still a, a domestic issue, a war between KMT and the CCP for them. So they're willing to talk to KMT people but not with any other party, even if that party is in government.

They basically, they don't recognize it. They refuse to recognize that Taiwan's being, being governed by any, any anybody else. And so they only talk to KMT people. And as you can also see that during President Ma, you'll see the interaction was very fluid, very active and very. But I think even if TPP won the presidency, I don't think they will talk to them because, again, they refuse to acknowledge that Taiwan, it works as a separate entity.

So what will happen with the ships, with the crew of the ship that was cutting cables and I think it will go through a long and tedious process. Eventually what will happen? I don't know. But there is mechanisms that can make the return or happen. And for example, there was a ship that our coast guard was chasing because they were illegally in waters and came in, but that ship flipped and two sailors died.

Which funny, these two so-called sailors, they were from inland, they were not from Xiamen. The crews didn't know how to swim, so what were they doing in those ships? But anyways, but eventually it was sorted out about how to deal with the deceased sailors, how to return them to China and etc.

So there are mechanisms, but again, it's a very hard and tedious because there are no formal communications.
>> James Ellis: But you raise a point there that leads to another question if I might, Larry.
>> Alexander Tah-Ray Yui: Yeah, please.
>> Larry Diamond: Clearly, you portrayed a picture of some urgency and compellence with which we agree.

And you know, as you noted, I've been a part of Taiwan's future for many, many years. But it's still interesting and maybe it's a sign of a vibrant democracy. The internal political issues are still, you Know, I said in a recent gathering focused on Taiwan that, you know, we used to say in the US all politics are local.

But in Taiwan's case, they're never local, they're always international because people are watching from outside how these actions take place. Is your sense that there's resolution ahead for that as you as Taiwan confronts the realities of the situation in which it finds itself?
>> Alexander Tah-Ray Yui: Exactly, as you mentioned, Congressman Moliner, who is the chairman of the China Committee, the US Committee.

And Krishnamurti, both of them were at the Brookings event last week, last few days, when they both talked about exactly what you said. That while they respected Taiwanese democracy at work. But it was concerning message they were sending outside of Taiwan that although it was the opposition trying to block or do something about our budget, especially on the defense budget.

But for the outside, it's Taiwan, you know, not having or not determined to defend itself because the budget is actually not increasing but decreasing. But the details doesn't matter, it's the outcome. But KMT actually sent, actually I think they're in DC right now, KMT sent a delegation to Washington.

Three of them are the vice president or deputy. Yeah, yeah. The deputy vice president of The KMT is Mr. Shah. He was also the deputy defense minister. So actually there are three deputy ministers former under. Under KMT government who are in D.C. right now. I think that, I think again, I can't speak for them, but I'm sure that what they're trying.

The message they're trying to convey to Washington is, KMT is also resolute and determined to have a strong defense. But actually they haven't really deleted or decreased the budget for defense, but rather they froze the budget, especially on the submarine. They have this opinion about whether we're spending too much money on building this.

I think we're trying to build eight submarines. So they put a freeze on the Navy being able to access certain part of the budget in the condition that they meet requirements by stage. For example, they're going for undersea trials very soon. And once it is completed, then their legislation will unfreeze the next tranche of money, etc.

So they're not deleting, they're not suppressing, but they're rather. I think their position is that they want to make sure that the money is well spent and not. And part of the problem is the military has been procuring or putting money in their budget for purchases. And, and unfortunately that's, that's a problem that we have with with the US Is we, we make purchases that you've announced for us to sell us, but it takes quite a long time for them to reach Taiwan and, and the, the M1A2s, others, the missiles, the, the, the aircraft.

Many times, for example, Air Force puts a budget for buying so many F16s this year or payment for receiving. They're scheduled to arrive this year but they don't, so they have to return the money to the coffers and then they're criticized by legislature saying, but why are you doing?

Obviously it's not particularly Air Force's fault but that's what happens and they criticize for that. They get criticized. But again, it's probably also expected that the opposition will try to make life as difficult as possible for the ruling party. But at the end I think even KMT and TPP are aware that sending a strong message overseas to our friends especially that we are determined to have better defenses.

Is a consensus in Taiwan. So I think that's the role of the delegation from KMT who is doing that right now in DC.
>> Larry Diamond: Mr. Ambassador, what are the highest priorities that you have for the US Taiwan bilateral relationship? You mentioned trade, maybe you could say a little bit more about where that stands now and how imminent a full agreement may be or not.

And then maybe we can talk a little bit about what needs to be done in terms of assisting you to be more resilient in rebuffing gray zone activity. But how would you prioritize your aspirations for the US?
>> Alexander Tah-Ray Yui: Well, the party that I have in DC would be obviously on national security and defense, obviously, because that's an existential issue for Taiwan.

And to make sure that Taiwan's peace stability, this position is shared by United States and its allies in Japan, Korea, now Philippines, which I think that has been an encouraging development. More and more coordination also with AUKUS and the Quad and all the countries, even European countries. And you've seen that now in most of these bilateral multilateral meetings that occur between us and the partners.

For example, the trilateral meeting between Secretary Rubio and its counterparts in Japanese and Korean foreign ministers in Munich, when they released the statement, it included peace stability in Taiwan opposed to any unilateral change of the status quo, particularly by military means, which is good. And also when President Trump met with Prime Ishiba and then the joint declaration had exactly the same wordings and also the G7 meetings, etc.

So that's, that's particularly essential for Taiwan. We have more and more friends and more support to maintain status quo in the Taiwan Straits. And so for example, there were talks about as if there was a big scandal that State Department deleted the phrase that United States does not support Taiwan independence.

It was a big thing, but actually, again, the US has explained that hasn't changed anything. The position in the United States has maintained the same, but it's not necessary for them to spell out each and every aspect of what status quo is. So on the bottom part of the re-edited page from State Department States United States against any bilateral change of status quo, etc., etc.

So that itself explains it. But on the economic side, as you know, President Trump, when he was a candidate at this time, he's being mentioned in Taiwan many times. And also as president, he has mentioned Taiwan even when he was signing the executive order on adding tariffs. A couple of weeks ago, he mentioned Taiwan as an example, especially conductors.

And obviously we try to lay low but almost impossible. President Trump has mentioned, you know, Taiwan's like the tip of this pen and in China it's like this table. So which one should we, you know, obviously it's obvious which one we should, we should take put more attention to or Taiwan is Taiwan and China so near and the United States is so far away from Taiwan.

So if there's ever a conflict, as we say in Chinese, Mandarin, a distant water doesn't help imminent or closer fires. But, and also he's been very critical about semiconductor. He said, in one occasion he says Taiwan stole the semiconductor manufacturing away from the US as well as jobs.

So he wants it back, and if we don't comply, he said we will not be very happy. So obviously, these are words that are obviously of concern to Taiwan of the people and government. But obviously, well, unfortunately we don't have the means to be able to talk directly to President Trump the way Israeli Prime Minister was.

He was the first head of state being received by President Trump. As Prime Minister, she was able to talk directly to President Trump or etc, all the ones that followed. So we don't have that, that, that access for obvious reasons. But we have been talking to the administration and President Lai, I think he, he made a public statement, maybe a week ago, about that, that we are willing to go in that direction, have more presence in the United States, manufacturing, more about energy and more about trade and etc and partners.

And also I think we're going in that direction. There's been some reports on what role TSMC or even Foxconn is in talks with certain companies. Obvious all that may not necessarily be but, but again, but the fact that there's something brewing there are, it is, you know, we are talking and there's conversations and, and I guess when the time comes it will probably be announced publicly.

But again, and I told my colleagues at Tech Run says, well, actually President Trump mentioned in Taiwan, obviously so far all negative. But it's not necessarily a bad thing because of all the 196 countries in the world, for the President United States to mention this country by name is not easy, but at least he has Taiwan in mind, which is again, would eventually, I think reach something that is agreeable for both sides.

>> Larry Diamond: Good, well, I'm gonna open it up now to our audience here. If anyone wants to ask a question, we don't have 10 cards, but I'll call on you. I'll just say that you have a lot of friends on Capitol. You know that. I know that. We all know that.

You have a lot of goodwill there.
>> Alexander Tah-Ray Yui: Yes.
>> Larry Diamond: You can talk to Capitol Hill, and I'm sure you spent a lot of time doing so. And you have a lot of friends in the administration, too, including one who was a contributor to our report, the Boiling Moat.

>> Alexander Tah-Ray Yui: Yeah.
>> Larry Diamond: Matt Pottinger edited
>> Alexander Tah-Ray Yui: that's in Taiwan, actually.
>> Larry Diamond: Yes. And that is, I think, a very powerful statement about what needs to be done right by all actors on the Democratic side, from Taiwan to the US To Japan and so on to secure Taiwan. So we, we don't want to be too overly worried about where the US Stands anyway.

David, why don't you start and if others have questions, you can your hands and for our online audience, if you have any questions, you can post them in the Q&A mechanism on our online video. And for our Hoover colleagues I think you can turn off the slides now and put the camera front and center.

Go ahead, David.
>> David Fedor: Thank you, Mr Ambassador, for being here today. David Fedor at the Hoover Institution and I just say, I tend to agree that in the sort of broad arc of things. The more that Taiwan is on the minds of the American people and its leadership, sort of whether left or right, the better.

A high level question. In your presentation you described I think, a trend, a generally positive trend in the nature of US Taiwanese relationships over these recent years and a generally negative trend in the Taiwan PRC relationship. You spoke about some of your near term policy priorities, but could you share your vision in the sort of longer term, five to ten year time frame for Taiwan's relationship with the U.S. with the U.S. and if you'd like, you can speak to the PRC relationship as well.

But I'm most interested in the U.S side.
>> Alexander Tah-Ray Yui: Well, first of all, I think this uncertainty about President Trump's what he expects from Taiwan, I think this will be dealt with in the first quarter. It will be dealt with and I put a positive fact that although again we can have President Lai be at the White House and have this handshake with him, say, we announced like Japan did or what India did, but obviously we have our own ways of dealing with them.

We've learned throughout the years and again after 1979 when diplomatic relations ended and some of you may have been in government during that time and it was a low point of Taiwan US relations and we couldn't even go into federal buildings to talk with officials. We had to meet at cafes and restaurants and, and then we slowly crawled back and to where we are today, where basically I have access to almost all, all buildings and be able to talk.

There's still some ceilings we have to overcome. And for the next few years I hope that we can have greater access or less limitations and act more again it's the fact that we don't have the black relations, but in reality we are very good partners and we are allies and values and partners and security and in technology or even indispensable collaborators.

You talk about AI and Stargate and all this, you can't talk about this without talking about Taiwan because we are part of, part of, part of this, this technology development. And so I think that the relations will only increase further and further. But again, the description on Taiwan US relations in the last few years has been called rock solid.

The rock solid relations between Taiwan and the United States. But I did complain to U.S officials. Yeah, okay, that's good. But when you describe U.S-Japan relations, you mentioned it as steel clad between steel and rock, I think we still have ways to go. So my mission for the next few years or for Taiwan is to make it steel clad eventually.

But I think again the outlook is good and again and I can't stress enough the importance of, and maybe many of you are doing this already with the Silicon Valley Taiwan and Semiconductors alliance and all that, but to maintain an edge or not not let the Chinese catch up with what you and I are doing in terms of technology.

It's very important. AI will be again many of you probably experts here, I can. But AI will be part of our lives and how they evolve in our daily surroundings and what we do. Obviously we want this system to be a healthy one and a good one and one that helps us and not control us.

And what the Chinese do with technology basically is to try to control or to manipulate which is not the direction we want it to go. Again, from what limited knowledge that I have on technology. But the Chinese they've tried, they spend billions of dollars to try replicate TSMC.

They've hired TSMC leadership managers hired TSMC engineers. They spent billions on machines and etc but they failed in more than one, one occasion to try to replicate. They even boasted that they would buy TSMC eventually. But obviously now all these companies are broke and, and you know, deep seek.

They say they spend almost 6 million and that's not true because they actually used other platforms and use Taiwanese made.
>> Larry Diamond: There's a lot of hype around it.
>> Alexander Tah-Ray Yui: But again they're good. I mean given they're good but the, but a generating technology they can, but once they have their hands on technology they can.

I'm gonna see replicate it and modify it, etc. Look at the for example, the German German industry, which is again, they they put all their eggs or at least most of the eggs on China. It's a huge market. Let's put the manufacturing the cars and now they're in deep trouble.

They were talking recently about closing the plants in Germany because,they're being beaten in the the markets in China, which that most of their earnings come from China now. But they're so deeply entrenched they can pull back and that's a warning sign from other countries. I think Korea is about in the same situation.

So yeah.
>> Larry Diamond: All right, we'll go to Lanny Chen and then one of our questioners from online.
>> Lanhee Chen: Thanks, Larry. Ambassador, welcome. Thank you for coming to Hoover. I'm Lanhee Chen. I'm a fellow here at the Hoover Institution. I've been here for over a decade now, can't believe that, but had the pleasure of joining Admiral Ellis and Larry in Taiwan on our trip last year.

I have one observation and a question. My observation is that I think amongst stakeholders in Washington and amongst this administration in particular.
>> Larry Diamond: The message on the primacy of the US Taiwan security relationship is well understood. I'm less convinced that the economic message is being well received. And so if I had a piece of advice to you and your colleagues, it would be to continue to develop with the economic leaders of this administration the value of the US Taiwan economic relationship.

Because I think that this administration in particular is quite focused on questions around economic relationships with our partners around the world, and particularly the benefit of those relationships for the American people. And so I think that's crucially important. My question is really about your view on Taiwan's positioning in the international community, and particularly with international organizations.

I continue to be alarmed by the way in which China is undergoing its systematic effort to continue to block Taiwan's participation International organizations, we know about the World Health Organization. That's something that we saw during COVID how problematic that was. But I'm concerned, for example, about Taiwan's inability to participate in ICAO.

When you look at the percentage of air traffic that moves through the Taiwan FIR, I think that's a great concern. So I think in the United States Congress is doing what it can to the Taipei act and through other means to elevate this conversation around iOS. But I'd like to hear a little bit about what the Taiwanese administration's approach is on iOS, and if you have any good news to report on that front.

>> Alexander Tah-Ray Yui: Well, first, thank you for your observation, indeed, it is something we are working again, and the very methodical, but also so far under the table or under the, are we calling Chinese like a duck swimming? You don't see the food, so we're trying to do now.
>> Larry Diamond: We refer to that at Stanford as the duck syndrome.

>> Alexander Tah-Ray Yui: The duck syndrome, okay.
>> Larry Diamond: The surf surface water is very calm, but beneath the duck is paddling furiously.
>> Alexander Tah-Ray Yui: So, yeah, but again, I think it's important that besides the talks engagement with administration behind doors, but that the public needs to also be, because again, at the end, it's American public, American worker that will benefit.

And this rhetoric about we stealing away your jobs is obviously, it's negative. So, yeah, that's something we should do more but again, hopefully not too distant future, more positive consensuses will be announced. And sometimes, again, as government, we talk and we try to communicate, but at the same time, Taiwanese companies, they're big enough that we don't have to hold their hands.

I probably need to have them hold my hand TSMC. But obviously in a loose sense there's some conversations between what we think is for the greater good of Taiwan and obviously each company has its own own interest at stake. But but I think they'll go in that direction and hopefully things will will come to light and President Trump will start have a different or at least publicly, again he's very clear on what China is, the last weekend's release of make it was it America first investment policy.

80 is on the PRCs as a threat to the United States etc. So there's somebody said no, I'm sure this President Trump didn't really because you can't but I think they won't release something if it wasn't approved. Obviously I worked as head of the Geneva office during President Ma's term.

At that time we had access, we had observers to the World Health assembly every year. So my health minister will be in town, I will sit with him. That was something very touching and moving for me to be able to sit at the Palais Nacion with my health minister and he see him go up to the podium and talk about Taiwan.

Obviously that ended when DPP came to power. Again this conscious notion that the PRC doesn't recognize any anybody else but the KMT on Taiwan. And so I back then was reporting to Taipei that although during prison MOS time again the expression between Taiwan and mainland China was two sides, there just one family and things were rosy and very nice.

But I reported Taipei that the waters are very cold in Geneva because the Chinese will try still do whatever they can to block us from participating in activities besides the one for example WHO which there was some sort of a consensus. But in others they were still because why because obviously it's obvious way of showing that Taiwan is a sovereign entity away from mainland China.

When we sit at different tables and we have even though it was Chinese Taipei but people recognize as Taiwan representative and so so they didn't like that at all. So again and now that somebody had this brilliant idea of using resolutions 2758 which is a resolution 1971 that decided who would sit sit on the on on China's desk at the United nations which obviously we were kicked out of United Nations 1971.

And that resolution allowed PRC to sit on China's pupil. But that didn't mention anything about what Taiwan would be, only resolved who sits on China's position but the Chinese PRC has been saying that actually also resolved that Taiwan internationally on legal grounds that Taiwan belongs to the PRC which is false.

There's no mention of ROC, they also mentioned Chiang Kai sheiks representatives etc. So and they'd be using, we call it lawfare, they've been using that as a sort of international legal legal grounds that they own Taiwan. But again, the United States has come out in the last few years especially last year at different levels at the State Department, even Assistant Secretary, I think even the Secretary of State mentioned about something about 2758 being that.

Again China was trying to model the concepts of who Taiwan belonged to, etc. The encouraging part is that the US has been involved in debunking this earlier this. At the World Health Organization's steering committee in January, United States also spoke very, so this is already under President Trump's administration.

They spoke also very clearly about, again, not agreeing with China's claims and 2758 being, you're trying to debunk the notion that 275 was approve that talent belong to them etcetera. So I think that will continue to be obviously United States, the current administration being reluctant to be more engaged in international organizations.

Some for good reason because United States, PRC has just too much influence within the secretariats of these international organizations. Too much influence, for example, United States pays for a quarter of WHO's finances and China pays maybe less than 1% of their budget. But yet China has just overwhelming influence within the secretariat.

And they have their ways. But also in many ways, the Chinese nationals who work at these international organizations, who are supposed to be working to enhance the work of the other organizations, yet they still work for the CCP. And that's the difference, the United Nations, they always have a Vice President or Deputy Secretary General who is a Chinese national and that's his role is just to enhance Chinese presence.

When I was head of office in Geneva at that time, the Secretary General who was Margaret Chan, she's distinguished health official from Hong Kong, but in her office they had put this senior advisor who was a Chinese diplomat, and his role was as many of you China. The person who really calls the shots in an institution China is not the minister nor the mayor, nor the governor, but the political officer in charge of that office, so they put this gentleman at Margaret Chan's office, he was screening everything for her, including Taiwanese.

And this gentleman's name is Food Song. So, so, so when I left Geneva, well, when I went to Belgium last two years ago, he was the Chinese representative in Belgium too. I go, what a coincidence, and then that came to United States. Now he's a Chinese UN representative just trailing you.

Yeah, stop following me, please. But that's how they work. So that's why there is a reason I sort of understand why President Trump is very negative on international organizations because again, it's unreasonable to have the UN Human Rights Committee and all the members are the worst human rights violators are members of that committee.

It's a joke. So I guess some form of reform needs to be done. But we want to be included because again, we are part of this global village. We want to hear what's going on. We also want to contribute what we can in health and in ICAO, in international flights and even Interpol, etcetera.

So again, it is our intention to continue. United States in general speaking, we still supports Taiwan's international partner. Again, you have a different position on international relations, but they still support Taiwan's inclusion.
>> Larry Diamond: Okay, thank you for that, you're an economic, technological, and moral leader in the world.

You have a right to be included.
>> Alexander Tah-Ray Yui: Thank you.
>> Larry Diamond: A couple of questions from Voice of America China division reporter Tina Chung. The first I think you've spoken to a bit in your last two answers, but she asked the Trump administration has now been in office for a few weeks.

How would you characterize US Taiwan relations right now? You can say something more about that if you want to. But the second question I particularly like you to answer, she wants your response to the statement, one of many famous statements by China's Defense Ministry just yesterday in a warning to Taiwan's government, claiming that Taiwan's government is seeking independence by relying on America's help, saying sooner or later we will get you.

Do you have a response to that?
>> Alexander Tah-Ray Yui: Well, again, don't be fooled by just because they're bringing pandas that they're different now. That position has never changed the standard but will get you eventually is what they've shot for always. So again, we're determined to maintain our way of life.

The fact that we are in Taiwan having elections, free elections, people are able to speak their minds is something that the Chinese citizens don't have. And that's why actually we pose a threat to the CCP's legitimacy in mainland China. And that's in my opinion that's also the why the reason why the PRC was willing to abrogate the the, the treaty that they signed with the with UK when they were returning Hong Kong to China as a colony.

They promised to keep Hong Kong as is for 50 years and they abrogated their agreement because the same thing the Chinese saw in Hong Kong that not as a territory of China, that people in Hong Kong could have different lives styles than the Chinese in on mainland China.

Though they were small, but the effect that it caused in China I think would have been devastating if people started to doubt why can't we have the same things in mainland China? So the cider says let's turn Hong Kong into any other Chinese city and that's what they've done unfortunately.

Again, we're beacon of hope for for the Chinese people in general that there are different ways of doing things different way. You can choose our leader we don't even like what they're doing we can speak our minds we kind of very lively opposition in Congress you, our legislature is very physical as you know literally very physical but again it's it's it's better for our legislator to be fist fighting in Congress than the people in general fighting on the streets, so let them fight and things will be good.

So again you can try to have a taste of what we being Taiwan are doing and you'll like it so yeah so anyways but on Taiwan jurisdictions again as you mentioned we have many friends in Congress in the executive and they. They all realize what China means to the United States.

It's is threat, their adversaries Taiwan is a partner. And again I want to repeat that to the United States, Taiwan is an asset, not a liability. And working together will enhance what you wanna achieve and what we want to is basically live in peace and stable Taiwan Straits.

So again, you mentioned about friends. Just one example, January 15th United States Congress just in into the first in the new 119th session of Congress and they put a priority to try to pass in the House Representatives the avoidance of double taxation bill. It was put in priority January 15th and out of that day was the vote for Taiwan.

The ADTA was 423 votes to 1 which is, there's 435 members of Congress 423 voted in favor of this bill. This was one and I was who the hell is this one? I'm sorry man. And this gentleman from Kentucky, Representative Massey and, and I was told he's well anyways I respect his opinion, but again that's just a very illustrative way of showing the friends we have in Washington D.C.

>> Larry Diamond: You don't get a vote like that except for a resolution to reaffirm Mother's Day honoring our mothers
>> Alexander Tah-Ray Yui: Yes.
>> Larry Diamond: I think we have time for only one last question if there's anything brief.
>> Alexander Tah-Ray Yui: Yeah.
>> Larry Diamond: And if not, I will just give you a chance to make any final comment you wish or maybe any reflection on the CHIPS act and where we stand with that.

>> Alexander Tah-Ray Yui: Well CHIPS Act again I know the current administration has a different view how CHIPS Act should be executed. President Trump said it that he was not for giving money to financial incentives to the companies. But again, there's a stick but there's also and again I still plead for Senate to prove the avoidance of double taxation as quickly as possible.

The House represent already did so January 15th on January 25th the Foreign Affairs Committee and this the Senate Foreign affairs and House of introduced along with the well they introduced. A bill that is has the exact content as a House. Meaning that they don't have to reconciliate the text but but still finding ways to reach the floor.

So we hopefully that will pass soon and that will be again a big character to incentivize our companies to come to the United States which we are already doing so so it will be a good incentive. But it's it's relevant the CHIPS act is to help Actually his sensei's presence in Arizona started with President Trump's term.

When they were invited by President Trump's administration to come to Arizona and obviously there are some incentives. I'm sure Arizona offers some incentives but it has not been easy at the beginning. One thing I want to stress is Taiwan and US were doing also pushing strong on generating talents just formation of human capable labor force to man these factories.

Actually there's not enough of them and the speed by which TSMC the Arizona plants are functioning depends on how many people they can get to man these factories and they're not enough of them. So the first thing they did TSNC was to partner with ASU to try to generate but also we're doing so across country with Texas A and M system, TU with Purdue etc, Illinois.

And all different and I'm sure here in California we're also probably partnering with many colleges to try to, we don't have enough engineers for manufacturing semiconductors. In Taiwan itself we don't have enough so we're trying to do that and that is important factor because what's coming with AI and Stargate and all these advanced technologies will need a lot of them and working together is important.

>> Larry Diamond: That was a major theme of our report Silicon Triangle we need more electrical engineers in the United States. In any case, I think one of the things that 423 to 1 vote in the House reflects is the depth and complexity of the US Taiwan Partnership that it's based not only on common interests but common values.

Representative you thank you so much for being with us and for the work you're doing and again thank you to San Francisco and thank you all for coming.
>> Alexander Tah-Ray Yui: Thank you.