This article examines Taiwan's new hedging policy toward China and its evolving relations with Japan. Taiwan under President Ma Ying‐jeou focused on hedging its bets against China's rise through engagement, accommodation, and soft balancing. Meanwhile, Taipei and Tokyo are also forging a strategic partnership as they cautiously achieve low‐commitment agreements for deeper cooperation, including signing an important fisheries agreement. Nevertheless, both international and domestic challenges may constrain the flexibility of Taipei's hedging strategy. Given the uncertainty and complexity in East Asia, Taipei will continue its hedging strategy as a way to expand its external cooperation in the region.