Sun, May 04, 2008 - Page 8 News List

Making more concessions to China?

By Lin Cho-shui 林濁水

Chinese Nationalist Party (KMT) president-elect Ma Ying-jeou’s (馬英九) recent appointment of Lai Shin-yuan (賴幸媛) as chairwoman of the Mainland Affairs Council (MAC) has enraged a group of KMT elders who were stepping over each other to kowtow to Beijing and beg for favors. Straits Exchange Foundation (SEF) chairman-designate Chiang Pin-kung (江丙坤) even claimed that the appointment could mean a dead end for cross-strait relations.

Those in the Chiang camp believe that China has been kindness itself to Taiwan. For instance, they believe that Taiwan’s trade policy toward China violates WTO regulations because of the one-way trade and investment restrictions that Taiwan places on China. Beijing, however, lets this pass because of its “united front” strategy, allowing Taiwan to run up a large trade surplus. Hence Taiwan should give in “a little” politically to China in order to gain economic benefits.

Is this really the case?

First, Taiwan’s trade surplus with China is a result of Taiwanese exports of mechanical equipment, upstream components and semi-finished goods for assembly or production in China before they are shipped to Europe, the US and Japan. This kind of trade allows China to acquire Taiwanese capital, technology and employment opportunities for 20 million Chinese, as well as rake in huge foreign currency reserves from foreign trade.

Second, the reason China does not deal with Taiwan under the WTO framework has nothing to do with a desire to protect Taiwan’s economy. Taiwan is a WTO member and has the right to sign free-trade agreements with any country in the world. However, China has constantly intervened to prevent Taiwan from gaining equal status with China under the WTO framework. In short, China does not wish to deal with Taiwan under the same context.

Third, if China wanted what is best for Taiwan, then in the matter of the three links, why has it always insisted that passenger transport be opened first while obstructing cargo transport? Why does China encourage Taiwanese businesses to invest in the electronics industry that earns foreign exchange for China, but continues to block access to its domestic financial market?

Although the MAC has the authority to oversee the SEF, Chiang probably thought he could lord it over the MAC. As KMT vice chairman, any KMT member who works for the MAC is subordinate to him within the party. His anger at the appointment of Lai, a former Taiwan Solidarity Union legislator, is not difficult to imagine. Chiang now insists that before negotiations between the SEF and China’s Assocation for Relations Across the Taiwan Straits take place, a consensus should be reached through the KMT and the Chinese Communist Party (CCP) communication platform. In short, the KMT-CCP communication platform will render Ma and Lai’s system for Chinese affairs hollow and turn Ma into the executor of Chiang’s policies.

While Chiang is still frothing at the mouth, former KMT chairman Lien Chan (連戰) left quietly for his fourth meeting with Chinese President Hu Jintao (胡錦濤), planning to use this occasion to teach Ma and Lai a lesson. Hu appears to have given Lien “face” by touting the so-called “1992 consensus.” While this may be a slap in the face for Ma and Lai, it is far from a “face-saving” measure for Lien. Hu avoided mouthing the KMT contention that the “1992 consensus” refers to “one China, two interpretations.” At the same time, Hu reiterated the four principles of “building mutual trust, leaving disputes aside, pursuing common ground while preserving differences, and creating a win-win situation” — echoing the policies that Ma has promoted. Hu was making it clear to Lien that he is still negotiating with Ma.

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