The proliferation of regional trading arrangements in East Asia offers challenges and opportunities for several countries in the region, including Taiwan.
Because of different levels of development, asymmetrical GDP size and divergent economic structures in East Asia, the emergence of trading blocs — be they ASEAN plus China or ASEAN plus China, Japan and South Korea — would generate a domino effect in favor of the largest countries.
As Nobel laureate Paul Krugman predicted, a free-trade area between large and small economies results in all factors of production, except land, transferring to the larger country, and thus the “hub and spoke” scenario.
Richard Baldwin has argued that a bicycle model of East Asian integration “with two natural hubs and many overlapping spokes” will emerge in the region. Essentially, there would be a Japan-centric versus China-centric hub, surrounded by many spokes across the region.
One can locate the divergence between the hubs: The Japan-centric hub would be driven by market forces through trade, investment and technology flow, whereas the China-centric hub would be largely motivated by foreign policy. Also, the Japan-centric hub is dominated by the nation’s industrial democracy — a leader of East Asian industrialization and well endowed with “oceanic civilization.”
On the other hand, China has been and still is an authoritarian regime, and is traditionally tied with “continental civilization.” The China-centric hub is, in addition to its political leverage over Hong Kong and Macau, manipulated by Beijing’s “good neighborhood” policy relating to Southeast Asian countries, as well as its overtures toward Taiwan.
From a global perspective, the China-centric hub would be technologically inferior to the Japan-centric hub. Unlike Japanese investments overseas, China’s outward foreign direct investment aims to exploit natural resources and obtain strategic supplies with little or no possibility of technology transfer to host countries. Moreover, China remains an emerging market economy at an earlier stage of development and industrialization relative to Japan.
What are the options for Taiwan? Since the Dutch arrived in the 17th century, Taiwan has belonged to an oceanic civilization. In its postwar development, Taiwan has been following the Japanese trajectory since its economy took off in the 1960s. By the measures of economic development and degree of industrialization, Taiwan is more similar to Japan than to China.
Therefore, if Taiwan signs an economic cooperation framework agreement (ECFA) with China without also signing individual free-trade agreements with the US, Japan and other ASEAN countries, then it will become one of the many spokes (or peripheries) of the China-centric hub. By integrating itself with a Greater China Economic Zone, Taiwan would become vulnerable to a clash between the oceanic and continental cavitations, as Samuel Huntington’s thesis dictates.
As long as unification is Beijing’s goal, economics cannot be separated from politics. Once Taiwan signs an ECFA with China, it will become part of Greater China economically — and eventually join China’s orbit politically.
Those who proclaim that trade pacts do not affect sovereignty are either naive or putting their heads in the sand. While Hong Kong has had no choice but to sign its trade pact with China, Taiwan still has autonomy — and vital alternatives in the process of globalization.
Taiwan must adopt a cosmopolitan perspective for the sake of its future. Globalization is not the same as Sinicization.
Peter C.Y. Chow is professor of economics at the City University of New York and a research associate at the National Bureau of Economic Research.
The US Senate’s passage of the 2026 National Defense Authorization Act (NDAA), which urges Taiwan’s inclusion in the Rim of the Pacific (RIMPAC) exercise and allocates US$1 billion in military aid, marks yet another milestone in Washington’s growing support for Taipei. On paper, it reflects the steadiness of US commitment, but beneath this show of solidarity lies contradiction. While the US Congress builds a stable, bipartisan architecture of deterrence, US President Donald Trump repeatedly undercuts it through erratic decisions and transactional diplomacy. This dissonance not only weakens the US’ credibility abroad — it also fractures public trust within Taiwan. For decades,
In 1976, the Gang of Four was ousted. The Gang of Four was a leftist political group comprising Chinese Communist Party (CCP) members: Jiang Qing (江青), its leading figure and Mao Zedong’s (毛澤東) last wife; Zhang Chunqiao (張春橋); Yao Wenyuan (姚文元); and Wang Hongwen (王洪文). The four wielded supreme power during the Cultural Revolution (1966-1976), but when Mao died, they were overthrown and charged with crimes against China in what was in essence a political coup of the right against the left. The same type of thing might be happening again as the CCP has expelled nine top generals. Rather than a
Former Chinese Nationalist Party (KMT) lawmaker Cheng Li-wun (鄭麗文) on Saturday won the party’s chairperson election with 65,122 votes, or 50.15 percent of the votes, becoming the second woman in the seat and the first to have switched allegiance from the Democratic Progressive Party (DPP) to the KMT. Cheng, running for the top KMT position for the first time, had been termed a “dark horse,” while the biggest contender was former Taipei mayor Hau Lung-bin (郝龍斌), considered by many to represent the party’s establishment elite. Hau also has substantial experience in government and in the KMT. Cheng joined the Wild Lily Student
Taipei stands as one of the safest capital cities the world. Taiwan has exceptionally low crime rates — lower than many European nations — and is one of Asia’s leading democracies, respected for its rule of law and commitment to human rights. It is among the few Asian countries to have given legal effect to the International Covenant on Civil and Political Rights and the International Covenant of Social Economic and Cultural Rights. Yet Taiwan continues to uphold the death penalty. This year, the government has taken a number of regressive steps: Executions have resumed, proposals for harsher prison sentences
RSS