The fourth meeting between Straits Exchange Foundation (SEF) Chairman Chiang Pin-kung (江丙坤) and Association for Relations Across the Taiwan Strait (ARATS) Chairman Chen Yunlin (陳雲林) focused on four issues: cooperation on standardizing inspections and certification; quarantine and inspection of agricultural products; avoidance of double taxation and cooperation on fishery labor affairs. These issues, in addition to the memorandum of understanding on financial supervision and management, as well as the opening up of Chinese investment in Taiwan, were designed to establish a single China market with the ultimate goal of unification.
President Ma Ying-jeou’s (馬英九) administration claims these agreements simply promote the economy and prevent Taiwan from being marginalized. It says there is no political element to the proposed economic cooperation framework agreement (ECFA). It is, however, trying to hoodwink the public under the rubric of maintaining a separation of politics and economics.
History tells us that there is no such thing as a separation of politics and economics. We have seen repeated instances of wars fought for economic interests: the Opium War, the Sino-Japanese War, the clashes between eight European powers and the Qing Dynasty in the 19th century, and, more recently, the US-led invasion of Iraq. Any given economic policy is inherently political.
Beijing’s insistence on setting its “one China” policy as a precondition for negotiations is an example of politics leading economics. You only have to listen to Chinese President Hu Jintao (胡錦濤), Chinese Premier Wen Jiabao (溫家寶) and other Chinese officials to see the similarities between the ECFA and the closer economic partnership agreements China signed with Hong Kong and Macau. Both were economic cooperation arrangements with the precondition of acknowledging the “one China” policy.
The aim is to incorporate Taiwan within the single China market. Beijing is trying to make Taiwan’s economy inextricably meshed with its own, with the ultimate political objective of being able to absorb Taiwan without a single shot being fired.
Ma’s basic position is this: Taiwan has to be more competitive, given the trend toward globalization and fierce international competition, and its best bet is cooperation with China. His idea is to benefit from a division of labor, whereby research and development is carried out in Taiwan but the manufacturing is done in China. To this end, he wants to see Taiwan open up to China, and to concentrate on China for both investment and exports.
Estimates published in the May 9 edition of The Economist showed Taiwan has already invested some US$400 billion in China. More than 80 percent of Taiwan’s investment overseas is in China. Taiwan, therefore, is well on the way to becoming overly dependent on China, economically speaking, and at risk of coming under its control.
The folly of not distinguishing friend from foe, and in fact allowing oneself to become economically reliant on the latter, is exposing Taiwan to serious danger.
Taiwanese investment in China is contributing to the rapid growth in China’s economy, providing it with both capital and technology. This is fueling the rapid modernization of China’s armed forces and helping it build a military empire. China has 1,400 missiles aimed at Taiwan, posing a serious risk to Taiwan’s survival.
This is the result of the policy of not distinguishing friend from foe, and a catastrophe in the making born of the pretence of the separation of economics and politics. When will the Taiwanese wake up?
Wang To-far is a professor of economics at National Taipei University.
TRANSLATED BY PAUL COOPER
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