Following Taiwan’s presidential elections in 2008 and 2012, Chinese President Hu Jintao (胡錦濤) seems to have gained insights that enabled him to refine his Taiwan policy. Later this year, the Chinese Communist Party (CCP) will go through a leadership change at the party’s 18th National Congress, and Chinese Vice President Xi Jinping (習近平), who is widely considered to be Hu’s likely successor, looks set to continue Hu’s policy of expanding cross-strait exchanges and using economic means to force political talks.
The Chinese government’s economic strategy behind its push in Taiwanese cities and counties ruled by the Democratic Progressive Party (DPP) has been to use procurement and investment delegations to win the support of the agricultural, fishery and livestock industries as well as small and medium enterprises; tourist groups to win over the tourism and hospitality industries, and the Economic Cooperation Framework Agreement (ECFA) to win the support of the manufacturing industry.
However, from the perspective of globalization and free trade, China’s strategy of using economic means to force political talks with Taiwan cannot last for long.
First, Taiwan’s benefits from the ECFA are limited. Since China and Taiwan signed the ECFA, 539 items have been listed on the “early harvest” list. This only accounts for 16 percent of the nation’s export items, which of course means that 84 percent of all export items are not on the list. Meanwhile, China launched negotiations with the 10 ASEAN member countries on tariff reductions last year, and it is also set to sign bilateral trade agreements with Japan and South Korea. The trend toward free-trade agreements (FTAs) has restricted the space for China to offer Taiwan advantages by cutting tariffs.
Second, the US has decided to “return to Asia” through the Trans-Pacific Partnership (TPP). In November last year, US Secretary of State Hillary Rodham Clinton published an article, “America’s Pacific Century,” in Foreign Policy magazine, declaring the US’ determination to return to Asia. US President Barack Obama has further used the TPP to co-opt the US’ major allies in the Asian-Pacific region, such as Japan, South Korea, the Philippines, Australia, New Zealand and Taiwan. The US hopes to counterbalance China with the TPP — the world’s largest free-trade economic community.
Third, the effects of China’s procurement delegations and tourist groups are falling short of expectations. Although the Chinese government orders provinces and cities to “adopt” Taiwanese counties and cities for procurement purposes, politically controlled procurement is no match for the market economy. Chinese leaders from many provinces and cities have made high-profile visits to Taiwan, bragging about the huge amounts of money they will spend on purchasing and signing letters of intent. In the end, a lot of this was just empty promises.
These three issues are the key factors, but there are others, such as China’s domestic economic bubble and inflationary pressures. All these factors have reduced China’s ability to use economic means to force political talks with Taiwan.
The DPP should systematically cultivate its own Chinese experts to be able to provide effective and long-term cross-strait policy analysis based on the international situation. This should help save the party from empty talk and instead allow it to construct a cross-strait discourse and policy with a Taiwanese identity.