Wed, Aug 15, 2012 - Page 8 News List

The Liberty Times Editorial: China’s power is its deep pockets

In China, politics is the goal and economics is a means rather than an end in itself.

China does not perform its calculations according to gains and losses on company accounts. In relation to China’s Taiwan policies, this mindset is expressed by a quote by Taiwan’s former vice defense minister Lin Chong-pin (林中斌) once commented, the CCP believes that the cost of “buying Taiwan” is lower than that of taking it by force.

China’s strategy of “buying Taiwan” has made a lot of headway with the government of President Ma Ying-jeou (馬英九), who thinks that Taiwan can deal with economic matters first and leave political issues until later in its dealings with China.

However, Ma’s approach has hit a bottleneck. During Ma’s first four-year term, his administration downgraded Taiwan’s status as a nation under the fig leaf of the so-called “1992 consensus.” Disregarding Taiwan’s sovereignty, the Ma government preferred to dance to China’s tune which opposes Taiwanese independence.

However, it looks as though the Ma administration cannot keep acting this way and China is now upping the ante by pressuring Ma’s Chinese Nationalist Party (KMT) to accept that “both sides of the Taiwan Strait belong to one country.”

The implication is that, if the KMT does not comply, follow-up talks on the cross-strait Economic Cooperation Framework Agreement (ECFA) will not be able to go ahead.

Is the ECFA not a repeat of the “ASEAN plus one” case that Glaser refers to in her article?

The KMT is like a turtle crawling into China’s giant sack and with no other options or exits available it will suffer the same fate — whether it crawls in or tries to beat a retreat. This is one of the main reasons why Taiwan’s economy has lost its drive and is floundering.

Recently Ma’s government has been saying that it wants to save the economy, but one of its suggested remedies is to further open Taiwan to Chinese capital investment. Chinese investors are eager to break through Taiwan’s strict restrictions — such as controls on permitted investment categories, limitations on stock ownership and total investments.

Judging by how China has operated in other countries, winning or losing money is not its primary concern. If China can dominate a country’s companies and their employees and markets, then at critical moments it will be able to influence and even decide that country’s political decisions.

So, is the government’s plan to allow more Chinese investment not tantamount to speeding up China’s strategy of buying Taiwan? Would it be right to view this process purely according to the theory of free-market economics?

Recently, Taiwan’s opposition Democratic Progressive Party (DPP) has been pondering how to get to know China better. Considering the US-oriented perspectives expressed by Glaser, and in view of the KMT’s past mistakes, it should be easy for the DPP to understand if its aspiration of “developing economic and trade relations with China while insisting on Taiwan’s sovereignty” is tenable or not.

The naive fantasy that economics can be separated from politics is not realistic even in a democratic country, let alone in China, where the economy is always placed at the service of politics.

Leaders of Taiwan’s governing and opposition parties must be willing to bite the bullet eventually and work together on walking a more difficult path. That path must involve encouraging research and development and finding ways of keeping technology, job opportunities and tax revenue here in Taiwan, while exploring new markets and linking up with advanced countries.

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