During President Ma Ying-jeou’s (馬英九) term in office, the government has adopted a more open policy for cross-strait economic integration. The two sides of the Taiwan Strait have signed 23 agreements to institutionalize and facilitate cross-strait economic integration.
Ma has repeatedly said that deepening such integration would benefit the nation and have a positive spillover effect for Taiwan’s participation in Asia-Pacific economic integration efforts.
However, a majority of Taiwanese have not seen or felt the expected spillover benefits; instead they have developed concerns about economic costs, income distribution, security and sovereignty. As a result, most Taiwanese no longer support further expansion of cross-strait economic integration without transparent negotiations and adequate supervision of policymaking. Because of this, economic integration has stagnated as the nation waits for the legislature to pass the proposed oversight act for agreements between Taiwan and China.
Yet, even without the further liberalization of cross-strait economic exchanges, Taiwan still faces the staggering challenge of economic marginalization.
Taiwan faces a serious crisis, evidenced by its historically low investment rates, decline in attracting foreign investment and talent, and the massive outflow of capital and skilled workforce. This has left the public anxious.
China is a very important market and production base for Taiwanese and foreign businesspeople, and Chinese personnel and investments could be essential for Taiwan’s economic development.
To improve its competitiveness, Taiwan has to maintain an equal or preferential access — compared with other economies — to China’s market and resources, and cautiously open itself to Chinese investment.
Taiwan also has to gain Beijing’s tacit consent, or at least non-objection, to participate in the Asia-Pacific economic integration regime.
To maximize opportunities and minimize risks, Taiwan should develop a new strategy to make breakthroughs on the current dilemma: the lack of progress in cross-strait economic integration and lack of participation in the regime.
With respect to the first problem, the government should follow three policy goals: creating overall economic benefits that are significantly bigger than the costs, subsidizing and assisting disadvantageous parties, and addressing the public’s concerns about security and sovereignty.
To achieve these three goals, the government should adopt a balanced policy approach: large-scale economic structural reforms, deepening cross-strait economic integration and participation in the regime.
Without large-scale economic structural reforms, the nation would lose its international competitiveness, efficiency and vitality vis-a-vis other economies in Asia, and it would continue to hemorrhage capital and personnel. If Taiwan opens up more to cross-strait economic exchange under the current conditions, its capital and people are likely to continue to pour across the Strait to China.
However, without deeper economic integration, Taiwan might lose its opportunities for equal or preferential access to Chinese markets and professional talent. Without Beijing’s tacit consent, it would be very difficult for Taiwan to participate in the regime.
Without Taiwan’s participation in the regime, Taiwanese are unlikely to feel confident about greater cross-strait ties, while the economy would continue to be marginalized and investors would continue to lose confidence in the economy.
The government should consider adopting the following concrete policy measures:
One, provide a comprehensive assessment on the political-economic effects of cross-strait economic integration.
Two, better coordinate its departments and agencies to develop a negotiation strategy with China.
Three, provide supplementary measures and assistance for those who are likely to be hurt by the economic integration efforts.
Four, communicate and build consensus with public and industrial sectors through public hearings, consensus-building meetings and opinion polls.
Five, ensure adequate supervision by the Legislative Yuan of the cross-strait process and closely brief opposition and ruling party lawmakers on the negotiating efforts.
Six, regularly review and publicize the effect of the implementation of cross-strait economic agreements.
Finally, to reduce the risks and uncertainties brought by cross-strait economic integration, the government should proceed in incremental steps.
If consensus on cross-strait economic integration policies can be reached, Kinmen could serve as an excellent location for testing cross-strait integration projects.
Tung Chen-yuan is a visiting scholar at the University of California at Berkeley.
Two sets of economic data released last week by the Directorate-General of Budget, Accounting and Statistics (DGBAS) have drawn mixed reactions from the public: One on the nation’s economic performance in the first quarter of the year and the other on Taiwan’s household wealth distribution in 2021. GDP growth for the first quarter was faster than expected, at 6.51 percent year-on-year, an acceleration from the previous quarter’s 4.93 percent and higher than the agency’s February estimate of 5.92 percent. It was also the highest growth since the second quarter of 2021, when the economy expanded 8.07 percent, DGBAS data showed. The growth
In the intricate ballet of geopolitics, names signify more than mere identification: They embody history, culture and sovereignty. The recent decision by China to refer to Arunachal Pradesh as “Tsang Nan” or South Tibet, and to rename Tibet as “Xizang,” is a strategic move that extends beyond cartography into the realm of diplomatic signaling. This op-ed explores the implications of these actions and India’s potential response. Names are potent symbols in international relations, encapsulating the essence of a nation’s stance on territorial disputes. China’s choice to rename regions within Indian territory is not merely a linguistic exercise, but a symbolic assertion
More than seven months into the armed conflict in Gaza, the International Court of Justice ordered Israel to take “immediate and effective measures” to protect Palestinians in Gaza from the risk of genocide following a case brought by South Africa regarding Israel’s breaches of the 1948 Genocide Convention. The international community, including Amnesty International, called for an immediate ceasefire by all parties to prevent further loss of civilian lives and to ensure access to life-saving aid. Several protests have been organized around the world, including at the University of California Los Angeles (UCLA) and many other universities in the US.
In the 2022 book Danger Zone: The Coming Conflict with China, academics Hal Brands and Michael Beckley warned, against conventional wisdom, that it was not a rising China that the US and its allies had to fear, but a declining China. This is because “peaking powers” — nations at the peak of their relative power and staring over the precipice of decline — are particularly dangerous, as they might believe they only have a narrow window of opportunity to grab what they can before decline sets in, they said. The tailwinds that propelled China’s spectacular economic rise over the past