In last year’s presidential and legislative elections, the Democratic Progressive Party (DPP) swept to victory with not just the presidency, but the party’s first-ever legislative majority. Eighteen months on, despite a slump in the opinion polls, President Tsai Ing-wen’s (蔡英文) government has already done three things that should please the public.
First, Tsai has declined to recognize the so-called “1992 consensus,” which covertly cedes Taiwan’s sovereignty to Beijing. Her government has also managed to maintain peace across the Taiwan Strait and avoided causing irrevocable damage to the cross-strait relationship, while weakening the magnetic pull of China on the nation’s economy.
The government has also successfully navigated the Act Governing the Handling of Ill-gotten Properties by Political Parties and Their Affiliate Organizations (政黨及其附隨組織不當取得財產處理條例) through the legislature and has begun to deal with the problem of the Chinese Nationalist Party’s (KMT) misappropriation of assets. This has given the public confidence in the ongoing process of transitional justice.
Legislators last week then finally passed the Act Governing Civil Servants’ Retirement, Discharge and Pensions (公務人員退休資遣撫卹法). In doing so, the government averted a financial crisis and the potential bankruptcy of the nation’s economy.
Although Tsai’s insistence on upholding Taiwan’s sovereignty has caused China to cut the number of tourists visiting Taiwan, place an embargo on Taiwanese agricultural imports and take other retaliatory measures; and while the government’s handling of the KMT’s ill-gotten assets and pension reform has caused unrest in political circles; Taiwan’s economy is showing signs of recovery.
In the first quarter of last year, the economy contracted by 0.23 percent, then grew by 1.13 percent in the second quarter, 2.03 percent in the third and 2.58 percent in the fourth, while in the first quarter of this year the economy grew by 2.56 percent.
The stock market has been performing even more strongly. On June 27, the TAIEX closed at a 17-year high of 10,513.96 points. Compared to Jan. 25 last year, when the TAIEX slumped to 7,762 points, the index has risen by 35.45 percent, making it one of Asia’s top-performing stock markets.
However, warning signs have begun to emerge which require a speedy response.
The first was the Economic Development Council’s composite economic growth indicator, which has been recording month-on-month falls in growth since January. April’s figure left the economy only 21 points short of losing the index’s “green light” rating which signifies “stable growth.”
A second is that in the first five months of this year, 214 Taiwanese businesses received approval to invest in China — an increase of 120 percent on the previous year’s figure. It appears that Beijing’s active infiltration of senior civil service officials sympathetic to the pan-blue camp is beginning to bear fruit, while Beijing’s overarching strategy to overwhelm Taiwan’s smaller economy and integrate it into its own is yielding results.
Another aspect to the flurry of investment in China is that domestic investment is severely lacking. Private sector investment growth is only 1.95 percent. Beijing is keenly aware that the cross-strait stalemate is beneficial to Taiwan’s economic recovery.
In an attempt to reverse the situation, Beijing has changed tack and ditched its former strategy of targeting the “three middles and the youth”; residents of central and southern Taiwan; middle and low-income families; small and medium-sized enterprises; and young people.
In its place is the “one generation, one line” strategy, which focuses on the younger generation and the grass-roots “front line.”
There is no difference between the two: both slogans are clear statements of intent that China is infiltrating Taiwan’s economy and will continue to do so.
Now that pension reform has passed the final legislative hurdle, the government must address the dual problems of sluggish inward investment and China’s infiltration by drawing up an “anti-infiltration special law.” In addition, an even more pressing need than transitional justice is for the nation to undergo a program of “economic transitional justice.”
This means transitional justice for domestic investors treated unfairly by the previous KMT government, which gave excessive preferential treatment to Taiwanese businesses operating in China, and transitional justice for domestic investors left disadvantaged by the KMT’s preferential treatment of foreign investors in the stock market.
The government should immediately enact legislation that provides genuine incentives for inward investment by Taiwanese investors, but not Taiwanese businesses operating in China or foreign investors. Only then will it be possible to defend Taiwan against the treat of economic annexation by China.
If the government fails to act now, all it has achieved so far will have been in vain.
Huang Tien-lin is a national policy adviser.
Translated by Edward Jones
In the US’ National Security Strategy (NSS) report released last month, US President Donald Trump offered his interpretation of the Monroe Doctrine. The “Trump Corollary,” presented on page 15, is a distinctly aggressive rebranding of the more than 200-year-old foreign policy position. Beyond reasserting the sovereignty of the western hemisphere against foreign intervention, the document centers on energy and strategic assets, and attempts to redraw the map of the geopolitical landscape more broadly. It is clear that Trump no longer sees the western hemisphere as a peaceful backyard, but rather as the frontier of a new Cold War. In particular,
When it became clear that the world was entering a new era with a radical change in the US’ global stance in US President Donald Trump’s second term, many in Taiwan were concerned about what this meant for the nation’s defense against China. Instability and disruption are dangerous. Chaos introduces unknowns. There was a sense that the Chinese Nationalist Party (KMT) might have a point with its tendency not to trust the US. The world order is certainly changing, but concerns about the implications for Taiwan of this disruption left many blind to how the same forces might also weaken
As the Chinese People’s Liberation Army (PLA) races toward its 2027 modernization goals, most analysts fixate on ship counts, missile ranges and artificial intelligence. Those metrics matter — but they obscure a deeper vulnerability. The true future of the PLA, and by extension Taiwan’s security, might hinge less on hardware than on whether the Chinese Communist Party (CCP) can preserve ideological loyalty inside its own armed forces. Iran’s 1979 revolution demonstrated how even a technologically advanced military can collapse when the social environment surrounding it shifts. That lesson has renewed relevance as fresh unrest shakes Iran today — and it should
On today’s page, Masahiro Matsumura, a professor of international politics and national security at St Andrew’s University in Osaka, questions the viability and advisability of the government’s proposed “T-Dome” missile defense system. Matsumura writes that Taiwan’s military budget would be better allocated elsewhere, and cautions against the temptation to allow politics to trump strategic sense. What he does not do is question whether Taiwan needs to increase its defense capabilities. “Given the accelerating pace of Beijing’s military buildup and political coercion ... [Taiwan] cannot afford inaction,” he writes. A rational, robust debate over the specifics, not the scale or the necessity,
RSS