AIT's Young should revise message


Thu, May 24, 2007 - Page 8

In his address at Monday's member meeting of the Chinese National Association of Industry and Commerce (CNAIC, 工商協進會), American Institute in Taiwan (AIT) Director Stephen Young said that "A critical way to improve the US-Taiwan trade partnership is for Taiwan to further open its economic relationship with China."

He also said that "Taiwan firms should observe high standards of environmental protection and labor rights in China. This can help speed the development of a modern China that is a constructive partner for both the United States and Taiwan."

The fact that Young spoke to the president of his host country and in the language of his host country was clearly aimed at conveying a specific message.

At a press conference late last year, Young urged Taiwan's legislature to quickly pass the arms procurement bill, and earlier this moth, on May 3, he offered a further impetus.

"It is no question that over the last decade China has deployed a large number of short-range missiles that threaten Taiwan," he said.

On the same occasion, Young also said "I am quite frankly puzzled by the reticence of the Taiwan political system and the Legislature to fund the current defense budget that is still being considered, including appropriate monies for the purchase of the Patriot III missile battery."

The implication is that Young is very clear on the threat that China poses to Taiwan. That threat, he points out, has by no means been diminished. By urging Taiwan to "further open its economic relationship" with China, isn't he actually telling Taiwan to knowingly put itself in harm's way?

If the relationship between Taiwan and China was that of two normal states, economic exchanges could follow market rules.

The naked reality, however, is that economic exchanges between the two are not the mutually beneficial exchanges that occur between regular countries. Instead, it is a war of economic unification based on China's ambition to annex Taiwan, defined by a Chinese government directive that states that "the meaning of trade with Taiwan shall be understood based on the strategy to achieve peaceful unification of the motherland" gives the best explanation of China's ambitions to promote unification through economic means.

Even so, Taiwan has continued to invest heavily in China over the past twenty years, with Taiwanese investment in China as a proportion of the national GDP being the highest in the world.

The problem is not that Taiwanese investment in China is insufficient; rather, it is excessive in the extreme. This really means that the negative consequences of continued deregulation of Taiwanese investments in China will be even more worrisome.

Perhaps Young doesn't completely understand the complexities of this situation. A deeper economic relationship with China is precisely the stance the pro-China pan-blue camp is using to block the national defense budget.

According to their rationale, an expansion of the trade relationship between Taiwan and China, the removal of investment caps and the opening up of the three direct links (mail, cargo, and transportation) will build peace in the Taiwan Strait -- a policy choice that will make a defense budget superfluous. It is easy to see how the pan blue camp might use Young's message to further pressure the government to deregulate investments in China and to oppose the national defense budget. Could this really be what Young proposes?

Just as with the US and other countries, Taiwan's foreign trade policy, especially with respect to China, is just one link in an overall national policy.

With China's menacing stance toward Taiwan still unchanged, Taiwan cannot afford to actively pursue liberalization and blindly "charge west" across the Taiwan Strait. Such a move could have serious side effects on Taiwan's economic and national security, and even on its national identity.

Young's frequent pleas to the legislature to pass the arm's procurement budget demonstrates his clear understanding of the fact that China-Taiwan relations are not merely issues of economics and trade. Perhaps he has been under pressure from US business; however, focusing only on economics and ignoring strategic considerations are not in the US' overall interests either.

As Young said during a May 3 press conference, "The United States is not only the best but really the only security partner Taiwan has."

This being the case, Taiwan has not only strategically cooperated with the US-Japan security alliance, but it has also always hoped to sign a free trade agreement (FTA) with the US to reduce the lure of the Chinese economy and strengthen Taiwan's economic security.

Unfortunately, the US has been unwilling to sign a FTA with Taiwan for many years and has instead awarded China "Most Favored Nation" status. Taiwan has also faced repeated pressure from the US, which has requested over and over again that Taiwan liberalize investment regulations in China. But with Taiwanese industries being hollowed out by the China gold rush, the question remains: Who will employ Taiwanese workers? How will Taiwanese be able to make a living?

Then there is the issue of Taiwan helping China modernize. China's economy has grown rapidly in recent years thanks to an infusion of capital from international investors, including Taiwan. But China hasn't used these resources to improve people's lives or spur democratic reform. On the contrary, China has blatantly expanded its military power, of which the nearly 1,000 missiles aimed at Taiwan are just one example.

China's defense budget has grown by double digits each year. Within a short period of time it will be able to penetrate Japanese waters to track the US aircraft carrier USS Kitty Hawk based in Yokosuka, Japan, as well as test-fire more anti-satellite missiles.

This certainly isn't the modernization that Young is hoping for. Instead, it is a dangerous military modernization, and China has Taiwan planted firmly between its cross hairs.

The economic aspect of China's unification campaign is motivated by the desire to annex Taiwan, not a wish to establish a constructive partnership. Therefore, Taiwan must use all resources at its disposal to defend its sovereignty and independence.

With this in mind, Taiwan would be ill-advised to recklessly pursue active cross-strait liberalization. Since the US sees Taiwan as a security partner, it naturally ought to understand Taiwan's economic and trade policy toward China, and it should cooperate with Taiwan's overall policies aimed at maintaining its sovereignty and independence.

Imagine if, on one hand, Taiwan must face China's military threat, economic unification campaign, diplomatic siege and desire to destroy Taiwanese sovereignty, while on the other hand, it must bear US demands that Taiwan further liberalize its economic relations with China, as well as occasional US pressure because of Chinese pressure on the US.

What other path would be left for Taiwan except "eventual unification"?

Everyone knows that Young is a friend of Taiwan. As such, he might further consider Taiwan's overall interests.

Translated by Perry Svensson and Marc Langer