Perhaps we should not take Former US secretary of state Hillary Rodham Clinton too seriously at the moment. If her recent public statements are in general designed as run-up declarations for the 2016 presidential election, then perhaps they should be taken with a pinch of salt.
She declared in an interview in Los Angeles on June 19 that closer economic ties with China have made Taiwan more vulnerable, as growing economic dependence leads inevitably to closer political dependency.
In the view of Clinton, in the long term it is inevitable that “the demands from China will grow, because [China] is growing so much.” If she becomes the next president this view could be of importance to Taiwanese. However, the huge irony should be noted, and so must all the faults of such a generalization.
The irony first: It was the administration of US President Barack Obama, which Clinton served so well, that came out in support of President Ma Ying-jeou (馬英九) and the Chinese Nationalist Party (KMT) in the most recent Taiwanese presidential election, in 2012. Indeed, the timing was perfect, serving to bolster a wilting KMT campaign, just days before voting took place.
Ironic also, because the main grounds of US support were openly declared to be the KMT’s better control of the cross-strait relationship. Finally, ironic because those US statements of support pretty much hit the same chord as statements in support of the KMT coming from China during the same period.
The combined Chinese and US support for the KMT served to obscure other domestic issues that might have swung things even at that late stage, toward the Democratic Progressive Party (DPP). Many of the students who supported the recent Sunflower movement were almost certainly first-time voters in 2012, who had voted for Ma and now must live with their decision.
However, the faults are worthy of more consideration. First, it is since the 2008 global economic downturn, when all the weaknesses of the US economy have been so starkly exposed, that the China-Taiwan economic relationship has become closer. With major Western economies floundering at low or zero growth and with confusion voiced over and over again on most matters of basic economic policy, no US politician is in a strong position to reflect on the Taiwanese economy.
Hit hard by the beginning of recession, Taiwan began to recover not long after, and since then has posted a higher growth rate than most Western economies. In 2008 as China began to apply policies similar to those of Europe and the IMF, wise commentators voiced fears. However, China by 2009 had already reversed course, moved into spending on infrastructure and provincial development, so was able to post very impressive growth rates by 2010.
Anyone who assigns the relative success of Taiwan to the Economic Cooperation Framework Agreement (ECFA) is at best foolish. Those who argue that Taiwan’s outperformance of the West has little to do with Chinese economic growth and closer relations is even more foolish.
Taiwan is highly dependent on the health and growth of its external sector, and any reverse in policy — say closer trading and investment links with the US and a weakening of Chinese commercial links since 2008 — would have been about as stupid a choice at that time as can be imagined.
The relative health of the Taiwanese economy, despite obvious problems of unemployment and a lack of public sector social expenditure, is clearly related to its commercial and investment relationship with China, led in particular with by the myriads of individual Taiwanese businesspeople, investors and traders, who took advantage of high Chinese growth after 2008. Individuals in their thousands made the decisions, not the KMT.
Public-sector encouragement — such as the ECFA — might have helped with marginal investment decisions but even this remains unproven. What seems more likely is that any government in power after 2008, the KMT or the DPP, would almost certainly have followed the same broad trajectory. Of course the rhetoric would have been different. You will gather that the irony remains.
Thus, Clinton must take her place among those who were part and parcel of Ma’s electoral victory and also integral to the growing Taiwan-China relationship, if only in so clearly failing to mitigate the recession through public economic policy measures, or break the prolonged stalemate in the US budget caused by the twin burdens of enormous military expenditure and growing welfare commitments in the absence of broader institutional change.
However, the historical record is even more telling. Clinton chose to compare the Taiwan-China relationship with that of Ukraine and Russia in terms of the terrors of economic dependency. Why? Must we live by rhetoric alone? Relations of economic dependency, with two parties highly interrelated via commerce, investment and technology, but with one party far more powerful than the other have been common throughout modern history. There are sorry tales — Chinese investment and technology dependency on the USSR from the 1940s to the 1960s led to an awful mess, yet they shared at least a nominally similar communist ideology and seeming isolation from the major capitalist economies.
What of Japanese development between 1945 and the 1970s, massively dependent on US aid, trade, institutional revolution and military expenditure? An erstwhile extreme nationalist and military system was turned into a nation of eastern capitalism by the largest democracy in the world, succored by its overwhelming military strength, expanded by the enormous US market, and provided with political and cultural legitimacy through US soft power and diplomacy.
The US occupied Japan until the end of the Korean War in 1952 [sic] then acted as her chief defender, and in 1971, under then-US president Richard Nixon, provided a huge shock to the international system — basically taking the dollar off the gold standard, forcing currencies to float at market values, destroying the chief functions of the IMF — that increased the value of the yen and ignited the huge movement of Japanese investment into East Asia, Europe and the US itself. This is clear dependency and led to the enormous growth of the Japanese industrial and commercial economy and to a widening of its electoral politics.
Historians can run back and forth in time. Back to the US revolution and war of independence from 1775 to 1783, the US fought against British political dominance and colonialism, but this was then followed by a close of economic relationship between the two — based first on the large imports of raw cotton from the US to Britain that fed the industrial revolution of the world — that saw the rise of US industrialism, again ironically owing much to the emergence of US military capabilities using techniques of mass production that may have led to Henry Ford in the next century, but more immediately made the US civil war from 1861 to 1865 far more bloody than it would otherwise have been.
Or we can jump forward in time to the effect of Japanese technology and investment on the so-called Four Tigers, the then-newly industrial economies of Taiwan, Singapore, Hong Kong and South Korea. Each benefited from very high rates of growth, technological modernization, and prosperity. In the case of Taiwan, this took place under a KMT regime that could ride high growth rates while maintaining austere discipline, political autarchy and a longer period of martial law than any other Asian nation, indeed matched only by Syria in the 20th century.
Throughout most of those years of dependency on Japanese technology and US military power, the KMT kept up its anti-China rhetoric, and indeed its policy that Taiwan was the only China and was duty-bound to defeat the mainland by force, whilst hiding under the military and cultural umbrella of the US; which you will note was the position also of Japan. How much irony can reality give us?
So it is more a packet of salt than a pinch. None of the above argues that economic dependency could not under restrictive conditions lead directly to political dependency. However, neither history nor circumstance support Clinton’s contention for Taiwan, which is anyway hypercritical in the extreme.
Historically, relationships based on economic dependency have had mixed political results, but it should be noted that very differing and highly capitalist nations have developed through dependency, from the US or Japan through Australia or Canada — long-dependent on unequal relationships with the UK and the US respectively — to the Four Tigers, and it happens that in all these cases the political trajectory has been toward, rather than away from, democracy.
It is very easy to be populist, and in Taiwan, commentators and politicians will jump to support Clinton. This may not do too much harm in the long run. However, any party that builds its electoral case for 2016 on the basis of an outdated anti-China perspective without combining that with a consistent and coherent program of economic and social reform will merely repeat the mistakes of 2012.
In particular, if the DPP follows Clinton to the letter and uses such claims to build a more radically critical position on China in coming months, it could be that by the 2016 electoral campaign it will once again be shattered by repeated US support for the KMT. So beware the rhetorical soothsayer and remember that irony is not always funny.
Ian Inkster is professorial research associate of SOAS, University of London, and professor of global history in the department of international affairs at Wenzao Ursuline University of Languages, Kaohsiung.