It would be difficult to overstate the importance and timeliness of Scott Kastner’s Political Conflict and Economic Interdependence Across the Taiwan Strait and Beyond, which seeks to explain why, despite hostile political relations between Taipei and Beijing, economic ties have not only persisted, but accelerated.
Kastner, an assistant professor in the department of government and politics at the University of Maryland, goes far beyond the general, albeit contested, view that increased trade between two states reduces the likelihood of armed conflict. Rather, he argues that the more important question is when conflict affects trade. His main hypothesis is that national leaderships that are more accountable to “internationalist economic interests” are less likely to act in ways that threaten economic stability.
To make his case, Kastner looks at three protracted hostile political relationships, or dyads — Taiwan-China, India-Pakistan and South-North Korea — with emphasis on the Taiwan Strait. What follows is a fascinating exploration of the cross-strait paradox, whereby despite serious political conflict, trade between the two sides from the 1980s on has accelerated.
While prior to the mid-1980s economic interaction between Taiwan and China was extremely limited, democratization in Taiwan, added to a revaluation of the New Taiwan dollar that made domestic manufacturing less competitive, brought gradual changes in Taipei’s policies on investment in China. Democratization meant that the authorities became more accountable to the people and could no longer ignore business associations, or the “internationalist economic interests,” which gained clout as the size of the businesses investing in China grew. As liberalization intensified, the cost to the national leadership of ignoring those interests, or of preventing their expansion, increased.
This process went relatively smoothly, until the nature of the commercial links began having what Kastner calls “negative security externalities” for Taiwan. Arguments for caution included fears that investment in China helped it modernize, or that Taiwanese operating in China could be used for blackmail by Beijing, or held hostage. Furthermore, as trade intensified, Taiwan became increasingly dependent on China, which by the early 2000s surpassed the US as Taiwan’s primary trade partner.
Those security externalities forced the Taiwanese leadership to perform a balancing act between safeguarding political interests (e.g., sovereignty) and remaining accountable to business interests that not only called for further cross-strait trade liberalization, but also increasingly clamored for stability in the Taiwan Strait.
Taipei was therefore compelled to adopt a two-track approach to economic ties with China, one that clearly separated trade from politics. For Beijing, however, the growing cross-strait economic relationship had few negative externalities; it realized, in fact, that economic integration could be a crucial component of its ambition to annex Taiwan. To this end, in times of crisis it has sought to reassure Taiwanese businesses operating in China — including, with a few exceptions, “green” ones — that their interests are safe. As it stands to gain economically and politically from cross-strait economic integration, Beijing has refined the signals it sends to Taipei to express displeasure when the Taiwanese leadership appears to threaten the “status quo” so that Taiwanese business will not be scared off. Still, given the authoritarian nature of its government, in extreme cases Beijing is at greater liberty to act, even when its decisions risk undermining local governments that benefit from Taiwanese investment.
Kastner nevertheless shows that despite becoming increasingly beholden to business interests, Taiwanese leaders can slow the pace of integration when the domestic political conditions are right. As such, both Lee Teng-hui (李登輝) during his second term and Chen Shui-bian (陳水扁) during the 2004 elections were able to tap into sovereignty and protectionist constituencies to retain their grip on power, which had a cooling effect on cross-strait liberalization.
Still, one conclusion that can be drawn from Kastner’s book is that even when pro-independence administrations are in power, and even in times of high political tension across the Taiwan Strait, liberalization will proceed. Furthermore, as Kastner rightly points out, leaders and their coalitions can have very different interpretations of the negative security externalities involved in trading with China, as President Ma Ying-jeou (馬英九) has shown.
The author remains ambivalent about the impact of trade on conflict, concluding that its constraining (higher costs of war making it less likely) and transformative (reconciliation through increased contact) effects appear to have been marginal. Despite two decades of economic integration, for example, Taiwanese support for the “status quo” has remained constant. Ironically, international economic interests and China’s dependence on global markets may also have limited its ability to send threatening signals to Taipei, as doing so risks alarming international investors. Taipei, Kastner writes, may have been aware of this, which could account for risk-taking on the question of sovereignty. One constraining factor that Kastner oddly leaves out, however, is the security guarantees the US has extended to Taiwan.
Kastner concludes on a note of cautious optimism about the pacifying potential of economic liberalization in the Taiwan Strait. Still, he argues that if economic integration continues to accelerate — which the proposed economic cooperation framework agreement (ECFA), added to growing Chinese investment in Taiwan, would certainly do — future Taiwanese presidents may be less inclined, or able, to undermine stability for political reasons. This would indicate that we can expect more “centrist” government coalitions that are more accountable to business internationalists to be voted into office. The ramifications for the future of Taiwan as a distinct political entity, while serious, are not addressed by Kastner, who throughout his book remains commendably neutral, if not clinical, about his political preferences regarding the question of Taiwanese independence.
Given the idiosyncratic nature of the Taiwan Strait conflict, added to the unique nature of the political systems in Taipei and Beijing, it would be imprudent to generalize the findings by applying them to other conflicts (something Kastner admits himself). This said, Political Conflict and Economic Interdependence Across the Taiwan Strait is arguably one of the most important works of political science theory written about the Taiwan Strait in recent years and makes a substantial contribution to our understanding of political decision-making.
Has the Taiwan People’s Party (TPP) changed under the leadership of Huang Kuo-chang (黃國昌)? In tone and messaging, it obviously has, but this is largely driven by events over the past year. How much is surface noise, and how much is substance? How differently party founder Ko Wen-je (柯文哲) would have handled these events is impossible to determine because the biggest event was Ko’s own arrest on multiple corruption charges and being jailed incommunicado. To understand the similarities and differences that may be evolving in the Huang era, we must first understand Ko’s TPP. ELECTORAL STRATEGY The party’s strategy under Ko was
It’s Aug. 8, Father’s Day in Taiwan. I asked a Chinese chatbot a simple question: “How is Father’s Day celebrated in Taiwan and China?” The answer was as ideological as it was unexpected. The AI said Taiwan is “a region” (地區) and “a province of China” (中國的省份). It then adopted the collective pronoun “we” to praise the holiday in the voice of the “Chinese government,” saying Father’s Day aligns with “core socialist values” of the “Chinese nation.” The chatbot was DeepSeek, the fastest growing app ever to reach 100 million users (in seven days!) and one of the world’s most advanced and
It turns out many Americans aren’t great at identifying which personal decisions contribute most to climate change. A study recently published by the National Academy of Sciences found that when asked to rank actions, such as swapping a car that uses gasoline for an electric one, carpooling or reducing food waste, participants weren’t very accurate when assessing how much those actions contributed to climate change, which is caused mostly by the release of greenhouse gases that happen when fuels like gasoline, oil and coal are burned. “People over-assign impact to actually pretty low-impact actions such as recycling, and underestimate the actual carbon
An internal Meta Platforms document detailing policies on chatbot behavior has permitted the company’s artificial intelligence creations to “engage a child in conversations that are romantic or sensual,” generate false medical information and help users argue that Black people are “dumber than white people.” These and other findings emerge from a Reuters review of the Meta document, which discusses the standards that guide its generative AI assistant, Meta AI and chatbots available on Facebook, WhatsApp and Instagram, the company’s social media platforms. Meta confirmed the document’s authenticity, but said that after receiving questions earlier this month, the company removed portions which stated
RSS