China's threats to place economic sanctions on Taiwan are part of a strategy to divide and conquer, but will only be realized if Taiwan moves closer to independence, analysts say.
"This is part of a traditional united-front strategy to use the business community to surround the government and to mobilize the people to exert pressure on the independence forces," said Joseph Cheng (
China employed the strategy in reverse throughout the 1990s, offering lucrative economic incentives to Taiwanese businesses in the belief that the more investment flowed from Taiwan, the greater the possibility of reunification, he said.
Similar tactics were also widely used to smooth over Hong Kong's handover to China in 1997.
But with the re-election of President Chen Shui-bian (陳水扁) in March, China has apparently decided it must now use disincentives to attract support for reunification.
In the last week, a number of Beijing academics have been calling for economic sanctions to be put in place against Taiwanese independence forces. The government has said that investment from pro-independence businessmen is not welcome.
Wang Jianmin (王建民), a Taiwan specialist at the Chinese Academy of Social Sciences, said that if economic sanctions against Taiwan were imposed, they would involve limiting or even banning imports.
"Taiwan's overseas trade sector would be the first to suffer and see a one-third drop in its exports, then the manufacturing and production sector would be hit, causing mass shutdowns among these firms and a major economic recession," he was quoted as saying by the state-run China Daily.
When contacted by reporters, Wang refused to detail what specific legal measures Beijing could use to impose such economic sanctions, nor whether it would invoke state security laws to achieve its goal.
"It is still not clear what the mainland plans to do, but it is likely to be calibrated to the actual situation," Cheng said.
"If Chen Shui-bian moves closer toward independence, they will step up the pressure and maybe attack suspect Taiwan businessmen, but if he backs down then things will probably go on as normal," he said.
Taiwan has been a major engine of China's economic growth with over US$70 billion invested in the Chinese economy.
Indirect trade between Taiwan and China rose 23.8 percent year-on-year to US$46.32 billion last year.
After naming suspect businessmen and companies, Beijing would probably seek to influence their share prices through attacks in the media, Cheng said.
"China would also refuse to approve any investment projects on the mainland by any suspect companies," he said.
China, though, would probably avoid confiscating investment or arresting suspect Taiwanese investors under its murky state security laws, which are routinely used to jail political dissidents and suspected separatists.
"They won't use arrests or jailing under the national security laws, because that would be just too scary and the reaction in Taiwan would make such moves counter-productive," Cheng said.
China has a history of using economic sanctions in political disputes, including unannounced sanctions against French companies following the sale of Mirage fighter jets to Taiwan in the early 1990s.
In recent years, both Credit Suisse First Boston and Japan's Matsushita have been temporarily blacklisted for falling foul of Beijing's Taiwan policy.
Trading house Jardine Matheson was long out of favor with China over its support for democratic reform in Hong Kong during the lead-up to the 1997 transfer of power.
The military has spotted two Chinese warships operating in waters near Penghu County in the Taiwan Strait and sent its own naval and air forces to monitor the vessels, the Ministry of National Defense (MND) said. Beijing sends warships and warplanes into the waters and skies around Taiwan on an almost daily basis, drawing condemnation from Taipei. While the ministry offers daily updates on the locations of Chinese military aircraft, it only rarely gives details of where Chinese warships are operating, generally only when it detects aircraft carriers, as happened last week. A Chinese destroyer and a frigate entered waters to the southwest
The eastern extension of the Taipei MRT Red Line could begin operations as early as late June, the Taipei Department of Rapid Transit Systems said yesterday. Taipei Rapid Transit Corp said it is considering offering one month of free rides on the new section to mark its opening. Construction progress on the 1.4km extension, which is to run from the current terminal Xiangshan Station to a new eastern terminal, Guangci/Fengtian Temple Station, was 90.6 percent complete by the end of last month, the department said in a report to the Taipei City Council's Transportation Committee. While construction began in October 2016 with an
NON-RED SUPPLY: Boosting the nation’s drone industry is becoming increasingly urgent as China’s UAV dominance could become an issue in a crisis, an analyst said Taiwan’s drone exports to Europe grew 41.7-fold from 2024 to last year, with demand from Ukraine’s fight against Russian aggression the most likely driver of growth, a study showed. The Institute for Democracy, Society and Emerging Technology (DSET) in a statement on Wednesday said it found that many of Taiwan’s uncrewed aerial vehicle (UAV) sales were from Poland and the Czech Republic. These countries likely transferred the drones to Ukraine to aid it in its fight against the Russian invasion that started in 2022, it said. Despite the gains, Taiwan is not the dominant drone exporter to these markets, ranking second and fourth
Japanese Prime Minister Sanae Takaichi’s comment last year on Tokyo’s potential reaction to a Taiwan-China conflict has forced Beijing to rewrite its invasion plans, a retired Japanese general said. Takaichi told the Diet on Nov. 7 last year that a Chinese naval blockade or military attack on Taiwan could constitute a “survival-threatening situation” for Japan, potentially allowing Tokyo to exercise its right to collective self-defense. Former Japan Ground Self-Defense Force general Kiyofumi Ogawa said in a recent speech that the remark has been interpreted as meaning Japan could intervene in the early stages of a Taiwan Strait conflict, undermining China’s previous assumptions
RSS