Thu, Nov 30, 2000 page8

• Keeping Taiwan's economic edge

  • By Wu Pei-shih 吳珮詩
  • • 
    • 
    • 

  The fourth ASEAN informal summit which concluded on Nov. 25 in Singapore sent out some very alarming messages to Taiwan. While Taiwan is preoccupied with domestic political turmoil and a chaotic approach to economic and industrial policy, its neighboring Asian countries are getting together to contemplate grand plans for regional cooperation and economic integration in the new millennium.

  To strengthen economic links, the 10 ASEAN countries and their three Northeast Asian counterparts (China, Japan and South Korea) announced the possibility of holding an annual East Asian Summit and an East Asian Free Trade Zone.

  The former would amount to the formalization and institutionalization of the present "ASEAN-plus-three," and the latter would comprise the markets of nearly 1.53 billion people in Northeast Asia and the 470 million people of Southeast Asia.

  Dubbed the "Two Big Ideas" by Singapore's Prime Minister Goh Chok Tong (吳作棟), these two plans, though still in their embryonic -- and even symbolic -- stages, testify to the intentions of the countries to strengthen the third leg of the triangular world economy (the other two legs being North America and the EU). At the post-summit press conference, Goh, the summit chairperson, said that it was out of the question for Taiwan to be included in either idea as a sovereign state, and that Taiwan's participation could only be as an economic entity.

  Taking into account the overall geo-political and geo-economic landscape in the region and Taiwan's present internal circumstances, there is ample reason to worry that Taiwan's political isolation is going from bad to worse, and that if the current situation continues, then the exclusion of Taiwan from the regional economic and trade bloc is not inconceivable.

  In fact, the idea of grouping the East Asian economies together is nothing new. Ten years ago, Malaysian Prime Minister Maha-thir Mohamad, among others, advocated the formation of an "East Asian Economic Caucus," an economic forum that would exclude the US, but would comprise all the booming East Asian economies, including Taiwan. The caucus failed largely due to pressure from the US and the resultant lukewarm response from Japan.

  The international and regional situation is quite different today. In a nutshell, the US' dominance in East Asia is waning while China's voice is carrying more and more weight. As one prominent commentator on international affairs, Bangkok-based Kavi Chongkittavorn, puts it, "China hasn't replaced the US [in Southeast Asia], but is eating away at America's influence." China's President Jiang Zemin's (江澤民) four-day tour of Indo-china received no less attention than US President Bill Clinton's historic trip to Vietnam.

  Though the full extent of future US engagement in East Asia remains to be seen pending the new president's inauguration, it is beyond doubt that China will secure its position as an economic giant in the years to come. In particular, the increased attraction of the Chinese market for foreign direct investment as China's entry into the WTO approaches is one of the telling signs that underlines a major shift in the economic center of gravity of Asia from the southeast to the northeast.

  China's emergence as a formidable player in the region has generated ambivalent feelings among some of its neighbors. Geo-economically, the ASEAN countries have no choice but to adopt a "unite and compete" strategy toward their northeast neighbors (especially China) in order to stand on their own feet in the face of globalization and regionalization. Geo-politically, ASEAN itself is not yet strong and coherent enough to be free from the specter of China's military expansion. The "China threat" theory (中國威脅論) may not be articulated as frequently as it was in the early 1990s, but the clearly perceptible preponderance of China prompted Singapore's senior minister, Lee Kuan Yew (李光耀), to comment in Sydney last week that, "The role of the US as the balancer is crucial if Asian countries are to have elbow room for themselves."

  It is therefore imperative that the ASEAN countries themselves solve their various differences and act as one in their conduct of external policies. Their enffort to form the ASEAN Free Trade Area by 2003 is but one case in point.

  So what is the relevance of east Asian economic integration to Taiwan? In addition to the fact that Taiwan's absence from the summit and discussion of the issue is generally disturbing in itself, some related points need to be made in the light of the comments of Singapore's leaders.

  First, solid and sound economic power is a must if Taiwan is to break China's efforts to isolate it internationally. This was the key with which Taiwan opened the door to APEC and the Asian Development Bank, and has been the best guarantee of our path to the WTO. Without a prosperous economy, few countries would speak for Taiwan, nor would those who do support Taiwan carry enough weight to counter China's diplomatic blockade.

  China, Japan and South Korea pledged in Singapore to support two major projects that would integrate the region economically -- the e-ASEAN initiative and the Trans-Asia Railway linking Singapore and Kunming, China. They also agreed to work on an Asian IT belt which would eventually link their capitals to form a "Silicon Valley." Does that ring a bell? While the high-tech industries are clamoring for gateways to China, President Chen Shui-bian's (陳水扁) campaign promise for a "Green Silicon Island" (綠色矽島) of Taiwan seems ever distant and empty.

  Whereas the raising of funds for the Trans-Asia Railway is already underway, Chen's administration remains at a loss as to whether, and if so, when and how, to go ahead with the "three links" with China. Whereas the development of the Mekong River Basin and commercial navigation on the Lancang-Mekong River are seen as priority projects among neighboring countries, Taiwan is still mired in the decade-long dispute over the Fourth Nuclear Power Plant (核四).

  The list goes on, but the message is clear and the contrast sharp: our Asian neighbors are setting their sights on equipping themselves in face of the ever more competitive global economy, while the politicians in Taiwan are still stuck in protracted, rigid and over-politicized ideological mazes.

  Second, as Lee Kuan Yew warned in Sydney, "? the consequence of a clash of arms across the Taiwan Strait ? could change the course of development in the whole of the Asia-Pacific region."

  Clinton also spoke at the last APEC meeting of the importance for the region of peace and security both across the Strait and on the Korean Peninsula. The message for Taiwan is about what it can do to maintain the stability across the Strait, which has region-wide implications. Provocation or recklessness from Taiwan's side would not solve the problems, but rather impose the image of "trouble-maker." It is also irresponsible and unrealistic for Taiwan to believe that the US would always come to its aid if a conflict breaks out in the Strait.

  Still another, if not the most, alarming development is that among these joint plans and projects, China's ambitions to take the initiative have become more and more evident. China's separate motion at the end of the meeting to establish a China-ASEAN Free Trade Zone was seen by analysts as a call to weaken or even absorb the ASEAN Free Trade Area. Its agreement to hold a triangular meeting with Japan and South Korea on an annual basis can also be understood as part of its self-assertiveness.

  China has been making progress in reversing its passive attitude toward international and regional affairs, while Taiwan's domestic disputes are hindering its momentum and energy to raise its international profile in a positive way.

  It should also be acknowledged that a number of variables could have an uncertain impact on the progress of east Asia's economic integration: the attitudes of the US, Japan and Australia; ASEAN's wariness toward China's expansion; and the rapprochement and reconciliation process on the Korean Peninsula, to name but a few. These factors should not be construed, however, as reasons for Taiwan to lie back and relax. For Taiwan, which cannot survive without external trade and economic exchanges, the developing scenario in which it risks being excluded from economic integration in east Asia is equally, if not more, unsettling than being excluded from and isolated in the international and regional political arena.

  If these observations are correct, the government has many tasks ahead: it should not only re-examine and update its "Go South" policy (南向政策), and amend laws and regulations to prepare for entry into the WTO, but also inject new strategic thinking into where it stands in the ever changing east Asian climate, where the rise of China and the decline of the US presence seem inevitable.

  Taiwan cannot afford complacency or shortsightedness, and the government should act soon before Taiwan actually loses the edge. A starting point would be the prioritization of the issues on the table: all parties must stop their power struggles and get down to business.

  Wu Pei-shih is an editorial assistant at the Taipei Times.
• Most Popular

  • 1

    China to ban sales to US

  • 2

    Earthquakes exceeding magnitude 5.5 on the Richter scale hit 14-year high

  • 3

    Taiwan places military on high alert

  • 4

    China warships near Taiwan nearly doubles

  • 5

    Flights arranged for Taiwanese stranded in Okinawa