The collision between a US spy plane and a Chinese fighter has triggered heated discussion about the possible consequences for international politics, and even the possibility of a new Cold War between East and West. What Taiwan needs to do is to analyze the different strategies adopted by China and the US and figure out the logic behind their respective maneuvers. Taiwan should then be able to find a niche in which to survive.
The term "new cold war" is only a description of a potential confrontation between East and West. It would be different from the original Cold War era both in nature and strategic rationales. The ideological antagonism, group confrontations and the top priority given to military power would not exist in this phenomenon which may be evolving at this very moment.
Although the traditional military conflict still plays the most pivotal role in the new wave of East-West antagonism, economic competition between nations is becoming much more intense as a result of the globalization of capital. Economic forces will therefore exert considerable influence in the newly emerging international situation. In other words, economic factors will become crucial bargaining chips in the political struggle between countries. Naked military confrontation of the sort that occurred in the Cold War -- such as the Cuban missile crisis -- is less likely to occur.
Since economic factors have become significant, powerful nations now have a third consideration in addition to military prowess and political consequences when they make
diplomatic policy or agendas for negotiation. In this regard, the US and China have shown different priorities in their diplomatic strategies.
The order of US priorities is that President George W. Bush intends first to formalize the policy of regarding China as a strategic competitor and then maintain US dominance through military alliances. Economic considerations are apparently secondary to foreign policy.
Meanwhile China, the world's most populous country and one experiencing rapid economic growth, thinks that it should be a major decision-maker in the international arena. In fact, China clearly demonstrated its determination to stand up against the US in the spy plane crisis.
On the other hand, China also recognizes that, unlike Russia, it is not powerful enough to counter the US. The present phase of China's diplomatic policy therefore involves dealing with US hegemony by using the growing Chinese market as its bargaining chip.
Consequently, most countries with which China tries to build ties are old friends in the Third World in desperate need of China's financial assistance.
What is noteworthy is that, even though China is still the Big Brother of its old friends, they are not united by ideology. Economic interaction between them is of greater importance.
China adopts a similar ap-proach with European countries it intends to befriend. For example, China provides preferential economic conditions or simplified administrative procedures for the importation of goods from these countries to lure them into the Chinese market and to foster good relations.
As for Taiwan, it must decide the order of priority in which it places the three elements of national security -- political relations, economic strength and military power.
In fact, Taiwan has great difficulty trying to decide on a specific order of priority. The position of Japan is instructive in this regard.
In terms of national security, Japan is a military ally of the US. Japan is continuing to suffer a long-standing economic slowdown, as well as serious threats to its agricultural products posed by low-priced agricultural imports from China.
Since China is currently not bound by any international economic organizations or agreements, it has become a major unauthorized source of agricultural products for Japanese consumers. Japan can only adopt administrative measures that have a superficial effect on restricting the import of such products, in order to protect its farmers. It cannot, under the rules of relevant international economic organizations, impose sanctions on China, such as levying anti-dumping penalties.
If the US delays China's entry into the WTO because of the EP-3 incident, Japan could suffer even greater economic losses.
Taiwan faces a similar problem. What should be Taiwan's priority: defense or economic development? Bush's firm stance on the cross-strait issue serves as a good defense for Taiwan. Since Taiwan relies on the US as a major importer of Taiwanese goods, Taiwan has been all too easily affected now that the US economy has run into a slump.
In these circumstances, how can Taiwan boost its economic competitiveness against a backdrop of increasingly intense international economic competition?
Basically, the Taiwanese government should recognize that in the era of economic globaliza-tion, what it faces is competition driven by capitalism in which capital flows are speedy and highly influential.
Under the logic of fierce economic competition, most governments actively try to attract foreign capital to promote economic development. Taiwan's excessive control of capital will only diminish its own competitiveness. It is difficult for foreign capital to enter Taiwan's market, and local firms are choosing to leave the country secretly. Many Taiwanese businessmen have moved to China where they have opened up shop.
The Taiwan government should adopt more open and liberal economic policies to meet the new challenges.
In a nutshell, Taiwan should realize that in the new chess game gradually taking shape, economic globalization necessitates a new approach to competition. Taiwan must know clearly where its own interests lie lest it get lost in the new wave of competition.
Hsu Tung-ming is a freelance writer based in Beijing.
Translated by Jackie Lin
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