President Ma Ying-jeou (馬英九) and Straits Exchange Foundation Chairman Chiang Pin-kung (江丙坤) have started talking about the cross-strait economic relationship in terms of dependence. Ma says the Taiwanese and Chinese economies are interdependent. Chiang has reinforced this by saying that it would not necessarily be a bad thing for Taiwan’s economy to be dependent upon China. Ma is the highest decision-maker for cross-strait policy and Chiang is in charge of the practical implementation of these policies. By echoing each other, they are saying that economic dependence on China has become the centerpiece of government policy.
Economic relations between countries is a normal state of affairs, and close and frequent exchanges between nations is a good thing. However, Taiwan’s degree of trade dependence on China has reached 40 percent, while China’s dependence on Taiwan is 9 percent. This imbalance is an indication of the gravity of Taiwan’s dependence on its larger neighbor. Ma’s talk about mutual dependence is not true, and such asymmetric dependence is all but certain to bring trade or exchange rate friction or conflict.
Ma’s economic policy has focused on China, and the disappointing results of opening Taiwan to Chinese tourism and the direct links are far removed from any earlier predictions, evidence that dependence on China is not a panacea for Taiwan’s economy.
With China still bent on annexing this country, economic independence will translate into social and political dependence. When that happens, Beijing can achieve its goal of unification peacefully by using Hong Kong’s dependence on China as a model.
When Chiang says that economic dependence on China is not a bad thing, he shows that he is blind to the realities of international trade and national security.
A wave of bankruptcies has swept across China in the past year, while the international financial crisis has led to greatly reduced exports. Taiwanese businesspeople are now moving out of the Chinese market in droves, aggravating the problems with foreign capital outflows, factory closures and unemployment in China’s coastal regions.
But even as Taiwanese capital is flowing back into Taiwan, the government is encouraging Taiwanese businesses to go to China. This runs counter to the principles of a free economy, even though there are not many successful examples of governments distorting the economy.
Taiwan’s economic miracle was created by international trade, and Taiwan should once again make the world its market. China is only one small part of that global market, not its mainstay. The Ma administration is neglecting the importance of international markets to gamble Taiwan’s future on China.
In the past, the government made efforts to expand Taiwan’s trade opportunities and avoid international isolation by trying to negotiate free-trade agreements with Japan, the US and other countries and gain entry into the ASEAN plus three. Such efforts appear to have been sidelined by the Ma administration’s interest in a common Chinese market and closer economic cross-strait relations.
Whether we take a theoretical, realistic, national security, sovereignty, or industrial perspective, dependence on China will put Taiwan in immeasurable danger. It is a flawed policy that will only assist China in its attempts to annex Taiwan.
Elbridge Colby, America’s Under Secretary of Defense for Policy, is the most influential voice on defense strategy in the Second Trump Administration. For insight into his thinking, one could do no better than read his thoughts on the defense of Taiwan which he gathered in a book he wrote in 2021. The Strategy of Denial, is his contemplation of China’s rising hegemony in Asia and on how to deter China from invading Taiwan. Allowing China to absorb Taiwan, he wrote, would open the entire Indo-Pacific region to Chinese preeminence and result in a power transition that would place America’s prosperity
A few weeks ago in Kaohsiung, tech mogul turned political pundit Robert Tsao (曹興誠) joined Western Washington University professor Chen Shih-fen (陳時奮) for a public forum in support of Taiwan’s recall campaign. Kaohsiung, already the most Taiwanese independence-minded city in Taiwan, was not in need of a recall. So Chen took a different approach: He made the case that unification with China would be too expensive to work. The argument was unusual. Most of the time, we hear that Taiwan should remain free out of respect for democracy and self-determination, but cost? That is not part of the usual script, and
All 24 Chinese Nationalist Party (KMT) lawmakers and suspended Hsinchu Mayor Ann Kao (高虹安), formerly of the Taiwan People’s Party (TPP), survived recall elections against them on Saturday, in a massive loss to the unprecedented mass recall movement, as well as to the ruling Democratic Progressive Party (DPP) that backed it. The outcome has surprised many, as most analysts expected that at least a few legislators would be ousted. Over the past few months, dedicated and passionate civic groups gathered more than 1 million signatures to recall KMT lawmakers, an extraordinary achievement that many believed would be enough to remove at
Behind the gloating, the Chinese Nationalist Party (KMT) must be letting out a big sigh of relief. Its powerful party machine saved the day, but it took that much effort just to survive a challenge mounted by a humble group of active citizens, and in areas where the KMT is historically strong. On the other hand, the Democratic Progressive Party (DPP) must now realize how toxic a brand it has become to many voters. The campaigners’ amateurism is what made them feel valid and authentic, but when the DPP belatedly inserted itself into the campaign, it did more harm than good. The
RSS