During his eight years in office, President Ma Ying-jeou (馬英九) has adopted several economic policies opening up the nation to China. However, most Taiwanese have not felt the benefits of the claimed positive effects of cross-strait economic integration. On the contrary, many are worried that this integration will lead to increased risk in terms of economic cost, income distribution, security and sovereignty. Furthermore, relaxation of cross-strait political tension and economic integration have not helped to promote Taiwan’s participation in Asia-Pacific regional economic integration.
Creating balance in the uneven flow of cross-strait economic resources; distributing the benefits of cross-strait economic exchanges in a reasonable way; maintaining Taiwan’s economic autonomy, while at the same time taking advantage of the opportunities provided by cross-strait economic integration and China’s economic expansion to resolve Taiwan’s current economic development problems; and the problem of joining Asia-Pacific regional economic integration pose a serious challenge for the next government.
Taiwan should therefore build a new model for cross-strait economic integration to allow it to speed up economic transformation and upgrading; build an effective mechanism for economic security; help create a fair environment for Taiwanese businesses in China; use the advantages offered by Taiwanese businesses based in China to establish an international economic cooperation platform for Taiwan; make good use of China’s production resources and market; balance cross-strait and international economic integration; improve its competitive advantage on the international stage; and improve the nation’s economic strength.
When dealing with cross-strait economic exchanges, Taiwan should set itself a tripartite goal: the promotion of economic growth and employment; the fair distribution of the benefits of cross-strait economic exchanges; and more effective management and control of security and sovereignty risks. At the same time, Taiwan should follow a balanced, three-pronged strategy consisting of large-scale economic structural reform and industrial upgrading; deepening cross-strait systemic economic integration; and participation in Asia-Pacific regional economic integration.
Based on this three-pronged strategy, Taiwan could adopt the following 10 sub-strategies:
First, the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area (兩岸人民關係條例) should be amended to include cross-strait economic security regulations in order to protect crucial Taiwanese technology, talent and intellectual property, as well as information security, business, industrial and economic stability, sustainable development and commercial fairness and security. When dealing with major issues involving economic security, the Mainland Affairs Council should submit an assessment report for implementation following a legislative resolution.
Second, a cross-strait economic security review committee should be established under the legislature. This committee should publish regular cross-strait economic security reviews and propose cross-strait economic security policy suggestions.
Third, provide comprehensive assessments of economic and political effects of the different aspects of cross-strait economic integration, including economic security, as well as routinely review and publicize the effects of cross-strait economic agreements.
Fourth, arrange meetings between representatives from industry, government and academic and research organizations to discuss current problems in cross-strait economic integration and evaluate how different aspects of cross-strait industrial integration can contribute to Taiwan’s economic development in order to build a new model for cross-strait economic integration, while at the same time securing Taiwan’s economic development and security.
Fifth, leverage security reviews and prevention mechanisms of developed countries as a safety valve for Taiwan’s economy. For example, big Chinese companies that for a certain number of years have been allowed to invest and operate in a developed country could be allowed to invest in Taiwan; Chinese citizens that have held residence and work permits in a developed country for a certain number of years could be allowed to work in Taiwan; and industries that have been opened up for investment in developed countries could also be opened up for mutual cross-strait investment.
Sixth, when addressing major cross-strait integration issues, representatives of industry, government, academia and research institutions could meet to build a preliminary consensus before public hearings are held to build a public consensus. Polls could also be conducted to gauge the public opinion before a final assessment report is delivered to the legislature. Legislative agreement would then establish a consensus on cross-strait economic integration.
Seventh, once a domestic consensus or legislative agreement has been established on cross-strait economic exchanges, the government must establish complementary measures and incentives in order to make effective use of economic benefits and minimize security risks.
Eighth, the government should explain its stance on major cross-strait economic exchange issues, which could also be used as foundation for reviews of cross-strait economic policy.
Ninth, cross-strait economic and trade talks should be the target of timely legislative oversight, and legislators from both the governing and opposition parties should receive detailed briefings on negotiation strategy and progress.
Finally, in order to effectively minimize political and economic risk and uncertainty, and to provide examples of the political and economic benefits and costs of cross-strait economic exchanges, the nation should take an incremental approach and implement pilot projects for certain strategies, economic areas and regions.
Tung Chen-yuan is a visiting scholar at the University of California at Berkeley.
Translated by Perry Svensson
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