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Why Taiwan Will Fail

John Lee

Last weekend, Taiwan’s Ministry of Economic Affairs was quick to attribute the country’s continued double-digit growth in industrial production to the cross-Straits Economic Cooperation Framework Agreement that came into force at the beginning of the year. However, while ECFA is an economic boon for the country, it accelerates trends that will lead to the island losing its sovereignty.

ECFA is the most significant pillar of Taiwanese President Ma Ying-jeou’s program of enhanced engagement with the mainland. The deal is important because China has indicated that it will not stand in the way of Taiwan signing free trade deals with other countries in the region—something Beijing has so far successfully blocked. It is also heavily tilted in favor of the Taiwanese economy.

For example, Taiwan is able to export 539 categories of goods to China tariff-free, while Taiwan will remove tariffs on only 260 types of products. Taiwanese investors will have privileged access to important sectors such as banking on the mainland.

However, Taipei knows this deal is all about politics. Whereas Chinese sabre-rattling in the mid-1990s ultimately achieved very little politically, this is about enmeshing the two economies in such a way that Taiwan’s future is tied to China’s.

And like the Chinese grand strategy of easing America out of Asia, the Chinese ideal is always to win without fighting. Even before ECFA, China gave preferential treatment to Taiwanese businesses and college students. As far as China is concerned, the largesse of ECFA is one more step in proving to the Taiwanese people and population that there is nothing to fear and everything to gain when it comes to future mainland proposals for reunification.

Greater economic and social integration with the mainland is inevitable. But Taipei’s decision to accelerate integration is not an unthinking one. There is a plan.

Taiwanese are well aware that the mainland’s apparent largesse is an act of economic seduction designed to accelerate eventual reunification on Beijing’s terms. But Taipei believes increased integration can lead to a different endgame—one that will strengthen the prospect of Taiwanese preserving their democratic way of life.

During a recent conference in Taipei discussing the implications of ECFA, a senior Taiwanese official put it to me this way: When ECFA really kicks in, the numbers of mainlanders entering Taiwan will be in the millions every year. These millions of mainland elites will stay in hotels with uncensored news reports. They will read newspapers in fearless disagreement with the government and surf an uncensored Internet. In short, millions of mainland Chinese tourists and businesspeople will go home having experienced the Taiwanese way of life.

So by accelerating integration Taiwan is trying to make a virtue out of necessity. China is gaining in political leverage, military power and economic influence. If Taiwan cannot change momentum, it can at least try to change elite attitudes in the mainland, and this might ultimately soften Beijing’s policies towards Taiwan.

The desperate hope is that social and economic elites in China will more likely persuade political elites to preserve the Taiwanese way of political governance and economic life—whether through an indefinite extension of the status quo or a meaningful settlement using the China-Hong Kong model. But there are three reasons why Taipei’s strategy is unlikely to succeed.

First, gaining physical and not just de jure or symbolic control of Taiwan is an essential element of Beijing’s and the People’s Liberation Army’s strategy to break free of the constraints of the first island chain. Symbolic rather than actual control over Taiwan will not be enough.

Second, mainland urban and social elites support the Chinese Communist Party and its authoritarian system simply because they are the primary beneficiaries. Chinese elites have been shaped by the CCP’s version of modern history—a narrative of victimhood and the belief that China’s time to redress these are fast arriving. As the primary beneficiaries of the system, they underestimate the P.R.C.‘s weaknesses such as inequality and corruption, and they mostly see the P.R.C.‘s strengths.

Not surprisingly then, Chinese elites tend to be the most enthusiastic advocates of a muscular mainland foreign policy, especially when it comes to Taiwan. It seems unlikely that time spent in Taiwan will change this mindset.

Third, China is no longer ruled by a charismatic leader like Mao Zedong or Deng Xiaoping but relies on a consensus model of decision-making, especially during a crisis. Unconditionally getting Taiwan back is deeply ingrained in the political culture, meaning that the default position on Taiwan is an uncompromising one.

None of this is to deny that Taipei faces a diabolical predicament. Greater economic integration is probably inevitable and that momentum is on the mainland’s side. True, Taiwan feels confident that its people enjoy a superior system of government and free enterprise. But this does not mean that Beijing will allow it to persist.

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