Taiwan's China Dilemma
Contested Identities and Multiple Interests in Taiwan's Cross-Strait Economic Policy
Taiwan's China Dilemma
Contested Identities and Multiple Interests in Taiwan's Cross-Strait Economic Policy
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China and Taiwan share one of the world's most complex international relationships. Although similar cultures and economic interests promoted an explosion of economic ties between them since the late 1980s, these ties have not led to an improved political relationship, let alone progress toward the unification that both governments once claimed to seek. In addition, Taiwan's recent Sunflower Movement succeeded in obstructing deeper economic ties with China. Why has Taiwan's policy toward China been so inconsistent? Taiwan's China Dilemma explains the divergence between the development of…mehr
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- Produktdetails
- Verlag: Stanford University Press
- Seitenzahl: 304
- Erscheinungstermin: 29. Juni 2016
- Englisch
- Abmessung: 229mm x 152mm x 23mm
- Gewicht: 522g
- ISBN-13: 9780804796651
- ISBN-10: 0804796653
- Artikelnr.: 44382895
- Verlag: Stanford University Press
- Seitenzahl: 304
- Erscheinungstermin: 29. Juni 2016
- Englisch
- Abmessung: 229mm x 152mm x 23mm
- Gewicht: 522g
- ISBN-13: 9780804796651
- ISBN-10: 0804796653
- Artikelnr.: 44382895
1Introduction
chapter abstract
This chapter identifies the puzzle of this study. Unlike Taiwan's economic
policies toward other major trading partners, its policies toward China
since cross-Strait economic relations resumed in 1990 have been
characterized by periods of economic liberalization (promoted largely by
Taiwanese businesses), followed by more restrictive measures (after a
strong public reaction from those who feared negative consequences), then
renewed liberalization once the costs of restriction became evident.
Compared to other small trading states in the modern global political
economy, Taiwan has a unique set of foreign economic policies. While most
research on foreign economic policy utilizes a structural analysis of the
international system and a rationalist analysis of domestic economic
factors, these approaches are inadequate when it comes to Taiwan. The
intense debate on Taiwan's national identity has shaped the formulation of
policy and must be factored in.
2Conceptual Framework
chapter abstract
After reviewing the shortcomings of prevailing analytic approaches, Chapter
2 outlines an eclectic analytical framework to be applied to the four key
episodes in the evolution of Taiwan's cross-Strait economic policy. That
framework integrates national identity, economic interests, and economic
policy and posits that national identity forms the basis for defining
Taiwan's core economic interests, which in turn shape Taiwan's cross-Strait
economic policy. The economic interests that form the basis for
cross-Strait economic policies are growth, equity, stability, and security.
The different priorities assigned to these interests distinguish four
competing clusters of opinions, which are used to categorize the policy
positions taken by various social and government actors, from extensive
restriction to extensive liberalization, during the course of the key
policy episodes. Specific policy alternatives that have been proposed to
advance Taiwan's economic interests are described.
3No Haste: The 1996 National Development Conference
chapter abstract
The first episode centers on President Lee Teng-hui's attempt to restrict
economic relations with China in 1996, when the nature of Taiwanese
national identity was still highly contested. Reflecting his concerns about
the initial liberalization of Taiwan's economic relations with mainland
China, Lee inaugurated the "Go South" policy in 1994, the Taiwan
government's first, albeit relatively weak, effort to redirect trade and
investment away from mainland China and toward Southeast Asia. After the
1995 missile crisis Lee rolled out a tougher "No Haste" policy, formalizing
restrictions on cross-Strait economic relations. A National Development
Conference in 1996 was convened to mobilize what initially appeared to be
overwhelming support for this policy. A case study of Formosa Plastics'
Zhangzhou project demonstrates the effectiveness of Lee's restrictive
policy towards China and illustrates how the debate on identity and on
policy choice continued during the implementation stage.
4Active Opening, Effective Management: The 2001 Economic Development
Advisory Conference
chapter abstract
By 2000, a "Taiwanese" identity was gaining ground over an exclusively
"Chinese" identity. Having won the presidential election that year, the
DPP's Chen Shui-bian became Taiwan's first non-KMT president. But he still
confronted a KMT-controlled legislature and an economic slump. Despite the
DPP's record of favoring independence, Chen concluded that liberalization
would be the most effective way to restore growth and strengthen his
political base. He therefore decided in 2001 to free cross-Strait economic
policies from some of the No Haste constraints. Chen's government organized
a large-scale Economic Development Advisory Conference in 2001 to discuss
policies relaxing the KMT's restrictions on investment in China. But Active
Opening proved even more controversial than No Haste. The case study in
this chapter-the first of two on the semiconductor industry-illustrates the
ongoing debate over identity and policy choice during the policy
implementation stage.
5Active Management, Effective Opening: The 2006 Conference on Sustaining
Taiwan's Economic Development
chapter abstract
In this episode, a largely "Taiwanese" national identity had become
dominant although few Taiwanese favored an immediate declaration of
independence from China. In 2004, Chen Shui-bian won reelection by a
razor-thin margin. Two years later, mired in personal scandal and facing a
growing national budget deficit and declining popularity, Chen sought to
appeal to the fundamentalist elements in his political base by restricting
investment in China. He convened the Conference on Sustaining Taiwan's
Economic Development to gain support for this Active Management policy. But
the conference failed to pass any formal resolution endorsing Chen's
proposals. A second case study on the semiconductor industry demonstrates
that the debate during the implementation of the new policy focused on its
expected economic costs and benefits, rather than on its implications for
Taiwan's national identity.
6"Prosper Again": The 2008-2010 Campaign for the ECFA
chapter abstract
The last episode begins with the KMT regaining power in 2008 under the
leadership of Ma Ying-jeou. A Taiwanese identity was largely consolidated
but the majority of Taiwanese showed a preference for political autonomy
rather than formal independence and supported further economic integration
with China. Cross-Strait negotiations on economic relations resumed and
produced liberalizing agreements. Ma's administration then launched a
campaign to gain public support for a framework agreement, the Economic
Cooperation Framework Agreement, which would gradually normalize and
institutionalize trade and investment relations. The final case study, on
the dramatic student-led protests in 2014 against the ratification of an
agreement on trade in services (the Sunflower Movement), analyzes this
unprecedented backlash and shows the changing nature of the debate over
cross-Strait economic policies where both supporters and opponents of
further liberalization made arguments on rational and pragmatic
considerations as well as national identity.
7Conclusions
chapter abstract
The last chapter summarizes the findings of the four empirical episodes.
First, a high level of contestation over national identity led to perceived
choice among extreme economic policies, as evident in the first two
episodes. Second, as a consensus on identity was forged, the narrowing
spectrum of policy debate eliminated the extremes, but did not produce a
consensus on the remaining options. However, this consolidated national
identity has allowed Taiwanese to separate their preferences regarding
Taiwan's economic policy toward China from their preferences on Taiwan's
future political status. This study has implications for Taiwan's domestic
politics, for the future of cross-Strait relations, and for theories of
international political economy.
1Introduction
chapter abstract
This chapter identifies the puzzle of this study. Unlike Taiwan's economic
policies toward other major trading partners, its policies toward China
since cross-Strait economic relations resumed in 1990 have been
characterized by periods of economic liberalization (promoted largely by
Taiwanese businesses), followed by more restrictive measures (after a
strong public reaction from those who feared negative consequences), then
renewed liberalization once the costs of restriction became evident.
Compared to other small trading states in the modern global political
economy, Taiwan has a unique set of foreign economic policies. While most
research on foreign economic policy utilizes a structural analysis of the
international system and a rationalist analysis of domestic economic
factors, these approaches are inadequate when it comes to Taiwan. The
intense debate on Taiwan's national identity has shaped the formulation of
policy and must be factored in.
2Conceptual Framework
chapter abstract
After reviewing the shortcomings of prevailing analytic approaches, Chapter
2 outlines an eclectic analytical framework to be applied to the four key
episodes in the evolution of Taiwan's cross-Strait economic policy. That
framework integrates national identity, economic interests, and economic
policy and posits that national identity forms the basis for defining
Taiwan's core economic interests, which in turn shape Taiwan's cross-Strait
economic policy. The economic interests that form the basis for
cross-Strait economic policies are growth, equity, stability, and security.
The different priorities assigned to these interests distinguish four
competing clusters of opinions, which are used to categorize the policy
positions taken by various social and government actors, from extensive
restriction to extensive liberalization, during the course of the key
policy episodes. Specific policy alternatives that have been proposed to
advance Taiwan's economic interests are described.
3No Haste: The 1996 National Development Conference
chapter abstract
The first episode centers on President Lee Teng-hui's attempt to restrict
economic relations with China in 1996, when the nature of Taiwanese
national identity was still highly contested. Reflecting his concerns about
the initial liberalization of Taiwan's economic relations with mainland
China, Lee inaugurated the "Go South" policy in 1994, the Taiwan
government's first, albeit relatively weak, effort to redirect trade and
investment away from mainland China and toward Southeast Asia. After the
1995 missile crisis Lee rolled out a tougher "No Haste" policy, formalizing
restrictions on cross-Strait economic relations. A National Development
Conference in 1996 was convened to mobilize what initially appeared to be
overwhelming support for this policy. A case study of Formosa Plastics'
Zhangzhou project demonstrates the effectiveness of Lee's restrictive
policy towards China and illustrates how the debate on identity and on
policy choice continued during the implementation stage.
4Active Opening, Effective Management: The 2001 Economic Development
Advisory Conference
chapter abstract
By 2000, a "Taiwanese" identity was gaining ground over an exclusively
"Chinese" identity. Having won the presidential election that year, the
DPP's Chen Shui-bian became Taiwan's first non-KMT president. But he still
confronted a KMT-controlled legislature and an economic slump. Despite the
DPP's record of favoring independence, Chen concluded that liberalization
would be the most effective way to restore growth and strengthen his
political base. He therefore decided in 2001 to free cross-Strait economic
policies from some of the No Haste constraints. Chen's government organized
a large-scale Economic Development Advisory Conference in 2001 to discuss
policies relaxing the KMT's restrictions on investment in China. But Active
Opening proved even more controversial than No Haste. The case study in
this chapter-the first of two on the semiconductor industry-illustrates the
ongoing debate over identity and policy choice during the policy
implementation stage.
5Active Management, Effective Opening: The 2006 Conference on Sustaining
Taiwan's Economic Development
chapter abstract
In this episode, a largely "Taiwanese" national identity had become
dominant although few Taiwanese favored an immediate declaration of
independence from China. In 2004, Chen Shui-bian won reelection by a
razor-thin margin. Two years later, mired in personal scandal and facing a
growing national budget deficit and declining popularity, Chen sought to
appeal to the fundamentalist elements in his political base by restricting
investment in China. He convened the Conference on Sustaining Taiwan's
Economic Development to gain support for this Active Management policy. But
the conference failed to pass any formal resolution endorsing Chen's
proposals. A second case study on the semiconductor industry demonstrates
that the debate during the implementation of the new policy focused on its
expected economic costs and benefits, rather than on its implications for
Taiwan's national identity.
6"Prosper Again": The 2008-2010 Campaign for the ECFA
chapter abstract
The last episode begins with the KMT regaining power in 2008 under the
leadership of Ma Ying-jeou. A Taiwanese identity was largely consolidated
but the majority of Taiwanese showed a preference for political autonomy
rather than formal independence and supported further economic integration
with China. Cross-Strait negotiations on economic relations resumed and
produced liberalizing agreements. Ma's administration then launched a
campaign to gain public support for a framework agreement, the Economic
Cooperation Framework Agreement, which would gradually normalize and
institutionalize trade and investment relations. The final case study, on
the dramatic student-led protests in 2014 against the ratification of an
agreement on trade in services (the Sunflower Movement), analyzes this
unprecedented backlash and shows the changing nature of the debate over
cross-Strait economic policies where both supporters and opponents of
further liberalization made arguments on rational and pragmatic
considerations as well as national identity.
7Conclusions
chapter abstract
The last chapter summarizes the findings of the four empirical episodes.
First, a high level of contestation over national identity led to perceived
choice among extreme economic policies, as evident in the first two
episodes. Second, as a consensus on identity was forged, the narrowing
spectrum of policy debate eliminated the extremes, but did not produce a
consensus on the remaining options. However, this consolidated national
identity has allowed Taiwanese to separate their preferences regarding
Taiwan's economic policy toward China from their preferences on Taiwan's
future political status. This study has implications for Taiwan's domestic
politics, for the future of cross-Strait relations, and for theories of
international political economy.