FT last week ran a piece on Taiwan's problem with China blocking Taiwan's entry into FTAs and other international arrangements and organizations. It observed (and no, I don't link to FT, not after they grievously harmed both the US and Taiwan with their intervention in the 2012 election):
“It’s a big problem,” said Lin Chu-chia, deputy minister of Taiwan’s Mainland Affairs Council, which is responsible for managing relations with Beijing. “We know that international economic co-operation is quickly increasing and Taiwan is a small, open economy. Without TPP and RCEP we are in big trouble.”Who could have predicted that? These complaints have been going on for some time. I noted last time:
Readers will recall those heady days of 2009 and 2010, when the Ma government was promising that the ECFA trade agreement would enable Taiwan to sign FTAs with other countries. As recently as 2013 the WTO came out with a book in favor of ECFA, saying it would help Taiwan sign FTAs. Of course, the failure of Ech!-Fah! to result in FTAs because Beijing wouldn't permit them was totally foreseeable. D'uh:Even though it was totally obvious that Beijing would continue to block Taiwan, the experts were swooning: a trio of experts saying of course it will lead to FTAs (but note Bonnie Glaser's prescient caveat) in 2010. Dong Wang at Jamestown Brief (2012). Kerry Brown (2010).
It goes without saying that the usual suspects were rah-rahing Taiwan into FTA oblivion. Yes, the Establishment was clueless. AmCham stated in its 2009 Taiwan White Paper that “the conclusion of ECFA would pave the way for Taiwan to participate in regional trade blocs and enter into bilateral FTAs with additional trading partners.” The European Chamber of Commerce said in its 2009-2010 Position Paper: “The sooner Taiwan signs ECFA with China, the quicker political impediments to other countries signing economic agreements with Taiwan will be removed.” If that wasn't fantastic enough, some of this ECFA=FTAs stuff rose to amazing heights of fantasy...
It was easy for anyone to see that Beijing would fight against Taiwan's FTAs because it wanted to force Taiwan firms to relocate to China to take advantage of China's FTAs. That, and because Beijing is Beijing, it will never do anything nice for Taiwan. Indeed in 2010 Beijing made it clear that FTAs would not be permitted that the stock market in Taiwan actually fell, forcing Beijing to rewrite the remarks and deny that's what it meant.
Fast forwarding ...just last week, Robert Manning at the National Interest gave a well-meant piece that regrettably internalized a range of errors:
The foundation of the elaborate development of economic, transport, communication and social ties that have evolved in the past seven years under Ma Ying-jeou’s presidency has been the so-called 1992 consensus  of “One China, Different Interpretations.” Thanks to openings in travel and communication, millions of Taiwanese and mainland Chinese now cross the Strait on a daily basis. Burgeoning cross-Strait trade and investment have boomed. China has become Taiwan’s largest trading partner, representing nearly 25 percent of Taiwan’s total trade. By some estimates, Taiwan has invested far more than the official figure of some $60 billion in the mainland economy, perhaps as much as $200–300 billion. Cross-Strait tourism has flourished, and more than a million Taiwanese are living and working in China, many around the Shanghai area. These cross-Strait realities are now so commonplace that it is easy to forget they were only a hope little more than a decade ago.The 1992 Consensus is NOT the basis of KMT-CCP relations -- China has never agreed to it. It can't be said enough: the basis of KMT-CCP cooperation is China's desire to annex Taiwan and it will last just as long as China imagines it can use the KMT to achieve that goal and not one minute longer. Just imagine an alternate reality where the KMT actually cared about the wishes of Taiwan and its people:
KMTer: Hi China! We've decided to call ourselves ROC permanently and not come under Beijing governance, as per the 1992 Consensus, since that is what our people want. One China, we'll just interpret it differently, permanently. 'k?What do you think would happen to Chinese cooperation with the KMT? The 1992 Consensus is a piece of KMT propaganda invented in 2000 aimed at imprisoning the DPP's cross-strait policy. That Beijing cooperates in enforcing it does not mean that Beijing agrees to it. Surely that level of nuance is not too great for The National Interest.
It should also be emphasized that in Chinese policy documents going back decades the economic relations are intended to forward the Chinese goal of annexing Taiwan (and Taiwan defense docs warn of this beginning in the early 1990s). Hence the "elaborate development" of economic relations depends entirely on the Chinese strategy of hollowing out Taiwan's economy and industrial base to destroy the economic basis of its democracy and independent existence. It has nada to do with the "1992 Consensus" (Manning even says that economic relations exist to forward China's annexation of the island further down, apparently without realizing the implications for his claims).
"By some estimates, Taiwan has invested far more than the official figure of some $60 billion in the mainland economy, perhaps as much as $200–300 billion."Did this happen under Ma Ying-jeou? Nope. This took place under Chen Shui-bian and Lee Teng-hui. Here's a TIER paper from 2007 discussing the investment boom which existed long before Ma. Remember these figures are low, covering only reported investments. Quick, can anyone name the year that Taiwan investment in China first peaked at 1.2% of Taiwan's GDP? That was... 1996. It didn't reach that figure again until after Chen Shui-bian liberalized cross-strait investment after 2002. By 2008 Taiwan investment in China was probably around $200 billion (For example, AIT's old 2008-9 backgrounder: "range from $150 billion to over $300 billion". No Ma necessary for any of that to happen. Ma simply plucked the low-hanging fruit, then signed trade agreements apparently intended to bolster China's economic hold on Taiwan.
The main effect of the Ma Administration has been to increase cross-strait exchanges to the detriment of Taiwan -- tourism does not help Taiwan, and the technology and financial outflows it has accelerated positively hurt it. The numbers show it: the golden age was under Chen Shui-bian, when Taiwan ran enormous trade surpluses with China. Our trade surplus with China is falling as imports from China increase, and export growth to China has fallen, as I have documented several times on this blog (most recently). In fact, that trade surplus is returning to 2007 levels this year.
The "millions" who cross the strait were doing so before, they were just going round through the busiest air route in the world at that time, the Hong Kong-Taipei route. Although some of the business media occasionally report on these realities, the international media and the commentariat are still thinking 2015 is like 2007.
That last comment -- "little more than a hope" -- is thus far removed from reality. In fact the Ma Administration has little hope of achieving the China trade numbers achieved under the Chen Administration.
Another thing I noticed:
But there were some interesting developments at the Singapore meeting that could also serve as precedents. For example, Xi offered to exchange representative offices in each other’s capital.Reality: the exchange of representative offices has been discussed for years. Here is Standard MaSpeak from April of last year:
Thanks to the joint efforts of both sides, cross-strait relations are at their best state in over six decades. To date, the two sides have completed 10 rounds of talks, signed 21 agreements, and plan to exchange representative offices in the future.or this AP piece from the previous year, which has Beijing calling for representative offices. This is just noise China always makes whenever it talks to/about Taiwan.
Of course, no analysis is complete without the causeless tensions that arise through mysterious processes of spontaneous generation:
Some fear a DPP-led Taiwan will become a sore spot for Beijing, and will revert to the tensions that were often the norm before Ma took office.Let's rewrite that to properly assign agency... "Beijing will revert to the tension-causing that was the norm before Ma took office."
But avoiding a “back to the future” scenario—a return to tension and confrontation—appears to be a major reason why Xi Jinping agreed to his meeting with Ma.Haha. Xi wants tension and confrontation, because the Chinese have learned that by skillfully deploying the idea of "tension" as a media tool, Beijing can transfer the tensions from the Beijing-Washington relationship to the Washington-Taipei relationship. Beijing has also learned that pundits consistently refuse to assign it agency in causing tension in the Beijing-Taipei relationship, giving it leverage over how international media and international observers describe its relationship with Taiwan. This consistent inability of the media to report reality is one of Beijing's most important sources of soft power.
Even when people are sympathetic, they still present everything in terms of the conventional discourse, which is studded with errors and misunderstandings.
Let's end on a ROFL: "China Expert" David Shambaugh, who hasn't spent serious time in Taiwan in years, in SCMP:
This extraordinary event is to be enthusiastically welcomed by the people of China and Taiwan, as well as the whole world. There is no downside to the meeting, unless one subscribes (as some in Taiwan do) to the delusion and illusion that Taiwan is an independent sovereign state. Much of the post-summit narrative and press coverage has emphasised the tactical expediency and linguistic obfuscation by both sides, but we should recognise the bold initiative for what it was: bold statesmanship. It is worthy of the Nobel Peace Prize.The level of pandering here is high; it looks like Kerry Brown (here) and Hugh White have competition! George Washington University where Shambaugh resides hosts a China government-funded intelligence and propaganda outfit Confucius Institute, part of a network of Confucius Institutes that appear to pay for Shambaugh to travel to give "talks." No doubt it's just a coincidence that Shambaugh gets junkets via the Confucius Institute, and the level of pandering in this piece would make Xinhua blush.
Think I can get a Confucius Institute for my blog?
- SPECIAL: Gender perceptions and Taiwan's elections
- SPECIAL: Ma: "I gave the US five days notice." Ma thinks of himself as the president of China, and compared to China, the US is just a bunch of upstarts and latecomers. Liberty Times' excellent reporting on this now looks confirmed.
- Meanwhile the KMT continues its ardent support of the 1% with its move to scrap a capital gains tax on stocks. The Taipei Times editorialized on this. The Ma-Xi meeting was an excellent distraction from this fundamental screwing of the nation.
- Of course public believes Ma-Xi benefited PRC more.
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