Facilitating the Market with a Gift: The Politics of the ECFA between China and Taiwan (2008–2016)

ABSTRACT

Guanxi is the Chinese manifestation of a universal phenomenon – the relationship between gift-givers and gift-takers – extended to include its antagonistic but symbiotic relationship with the state. As China’s market has been increasingly integrated into the global economic system, guanxi has been adapted, so that similar practices can now be seen in areas such as international business and trade, and industrial relations. In this article, I investigate how guanxi has played a part in the 2010 Economic Cooperation Framework Agreement (ECFA) between China and Taiwan. Even though the ECFA has served more as an ongoing framework for negotiations than a final agreement, it was highly controversial in Taiwan right from the opening of negotiations in 2008. Taiwan’s reactions to the ECFA reflect how the Chinese government leveraged a guanxi strategy to facilitate the talks. This guanxi strategy shows that the ECFA not only represents economic cooperation, but also works to promote political integration. News reports and official documents in Taiwan highlighted two different reactions to the ECFA there. While one strand approved of the framework and accepted the implied obligations, the other, especially within civil society, saw guanxi as an external threat that needed to be counterbalanced.

KEYWORDS:

• Gifts
• guanxi
• China
• Taiwan
• trade agreements
• Economic Cooperation Framework Agreement (ECFA)
• cross-Strait relations
• relational turn
• relationalism

Acknowledgements

This paper and the research behind it would not have been possible without the exceptional support from the North American Taiwan Studies Association (NATSA), especially the hospitality from NATSA 2016 Conference team members and the insightful feedback from Associate Professor Dennis Weng at Sam Houston State University. I would like to acknowledge Dr Shiau Ching Wong’s selfless and tremendous help in giving this article a sharper shape in the final stage of writing. I am also grateful to Dr Daniel McCarthy, Dr Surjeet Dhanji, Dr Caroline Chia, Dr Bibiana Huggins, Dr Lou Olliff, Dr Ben Glasson, Adam Chen-Dedman and Philippa Riley for their time and effort, and for giving me the advice and encouragement that made this article possible. Finally, I am deeply indebted to the insightful comments offered by the reviewers. The generosity and expertise of one and all have improved this study in innumerable ways and saved me from many errors; those that inevitably remain are entirely my responsibility.

Disclosure Statement

No potential conflict of interest was reported by the author.

Notes

¹. This article focuses on Taiwan’s reactions, but this does not mean that China has been passive in cross-Strait relations. Compared with Taiwan’s tense reactions to the ECFA, China’s reaction has been understated, at least during Ma’s presidency (2008–2016). Examining the full scope of China’s reactions is another topic and beyond the scope of this article.

². Currently, Taiwan has nine FTAs with other trading partners. Four were signed during Chen Shui-bian’s presidency, and two (ECFA excluded) were signed during Ma’s presidency. The other three were signed during Tsai’s presidency.

³. There was a discussion about whether the ECFA would ‘expire’ or whether the Beijing government would terminate the ECFA. Because the ECFA is an interim agreement, the WTO framework requires signatories to finalise the agreement within 10 years. The subsequent negotiations have not been completed, so some experts believe the agreement was supposed to expire in September 2020, but since neither Beijing nor Taipei – nor any third party in the WTO – has officially raised the issue of termination, the ECFA has continued to be an ongoing trade deal. The ECFA is thus in a strange and interim situation whereby agreed items are still operational even though the package has never been finalised.

⁴. The idea of face in Chinese refers to two slightly different but interrelated concepts: lian (臉) and mianzi (面子). Earley (1997) makes a distinction between these, stating that ‘lian reflects the enactment of “correct” behavior, whereas mianzi reflects an outcome state of social interaction’. The two terms refer to the action and the object that this social protocol aims to achieve. Both ideas often appear at the same time in social exchanges (see also Hu, 1944).

⁵. ECFA sounds like ē-koh-huat (會擱發) in Taiwanese (‘we will get rich again’).

⁶. One could debate whether rang li really exists, but that is not the intention of this article. Its purpose is rather to show how rang li has been framed as beneficial by certain parties while others have framed it differently. In reality, the early harvest list did send a message that the CPC was willing to sacrifice some benefits in order to make the ECFA happen. In the later rounds of negotiations, however, rang li was highlighted less frequently, and messages from negotiators reveal that the CPC wanted a trade deal that was fair to both sides.