The political economy of Taiwan’s regional relations

Abstract

In a world of globalized markets, sizeable core states gain greater benefits from economic integration. Small peripheral states generally increase in trade incomes yet at cost of sovereignty and agenda decisions. Recent studies in the field of political economy have demonstrated that concerted economic integration efforts actually lead to disproportional gains for bigger powers at the expense of smaller neighboring states. This differential in integration benefits results in political disintegration for the latter.¹ In the case of Asia Pacific, Taiwan is situated at the forefront of regional superpower China’s unification campaign. We examine the history of Taiwan’s cross-Straits relations highlighting its experience with China’s various forms of power. For other smaller states in the region, what lessons can be learnt from Taiwan’s experience in the last few decades characterized by China’s “peaceful ascendance” and regional bloc initiative? We suggest that Taiwan serves as a reference for other states in the region. We discuss on the implications of China’s economic integration projects, such as the Belt and Road Initiative (BRI) and the role of Taiwan in the political economy of regional relations. Not only can its experience provide reference data for other small states like canary in the mines,² but it can also be a facilitator of synergetic strategies among smaller state to broker new possibilities under China’s expansive influence.

Keywords:

• Taiwan regional relations
• trade
• China
• Belt and Road Initiative (BRI)
• ASEAN

Notes

Notes

1 Alberto Alesina and Enrico Spolaore,“On the Number and Size of Nations,” The Quarterly Journal of Economics 122, no. 4 (1997): 1027–56; Karl Ho, Stan Hok-wui Wong, Harold D. Clarke, and Kuan-Chen Lee, “A Comparative Study of the China Factor in Taiwan and Hong Kong Elections,” in Wei-chin Lee ed., Taiwan's Political Re-Alignment and Diplomatic Challenges (New York: Palgrave Macmillan, 2018), 119–44; Paul Krugman and Anthony J. Venables. 1995. “Globalization and the Inequality of Nations.” The Quarterly Journal of Economics 110, no. 4 (1995): 857–80.

2 Alexander C. Tan, Cal Clark, and Karl Ho, “Canary in the Mine? Taiwan, New Southbound Policy, and Regional Relations,” presented at the Taiwan Democracy Symposium held at University of Texas at Dallas, April 14th, 2018.

3 John F. Copper, Taiwan’s 2016 Presidential/Vice Presidential and Legislative Elections: Reflections on the Nature of Taiwan’s Politics and Shifts Therein (Baltimore: Maryland Series in Contemporary Asia Studies, School of Law, University of Maryland, 2016).

4 Joseph Nye, “Propaganda Isn’t the Way: Soft Power.” International Herald Tribune (January 10, 2003), www.nytimes.com; Ernest J. Wilson 2008. “Hard Power, Soft Power, Smart Power” The Annals of the American Academy of Political and Social Science 616, no. 1 (2008): 110–24.

5 Chester A. Crocker, Fen Osler Hampson; and Pamela R. Hall, Leashing the Dogs of War: Conflict Management in a Divided World (Washington, DC: US Institute of Peace Press, 2007), 13.

6 Cal Clark and Alexander C. Tan, Taiwan’s Political Economy: Meeting Challenges, Pursuing Progress (Boulder, CO: Lynne Rienner Publishers, 2012), 36 .

7 Christopher Walker and Jessica Ludwig, “The Meaning of Sharp Power: How Authoritarian States Project Influence,” Foreign Affairs, (November 16, 2017), www.foreignaffairs.com.

8 Wei-chin Lee, “Taiwan’s Cultural Reconstruction Movement: Identity Politics and Collective Action Since 2000” Issues & Studies 41, no 1 (2005): 1–51.

9 John Henderson, “China, Taiwan and the Changing Strategic Significance of Oceania.” Revue Juridique Polynesienne 1, no. 1 (2001): 143–55; Timothy S. Rich, 2009.  “Status for Sale: Taiwan and the Competition for Diplomatic Recognition,”  Issues & Studies 45, no. 4 (2001): 159–88.

10 Alexander C. Tan and Karl Ho. 2017. “Cross-Strait Relations and the Taiwan Voter,” in Christopher H. Achen and T.Y. Wang, eds., The Taiwan Voter (Ann Arbor, MI: University of Michigan Press, 2017), 162.

11 Ibid, 163.

12 Cal Clark and Alexander C. Tan, “Identity and Integration as Conflicting Forces Stimulating the Sunflower Movement and the Kuomintang’s Loss in the 2014 Elections,” Contemporary Chinese Political Economy and Strategic Relations: An International Journal 2, no. 1 (2016): 314.

13 Tan and Ho, 162.

14 Clark and Tan, “Identity and Integration.”

15 Ibid, 314.

16 Ibid, 319.

17 Ibid.

18 Damian Paletta, Carol E. Lee, and Andrew Browne, “Trump Spoke With Taiwan President in Break With Decades of U.S. Policy,” The Wall Street Journal (December 2, 2016), www.wsj.com.

19 Cedric Sam, “Taiwan 2020 Election Results,” Bloomberg (January 11, 2020) ,www.bloomberg.com; Kharis Templeman, “Politics in the Tsai Ing-wen Era,” in Hans Stockton and Yao-Yuan Yeh eds., Taiwan: The Development of an Asian Tiger (Boulder, CO: Lynne Rienner, 2020), 67–96; Ching-Hsing Wang and Dennis Lu-Chung Weng, Social Issues and Social Policy” in Hans Stockton and Yao-Yuan Yeh eds., Taiwan: The Development of an Asian Tiger (Boulder, CO: Lynne Rienner, 2020), 97–116.

20 The Economist “Xi Jinping’s Vision: Chasing the Chinese Dream,” (2013), https://www.economist.com/node/21577063/all-comments?page=6.

21 Mingfu Liu, The China Dream: Great Power Thinking & Strategic Posture in the Post-American Era (New York: CN Times Books, 2015); Yanan Wang, Yanan. “China Will ‘Never Seek Hegemony,’ Xi Jinping Says in Reform Speech.” Washington Times (December 18, 2018), https://www.washingtontimes.com/news/2018/dec/18/china-will-never-seek-hegemony-xi-says-in-reform-s/.

22 Alexander C. Tan and Karl Ho, “China Blocked Exports of Rare Earth Metals to Japan, Traders Claim,” Telegraph (2017) https://www.telegraph.co.uk/finance/china-business/8022484/China-blocked-exports-of-rare-earth-metals-to-Japan-traders-claim.html.

23 Alexander C. Tan, Steve Chan, and Calvin Jillson, Taiwan’s National Security: Dilemmas and Opportunities (Aldershot, UK: Ashgate, 2001).

24 Karl Ho, Cal Clark, and Alexander C. Tan, “The New Southbound Policies,” in Hans Stockton and Yao-Yuan Yeh eds., Taiwan: The Development of an Asian Tiger (Boulder, CO: Lynne Rienner, 2020), 133–48.

25 Nick Aspinwall, “Taiwan Braces for Economic Impact of Global Coronavirus Outbreak,” The Diplomat (March 6, 2020), www.thediplomat.com; Steven Mosher, “The World has a Lot to Learn from Taiwan’s Hugely Successful Response to the Chinese Coronavirus,” Life Site News (March 19, 2020), www.lifesitenews.com; Dan Shapiro, “Taiwan Shows Its Mettle in the Coronavirus Crisis, While the WHO is Missing in Action.” Brookings Research (March 19, 2020), www.brookings.edu; Katherine Schultz and Russell Hsiao, “Why Taiwan’s Coronavirus Response Shows Europe It Should Join the World Health Organization,” National Interest (March 30, 2020), www.nationalinterest.org.

26 Ralph Jennings, “Taiwan Faces Outsized Risk to Economy from Coronavirus Outbreak” Forbes, (March 10, 2020), www.forbes.com; Roger Tung and Yimou Lee, “Taiwan Trims 2020 GDP, Export Forecast as Virus Risk Heightens,” Reuters (February 12, 2020), www.reuters.com.