Yanqi Lake Tempest: Economic Coopetition vs. Political Confrontation
United Daily News editorial (Taipei, Taiwan, ROC)
November 21, 2014
Executive Summary: Taipei must improve economic coopetition with Mainland China. Taipei must "connect with the rest of the world through Mainland China." It must join the TPP, RCEP, FTAAP and other regional economic organizations, in order to soften and limit cross-Strait political confrontation. This is the only viable strategy for Taiwan’s survival. Otherwise, once economic coopetition between Taiwan and Mainland China changes, political confrontation will increase. This will make it even less possible for Taiwan to participate and respond to globalization. If Taiwan is marginalized in the international market place, it will have even more to lose in the international political arena.
Full Text Below:
Two developments unfolded at this years Yanqi Lake APEC meeting. One was political confrontation. The other was economic coopetition. When the meeting adjourned and the curtain rang down, economic coopetition overshadowed political confrontation.
During the Cold War, economic sanctions and military containment were two sides of the same coin. The two camps lacked any framework for mutually beneficial coopetition. This intensified military confrontation. Whoever wielded more nuclear warheads had the upper hand. This became the Conventional Wisdom. But the drama that unfolded at Yanqi main showed that under globalization, regional dominance requires more than warships, armaments, nuclear warheads, or collective self-defense. It requires participation in the regional economy. Whoever dominates economic coopetition, will also dominate political confrontation. “It’s the economy, stupid!” This was APEC’s answer to questions about political confrontation in the Asia-Pacific region.
The annual Yanqi meeting is usually characterized by behind the scenes political confrontation. Japan and South Korea nurse historical grudges. The Sino-Japanese dispute over the Diaoyutai Islands is particularly bitter. Add to this the United States' saber-rattling “return to Asia and " rebalancing" strategy, which makes the Asia-Pacific situation even more upsetting. Nevertheless the Abe government and Beijing reached "different interpretations" of the "four-point consensus." Abe has at least acknowledged that recent tensions in Diaoyutai Island waters are the result of different ideas about its sovereignty. The main reason was the Japanese economy cannot do without China. Xi Jinping and Park Geun-hye also announced the imminent signing of the PRC-ROK FTA. This helped the Mainland and South Korea consolidate their opposition to Japan. This showed that economic coopetition trumps even political confrontation.
The primary focus of the Yanqi Lake meeting was the new Beijing-Washington “Great Game.” Beijing’s home court strategy was to use economic coopetition to trump political confrontation. Xi Jinping held all the trump cards. He laid they all out at the APEC annual meeting. He established his "one zone, one road." He established his 40 billion US "Silk Road Fund," also known as the "Chinese version of the Marshall Plan." He promoted the FTAAP, and announced a "Beijing road map." The name of course has a double meaning. It means a "road map drawn up in Beijing." But it also means a "road map drawn up by Beijing.” It advocates Asian integration as opposed to fragmentation. He announced the signing of PRC-ROK FTA. He announced the Hong Kong-Shanghai Stock Exchange Link. He reached an ITA (Information Technology Agreement) tax cut agreement with the United States. He donated another 10 million US to ECFA. Beijing's ambition appears to be to go from being the world's factory, to being the world’s market, to being the world’s engine. Today it is nothing less than the world’s money-lender. In fact, Beijing has long dominated the 100 billion US Asian Investment Bank. Such is the Mainland China the US must face. When the US considers the situation in the East China Sea and returning to East Asia, the first thing it must face is economic coopetition, how to avoid losing its bargaining chips during political confrontation.
The US-led TPP is an attempt to manipulate economic coopetition and political confrontation. But Mainland China expressed willingness to join the TPP and RCEP. It is using “one zone, one road, the FTAAP, and other FTAs to break America's "TPP containment." Mainland China's one-party dictatorship enjoys an authoritarian advantage not shared by democratic governments when competing for FTAs. Industrial transformation requires nothing more than an order from the CCP, and the bird in the cage gets replaced Mainland China's handling of "vulnerable industries" does not lead to democratic street protests during FTA negotiations. The Mainland China-led Asian Investment Bank and the Silk Road Fund are unlike Cold War radar stations and missile bases in other countries. Mainland China refers to them as "excess capacity." This results in the construction of roads, power plants, and other kinds of infrastructure. According to Li Keqiang, for Mainland China economic development and political security are two wheels that turn in unison during international political and economic jockeying. No wonder when Obama was in Beijing, he said that the United States has no intention of containing the rise of China, because that is not in the US interest. What he really meant was that economic coopetition is even more difficult than political confrontation.
Economic coopetition and political confrontation between Taiwan and Mainland China is even more difficult. Therefore globalization and cross-Strait relations must be viewed even more seriously. Mainland China has declared its intention to dominate the regional economy. It may already have sufficient strength. In other words, if Taipei wants to connect with the rest of the world, it cannot bypass Beijing. Washington can’t. Tokyo can’t. Seoul can’t. Does Taipei really think it can achieve "globalization without Mainland China?"
Taipei must improve economic coopetition with Mainland China. Taipei must "connect with the rest of the world through Mainland China." It must join the TPP, RCEP, FTAAP and other regional economic organizations, in order to soften and limit cross-Strait political confrontation. This is the only viable strategy for Taiwan’s survival. Otherwise, once economic coopetition between Taiwan and Mainland China changes, political confrontation will increase. This will make it even less possible for Taiwan to participate and respond to globalization. If Taiwan is marginalized in the international market place, it will have even more to lose in the international political arena.
2014.11.21 02:13 am