China Times Editorial (Taipei, Taiwan, ROC)
November 9, 2015
Executive Summary: The Ma Xi summit led neither to the issuing of a joint statement, nor the signing of a joint agreement. But leaders from the two sides conversed and dined as equals in a dignified setting. They wrote a new page in cross-Strait history. They garnered international approval. The Ma Xi summit will improve cross-Strait relations. It will help the two sides to accept each other's jurisdiction, even as they reject each other's sovereignty. It will help the two sides accept the "one country, two governments" model, with undivided sovereignty and divided jurisdiction. If the two sides can reach closer agreement, and the political status of Taiwan can be clarified, Taiwan's future will be even brighter.
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The Ma Xi summit led neither to the issuing of a joint statement, nor the signing of a joint agreement. But leaders from the two sides conversed and dined as equals in a dignified setting. They wrote a new page in cross-Strait history. They garnered international approval. The Ma Xi summit will improve cross-Strait relations. It will help the two sides to accept each other's jurisdiction, even as they reject each other's sovereignty. It will help the two sides accept the "one country, two governments" model, with undivided sovereignty and divided jurisdiction. If the two sides can reach closer agreement, and the political status of Taiwan can be clarified, Taiwan's future will be even brighter.
The KMT vs CCP civil war divided the two sides for 66 years. Their leaders never met each other. They knew each other existed. But they acted as if they did not. Over the years cross-Strait relations have improved. Exchanges have taken place on a solid foundation. But neither side has recognized the other. The Ma Xi summit has enabled the two sides to reach a consensus on undivided sovereignty with divided jurisdiction. This is an important step in the establishment of cross-Strait peace.
Economic theory suggests that human beings faced with uncertainty tend to avoid risks. Uncertainty dogged cross-Strait relations under Chen Shui-bian. The two sides were at one time on the brink of war. Business owners must plan their business operations and choose their business models. They must consider the possible risks. As a result, they are compelled to hedge their bets when investing on either Taiwan or the Mainland. Ordinary citizens spend large sums to obtain foreign passports. They travel to dangerous and chaotic lands far from home. This widespread hedging bleeds resources and inflicts enormous harm on Taiwan's economy.
The Mainland is too big, and Taiwan is too small. For the Mainland, cross-Strait relations is merely one among many of its problems. For Taiwan, cross-Strait relations is everything. It impacts everything, domestic and international. If cross-Strait relations are stabilized, Taiwan can enjoy a peace dividend. Current problems can be solved.
First consider Taiwan's economic plight. This year, economic growth figures were dismal. The latest growth figure was -1.01% for the third quarter. The annual growth figure was under 1%. Two think tanks, the Chinese Economic Research Institute, and the Taiwan Institute of Economic Research, have revised their annual growth rate downward, to 0.9% and 0.8%. Improved cross-Strait relations will enable Taiwan to share in the Mainland's near 7% rapid growth rate. No country in the world today is willing to offend Mainland China, the second-largest economy in the world, soon to be the biggest. Stabilizing cross-Strait relations will enable Taiwan to liberalize its economy and let in a steady stream of capital. In other words, the scale and scope provided by Mainland factories, can address Taiwan's plight and help Taiwan's growth. Taiwan business owners can invest on both sides. They can invest heavily on the Mainland, expand into overseas markets, and seek profit maximization, to the eventual benefit of everyone on Taiwan.
A second benefit is relief for Taiwan's fiscal plight. Fiscal imbalances have increased the deficit to about 100 billion NT per year. The government is living on borrowed money. The government has no money for urban renewal, long-term health care, and other major projects. Pensions may be slashed. This will inevitably lead to political turmoil and pension reform. Stable cross-Strait relations mean that Taiwan need not spend so much on defense, on white elephant military hardware. The money saved can then be devoted to infrastructure. In 2004, arms purchases amounted to 618 billion NT. These weapons and equipment burn money every minute and every second of the day. They undermine the public interest. Future budgets must reduce them to a minimum.
Uncertain cross-Strait relations also affects the free movement of human talent. According to the World Economic Forum (WEF) 2015 Global Competitiveness Index, the ROC ranked last among seven Asian-Pacific nations in its "ability to attract talent", two years in a row. The International Institute for Management Development released a Competitiveness Report last year. Taiwan's ranking fell to 27th in the world, four places from the previous year. This was its worst showing in a decade. Cross-Strait peace will enable Taiwan became the ideal springboard for the Mainland market. It can attract large numbers of talented people. This can greatly boost Taiwan's growth. Students from Taiwan can experience the mountains and rivers of the Mainland as their own. An in-depth understanding will prepare them well for a future in the Mainland market. Young people need not settle for “the little things that make us happy”. They need resign themselves to being a small shopkeeper in some alley on Taiwan. They can spread their wings on the Mainland and become regional managers for major companies.
Sound cross-Strait political relations and the signing of a peace agreement will not just ensure lasting peace. Even more importantly, it will ensure continued divided jurisdiction. Economic theory tells us that competition is the best way to ensure the general welfare. In the past, the cross-Strait struggle was between the KMT and CCP, between capitalism and communism. Today the system adopted by the entire world is a mixed economy that is neither capitalism nor communism. Different means of governance however, mean ways of living. The two sides can maintain their own systems and means of governance. They can care for their people in their own manner. This will create a virtuous cycle, with each side acting as a mirror for the other, as a model for emulation, and ensure the greatest benefit for all the people.