Sunday, March 21, 2010

Profit Sharing: In the Long Term Interest of Both Sides

Profit Sharing: In the Long Term Interest of Both Sides
China Times editorial (Taipei, Taiwan, ROC)
A Translation
March 21, 2010

Taipei and Beijing underwent a crisis when Washington sold Taipei arms. Nevertheless consultations over the cross-Strait Economic Cooperation Framework Agreement (ECFA) remained unaffected. Recently, while speaking before the National People's Congress, Mainland Chinese Premier Wen Jiabao even announced a policy of "profit sharing" with Taipei. If this pragmatic policy can be implement in good faith at all levels, we can expect positive and far-reaching impacts.

Mainland Chinese leaders consider cross-Strait differences a fraternal quarrel. They may have differences of opinion with Taipei. Their positions may differ. But blood remains thicker than water. In negotiations over the cross-Strait Economic Cooperation Framework Agreement, Beijing is willing to "share profits" as an expression of sincerity and goodwill. If we read between the lines, Beijing seems to be implying that it is willing to make even more concessions during future negotiations, or to allow Taipei to receive even more benefits.

In fact this responds to the concerns of many on Taiwan. A clear disparity exists between Mainland China and Taiwan in size, population, markets, economies of scale, and international status. Some on Taiwan are afraid of being swallowed up or inundated. They feel insecure as they face an uncertain future. After decades of cross-Strait confrontation, exchanges and cooperation have only just begun. They have yet to take effect. The public remains unable to lower its guard. Long-term hostilities cannot be dissolved overnight. That is why even though the government has talked until it is blue in the face, many people on Taiwan remain dubious. They worry that once the door is opened, the local economy will wither and die. Beijing has now explicitly declared a willingness to engage in "profit sharing" with Taipei. Whether this will be translated into concrete moves remains to be seen. The public on Taiwan is adopting a wait and see attitude. It will arrive at its own conclusions about Beijing's goodwill based on the evidence.

Cross-Strait consultations have never been purely consultative. Even ECFA, ostensibly only about trade and investment matters, is not confined to economic relations and trade agreements. The key of course is which items will be allowed in. Based on negotiations and the final agreement, each side will make political declarations to each other and their own constituents. More importantly, they will lay out their plans for the future. The two sides are still being integrated. What is covered on the Early Harvest list remains uncertain. If we want negotiations to be completed on schedule in May, and the agreement signed at the Chiang-Chen meeting in June, we clearly need to step up consultations. We also need to seek internal consensus on Taiwan. The agreement is merely an expression of bilateral attitudes. For Beijing the most important issue is what kind of message it wants to send Taipei. When it comes time for negotiations, it will naturally incorporate its concerns into its political considerations.

Why should the two sides turn swords into plowshares? Because any conflict will directly impact both sides. It will also undermine the next generation's chances of living together in peace and prosperity. Why do we need to sign ECFA? Because it is the basis for wide-ranging economic and trade cooperation. It will provide increased opportunities for Taiwan's prosperity. It will allow cross-Strait exchanges and cooperation to enter a new and more intensive stage.

Of course certain industries may be affected. The same was true when Taipei was admitted to the WTO. Because Mainland China is such an important global economic power, Taipei has an opportunity to establish more favorable relations with others. It has no reason not to seize the opportunity. Some people are worried that Taiwan may be swallowed up. But in a globalized world, as long as one is able to find one's own niche, one can establish one's own little piece of heaven. The real fear is that one will shrink and retreat. We must not do nothing merely because we are afraid of the risk. Doing nothing may cost us even more.

The specifics of the cross-Strait Economic Cooperation Framework Agreement will be decided over the next two months. They may require something of a tug of war. Beijing may need to show what "profit sharing" means in more concrete terms. That might ease public concerns, and enable this vital framework for cross-Strait relations succeed. That might contribute to a peaceful and friendly interactive environment, helping the two sides put past grievances behind them, promote mutual understanding and tolerance, and find better ways of dealing with differences.

We are promoting cross-Strait exchanges and cooperation for our own sake, to ensure our future and to seize opportunities. If Beijing were to make certain concessions, they might be perceived in the short term as "profit sharing." But in the long term they would benefit both sides. Beijing would not be granting concessions to Taipei. Beijing would be demonstrating an even greater commitment to the future.










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