Tsai Ing-wen Nukes Cross-Strait Trade and Economic Relations
China Times editorial (Taipei, Taiwan, ROC)
August 25, 2011
Summary: DPP Chairman Tsai Ing-wen refers to her presidential campaign platform as the "Platform for the Coming Decade." In the section on cross-Strait relations, Tsai denies the existence of a 1992 Consensus. If Tsai Ing-wen is elected, her denial will become an atomic bomb dropped on cross-Strait economic and trade relations. The peaceful and mutually beneficial economic and trade exchanges that the governments and people on both sides of the Strait have enjoyed over the past three years will be destroyed overnight. To no one's surprise, Mainland officials have already responded. They have said that repudiation of the 1992 Consensus is "unacceptable to the Mainland side." They have said that if such a policy is implemented, "cross-Strait negotiations will be impossible."
Full Text below:
DPP Chairman Tsai Ing-wen refers to her presidential campaign platform as the "Platform for the Coming Decade." In the section on cross-Strait relations, Tsai denies the existence of the 1992 Consensus. If Tsai Ing-wen is elected, her denial will become an atomic bomb dropped on cross-Strait economic and trade relations. The peaceful and mutually beneficial economic and trade exchanges that the governments and people on both sides of the Strait have enjoyed over the past three years will be destroyed overnight. To no one's surprise, Mainland officials have already responded. They have said that repudiation of the 1992 Consensus is "unacceptable to the Mainland side." They have said that if such a policy is implemented, "cross-Strait negotiations will be impossible."
The Ma administration has been in office three years. During that time, cross-Strait economic exchanges reached yet another milestone. They went from direct links, Mainland tourists visiting Taiwan, liberalization of the financial industry, and Mainland purchasing groups coming to Taiwan, to the signing of ECFA. Cross-Strait economic exchanges were finally normalized. This process, and these results, benefited both sides. The Mainland has undeniably made many concessions to improve relations with Taiwan. Overall, therefore, Taiwan has benefited more.
For example, when the financial tsunami struck, the technology industry on Taiwan stalled. Capacity utilization fell to 30%. Unpaid leaves were widespread. The Mainland launched a four trillion RMB Home Appliances for Rural Families Program. Provincial and municipal governments on the Mainland dispatched swarms of purchasing groups to Taiwan. In a single year they purchased 20 billion USD in home appliances. This was a shot in the arm for ailing industries and enterprises. Allowing Mainland tourists to visit Taiwan led to a tripling in their numbers. Last year the number increased to 1.5 million. The growth rate reached 5%. This enabled last year's tourism foreign exchange earnings to increase 30%. The signing of ECFA has yielded even more far-reaching benefits. Taiwan benefited from the tariff reduction early harvest list more than the Mainland. The side effects are even more impressive. All in all, the benefits of this wave of deepening cross-Strait trade, amount to an entirely different class of benefits that benefit the common people.
Maintaining good cross-Strait relations and further expanding economic and trade interests is essential to our economic future. It affects the economic interests and lives of everyone. The Mainland's economic strength is growing. It is now the second largest after the United States. According to forecast by international think tanks, the Mainland may overtake the U.S. as the world's largest economy as early as 2020, or as late as 2030. People on the Mainland and Taiwan are the same people. We speak the same language. We have the same culture. Given the economic prospects before our noses, how can we not take advantage of them? If we refuse to have any dealings with the Mainland, our economy will fall into an abyss.
Secondly, in recent years the Mainland has become the world's factory. Seizing "Mainland opportunities" is no longer limited to mastering production factors and plant problems. Seizing Mainland opportunities means opening up one's markets, building one's brand, and enhancing one's businesses and industries. For example, the local Taiwan market has remained small. The financial sector has too many banks. These businesses would have a vastly larger market on the Mainland, enabling them to survive and to thrive.
Thirdly, exports account for about 70% of our gross domestic product (GDP). The Mainland accounts for 40% of all "exports" from Taiwan. Last year, Taiwan enjoyed a 80 billion USD cross-Strait trade surplus. Most companies listed on Taiwan have built factories on the Mainland. For many technology industries, shipments from the Mainland, already exceed 50% to 80%. People say one should not put all one's eggs in the same basket. But the reality is all our eggs are in one basket. The most important thing is to take good care of that one basket. Tsai Ing-wen's repudiation of 1992 Consensus runs the risk of destroying this basket.
Finally, the reason Taiwan and the Mainland had to rush the signing of ECFA, was the imminent launch of the ASEAN plus One (ASEAN plus the Mainland) East Asian free trade zone. Had Taiwan been excluded from the world's largest free trade zone, over half our exports would be affected. Lest we forget, ASEAN plus One was followed by ASEAN plus Three (ASEAN plus Mainland China, Japan, and South Korea). South Korea is Taiwan's toughest competitor. If cross-Strait relations change, and ECFA cannot integrate Taiwan into the ECFA regional trade zone, exports from Taiwan and the Taiwan economy will be in trouble.
Tsai Ing-wen says ECFA is a fait accompli, and that is why it will be submitted to the people for "democratic approval." But Tsai Ing-wen does not seem to realize that three years of cross-Strait economic and trade exchanges, and other interests and achievements, are all based on good faith and consensus. Take away this good faith and consensus, and ECFA will be an empty shell. The most important cornerstone of cross-Strait good faith is the 1992 Consensus. Tsai Ing-wen seems to think she can repudiate the 1992 Consensus, but the other side will continue to respond in good faith. She seems to imagine that the other side will do everything according to her play book, and handle cross-Strait economic and trade relations according to her whims. Tsai is either naive and ignorant beyond belief, or is knowingly deceiving the public.
By repudiating the 1992 Consensus, Tsai Ing-wen is gambling with her political future. Motivated by personal beliefs, ideals, ideology, or merely by a desire to consolidate her support among the Green Camp, she is "betting the farm" on cross-Strait relations. But the economy, people's livelihood, and people's hopes for cross-Strait harmony, are not chips to be gambled away on the whims of politicians.