The Other China: Will the ECFA Be the End of Ma if Taiwanese Don't 'Choose Right…'

Firstly, an update to my previous post concerning Chinese Cyber-Espionage attacks on the U.S. and other developed nations.  AP national writer, Pauline Arrillaga, did a much broader write-up on the issue, here.  It is definitely worth a look-see.

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On to the Other China, Taiwan – Current Taiwanese President, Ma Ying-Jeou (Mă Yīngjiŭ: 马英九) of the Guomingdang (KMT, Koumingtang: 中国国民党革命委 员会) will be facing re-election on January 14, 2012, and it already looks to be an uphill battle for the Incumbent as his popularity continues to slide.  Ma is seen by some on the island (and maybe many more in the West) as being a practical politician who is trying to balance Taiwan’s interests with those of China,  while trying to avoid military conflict.  Others on the island see Ma as a pro-China sellout whose policies are making Taiwan increasingly dependent on China economically, at a time when China continues to isolate Taiwan internationally.  It is probably safe to say that many on the island do not quite know what to make of Ma, but are not yet convinced of a viable alternative.

Since Ma took office in 2008, the Mainland China and Taiwan have indeed moved toward unprecedented closer economic integration.  They have begun direct flights and shipping links, and tourism of mainlanders to Taiwan.  In fact the number of Chinese tourist to Taiwan has jumped to 1.6 million last year, a 40% increase from the previous year, which in turn has brought millions of dollars in revenue to the tourist and retail industry.  Exports have also increased over 14% since the previous year, to the tune of US$20 billion with more gains expected.  For his part, Ma also wants Taiwanese firms to operate on the Mainland under a stronger bilateral agreement on investment and property rights protections. Further, the Ma administration is negotiating the ability of Taiwanese firms to sell financial products in China, Taiwanese professional credential recognition on the Mainland, and investment restrictions lifted on the entertainment industry.  The main problem for Ma is all of this will take years to implement, so he has little to show in way of substantive benefit to Taiwan, but for the Economic Cooperation Framework Agreement with he Mainland (ECFA: 两岸经济合作框架协议).

The landmark agreement is not helping Ma in Taiwan as much as some Western critics tend to think.  Ma’s Taiwanese critics contend that the economic data he flaunts as proof of the  ECFAs success are not coming from Taiwan’s Ministry of Economic Affairs (MOEA), but China, therefore they are bias.  Further, they argue that Ma’s policies do nothing but to further hollow-out the island’s industrial base, which only benefit the wealthy while taking Taiwan from a industrial economy to a service economy which is ever increasingly dependent on the Mainland.  At the same time, Taiwan, due to Beijing’s objections, is unable to make independent trade deals with many of its neighbors (such as the ASEAN states), due to China’s diplomatic objections, which it uses as blackmail for “good behavior”.  In fact, opponents point to Tung Chen-yuan, a professor at Taipei’s National Chengchi University’s Graduate Institute of Development Studies, who claims that the ECFA has not been responsible for an increase in exports to China, because no increases occured:

“In January 2010, after the free-trade area between China and ASEAN took effect, China accounted for 32.3 percent of Taiwan’s exports. After the ECFA took effect in 2011, China only accounted for 29.3 percent of Taiwan’s exports.”

SNIP

He finds that China’s proportion of Taiwan’s imports saw a marked increase from 13.9 percent last year to 15.9 percent this year.

It seems many other Taiwanese are not buying what Mr. Ma is trying to sell:

While 47.3 percent of the public think cross-strait exchanges over the past three years have not negatively impacted Taiwan’s sovereignty, 40 percent believe that there has been a severe erosion of sovereignty following the cross-strait exchanges initiated by President Ma Ying-jeou’s (馬英九) administration since 2008, according to a survey released by the Taiwan Brain Trust yesterday.

The article above cites Ma’s approval rating somewhere between a modest 40.2-32.9% .  Ma already knee deep into the ECFA has no choice but to “double down” and make the ECFA the centerpiece of his re-election campaign.

In his defense, Ma supports believe the downward trend in Taiwan’s industrial base, the growing wealth gap, souring real-estate prices, and capital investment flight has nothing to do with ECFA, but is a pre-existing trend that many industrialized nations are undergoing.  So any claims that Taiwan is suffering due to ECFA are premature at best.

In an effort to show some results ahead of the election, Ma sought to speed things along on May 6 of this year with a meeting in the southwestern Chinese city of Chengdu.  The forum focused on how to deepen trade and economic cooperation. More than 400, industrial and business, leaders from both sides of the Strait discussed increasing the number of direct flights and allowing Chinese tourists to visit Taiwan without having to join tour groups.  The island is also searching for ways to jointly develop key industries with China, such as biotech and tourism.

Ma will stand against Taiwan’s first female candidate for president, Tsai Ing-wen (Cài Yīngwén: 蔡英文).  Tsai, of the Democratic People’s Party (DPP,: mín zhŭ jìn bù dăng: 民主进步党) Ms. Tsai has called for trade links with China to be developed in balance with its links to the rest of the world, basically, an end to Taiwanese diplomatic isolation.  More on Tsai:

Tsai resembles Ma in many ways. Like Ma, she is a graduate of National Taiwan University’s school of law. Like Ma, she holds a PhD from a prestigious foreign institution and speaks fluent English. And both served at the Mainland Affairs Council and are versed in the art of dancing with mainland China.

Tsai’s nomination represents the beginning of a generational shift that is renewing the DPP. She is the first DPP leader who did not rise to prominence in the crucible of the 1979 Kaohsiung demonstrations that sparked Taiwan’s democracy movement. Under her quiet but firm leadership, the party recovered from the ethically deficient leadership of former president Chen Shui-bian, who is now in jail for corruption. Tsai convinced the public to give the DPP a second chance; for that feat alone, she deserved the nomination.

So far Ma’s camp have questioned Ms. Tsai’s sexuality, her experience in politics, and hinted at a forthcoming new round of ” the politics of fear”.  The political epicenter of Ms. Tsai’s party is the south of Taiwan, a region known for it’s pride in local Han Taiwanese culture (bensheng ren: 本省人).   This region, like the party is unapologetically pro-independence. Although the DPP is unlikely to declare independence even if elected, Ma will argue that the risk of bringing forth the ire of the Dragon is too great.

Unlike past elections, when China tried to persuade those on Taiwan to make the “right electoral decision” by lobbing missiles over the island, this time, so far,  stern ominous words have been used:

Jia Qinglin, chairman of the Chinese People’s Political Consultative Conference (CPPCC), urged the people of Taiwan to “choose the right person” in two upcoming major elections on the island in order to maintain the stable development of the cross-strait relationship.

It remains to be seen if Beijing will do something to aid a flailing Ma, such as withdraw missiles that have for years been positioned adjacent Taiwan on the Mainland.

So how is the U.S., Taiwan’s chief defender, viewing things?  Or better yet, how should it view things?  Well, the U.S. probably should not be rejoicing over Taiwan moving closer to China, while defense spending under the Ma administration drops.  China acquiring Taiwan into it’s orbit will give China more of a reach in the South China and East China Seas, places Washington is currently seeking to contain China’s growing naval power.  We will look more at this in my next post on “The Other China”.