China's good neighbor policy and its implications for Taiwan

Chinese leaders in recent years have been following a coherent policy toward Asia that emphasizes moderation and accommodation while preserving core PRC interests. China's prevailing ‘good neighbor’ policy approach—backed by improvement in US–China relations—provides important opportunities and challenges for Taiwan. It clearly inclines the PRC leaders to avoid more aggressive or harder‐line tactics in the mix of carrots and sticks that makes up China's recent approach toward Taiwan. To follow a more disruptive course would undermine the influence and advantage Beijing has been seeking with its ongoing moderate approach toward the United States and other Asian powers. The main challenge for Taiwan is how to deal with the current balance of carrots and sticks in China's policy. Much depends on the ability of Taiwan's leaders and populace to turn the prevailing balance in PRC policy to Taiwan's advantage. This presumably will involve reviving their economy, promoting effective governance and prudent defense, while consolidating relations with the United States and managing tensions in cross‐Strait relations to the advantage of Taiwan's future security and development. Unfortunately, there is no political consensus on Taiwan to mobilize domestic resources and opinion in a concerted effort to protect Taiwan's future as an entity independent of PRC control. Those outsiders who have followed with positive interest Taiwan's remarkable development over the past decades hope that Taiwan makes good use of the opportunities posed by China's good neighbor policy to adopt prudent and concrete measures beneficial to Taiwan's long range prospects.     

International Political Economy from a Chinese Angle

In the 1990s, international political economy (IPE) as a set of concepts to interpret the current and future world system caught on quickly among Chinese scholars and policy analysts. Recent events (the Asian financial crisis and the US role, WTO negotiations, US‐Japan trade disputes) combined with China's historical experience (imperialism, war, revolution) and aspirations (to be a regional power) have given IPE specialists a different perspective on and language for the issues and events of today's global political economy. Zhu Wenli highlights the divergence between US and PRC views and interpretations on concepts of hegemony (the role of the US in a unipolar system), globalization, development models, and economic security, arguing that understanding this theoretical gap helps us to understand the current policy gap. She concludes with a reference to the limited role that international relations concepts and ideas play in the formation of foreign policy.     

The China–asean Free Trade Agreement And Taiwan

While China's move toward a FTA with ASEAN reflects Beijing's most recent foreign economic policy adjustment and represents a new stage in the nation's open-door policy, it inevitably produces significant impact on cross-Taiwan Straits relations. This recent development in China's foreign economic relations brings not only substantial psychological and real effects and pressure on Taiwan for its possible isolation and marginalization from the ongoing process of regional integration in East Asia, but also growing pressure exerted by the island's business community that fears being pushed into a disadvantageous position in competition with ASEAN companies in the ever expanding and lucrative market of the mainland. For strategic, diplomatic, and economic considerations in the face of this new challenge, Taiwan is pursuing counter-measures by searching for its own FTAs with other countries within and beyond the region.     

From functional integration to structural readjustment: Taipei–Beijing relations and the role of the United States

Regardless of the continued stalemate in the political arena, trade and economic interactions between the two sides of the Taiwan Strait have increased steadily. Both aggregate data and the results of survey research have testified to the existence of functional integration of the two societies across the Taiwan Strait. In addition to functional integration, structural readjustments have also been made by political authorities both in Taipei and Beijing so as to facilitate continuity of trade and economic relations. These types of mutual accommodations include: establishing proper ‘unofficial’ agencies on both sides to serve as instruments of practical contacts and negotiation; the more flexible definition of ‘One China’ by Beijing; and the opening of ‘small links’ between Quemoy and Amoy by Taipei. Beijing's refusal to grant Taipei any official diplomatic status and Taipei's reluctance to accept the ‘One China’ principle remain major obstacles to cross‐Taiwan Strait relations. The United States will continue playing a key role in future cross‐Strait relations. Beijing seems to be content, at least temporarily, to maintain cordial relations with the United States in exchange for the latter's adherence to the ‘One China’ principle and rejection of the option of Taiwan independence. Whether Taipei will use enhanced US commitment to Taiwan's security to strike a better deal with Beijing for gradual cross‐Strait integration or to utilize increased American protection to move onto the separatist road will be affected by domestic politics in Taiwan, future US policy toward to the island, and Beijing's response to Taipei's demand for security and international recognition.     

Southeast Asia and cross‐strait relations: The policy of separation of politics and economics

During the periods of July‐August 1995 and mid‐March 1996, China initiated a series of missile tests and military exercises in the Taiwan Strait, and the mainland for many was considered responsible for the rising tensions across the Taiwan Strait. But, Southeast Asian countries held Taiwan responsible for stimulating the mainland's military actions because of the island's claim for independence. Why? There are three different theoretical arguments on this issue, i.e. those of political primacy, economic determinism, and the separation of politics and economics. This paper contends that the principle of separation of politics and economics is the policy that Southeast Asian countries pursue in developing their relations with the PRC and the ROC, i.e. maintaining official and full‐scale relations with the PRC, but keeping unofficial and economic links with Taiwan. Therefore, for Southeast Asian countries, the PRC's military exercises in the Taiwan Strait were a political and not an economic problem, and one between the mainland and Taiwan. This is the key factor in explaining attitudes in Southeast Asian nations toward the Taiwan Strait crisis.     

China Goes to Africa: a strategic move?

Entering the twenty-first century, particularly under the reign of Hu Jintao, China began to pursue an increasingly pro-active diplomacy in Africa. Most analysis on China's offensive diplomacy in Africa focuses on Beijing's thirst for energy and raw materials, and for economic profits and benefits. That is why it is often called ‘energy diplomacy’ or ‘economic diplomacy’ as if China, just like Japan in the 1980s, became another ‘economic animal’. But if one looks at the history of the PRC's foreign policy, Beijing has seldom pursued its diplomacy from purely economic considerations. Is this time any different? This article exams China's diplomacy in Africa from a strategic and political perspective such as its geo-strategic calculations, political and security ties with African countries, peacekeeping and anti-piracy efforts in the region, support for African regionalism, etc. It argues that China's diplomatic expansion in Africa, while partially driven by its need for economic growth, cannot be fully understood without taking into consideration its strategic impulse accompanying its accelerating emergence as a global power. Africa is one of China's diplomatic ‘new frontiers’ as exemplified by new Chinese leader Xi Jinping's maiden foreign trip to Africa in 2013.     

Domestic Institutional Constraints on China's Leadership in East Asian Economic Cooperation Mechanisms

The study of Chinese foreign policy has long shown that domestic politics and domestic constraints are sources of foreign policy, albeit generally considered less potent than ideology and interests. Domestic political constraints should also be explored as factors in Chinese regional policies toward East Asia, including regional economic institutions. This paper examines three domestic institutional constraints on regional foreign policy in the area of trade and economics: a fragmented decision-making structure that has difficulty with coordination, a relatively heavy reliance on top level decision-makers at a time when issues of Asian economic policy have relatively low priority for these same decision-makers, and the relatively extreme lack of autonomy for negotiators vis-á-vis top decision-makers in Beijing. These constraints are by any means unique to China. However, at a time when many observers and participants are expecting—indeed, often hoping for—Chinese leadership in the region, the paper posits that these constraints hinder the PRC's ability to fill this role. The key empirical focus is regional trade agreements and regional economic organizations.     

China and the Asian Economies: mutual acceptance,economic interaction and interactive dynamics

The objective of this article is to explore the economic relationship between China and the surrounding dynamic Asian economies. It delves into China's influence over the Asian economies and whether this relationship has evolved in a market- and institution-led symbiotic manner. The three principal channels of regional integration analyzed in this article are trade, FDI and vertically integrated production networks. Another issue that this article explores is the so-called China ‘threat’ or ‘fear’ in Asia. The China threat implied that China was crowding out exports from the other Asian economies in the world market place. Also, as China became the most attractive FDI destination among developing countries, it was understood that China was receiving FDI at the expense of the Asian economies. These concerns were examined by several empirical studies and the inference was that they were exaggerated. The article concludes that China methodically expanded and deepened its economic ties with its regional neighbors. At the present juncture, China's integration with the surrounding Asian nations is deep. Both China and its dynamic Asian neighbors have benefited from this synergy.     

The political economy of Taiwan's mainland policy

The emerging patterns of the cross‐strait interaction present a perplexing duality, revealing both the trends toward closer economic convergence and greater political divergence. Taiwan's mainland policy is both the manifestation and the catalyst of the two contradictory processes. It is the locus of confrontation of the various economic, social, and political forces that propels the two concurrent processes. It has been propelled by the epic changes in the global political economy, the market‐oriented reform in China, and Taiwan's economic restructuring process. It has also been prompted by the perceived challenges and opportunities brought about by the transition to the post‐Cold War era, the unraveling of structural conflicts between a status‐quo power (i.e., the US) and a rising power (i.e., the PRC) and by the politics of political succession within the CCP. In more immediate terms, it has been driven by the power struggle over political succession within the KMT, the bureaucratic process, the interest group politics, the partisan politics in both the electoral and legislative arenas, and the unfolding of the national identity crisis during Taiwan's recent transition to democracy.     

China and Major Power Relations in East Asia

Tremendous changes have taken place in East Asia in the post-Cold War era, which have a great impact on Chinese foreign policy and its relations with major powers in East Asia. This new power configuration is related to as 'two ups' and 'two downs', which have become apparent since the early 1990s. The 'two ups' concern the rise of the United States and China. The United States' rise to sole superpower status has given Washington a dominant role in all four dimensions of world affairs: political, strategic, economic, and technological/cultural. Meanwhile, China has achieved a spectacular economic performance for the past two decades, sustaining high growth rates, and escaping, so far, the Asian economic crisis of 1997‐98. This expansion has greatly increased China's influence in regional and global affairs. The 'two downs' refer to the downturns of Russia and Japan. This article provides a detailed analysis of China's international environment in the context of the changing dynamics of major-power relations in East Asia. Special attention is paid to the crucial Beijing‐Tokyo‐Washington triangle. The examination focuses upon political, economic, and strategic dimensions.     

A “greater China“?

This paper sees “Greater China” as a would‐be reunited China that includes the present PRC, Taiwan, Hong Kong and Macao. The coming into being of a “Greater China” hinges on future domestic politics in the PRC and Taiwan and among the triangle of Beijing‐Taipei‐Hong Kong. It also hinges on American, British, and Japanese policies addressing the current trends of economic integration and political accommodation among the three Chinese entities. Of the external variables, future U.S. politics toward the PRC, and toward the evolution of political exchanges on the Beijing‐Taipei trajectory will be the most decisive. Economic and political developments in the past fifteen years have brightened the prospect of Chinese reunification, but national reunification remains a complicated and protracted process.     

Hong Kong in United States‐China relations: The international politics of Hong Kong's reversion to Chinese sovereignty

This article examines the implications of the political transition of Hong Kong on US‐China relations in strategic, political and economic dimensions. It evaluates the impact of Hong Kong's changing status in the context of the engagement‐containment debate on China policy in the US. It suggests that US concerns over questions such as democracy and human rights and China's rejection of foreign interference’ in Hong Kong would turn the territory into a source of political conflict between the US and China. Finally it points out that any major trade confrontation between the two countries would have serious implications for the territory. The article concludes by arguing that if Hong Kong could continue to be a prosperous and free society with a global outlook, it would facilitate China's integration with the global community, but if a reversion to authoritarian rule occurred in Hong Kong, US‐China relations will be aversely affected.     

台湾学运背后的经济发展困境

台湾爆发“3·18”学运的一个深刻背景原因是近年经济持续低迷不振。台湾经济困境主要表现在经济增长、物价变动及劳动市场等方面。由于民间消费与投资增长乏力、出口竞争力明显下降、工业生产增幅小、服务业发展不平衡，导致总体经济增长动力明显不足。造成台湾经济困境的原因，除了全球景气衰退与台湾自身结构性问题外，近年台湾经济还面临一些新问题的严峻挑战。一是区域经济整合潮流对台湾的冲击效应日益明显；二是台湾应对大陆经济转型发展乏力；三是经济振兴严重受困于政治因素。台湾突破经济困境的路径，关键在于要排除非经济性因素障碍，深化与大陆经济交流合作，充分利用大陆市场和区域整合来提高自身竞争力。     

Economic interdependence and political divergence: The emerging pattern of relations across the Taiwan Strait

Economic interactions between Taiwan and mainland China have grown at an astounding speed since the Taipei government began to relax restrictions on indirect trade with the mainland in the late 1980s. A growing flood of cross‐border investment and trade has created an economic interdependence. However, intensified economic exchanges have not spilled over into political recognition of the legitimacy to each other or even ameliorated hostility across the Taiwan Strait. Growing economic interdependence has been a function of political power and political choice. This paper examines the emerging pattern of the relations across the Taiwan Strait and attributes the discrepancy between economic and political relations to significant disparities across the Taiwan Strait, which has worked as both integrative and disintegrative forces.     

China's Prolonged Stability and Political Future: Same political system,different policies and methods

Contrary to the earlier political upheavals which culminated in the 1989 Prodemocracy Movement, China has achieved an extended stability in the 1990s. This paper argues that the prolonged stability resulted from a set of changes in China's state‐society relations, and much of it was related to the 1989 movement. After the 1989 movement, the CCP veterans selected younger leaders who were both reform-minded and had a Machiavellian sense of politics. This new leadership skillfully managed the economy and contained dissident activities from public attention. Reform and the booming economy also provided many opportunities for intellectuals and students and turned them from the earlier economic 'losers' into the current 'winners'. As market forces penetrated into China more deeply and the state no longer took charge of everything as it used to, the Chinese became less interested in national politics, and political conflicts localized. This paper also argues that although China's state‐society relations underwent great changes, the state still bases its legitimacy on performance and is thus intrinsically unstable. A political reform that aims at changing the basis of state legitimation becomes crucial.     

Political Economy of Cross-Strait Relations: is Beijing’s patronage policy on Taiwanese business sustainable?

Via quantitative analysis and interviews, this article examines the credibility and sustainability of Beijing’s patronage policy towards Taiwanese business. The new finding is that the rise of economic nationalism and local protectionism in China is undermining and constraining Beijing’s patronage policy. Consequently, China’s rising economy does not deepen cross-Strait integration but rather crowds out Taiwanese business. Moreover, considering the growing influence of Chinese domestic constraints, this article attempts to provide a bilateral two-level game to grasp the new dynamics on cross-Strait relations under the new normal.     

The changing role of business associations in democratizing Taiwan

This article examines the role of business associations in Taiwan. It begins by comparing the three approaches used to explain state‐society relations in modern Taiwan: capitalist, corporatist, and pluralist. Legal requirements for economic organizations reflect a corporatist impulse. However, empirical measurements of associations’ communications with government, government supervision of associations, and economic impacts on state policy demonstrate increasing pluralism. Today's business associations have greater autonomy than previously, but at the cost of reduced control over their members. SMEs and large conglomerates have growing political influence in Taiwan's changing political economy.     

China as a latecomer: Toward a global logic of the open policy

The paper reviews a number of substantive issue‐areas in China's foreign economic sector (the foreign trade system, industrial and geographical targeting, foreign investment regulations, and the foreign exchange regime), finding that conventional mercantilist accounts of China's recent success in world markets are overstated. In fact, the paper argues that the most salient changes occurring in China's foreign economic sector are now in many respects beyond the immediate control of the state. In this vein, it is argued that most scholars have seriously underestimated the structuring impact of the international political economy on China's reform and opening. Indeed, the paper maintains that there is a ‘global’ logic to the evolution of the Open Policy, just as others have identified an ‘economic’ or ‘political’ logic to foreign trade reform, the creation of the SEZs, liberalization of investment laws, the loosening of foreign exchange controls, and other such changes. The paper concludes, therefore, that there is much about the course of China's reform and deepening integration into the world economy that can be understood as a function of its position as a latecomer in the international system.     

Coping with the Global Financial Crises: institutional and ideational sources of Taiwan's economic resiliency

Over the last two decades, Taiwan has weathered two global financial crises: the Asian financial crisis of 1997–1998 and the sub-prime loan crisis of 2008–2009. Each time the island's economy emerged from the crisis relatively unscathed. Many of the elements that constitute Taiwan's economic resilience have been fostered through entrenched institutional arrangements and established policy orientations over a long period. Taiwan managed to retain the bulk of these long-running sources of economic resilience despite the tremendous external pressures exerted by neo-liberal policy advocates to dismantle these ‘out-dated’ policy thinking and practices in the name of reform during the decade-long interval between the two crises. Taiwan was able to cope with the 2008–2009 global financial crisis thanks also to a more enabling regional environment created through stronger cooperation among Asian economies and under a new awakening among the East Asian policy makers.     

Touching stones to cross the river: Evolving telecommunication policy priorities in contemporary China

This article, drawing on fieldwork in China, charts the ascendancy of Lian Tong (China Unicom), the first competitor to the incumbent Ministry of Posts and Telecommunications. Commencing with an historical overview of Chinese telecommunications, it suggests that Lian Tong's formation has been contingent upon support from key constituencies within China's political elite. The company's emergence mirrors technological trends and user pressure evident globally. It embodies the drive towards market liberalisation now evident within the Peoples’ Republic. While the Chinese policy community is sensible of the need to make haste slowly toward the goal of telecommunications competition — ‘touching stones to cross the river’ in the contemporary aphorism — the success of this ‘policy experiment’ depends both on the subtleties of Chinese politics and the construction of bold new regulatory frameworks. Lian Tong's genesis is symbolic of developments in the telecommunications sector, and maybe also more generally in the Chinese economy.