State versus market: Taiwan’s trade, investment and aid policies in mainland China and southeast Asia in the post-Deng period

For many years Beijing has sought to isolate Taiwan from the world community, threatening to sever relations with any country that tries to establish or strengthen relations with Taiwan. As a result, economic diplomacy has become a tool in conducting Taiwan’s international affairs. Political and economic considerations are thus intermingled in Taiwan’s pursuit of its foreign economic policy. This paper does not intend to go into a traditional debate on the conflict between the state (politics) and the market (economics) in conducting a country’s foreign economic relations. Rather, it attempts to coordinate the merits of both state and market and assumes that an understanding of their interaction is useful in examining Taiwan’s foreign economic relations in the post-Deng period. The empirical study of this paper will focus on mainland China and the Southeast Asian countries. Southeast Asia is a region where no country maintains diplomatic relations with Taiwan. It is difficult indeed for Taiwan to develop official political ties with Southeast Asian countries because of their geographical proximity to mainland China, which tends to make them subject to pressure from Beijing. Thus, whenever Taipei conducts its economic communications (such as in foreign trade, foreign direct investment and foreign economic assistance) with mainland China and those Southeast Asian countries, political and economic factors are always taken into account by decision-makers.     

Sudpolitik: the political economy of Taiwan's trade with Southeast Asia

Abstract

In December 1993 the Taiwan government adopted a policy called nanjin zhengce or sudpolitik, a policy aimed at diverting part of Taiwan's trade and investment flows from China to Southeast Asia. This paper addresses the following questions: what is sudpolitik? why adopt such a policy? what are the economic, political, and strategic considerations in the pursuit of this policy? which countries are its specific targets? how do the countries directly affected by this policy respond to it? The paper also discusses the issue of Taiwan's aid in connection with sudpolitik. While the effectiveness of the policy is far from clear at present, the paper concludes with four observations: Taiwan's trade and aid are beginning to intertwine; Taiwan's diplomacy is largely economically or commercially led; Taiwan has achieved some positive results in improving its relations with Southeast Asian countries; and, Taiwan has reached a new stage in its economic development whereby it needs to invest overseas in order to sustain its economic growth. Overall, sudpolitik represents a novel step in Taiwan's diplomatic practice.     

Affordable Ally: Taiwan's Diplomatic Venture in Macedonia

This article examines foreign policy of the Republic of China (ROC) towards East Central Europe (ECE) through the prism of Taipei's diplomatic strategies vis-à-vis Macedonia. Specifically, it identifies and explains the broad goals and rationale behind Taipei's increased interest in ECE after the Cold War. The study concludes that the Taiwanese interest in East Central Europe was motivated by its wish to capitalise on ECE's anti-communist euphoria and need for foreign capital, hoping that promises of generous economic assistance would convince some ECE states to extend diplomatic recognition to the ROC.     

Motivations behind China’s Foreign Oil Quest: A Perspective from the Chinese Government and the Oil Companies

China’ economic boom has produced a surging appetite for fossil fuels, particularly oil. To foster and sustain its economic development, China has taken a series of steps to quench its thirst for energy. The most striking measure is its high-profile oil diplomacy, centering on the goal of gaining more secure national control of overseas oil and gas supplies. Why has China chosen oil diplomacy over directly purchasing oil on the international market? And why does one prefer direct control of oil and gas? This paper attempts to address China’s motivations from the perspectives of both the central government and the national oil companies (NOCs). It is argued that China’s oil diplomacy has been driven not only by the government’s learning skill and strategic concerns, but also by the NOCs’ strong commercial motives to expand business abroad and their management’s personal incentive. Although both actors have common stakes in securing oil and gas from abroad, this by no means can guarantee that the NOCs will obediently follow state orders.

     

United States and Evolving Cross-Strait Relations

The article discusses the U. S. role in cross-strait relations before and after the political power transition in Taiwan during 2008. It explores the question of whether a new dynamic is shaping the Beijing-Taipei-Washington trilateral relations with the significant relaxation of cross-strait relations, and how that affects Washington’s ability to influence the direction of cross-strait relations in the future. More specifically the paper analyzes the role the United States played in shaping the new reality in the Taiwan Straits, and the evolving thinking on Taiwan in American strategic and political circles. It will also discuss how Washington has managed the cross-strait relations so far as well as how Beijing and Taipei have handled the American factor on some sensitive issues. Finally it will look at the potential benefits and limitations that the United States could contribute to achieving a higher level of reconciliation and integration between the two sides across the Taiwan Straits.     

China–Taiwan diplomatic competition and the Pacific Islands

Abstract

China and Taiwan have become important actors in South Pacific affairs due to their diplomatic rivalry. Securing the diplomatic recognition of the Pacific Islands countries is expensive for China and Taiwan. There are limits to what the rivals are willing to spend, and they attempt to reduce costs. This dynamic shapes how Taiwan and China engage Pacific Islands politicians. It also motivates their high level official visits to the region, and how they engage South Pacific regional organizations. Despite criticisms that China–Taiwan rivalry corrupts and destabilizes the South Pacific, the issue of whether China and Taiwan's diplomatic rivalry has been beneficial or detrimental to the region remains contentious. China and Taiwan appear to have recently called a truce in their decades-old rivalry. This tacit agreement is still tentative, and the involvement of China and Taiwan in the region has yet to change significantly. However, Taiwan has reportedly begun to reduce funding, and is likely to reform its aid delivery in order to satisfy demands from the South Pacific region's dominant power, Australia, and to improve its image as a humanitarian aid donor. China is also likely to reduce funding while the truce holds. However, China considers its ties with South Pacific governments more important than responding to Australian pressure, and is unlikely to reform its South Pacific aid programmes as a result of the diplomatic truce.     

Chinese and Japanese foreign policies towards central Asia from a comparative perspective

Abstract

This paper compares and analyses China’s and Japan’s foreign policies with regard to the newly emerging Central Asian (CA) states based on the role that each country attributes to that region, including political cooperation, economic interaction, security, public perception and mutual relevance. It demonstrates that in some respects, the interests of China and Japan in CA are similar, as exemplified by their focus on mineral resources and political stability. However, these countries differ in their approaches and strategies there: China is inclined to follow pragmatic approaches, whereas Japan’s policy is a mixture of idealistic and pragmatic perspectives.     

Assessing the Impact of Performance-Based Budgeting: A Comparative Analysis across the United States, Taiwan, and China

What is the impact of performance-based budgeting (PBB) on governmental spending? Do various PBB implementation strategies result in different outcomes? The authors, Jack Yun-jie Lee of National Open University in Taiwan and XiaoHu Wang of the University of Central Florida, gathered data from the United States, Taiwan, and China (Guangdong Province) to explore the possible intermediate- and long-term results of PBB. The data demonstrate how the impacts of PBB vary across countries and regions.     

Valence politics and electoral choice in a new democracy: The case of Taiwan

After two peaceful alternations of political power in a single decade, Taiwan is a democratic success story, demonstrating levels of party competition, turnout rates and patterns of civic engagement similar to those in mature Western democracies. What factors drive electoral choice in Taiwan's new democracy? This paper addresses this question by testing rival models of voting behavior using the Taiwan Elections and Democratization Study (TEDS) 2008 presidential election survey data and the 2010 mayoral election survey data. Analyses show that, similar to their counterparts in mature democracies, Taiwanese voters place more emphasis on the performance of political parties and their leaders in delivering policies designed to address valence issues concerning broadly shared policy goals than on position issues or more general ideological stances that divide the electorate. Findings demonstrating the strength of the valence politics model of electoral choice in Taiwan closely resemble the results of analyses of competing models of voting behavior in Western countries such as Great Britain and the United States.     

Neoconservatism,US–China conflict,and Australia's ‘great and powerful friends’ dilemma

Abstract

Following its time-honoured ‘great and powerful friends’ foreign policy tradition, Australia has been cultivating close ties simultaneously with the United States and China. Yet, as a rivalry between the two powers apparently looms large, Australia faces an acute dilemma. While the rise of China and the question of Taiwan are often cited as main causes of US–China discord, this article argues that the American neoconservative policy on China, underpinned by a belief in both military strength and moral clarity, is integral to this growing competition and is, by extension, partly responsible for the emergence of Australia's predicament. To avoid such a difficult choice, the article suggests that Australia should strive to curb the policy influence of neoconservatism both in the United States and at home by pursuing a more independent foreign policy, making clear its strategic postures on US–China relations, and helping establish a trilateral strategic forum between Australia, the United States, and China.     

The United States,Japan, and the European Union: comparing political economy approaches to China

Abstract

This paper examines US, Japanese, and European political economy approaches to China, and their effect on US–Japan and US–EU relationships. Great powers with a greater security concern in dealing with another major country care more about power while those with less of a concern are preoccupied with calculations for wealth. China's rise and its actions have posed a far greater security challenge to the United States and Japan and are driving the two countries closer together. The political economy game involving China reveals a dominant welfare motive among the advanced market economies. The ambition to transform China politically has diminished. China's integration into the global market makes a relative gains approach difficult to implement. Globalization simply limits the ability of a state to follow a politics-in-command approach in the absence of actual military conflict, which explains why the political economy approaches of the United States, Europe, and Japan are not that different in the scheme of things. China's own grand strategy to reach out to the world to outflank the US–Japan alliance has also contributed to a divergent European policy toward China although there are severe limitations to Beijing's ability to drive a wedge between the United States and Europe.     

Shaping China’s Climate Diplomacy: Wealth,Status, and Asymmetric Interdependence

China’s diplomacy in the post-Kyoto Protocol international climate change negotiations (ICCN) under the United Nations Framework Convention on Climate Change (UNFCCC) bears proactive and reactive feature. On the one hand, China has proactively built several new coalitions including its bilateral climate coalition with India, the BASIC group and the Like-minded Developing Countries (LMDCs) while maintaining its traditional coalition with the Group-77 and China to facilitate its bargaining power against developed countries and their negotiating blocs. On the other hand, however, China has reactively made significant compromises to its negotiation partners on mitigation obligations of greenhouse gas emissions. Such a proactive and reactive feature of China’s climate diplomacy has been mainly shaped by: first, China’s desire to maximize its wealth/profits from its participation in the Clean Development Mechanism; secondly, its desire to build a responsible great power status in the international system; and thirdly, its asymmetric dependence on the developed countries especially the US and the EU for transferring climate mitigation-related technologies.     

Identity,rights and surveillance in an era of transforming citizenship

This review essay focuses on the problem of citizenship in three different areas, namely human rights, identity politics and surveillance. Heli Askola’s work focuses on the magnitude of demographic challenges that contemporary migrant-receiving states in the Global North face, and specifically focuses on the broader demographic picture of low birth rates, and increasing diversity and populations ageing; thus, focusing the problem of identity politics in the context of citizenship acquisition in Global North states. Richard Sobel’s book explores the empowerment of American citizenship, specifically through a unique reading of constitutional and political apparatus in the United States. Finally, Pramod Nayar’s work addresses state-based surveillance mechanisms like biometrics, biobanks and the internet within the context of citizenship and how new forms of subjectivity are forged within a culture of surveillance. These three works approach citizenship through a legal category of political membership, but also a process of political subjectivization.     

Do the “Dragon’s Gifts” Improve China’s National Image? An Empirical Analysis of the Economic Relations and Public Perceptions of China in Africa

Using a multivariate framework and the most recently available data that include numerous African countries, this investigation has produced the first extensive statistical evaluation of China’s image in Africa based on China’s various economic relations with Africa, including aid, trade, FDI and contracts. We find that China’s economic development assistance, contracts, and to some degree, trade with African countries contribute to a positive image of China in Africa. In addition, we find that people in African countries of a smaller population, poorer livelihood, less open economy, and better governance tend to have positive views of China’s political and economic influence. With the implementation of the Belt and Road Initiative, Chinese economic activities in recipient countries have been increasing. The implications of this research shed light on how BRI may be received in the host countries and the likelihood of its success or failure.

     

Rivalry between Taiwan and the PRC in Latin America

Latin America and the Caribbean have been a major battleground of the “foreign policy war” between Taiwan and the PRC over international legitimacy, and recognition. This paper analyzes the growing rivalry between China and Taiwan and its implications. The first part of the paper examines the importance of Latin America and the Caribbean for both Beijing and Taipei. The second section explores political aspects of their involvement in the region. The third part assesses how Beijing and Taipei use economic diplomacy to meet their diplomatic objectives in Latin America. The fourth section examines the implications of the increasing rivalry between Taipei and Beijing in the region. This study is supported by a Fulbright scholarship and a faculty development grant from Merrimack College. The views in the paper are entirely mine and should not be ascribed to the institutions acknowledged above. I would like to express my appreciation to Wang Hsiu-chi at Tamkang University in Taiwan who provided me with excellent facilities during my field trip to Taiwan. Author would like to thank Curtis Martin, Lowell Dittmer, Xiaogang Deng, Antonio Hsiang, Tchen Tchiang, Baohui Zhang, Baogang Guo, Guoli Liu, Ping Li, and two anonymous reviewers for their valuable comments on earlier versions of this paper. An earlier version of the paper was presented at the International Symposium on National Identity and the Future Cross-Strait Relations, University of Macau, in December, 2004.     

Creating a commonwealth intelligence culture: the view from Central Africa 1945–1965

This article examines attempts by the British intelligence community to improve the security arrangements of members of both the ‘old’ and ‘new’ Commonwealth in the post-war era. The process was regarded not only as a means of countering Communist subversion and protecting Britain's key relationship with the United States, but also as a way of entrenching British influence, particularly in countries nearing independence. The result of this process was a complex network of intelligence contacts reaching across the Commonwealth. Viewing this network from the perspective of the Federal Intelligence and Security Bureau (FISB), the intelligence organization of the Central African Federation, the article suggests that it offered both opportunities and dangers. It provided a potential channel for covert diplomacy. Yet it also threatened to undermine the credibility of Commonwealth intelligence chiefs whose links with the United Kingdom were perceived as being excessively close.     

Taiwan and the geopolitics of late development

Abstract

Through a case study of Taiwan, this paper seeks to address recent debates surrounding the transformation of developmental states in East Asia. Whilst a number of authors have cited the Taiwanese state as being both cautious and resilient in the midst of global restructuring, this paper seeks to critically engage with such arguments by highlighting the dynamic and mutually constitutive relations between the forms of social relations that underpin late development and the wider geopolitical system in which such development occurs. Specifically, Taiwanese industrialisation can be viewed as an outcome of the US intervention in the Chinese civil war and subsequent exclusion of China from the regional political economy in the period between the Korean and Vietnam Wars. The Kuomintang (KMT)'s retreat to Taiwan established the basis for the autonomous developmental state, and the US underpinned this state through military protection, aid and access to its own domestic market. However, the relative decline of US hegemony and the readmission of China into the international system have posed significant challenges to Taiwan's developmental state. The US sought to redress its trade imbalance with East Asia by placing pressure on Taiwan to liberalise its political economy. Furthermore, the very process of development itself served to undermine the autonomy of the state as it came under pressure from new social forces. Taiwan has more recently been faced with a dilemma of closer integration with the mainland or the maintenance of its de facto economic and political independence at the risk of becoming isolated from the global trading system.     

“Freedom of Choice”: Israeli Efforts to Prevent Soviet Jewish Émigrés to Resettle in the United States

Beginning in 1967 the Soviet Union allowed some Jewish citizens to leave for family reunification in Israel (see Appendix ). Due to the break in diplomatic relations between Israel and the U.S.S.R., most émigrés traveled to Vienna where they were then flown to Israel. After 1976 the majority of émigrés who left on visas for Israel “dropped out” in Vienna and chose to resettle in the West. Several American Jewish organizations facilitated their obtaining visas and being resettled in the United States and other countries. This article examines efforts by Israel to deny Soviet Jewish émigrés the option of resettling in the United States. Israeli officials pressured American Jewish organizations to desist from aiding Russian Jews who wanted to resettle in the United States. Initially American Jews resisted Israeli efforts. Following Gorbachev's decision in the late 1980s to allow free emigration for Soviet Jews, the American Jewish community agreed to a quota on Soviet Jewish refugees in the United States, which resulted in most Soviet Jewish émigrés to Israel. The article uses the case study to explore efforts by American Jews and Israel to influence American refugee policy in the 1970s and 1980s. It provides insights into ethnic politics as well as “sponsored politics,” whereby Israel used the American Jewish community to further its interests in the making of United States foreign policy. It also deals with the issue of human rights and migration. While no migrant has the right to go to a country of his or her choice, Israel did deny some émigrés the right to exercise freedom of movement to other countries who welcomed them as refugees.     

The Struggle for Recognition: Diplomatic Competition Between China and Taiwan in Oceania

The PRC and Taiwan are competing to gain diplomatic recognition from Pacific Islands states, a number of which recognise Taiwan and serve as a barrier to its international isolation. Since much of Oceania is in Australia’s sphere of influence, this struggle has often involved Canberra. This paper focuses on the intensifying conflict–with conclusions about the local political economic situations of the countries in Oceania that are most likely to switch recognition, the dilemmas that the issue poses for Australia and its alliance with the US, and the game theory of these auctions of diplomatic recognition. The rental of recognition is analysed as a “sovereignty business” in which some Pacific Islands states engage—similar to the offshore financial centres which are prevalent in the region. Anthony van Fossen is Senior Lecturer in Social Sciences in the School of Arts, Media and Culture and member of the Griffith Asia Institute at Griffith University. He has written extensively about the Pacific Islands, particularly in relation to its offshore financial centres and ‘sovereignty businesses’. His most recent book is South Pacific Futures: Oceania Toward 2050 (Brisbane: Foundation for Development Cooperation, 2005), the first comprehensive survey of expert views of the future of the region.     

China and Europe: engagement,multipolarity and strategy

Abstract

Ever closer relations between China and Europe over the last decade have sparked speculation about an emerging axis or balance of power vis-à-vis the United States. China, the European Union and its key member states have expressed a preference for a more balanced international order based on multilateral institutions. Despite a rapid and extensive expansion in economic and political relations between China and the European Union, there is no evidence for balancing against the United States in strategic areas. Rather, the variations in the positions of China, the European Union and the United States can more accurately be seen as policy or interest bargaining. Because the European Union does not share US security interests in the Asia-Pacific region, the European Union and its key member states can seem at variance with the US position on China. Bargaining over the failed attempt to lift the European Union's arms embargo against China shows that the European Union and the United States are not so far apart on strategic issues in the Asia-Pacific.