Taiwan's growing trade with China: A national security threat?

Last Friday, I presented a paper at a symposium at the University of Chicago's International House. The paper was part of a symposium on "Taiwan's New Approach: Opportunities and Challenges for President Ma Ying-jeou's Government." The paper is titled Poisoned Milk and the Poisoning of Democracy: Some Cautions about China Trade and Taiwan Sovereignty. It argues that Taiwan should make national security the foremost consideration in trade policy with China. This would support liberalization of Chinese tourism and Chinese students being allowed to study in Taiwan, the better to win the hearts and minds of the Chinese people. The paper suggests that--for purposes of human rights, and to sow the seeds for long-term political reform in China--new Taiwanese foreign direct investment in China be required to go to businesses which allow Chinese workers to elect a workers council. Taiwan should energetically develop its trade with India, as an alternative to China; should further restrict Chinese food imports; and should get rid of trade negotiators who have business interests in China. Allowing economic integration with China without regard for national security could, the paper suggests, lead to the destruction Taiwan's sovereignty, independence, and freedom.

Who's national security? A Taiwan in conflict with China, or even just stumbling around a Casus belli, is in neither their nor our interests.
10.29.2008 3:31pm
Bryan Long:
No need to worry, David. As we know, liberal democracy is a naturally occurring byproduct of free trade.
10.29.2008 4:04pm
Nor would conflict with Taiwan really be in China's best interest either. On the other hand, they cannot allow Taiwan de jure independence because doing so would meaning losing face and emboldening Tibetan/Uighur separatists. Hence the imperfect solution of allowing Taiwan to be sovereign so long as they don't actually claim the right to be sovereign.

The extent to which strong trade between Taiwan and the mainland makes such conflict impossible is not the same as the extent to which such trade might spur internal changes in the PRC.
10.29.2008 4:07pm
Jimmy W (mail) (www):
What's so bad about Taiwan losing sovereignty? Taiwan would rejoin China, which is its eventual goal anyway.

Developing alternate trade relationship with India may depend on Indians themselves. Besides, Taiwan can teach India a thing or two about government funded indigenous weapon research.
10.29.2008 4:21pm
and should get rid of trade negotiators who have business interests in China.

Is this possible? The amount of foreign money and trade that goes through the ROC into China is staggering. Are there enough trade lawyers out there who would have the competence on these issues, but who are nevertheless not associated with "business interests" on the mainland?

I don't know anything about this topic beyond what's in the Economist. But this strikes me as a parallel to the argument one hears from populists of various breeds that the Pentagon has too many deputy assistant secretaries who have connections with "the defense industry." But where else are you going to find expereinced managers who know something about buying helicopters?
10.29.2008 4:30pm
Taipei21 (mail):
The issue of Taiwan for the PRC goes far beyond some nebulous concept of "losing face" (which is a Western concept as well, not just a Chinese one).

For the Chinese, Taiwan's current status, and especially Western support for Taiwan's independence, represents a continuation of the wounds from the Opium War and the Sino-Japanese Wars of the 19th and 20th centuries. Regardless of how the PRC is governed, China's territorial integrity and eventual reunification with Taiwan will be national obsessions. Just like Hong Kong and Macau, Taiwan had deep symbolic value to the Chinese (beyond its obvious strategic value).

It is foolish to think that any kind of political reform in the PRC will bring about a fundamental change in this dynamic. Even if the PRC were a US-style democracy, the most you can expect from the Chinese is a Two-Koreas style solution: i.e., the status quo will be maintained so long as both sides agree that eventual reunification is the goal. As soon as Taiwan renounces such a goal, a democratic or autocratic PRC will resort to war.

Western observers sometimes have trouble separating what is (1) Communist posturing from (2) Chinese nationalism, and in turn, separating those from (3) post-colonial recovery. The main theme in China's attitude towards Taiwan is the last of the three, and for that reason, we should be very pessimistic that war with China can be avoided over Taiwan. It does NOT matter what happens inside of China politically, the wounds from 1842 are felt afresh in that country, and still drive that country's people. There are many problems for which democracy and liberalism do not offer solutions, and this is one of them. (We shouldn't be all that surprised; after all, we are still dealing with the wounds from slavery, and that ended just some twenty years later than that.)
10.29.2008 4:35pm
I guess the point is that a democratic and capitalistic PRC makes the concept of reunification much more of a possibility. Closer trade ties and interlocking economies will help prevent war until the time is right for reunification. And that reunification doesn't have to be the absorption of Taiwan into PRC. There are numerous governmental structures that could slowly move the two entities together, once PRC has a free government.

The ideal is that the "two systems" approach will go away in favor of one China with a political and economic system that looks like HK or Taiwan, with a federal system.
10.29.2008 4:40pm

Chinese students being allowed to study in Taiwan

How do a handful of students studying in Taiwan is going to affect Chinese policy? The numbers are bound to be comparatively "handful" considering the size of their populations. Besides, how would Taiwanese students feel about competing with the vast numbers of Chinese students for the limited number of spots in their universities? There are many Chinese students in the US, if that does not dissipate the chances of a conflict, why should a few more students in Taiwan be more effective?

new Taiwanese foreign direct investment in China be required to go to businesses which allow Chinese workers to elect a workers council.

I did not know China allowed such elections. Assuming they are allowed, if US or other Western companies do not obey such restrictions, wouldn't this put Taiwanese companies at big disadvantage? The long-term advantages sound doubtful at best, so I don't believe Taiwanese business people supporting such a measure.

It seems the point of no-return has passed some time ago. I don't think Taiwan can afford to take steps that will seriously anger China, but that is not necessarily a bad thing. Of course, I never thought Georgia would push things that would start a war with Russia, so a miscalculation is always possible. It seems Taiwan is more politically mature, so that risk is hopefully very low.
10.29.2008 5:03pm
Big E:
Why should Taiwan do anything until the US scraps the stupid one china policy. Until the US explicitly states it would defend Taiwan the other commenters are correct they have to keep playing with China.
10.29.2008 7:41pm
Dr. T (mail) (www):
The paper is irrelevant. China will take over Taiwan whenever it wishes. The Taiwan military cannot stop this, and we are unlikely to intervene.

Jimmy W. is wrong. The Taiwanese do not wish to rejoin China while it is a communist autocracy. But, as small as Taiwan is, it has no hope of holding out against a full-scale military take-over by China. In my view, a forcible takeover will occur long before the Chinese government changes to one that would be acceptable to the Taiwanese.
10.29.2008 7:56pm
advisory opinion:
What Taipei21 said. He has China's psyche exactly right. Anyone who thinks that a one-China policy is "stupid" is cluelessly kidding himself that Taiwanese de jure sovereignty is not an existential thorn in China's side.
10.29.2008 8:54pm
CB55 (mail):
A bigger worry that the USA should have is how Chinese hardware even defective parts are included in our defensive and national security systems. In "Dangerous Fakes" (October 2, 2008), BusinessWeek magazine reports that our systems includes parts and subsystems sold to the USA not only by our own companies but also our allies:

"Potentially more alarming than either of the two aircraft episodes are hundreds of counterfeit routers made in China and sold to the Army, Navy, Air Force, and Marines over the past four years. These fakes could facilitate foreign espionage, as well as cause accidents. The U.S. Justice Dept. is prosecuting the operators of an electronics distributor in Texas—and last year obtained guilty pleas from the proprietors of a company in Washington State—for allegedly selling the military dozens of falsely labeled routers, devices that direct data through digital networks. The routers were marked as having been made by the San Jose technology giant Cisco Systems (CSCO)."

Any one that works in high technology knows that espionage is as common as the lunch break. We build operations or outsource in India and China and they walk out with our technology by the front door - later we learn that we are competing with our own technology.
10.29.2008 9:12pm
Milhouse (www):

Even if the PRC were a US-style democracy, the most you can expect from the Chinese is a Two-Koreas style solution: i.e., the status quo will be maintained so long as both sides agree that eventual reunification is the goal.

If the PRC were a US-style democracy, why would Taiwan object to reunification? Surely it would happen about as quickly as Germany reunified as soon as the GDR became a US-style democracy.
10.29.2008 10:43pm
Dr. T
The paper is irrelevant. China will take over Taiwan whenever it wishes. The Taiwan military cannot stop this, and we are unlikely to intervene.

They don't have the amphibious capability.
10.29.2008 10:56pm
Randy R. (mail):
I see. So trade with China is bad for Taiwan because it makes them more dependent upon the Chinese? They should even restrict food purchases from China?

I'm sure higher food prices are just what Taiwanese people are clamoring for.

Of course, Taiwan should be trading with a lot of countries, not just China, but to think that you can actually restrict trade with another country violates free trade principles, perhaps even international law. And for what? An amorphose hope that somehow that will prevent the Chinese from taking over Taiwan? As. Taipei21 said, ain't gonna happen. This isn't to say that the Chinese WILL actually take over Taiwan, but you certainly are not going to stop their plans, whatever they are, merely by refusing to buy their food.
10.29.2008 11:06pm
I agree with many other earlier commenters.

At this point, Taiwan does not have much that they can use as leverage against China anyways. To rock the boat (or even begin to rock the boat) now between the two would be irresponsible, there are bigger problems to solve like the two Koreas.

To Hoosier:
China doesn't need amphibious capability, they just fire their missiles that are already aimed at Taiwan. Problem solved. Amphibious landings on Taiwan would be difficult anyways, viable landing areas are limited.
10.30.2008 6:49am
KRC--I read "take over Taiwan" as meaning "invade." But if one means "solve the Taiwan-problem by force," then you're certainly correct.
10.30.2008 1:18pm
einhverfr (mail) (www):
I suspect our military uses a lot of Taiwanese-made integrated circuits ad the like, so if it is a threat to their national security, it is a threat to ours as well...
10.30.2008 9:48pm
Michael Turton (mail) (www):
Taipiei 21 only has the exterior right, what China tells its own people to whip up artificial nationalism, and what it tells foreigners. But the idea that "recovering Taiwan," an island no Chinese emperor ever owned, is some sort of post-colonial recovery, is a clear misunderstanding.

What is going on is simply another phase of Chinese expansion, aimed at Taiwan in the opening stages -- the last prize of the 19th century's great game in north asia -- but with long-term plans to continue outward. China presents this expansion as "post-colonial recovery" but of course it is simply imperial expansion no different from British expansion in North America or Russia expansion into Siberia and Central Asia(Lucien Pye's observation that China is an empire in search of a state is particularly apt here). Beyond that are the islands that China already claims, such as the Spratlys, and the Senkakus -- which became the sacred national territory of China for every second of the last 5,000 years in 1969 after Japanese scientists announced that there may be oil under the continental shelf there -- and beyond that, the territory of other nations that from time to time appear on its maps, such as Indonesia's Natunas Islands, and of course, India's entire state of Assam. Taiwan is not the last piece but the first step, and to interpret it as some salve for a wounded national psyche is simply to represent Chinese expansion in the terms Beijing would like you to.

It would not be difficult for China to defeat Taiwan's military in a war, but the idea that China can easily occupy Taiwan is another problem; indeed a daunting one as Taiwan has a long history of vicious revolts against its colonizers, there is widespread dislike of China in Taiwan, especially in the South, and of course, China would have to take over after butchering civilians wholesale, a situation not making for future married happiness. The problem China has is thus not defeating Taiwan militarily but occupying it afterward. That's why the real solution for Beijing is to get the current KMT government to hand the island over to China intact and with the Taiwanese propensity to revolt muted by a reversion to the authoritarian state (the government at present appears to be targeting pro-Taiwan politicians for "corruption" investigations), or better yet, sated with positive economic growth.

Kopel is absolutely right on the problem of our ruling classes being owned by China. It is ridiculous that our policymaking class also is heavily invested in the China market, it can only slant policy and result in the public hearing unmitigated nonsense. One does not need to do business with China to make good policy toward it. For those of you seeking more information, please see Ken Silverstein's recent article in Harper's on this very issue, as well as his blog there.

Sorry for the long comment....

Living the High Life in Taichung
10.31.2008 9:05am
advisory opinion:
Long and drivelous.

"an island no Chinese emperor ever owned"

False. The Kangxi emperor in his campaign against Ming subversives annexed the island in 1683: "Kangxi had repressed the Three Feudataries uprising in 1678 and taken Taiwan in 1683." See Peter Perdue, China Marches West: The Qing Conquest of Central Eurasia, 166 (2005). Even if we ignore the Ming subversives who until then occupied Taiwan in lieu of the Ming Court, it would still be the case that Chinese dominion over Taiwan begins no later than 1683.

To describe your historical revisionism as a "misunderstanding" would be charitable.
10.31.2008 9:13pm
chemist (mail):
And ends in 1895 when China renounced its claim to Taiwan in the Treaty of Shimonoseki.
11.1.2008 7:43am
advisory opinion:
Wrong. Japan then nullified the Treaty of Shimonoseki in the Treaty of Taipei and the San Francisco Peace Treaty, thereby returning Taiwan to the status quo ante. So it is not the "end[]" of the story as you suggest.

Article 2 of the SFPT: "Japan renounces all right, title and claim to Formosa and the Pescadores."

Article 4 of the TOT: "It is recognised that all treaties, conventions, and agreements concluded before 9 December 1941 between Japan and China have become null and void as a consequence of the war."

Shimonoseki was a direct result of nascent Japanese aggression in the first Sino-Japanese war, and is viewed as an "unequal treaty" by the Chinese. You inadvertently make Taipei21's point by citing a repudiated treaty that codified China's losses to Japanese militarism and rapacity. The symbolism couldn't be more acute. And you wonder why the Chinese are suspicious and resentful of sophomoric attempts to pry Taiwan from China, when your own narrative openly asserts a colonial treaty -- no longer good law -- as the basis for doing so.
11.1.2008 8:39am