In the Wake of Taiwan’s January 2020 Election, how are Cross-Strait Relations?

Written by John F. Copper.

Image credit: 10.10 總統出席「中華民國中樞暨各界慶祝109年國慶大會」by 總統府/Flickr, license CC BY 2.0

In January this year, Taiwan held a key national election. The Democratic Progressive Party’s (DPP) president, Tsai Ing-wen, won reelection while the DPP kept its majority in the national legislature. It was an across-the-board victory for the pro-independence party.

Fast forward to autumn, nine months later. How does Taiwan look politically? Not much different! Reassessing campaign policies and reality-checking that usually follow a big election have been mostly missing.

How can this be explained? First, President Tsai and her party won the election in some part because their base that supports Taiwan’s legal independence from China was content owing to the Tsai administration’s harsh criticism of China and its opposition to the “92 Consensus” after the campaign. Ordinarily, there would have been a walk back from the independence issue realizing Taiwan’s status was a matter that would be decided by the United States, not Taiwan. Second, the Tsai administration offered a solution to Taiwan’s economic dependence on China; that was not revised post-election owing to China’s continued threats and intimidation and a proposed trade deal with the United States.

The devil is in the details. U.S. relations with China remained frosty after January 2020. A U.S. election was approaching, and American voters felt unfriendly toward China. Democrats had joined President Trump in demonizing China, and the two competed for being anti-China. Taiwan’s cross-strait policies, which usually followed America’s lead, continued to do so.

During the campaign, the Tsai administration advanced the idea of Taiwan cutting its economic dependence on China that it alleged endangered Taiwan’s sovereignty. President Tsai and her party posited reducing economic intercourse with “the mainland” by expanding commerce with South East Asia, Japan, Europe and the United States.

In fact, Taiwan’s economy shrank the second quarter of 2020 by 0.58 per cent, and Taiwan needed to raise its exports, which it did. However, the destination of its foreign sales according to the most recent data was wrong: exports to China grew by 22.9 per cent but declined to Europe and Southeast Asia. President Tsai talked about a trade treaty with the United States instead that held some promise.

There were other telling reality check numbers for Taiwan to consider. In August, the British magazine Economist published gross domestic product (expected) numbers for 2020 for the world’s important countries. All were to experience negative growth in their 2020 GDPs—except China. Meanwhile, the International Monetary Fund and some other noted financial organizations predicted China would return to its “normal” high growth in 2021—in the range of 7 to 8 per cent growth in GDP. The U.S. would do well at half of that and Europe and Japan less.

Another variable is China’s continued fast rise as a global financial and military juggernaut. This has even greater significance because it will happen in spite of the global coronavirus pandemic. If the virus could not stop China, then what could?

China was already the number one country in the world in economic size or the output of its economy if measured in purchasing power. In 2020 it was poised to become the world’s top nation measured in GDP nominal value.

In manufacturing and manufacturing, value-added China reached numero uno in 2020—it became the U.S., Japan and Germany combined. China still owned the largest amount of foreign exchange, the most significant portion of U.S. debt and the top banking system (in terms of assets twice the size of the U.S. in 2020). It kept its ranking as the world’s foremost trading country.

The makeup of China’s attainments speaks loudly. China’s representation in Fortune Five Hundred companies passed the U.S. in 2020. It also became #1 in the world or kept that honour in the size of its middle class, the worth of its top households, e-commerce, the retail market, internet users, smartphones, 4G mobile networking, electric cars, consumer drones, supercomputer, high-speed trains and skyscrapers. In addition, China topped all countries in the world in the production of solar, wind and hydroelectric power.

It seems inevitable that China will continue to grow in terms of its technology oomph. According to Bloomberg, its high school students lead the world in math, science and reading skills. Also, China is registering more patents, and its scientists are producing more academic papers. China is putting more money into R&D spending in artificial intelligence, and quantum computers to the extent that it will, arguably, enhance its future global power by a large margin over its competitors.

Given the above, can Taiwan really think of isolating itself from China or even consider reducing economic and other ties? Of course, not; but with Beijing continuing to intimidate Taiwan after the election and its unpopularity around the world Taiwan’s leaders chose to say or do little about this.

Still another conundrum for Taiwan is a coming election campaign in the U.S. in which China relations are at play. A Biden/Democratic Party victory is likely to result in restoring the U.S. China policy that characterized the previous Obama/Biden administration. Recall that during the Obama/Biden administration U.S. relations with Asia were first ignored, then a policy of abandoning Taiwan was tried. Finally, it decided to view China as an existential enemy and launch the Asia pivot and its Transpacific Partnership economic leg—both of which failed badly.

Further, Beijing certainly has reason to think Biden would be venal, and his foreign policy advisors will not act from a position of strength and will not protect Taiwan. Otherwise, why would Chinese leaders express their hope for Biden’s win? Political leaders and pundits in Japan and India have already expressed warnings about this.

A Trump second term will likely see a U.S.-China trade deal. Perhaps it will also see a broader rapprochement aimed at fixing the current relationship that has hurt both and that has impeded dealing with some critical global problems: nuclear proliferation (some accords are already on the agenda), an unstable global financial situation, the illegal drug trade, environmental problems and more. In that context, Taiwan would likely experience a downgrading. John Bolton, in his recent book, The Room Where int Happened, predicts this.

Further, some in Taiwan are apprehensive about the current intimate relationship with the U.S. They fear that it will eventually be hindered by the fact that the Tsai administration is progressive in ways the Trump administration is not. Indeed, its ties with liberal regimes in Europe, Japan and elsewhere will be irrelevant in the event of a Taiwan crisis. Also, Taipei downplays Taiwan’s military help to the U.S. (though the recent large arms deal suggests something different).

Alternatively, a Trump/Republican victory may well result in challenges to the election results and a protracted domestic fight with all of the instability and even violence that would accompany that. Taipei siding with Trump will seriously test its skills to deal with that.

In brief, Taiwan is dependent on the two superpowers—one for its economic health, the other for its security. Mainly for reasons beyond its control, it now faces an urgent need for strategic decisions to deal with big problems it faces or will face.

Historians often say the fall is a time to launch your revolution or forget it with winter approaching. Taiwan’s situation seems to be just that in terms of it having to chart its future thoughtfully, seriously and carefully. Fortunately, it has experience dealing with matters of consequence.

John F. Copper is the Stanley J. Buckman Distinguished Professor (emeritus) of International Studies at Rhodes College in Memphis, Tennessee. He is the author of more than thirty-five books on China, Taiwan and U.S. Asia policy, including Donald J. Trump and China published this past summer and Taiwan: Nation-State or Province? 7th edition published in December. His forthcoming book is entitled Taiwan’s Politics in Action: Struggling to Win at the Ballot Box.

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