As next year's presidential election draws near, it is time to ask whether a China-Taiwan common market -- in effect a "one China" market -- is feasible. The concept has been promoted by Chinese Nationalist Party (KMT) vice presidential candidate Vincent Siew (蕭萬長), approved by KMT presidential candidate Ma Ying-jeou (馬英九) and endorsed by China.
The first common market was realized in Europe as a step toward the formation of the EU. But for this European project to succeed, it had to be built on an extensive common basis of all participating countries. Every member had to be a sovereign independent country, have a market economy and adhere to a number of strict economic standards before it was allowed to participate.
The most important goal of Europe's common market was the free movement of labor, services, goods and capital -- the four essential factors for production. One could say that unless every member had shared its own sovereignty and respected the sovereignty of the other members, it would have been impossible to complete the integration of the European Community market.
But when Siew talks about the idea of a common market with China, he pointedly avoids mentioning that this common basis that is absolutely necessary for a common market. Also, his plan would have a major impact on the progress of global economic integration.
First, to implement a common market, countries have to break down the barriers between the economic entities, as the differences in how economic actions are handled must not be too big.
Taiwan is currently a democracy with a high degree of rule of law. China on the other hand is still a dictatorial autocracy ruled by the Chinese Communist Party, and its system of rule of law has no basis in public opinion. Also, orders from China's central government do not necessarily reach the lowest governmental levels.
Although all foreign investments in China are somewhat protected by the governments of the companies' home countries, they still face risks higher than in most democratic countries.
On top of that, Taiwan is under serious military threat from China. How would it be possible for China and Taiwan to establish a common market as equal partners under such circumstances?
A common market between China and Taiwan would bring catastrophic harm to Taiwan.
First, there is the labor issue. If the common market allowed the free exchange of persons, this means Chinese workers would be free to come to Taiwan. If that happened, it would not only pose a problem to Taiwan's national security, but would also cause major unemployment here.
Second, another principle of common markets is that there is a free flow of capital between members. This means that if China and Taiwan had a common market, Chinese capital would be able to freely enter the Taiwanese market.
But China controls its capital much more tightly than Taiwan does. In addition, there is a serious problem of bad debt in China.
It would be very hard to get China to give up this important piece of sovereignty in the foreseeable future. And looking at the skill with which Beijing is trying to annex Taiwan by economic means, if Chinese capital were allowed to come to Taiwan, this nation's economic safety would be impossible to guarantee.
Also, even though Taiwan has strict controls on the flow of capital to China, billions of NT dollars have seeped away, and because of this, the economy hasn't been doing well for a long time. If the limits on sending capital to China were removed, Taiwan's economy might never recover.
Then there is the issue of products. When it comes to product quality control, there is a huge difference between China and Taiwan.
The principles of a common market include a free flow of products. This means that large quantities of Chinese products would be able to enter the Taiwanese market.
Not only would it be impossible to put Taiwan's economy in order again once this happened, health and safety problems would also produce unpredict-able social costs. China's agricultural products would also arrive in large quantities.
China is rife with unscrupulously made products: poisonous powdered milk and toothpaste, towels, toys, plastic bags and more. It would be impossible to guard ourselves against this. It would be the beginning of a disaster.
If we stop to think for just moment, it's not hard to imagine the immense harm a common market would bring to Taiwan.
Liao Lin Li-ling is the deputy secretary-general of the European Union Study Association.
Translated by Anna Stiggelbout
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