It was reported on Tuesday in the Taiwan Economic News that Guangdong Provincial Governor Huang Huahua (黃華華) would lead a group of buyers to Taiwan this month. Staying in Taiwan from Aug. 16 to Aug. 22, the group is expected to place an estimated US$5.2 billion in orders with Taiwanese manufacturers.
This would be the largest purchase of goods made in Taiwan by one of China’s provinces. The group will reportedly consist of representatives of 70 to 80 enterprises headquartered in Guangdong and about 80 Taiwanese enterprises operating in the province. Products on the shopping list are expected to include LCD panels, steel, chemicals and foods.
This is not the first time that People’s Republic of China (PRC) officials have led purchasing delegations to Taiwan. Indeed, these delegations appear to have their origin in Taiwan Affairs Office Minister Wang Yi’s (王毅) Nov. 16, 2008, announcement that China would adopt measures to help Taiwan during the financial crisis.
Knowing that the financial crisis’ effect on Taiwan’s economy would serve to weaken Taiwan’s already low public support for President Ma Ying-jeou (馬英九), it is evident that a major factor in the PRC’s decision to “help Taiwan” was to help Ma.
As well-known US-China specialist Shelley Rigger writes: “Beijing is unlikely to find any Taiwanese leader easier to deal with than Ma, so it is in China’s interest to keep the relationship on a positive track.”
In the past, economic downturns in Taiwan were not met with this “Buy Taiwan” reaction. Indeed, as Sheng Lijun (盛力軍) writes in China and Taiwan: Cross-Straits [sic] Relations Under Chen Shui-bian in the section entitled “Taiwan’s Weaknesses” under the subheading “A Deteriorating Economy,” Chen’s election led to “[e]normous political and social dislocations” that “have bitten deeply into Taiwan’s economy.”
His argument seems to be that, during the time following Chen’s election, it was Chen’s fault that Taiwan’s economy took a downturn, and, therefore, could be seen as a Chinese strength in the face of Taiwanese weakness. This downturn would undermine Chen’s leadership and worsen Taiwan’s economic situation.
That did not occur. Taiwan’s economy recovered despite China’s continued attempts to undermine Chen’s authority. Pan-blue opposition leaders repeatedly visited China despite the fact that they did not at that time represent Taiwan. Both the PRC and pan-blue parties bashed Chen and his administration for their “mishandling” of the economy and helped create political deadlock in the Legislative Yuan.
How times have changed: During the Chen administration, Taiwan’s economic weakness, as Sheng Lijun calls it, China trumpeted strength while courting the opposition of a “weakening” Taiwan. During times of economic weakness under the Ma administration, China willingly jumps at the opportunity to “buy Taiwan” to help it remain economically strong.
Are we supposed to believe the comments by the Ma administration that improved relations across the Taiwan Strait are not political? They are completely political.
What do these “Buy Taiwan” delegations mean politically? Are they not an attempt by Chinese officials to help Ma politically?
Any reasonable person would have to reply “yes.” Even before the Economic Cooperation Framework Agreement (ECFA) was signed, China sent delegations to “Buy Taiwan” and help Ma politically. This is further evidence that China would not allow Taiwan to fall from its economic and political sphere of influence even were Taiwanese companies to lose their competitive advantage in the Chinese market after Beijing signs the China-ASEAN Free Trade Agreement.
Economists who argue that Taiwanese companies would be allowed to lose their competitive advantage in the Chinese market are making a fatal error: They assume that efficiency guides China’s economic decisions and decision makers, but based on recent studies and analyses that China’s State Owned Enterprises are gaining market share in the Chinese economy at the expense of private enterprises, the assumptions made by those economists are shown to be false. Based on the Chinese drive to “Buy Taiwan,” which is led by government and party officials, one has to wonder how much these “Buy Taiwan” campaigns are based on market rationale.
Free-market rationale would lead Chinese buyers to buy from the suppliers who offer the highest quality and cheapest goods. Taiwanese suppliers may in fact offer high quality goods at low prices, but if they already do, then why sign the ECFA? And if they already do, why the drive to specifically “Buy Taiwan”?
“Buy Taiwan” campaigns may be a good thing for Taiwanese enterprises, they may help Taiwan’s economy, but they betray one more weapon in Beijing’s arsenal that any informed and educated viewer can clearly spot: as Alan Romberg wrote in the Spring edition of China Leadership Monitor, for Beijing, “all economics is political.”
Nathan Novak is a writer, researcher and student of China and the Asia-Pacific region with particular focus on cross-strait relations.
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