As president-elect Tsai Ing-wen (蔡英文) prepares for her inauguration ceremony in May, the nation’s expectations of the new administration grow.
Efforts are now underway to promote the mechanisms of transitional justice and truth — attempts to heal a population that was subject to political oppression during the White Terror era.
Tsai has also called for the need to upgrade the nation’s skilled work force, to restructure and diversify the economy and to better integrate the nation into the world.
All these initiatives mark a clear departure from outgoing President Ma Ying-jeou’s (馬英九) administration, and put Taiwan on the offensive in reshaping cross-strait relations.
For decades, China has been using the discourse of “one country, two systems” to pressure Taiwan into negotiations. Beijing’s efforts to bring Taiwan closer to China rely heavily on using financial incentives to lure Taiwanese investors to China. Using bilateral trade as a vehicle of engagement, Beijing is convinced that the improvement of cross-strait economic ties will spill over to political interactions and eventually absorb Taiwan into the “Chinese union.”
In fact, the Closer Economic Partnership Agreement between China and Hong Kong provided a template for the Ma administration to pursue the Economic Cooperation Framework Agreement (ECFA) in the early 2010s. However, bad timing often coincided with bad decisions. ECFA appeared to do more harm than good.
The Sunflower movement emerged in March 2014 to oppose “black box” bilateral trade negotiations. With so many Chinese investors taking control of strategic industries, Taiwanese find themselves strangers on their native turf and feel that the nation is losing its socioeconomic autonomy.
Meanwhile, the rapid erosion of Hong Kong’s “one country, two systems” has sent a warning signal to Taiwan, especially when the territory’s rule of law, freedom of speech and free economy are under attack.
On the economic front, the latest decision of Moody’s Investors Service to downgrade the outlook of both China’s and Hong Kong’s long-term debt ratings from stable to negative completely shattered the promises of prosperity and stability under the “one country, two systems” policy.
Moody’s announcement confirmed the widespread anxiety about the dangerous effects of a Chinese economic slowdown on the former British colony, even though Hong Kong Financial Secretary John Tsang (曾俊華) defended the benefits of cross-border trade as an unprecedented opportunity for local businesspeople.
His defense was classic political hypocrisy as he ignored the failures of China’s top-down economic reforms, the wealth gap between urban and rural areas and the escalation of workers’ discontent.
Many Taiwanese policymakers have realized that the Chinese state-led model of capitalism has run its course, and it is even beyond the ability of the Chinese Communist Party’s (CCP) upper echelons to deal with the aftermath of the country’s financial mayhem.
Growth and corruption are deeply intertwined when the Chinese state permits government bureaucrats to participate in commercial activities without checking their absolute power. Although the CCP’s Central Discipline Inspection Commission has prosecuted many high-profile corrupt officials, the anti-corruption campaign is far from effective.
Unfortunately, CCP leaders are reluctant to liberalize the economy and empower private entrepreneurs. They still adhere to the outdated policy of using state-run commercial banks to drive growth while hiding non-performing debts and distorting the real value of these banks’ assets.
Today, Hong Kong is at the mercy of China for its survival and growth. Faced with a Chinese financial slowdown, the territory is incapable of resolving a series of structural problems: a stagnant economy, an incompetent bureaucracy void of any legitimacy, its marginalization by mainland cities and Beijing’s denial of Hong Kongers’ demand for democracy.
Worse still, pledging allegiance to the communist regime, Hong Kong Chief Executive Leung Chun-ying (梁振英) has exacerbated irreconcilable conflicts with China. His tenure has been marked by rampant corruption inside and outside the local government, worsening socioeconomic inequality and the police’s crackdown on dissent amid rising discontent.
Hong Kongers are so worried about Beijing’s reappointment of Leung next year that they are constantly calling for his resignation rallies big and small.
In view of the escalating socioeconomic and governance crises in China and Hong Kong, the Tsai administration should seize this crucial moment to strengthen a cohesive democratic state from within, expand Taiwan’s international and regional space and explore ways to revitalize domestic industry and maintain economic stability.
This is a battle for the future that needs to be fought. Otherwise, the nation will become more vulnerable to political and economic volatility from within.
Joseph Tse-Hei Lee is professor of history at Pace University in New York.
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