Reşat Kasaba, director of the Jackson School and the Stanley D. Golub Chair of International Studies, recently spent a week in Taiwan at the invitation of the Ministry of Foreign Affairs. In this first-person account, he shares his observations of the political, economic and social situation as a first-time visitor to the country. For ease of reference, the shortened names of both the People’s Republic of China (China), and the Republic of China (Taiwan) will be used.
I was part of an eight-member delegation that visited Taiwan on July 2-9, 2016. We were hosted by the country’s Ministry of Foreign Affairs. Our schedule was packed with visits with political officials and academics. This was my first visit to Taiwan, and East Asia is not an area where I have done any previous research. As such the observations below should be read as those of a novice. Also I would like to thank Professors David Bachman, Bill Lavely and Gary Hamilton for their feedback.
In early July 2016, Jackson School Director Reşat Kasaba (third from left) spent a week in Taiwan learning about the country’s political and economic situation as part of a delegation of leaders in higher education in the U.S. He is pictured standing next to Taiwan’s Deputy Minister of Mainland Affairs Council of the Executive Yuan (the country’s Congress).
This is a tense period in Taiwanese history. After an election that was held in January 2016, the new president Tsai Ing-wen was sworn in on May 20. The election was a total rout for Koumintang (KMT). While the Democratic Progressive Part (DPP) increased its seats from 40 to 68, KMT’s seats were reduced from 64 to 35. In addition to holding the presidency, DPP will have an absolute majority in the 113-member legislative body (called Legislative Yuan) for the first time in its history.
Taiwan also now has its first woman president, who is, in part, of aboriginal descent. The legislature also has a record 43 female lawmakers.
During the week we were in Taiwan, we met a wide range of academics and politicians. All but one of the politicians we met were from the newly victorious DPP. Some of the academics also had ties with the government. A close relationship between the universities and the government seems to be common in Taiwan.
DPP is portraying its election victory as a powerful statement in favor of a growing sense and assertion of Taiwanese identity as opposed to accepting the notion that Taiwan is a part of China. During the election campaign, President Tsai and DPP argued that President Ma Ying-jeou’s conciliatory policy toward China in the previous eight years did not deliver any tangible benefits for Taiwan and, if anything, Taiwan’s dependence on China and its isolation in the international community grew during those years.
They further claimed that especially the young people have no hesitation in putting their Taiwan identity before any affinity or relationship with the mainland. Several of the officials we visited told us about surveys where people chose being Taiwanese over Chinese by very high and growing margins. President Tsai and her government seem confident that they have a very strong mandate to defend Taiwanese identity.
To put it mildly, the Chinese government is not happy with either the election results or the new Taiwan government. Beijing refrained from taking any steps until President Tsai’s inauguration speech in May. They were waiting to see if the new president would state unequivocally that she would follow the “1992 Consensus,” which refers to the understanding between Taiwan and China that neither would object to the general principle that there was only one China. When President Tsai avoided mentioning the Consensus specifically and stated only that she would uphold the status quo, China cut all official communication with Taiwan. Obviously, without the magic words, affirming the status quo was not sufficient for Beijing.
Cooling of relations with China comes at a particularly difficult time for Taiwan. Taiwan’s gross domestic product growth dropped to 0.75 in 2015. Given that about 60 percent of Taiwan’s investments are in China, and 40 percent of Taiwan’s trade is with that country, China has the potential to inflict further serious damage on Taiwan if Beijing chooses to manipulate its economic relations for political purposes. A recent example of such an approach is the new restrictions China has placed on tourism, which has resulted in significant decline in the number of people who are visiting Taiwan from the mainland. Even without such deliberate interventions, the slowing economic growth in China is affecting Taiwan’s economy in significant ways by putting limits in consumption and investment.
The new DPP government is planning to reduce Taiwan’s heavy dependence on China, by pursuing what they describe as their new southbound policy. They have already started conversations and reached preliminary agreements with India, Indonesia, New Zealand, and Vietnam. China, however, is known to use its own economic influence in these third countries in order to prevent Taiwan from diversifying its economic relations.
Rising labor costs in China constitute another structural imperative for relocating Taiwan’s investments from the mainland but similar pressures from China inhibits these plans as well.
Another issue that is likely to affect Taiwan in important ways in the near future is China’s assertiveness in the South China Sea. This is a complex multilateral issue that touches on several states in the region. It revolves around the extent of waters where China can legally exercise its claims of control, the ownership of resources, and restrict others’ (especially) the US presence. This dispute has strong implications for Taiwan’s relations with the other countries in the region and with China. Ironically, on this particular issue, China and Taiwan are on the same side in that both defend the claim of Chinese (China or Taiwan) sovereignty over virtually all of the South China Sea based on a map drawn by the Nationalist government in the 1940s before it fled to Taiwan.
As the ruling by International Court on July 12 shows, China’s position in this issue is not likely win her any support in the international community any time soon. The court’s sweeping decision also jeopardizes Taiwan’s status in relation to Itu Aba (Taiping) Island, which is administered by Taiwan and is the largest naturally occurring island that is part of the Spartly Islands in South China Sea. Taiwan was not recognized as a party to this case and it was not invited to take part in it. Nevertheless, they were quick and strenuous in their objection to the Court’s ruling; especially to its decision to demote Itu Aba to the status of a rock, which deprives Taiwan of its right to a 200-mile exclusive economic zone. In response, Taiwan moved up its planned patrolling of the waters around Itu Aba and sent off its sailors with a Presidential ceremony one day after the Court’s ruling.
In addition to its economic and political dependence on China, Taiwan is facing many other challenges. Its youth unemployment is around 11 percent — more than twice the national average of 4 percent. It also has one of the lowest birth rates in the world. While its previous investment in education played a big role in modernizing Taiwan’s economy and society, the country today is facing a problem of having too many schools where teachers and professors are expected to recruit students from the country at large as part of their jobs. This is a demoralizing situation especially for those who cannot get into or are affiliated with one of the top schools in the country.
No one doubts that the problems Taiwan is facing today are very big. Some of these have to do with the changes in the global economy and are not specific to Taiwan. But being in the shadow of the second largest economy in the world that has regional and global ambitions creates a set of particularly difficult issues. Nevertheless, one would be hard-pressed to argue that the past two decades of economic relations with China and other countries have been bad for Taiwan. No one would seriously support the idea that Taiwan can deal with its problems by closing to the outside world, developing its military capabilities, and marshalling its resources for an economic transformation that is not linked to foreign trade or investment.
While this is her first elected office, Tsai Ing-wen has a long experience in government. She also brings an intellectual depth to the office. She has an undergraduate degree from the College of Law at National Taiwan University, a master’s of law from Cornell University and a Ph.D. in Law from The London School of Economics. Ironically, her party’s emphasis on Taiwan identity translates into being not less but more open to the outside world.
DPP officials and representatives believe that only by moving away from China’s shadow and being allowed to diversify will Taiwan be able to protect its long-term interests. In addition to dealing with the country’s economic problems, the new government has identified helping the youth, reforming government institutions, corruption and transitional justice (addressing the abuses of indigenous peoples) as its priorities.
Managing the global transitions and transformations we are all going through is proving difficult not only for Taiwan but also for many other places. From Brexit to the presidential campaign in the US and to the continuing conflicts in the Middle East, we are constantly reminded of our difficulties.
Taiwan is a prosperous country with impressive infrastructure that runs well. It has a tremendous resource in its well-educated, and skilled youth. Most importantly it has an open society that allows full and free access to information. With all of its positive qualities, especially with its successful transition from authoritarian to fully democratic rule, Taiwan constitutes a special case and deserves to be protected and upheld for the important message it sends to other countries and people in and outside of Asia.
