Wednesday, July 18 2018 | ASIA TODAY INTERNATIONAL - Reporting the Business that Matters in Asia
Taiwan offices in China a dangerous idea
TAIPEI — Both the New Taipei City Government and the Taipei City Government have announced plans to open liaison offices in China to assist Taiwanese citizens and promote business ties.
In the current context, such plans hold many pitfalls, and could play into Beijing’s efforts to bypass and discredit central Government institutions in Taiwan.
Announcements by New Taipei City Mayor, Eric Chu, of the Kuomintang (KMT) and Taipei Mayor Ko Wen-je, an independent, prompted a response from Taiwan’s Mainland Affairs Council (MAC) emphasising that decisions on initiatives pertaining to cross-Strait relations are the remit of the Central Government.
Although there conceivably are valid reasons for liaison offices in China (Mayor Ko, for example, singled out Shenzhen, where many Taiwanese businesses are located), such initiatives must be weighed against ongoing efforts by Beijing to bypass Central Government institutions in Taiwan, efforts which have intensified since the election of the Democratic Progressive Party’s Tsai Ing-wen in January 2016.
Increasingly, Chinese institutions have promoted direct exchanges with Taiwan at the municipal and village level, both as a means to cultivate willing partners through economic incentives and to elbow out those whom it finds unpalatable for political reasons.
While creating problems for the control and monitoring of cross-Strait interactions — involving people, money, trade secrets and technology — such mechanisms also risk undermining the credibility of Taiwan’s Central Government and institutions such as the MAC and the semi-official Straits Exchange Foundation, which may come to be regarded as impediments to business opportunities.
Additionally, the unfair advantage that Taipei- and New Taipei City-based businesses would have over businesses based in other cities around Taiwan could create incentives for other municipalities to follow suit with offices of their own, further sidelining Central State institutions charged with handling cross-Strait affairs.
Little by little, liaison offices could serve to institutionalise the bypassing of Central Government institutions in Taiwan.
Lack of reciprocity, where municipal agencies would serve the interests of Taiwanese in China and State institutions such as the China State Council’s Taiwan Affairs Office (TAO) and semi-official Association for Relations Across the Taiwan Straits (ARATS) continue to serve Chinese nationals in Taiwan, would exacerbate the notion of central-to-periphery relations that Beijing has been seeking to reinforce.
(Chinese municipalities setting up their own liaison offices in Taiwan would create another series of challenges, not least the possibility that these would be involved in united front work in Taiwan, much as they did in Hong Kong prior to the handover in 1997).
The fact that the proposed initiatives by the New Taipei City and Taipei City governments occur in the wake of the 19th CCP National Congress is also not coincidental.
In a November 6 news report, China’s State newsagency Xinhua quoted Yu Zhengsheng, Chairman of the National Committee of the Chinese People’s Political Consultative Conference, as saying that the just-concluded National Congress “provided guiding thoughts, major tasks and key measures in handling cross-Strait affairs, charting the course for the development of relations between the two sides”.
Speaking at the 2017 Zijinshan Summit for Entrepreneurs Across the Taiwan Strait in Nanjing, Yu said that “entrepreneurs from both the Chinese mainland [sic] and Taiwan” should “seize the opportunity of the mainland’s [sic] rapid development to explore broader areas for economic co-operation, and shoulder responsibilities for the peaceful development of cross-Strait relations”.
According to Xinhua, he also “proposed more co-operation based on innovation, and encouraged more small and medium-sized firms as well as grassroots and young people to participate in cross-Strait economic co-operation.”
The proposal to encourage more SMEs, grassroots and young people to participate in cross-Strait economic co-operation is part of Beijing’s new approach to co-opting Taiwanese after previous efforts, led by the TAO, were proven to have failed.
By creating business opportunities for young Taiwanese entrepreneurs, Beijing seeks to accelerate a “brain drain” in Taiwan, where wages remain admittedly uncompetitive, and to tighten Taiwan’s economic dependence on China.
The role of municipal liaison offices could conceivably be to compound already existing efforts to lure Taiwanese entrepreneurs by easing access and bypassing Central Government institutions in Taiwan, where red tape and regulations often make the process a more difficult one.
Another reason behind this latest effort could also be related to the success of President Tsai’s New Southbound Policy, where early showings seem to confirm the feasibility of a partial decoupling of Taiwan’s economy from China through diversification, not to mention the “soft power” that the initiative has enjoyed across the region.
In the wake of the Yushan Forum last month and the planned opening of a State-sponsored Foundation early next year dedicated to furthering Taiwan’s efforts in South and Southeast Asia, Beijing and opponents of President Tsai in the KMT have done their utmost to discredit the initiative — not because it isn’t yielding dividends, but because it threatens to dilute China’s political objectives of economic integration.
With a Central Government in Taipei that is committed to diversification, it makes sense for Beijing to seek alternatives to strengthen economic ties with Taiwan.
In the current context, this means working around Taiwan’s State institutions.
*J. Michael Cole is Taiwan correspondent for ATI.