Civic Exchanges across the Taiwan Strait Week 7

Week 7: Teaching Outline Development of Civic Exchange Asymmetric Economic Relations Political Impact of Strait Exchanges on Mainland China

1. Development of Civic Exchange Political transition as a result of the détente of cross-strait relations (since 1979) –The irrelevance of the martial law Political transition made people-to-people possible and inevitable –Pressure from the civil society –Three indirect links proposed by Chiu Hongda –Appeals from the KMT’s and DPP’s representatives –Retired soldiers were allowed to visit their family members in the mainland (1987)

1. Development of Civic Exchange Despite Lee Teng-hui’s warning against the so-called the “mainland fever” and his policy of controlling strait exchange, which was followed by Chen Shui-bian, economic exchanges between the two sides have developed swiftly over the past twenty years.

1. Development of Civic Exchange By the end of 2012, 88,001 Taiwanese business projects had been approved by the mainland, with $57.05 billion being actually invested, accounting for 4.5% of total foreign capitals the mainland had employed Cross-strait trade reached over $169 billion in the year 2012, with an accumulated amount of $1439 billion by the end of 2012 (cf. SK 300 B for 2015)

1. Development of Civic Exchange The mainland is No.1 trade partner, biggest export market and No.2 import partner of Taiwan Taiwan is No.7 trade partner, No. 9 export market, and No. 5 import partner of the mainland

1. Development of Civic Exchange Personnel exchanges （ person/times) From indirect and asymmetric visits to direct and less asymmetric visits –From 4.6 million vs million in 2007 to 4.5 million vs. 0.9 million in 2009, and 5.3 million to 2.6 million in 2012, mainland tourists:2.75 in From Total Taiwan Mainland

Cruel War and Priceless Peace

战争无情，和平无价（ 1 M ）

2. Asymmetric Economic Relations From unilateral benefits for Taiwan to reciprocal exchanges for both? –$169 billion cross-strait trade in 2012 Accounting for 29.6% of Taiwan’s foreign trade which is $571.8 billion But only about 4.4% of mainland’s foreign trade

2. Asymmetric Economic Relations –Import from the mainland: 21.77% ($36.8 billion), export to the mainland: 78.23% ($132.1 billion), contributing to Taiwan’s trade surplus ($30.4 billion in total), otherwise Taiwan’s trade deficit would be $6.5 billion

Asymmetric Trade Structure between the Two Sides ( )

Cross-Strait Trade by End of 2012 ($1438 billion)

Asymmetric Trade Interdependence in % vs. 29.5%

Asymmetric Trade Interdependence in 2012

Cross-Strait Trade in 2010 ($145 billion) 20 % vs. 80%

Cross-Strait Trade in 2009 ($106 billion)

Cross-Strait Trade in 2008 ($129 Billion) 19% vs. 81%

Cross-Strait Trade in 2007 ($124 Billion) 17% vs. 83%

Cross-Strait Trade in 2006 ($108 Billion) 19% vs. 81%

2. Asymmetric Economic Relations –Asymmetric interdependence Taiwan gets more benefits from cross- Strait trade Trade is more important for Taiwan’s development than for the mainland

2. Asymmetric Economic Relations Domestic constraints: who gets benefits from the economic exchange, if not integration –Businesspeople vs. labors issues of employment support for 92 consensus from business people during elections –Income distribution among different social strata –Development disparity between the North and the South

3. Political Impact of Strait Exchanges on Mainland China More people learn about Taiwan through their personal experience Is cultural exchange an antidote against increasing Taiwanese identity or a catalyst for value diffusion to the mainland?

3. Political Impact of Strait Exchanges on Mainland China The 3 direct links have increased mainlanders’ knowledge of Taiwan Maintaining the status quo has become an acceptable solution in a short term –Danger of Taiwan’s de jure independence –From an instant unification to peace accord –Ma’s “Three No’s” and the normalizing cross-strait relationship –From confrontation to cooperation –More challenges for Beijing

3. Political Impact of Strait Exchanges on Mainland China Impact of Taiwanese democratic experience on the mainland –Democratization in Taiwan was understood as a movement related to TI –Democracy in Taiwan was conveyed as political corruption, social chaos, etc. –TI released by the democratic process served as an antidote against the threat of peaceful evolution in the mainland

3. Political Impact of Strait Exchanges on Mainland China Second power turnover was positively coverer by the Chinese media –KMT politicians on CCTV 4 Wu Po-hsiung (June 2, 2008) Hao Lung-bin (June 29, 2008) Jason Hu (July 7, 2008) Chou His-wei (July 15, 2008) Wu Tun-yi (Sept. 7, 2008), and most recently Chu Li-lun (May 18, 2009) –Respect for electoral outcomes –Democracy (election) is a good thing

3. Political Impact of Strait Exchanges on Mainland China Taiwanese commentators on CCTV 4 –Cheng You-ping, Chiang Min-chi –Lan Hsuan, Yin Nai-ching –Wang Hong-wei, etc. Taiwanese newspapers readable via internet –China Times, United Daily, the Commons Daily, but not Liberty Times –Note: Washing Post not available in 2003

3. Political Impact of Strait Exchanges on Mainland China Back to tourists –Well-off people tend to be more conservative to dramatic political change (Fewsmith) –The quality of Taiwan democracy will have profound impact (Chu) –Empirical study needed