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Key Economic Data 
  2003 2002 2001 Ranking(2002)
Millions of US $  406,000    
GNI per capita
 US $ 18,000
Ranking is given out of 208 nations - (data from the World Bank)

Books on Taiwan

Update No: 076 - (01/06/10)

Time to take stock
With President Ma Ying-jeou at the mid-point of his first four-year term of office, analysts have been busy analysing his performance. Is he China’s fifth column working to deliver Taiwan into China’s arms or is he merely recognizing the realpolitik of a changed world in which China will be the undisputed power centre of East Asia?

May marked the mid-point of President Ma Ying-jeou’s term of office and the return to power of the Kuomintang (KMT) party. Ma was elected president in May 2008 for an initial four-year term. Naturally there has been much comment in the local press regarding his performance. Has he abandoned Taiwan and instead chosen to pull the island towards reunification with China? Or is he a realist that understands that Taiwan independence is an illusion? The answer probably lies somewhere between the two.

Certainly the timing of his presidency was unfortunate to say the least. While the eight years of DPP rule meant that China was largely ignored, the economy continued to perform reasonably well. Again timing was everything—under the impetus of globalisation, the world was going through its best decade of trade expansion ever recorded and, as an economy that relies on trade for 70 percent of its GDP, Taiwan could not have failed to have done well. By contrast the hapless Ma took office while the storm clouds were gathering and which resulted in the Global Financial Crisis where everything went into a tailspin.

Not surprisingly, Ma Ying-jeou’s popularity plummeted along with the export figures. Ma’s response was to turn to China. From the “closed door” policy that marked his predecessor, Ma very quickly moved towards a policy that was “China-centric.” Certainly, this sea change in attitude has resulted in greatly reduced tensions across the Taiwan Straits. China is much more at ease in dealing with a government on Taiwan that is pro-China if not exactly, pro-Beijing; the United States too is much more relaxed with cross-straits tensions now off the international agenda. But have the people of Taiwan benefited? That depends on your point of view.

Washington has welcomed the less confrontationalist stand that Taipei has taken with China. In its own efforts to engage Beijing on matters as diverse as climate change and North Korea, removing Taiwan as an irritant in the relationship has won Taipei new respect in Washington and made negotiations with China much easier. However, that could change if President Ma’s strategy of engagement with China unravels.

Simply put, he has been so focused on forging a partnership with China that he has raised alarm among the domestic electorate that he and his party have their own agenda. It does not help that he has consistently downplayed issues related to Taiwan’s own sovereignty nor that he prefers to refer to China as the “mainland”.

So far the re-engagement with China has produced 12 agreements following the resumption of negotiations between the Straits Exchange Foundation of Taiwan and China’s Association for Relations Across the Taiwan Strait which had been put on hold since 1995. Direct flights are set to increase in June to 370 per month. Negotiations for an economic cooperation framework agreement (ECFA) are also under way with Ma declaring that the pact will be ready for signature in June 2010. However, that plan could yet come unstuck and there is now talk that the third round of talks designed to finalize the ECFA may have to be postponed. Much of the negotiation with Beijing has been cloaked in secrecy, which might be a normal part of the bilateral process between two states under normal circumstances, but relations between China and Taipei are a tad more complex. China after all, especially since the passage of its anti-secession legislation has made no secret of its political agenda within the ECFA despite Ma’s claim that it is all about the economic relationship.

The latest issue to surface was the revelation that customs inspectors in China were denying entry to Taiwanese products unless they were labelled as “Made in Taiwan, China”. So far this issue has only arisen at Shenzhen port in Guandgong province, but there are fears in Taiwan that this could all be part of the broader Chinese strategy to ensure that any customs union arising out of the ECFA would bind Taiwan closer to political integration with China.

President Ma insists that this is not so. He claims that the framework for his cross-straits policy is embedded in what he terms the “three noes”: no discussion of unification with Beijing during his term, no pursuit or support of de jure Taiwanese independence and no use of military force to resolve the Taiwan issue. He has publicly committed that he would not negotiate unification with China during his four-year or potential eight-year term. His strategy was reported in the local press recently in the following terms:

“My goal is to buy as much time as possible so that people on both sides of the Taiwan Strait, who are all yan huang zisun [or descendants of emperors Yan and Huang], can find a solution to our disputes with the collective wisdom of the Chinese nation,”

Beijing may differ and there comes the sticking point. Ma is already ahead of public opinion and needs to garner wider support for his ECFA if he is to have any hope of anchoring this as his major achievement come the next election—campaigning for which will start next year. But while Washington may appreciate the democratic processes underway in Taiwan, Beijing will likely take an entirely different viewpoint. China adopts the ratchet approach which brooks no backsliding.

Much of the problem has been of Ma’s own making. He has come across as aloof and at times uncaring. As Chair of the KMT as well as president of Taiwan he has shown a penchant for unilateral decision-making rather than consensus building. This will need to change if he is to build his re-election bid around his achievements with China.

With the economy on the mend, President Ma’s popularity rating appears to have bottomed out. The most recent such poll, conducted by the Global Views Survey Research Center, put Ma's popularity at 30.4 percent, up 3.8 percentage points from the previous survey. His disapproval rating dropped 2.5 percentage points, but remains high at 58.9 percent. Perhaps more noteworthy is that despite the high disapproval rating of the Ma government's performance, the same poll showed that 45.3 percent of respondents thought the KMT would do a better job of protecting Taiwan’s interests and developing cross-strait peace than the DPP, which polled 29.9 percent. There is a salutary message in that outcome. Ma and the KMT need to work at consensus building and China needs to give him and his government the space and time to do so.   

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