Academic journal article China Perspectives

Under the Shadow of China: Beijing's Policy towards Hong Kong and Taiwan in Comparative Perspective

Academic journal article China Perspectives

Under the Shadow of China: Beijing's Policy towards Hong Kong and Taiwan in Comparative Perspective

Article excerpt

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On 18 March 2014, student protesters stormed Taiwan's Legislative Yuan, kicking offto a 24-day sit-in that paralysed the island's legislature. The historic occupation, later given the name Sunflower Student Movement (taiyanghua xueyun ...), was a protest against the attempt by the ruling Kuomintang (KMT) to pass a service trade pact with China. The pact, entitled the Cross-Strait Service Trade Agreement (CSSTA), (1) was signed between China and Taiwan in June 2013 as one of two follow-up treaties to the Economic Cooperation Framework Agreement (ECFA) signed in 2010. (2) As a component of ECFA, CSSTA vows to substantially liberalise trade in services between the two economies. Up to 80 Chinese industries and 64 Taiwanese industries will be opened up under the pending agreement.

Apart from the extraordinary vibrancy of Taiwan's civil society participation, another distinctive feature of the Sunflower Student Movement was the constant reference to Hong Kong in the protest rhetoric. The service trade pact in question, together with its parent treaty ECFA, was widely thought to be a replica of the free trade agreement signed between Hong Kong and China in June 2003, named the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA), and framed at that time as a "generous gift" from Beijing to pull Hong Kong out of its economic low-tide brought by the SARS epidemic. (3)While CEPA, after over a decade of implementation, has significantly increased cross-border economic cooperation as intended and, perhaps more arguably, has achieved considerable economic results as claimed by the government and some mainland scholars, (4) it has certainly made the Hong Kong economy more dependent on China and, more crucially, has created an open platform for China's United Front strategy to co-opt local economic elites. ECFA was thus seen by observers as an agreement broadly modelled upon Hong Kong's CEPA, as both of them contain the objective of increasing cross-strait economic integration (5) - just as it is often pointed out that Hong Kong's "One Country Two Systems" was originally devised by Deng Xiaoping as a formula ultimately aimed at the reunification of Taiwan with China. (6) Chinese officials even explicitly proposed the concept of a "Greater China Economic Circle" (dazhonghua jingji quan ...) through which economic cooperation between Hong Kong, Taiwan, and China can be fostered through ECFA and CEPA. (7) Both pacts, as clearly stated, aim to normalise and facilitate inter-and-cross-territory trade relations in goods, services, and investment. Less explicitly revealed, however, is the parallel objective, which has been pointed out by observers in Hong Kong and Taiwan, to induce political integration through closer economic partnership with China.

With the lessons of CEPA in mind, opinion in Taiwan was divided over the service trade pact. Supporters, including the KMT government led by President Ma Ying-jeou, argued that the pact would be economically beneficial to Taiwan while diplomatically indispensable for Taiwan to join other free trade zones such as the Regional Comprehensive Economic Partnership (RCEP) and the Trans-Pacific Partnership (TPP). (8) Opponents argued that the pact lacked a democratic mandate and condemned the negotiation process between the CCP and KMT governments as a "black box" (heixiang ...). Meanwhile, quoting a government report estimating that the trade pact would only boost GDP by 0.03%, (9) they argued that the economic benefits were not as clear as supporters claimed. Instead, they worried that opening Taiwan's service industry to Chinese companies would harm local small-business owners and create only low-skill service jobs, pointing to Hong Kong's widening poverty gap after the implementation of CEPA. (10) Beneath these reservations, however, lies a deeper existential concern. Protesters fear that the service trade pact will make the de facto independent Taiwan vulnerable to more direct forms of political intervention from Beijing, a constant threat that has pervaded Taiwanese society since the KMT retreated to the island in 1949. …

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