A New Era in Cross-Strait Relations? Tsai Ing-Wen Comments on the Implications of Taiwan's and China's Entry to the World Trade Organisation
Ing-wen, Tsai, New Zealand International Review
The People's Republic of China (China) formally became a member of the WTO on 11 December 2001, and the Republic of China (Taiwan) did the same on 1 January 2002 under the name of the `Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu'. This marked the end of a negotiation process for each side dating back to 1992, when the General Council of the then GATT established two separate working parties for the respective accessions of China and Taiwan.
Many people see the two entries as beginning a new era for the bilateral relationship between Taiwan and China. The accessions to the WTO present a great opportunity for both sides to interact in a more structured and systemic manner, which is very much needed after more than a decade of exchanges between the two sides in trade, investment, and tourism. What is more significant, hopefully, is the possibility of both sides using the WTO as a venue to open bilateral discussions on WTO issues and a bridge for discussions on a wider spectrum of issues in a separate context. The possibility is there. It is a matter of the will of the Chinese political leadership to explore such a possibility.
When the Japanese government surrendered its sovereignty over Taiwan after the Second World War, the government of the Republic of China took control of and continued to function in Taiwan. Over a period of fifty years, Taiwan has developed from an agriculture-based economy to a major producer of high-tech products. At the same time, the political structure has been changed from an authoritarian regime to a democracy that is close to Western democracies. The relationship with China has been changed from rivalries in civil war to Taiwan's unilateral termination of hostility towards China in the late 1980s, and to a relationship emphasising dialogue and exchanges in the 1990s. Both sides continue to debate, among themselves and in the international setting, on sovereignty issues. Despite the sovereignty controversy, it is very clear that each side exercises full control and jurisdiction over a clearly delineated territory and there is no issue of political subordination to each other. The Republic of China on Tai wan does exist, and is a fully-functioning country.
With the increasing exchanges between the two sides in the 1990s, the relationship is now a complicated one, especially in the trade and economic areas. Statistics illustrate the magnitude and nature of the relationship today. Between 1987 and 2000, indirect trade between the two sides grew by around twenty-one times. For 2000 alone, China was Taiwan's third largest market, with total trade valued at US$31.25 billion. In terms of Taiwanese business investment in China, by the end of 2000 official figures show that Taiwan investments in China totalled US$17.1 billion (actual figures could be US$70 billion), which accounted for 40 per cent of Taiwan's outward investment. Conservative estimates indicate that Taiwan's investment in China has contributed to the creation of at least 3 million jobs. With Taiwan's investments in China exceeding trade figures, this could imply the shift of Taiwanese job opportunities to China.
With regard to travel by people to China, an estimated 300,000 Taiwanese are regularly in China for business reasons. This figure rises as high as 500,000 if Taiwanese tourists and visitors are included. At the moment, without direct air links with China, Taiwanese are already making around 3 million trips to China per year. The numbers also show that Taiwan's economic relationship with China has shifted from one that was complementary to one of competition.
These flourishing economic and trade flows between the two sides are expected to be furthered by China's greater opening after its WTO accession and the expansion by Taiwanese firms of their operations in China. China has become very relevant to Taiwan's economy, especially in its enterprises' business globalisation efforts. …