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ECFA may place food security in jeopardy
By Chen Tsung-yen ³¯©vÅÉ
Saturday, Jul 10, 2010, Page 8
The respected publication The Economist recently ran a number
of articles on the Economic Cooperation Framework Agreement (ECFA). On July 1,
one of these posted on the online edition said that the deregulation of the
agricultural and financial sectors embodied in the ECFA was likely to have
implications for Taiwan¡¦s national security.
The deregulation of agricultural products across the Taiwan Strait will result
in increased reliance on Chinese imports to satisfy domestic demand for food and
this has the potential to undermine Taiwan¡¦s self-sufficiency in food. Some
experts are predicting a global food crisis by 2030. If this were to happen,
then Taiwan would be in a worse position because of the ECFA as the agreement
would have weakened its domestic agricultural sector. Unsurprisingly, China will
remain self-sufficient.
Then there is the financial sector. Further deregulation would allow
cross-strait financial institutions to simultaneously set up bases in China and
engage in financial activities in Taiwan. In the future, Taiwanese businesses
will be able to take out loans from Chinese banks, which will make doing
business much more convenient as well as reduce the costs of borrowing Chinese
currency.
Although this will bring immediate benefits for industry, it will in essence
also mean that China has a firmer grip on businesses and banks in Taiwan, and
therefore our economic future. One example of this, mentioned in The Economist
article, is the sale of Nanshan Life by AIG, with the blessing of the US
government, to a Hong Kong-based company that has Chinese backers. As a result,
Taiwanese people could find their life insurance in the hands of Beijing.
If international deregulation is handled properly it results in benefits for
both sides. There is, however, real risks for Taiwan, because deregulation could
lead to over-reliance on China. This risk, although small, could lead to
disastrous circumstances that threaten the very existence of the state.
In the context of cross-strait relations, this risk refers to the possibility,
following economic integration, of China exploiting the outbreak of military
tension across the Taiwan Strait, however inconsequential, to rein in Taipei. If
this were to happen then Taiwan¡¦s national security would be compromised before
there was anytime to devise a response.
China would have several options available if it wanted to exploit such a
situation, including prohibiting food exports to Taiwan, restricting Taiwanese
investment without Chinese backers, or making it harder for Taiwanese businesses
to set up in China. There is no reason to suppose that Beijing is not capable of
going to such lengths either, as it is run by a dictatorship.
The question on everyone¡¦s mind now is what comes after the ECFA? Trade
relations between Taiwan and China will certainly become much closer and this
will bring benefits in the first instance, but it will also enable China to lay
siege to Taiwan and strangle its food supply. In other words, with Taiwan¡¦s
self-sufficiency compromised, we would have no choice but to comply with
whatever China wants.
If Taiwan wants to reduce this risk, we really need a more balanced foreign
policy, which means we have to engage more with other countries and not just
China. We have to make sure we do not place the future of this nation in the
hands of a country that to this day remains hostile to our national aspirations.
Chen Tsung-yen is a research coordinator at the Taiwan Brain
Trust.
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