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The dangers of economic dependence on
China
By Lin Kien-tsu 林健次
In what many consider a loss of face, Japan finally caved in to pressure from
China and released, without charge, a Chinese fishing boat captain it had held
for more than two weeks after a collision in disputed territorial waters around
the Diaoyutai Islands (釣魚台).
China’s unrelenting pressure over the past two weeks included a threat to ban
Chinese exports of rare earth metals to Japan, restrictions on tourist groups
traveling to Japan, harassment such as fines on Toyota and other Japanese
companies in China, the arrest of four Japanese citizens and cancelation of the
two countries’ ministerial-level meetings and talks on the East China Sea oil
fields, as well as other economic sanctions and threats.
The possibility of economic weapons or sanctions is an inevitable consequence of
the establishment of economic relations. Without economic exchanges, there would
be no economic weapons or sanctions at all. Since the two sides of the Taiwan
Strait had no contact with each other when Chiang Kai-shek (蔣介石) and his son
Chiang Ching-kuo (蔣經國) were in power, economic sanctions were not available. As
a result, China was unable to impose economic sanctions against Taiwan.
President Ma Ying-jeou’s (馬英九) administration claims that the cross-strait
economies are interdependent. This is a big lie. It is wrong to equate economic
transactions with economic interdependence, as the two parties of a transaction
are not necessarily interdependent.
Economic interdependence only exists between countries with economies equivalent
in size. This corresponding scale means that sanctions may be mutually damaging.
Sanctions are therefore rarely seen in this kind of situation. A significant
difference in the size of the respective economies, however, leads to one being
more dominant and the other more dependent.
It is very similar to the relationship between employer and employee. Of course,
an economic relationship exists between the two parties, but that does not mean
they are actually interdependent, as the employer is more dominant and the
employee is more dependent. If the employee fails to satisfy the boss’
expectations, he or she can be replaced at any time. The worker can hardly
replace the boss.
Japan and China are not economically interdependent. And it is certainly the
case that neither are China and Taiwan.
What can we learn from China’s brazen economic sanctions on, and intimidation
of, Japan?
First, Beijing is apparently brave enough to use economic policy to achieve
political ends.
Second, because China is a dictatorship, the ruling party, politics and commerce
are all inextricably linked, and China can move quite quickly and efficiently to
achieve these ends. This is one of the main reasons that China seems to have
gotten the upper hand over Japan in this particular diplomatic spat.
China’s ability to manipulate economic policy in this way has implications for
Japan’s — and even Taiwan’s — territorial claims over the Diaoyutais. If China
can take this tack against Japan over the Diaoyutais, it is going to be just as
willing, more so in fact, when it comes to Taiwan, which it considers to be part
of its territory. The Economic Cooperation Framework Agreement (ECFA) reinforces
Taiwan’s economic dependence on China and, correspondingly, dilutes Taiwan’s
economic relations with other countries.
Signing the ECFA was tantamount to arming China with more economic instruments
with which to control Taiwan, making it easier for China to achieve its
political goals through economic means. Is this why Ma and his government were
so willing to sign the agreement?
Lin Kien-tsu is a member of the Taiwan Association of
University Professors.
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