Unit 8: Analysis on Current Cross-Strait Relations and Taiwan’s Foreign Relations

1. Unit 8: Analysis on Current Cross-Strait Relations and Taiwan’s Foreign Relations Lecturer: Dr. Andrea, Pei-Shan KAO Centre for General EducationNational Chiao-Tung University Hsinchu City, Taiwan

2. I. Introduction •  II. Ma Ying-jeou’s Cross-Strait Policies • 1. New Economic and Trade Policy • 2. Educational Plans • 3. Resumption of Cross-Strait Dialogue • III. Current Cross-Strait Relations • 1. Interdependent Economic and Trade Relations • 2. Social and Cultural Exchanges • 3. Political Contacts • IV. Challenges of the Development of Cross-Strait Relations • 1. Domestic Politics • 2. Public’s Views on Cross-Strait Relations • 3. Difficult Diplomatic Situation of Taiwan •  V. Conclusion

3. Ma Ying-jeou’s Cross-Strait Policies • New Economic and Trade Policy • Ma: Economically China is an opportunity although it could be a threat politically. • What Taiwan should do is to “maximise the opportunity but minimise the threat.” • ∴Ma stated that he would pursue economic cooperation with China. • ∵Opening Taiwan to Chinese tourists and allowing local banks to invest in China’s financial market were crucial to improve cross-strait relations. • Source: “Ma Ying-jeou Talkasia Interview,” CNN.com, February 13, 2007.

4. Ma hence proposed signing a general cross-Taiwan Strait economic agreement to address cross-Strait economic issues, including investments by Taiwanese financial institutions in China, investment protection, and avoidance of double taxation. FTA→CEPA→CECA→ECFA

5. 2. Educational Plans Ma Ying-jeou (2007.2): If he was elected, he hoped to increase the cultural and educational exchanges with China to make the people to understand each other more hence help to normalise and improve cross-strait relation ∴ Ma promised to open up Taiwan to Chinese students and to recognise Chinese diplomas.

6. In Ma’s plans, Taiwan would open its doors to Chinese students seeking to pursue advance studies, ≠ allow them to sit test in Taiwan and obtain Taiwanese professional licenses. (2008.10) For Ma, recruiting Chinese students to Taiwan, could make Taiwan's educational environment more liberalised and globalised. →This also could bring about business opportunities to Taiwan and help solve increasing declining enrollment rates of privately run colleges and universities. →The most important: The opening policy could help to spur Taiwan students’ competitiveness.

7. 3. Resumption of Cross-Strait Dialogue *The first Chiang-Chen Talk: 11-14 June 2008, Beijing. →Outcome: The two sides signed the “Cross-Strait Agreement on Travel by Mainland Residents to Taiwan” and the “Minutes of Talks on Cross-Strait Charter Flights”. *The second Chiang-Chen Talk: November 3-7 2008, Taipei. →Outcome: Signed 4 agreements on food safety, air transport, sea transport, and postal service. *The third Chiang-Chen Talk: April 26 2009, Nanjing. →Outcome: Signed 3 agreements on regularly scheduled cross-strait flights, financial cooperation, and tackling cross-strait crime and providing legal assistance.

8. III. Current Cross-Strait Relations 1. Interdependent Economic and Trade Relations • -In 1991, Taiwan invested $174 million in China, occupying 9.52% of Taiwan’s DFI to the world, which was $1.8 billion. • In fact, it is difficult to figure the real and correct amount of Taiwan investment in China as many investments go unreported to the government. • According to Taiwan’s Ministry of Economic, in 2006, Taiwan’s investment in China increased to $7.64 billion. • The number then reached to $9.97 billionin 2007, making for a cumulative total of $72.28 billion since 1991 to September 2008. Taiwan now is the largest foreign investor in China

9. *Taiwanese investment has already transferred from labor intensive to capital and technology intensive industries, e.g. electronic parts and components manufacturing; and computers, electronic and optical products manufacturing. Most of Taiwan investment focuses in Kiangsu, Canton, and Shanghai.

10. Trade Statistics: • China has become the largest source of Taiwan’s trade surplus. • The trade amount has grown sharply from $77.8 million in 1979 to over $100 billion in 2007. • The cross-strait trade accounted for 0.25% of Taiwan’s total trade amount in 1979 and increased sharply to 21.95% in 2008. • China’s trade dependence on Taiwan was 0.26% in 1979; it then grew over 20 times to 5.44% in 2003. • Now the cross-strait trade occupies 4.71% in China’s total foreign trade.

11. 2. Social and Cultural Exchanges *According to Chinese statistics (See Figure 1), 437,700 Taiwanese visited China in 1988. However, this level grew over ten times to 4,627,881 in 2007. Similarly, the number of Chinese residents travelling to Taiwan also increased sharply. *Figure 2 shows that in 1989, there were 1,261 Chinese residents visiting Taiwan; the numbers grew greatly to 279,751 in 2007. It increased over 221 times. →From Figure 1 and 2, we can perceive that not only did Taiwanese tourist travel to China grow substantially since 1988, but that the number of Chinese residents travelling to Taiwan also steadily increased since 1989.

12. *There are now 1,500,000 Taiwanese working and residing in China. *According to the SEF, in 2008 there have been 20,729 Chinese professionals who applied for coming Taiwan to visit. *(1st Chiang-Chen Talk) Taiwan will open 11 harbours and China will open 63 ports for direct shipping; weekly flights across the Strait will total 108, supplemented by 60 monthly cargo flights.

13. Figure 1. Taiwanese Travel to China (1988-2007) Unit: 1 thousand people Source: Straits Exchange Foundation, “Taiwanese Travel to China”, http://www.sef.org.tw/, “consulted in February 2009.”

14. Figure 2. Chinese Resident Travel to Taiwan Unit: Person Source: Straits Exchange Foundation, “Chinese Resident Travel to Taiwan”, http://www.sef.org.tw/, “consulted in February 2009.”

15. 3. Political Contacts In 1991, Establishment of the SEF, and the ARATS →In 1993, “Koo-Wang Talks” in Singapore →In 1995, Suspension of Cross-strait negotiations as President Lee Teng-hui visited the United States. →Contacts between the SEF and ARATS resumed in 1998, “Koo-Wang Meeting” in Shanghai → Communication between the SEF and ARATS broke off again in 1999 as Lee Teng-hui’s statement to a German media. → Since 2000, under Chen Shui-bian’s rule; the bilateral bargaining was nearly suspended. According to the SEF, there were a total of 29 bargaining and talks that have been held by the two sides from 1991 to 2008.

16. Other Political Contacts and Exchange: *The “Cross-Strait Economic, Trade and Cultural Forum” held by the Chinese Nationalist Party (KMT) and Communist Party of China (CPC). e.g.: Wu Poh-hsiung, the Chairman of Kuomintang, visited China in May 2008 and met with Chinese Communist Party Secretary General Hu Jintao. ↓ The first political contact between the two parties in 60 years. *In March 2008, the vice-president elect, Vicent Siew met with Hu Jintao at the Boao Forum in April in Hainan. ↓ The highest-level political contact across the Taiwan Strait in nearly 60 years. *Lien Chan, KMT honorary Chiarman also have met with Hu Jintao at the APEC in November 2008 in Peru.

17. Thanks For Your Listening!!