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Can Taiwan bank on China?

Can Taiwan bank on China?

After ECFA, Taiwan has found another acronym likely to cause far-reaching internal divisions.
The AIIB or Asian Investment Infrastructure Bank is a new international financial organization to be formed soon by interested countries. Since the idea is the brainchild of the communist government in China, several countries, including the United States and Japan, have voiced concern that it might turn into an instrument of Chinese policy making.
Since China is still communist rather than capitalist, Beijing might use the body to expand its influence to benefit not just its economy, but also its military and diplomatic efforts.
Taiwan moved from expressing an interest at the Boao Forum for Asia during a handshake between former Vice President Vincent Siew and Chinese leader Xi Jinping to a hurried faxed letter of intent and a request to the Chinese government’s Taiwan Affairs Office to pass the fax on to the secretariat.
The speed with which the administration of President Ma Ying-jeou changed from being merely an interested party to pushing for an application to become a founding member of the AIIB left many perplexed.
The ruling Kuomintang had been in power for seven years yet still succeeded in repeating the same mistakes, Democratic Progressive Party Chairwoman Tsai Ing-wen pointed out.
If AIIB membership is so important that Taiwan has to rush before the deadline to become a founding member, why did the government not prepare its case better? Its sudden decision was too similar to its behavior over the past Economic Cooperation Framework Agreement and trade-in-services pact with China.
In the beginning, the government barely mentions the project, though when it starts to gain international traction, it begins to praise the plan, usually comparing the country with South Korea in order to defend why Taiwan should become a member.
Its approach to the Regional Comprehensive Economic Partnership and the Trans-Pacific Partnership has been roughly the same, with dire warnings of a loss of economic competitiveness if Taiwan misses the boat.
However, the government never explains precisely why Taiwan should be on that boat in the first place, and what the destination is it wants to reach. The administration only curries favor with public support for higher international visibility for the country, promising economic improvements and wider cooperation with a number of unclear benefits for the population at large.
When it rushes headlong into a crucial stage, it then appears surprised that the public does not follow suit.
Critics have correctly pointed out that the government failed to conduct a cost-benefit study about AIIB membership, which means that nobody even knows whether Taiwan will benefit or not.
Finance Minister Chang Sheng-ford’s alleged remark that in the worst case, Taiwan would see NT$2.2 billion of its money turn into wallpaper, is hardly likely to instill confidence in the government’s ability to give the country a good deal.
While defending himself he was making a general comparison not based on fact, his words show that Taiwan should be concerned about the costs of joining the AIIB.
Membership of international organizations might not come cheap, and an international investment bank is likely to spend substantial amounts of money on development projects. The question remains open whether those projects will benefit local populations or just international financiers and in this case, China.
There is also still the question of the necessity of the AIIB, since there already is an Asian Development Bank which might be found to hold overlapping functions.
The Ma Administration should not be surprised that the AIIB decision provokes another round of protests, just like ECFA did back in 2010 and the trade-in-services pact with China last year. Indeed, the AIIB issue had barely surfaced or lawmakers occupied the podium and students went out to protest outside the president’s residence.
While Taiwan’s trade and diplomatic interests should be protected and membership of international organizations is a praiseworthy goal which can be supported by all parties, there should be no blind rush into an organization which has not even been founded yet, especially when that group is being led by China.
The ultimate aim of Beijing’s communist rulers vis-à-vis Taiwan remains the same: unification, demoting Taiwan from a sovereign and independent country to the level of a province, most likely under the “One Country, Two Systems” formula which the people of Hong Kong have already clearly rejected over the past few months.
Despite Ma’s flexible diplomacy, China has never abandoned its attempts to either keep Taiwan out of international and regional organizations or to downgrade its status to that of an observer without full representation.
Taiwan should not hurry to join the initiative of a country which has almost 2,000 missiles pointing at its people. There is not just the political and military juxtaposition between the two sides, but there is also the danger of economic dependency on China, which has already been stretched to its limits during seven years of Ma.
The KMT administration has also been severely lacking in its defense of Taiwan’s equality and dignity on the international scene, and that is another concern when the AIIB comes around to allowing Taiwan in.
The usual problem is the name which Taiwan will be allowed to use. It won’t be Taiwan and it won’t be the Republic of China, but some hybrid acceptable to Beijing, such as “Chinese Taipei.” While Taiwan is not China and is more than Taipei, the phrasing has been used before, being “acceptable” to China for the Olympics, for example.
Beijing’s Taiwan Affairs Office said it could accept Taiwan’s application for AIIB membership “under a suitable name,” which immediately begged the question which name that would be. While Taiwan should take a strong stance for a change, such a stance cannot be expected from the Ma Administration, which is highly likely to agree to “Chinese Taipei.”
Now that the government has again escaped public scrutiny in the run-up to the AIIB deadline, the next phase will be more crucial than ever.
First of all, the government should clearly explain, through public hearings and the release of independently judged documents, whether the benefits of joining AIIB outweigh the disadvantages.
Each step of the way, the government will also have to be open with the public, and with its representatives, the Legislative Yuan. The only way forward is complete honesty by offering the negative side of the picture as well as the supposedly positive.
The government should provide a strong defense of an acceptable member name and an acceptable role for the independent and sovereign nation with a strong economy which Taiwan is.
Taiwan deserves to be treated by the AIIB as a global trading power, not as a tiny afterthought.


Updated : 2021-09-24 11:48 GMT+08:00