East Asia: Politics, Economy, and Society

Joshua Su-Ya Wu
Committee on International Relations (CIR)
East Asia: Society, Politics, and Economy Workshop October 10, 2007
“Triple Threat: Triangulating the Impact of the Taiwanese Business Community in the Taiwan Strait”

PRESENTATION ABSTRACT
Since the Republic of China government relocated to Taiwan in 1949, following its defeat to the Chinese communists, the Taiwan Strait dilemma has been characterized by a conflict of two opposing state actors. The dominant neorealist tradition portrays the Taiwan Strait as a classic example of the security dilemma, where Taiwan and the People’s Republic of China (PRC) are locked in a vicious cycle of mistrust that leads to a continuous deterioration of each state’s security environment. From a political economy perspective, the Taiwan Strait dilemma can be described as a balancing act between economics and security, as both Taiwan and the PRC must balance national economic priorities with the priority of national security. Though such analysis has yielded significant insights into the study of the Taiwan Strait, they share a common shortcoming, namely the focus on the state as the primary analytical actor. A state-centric view, however, fails to capture the dynamic nature of domestic politics, and the significant impact that sub-state actors play in cross-Strait relations.
One such sub-state actor is the Taiwanese business community (TBC). Since 1979, the TBC is estimated to have invested over $100 billion in the PRC despite governmental bans and restrictions on cross-Strait trade and investment. More than simply economic capital, growing Taiwanese has also led to a large-scale relocation of the TBC to the PRC; it is estimated that 2 million Taiwanese citizens live in the PRC, at least for parts of the year, and 200,000 reside in Shanghai alone. Existing studies on the TBC have focused on its impact on the economic development of the PRC. While important, the TBC also has significant social and political effects. Such effects can be differentiated based on the size of the Taiwanese firm operating in the PRC, but in aggregate, it is undeniable that collectively, the TBC has emerged as a significant economic, social, and political actor in the Taiwan Strait.
To fully describe the impact of the TBC on cross-Strait dynamics, it is analyzed in three different contexts, namely its effects on Taiwan’s cross-Strait policies, on the PRC’s cross-Strait policies, and on the overall state of cross-Strait relations. First, I examine the impact that the TBC has on Taiwanese politics, and whether the TBC has emerged as a cohesive and important lobby that influences Taiwanese domestic politics. By contextualizing the roles and domestic views of the TBC within a context of growing Taiwanese nationalism, I highlight how differing perceptions reflect growing domestic trends in Taiwan. Next, I analyze how the TBC’s presence in the PRC has paradoxically both facilitated and hindered the PRC’s goal of unification. On the local level, I examine the role of the TBC in changing the Chinese social landscape and the state-local relationship. Thirdly, I examine the TBC in the macro environment, the Taiwan Strait, and how the TBC has changed the dynamics of cross-Strait relations. After analyzing the economic, social, and political consequences of the TBC in each of these three contexts, I draw three conclusions on how the TBC is transforming the relational dynamics of the Taiwan Strait and challenging the conventional wisdom of focusing on the Taiwan Strait dilemma as state conflict as it undermines state sovereignty in governing international relations, complicates the autonomy of domestic politics, and diminishes the internalization of distinctive national identities on both sides of the Strait.