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4. Cross-Strait Relations: Globalization, China, and Taiwan’s Strategy
4.1 China – Fragile Superpower
After the Communist victory in the Chinese Civil War, and the subsequent founding of the People’s Republic of China on October 1st 1949, China underwent a period of immense transformation: socially, politically and economically. Following a series of catastrophic policies such as the Great Leap Forward and the Cultural Revolution in which millions of people died, it was clear that Maoist economics and politics had completely failed and was no longer a sustainable model to follow. Mao’s death on September 9th 1976 and the arrest of the ‘Gang of Four’ ultimately triggered the economic reforms that would be undertaken soon after by Deng Xiaoping, whereby the country would be transformed ‘...from a policy of self-reliance and suspicion to one of openness and integration” (Economy and Oksenberg, 1999: 5). Since the opening up policy, China has moved fast to become an integral part of the global economy and is currently the world's second largest economy, as well as being the largest contributor to world growth since the global financial crisis of 2008 (World Bank, 2018).
Since Deng Xiaoping embarked on the opening up policy (改革開放, gaigekaifang) and market reforms of the late 1970s, the Chinese economy has grown at a breakneck speed, regularly churning out double digit growth figures. In 2011 China overtook Japan to become the world’s second largest economy, boasting nominal gross domestic product worth 5.879 billion USD (Dickie, 2011). The driving force behind its double digit
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annual economic growth is the astonishing expansion of China’s international trade.
From 2000-2009 the value of China’s trade leapt from 474 billion USD to 2.207 trillion USD, replacing Germany as the world’s leading exporter (Yahuda, 2011, pp. 271). In 2016 alone, the value of China’s exports reached 2119.0 billion USD, and even then, that was a 7.1% decrease on the previous year. Further highlighting its rapid economic ascent, China's standalone trade with the United States now exceeds China's entire trade from the turn of the millennium. United States goods and services trade with China totalled an estimated 648.5 billion USD in 2016 (Office of the United States, 2018).
A number of domestic and foreign factors can be attributed to China’s rapid development. Hu & Khan (1997) attributed China’s rise to foreign investment and a rapid growth in the level of exports. Other factors point to a large under-employed workforce willing to work for relatively low wages (Bosworth & Collins, 2007).
Altogether, it is possible to suggest that successive leaders in Beijing have succeeded in making China stand up and become a major player in the international community.
In keeping with China's historic opening up reforms of the 1980s, at the 2017 annual Party Congress in Beijing, President Xi stated that “...China’s open door will not be closed — it will be only be opened wider” (Shepherd, 2017), pointing to further economic liberalisation of the economy. Some political analysts such as Jacques (2005) have in the past suggested that China has already reached ‘superpower’ status, second only in the world to the U.S. Utilizing the dynamics of the globalization process has undoubtedly been of key importance in such a rapid rise.
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While globalization has clearly brought a great deal of economic benefits to the country, the Chinese state has suffered a number of social and political consequences as a result.
The deepening of economic reforms and the embrace of the global market economy has caused immense economic and social change, producing factors at both domestic and international level which had implications on the security of the state. One such problem is internal political and economic disintegration. Economic disintegration is particularly evident in the vast disparity in regional development between areas such as the Pearl River Delta, and the substantially poorer inland provinces such as Gansu, Ningxia, Xinjiang and Tibet. Regional inequality in particular is one of the major concerns facing governments as it reflects unequal opportunities among regions and may threaten national unity and social stability (Smith, 1995). Since 1949, despite attempts to develop economically lagging areas there remains an immense disparity between the GDP of provinces like Guangdong and Jiangsu to some of China's other provinces. Guangdong’s GDP, measuring 1,217.27 trillion USD is equivalent to the entire GDP of Spain, whilst Jiangsu, the other manufacturing heartland of China records an equally impressive GDP of 1,165.08 trillion USD. On the other hand, the provinces of Xinjiang, Tibet and Ningxia share a combined GDP of just over 200 billion USD (IMF, 2018).
After China’s opening up policy there resembled a shift from self-reliance, to a policy based on comparative advantage, whereby the borders of China’s thirty-one provinces created separate markets, forming a kind of de facto economic federalism. This has created a whole range of problems relating to migration and provinces competing with each other to attract direct foreign investment. Regional intra-provincial ‘resource wars’
also erupted across China in which regions used illegal administrative and even military
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measures to protect local markets and restrict interregional resource flows (Wei, 2000).
A number of intra-provincial trade disputes have also emerged making the internal market of the PRC become increasingly fragmented. Investment in the poorer inland provinces has increased in recent years; a notable example being the 2006 completion of the Qinghai-Tibet Railway (青藏鐵路 qingzangtielu) railroad connecting Lhasa to Beijing via the city of Golmud. However, infrastructure projects such as the railway link to Tibet appear to be part of a broader plan to exploit vast deposits of metals in the disputed territory and to strengthen the state's political control over the region, rather than bring prosperity and economic development to Tibetan society (Lustgarten, 2007).
It is clear that the gap between the rich provinces of China’s east coast and the underdeveloped western provinces is rapidly widening.
Poverty and the ever increasing income gap between rural and urban residents also present a challenge to domestic stability in the PRC. Despite making notable strides in the economy in recent years and lifting millions of Chinese out of poverty, levels of rural poverty remain high. According to World Bank statistics, in 2010, 11.2 % of the population (almost 150 million people) lived on less than 1.90 USD a day, whilst 27.2 % (almost 360 million people) lived on less than 3.10 USD a day (Shaprio, 2016). More recent official statistics however still reveals 82 million people in China as living on less than 1 USD a day (Wong, 2014). Xi Jinping has repeatedly vowed to fulfil the Communists’ original intent, staking his legacy on an ambitious plan to complete the eradication of rural poverty by 2020 (Hernandez, 2017), and as can be seen below in Figure a, poverty alleviation is an area of significant investment from the central government in recent years.
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Figure a
Ministry of Finance, People’s Republic of China as shown in the Economist (2018).
Rural income distribution has also become a great deal more unequal. In 2010, with the urban-to-rural income ratio being 3.33:1, China recorded its widest rural-urban income gap since launching the reform and opening-up policy in 1978 (Jing, 2010). Those in the interior provinces are not feeling the positive effects of globalization as much as their counterparts in cities along the eastern coastal provinces, with many of them having a per capita income per household dangerously close to the World Bank’s poverty cut-off. In addition, corruption continues to be a constant thorn in the side of the CCP. President Xi Jinping has talked repeatedly of the need to stamp out rampant corruption which he has signalled to be the party’s greatest threat (Xinhua, 2017).
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Figure b, c - China’s statistical yearbook compiled by the National Bureau of Statistics of China (2015)
Increasingly we can see internal unrest as a product of the economic reforms China undertook in the 1970s. Since the 1990s China has shown more and more signs of such internal unrest. Even after a sustained period of economic growth, with little investment in institutional change, the number of ‘mass incidents’ – the term the Chinese government uses to describe public protests – is on the rise. Protests have been a frequent occurrence in post-1989 China. Although reliable statistics are hard to come by, most sources agree that the frequency of protests have been much higher from the turn of the millennium to the present than it was in the 1990s, and that it was much higher in the 1990s than it was in the 1980s. In 2005, the last year that the Chinese government published official statistics on “mass incidents,” there were 87,000 such occurrences, as compared with roughly 5,000-10,000 per year in the early 1990s and fewer than 1,000 a year in the 1980s (Wright, 2018).
Since 2005, various Chinese officials have given estimates, and some Chinese scholars and non-governmental organizations (NGOs) have offered their own statistics based on their research into mass incidents. Drawing on these sources, for about the past decade, the number of annual protests in China is estimated to have remained in the high tens-of-thousands, and according to some mainland Chinese scholars rose as high as 180,000 in 2010 (Sun, 2011). These protests have included activism by farmers, workers, and homeowners; environmental activism; nationalist protests; political dissent; separatist unrest by Uighurs and Tibetans; and quasi-separatist activism in Hong Kong.
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As globalization gradually spread its influence over post reform China, a number of non-state actors also emerged, bringing with them threats to Chinese domestic stability.
The emergence of the Falun Gong religious sect in the late 1990s demonstrates well the risks posed to states by non-state actors. Falun Gong, a quasi-religious movement blending Taoist and Buddhist beliefs had gained widespread popularity in China in the mid-1990s, attracting a large following from those who had lost out in the reform process and for whom the sect proved succor in uncertain times (Yahuda, 2011).
However, the movement was soon banned and labelled a pernicious religious cult which constituted a threat to political and social order. The spread of Falun Gong as a threat to security was also underlined by the reported size of the movement. The movement had penetrated various party and military organizations, and practitioners included a number of high ranking party officials, as well as sections of the higher echelons of the People’s Liberation Army (Zhang, 2001). The constant crackdown of Christian church groups in Beijing and throughout China also highlights the potential security threats non-state actors such as religious groups pose to the Chinese government (Brook, 2011).
If globalization has resulted in an increase in identity issues which have potential consequences to state security, the continued instability witnessed in Tibet and Xinjiang poses another security challenge to Beijing. Riots in Xinjiang’s provincial capital, Urumqi in July 2009 left 184 people dead after clashes between ethnic Uyghur and Han Chinese (Wei and Gang, 2010). Similar smaller scale riots have since been contained by the Chinese government after the launch of a ‘strike hard’ campaign aimed at carrying out further detentions of ethnic Uyghur’s suspected by the state of terrorist
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provides a constant thorn in Beijing’s crown. A series of self-immolations by Tibetans in the Tibetan Autonomous Region in recent years, in protest to what Tibetans perceive as a lack of religious freedom, has seen Beijing react with a series of heavy handed responses (Branigan, 2012). Both Xinjiang and Tibet possess enormous symbolic significance to the PRC, any loss of their integrity and/or sovereignty over the territories endangers their position in the international order as well as their domestic legitimacy.Therefore, whilst Beijing has seemingly kept the separatist movements in both Xinjiang and Tibet under control, unrest there could arise again, deepening Chinese suspicion of anti-Chinese forces abroad, especially in Taiwan (Yang, 2010).
Alongside Tibet and Xinjiang, the destabilising effects of the globalization process have also had a significant impact on China's relationship with another one of its troubled regions – Hong Kong. For decades, the former British colony enjoyed an unprecedented level of political, social, and economic autonomy away from Beijing's centralised rule.
In particular, the city's rapid economic development grew Hong Kong into one of the world's economic, financial capitals. For decades, China’s GDP relied heavily on FDI flowing into the country via the British colony. Some of the first significant levels of foreign investment into China in the 1970s came through Hong Kong in the form of Taiwanese investors looking to establish factories and other business ventures in the Pearl River Delta region. In 1997, the colony was returned to Chinese rule and absorbed into the ‘One Country Two Systems’ model first proposed by Deng Xiaoping in the early 1980s. Over the coming few decades, a combination of lessening economic importance, plus an encroaching, and increasingly nationalist pro-China agenda in the city would lead to an increase in anti-China sentiment and opposition to Chinese rule.
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Hong Kong’s economy relative to China’s overall GDP has fallen considerably from a peak of 27 % in 1993 to less than 3 % in 2017 (Albert, 2019). In 1997, when Britain handed over Hong Kong to the PRC, Hong Kong’s GDP was still around 20 % the size of the mainland economy, as the territory played the vital role of a middleman in China’s trade and investments with the rest of the world. Through the years, however, and as a by-product of the globalization process, China undersaw enormous economic growth taking the country from the ruins of the Great Leap Forward to one of the world’s biggest economies. Cities such as Shenzhen and Shanghai developed rapidly and continued to attract huge levels of foreign investment. The Chinese government also launched a slew of policies, such as the establishment of free trade zones, to further stimulate the country's economic expansion. In Hong Kong, however, it failed to change its economic structure sufficiently, leading to a slowdown in growth. Hong Kong's economy in terms of GDP is thus now only equivalent to just 2.9 % of China’s overall economy.
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Figure d - World Bank, One Road Research (2015).
Recent years have seen an increasing number of protests in both Taiwan and Hong Kong (Cantoni, 2018). While the reasons for the protests have varied, they have generally reflected a discontent with the rapid pace of integration with China, the consolidation of powerful local identities and a weakening of previous identification with China. If the globalization process can be seen as a trigger for an increase in identity issues, the case of Hong Kong and Taiwan certainly points in the direction of globalization as a contributing factor for this unrest. Both the Umbrella Movement in Hong Kong and the Sunflower Movement in Taiwan introduced to the equation a vocal anti-China movement which hadn't previously garnered so much influence and public attention. Both movements' protests were broadcast all over the world, and watched by a global audience. To a global audience this resembled an increasing level of opposition to China’s influence.
Furthermore, China’s embrace of the globalization process, and in particular the economic benefits it brings has resulted in Hong Kong becoming less relevant to China's overall strategic aims. An increasingly confident China thus sees no problem with dallying with issues of sovereignty in the former British colony, including openly overstepping the conditions laid out during the signing of the Basic Law during the handover in 1997. As has already been determined, domestic and foreign affairs are becoming increasing overlapped, blurring the traditional divisions between internal and external security. By understanding this, we can see how the case of Hong Kong and its position as part of China has obvious implications for Taiwan and the cross-Strait relationship. The more Beijing brings criminal proceedings to the leaders of Hong
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Kong's pro-independence movement, and the more cases like the disappearance of the Hong Kong booksellers continue to dominate the headlines in Hong Kong, the more the Taiwanese will grow wary that a similar model could ever be replicated in Taiwan.
Seeking to woo Taiwan into its fold, Beijing has continued to use the one country two systems model as a model for reunification. As it stands, however, that system is as much as dead to the Taiwanese public as well as its ruling party – the DPP. A recently as March 2019 President Tsai openly rejected the notion of adopting the model, stating:
“I want to emphasize that the ‘one country, two systems’ principle unilaterally undermines the status quo, eliminates the sovereignty of the Republic of China (Taiwan), and forces Taiwan to accept unification with China. For many years now, countless public opinion polls have shown that the vast majority of Taiwanese will not accept this.” (Office of the President Republic of China (Taiwan), 2019).
Tsai’s comments were well-received in Taiwan with her tough rejection of Beijing’s call for unification talks gaining her 10 %age points in the polls (Chung, 2019) – an important development with elections less than one year away. This suggests that the Taiwanese will know what to expect from reunification with China by watching how Beijing has handled Hong Kong. The Taiwanese public are seeing their future in the mirror of Hong Kong and so far, they aren’t pleased with the reflection. Furthermore, even though the Umbrella Movement has failed to build on its initial promise, an intensified campaign once more against the Beijing authorities in Hong Kong would have possible consequences for Taiwan. For one, Beijing might increase its suspicions of anti-China forces overseas. The common ground between the protest movements in
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Taiwan and Hong Kong mean that suspicion would be aimed at Taiwan, especially with a DPP government that has gone on record suggest that China’s record in Hong Kong
‘underscores the need for Taiwan to increase our self-defence’. (Agence France-Presse, 2019).
Globalization and in particular economic globalization have clearly impacted upon China’s economic and political systems. Whilst China has clearly benefitted from the globalization process, it has also been subject to aspects of globalization which serve to undermine state security. Thus, the term ‘fragile superpower’ has emerged (Shirk, 2007). Other scholars suggest that whilst China continues to produce relatively high level GDP growth rates, a deepening of the social fractures caused by the globalization process are taking the country to the brink of ‘revolutionary turmoil’ (Garnaut, 2010).
Products of the opening up policy, such as the vast income disparity between China’s rich and poor have potentially explosive consequences for the state. Therefore, Beijing finds itself in a predicament. Closing China to the forces of globalization would only limit the potential economic gains, restricting long term prosperity. At the same time, opening China to the globalization process has clearly had a detrimental effect on China’s domestic stability and security. It is these threats to its internal stability that will come to shape China’s foreign relations, in particular its current and future relations with the ROC.
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