Chapter V: Potential Development of Cross-Strait Relations under the U.S. Rebalance
5.2 Taiwan’s Cross-Strait Policy under President Ma Ying-jeou
5.2.2 The Sun-Flower Movement
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political ones."8
5.2.2 The Sun-Flower Movement
On March 18th 2014, students broke into the Legislative Yuan and occupied the chamber for 23 days. They also occupied the Executive Yuan on March 23. Both occupations were triggered by the Home Affairs Committee of the Legislative Yuan to pass a bill on the Cross-Strait Service Trade Agreement (CSSTA) with China, which was designed to open up the service sector across the Taiwan Strait. The students’
occupation of parliament was a bid to prevent the passage of an agreement allowing for freer trade in services with China. They argued that the pact was negotiated in secret and would allow China to gain greater political control over the island. The students demanded government transparency and a review of the trade bill between Taiwan and China. “Oppose the Trade Pact, Save Taiwan” and “Protect our Democracy, Retract the Trade Pact” were the key slogans throughout the protest. One of their main demands was for a law allowing for greater public oversight of such Cross-Strait agreements, which was to also be implemented before this particular services pact was passed.
The CSSTA was negotiated and signed in Shanghai on July 21, 2013 by representatives from Taiwan’s Quasi-state agency, the SEF, and its Chinese counterpart, the ARATS. The CSSTA opens selected service-sector markets in Taiwan to mainland Chinese investment, and vice versa, within the context of the Cross-Strait Economic Cooperation Framework Agreement (ECFA). It aims to formalize existing business
8 Office of the President, Republic of China (Taiwan), “President Ma convenes press conference for local and foreign press to mark the inauguration of the 13th-term president and vice president of the ROC.” May 20, 2012. Retrieved 10 January 2016, from
http://english.president.gov.tw/Default.aspx?tabid=491&itemid=27448&rmid=2355
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practices and lift trade restrictions between Taiwan and China. China would open a total of 80 market segments while Taiwan would liberalize 64 industries. As the smaller economy, Taiwan is expected to benefit more from China’s larger market. Many observers have projected that Taiwan’s financial and retail-related industries, which together compose roughly 25 percent of Taiwan’s GDP, would emerge as the primary beneficiaries.9
Taiwan’s service sector produces almost 70 percent of its GDP. However, it consists mainly of small- and medium-sized enterprises (SME). In contrast to their Chinese counterparts, who are usually larger, better-funded state-owned enterprises (SOE). This scale disparity threatens the Taiwanese SMEs and gives them a competitive disadvantage. In addition, other domestic barriers would remain after the CSSTA’s implementation. For example, in regards to e-commerce, Taiwanese portals, such as Yahoo and PChome would continue to be barred from entering China.
However, some Chinese firms such as Taobao.com had already been operating in Taiwan without any market restrictions. Also, local Chinese spas and hairdressers would be subject to a flat-tax scheme, while Taiwanese entrants may face higher operating expenses. The other stakeholders are the workers. The service sector in Taiwan employs nearly 60 percent of its workforce. The CSSTA could potentially affect roughly 2.85 million people’s livelihoods. With the average annual real salary in 2013 shrinking back to the level of what it was 16 years ago, at around US$14,400 in 1997 dollars, with lower-skilled workers in less competitive industries being already at risk. Younger workers may be greatly affected as well as many are experiencing a lack of job mobility and stagnation in entry-level wages which
9 JoAnn Fan, “The Economics of the Cross-Strait Services Agreement,” The Diplomat, April 18, 2014.
Retrieved 10 January 2016, from http://thediplomat.com/2014/04/the-economics-of-the-cross-strait-services-agreement/
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run approximately 38 percent below norm.10
The Sunflower Movement showed two main facts. Firstly, the movement was a sign of distrust of China by Taiwanese who feared that the increase of Taiwan’s economic dependence on China would hurt Taiwan’s national security. Secondly, many young students worried about their own futures, including the widening disparity between rich and poor, low salaries and skyrocketing housing costs. At the very beginning of the Sunflower Movement, students required political transparency, however, it became different as numerous political and social demands all converged together. The Sunflower Movement was comprised of four different elements, including Democratic reform, the anti-China factor or Taiwanese nationalism, anti-free trade and the youth’s overall dissatisfaction and insecurity regarding the future.11
Regarding the Anti-China factor or Taiwanese nationalism, some students believed that it was important to ensure the future of Taiwan as a democratic nation, especially under the potential effects of increased Cross-Strait interaction its resulting effect on the integrity of the Taiwanese identity. Therefore, the identity issue played an important role during the protests. Some protestors believed that the CSSTA would bring an excessive economic reliance on China. Furthermore, it would give Beijing more leverage in pushing Taiwan towards unification. In addition, they also feared that the penetration of Chinese capital might affect the neutrality of media and compromise the liberty of the Taiwanese in the future.12
10 Ibid.
11 Ferran Perez Mena, The Sunflower generation’s new political vales and their attitudes towards Cross-Strait relations: A political generation in the making? (MA Thesis for International Master’s Program in Asia-Pacific Studies , Taipei: National Chengchi University, 2015), p.71.
12 Ibid.
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Regarding the critics of free trade agreements, the students worried that the CSSTA, as a consequence of capitalist globalization, would endanger the livelihood of the middle and lower classes with a rather strong sense of “relative deprivation.” From 2010 to 2011, Taiwan had a short period of economic recovery; but the living conditions of most people did not improve because of unequal distribution.
In general, the KMT believed that in order to maintain economic growth, Taiwan must have close ties with China. Although one of the main reasons that caused the Sunflower Movement was due to the overall mistrust of China, other the domestic issues such as the widening of the wealth gap, low salaries, high housing prices and confusion with regards to Taiwan’s national identity were also issues the students protested to draw attention from the public.