Democratization, National Identity and Foreign Policy in Asia, edited by Gilbert Rozman

Taiwan’s Economic and Diplomatic Challenges and Opportunities, edited by Mariah Thornton, Robert Ash, Dafydd Fell

My interpretation of the importance of Taiwan's elections.

Syaru Shirley Lin says the commotion over the Trump-Tsai phone call has exposed the US challenge in forging stable relations with both the vibrant democracy that Taiwan has become and the assertive China of today.

Syaru Shirley Lin believes newly-elected President Tsia’s biggest challenge is to fulfill Taiwan’s role in maintaining global peace and stability while satisfying the aspirations of young people. For DPP government, the focus is on Taiwan and domestic social welfare, rather than China or cross-Strait relations.

With local identities increasingly consolidated, especially among young people, there have been unprecedented protests in both Taiwan and Hong Kong against their respective governments’ policies toward Beijing. Taiwan’s Sunflower Movement in March 2014 opposed further economic integration with China, specifically the ratification of a cross-Strait agreement on trade in services. Soon after, in September 2014, Hong Kong’s Umbrella Movement demanded that Beijing modify its formula for nominating and electing Hong Kong’s next chief executive in 2017. Taiwanese students held sunflowers as a symbol of hope to effect change, while Hong Kong students held umbrellas to shield themselves from police tear gas. In both instances, the international attention and the political impact were far greater than what the two governments and most pundits had expected. Both protests were led by young people, many of them students, some of whom expressed strong “anti-China” sentiments. This was despite a continuing effort by Beijing to promote a Chinese identity among young people. Although the protests shared similar roots, the two governments responded very differently. Taipei yielded to the students’ demand to delay the passage of the trade pact and draft a mechanism for the Legislative Yuan to monitor future negotiations with China. The Hong Kong government refused to amend the electoral proposal and initiated legal proceedings and other punitive measures against the protestors and their supporters.

After more than one hundred years of colonial rule, China regained sovereignty over Hong Kong in 1997 and is now seeking the eventual return of Taiwan, which has enjoyed de facto independence since the Kuomintang government retreated there from the mainland in 1949. China has continued to expand its social and economic ties with Hong Kong and Taiwan. However, despite China’s deepening economic integration with Hong Kong and Taiwan and the transfer of sovereignty over Hong Kong from Britain to China in 1997, surveys show that there has been no increase in Chinese identity among the people in Hong Kong or Taiwan. Instead, there is a rise in local identities. Beijing is determined to bridge the identity gap in both regions in the belief that the development of a Chinese national identity is necessary to ensure political stability and territorial integrity. Its aim is to prevent Taiwan from declaring de jure independence and to secure the eventual unification of Taiwan with the rest of China, and with regard to Hong Kong, it seeks to ensure that the continued progress toward direct elections does not produce an unacceptable legislature or chief executive. Promoting Chinese national identity in both Hong Kong and Taiwan is seen as important to achieving those goals.

From 2008, Ma Ying-jeou has raised the possibility of Taiwan becoming an Asia Pacific financial center. Rather than taking the necessary steps to upgrade Taiwan's capability in finance on a comprehensive basis, the Ma administration has focused predominantly on expanding cross-Strait financial flows. This paper introduces the background and details the process of liberalization in banking, insurance and securities. Implications of such development for Taiwan's economy are explored followed by a review of prospects for the future.

Contrary to expectation, policies such as the ECFA have produced protectionist backlash, not spillover favoring political engagement with China. Using primarily economic incentives and hoping that special interest groups or political parties who benefit from cross-Strait interdependence will help China win over the Taiwanese public may be ineffective in promoting political integration.