Written by Ian Inkster 

Most social scientists now regard global dynamics as a complex system, more akin to a human body than to the workings of a machine or a single economy, with more open-ends, fractals and complete unknowns than could ever be wanted by any analyst. Yet it persists in popping up. This is because – particularly in a high-trading economy such as Taiwan – forecasts or other analyses of major political trends in any nation fall victim to the untoward and often anarchic forces of the global system. If this is not through cultural impacts and convergences then it works through the more stalwart forces of trade, investment, labour migrations, information flows, military challenge or threat, and institutional networks. So, to trust that we can now see forthcoming political events in Taiwan in the absence of the limelight shed by international trends would be whimsical, but to rely on the salience or machine-like logic of the outside world would be properly foolish.

Trump Withdrawing

For some time now Donald Trump has been in effective if confusing command over the withdrawal of the US from global affairs at very different levels – abandoning the Syrian intervention, proclaiming the need for NATO to fund itself in Europe rather than rely on massive windfall gains from the American defence system, withdrawal from the Paris climate accord, urging that Japan be freed of the treaty restrictions binding its defence system so that it may take over erstwhile US burdens in the Pacific, withdrawal from the world of migration and refugees by erecting a physical wall between the North and the South of the continent, abandoning the neo-lib doctrine of free global markets for a protectionist regime that is only partially aimed at curbing Chinese economic power. The warnings for all of this came with the original presidential campaign and they might be taken altogether as the operational features of a new general US philosophy. Periods of US withdrawal are of course not unknown, but this one seems multifunctional, part of an original White House agenda, and very appealing to the host of American citizens who rightly feel neglected if not disdained by their own more conventional political elite. There now seems to be every likelihood that Trump will secure his second term at least to an extent on the basis of a series of withdrawals – during 2019 this might well embrace a more distant attitude towards Taiwan.

Post-Diplomacy

We are fast moving towards post-diplomacy, a world in which relations within the old comity of nations are being replaced by emergencies caused by strategically placed leaders such as Donald Trump, Xi Jinping, Vladimir Putin, and Kim Jong-un, to whom we might now add Theresa May, Angela Merkel and Emmanuel Macron.  Today, a premature stupid action might become a last action before war, in contrast to an old world wherein even stupid actions by thoughtless leaders could be mitigated or even resolved within a quieter world of the diplomats.

Trump’s present forced closure of a crucial part of the US political machine as quid pro quo for the granting of funds for his Mexican wall is a classic instance of global spit-the-dummy post-diplomacy and must vex all of us who worry over the strategic position of US regarding the China-Taiwan issue. Taiwan might quite easily find itself in dummy trajectory at only a moment’s notice. Given a unique combination of international forces this is especially worrying for Taiwan policy makers. The mix of nuclear threats (US and North Korea are merely exemplary) in a new situation of low diplomacy and high-tech, where the capacity to destroy is now more and more divorced from the actual wealth and income of the belligerent nation, means that as a hot-spot speedily emerges, the power of diplomacy is gone. In contrast, other high-tech anarchically operated through the social media penetrate every delicate negotiating situation, so that any remnants of diplomacy must take place in institutional bunkers, but these latter are working without effective political executive guidance. This is a vivid conjuncture to Taiwan diplomats and decision-makers to consider during 2019.

Chinese Economic Restructuring

The present Five-Year Plan and its associated elements of industrial and technological restructuring offer a more positive international element to the Taiwanese political economy. Although most global media focus all but entirely upon supposed Chinese economic growth slow-down, more crucial is the changing character of the Chinese economic system. This is true for the world trading system as a whole, but most directly so for Taiwan. Growth in trade and investment relations with China do not depend primarily on the rate of overall growth but on the rate of growth of foreign trade and commerce and the direction of technological change. During 2017-18 China’s direct foreign investment, designed to gather both influence and technical information and expertise in the US, Europe and Africa, enjoyed rapid growth, and the investment in Belt and Road countries saw a growth of 30 percent. Elsewhere I have argued in great detail that the Chinese political system has been creative in the use of novel political rhetoric to justify switches in economic policy that are designed to open up foreign technologies through either trade and investment or through tutelage in terms of multinational enterprise (and the practical tutelage embedded in producer-supplier relations), patenting, educational and training packages, intergovernmental science and technology contracting, and so on. Major swings in political rhetoric designed to demarcate new political ‘eras’ correlate with new policies towards a transfer-in of information and technologies.

The present Chinese planning regime does seem to represent something of a new technology strategy, and this could be of enormous benefit to Taiwan, especially in the employment of graduates skilled in business, foreign languages, mathematics, information technologies, environmental industries and marine and biotechnical innovations. That is, present tendencies in China are likely to increase Taiwan-China techno-complementarity. This should be seen as a regional context for an industrial programme based on high tech and high value-added exports.

An East-Asian Prosperity Zone?

Already we have introduced some elements that might well encourage closer East-Asian economic and political cooperation as a firm focus of Taiwanese politics – the probable US leniency towards a re-armed Japan, increased high-tech complementarity amongst otherwise contrasting political economies (exemplified here by China and Taiwan but this theme can easily embrace Japan, South Korea and Hong Kong), a possible long-term US regime of withdrawal from intervention. It might even be that the contrasts between the political regimes in this huge and complex region might allow growing economic, strategic and technological complementarities to become even clearer. Whatever the political noise, the main destinations of Taiwan’s exports in order of importance are China, Hong Kong, the US, Japan; similarly, Taiwan’s imports come from China, Japan, the US, and South Korea (2018). Contrasting political economies coalesce in a flow of basic goods primarily spanning machinery and electrical equipment, metals, plastics and chemicals.

Taiwan’s ‘Southward’ Strategy

It would not be too difficult to reinterpret the DPP’s earlier focus on Southward commercial expansion (a rebuff of the KMT’s emphasis on closer China-Taiwan commercial relations) as well beyond internal political rhetoric, as indeed a harbinger of Taiwan’s place in a wider framework. A framework that incorporated closer commercial networking between East and South Asia (especially Indonesia, India, Singapore and Malaysia). This was an alternative to a global perspective that has fallen fowl of low growth, protectionism, weakening of democracies and challenge to free markets, anarchic elements in traditional major commercial systems (from France to Russia), and continued low performances of growth and welfare in most of Africa and South America.

The internal politics of Taiwan might well become re-drafted to switch from positing the stark China-South alternatives in commercial and economic policies towards a more embracing Eastern and Southern strategy designed to free much of Asian growth from restrictions established by slow-performing Western democracies, as well as to establish a secure status for Taiwan as a high-tech, highly-skilled, democratic and global site for innovation across institutions, markets and technologies.

The second part of this paper takes up some detailed implications of these international elements for political debate and policy within Taiwan. It opens up notions of power-sharing and the difficulty in developing a coherent approach to both the internal and external public policy problems and choices now facing Taiwan. Particularly it is suggested that Taiwan in 2019 might shift to a more innovative international focus that does not exclude China but rather helps towards delineating a new China.

Ian Inkster has been an academic economic historian and global political economist since 1973, holding professorships in Australia, UK, and Taiwan, and is a Professorial Research Associate, Centre of Taiwan Studies, SOAS, London; a Senior Non-Residential Fellow at the Taiwan Studies Programme and China Policy Institute at the University of Nottingham; and editor of History of Technology (London) since 2001. Photo Credit: Flickr/ Gage Skidmore