Taiwan in 2009: Eroding Landslide
Author(s): Thomas B. Gold
Source: Asian Survey, Vol. 50, No. 1 (January/February 2010), pp. 65-75
Published by: University of California Press
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THOMAS B. GOLD
Taiwan in 2009
Eroding Landslide
A B S T R AC T
After landslide victories in elections in 2008, the ruling Kuomintang (Nationalist Party)
under Ma Ying-jeou promoted closer economic ties with the booming economy of mainland China, working toward a free trade agreement. The destruction in Taiwan wreaked
by Typhoon Morakot in August exposed weaknesses and doubts about Mas leadership.
K E Y W O R D S : Taiwan, Ma Ying-jeou, Kuomintang, Democratic Progressive Party,
Typhoon Morakot, cross-strait relations
In march 2008, Ma Ying-jeou won the presidency of the Republic of
China on Taiwan in a metaphorical landslide. In 2009, a series of deadly
typhoon-spawned mudslides exposed the weakness of his administration and
the erosion of his popular support. The continuing global economic downturn and the seemingly unstoppable rise and swaggering confidence of the
Peoples Republic of China (PRC) shaped the context in which Ma (and
much of the rest of the world) had to operate. This article will first lay out
the economic situation, then focus on cross-strait relations, ties with the
United States, and the domestic political scene.
THE ECONOMY
The global economy continued to spiral downward for most of the year, taking tech- and export-dependent (over 70% of gross domestic product
[GDP]) Taiwan along for the ride.1 Year-on-year, GDP declined 11.29% in
Thomas B. Gold is Professor of Sociology at the University of California, Berkeley, and Executive
Director of the Inter-University Program for Chinese Language Studies. Email: <tbgold@berkeley.edu>.
1. Data come from the website of the Council for Economic Planning and Development, at
<http://www.cepd.gov.tw>. See also Merritt T. Cooke, Taiwans Economy: Recovery with Chinese
Characteristics, December 24, 2009, at <http://www.brookings.edu/opinions/2009/11_taiwan_
economy_cooke.aspx?p=1>.
Asian Survey, Vol. 50, Number 1, pp. 6575. ISSN 0004-4687, electronic ISSN 1533-838X. 2010
by the Regents of the University of California. All rights reserved. Please direct all requests for permission to photocopy or reproduce article content through the University of California Presss Rights
and Permissions website, http://www.ucpressjournals.com/reprintInfo.asp. DOI: AS.2010.50.1.65.
65
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66 as i an s u r v ey 5 0 : 1
the first quarter, then began to recover, registering a 1.29% dip for the third
quarter as the global economy began to show signs of strength. The Council
on Economic Planning and Development revised its prediction upward to a
2.53% decline for the year.
Trade improved dramatically at the end of the year as well, after suffering
sharp drops. Exports increased in November for the first monthly rise since
August 2008. The stock market bounced back. Unemployment topped out
at 6.13% in August, then began to decline. Inflation remained low. Forecasts
for 2010 are for 4.39% growth, but candidate Mas 2008 campaign pledges of
6% GDP growth and unemployment below 3% were clearly out of reach.
The government took active measures to save the banking industry, cutting the benchmark interest rate to 1.25%, and invested in infrastructure
projects to prime the pump. Officials listed biotech, green energy, tourism,
health care, cultural innovation, and refined agriculture as six core sectors.2
This should also help the economy diversify out of the IT (information technology) and computer industries. Of course, much of Taiwans economic
recovery is increasingly tied to relations with the mainland, about which
more below.
C R O S S - S T R A I T R E L AT I O N S : C H I N A I N T H E CAT B I R D S E AT
China enjoyed a truly remarkable Year of the Ox. Sensitive anniversaries
populate years ending in 9, but the technocrat-helmsmen in Beijing navigated these shoals quite skillfully. With most of the world mired in economic
recession, booming Beijing was in the catbird seat. A reeling U.S. remained
dependent on China for purchase of Treasury bills to fund American debt.
Washington also needed Beijings hoped-for influence with wannabe nuclear
powers North Korea and Iran, and its cooperation on climate change. Thus
constrained, U.S. officials held off their usual criticism of Chinas human
rights record, let the Chinese stage manage President Barack Obamas trip to
Shanghai and Beijing, and delayed a meeting between the president and the
Dalai Lama.
Beijing also handled cross-strait relations well, deploying a combination
of sophistication and patronizing magnanimity. January 1, 2009, marked the
30th anniversary of Chinas Message to Taiwan Compatriots (as well as
2. Ma: Taiwan Focuses on Six Core Industries, <http://tecosf.blogspot.com/2009/04/ma-taiwanfocuses-on-six-core.html>.
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establishment of formal diplomatic relations with the U.S.), when Beijing
began to soften its rhetoric and approach to Taiwan from liberation to
unification. In 2009, building on PRC President Hu Jintaos December 31,
2008, speech laying out six points to guide cross-strait relations,3 Chinese
officials pressed forward with the strategy of preventing independence while
downplaying talk of unification. With pro-independence ex-Taiwan President Chen Shui-bian out of the picture and his Democratic Progressive Party
(DPP) in disarray, Beijing made life significantly easier for Ma Ying-jeou,
using mostly carrots instead of sticks. This did, however, generate fears in
some quarters of the island of slipping into an elaborately constructed trap,
thereby dooming any hopes of independence.
Beijings main approach was to press ahead with economic agreements
that deepened Taiwans economic integration with and dependence on China.4 Given the weaknesses of the economies of Taiwan and the U.S. and the
seemingly unstoppable onslaught of the Chinese juggernaut, the China option was well nigh irresistible. Through the mechanisms of talks between
Chiang Pin-kun, chairman of Taiwans (formally) non-governmental Straits
Exchange Foundation (SEF), and Chen Yunlin, chairman of Chinas (formally) non-governmental Association for Relations across the Taiwan Straits
(ARATS), the two sides signed a number of technical accords.
After two rounds of talks in 2008, in late April 2009, they met in Nanjing
to pen agreements converting direct charter flights into regularly scheduled
ones, increasing the weekly frequency from 108 to 270 and opening six more
mainland destinations. Also agreed upon were financial (mainly currencyrelated) services and crime-fighting cooperation. The accords did not go so
far as to allow Taiwan-based airlines to fly to other international destinations
from China.
In July, Taiwans Ministry of Economic Affairs (MOEA) began accepting applications from Chinese investors, a step many critics feared would compromise
3. Russell Hsiao, Hu Jintaos Six-Points Proposition to Taiwan, China Brief 9:1 (January 12,
2009), <http://www.jamestown.org/programs/chinabrief/single/?tx_ttnews%5Btt_news%5D=
34333&tx_ttnews%5BbackPid%5D=25&cHash=11701d2ca6>. The points call for various forms of exchanges but all under the prime condition: firm adherence to the one China principle, which is a
highly contested formulation on Taiwan. President Ma and his team adhere to the so-called 1992
Consensus where each side agrees there is one China but with different interpretations. In his Taipei
Times interview (see fn. 8 below), he elaborates on some of the subtleties of this formulation.
4. Bryce Wakefield, ed., Taiwan and the Global Economic Storm, Woodrow Wilson International Center for Scholars, Asia Program, no. 143 (October 2009), especially articles by Peter Chow
and T. Y. Wang.
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68 as i an s u r v ey 5 0 : 1
the islands security and technological advantage and make it vulnerable to
stock market manipulation. Some telecommunications and semiconductor
sectors were declared off-limits. Three more financial memoranda of understanding were signed in November by financial regulators of both sides, that
is, real government officials, bypassing the SEF-ARATS channel.5 The potentially most significant advance here was more liberalization of banking
activities.
The final signing of the year took place in late December in Taichung,
Taiwan, when Chiang and Chen agreed on three more trade accords. These
addressed industrial product standards, food quarantine, and fishing crews.
An expected pact on taxation was not signed.6
The elephant in the room at all bilateral meetings in 2009 was a potential
Economic Cooperation Framework Agreement (ECFA) between the two
sides, and it was finally broached in the Taichung meeting. Debate over what
was initially called a Comprehensive Economic Cooperation Agreement
(CECA) heated up in mid-February with an MOEA announcement that it
was studying the feasibility of such a pact. The context was the scheduled
January 2010 implementation of a free trade agreement (FTA) between
China and the Association of Southeast Asian Nations (ASEAN), and the
discussion of a broader FTA of those countries plus Japan and South Korea.
This would put Taiwan at a serious disadvantage in the region, slapping its
goods with a 5%15% tariff. Ma Ying-jeou had included some sort of a
CECA in his 2008 campaign, and Vice President Vincent Siew had promoted a cross-strait common market as far back as 2001.7 In a feisty interview with the pro-DPP Taipei Times, Ma laid out the rationale for such an
agreement in a pragmatic fashion and retorted that economic ties with the
mainland had actually accelerated under the previous DPP administration.8
To avoid evoking the China-Hong Kong Closer Economic Partnership
Agreement (CEPA) between two parts of the PRC, the acronym CECA
5. Jonathan Adams, A Small Step to Bridging the Taiwan Strait, <http://www.nytimes.
com/2009/11/19/business/global/19finance.html?partner=rss&emc=rss>http:/lf5b0ba5.jpg>; Agnes
Crane and Wei Gu, Strait Logic, New York Times, December 3, 2009, p. B2.
6. Jonathan Adams, Taiwan-China Talks Hit Headwinds, <http://www.csmonitor.com/
World/Asia-Pacific/2009/1223/Taiwan-China-talks-hit-headwinds>.
7. He gave a speech at the American Enterprise Institute on January 22, 2001. At that time, he
was not in government but was chief adviser to the Business Development Foundation of the Chinese Straits, <http://www.aei.org/event/423>.
8. See <www.taipeitimes.com/News/front/archives/2009/02/20/2003436567>.
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became ECFA in March 2009. Beijing might wish that an ECFA would
deepen Taiwans dependence on the mainland, but Taiwans leaders see it as
a step toward signing FTAs with their ASEAN neighbors and possibly other
countries. After all, if China would sign what is a near-FTA with its erstwhile
enemy, why shouldnt everybody else? Of course, from Taiwans point of
view, any sort of signed pact enhances its international visibility and expands
its international living space, as well as its very existence as some sort of entity not part of China. This is exactly what Beijing wants to avoid.
While Taiwan business groups and the political elite were pushing ECFA,
many people at the societal level pushed back. They argued that Ma was selling out Taiwans sovereignty and turning the economy over to the mainland,
just as they had feared from the start. They predicted an influx of cheap (and
possibly tainted) Chinese goods as well as labor, all to the detriment of the
islands economy and society. The DPP mobilized (by its estimate) 100,000
protesters in Taichung on December 20. Although the Taichung talks produced a statement of intent to negotiate an ECFA, the actual content of such
a pact has yet to be clarified, provoking more uneasiness and mistrust. Over
the summer, the DPP petitioned for a referendum on the issue. The administration rejected this and stressed that any pact of this nature needed approval by the democratically elected (and overwhelmingly Kuomintang
[KMT]) Legislative Yuan, which, formally at least, represents the interests of
the majority of the citizens. The regime also indicated that it planned to
expend much effort in consulting with the people of Taiwan as the process
evolved. As it was, cross-strait trade declined for the first 11 months of the
year, to US$94.35 billion, 22.9% less than the same period of 2008. Taiwan
still enjoyed a $58 billion surplus.9
Although Ma Ying-jeou continued to maintain that the time was not
right to discuss a peace agreement or political issues, KMT heavyweights,
past and present, trekked to the mainland seriatim. Chinese Prime Minister
Wen Jiabao set the context for these visits in a March 5 speech to the National Peoples Congress. Wen acknowledged improved relations across the
strait over the previous year and offered to hold talks to create conditions
for ending the state of hostility and concluding a peace agreement. Although
9. Mainland exports to Taiwan were $18.12 billion, and imports from Taiwan were $76.22 billion,
very lopsided. These were a 25.1% and 22.3% decline, respectively. See Zhao Chunzhe, Cross-Straits
Trade Volume Decreases from Jan-Nov, <http://www.chinadaily.com/cn/china/09taiwantalks/
2009-12/21/content_9209522.htm>.
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70 as i an s u r v ey 5 0 : 1
there was nothing new here, after the stressful Lee Teng-hui and Chen Shuibian eras, this offer and tone were refreshing. Wen, as Hu Jintao had done in
his six points, held out a carrot of giving Taiwan more international space for
action, which is one of Taipeis chief concerns.
Beijing did just that in April when it agreed to let Taiwan, as Chinese
Taipei, send observers to the World Health Assembly (WHA) meeting
scheduled for Geneva in May. This may have been an indirect admission of
Chinas culpability in the spread of Severe Acute Respiratory Syndrome
(SARS) to Taiwan in 2003 and Beijings obstruction of foreign experts traveling there, as well as a proactive stance on H1N1 (swine) flu, which was breaking out in spring 2009. The WHA is the decision-making body of the
United Nations World Health Organization, and its director-general is Margaret Chan of Hong Kong. Taiwan had failed in its 12 previous attempts to
attend the WHA since 1997. This time, the health minister took part in the
Geneva meeting.
This marked Taiwans first appearance at a U.N. body since turning over
its seat to Beijing in 1971. Since 1993, Taipei had tried to regain U.N. membership, backed by its dwindling number of diplomatic partners. In 2009,
perhaps buoyed by the WHA outcome, Taiwan dropped its efforts to join
the U.N. itself. Instead, it sought to concentrate on meaningful participation in U.N. organizations, specifying two in particular: the International
Civil Aviation Organization and the U.N. Framework Convention on Climate Change.10
This shift in strategy was part of Mas goal of achieving a diplomatic
truce with China, especially in the area of checkbook diplomacy, that is,
buying formal ties with small, cash-strapped developing countries. Taiwan is
down to less than two dozen diplomatic allies now, and the effort to expand
this was having little payoff, so to speak.11 Ma did make two trips to Central
America for presidential inaugurations, with U.S. stopovers.
On the high-level cross-strait meeting front: KMT Chairman Wu Pohhsiung and Hu Jintao met in late May in Beijing, and then again in July for
the fifth KMT-Chinese Communist Party (CCP) forum, held in Changsha.
Former KMT Chairman Lien Chan and Hu met in Singapore at the Asia
Pacific Economic Cooperation summit in November. When Ma Ying-jeou
became KMT chairman in July, speculation boomed about a Ma-Hu
10. Not Even Asking, Economist, September 26, 2009, pp. 5254.
11. Sorry, the Offers Closed, ibid., June 27, 2009, p. 49.
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summit in their capacities as party chiefs.12 The two corresponded directly
after Ma took over the party reinsHu sent a congratulatory message to
which Ma responded. But Ma also dampened expectations of a face-to-face
meeting anytime soon, to say nothing of a peace agreement, and he raised
the issue of Chinas ongoing military threat, including the estimated 1,500
missiles aimed at the island. Certainly, the political climate in Taiwan, with
much suspicion of Mas selling out of Taiwan in digestible stages, would not
tolerate such expressions of amity.
One of the most unorthodox visitors to China was DPP stalwart and
Kaohsiung Mayor Chen Chu. She is now the highest ranking office holder
from her party. She went in May primarily to boost the World Games slated
for July in Kaohsiung, and also to promote mainland tourism to her city. She
referred to Ma as the president of our central government, which China
swallowed. The trip sparked much debate within the DPP. After two other
prominent party members, Hsu Jung-shu and Fan Chen-tsung, attended the
Changsha forum referred to above, the party first suspended them and then,
after they criticized this move, expelled them.13 Kaohsiung did hold the
games in July with much success and praise for the spectacular Toyo Itodesigned stadium,14 although the Chinese team boycotted the opening ceremony because Ma Ying-jeou spoke in his capacity as president.
Cross-strait relations did run into trouble over issues tied to figures the
CCP labels separatists. After Typhoon Morakot slammed Taiwan in early
August, killing over 600 people, Beijing delivered aid and did not obstruct
foreign aid givers. But when seven DPP mayors and county magistrates from
southern Taiwan invited the Dalai Lama to come and offer comfort to the
victimsthe majority of whom were aborigines and not Tibetan Buddhists
Beijing took deep offense. President Ma, politically damaged by his administrations ineffective and slow response to the disaster, was damned no matter
how he handled the visit, so, while approving a visa, his government drastically curtailed the Nobel Peace laureates public activities. During his early
September visit, the Dalai Lama concentrated on religious and compassionate
12. Cui Xiaohuo, Mas Move Paves Way to Meet Hu, <http://www.chinadaily.com.cn/
china/2009-06/11/content_8270182.htm>.
13. Jenny W. Hsu, DPP Expels Duo from Party, Taipei Times, July 28, 2009, <http://www.
taipeitimes.com/News/front/archives/2009/07/28/2003449770>.
14. Nicolai Ouroussoff, Stadium Where Worlds Collide, Humanely, New York Times, July 16,
2009, p. C1; Editorial: Taiwan Triumphs in World Games, <http://www.etaiwwannews.com/etn/
news_content.php?id=1015087>, accessed on July 28, 2009.
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72 as i an s u r v ey 5 0 : 1
matters. In one speech, however, while encouraging Taiwans improved ties
with the mainland, he also urged the island to preserve its democracy. The
Dalai Lama met with DPP Chair Tsai Ing-wen as well as Mayor Chen Chu
in Kaohsiung, where he led prayers. China refrained from blaming Ma or
the KMT personally, but it did cancel some delegations, and mainland tour
groups avoided Kaohsiung.
In a related affair, the Kaohsiung Film Festival had planned to screen a film
about exiled Xinjiang Uighur activist Rebiya Kadeer, The 10 Conditions of Love,
and some other groups invited her to speak. Given the violence in Xinjiang in
July, this was even more of a provocation to Beijing than inviting the Dalai
Lama. The showing of the film in Australia in August had provoked objections
from Beijing. Rebiya Kadeer did not receive a visa, although the film was
shown in several venues around the island. She also announced an intention
to sue Taiwan after Minister of the Interior Jiang Yi-huah claimed her organization, the World Uighur Congress, had ties to terrorists.
R E L AT I O N S W I T H T H E U N I T E D S TAT E S : T H E T R A AT 3 0
April marked the 30th anniversary of the Taiwan Relations Act (TRA), the
foundation of relations between the peoples of Taiwan and the U.S. In 2009,
relations were very good. The easing of cross-strait tensions alleviated a headache the U.S. did not need, given all the crises it was facing elsewhere. President Ma gave a positive appraisal of the TRA in a speech he delivered via
teleconference to a seminar at the Center for Strategic and International
Studies, an American think tank. 15 Ma pledged that his administration
would be surprise free and low key, in contrast to his predecessor, who had
been seen as provocative by the Bush administration. Ma reiterated that
U.S. arms sales [are] . . . central to our relations.
In October 2008, then-President George W. Bush had notified Congress
of his intention to sell $6.5 billion of advanced arms to Taiwan, prompting
the PRC to cut off military-to-military exchanges with the U.S. until the middle of 2009. At years end, after President Obama returned from his November
maiden trip to China, his administration appeared ready to proceed with the
15. The Taiwan Relations Act: Turning a New Chapter, <http://csis.org/files/media/csis/
events/090422_ma_speech.pdf>. See also Richard C. Bush, Thoughts on the Taiwan Relations
Act, <http://www.brookings.edu/opinions/2009/04_taiwan_bush.aspx?p=1>. Bush had directed the
American Institute in Taiwan for many years.
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arms package, although it did not signal if it would sell the advanced F-16
fighter jets Taiwan desperately wants. Xu Caihou, the vice chairman of Chinas Military Affairs Commission, had journeyed to Washington in October
after the PRC celebrated its 60th anniversary with a gigantic military parade,
to lobby against the sale. Not unexpectedly, Beijing repeatedly denounced
reports of the sale as a formal announcement drew near in 2010. (Subsequent
U.S. reports hinted that the fighters were unlikely to be included.) It was
also revealed in December 2009 that a Taiwanese company had procured
sensitive components with nuclear uses for a Chinese firm and then
shipped them to Iran in violation of U.N. sanctions.16
In October, Taiwan decided to lift a ban on the import of certain U.S beef
products dating from the December 2003 mad cow disease scare. Demonstrations ensued in Taipei in the name of food safety. The Legislative Yuan
voted at years end to reimpose a ban on some products, including cow organs
and ground beef.
D O M E S T I C P O L I T I C S : M A N DAT E O F H E AV E N ?
After the frenzy of two island-wide elections and massive demonstrations
against negotiations with China in 2008, 2009 was definitely on the quieter
side. The trials of former President Chen Shui-bian; his wife, Wu Shu-chen;
their son and daughter and their spouses; former officials; and business associates on charges of corruption, money laundering, and embezzling public
funds continued for much of the year. In September, the former first couple
received life sentences and in December faced new indictments on similar
charges. The trials attracted much criticism. DPP members saw them as little
more than KMT revenge for its loss of power after decades of single-party
rule. Local and foreign observers pointed to a range of irregularities: prosecutors performing a skit mocking the former president, 17 a change of judge,
merger of the Chen and Wu trials, and the extended detention of Chen.
Taiwans legal system was as much on trial as the defendants themselves,
whose guilt was in little doubt.18
16. China Sent Iran Parts with Nuclear Uses, <http://www.jpost.com/servlet/Satellite?cid=
126233943594&pagename=JPArticle%2FShowFull>.
17. See <http://www.youtube.com/watch?v=Afpm1EIgEfQ>.
18. Among the most astringent critics was Mas former Harvard Law School professor, Jerome
Alan Cohen, who wrote a series of columns in Hong Kongs South China Morning Post.
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The KMT certainly did not fare well in the year following its triumphant
return to power. The opposition hammered Ma for rushing into deals with
China without thinking through the consequences for Taiwans ability to
manage its own affairs. Huge crowds were mobilized for massive demonstrations in Taipei and Kaohsiung on May 17.
While the DPP seemed to flounder for much of the year, nature handed
it a boost: Typhoon Morakot, which wreaked havoc in DPP-run counties in
central and southern Taiwan in early August.19 Ma had no sooner engineered
his return to the KMT chairmanship in late July to assert control over warring factions than heaven seemed to have second thoughts about Mas mandate to rule.20 Although he assumed the post in October, what were seen as
massive failures on the part of himself and his Cabinet to prepare for and
manage the natural disaster referred to as Mas Katrina had already seriously damaged his credibility, to say nothing of his poll numbers. Oddly
enough for a place desperate for international attention, the Ministry of
Foreign Affairs initially declined offers of foreign assistance. The Executive
Yuan (Cabinet) and Premier Liu Chao-shiuan resigned en masse. Former
Kaohsiung Mayor Wu Den-yih, a Taiwanese in a regime dominated by
mainlanders, took over the post in September.
But then the KMT began losing local elections: a by-election later in
September in Yun-lin County for the Legislative Yuan, five mayors and magistrates in December, and three more Legislative Yuan by-elections in January 2010. This raised the number of DPP seats to 30. Ma stepped down as
party chair in favor of his former Taipei Deputy Mayor King Pu-tsung.
Ma staked a lot of his credibility and support on demonstrating that continued accords with the mainland would redound to Taiwans economic benefit
and international standing, but his personal standing in opinion polls stayed
low. According to a poll by the pro-KMT United Daily News on December
25, 2009, his approval rating, which had been at 66% at the time he took
office, plummeted to half at years end. Still, this was better than the 29%
after Morakot. The DPPs Tsai Ing-wens positives were 43% after the December 2 election.21
19. Cindy Sui, Typhoon Turns into a Political Storm, <http://www.atimes.com/atimes/China/
KH21Ad)1.html>, accessed on August 21, 2009.
20. The Mandate of Heaven was a traditional concept of rulership in imperial China, which
transferred legitimacy from a failed former ruler to a new one.
21. See <http://www.kmt.org.tw/english/page.aspx?type=article&mnum=11&anum=7399>.
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At the end of 2008, China rewarded Mas good behavior with a gift of two
pandas. But the Beelzebubs of Beijing put a lump of coal in his 2009 Christmas stocking, sentencing the mainland dissident Liu Xiaobo to 11 years in
prison for subversion of state authority, in spite of international condemnation and damage to officials assurances of harmony to the people of Taiwan.
With four more Legislative Yuan by-elections and important municipal elections coming up in 2010, Ma has a lot of shaky ground to firm up. DPP
Chair Tsai appeared to be turning the DPPs fortunes around at the local
level while raising morale ahead of the elections.
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