Caracterización de Paraoxón® y porfirinas de hierro (III)

As will be explored in chapters 5 and 6, the economic contribution of the ECFA to both China’s and Taiwan’s economies is still not clear because several important sub-agreements are pending in effect, such as the CSSTA (please see Appendix I). Without these sub-agreements, cross-Strait trade liberalization is limited by the early harvest list contained in Annex I in the ECFA.61 _{It is clear from the ECFA’s early}

harvest list that Taiwan has received more benefits than China, which contradicts the prevalent argument that the ECFA is harmful for Taiwan’s economic development.62 First of all, in terms of the ECFA’s contribution to both sides’ GDP growth rate, this agreement was estimated to boost Taiwan’s GDP performance by 1.72% annually since 2010, whereas China only saw a 0.17% annual growth in GDP.63

Furthermore, according to Annex I of the ECFA, Taiwan had to impose zero tariffs on 267 products imported from China in 2013, which constituted 10.5% of China’s total export to Taiwan in 2009. 64 Meanwhile, China must reduce its tariffs to zero on 539 imported goods — containing 18 agricultural products — from Taiwan by 2013, which accounted for 16.1% of Taiwan’s total exports to China in 2009.65 It is notable that among the zero tariff preference products Taiwan released (with the exception of several textile and petrochemical products), most of their import tariffs had already been reduced to 5% or even lower when Taiwan joined the WTO in 2002.66 _{As for China, the import tariffs on almost all the items listed in the}

61 _Ibid.

62 _{MOEA, ROC, “The Economic Cooperation Framework Agreement”.}

63 _{Ibid.; see also Hong and Yang, “The Economic Cooperation Framework Agreement between China}

and Taiwan”, 90-92.

64 _{MOEA, ROC, “The Economic Cooperation Framework Agreement”.; Tung and Yeh,}

“Development of a Cross-Strait Economic Cooperation Framework Agreement”, 42.

65 _Ibid.

early harvest list were still higher than 10% before 2010, and the taxes on several household appliances had even reached 35%.67 By this reasoning, economically, the ECFA should be more beneficial for Taiwan’s exports. Nonetheless, before concluding that Taiwan has benefited from the ECFA, the huge outflow of Taiwan’s capital towards the Chinese market must be examined.

Indeed, despite the suspended sub-agreements for the liberalization trade in goods and services, Taiwanese investment in the mainland had peaked at US$14.6 billion in 2010, accounting for 83.81% of Taiwan’s total outward investment that year.68 The fact that Chinese enterprises only invested US$94.3 million into the Taiwanese market in 2010 magnifies the considerable degree of asymmetric economic interdependence between China and Taiwan.69 Moreover, despite tense debates in Taiwan, an important sub-agreement of ECFA the BIPPA which aims to not only facilitate but also protect bilateral investment was reached between China and Taiwan in 2012.70

So far, owing to the pending CSSTA, the BIPPA is only applicable to investments from Taiwan’s manufacturing industries, as well as several finance institutions contained in the early harvest list of ECFA. In spite of its limited scope of application, the capital account deficit in Taiwan peaked at US$15 billion in 2014 after signed the BIPPA with China in 2012.71 The huge amount of capital outflow from Taiwan seems to support scholars’ arguments that cross-Strait economic

67 _{MOEA, ROC, “The Economic Cooperation Framework Agreement”.}

68 _{Investment Commission, MOEA, ROC, “Monthly Report (December 2015)”, 2016, accessed April}

17, 2016, http://www.moeaic.gov.tw.

69 _Ibid.

70 _{SEF, “Chronology of Meetings”.}

integration may cause Taiwan’s economy to be “hollowed out” by China.72 Consequently, without a convincing explanation as to why this “hollowing-out” effect is not a real threat, the Taiwanese government has faced difficulties in promoting ECFA sub-agreements.73

The most prominent obstacle to the government’s initiative was the Sunflower Movement that began on March 18th, 2014. Organized by Taiwanese university students, the protest consisted of the occupation of the Legislative Yuan to demonstrate against the intensive economic ties with China and to safeguard Taiwan’s sovereignty.74 These students alleged that the negotiation process of the CSSTA as casual and opaque, despite the fact that the service industry makes up nearly 70% of Taiwan’s GDP.75 Thus students called on legislators re-review this agreement by adopting the “item-by-item” review process.76 _{Most significantly,}

protestors also connected the issues of cross-Strait economic integration with Taiwan’s democracy and sovereignty.77 By comparing the case of cross-Strait economic integration with the cases of asymmetric economic interdependence between Germany and Eastern European countries before World War II, several scholars who participated in this protest appealed to the government to take China’s reunification strategy seriously.78 Eventually, all bilateral negotiations over the sub-agreements of the ECFA signed between 2013 and 2014 (see Appendix I) were suspended in the aftermath of the Sunflower Movement, and therefore the analyses of China’s commercial diplomacy in the subsequent chapters of this thesis finish in

72 _{Tanner, Chinese Economic Coercion Against Taiwan, 18-20; Hong and Yang, “The Economic}

Cooperation Framework Agreement between China and Taiwan”, 88-90.

73 _{Magcamit and Tan, “Crouching Tiger, Lurking Dragon”, 92-99.}

74 _{Rowen, “Inside Taiwan’s Sunflower Movement”, 6.}

75 _Ibid. 76 _{Ibid., 5-6.} 77 _{Ibid., 6-9.}

2014.79