Facing the transformation of the international order and the increasing influence of China in East Asia, policymakers in Taiwan acknowledge the necessity of engaging with China in order to survive the international political transformation and cope with more globalized economic competition. As presidential candidates, both Ma and Tsai require concrete cross-Strait policy platforms to inform the electorate about their methods to make use of Taiwan’s strategic position in East Asia as well as in the triangle relationship between China, Taiwan, and the United States. Since the principles of Ma’s and Tsai’s Cross Strait policy are respectively represented in the KMT’s “Golden Decade” and the DPP’s “Ten Year Policy Guidelines”, I briefly analyze the merits and shortcomings of their policy principles by comparing the two documents along with the security and economic conditions in East Asia.

China’s governing class is undergoing an authority handing-over process. Its current priority is to maintain domestic stability and peace in its neighborhood. Therefore, China is reluctant to see increasing competition in the cross-Strait relationship, initiated by US arms sales to Taiwan. It always tries hard to shape the cross-Strait problem as a domestic issue in order to drive out foreign intervention. In responding to China’s preference, the security dimension of the KMT and DPP’s cross-Strait policies have great similarity. On the one hand, they agree on maintaining a stable and peaceful cross-Strait relationship, since it is the most desirable outcome for most Taiwanese. On the other hand, they agree on improving self-defense capabilities against China since China does not relinquish its right of solving cross-Strait problems with a military approach. The KMT inclines to achieve the goal by technological innovation and arms sales primarily from the US, while DPP does not propose a concrete method.

However, a stable and peaceful cross-Strait relationship and enhanced military power seem contradictory. Neither Ma nor Tsai clarify how the two goals can coexist. In addition, from the perspective of US self-interest, the US needs China to deal with important issues in international affairs such as counter-terrorism and the Six-Party Talks. Foreign policy is always “realistic” and China’s role may compromise US willingness, or the contents of, arms sales to Taiwan. Accordingly, high dependence on US arms sales does not seem a cost-effective strategy and entails certain risks in the long-term. Moreover, the defense budget cut in recent years has led to domestic suspicion about the government’s determination to improve self-defense capabilities. Taiwan does not need (and cannot afford) an arms race with China, nor should it cut defense budgets year by year to express its benign motives to China . According to my experience of serving in the Taiwanese Marine Corps, it is more cost-effective to invest in developing advanced defense systems and increase the maintenance budget for self-developed systems as well as those we bought from foreign countries. Only by possessing a high quality (not large quantity) defense power capable of ensuring our own security do we have the leverage to negotiate the terms of a stable and peaceful Cross Strait relationship. Otherwise, China will call all the shots.

In terms of the economic dimension, China has made use of its large-scale internal market to increase Taiwan’s economic dependence and has tried to cut the political and economic connection between Taiwan and other countries in order to isolate Taiwan. Japan and South Korea also need China’s internal market for certain products (particularly the automotive and electronics industries) to stimulate their economic growth. China’s strategic objective is to increase East Asian countries’ dependence and thereby reduce US influence in the region. Further, China has become the second largest creditor (the first is Japan) of the US by buying huge sums of US governmental bonds. This increases China’s influence on US policy and ability to resist US attempts to shape East Asia’s balance of power.

Ma and Tsai propose different strategies to respond to this situation. Ma prefers active openness for Taiwan-China mutual investment through which he expects to resuscitate Taiwan’s economy and to make commercial profits. While Ma argues that the signature of the Economic Cooperation Framework Agreement (ECFA) with China (which provoked serious domestic debate) would facilitate free trade agreements (FTA) between Taiwan and other countries, the claimed effect has not been clearly discerned yet (though the Senate “suggests” US-Taiwan FTA). However, the US and South Korea signed an FTA recently. It increases the opportunity for mutual investment and intensifies US economic connections with East Asia. In addition, the technological level and investment environments in Taiwan and South Korea are quite similar. Under the US-Korean FTA, Taiwan must prudently deal with the substitution effects of investment caused by tariff variation.

Tsai possesses a more cautious attitude about the impact of openness for Chinese investment, and emphasizes governmental support for native industries and economic autonomy. She also argues that Taiwan should engage with China from a multilateral framework (e.g. WTO) rather than through bilateral interaction or reckless unilateral action. This seems a more secure strategy for a small country to interact with another country with a much larger economy. However, Tsai’s argument remains stuck at the conceptual level and we get no clue about any precise method to achieve this goal.

In my opinion, Tsai’s strategy is conceptually correct but very difficult to carry out due to China’s international influence. Ma’s strategy is relatively risky, but easier to implement because it is more consistent with China’s interests. In sum, every problem has a solution, and every solution is a problem. Taiwanese people have to make their choice on 14 January 2012.

Dr. Sheng-Chih Wang is a Research Assistant in the Department of Diplomacy at National Chengchi University, Taiwan.