Chinese Economic Coercion Against Taiwan

Chinese Economic Coercion Against Taiwan: A Tricky Weapon to Use

Murray Scot Tanner
Copyright Date: 2007
Edition: 1
Published by: RAND Corporation
Pages: 178
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  • Book Info
    Chinese Economic Coercion Against Taiwan
    Book Description:

    Since the early 1980s, the cross-strait relationship between Taiwan and mainland China has exploded, driven by economic and political reforms. As a result, each would suffer great economic pain and dislocation in the event of a major disruption in that rapidly growing economic relationship. This monograph analyzes the political impact of that relationship and evaluates the prospects for Beijing to exploit it by employing economic coercion against Taiwan.

    eISBN: 978-0-8330-4253-8
    Subjects: Political Science

Table of Contents

  1. Front Matter
    (pp. i-ii)
  2. Preface
    (pp. iii-iv)
  3. Table of Contents
    (pp. v-viii)
  4. Figures
    (pp. ix-x)
  5. Tables
    (pp. xi-xii)
  6. Summary
    (pp. xiii-xvi)
  7. Acknowledgments
    (pp. xvii-xviii)
  8. Abbreviations
    (pp. xix-xx)
  9. CHAPTER ONE Introduction
    (pp. 1-10)

    Economic relations between Taiwan and the People’s Republic of China (PRC) were virtually nonexistent from 1949—when China’s Guomindang (GMD, the Nationalist Party) government fled the mainland to Taiwan—until 1979, when the Communist Party embarked upon its historic policy shift toward market-oriented economic reform and opening to the outside world. Throughout this period, Taiwan, motivated by security concerns, maintained a rigid policy of no economic or political contact with the mainland. During much of this same period, the PRC leadership under Mao Zedong was committed to one of the world’s strictest regimes of economic isolation and autarky. There were...

  10. CHAPTER TWO Economic Coercion: Factors Affecting Success and Failure
    (pp. 11-32)

    This study examines Chinese efforts at “economic pressure” or “economic coercion.”¹ Economic pressure, coercion, or sanctions are usually initiated by large, internationally activist countries acting singly or at the head of a coalition of countries, and their targets are usually much smaller countries.² Countries that initiate sanctions or pressure usually do so as a surrogate or replacement for other policy measures, because they believe those alternative measures are either insufficiently harsh (as with diplomatic protests), or inappropriate to their policy goals, or potentially too dangerous (as with covert action or military attacks). Economic pressure often serves as a convenient and...

  11. CHAPTER THREE Taiwanʹs Struggle to Manage Expanding Cross-Strait Economic Ties
    (pp. 33-72)

    Throughout the presidential administrations of Chiang Ching-kuo (1975–1987), Lee Teng-hui (1987–2000), and Chen Shui-bian (2000 to the present), Taiwan’s government has increasingly feared that excessive economic dependence upon mainland China would give Beijing the leverage it desired to force Taiwan to the bargaining table on terms unfavorable to Taipei. One of Taipei’s most enduring goals in its mainland China policy has been to minimize the potential economic pain and disruption that China could inflict upon Taiwan through economic coercion. But the goal of minimizing mainland economic pressure has often come into conflict with Taipei’s desire to ensure continued...

  12. CHAPTER FOUR Economic Factors: Evaluating Taiwanʹs Vulnerability
    (pp. 73-102)

    This chapter analyzes Taiwan’s economic interdependence with mainland China in an effort to gauge the island’s potential vulnerability to mainland economic pressure. It focuses on the magnitude and importance of Taiwan’s cross-strait trade, investment, financial, and other economic relationships, as well as the vulnerability of Taiwan’s key economic sectors and infrastructure to mainland disruption. Based on an analysis of these relationships and vulnerabilities, this chapter assesses Beijing’s capacity to inflict economic pain or deprivation upon Taiwan as a source of economic leverage.

    As noted in Chapter Two, many experts on economic diplomacy have pointed out that the level of economic...

  13. CHAPTER FIVE Political Factors: Converting Economic Influence into Political Leverage
    (pp. 103-134)

    A central theme of this study, long stressed by experts on economic coercion, is that one country’s economic influence over another country does not automatically translate into political leverage. Chapter Two analyzed several of the intervening political factors that have historically had a powerful impact on the effectiveness of economic coercion, and are likely to influence mainland China’s capacity to convert its growing economic influence over Taiwan into effective leverage for achieving its key political goals. Briefly, these factors include

    the historical relationship among the initiating and target countries

    the nature of the goals or demands sought by the initiating...

  14. CHAPTER SIX Chinaʹs Economic Leverage: A Powerful Weapon, but Tricky to Use
    (pp. 135-144)

    The explosive growth of the China-Taiwan economic relationship since the 1980s has created a powerful and wide-ranging relationship of “asymmetric interdependence” between the two sides. Each side relies upon the other for important contributions to its economy, and each would suffer great economic pain and dislocation in the event of a major disruption in that relationship. But as Taipei’s leaders have long feared, Taiwan is dependent upon the mainland market for a far higher percentage and a far broader range of its economic activities than the mainland is dependent upon Taiwan. Taiwan’s economic reliance on mainland China is unquestionably—and...

  15. Bibliography
    (pp. 145-158)