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Amanda Bullington

Cross Strait Agreement Opens Trade Relations, Dances Around Sovereignty

This looks good, but real problems remain

On August 9, the two sides of the Taiwan Strait made yet another stride towards economic cooperation by signing the Cross-Strait Investment Protection and Promotion Agreement. The agreement is the culmination of the most recent official trade talks, and provides a framework for settling trade disputes, shortening the time needed for products to clear customs, and granting legal protections for Taiwanese or Chinese businessmen who are arrested by the authorities on the other side.

Unsurprisingly, some netizens on both sides of the strait were wildly optimistic about the latest agreement, anticipating that removing these barriers to trade will encourage the flow of investments. @鑫KOU’s comments on Sina Weibo, China’s twitter, were indicative: “We welcome our Taiwanese friends to come and do business together with us!” {{1}}[[1]] 欢迎台湾的朋友来合作![[1]] A number of netizens, like @小江琪, agreed with statements made by officials like Taiwan’s former representative for cross-strait relations Lai Shin-yuan (賴幸媛). Ms. Lai has pointed out that while the agreement “is not a panacea and can’t resolve every problem, it is building a safe first step and an important foundation for the protection of Taiwanese and Chinese businessmen.” {{2}}[[2]] 两岸投资保障和促进协议并非万灵丹,无法解决所有问题,但“建置了安全的第一步”,成为台商及陆商保障重要基础。[[2]]  

Former Mainland Affairs Council Chairwoman Lai Shin-yuan (left)

Some netizens, however, were a bit more reserved, comparing the agreement to the early years of the Closer Economic Partnership Agreement (CEPA) between China and Hong Kong. For example, @北方思想库 said that “the agreement is pragmatic, down-to-earth, matter-of-course; we see that pragmatic solutions are becoming the trend in cross-strait relations. But from another point of view, that the two sides were able to agree this time can be illustrated by the idiom ‘loud children get the candy.’” {{3}}[[3]] 务实发展,脚踏实地,水到渠成,客观条件驱动才是两岸关系的发展总趋势。 其他观点 、本次陈江会签署的协议说明:爱闹腾的孩子有糖吃。[[3]] Still other netizens like @天津卫老爷子 mocked the shortcomings of the agreement, joking that the most important accomplishments of the new agreement will involve the social behavior of businessmen: “Taiwanese businessmen who love entertaining and socializing must be careful, because the agreement includes a 24-hour notification mechanism for drunk-driving and being caught with prostitutes—the Chinese authorities will notify family members within a day.” {{4}}[[4]] 但对不少喜爱应酬交际的台商来说,却是一大警惕,因为协议里头纳入了24小时通报机制,未来台商因酒驾、嫖妓遭捕,陆方将依规定,在一天内通知大陆家属。[[4]]

Problems ahead?

Many acknowledged that there is much more work to be accomplished before the two sides can have truly open and balanced trade relations. The trading volume remains very uneven, with more than US$120 billion of Taiwanese investments in China but only about US$300 million of Chinese investments in Taiwan.

In addition, negotiators at the trade talks could not avoid the pervasive question of Taiwan’s national sovereignty. Taiwan insisted throughout the talks that Taiwanese businessmen in China be given the right to a third-party arbitrator in the case of business disputes. Beijing simply refused, given that the right to third-party arbitration in China is currently only reserved for foreign business entities. Since China does not recognize Taiwan as a foreign state, granting Taiwanese businesses these rights was out of the question. In the final agreement, Taiwanese businessmen were given the right to use Taiwanese arbitrators, but not third-parties. One netizen @半岛鸟ER addressed this as the elephant in the room, saying that although no one wants to bring up issues of national sovereignty in economic talks, ignoring it is equivalent to both sides burying their heads in the sand. “The sovereignty issue is a diplomatic issue, so understandably they wanted to avoid it in trade negotiations. But if people keep using this as an excuse, it is just typical self-deception.” {{5}}[[5]] 在涉及主权问题上的外交场合,如此避免当然有理由,但如果这个理由一直成立的话,那就是典型的掩耳盗铃。[[5]]

The corner of a Taiwan-themed shopping arcade in China

Furthermore, some netizens felt that the agreement was nothing more than a façade by the two governments to pretend to be working toward economic cooperation. In the weeks following the agreement many netizens doubted the actual effect of the agreement, mentioning aggravations faced by Taiwanese businessmen planning to invest in China. For instance, @don1705 posted about last-minute disputes that almost stopped Beijing’s “Taiwan City” shopping center from opening. “Even though the investment protection agreement went into effect, problems for investors continue to occur. More than a hundred Taiwanese businesses had intended to move into the mall and start operations in May, but the mall developers unexpectedly raised issues with the lease…many businesses that had already invested more than tens of millions of dollars were worried for their investments. Because the mall is owned by mainland Chinese entities, the Taiwanese investors are merely tenants without any protection. {{6}}[[6]] 雖然簽署兩岸投資保障協議,但糾紛屢見不鮮,逾百家台商有意前往設攤,不料因開發商傳出租糾紛,讓5月要營運的「北京台灣城」,突然停擺,連帶30家已投逾千萬資金的台商,擔心血本無歸。受害的台商抱怨,由於該商場是由陸商經營,因此台商角色像「房客」,未受保障。[[6]]

With such mixed feelings about the usefulness of the investment agreement, perhaps netizen @dragonballz1994‘s question is on everyone’s minds: “In the blink of an eye we finally have had eight trade talks, and we signed the investment protection agreement…in this time, things have changed but are we closer or farther apart? Friendlier or more distant?” {{7}}[[7]]眨眼已经是第八次江陈会,投保海关协议也终于签了…物转星移,更远或更近、更亲或更疏?[[7]]  

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Amanda Bullington

Amanda is currently studying Mandarin at the National Taiwan Normal University in Taipei. Before Taipei, she spent four years living in Washington DC, getting a degree in International Affairs and occasionally sneaking off on backpacking trips or study abroad programs in various Asian countries. She likes writing, yoga, sipping tea, and exploring the great outdoors.