Lai's policy is 'economic suicide' for Taiwan

Editor's note: Liu Kuangyu is an associate research fellow with the Institute of Taiwan Studies under the Chinese Academy of Social Sciences. The article reflects the author's opinions and not necessarily the views of CGTN. It has been translated from Chinese and edited for brevity and clarity. 

On May 20, Lai Ching-te, the new leader of China's Taiwan region, assumed office, which will influence the island's economy and cross-Straits economic and trade trends. This "pragmatic advocate of Taiwan independence" has worryingly begun to shape his "economics of Taiwan independence".

First of all, he proposes that "economic security is national security". This is the second of Lai's "Four-pillar plan for peace", aligning with the U.S. and Western rhetoric on "relating economy to national security" and insisting on not following the "old path of economic dependence on Chinese mainland". A clear proponent of sailing against the wind, he is advocating the misguided strategy of "decoupling from and reducing economic and trade reliance on Chinese mainland" and escalating the region's cooperation with the U.S. and the West to impose upgraded suppression and containment against China.

Second, he heavily bets on the "five trustworthy industries", namely, semiconductors, artificial intelligence, military, security monitoring, and communications. This indicates that Lai will integrate the competitiveness and innovation potential of Taiwan's most core industries into U.S. and Western supply chain restructuring of "democratic confrontation against authoritarianism" and "de-Sinicization".

Moreover, Lai ambitiously claims to build a "Taiwanese economic empire on which the sun never sets". He forces Taiwanese companies to expand abroad, relinquishing economic control; he will also sign new agreements to promote "trade diversification" and "globalization of enterprises" with the U.S. and the West, expediting Taiwan's "economic colonization" through multiple dimensions such as investment and trade.

Clearly, under the guise of "Taiwan's security", Lai actually aims to fully upgrade and deepen the "decoupling from Chinese mainland and integrating into the West" strategy, thus consolidating the economic foundation for resisting unification and seeking independence. This is not a positive signal for the already distorted and disordered Taiwan economy, furthermore causing negative impacts on cross-Straits economic and trade relations.

Lai's economic policy is highly antagonistic and instrumental. It narrowly focuses on pleasing the strategic needs of the U.S. and the West and the interests of the military-industrial complex and "green political and business groups". This is likely to exacerbate Taiwan's current structural, civil, and fundamental economic issues, including energy shortages, industrial imbalances, unequal distribution, inflation, and capital plundering. It will make Taiwan more vulnerable to the turbulent and volatile international environment.

At present, Taiwan's trade dependence on the mainland remains as high as 40 percent, and Taiwan earns substantial surpluses from the mainland. Cross-Straits economic and trade relations, alongside the expansive mainland market serve as a haven, power source, and growth pole for Taiwan's economy. The two sides have unlimited innovative and development potential in new quality productive forces, emerging strategic fields, and cutting-edge technologies. Lai's decoupling and confrontational route is tantamount to "economic suicide" for Taiwan.

(Cover via CFP)