Abstract
The relationship between Taiwan and China in the past 30 years has been marked by the relocation of a large number of Taiwanese factories and industries, and their operators, the taishang (台商), to China, the very state threatening the independent existence of their own country. Many researchers have documented the taishang experience, but rarely are we presented with a broader attempt to analyse the historical and political dimensions of this phenomenon in both Taiwan and China. Françoise Mengin’s book provides just that study, and more. It is an important addition to studies on Taiwan and East Asia and will be welcomed by students and specialists alike.
Lengthy and detailed, the book is divided in four chapters of roughly 100 pages each. The first chapter begins with a critical overview of the cumbersome rise of an island-based business class under the Kuomintang regime in Taiwan from 1945 to the 1970s. Then Mengin analyses the shift to export-oriented policies first in Taiwan in the 1960–70s, then China in the 1980s, which she describes as ‘Thermidorian’ moments of the regimes where, following the model of the French Revolution, a pragmatic and managerial turn was taken in order to re-legitimate a regime in crisis without it having to give up its founding principles. The author also highlights Taiwan’s specific economic development based on small and medium enterprises (SMEs) and the ‘self-exploitation’ of the petty bourgeoisie that fostered the Taiwanese economic miracle. Chapter 3 provides an informed picture of diverse taishang communities and their modus operandi in China, who made their way across the Strait because of rising costs and demographic change in Taiwan and a string of benefits offered by Beijing. The final chapter analyses changes after 2000, first under Chen Shui-bian’s administration and the failed attempt to reconcile its pro-business orientation with its support for independence, and later the pro-taishang policies and rapprochement politics of the Ma Ying-jeou administration after 2008.
Mengin’s close attention to political economy, history and the concrete interplay between state policies and economic actors allows her to demonstrate how the rise of the taishang is not only linked to the political divide and an unrecognized frontier across the Strait, but also an unintended by-product of the Kuomintang regime’s survivalist policies. The book provides a synthesis of a wealth of past studies on Taiwan’s economy and entrepreneurs coupled with empirical research based on a series of interviews with political and economic actors from the 1990s to the late 2000s. The critical history of cross-Strait relations which the author presents is also informed by recent conceptualizations in political philosophy, and, in particular, it recaptures these interactions in terms of the depolitization of the political with significant consequences on the issue of sovereignty.
This book also highlights aspects of Taiwan’s contemporary history that are often not appreciated to the fullest extent. One is the colonial configuration of the Kuomintang regime until the democratization era, which, together with the war economy and anti-capitalist ideology under Chiang Kai-shek’s rule, had direct consequences for the structuring and the practices of economic actors. Far from the self-serving Kuomintang discourse on Free China, Mengin shows how Taiwan’s post-war economy was dominated by state and party ownership, monopolies, private profiteering from public goods, a rent-seeking system of patrons and clients all linked to ruling political actors, and a sustained effort to block the rise of an autonomous private capitalist class and economy. Later, rather than being the design of a developmental state, the export-oriented economic policies of the 1960s were initially devised to provide complementary legitimacy to a weakened regime in order to maintain the state’s ability to finance its defence effort. Mengin retraces here the development of the new export-oriented SMEs which fed the state-controlled economy while being forced to operate largely independently from the state, without access to bank loans and state support which were reserved for state-owned enterprises and well-connected regime collaborators. Once rising production costs undermined the profitability of SMEs in Taiwan in the late 1980s, many of them relocated to China, largely outside the control of the Taiwanese government which could do little but legalize their unauthorized flight after the fact.
Another aspect that Mengin documents well is the way the taishang became actively involved in China’s economic development spurred by Deng Xiaoping’s reforms. Rather than pursuing unification with China or promoting democratic practices across the Strait, the taishang have essentially been driven by opportunistic strategies, playing both sides’ hopes and fears to maximize their own profits. Where Beijing was concerned, the tai-shang have contributed tremendously to the country’s take-off in all aspects (including investments, technology, managerial skills, and international networks). But they also became perfect tools for China’s policy of ‘national unification by economic means’. In an unofficial and often uneasy relationship, mainly negotiated and secured at the local level to the personal benefit of Party cadres, the taishang also replicated the Taiwanese pattern of collusion between political agents and business operators, feeding the bureaucratic rent-seeking capitalism that emerged in China in the 1990s. Mengin also shows how the taishang have benefited directly from the closed border and unrecognized frontier, a situation which works to their advantage as they may obtain maximum protection from both sides, in the absence of which they would be forced to make hard choices concerning residence and immigration with detrimental consequences for their mobility and social and fiscal benefits.
The combination of the taishang’s immense wealth derived from their operations in China, their autonomy, and their interests which diverged from the Taiwanese state’s economic and strategic security needs under both the Lee Teng-hui and Chen Shui-bian administrations also had some important consequences for Taiwan. First, they increased the pressure on the state to liberalize cross-Strait relations, financing whoever is in power or in opposition to advance their interests. Second, when the Kuomintang under Lien Chan and later on Ma Ying-jeou decided to align its goals and interests with the taishang they acted as an important conduit for Beijing’s United Front strategy pushing towards a closer economic and political partnership across the Strait. Mengin reads this whole development as one that increasingly subjects Taiwan to the principle of a united China with significant negative impacts in terms of political freedom, human rights and democratic process, and a growing risk of ‘long-distance colonialism’ facilitated by China’s ‘hegemonic capital’ and its sympathizers within the blue camp in Taiwan.
Among the regrets the reader may have is first the lack of an index that hinders the full use of the book. There is also the relative absence of Taiwanese ‘society’ in the study, relegated behind state and economic actors. Yet a large part of contemporary Taiwanese history has been written by social actors, and often successfully against the objectives of the state or the business class. There is thus not much discussion of the issue of national identity – something taishang are indeed wary of as Mengin documents – and the spectacular change in public opinion away from Chinese identity and towards the continued separation of political entities across the Strait. That this shift has grown concurrently with the taishang’s flight and increasing economic interactions with China is part of the Taiwanese conundrum, and it creates challenges that all cross-Strait actors must face. Beyond direct political issues, the future of the taishang and their grip on Taiwanese economic policies are also linked to the uneven results of cross-Strait integration for the population, as well as the current recomposition of the East Asian economy which may usher in a new regionalizing phase for Taiwanese entrepreneurs. Research on these issues will in any case greatly benefit from the synthesis and detailed analysis of the political economy of cross-Strait businesses which Mengin offers.