Economics Versus Security in Cross-Strait Relations: A Comment on Kastner

Author(s): Ming Wan

Source: Journal of East Asian Studies, Vol. 6, No. 3 (SEPTEMBERDECEMBER 2006), pp. 347-349
Published by: Lynne Rienner Publishers
Stable URL: http://www.jstor.org/stable/23417932
Accessed: 11-11-2015 13:06 UTC

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at http://www.jstor.org/page/
info/about/policies/terms.jsp
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content
in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship.
For more information about JSTOR, please contact support@jstor.org.

Lynne Rienner Publishers is collaborating with JSTOR to digitize, preserve and extend access to Journal of East Asian Studies
.

http://www.jstor.org

This content downloaded from 203.78.9.149 on Wed, 11 Nov 2015 13:06:11 UTC
All use subject to JSTOR Terms and Conditions

Journalof East Asian Studies 6 (2006), 347-349

Economics Versus Security

in Cross-Strait Relations:
A Comment on Kastner
Ming Wan

Taiwan Strait conflict is an important case for testing the inter

economics and security. The economic ties be

The action between

tween Mainland China and Taiwan are close and are getting closer,
however one measures them. At the same time, the Taiwan Strait is rec
ognized correctly as a hot spot that would potentially involve several
great powers in a military conflict. Does economic integration across
the Taiwan Strait make military conflict less likely or not? Scott Kst
ner addresses this important practical and theoretical question. His ar

ticle contributes to a useful conversation on the issue but provides an

inadequate answer.

To start with, the essay addresses its central question only indi
rectly. Its main focus is on whether Taiwanese leaders Lee Teng-hui
and Chen Shui-bian have been constrained by cross-Strait economic
ties in their policy toward the Mainland. Kastner's answer to that ques

tion is "no," which leads to his pessimistic view of the effect of eco
nomic integration on the likelihood of conflict.
Kastner acknowledges that he is talking about the Taiwan side of

the equation. I agree that the policy choices of the Taiwanese govern
ment matter. Taiwan's "provocation," even if considered only a reaction
to Beijing's hostility, is the most likely trigger for a hostile reaction from
China, which would move the two sides closer to military conflict.
At the same time, to answer the central question Kastner has raised,
one has to examine whether economic integration has constrained Bei

jing's policy choices or transformed its preferences as well. In addition,

one has to examine the preferences of the United States as a principal
player in this dangerous game.
With high stakes in this potentially explosive issue, both China and

the United States have recently acted to minimize the "shock effect" of
the policy declarations of the Taiwan government. Since summer 2004,
347

This content downloaded from 203.78.9.149 on Wed, 11 Nov 2015 13:06:11 UTC
All use subject to JSTOR Terms and Conditions

348

A Comment

on Kstner

the Chinese government has shifted its Taiwan policy. Having learned
the lesson of dancing to Taipei's tune, Beijing has increasingly turned
to Washington to help manage tensions. China's economic interests
partly explain this shift. But it is not just economic ties with Taiwan,
but also its far more important ties with the United States, that make
Beijing think twice about risking a military conflict with the world's

sole superpower. Economic ties with China have also affected US

thinking. China's integration with the global market promises a
changed China that the United States is more likely to live with peace
fully down the line.
To understand whether economics

has made cross-Strait conflict

less likely, one has to look at whether economics has made military
conflict less likely between China and the United States. Put differ
ently, if we treat the prospect of military conflict in the Taiwan Strait as
a dependent variable, one has to consider China and the United States
as principal causal factors. In this strategic dynamic, any discussion of
Taiwan, or even cross-Strait economic relations, will be insufficient.
Kastner acknowledges that Taiwanese leaders believe that economic
ties have constrained Mainland

Chinese leaders and that is why they

think that they can take greater risk. The moral hazard problem of Tai
wan's proindependence leaders taking advantage of Beijing's econom
ics-driven moderation is the most interesting point in the article, but it
is subordinated to the author's main point about the constraining effect
of economic ties. With respect to his account of the Taiwan story, Kst
ner

has

focused

narrowly

on

Lee

and

Chen.

But

if we

want

to know

why Lee and Chen have not changed their orientation toward Mainland
China despite closer bilateral economic transactions, we would need to
start with the fact that election-driven identity politics trumps economic
interests. This fact does show that economic integration is not every
thing, which would support Kastner's pessimism. But no one argues
that economic

interests always matter more than identity or other

causal variables. What is required is a more in-depth analysis of why
identity politics trumps economic interests. Moreover, to assess the im
pact of economic integration, it is essential to consider how economic
integration has affected Taiwan's domestic political economy and iden
tity politics.
Methodologically, Kastner expresses his intention of using a causal
mechanism approach for his essay, a sensible choice given that it deals
with a single case with deep historical and cultural roots. But he then
cites a lack of covariance

of economic ties and political ties as the prin

cipal evidence that the economic integration claim does not hold. One

This content downloaded from 203.78.9.149 on Wed, 11 Nov 2015 13:06:11 UTC
All use subject to JSTOR Terms and Conditions

Ming Wan

349

adopts a causal mechanism approach precisely because statistically in

ferred correlations do not necessarily tell us whether a causal relation

ship actually exists. Consistent with the choice of methodology in the

article, a lack of correlation should not matter that much; what matters
is whether things could have been worse. Kastner recognizes that such

a counterfactual logic should be at the center of his empirical research.

But he cites only one case, Lee's "special state-to-state" speech in July
1999, to make his case that economic considerations have not had a
constraining effect. This is problematic. There is substantial variation
in both Lee's and Chen's approach toward the Mainland over time, as
well as differences between Lee and Chen. Lee's 1999 "two-state" dec
laration was on one end of the spectrum of positions he took over the
course of his presidency. The point is that economics does not always
lose out, even for Lee and Chen.
The section on economic signaling opens a new front of inquiry
that does not flow from the previous sections. And it follows a some
what tortured line of argument. Economic integration may contribute to
peace because it allows the countries involved to hurt each other. Since
Beijing has refused to sanction Taiwan, economic integration does not
make conflict less likely. Ironically, the facts presented in the section
are mostly about Beijing's reluctance to use economic cards to punish

Taiwan precisely because of the constraining effect of economic ties.

As Kastner recognizes, the Chinese government does not want tension

to spill over into commercial relations because the Chinese economy

would be hurt. This discussion seems to weaken his central claim that
economic factors are not constraining.
An alternative logic is that economic integration makes military
conflict less likely because countries have an additional weapon of "at
tracting." Beijing leaders now do see economic ties as a weapon to at
tract Taiwan into China's orbit. Whether or not Beijing can realize its
goal of national unification in this fashion, such thinking nonetheless
now has a calming effect on Beijing's behavior.

This content downloaded from 203.78.9.149 on Wed, 11 Nov 2015 13:06:11 UTC
All use subject to JSTOR Terms and Conditions