Economics vs Security

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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 (SEPTEMBER–DECEMBER 2006), pp. 347-349Published by: Lynne Rienner PublishersStable URL: http://www.jstor.org/stable/23417932Accessed: 11-11-2015 13:06 UTC

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Journal of East Asian Studies 6 (2006), 347-349

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

Ming Wan

The

Taiwan Strait conflict is an important case for testing the inter

action between economics and security. The economic ties be

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 Käst

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



348 A Comment on Kästner

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, Käst 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



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.



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Economics vs Security