High-quality cross-strait economic ties refute Lai's separatist claims

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. 

The Lai Ching-te administration has aggressively pursued a path of accelerating cross-strait "decoupling and supply chain severance", attempting to establish a globally influential economy, and seeking to position "economics of Taiwan independence" as a security and international strategy. Recently, Lai actively proposed to the US that Taiwan align with its efforts to strengthen "non-red supply chains". His "17 strategies of seeking independence and rejecting reunification" prioritize a "Taiwan first, global layout" approach to cross-strait trade and economy, thereby becoming the primary disruptor and troublemaker in this arena.

In reality, despite geopolitical uncertainties, rising protectionism, and deliberate disruption and interference by the Democratic Progressive Party (DPP) authorities, cross-strait economic and trade cooperation has maintained stability, continued to grow against the odds, and achieved deeper integration, demonstrating remarkable resilience and risk resistance. Data shows that in 2024, cross-strait trade reached $292.97 billion, marking a 9.4 percent year-on-year increase. Taiwan's trade dependence on the mainland still stood at 30 percent, with a trade surplus of nearly $150 billion. On a macro level, the economic and social development of both sides of the Taiwan Strait remains highly correlated. From 2013 to 2022, before the DPP's aggressive "decoupling" efforts, the economies of both sides grew at an average annual rate of over eight percent and three percent, respectively, significantly outperforming other key East Asian economies such as Japan and South Korea. Taiwan's trade surplus with the mainland grew at an annual rate of 12.8 percent. These figures reveal that the economies of both sides are complementary and their industrial cooperation is mutually beneficial. 

Industries on both sides of the Strait have distinct areas of focus, leveraging their respective resource endowments to develop an integrated and complementary industrial chain. For a long time, Taiwan enterprises, with their technological expertise and international experience, have secured key positions in global supply chains for consumer electronics, machinery, equipment, and more. Meanwhile, the Chinese mainland, with its vast market and comprehensive system of industrial chains, has fostered economies of scale in raw material supply, manufacturing, logistics and storage, software R&D, and end-user consumption.

The two sides have learned from each other and integrated deeper, laying a solid foundation for a shared cross-strait market and a community of common interests. In the Pearl River Delta's electronics cluster, the Yangtze River Delta's high-end manufacturing hub, and Fujian's demonstration zone for cross-strait integrated development alone, over 100,000 Taiwan-funded enterprises participate in industrial collaboration. This multi-tiered, diversified, and functional division of labor allows enterprises from both sides of the Taiwan Strait to tap into the benefits presented by a market with 1.4 billion consumers, forming a virtuous cycle of factor mobility and value creation.

At its core, cross-strait cooperation on industrial chains is an autonomous choice made by market entities following the laws of economics. It also serves as a crucial pillar of well-being for people on both sides. For years, the mainland market has accounted for approximately 40 percent of Taiwan's exports and 20 percent of its imports, with total cross-strait trade making up about 30 percent of Taiwan's total external trade. The mainland is Taiwan's largest trading partner and primary source of trade surplus. This enormous economic force has been a crucial factor behind Taiwan's doubling of per capita GDP over the past decade. Furthermore, it not only benefits direct stakeholders in manufacturing, tourism, and agriculture but also serves as a key driving force behind Taiwan's overall economic stability, prosperity, and social welfare.

Taiwan's agricultural exports to the mainland exceed $5 billion annually, and over 800 Taiwan-related enterprises operate in 28 national-level parks for agricultural entrepreneurs from Taiwan across the mainland. Products such as Yongfu high-mountain tea, Xianyou persimmons, and Qinzhou oysters have become household names on both sides of the Taiwan Strait. Cross-strait exchanges have directly benefited grassroots farmers and fishers, who are among the most marginalized and lowest-tier participants in Taiwan's social distribution and industrial division of labor.

These practices demonstrate that market-driven industrial and supply chain integration not only optimizes resource allocation but also ensures that people on both sides of the Strait share in development opportunities.

At present, the cross-strait economic cooperation is undergoing a qualitative transformation from the integration of factors to a systematic restructuring. On the one hand, the Chinese mainland is committed to driving the institutional development for cross-strait economic cooperation. This year's government work report, for the first time, explicitly proposed that "we will improve institutions for promoting economic and social exchanges across the Taiwan Strait", signaling that the mainland will continue to refine the top-level design and policy pathways for integrated development. This move further reinforces the confidence and sense of security for businesses and individuals from Taiwan seeking development opportunities in the mainland.

On the other hand, the mainland is accelerating the establishment of a unified national market while actively participating in the reshaping of the global market. With a strong focus on developing new quality productive forces and driving high-quality economic growth, the mainland is taking the lead in cross-strait economic and trade development to promote industrial transformation and upgrading of both sides through bolder strategies and more innovative initiatives, opening new frontiers for cross-Strait cooperation. In particular, as the artificial intelligence era dawns, the mainland's strategic blueprint for new infrastructure presents boundless opportunities for Taiwan's pillar industries and emerging sectors. Meanwhile, the US and Western countries have ramped up efforts to exclude Taiwan from industrial and supply chains, and the mainland is focused on expanding, supplementing, and strengthening these chains. This landscape will also help boost the international competitiveness of both sides' industries and elevate their standing in the international division of labor.

Essentially, Chinese modernization, as an important part of the new model for human advancement, fundamentally aims for common prosperity, which aligns closely with the intrinsic aspirations of the people in Taiwan for a better life. Taiwan's Chinese National Federation of Industries has repeatedly highlighted the island's structural industrial imbalances, persistent shortages in five key resources, and youth employment crises, calling for deeper cross-Strait economic and trade cooperation, expansion of shared opportunities in this area, and joint development with the mainland as the key to sustaining Taiwan's economic prosperity.

Unfortunately, Lai remains determined to defy historical trends, disregard the expectations of Taiwan's business community, and undermine the well-being of its people. The inevitable consequence will be self-inflicted harm, with Taiwan's industries bearing the brunt, sacrificing the interests of both Taiwan enterprises and the general public. Yet, this appears to be the essence of "Lai's economics of Taiwan independence", much like reducing Taiwan Semiconductor Manufacturing Company (TSMC) from a "shield" to a mere "tribute". He seems willing to trade away Taiwan's prosperity and resilience in exchange for external support for his pro-independence and Taiwan-independence agenda, gambling on the possibility of starting afresh and seizing illusory gains at great risk.