Business must go on

What can we learn from China-Taiwan trade ties?

Business must go on
The November 7 meeting between the leaders of People’s Republic of China (PRC) and the Republic of China (ROC, popularly known as Taiwan) – their first since their split at the end of the Chinese Civil War in 1949 – has lessons for India and Pakistan.

The China-Taiwan political rift is in some ways similar to the one between India and Pakistan, although there are some differences.

China considers Taiwan a breakaway province which will one day be reunited with the mainland. The PRC calls it One-China Policy, which means that there is only one state called China, despite the existence of two governments that claim to be China. They do not recognize each other as legitimate national governments.

“Taiwan is part of the sacred territory of the People’s Republic of China,” the preamble to the PRC constitution says. “It is the lofty duty of the entire Chinese people, including our compatriots in Taiwan, to accomplish the great task of reunifying the motherland.”

India and Pakistan recognize each other as legitimate independent states, but there are certain entities in India that believe in the idea of ‘Akhand Bharat’, or Undivided India. The Vishwa Hindu Parishad, a right-wing Hindu nationalist organization, is a strong proponent of this idea. Its leader Praveen Togadia once stated: “Hindu birth rates should increase so that the Indian flag flies in Kandahar, Lahore, and Dhaka.” The Hindu Mahasabha, the Rashtriya Swayamsevak Sangh (RSS), and even some in the Bhartiya Janata Party (BJP) are proponents of the idea of a ‘United India’.

Student protesters against a China Taiwan trade pact peak out from behind a cartoon character of Taiwan's President Ma Ying-jeou hung on the occupied legislature in Taipei last year
Student protesters against a China Taiwan trade pact peak out from behind a cartoon character of Taiwan's President Ma Ying-jeou hung on the occupied legislature in Taipei last year

Across the border in Pakistan, some people believe that India wants to dismember Pakistan because it has never really recognised Pakistan as an independent country. To substantiate their viewpoint, they say that the dismemberment of Pakistan in 1971 was triggered and finally executed by India. This belief is not entirely ill-founded, and there have been statements time and again from the Indian side cementing this viewpoint. For instance, in the wake of the recent ceasefire violations on the Line of Control, BJP Leader Bhaskar Subramanian Swammy said, “We already ripped them into two last time. The next time we will break them into four pieces.” He did add that India did not want a war and would never initiate one.

Another divide that has continued to plague the relations between India and Pakistan – which is certainly not an issue between China and Taiwan – is religion. In fact, as per popular belief, religion was the very reason due to which the British India was divided and Pakistan was formed. Whenever there is an initiative to normalize ties between Islamabad and New Delhi, religious fundamentalists on both sides of the border remind us that Hindus and Muslims can never coexist, and there cannot be any cooperation between them.

A third very important aspect is the economy. A comparison of trade ties between China and Taiwan with those between India and Pakistan is eye opening. According to the Taiwan Bureau of Foreign Trade, the PRC is its biggest trading partner as of November 11, with a total trade volume of approximately $123 billion – a trade share of around 18%. Taiwan’s exports to the PRC are around $81 billion (22.7% of its total exports) and the imports are approximately $41.5 (13% of its total imports). On the other hand, according to the Indian Department of Commerce, India’s total exports to Pakistan in 2014-15 were $1,857 million – an export share of only 0.54%. The projected export figures in 2015-16 (April to August) are lesser, at $567 million – an export share of 0.51%. India’s total imports from Pakistan were $497 million in 2014-15 (0.1110% of its total imports), and the projected imports in 2015-16 (April to August) stand at $188 million (0.1118% of its total imports).
They do not recognize each other, but their trade volume was $123 billion

What is absolutely clear from this data is that economic or trade relations between countries, and especially between two neighbours, must never be overshadowed by the strains in their political relationship or differences in their religious inclinations.

The November 7 meeting between the Chinese and Taiwanese leaders was the first in more than 60 years, and they do not officially recognize each other, but their total trade was $123 billion. Indian and Pakistani leaders meet each other regularly, carry out negotiations to resolve their differences regularly, and have officially recognised each other since their independence, but their total mutual trade is just over $2 billion. This is a matter of serious concern for leaders on either side of the border. We must follow the China-Taiwan example.

The writer is a civil servant