China advised to remain open, engaged as year of tension appears inevitable
- As heightened tensions seem set to continue through 2024, analysts have encouraged China to rely on openness and engagement to weather strained ties
- Trade agreements like the Regional Comprehensive Economic Partnership should be emphasised, they said, in face of challenges from US and others
With 2024 shaping up to be a challenging year centred around major elections, China analysts have foreseen further tensions with the United States and are calling for Beijing to counteract this trend by staying open to the world and cementing regional networks to build a solid economy.
The Taiwan election on Saturday – which saw William Lai Ching-te of the pro-independence Democratic Progressive Party elected president of the island for the next four years – and the US presidential election in November are set to reflect a thornier set of circumstances that will need to be handled carefully by Beijing, they said.
“[Mainland China can] provide favourable policies to foreign investors, enhance intellectual property rights protection, and [guarantee] equal treatment between foreign firms and local firms,” she added.
He Weiwen, a senior fellow with the Beijing-based think tank Centre for China and Globalisation, said it would be impossible for Taiwan to join the IMF but suggested the mainland “consistently work on innovation and develop hi-tech on its own.”
“The IMF follows the United Nations General Assembly Resolution 2758 that the government of People’s Republic of China is the only representative of China,” he explained.
Beijing sees Taiwan as a part of China to be eventually reunited, by force if necessary. Most countries, including the US, do not recognise Taiwan as an independent state.
Taiwan chip sector is ‘world’s common asset’: president-elect William Lai
“[We can] cooperate with the world to counter containments, especially to enlarge collaborations with the European Union. [And] work with US hi-tech firms, particularly the multinationals, to maintain and propel supply chain cooperation,” He said.
With Lai set to serve a four-year term, Alicia Garcia-Herrero – chief economist for Asia-Pacific at Natixis – said that the US would ask Taiwan to join its alliance with the Netherlands and Japan on controlling the export of semiconductors and computer chips to the mainland.
“It would be a step that the US might require from Taiwan [to offer] more support,” she explained, noting the mainland could react by stopping the entire Economic Cooperation Framework Agreement (ECFA) with Taiwan.
The Republican-controlled House passed the bills from Lucas and Kim by voice vote on Friday, and both will be sent to the Democratic-controlled Senate as the next step before passage.
But approval would be largely symbolic, Garcia-Herrero said, as “the US cannot make such a decision on its own” because policies from international organisations like the IMF “depend on all members” and it will be “impossible” to get majority support.