The Politics Behind Taiwan’s AIIB Bid

Expect the controversy over Taiwan’s application to join the Beijing-led financial body to spill into the 2016 elections
J. Michael Cole

The sudden announcement on the evening of March 30 that Taiwan had applied to join the Asian Infrastructure Investment Bank (AIIB) — Beijing’s answer to the World Bank and the Asian Development Bank — caused some consternation after it was discovered that Taiwanese authorities agreed to join despite Beijing’s precondition that it do so under the “one China” principle. Lack of transparency, the absence of consultations or review within the legislature, as well as uncertainty over which channels were used to submit the application have raised serious questions about what happened. Alarming though this may all be, expect more trouble ahead as the AIIB question will likely become an item of contention in the lead-up to the 2016 elections and a challenge for the Democratic Progressive Party (DPP).

The DPP’s handicap in all this is the perception, cultivated by the Chinese Nationalist Party (KMT) and Beijing, that the party is “bad” for Taiwan’s economy, that it is “anti-trade.” Try as it might to dispel that notion, the stigma has stuck. And yet, in the 48 hours prior to the unilateral announcement that Taipei had applied to join the AIIB as a founding member, DPP Chairperson Tsai Ing-wen (蔡英文) — a trade negotiator — adopted a wait-and-see position. It was only after the application was announced, and when the “black box” nature of the process were exposed, that the DPP issued a second, and this time stronger, response.

As the DPP spokesperson said, Taiwan is an important actor in regional trade and is keen to increase its participation in regional economic integration. However, the party maintains that democratic procedure and proper oversight cannot be sacrificed in the process. Protesters from the Black Island Youth Front who gathered outside the Presidential Office on March 31 made similar calls for transparency and accountability.

The DPP isn’t opposed to joining the AIIB per se. However, it argues — and rightly so, in my opinion — that more information and evaluations are necessary before Taiwan can make the decision to join a body about which little is known. The complex nature of relations between Taiwan and China adds variables to the equation and therefore calls for even greater caution, given the political implications.

The fact that Taiwan was invited to apply under “one China” is not accidental. With the Jan. 16 presidential elections approaching, AIIB will likely become a political tool for Beijing and the KMT to discredit the DPP, much as they have over the so-called 1992 consensus. The “yes, but” precondition, and the Ma Ying-jeou (馬英九) administration’s agreeing to join under “one China,” has already telegraphed Beijing’s strategy.

It’s pretty clear that whoever runs for the KMT in 2016 will support joining the AIIB to ensure that Taiwan is not “marginalized.” The symbolic cost to the nation’s sovereignty (agreeing to “one China,” perhaps joining as “Chinese Taipei,” and so on) will be rationalized as the necessities of pragmatism. The KMT will therefore be presented as the “rational” party that seeks the continuation of warm relations with China, that is good for the economy, and that will not let trivialities get in the way of integration.

For its part, the DPP will maintain that agreeing to “one China” and to mechanisms that portray Taiwan as being part of China is unacceptable, both to the public and to its constituents. It will also argue that like the Cross-Strait Services Trade Agreement (CSSTA) last year, proper democratic mechanisms must be respected. By emphasizing the need for government accountability, it will be portrayed as an irresponsible “troublemaker” that is once again set on poisoning relations between Taiwan and China, and that ultimately is against regional trade integration. The accusations may be invidious and based on a misreading of the DPP’s intentions, but they will occur nonetheless. And very likely, foreign capitals will join in.

The KMT is already presenting the controversy using a Manichean position: You’re either for joining the AIIB (“black box” notwithstanding), or you’re against it. But there is actually a third option — joining, but doing so only after proper reviews have been held and in a way that does not undermine the sovereignty of this nation. That appears to be the DPP position on the matter.


J. Michael Cole is editor in chief of Thinking Taiwan, a senior non-resident fellow at the China Policy Institute, University of Nottingham, and an Associate researcher at the French Center for Research on Contemporary China (CEFC) in Taipei. His latest book is Black Island: Two Years of Activism in Taiwan.

5 Responses to “The Politics Behind Taiwan’s AIIB Bid”

April 01, 2015 at 7:17 am, Anatole Pang said:

What utter nonsense! This supposed “triangulation” is a complete myth – could you point to ANY basis at all which supports the idea that China would allow Taiwan to join the AIIB on any terms other than “One China”? If you are basically against joining the institution you should be clear, but don’t dress it up as some sort of lack of common sense on the part of the KMT. The choice, assuming one buys into the opportunities that the AIIB will bring, is clear; furthermore the it is an institution which is also clearly on “the side of history”, as the rhetoriticians of the White House would have it. Just for good measure, there is no way that China’s treatment of Taiwan would cause any of the other members or potential members (which as of this morning now appears to include Japan) to think twice either.

Sorry but this posting is premised on a shallow piece of wishful thinking, no more, no less.


J. Michael Cole

April 01, 2015 at 9:21 am, J. Michael Cole said:

Anatole: You’re up in arms because your premise is that only Beijing has the right to define the parameters of reasonableness. There is no basis for “the idea that China would allow Taiwan to join the AIIB on any terms other than ‘One China’” simply because Beijing doesn’t compromise. But why must one always give in to Beijing’s maximalism to not be called unreasonable? Why can’t Beijing compromise for once. Tell me, what is Taiwan’s designation at the WTO? (Yes, Taiwan’s name at the ADB is “Taiwan,China” but that is because its initial name, ROC, was changed after the PRC joined, a move which it has disputed, by the way, though its options were either to accept it or drop out…and we all know what good dropping out did Taiwan at the U.N.) Taiwan has every right to be treated as an equal partner in the AIIB — especially as it will be donating millions of dollars to help others. My view, since you asked, is that Taiwan should join as many multilateral bodies as possible. But it must do so in a transparent and democratic fashion. So no, I am not against the AIIB per se.


April 01, 2015 at 12:46 pm, Jenna Cody said:

Something is very wrong with your comments – anything over 2 lines and the “Post Comment” button gets pushed down, and I can’t get it to come back up to click it.


J. Michael Cole

April 01, 2015 at 12:55 pm, J. Michael Cole said:

Yes, we’re aware of the problem. We will soon migrate the comments section to Disqus. Apologies for the inconvenience.


April 13, 2015 at 9:59 am, justrecently said:

Well, let me tell you how much I appreciate your blog before you are moving the commenting function to “Disqus”. Best, JR.


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