1 2 4 The impact on ’s 3 4 elections 5 6 Cross-­Strait economic integration 7 through the lens of election advertising 8 9 10 Dafydd J. Fell 11 12 13 Since the lifting of martial law in 1987, there has been a transformation in Tai- 14 wan’s trade and investment patterns. In that year, Taiwan’s dominant trade part- 15 ners were still the United States and Japan, while trade and investment with 16 China remained outlawed and only limited indirect flows were possible. It was 17 not until 1987 that the Taiwanese were permitted to visit China, and it would be 18 another two decades before there was genuine liberalization in the form of 19 Chinese visitors coming to Taiwan for tourism and study.1 20 The shift towards increasing trade relations with China began in the early 21 1990s, although it was largely registered as trade with Hong Kong. Similarly, 22 much of the initial China-­bound Taiwanese investment was routed via Caribbean 23 tax havens, such as the British Virgin Islands and the Cayman Islands. However, 24 between the mid-­1990s and the fall of the Democratic Progressive Party (DPP) 25 government in 2008, a political stalemate featured prominently in cross-­Strait 26 relations, while rapid integration or convergence was the dominant trend in the 27 economic sphere. The return to power of the (KMT) in 2008 28 resulted in much closer economic integration and warmer political relations. By 29 the time Taiwan signed the Economic Cooperation Framework Agreement 30 (ECFA) with China in 2010, China (including Hong Kong) had become by far 31 Taiwan’s leading trading partner and destination for outward investment. The 32 fact that Taiwan still enjoys a healthy trade surplus with China is critical for the 33 country’s capacity to maintain an overall balance of payments surplus. 34 Over the last two decades, Taiwan’s governments have fluctuated between 35 liberalizing and attempting to control levels of cross-­Strait trade and investment. 36 Key elements in its attempts to prevent trade dependence in the 1990s were the 37 ‘go south’ (南向政策) policy that encouraged Taiwanese companies to invest in 38 South East Asia rather than in China, and the ‘go slow, be patient’ (戒急用忍) 39 guidelines that aimed to monitor and limit the level of Taiwanese investment in 40 China. Such measures were primarily motivated by political concerns, such as 41 expanding Taiwan’s international relations and also preventing China from 42 exploiting trade dependence in its bid to achieve its ultimate goal of Chinese 43 unification. Under both the DPP (2000–2008) and KMT (2008–present) admin- 44 istrations there has been a progressive trend towards trade and investment 45 liberalization. Nevertheless, the question of whether the economic benefits of

04 589 Taiwan ch04.indd 53 28/9/15 16:31:26 54 D.J. Fell cross-Strait­ economic integration outweigh the potential national security con- 1 sequences has been a hotly debated political issue since Taiwan’s democratic 2 transition. The centrality of the Cross-­Strait Services Trade Agreement in the 3 Sunflower social movement protests in 2014 reflects the fact that Taiwan’s 4 society remains deeply divided on the issue of economic integration. 5 This study considers the China impact on Taiwan’s electoral politics. The 6 China impact is conceptualized here by looking at how growing economic inte- 7 gration has affected the way that Taiwan’s economic relations with China have 8 been debated in electoral propaganda. The relationship has been two-­way, since 9 the increase in economic links has made cross-­Strait trade an increasingly salient 10 electoral issue and, at the same time, electoral debate has had a growing effect 11 on how cross-­Strait policy is developed on the Taiwan side. As with other policy 12 areas, there has been a shift from top-­down decision-making­ to a situation in 13 which cross-­St