The ties that bind?

Both warnings are overblown. But Taiwan is entering a lengthy season of frantic politics in which a nuanced debate about trade will be an early casualty. In November mayoral elections will be held in Taiwan8217;s five key municipalities. The DPP is hoping for a boost as it prepares for parliamentary and presidential polls in 2012.

Taiwan8217;s government says the ECFA,signed on June 29th in Chongqing,the KMT8217;s old civil-war headquarters,will prevent Taiwan8217;s economic marginalisation. Because of Chinese pressure,Taiwan has been excluded from a recent spate of free-trade agreements FTAs. This has worried the government,especially since an FTA between China and the ten-member Association of South-East Asian Nations ASEAN came into effect this year.

China8217;s prime minister,Wen Jiabao,has promised that Taiwan,which enjoys a big trade surplus with China see chart,will 8220;benefit more8221; from the ECFA than the mainland. Indeed,over the next two years China will lower tariffs for 539 categories of imports,worth 13.8 billion a year,and open 11 service categories,including banking. To appease an important lobby,the deal includes 18 farming and fishery categories,with no reciprocal liberalisation in Taiwan. Overall,Taiwan will lift tariffs for only 267 categories of imports from China,worth 2.9 billion.

Mr Ma hopes the pact will demonstrate the benefits of his pragmatism in dealings with China. Unlike his predecessor,the DPP8217;s Chen Shui-bian now in jail for corruption,he has not trumpeted Taiwan8217;s separate identity. Rather,the KMT has reached agreements allowing scheduled flights across the strait and Chinese tourists to visit Taiwan.

The DPP portrays the pact as a Trojan horse. Its leader,Tsai Ing-wen,has rejected the government8217;s assertion that there will be a net employment gain of 260,000. In a rare televised debate with Mr Ma,she said 5m jobs in Taiwan would be adversely 8220;affected8221; by the pact. A DPP spokeswoman,Hsieh Huai-hui,says her party fears the ECFA will 8220;strengthen interdependence8221;. China,she says,will use it as a stepping stone toward political integration.

The DPP gained some ammunition in early June when a Chinese spokesman gave a seemingly negative response to Mr Ma8217;s oft-stated hope that the ECFA might encourage other countries to sign FTAs with Taiwan. They have hitherto held back so as not to upset China. The Chinese spokesman8217;s remarks,though not explicitly ruling out such FTAs,drew a rare rebuke from Mr Ma8217;s government.

A government committee8217;s rejection of proposals for a referendum on the ECFA has also galvanised opposition. China recoils at any hint of a plebiscite in Taiwan,fearing one might one day be used to justify a formal declaration of independence or to block reunification. Mr Ma has denied opposing an ECFA referendum,but the DPP suggests the committee8217;s decision reflected Chinese pressure on the KMT.

The DPP can still get thousands of people onto the streets,but it has struggled to expand its support beyond 30-40 per cent of the electorate. It also lacks a convincing challenger to Mr Ma in the 2012 elections. Many analysts believe that Su Tseng-chang,its candidate in the Taipei mayoral election later this year,would do better than Ms Tsai. Mr Su is unlikely to win in Taipei,a KMT stronghold. But an honourable defeat might boost his presidential hopes.

Devising a strategy for dealing with China will be hard for the DPP. Harping on about the ECFA may not go down well with voters if the risks the DPP stresses do not materialise. The government predicts GDP will grow by more than 6 per cent this year after contracting by nearly 2 per cent in 2009. Merchandise exports to China,which account for almost 30 per cent of Taiwan8217;s total,have been helping to power this recovery.

China8217;s backing for Mr Ma is clear. It studiously avoided any criticism of Taiwan itself when America approved 6.4 billion-worth of arms sales to the island in January. But for all its efforts to show goodwill,it has made no attempt to scale down its military deployments on the coast facing the island,where its missile build-up continues. A defence-ministry official in Taipei points to a map of the island and sweeps his arm around to its east to show where,in the past year or so,Chinese naval forces have begun to extend their war-gaming reach. China is still,he says,a 8220;clear and present danger8221;. Greed for China8217;s market is good for the KMT8217;s electoral prospects; but fear of its long-term intentions can still boost the DPP.