Can Beijing Buy Taiwan? An empirical assessment of Beijing’s agricultural trade concessions to Taiwan

Abstract

In the mid-2000s, Beijing made a series of unilateral trade concessions with respect to agricultural trade with Taiwan. This move distressed the then incumbent party of the Republic of China, the Democratic Progressive Party (DPP), because Beijing’s offers might weaken the DPP’s rural support. This article offers the first empirical assessment of Beijing’s trade concessions. Using an original and highly disaggregate dataset at the township-product level, it examines what types of regions were more likely to be the beneficiary of the trade concessions, whether the concessions caused any production change, and the extent to which these changes undermined the DPP’s electoral support. It is found that while the benefit of tariff concession was not confined to pro-DPP regions, the townships that grew tariff-reduced products were no less likely to vote for the DPP. The result suggests a limit of Beijing’s economic enticement.