ANNUAL REPORT

364
agreements. 57 Since then, many draft bills for such a mechanism
have been proposed, but they were not debated. 58 Much of the political
logjam was the result of disagreement over the roles of the
Legislative Yuan and the Executive Yuan (Taiwan’s executive
branch) in the oversight process. 59 Ker Chien-Ming, head of the
Legislative Yuan’s DPP caucus, said in August 2016 that the Legislative
Yuan would review the bill during the fall legislative session.
60 How the bill will fare is uncertain. Although the DPP has
a majority in the Legislative Yuan, the version of the bill proposed
by the DPP caucus has been criticized by civil society groups. 61 In
addition, Mr. Ker in January 2016 said that the DPP’s stance on
the CSSTA was that the agreement should be renegotiated. 62 Although
it is unknown whether the Tsai Administration will call for
the agreement to be renegotiated, if it chooses to do so, the question
remains whether Beijing will agree.
Cross-Strait Trade and Investment
In 2015, Taiwan’s economic growth slowed to less than 1 percent
as exports dropped significantly amid China’s economic slowdown
and low global demand. 63 Taiwan’s exports also were hurt by increased
competition from Chinese high-tech suppliers, which undercut
them on cost. 64 With China ranking as its largest trading
partner, Taiwan’s export-oriented economy is dependent on China
and vulnerable to fluctuations in China’s economy. 65 Taiwan’s industrial
production * has grown increasingly tied to its Chinabound
exports. In the years after Taiwan joined the World Trade
Organization, Taiwan’s exports to China grew rapidly as Taiwanbased
firms expanded manufacturing operations in China and established
regional supply chains, especially in information technology
products. By the time the Ma Administration took office in
2008, fluctuations in Taiwan’s industrial production closely tracked
exports to China (see Figure 1). 66
dkrause on DSKHT7XVN1PROD with USCC
* Industrial production is quantified using the industrial production index, which measures
outputs of the industrial sector of the economy, including manufacturing, mining, and utilities.
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