R T R B -T- W S 1995
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R T R B -T- W S 1995 S Q T S Edited by
Shiping Hua
REFLECTIONS ON THE TRIANGULAR RELATIONS OF BEIJING-TAIPEI-WASHINGTON SINCE
1995
© Shiping Hua, 2006. All rights reserved. No part of this book may be used or reproduced in any manner whatsoever without written permission except in the case of brief quotations embodied in critical articles or reviews. First published in 2006 by PALGRAVE MACMILLAN™ 175 Fifth Avenue, New York, N.Y. 10010 and Houndmills, Basingstoke, Hampshire, England RG21 6XS Companies and representatives throughout the world. PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin’s Press, LLC and of Palgrave Macmillan Ltd. Macmillan® is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries. ISBN-13: 978–1–4039–7061–9 ISBN-10: 1–4039–7061–0 Library of Congress Cataloging-in-Publication Data Reflections on the triangular relations of Beijing-Taipei-Washington since 1995 : status quo at the Taiwan straits? / Shiping Hua [editor]. p. cm. Includes bibliographical references and index. ISBN 1–4039–7061–0 1. United States––Foreign relations––China. 2. China––Foreign relations––United States. 3. United States––Foreign relations––Taiwan. 4. Taiwan––Foreign relations––United States. 5. China––Foreign relations––Taiwan. 6. Taiwan––Foreign relations––China. 7. Taiwan––Strategic aspects. 8. United States––Foreign relations––1993–2001. 9. United States––Foreign relations––2001– I. Hua, Shiping, 1956– E183.8.C5R44 2006 327.73051––dc22
2006045184
A catalogue record for this book is available from the British Library. Design by Newgen Imaging Systems (P) Ltd., Chennai, India. First edition: September 2006 10 9 8 7 6 5 4 3 2 1 Printed in the United States of America.
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List of Illustrations
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Acknowledgments
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List of Contributors
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Introduction Shiping Hua
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PART I PERSPECTIVE FROM BEIJING 1 The Taiwan Dilemma in U.S.-PRC Relations Gang Lin 2 Two Steps Forward, One Step Back: Domestic Politics and PRC’s “Dual-Track” Taiwan Policy Qingmin Zhang
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3 China’s Economic Policy Toward Taiwan: An Empirical Analysis Joseph Y. S. Cheng and Chak-yuen Kan
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Militarization of the Taiwan Strait Issue Quan Jing
PART II PERSPECTIVE FROM TAIPEI 5 The Taiwan That Can Say No: Taiwan’s External and Cross-Strait Relations Since 1995 Philip Yang
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6 Taiwan’s New National Identity, Domestic Politics, and Cross-Strait Relations Hsin-Huang Michael Hsiao and Jiann-Fa Yan
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7 Economic Interaction Between Taiwan and Mainland China and Its Influence on Both Economies Charng Kao and Wen-Thuen Wang
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8 Taiwan’s Preparation Against Beijing’s Military Attacks Andrew N. D. Yang
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PART III PERSPECTIVE FROM WASHINGTON 9 PRC, ROC, and U.S. Interests: Can They Be Harmonized? Lynn T. White III 10 Bush, China, Taiwan: A Triangular Analysis Lowell Dittmer 11 Rethinking the Political Consequences of Economic Integration in Mainland China-Taiwan Relations Scott L. Kastner
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12 The United States and East Asia: How the Taiwan Strait and China Affect U.S. Security Strategy Larry M. Wortzel
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Index
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L I T 3.1 Mainland China Foreign Capital Inflow by Country (Area) at the End of 2004 3.2 Approved Investment from Taiwan in Mainland China by Province 1991–2004 3.3 Approved Investment from Taiwan in Mainland China by Economic Sector, 1991–2004 3.4 Comparison Between Re-exports and Transshipment Trade 3.5 Entrepôt Trade Across the Taiwan Strait through Hong Kong, 1993–2004. Unit: US$ million 3.6 Taiwan’s Major Exports to Mainland China, 2004 3.7 Taiwan’s Major Imports from Mainland China, 2004 3.8 Transshipment Trade Across the Taiwan Strait through Hong Kong, 1993–2004 3.9 Comparisons of Trade Statistics and Assessment Across the Taiwan Strait from Various Sources. 1989–2004 Unit: US$ million 3.10 Share of Cross-Strait Trade in Hong Kong’s Entrepôt Trade and Transshipment Trade, 1990–2004 7.1 Commodity Trade between Taiwan and Mainland China 7.2 Trade Interdependence between Taiwan and Mainland China 7.3 Development of Taiwan’s Investment in Mainland China. Value: US$ million 7.4 Taiwan Approved Investment in Mainland China by Industry Amount: US$ million 7.5 Changes in Intraindustry Trade Index for Taiwan and China
68 69 70 74 76 79 80 81
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84 154 157 158 160 165
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F 8.1 Decision-Making Process of ROC’s Defensive Operation NSC: National Security Council; MND: Ministry of National Defense 8.2 Rules of engagement 10.1 Logic of the strategic triangle
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10.2 10.3
The Chinese dependent triangle “Great” strategic triangle: 1949–1991
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10.4 11.1
Triangular Dependency A simple model of cross-Strait relations
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11.2 The impact of increasing economic interdependence
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his book was edited when I was an Asian Policy Studies Fellow at the Woodrow Wilson International Center for Scholars, George Washington University, during the 2004–2005 academic year. I would like to thank Dr. Robert Hathaway, Director of the Asia Program, Dr. Gang Lin, Program Associate of the Asia Program at the Wilson Center, and Dr. Mike Mochizuki, Director of the Sigur Center for Asian Studies, the Elliott School of International Affairs, George Washington University, for their most valuable support. I would also like to thank Dr. Nancy M. Theriot, Chair of the University Publication Committee, and Dr. Charles Ziegler, Chair of the Department of Political Science, the University of Louisville, Kentucky, for their support in publishing this book. The majority of the papers were presented at the Eighteenth Annual Conference of the Association of Chinese Political Studies (ACPS) of which I serve as the President during the period 2004–2006. The Conference was held at San Francisco State University during July 30–31, 2005. With permission, “Bush, China, Taiwan: A Triangular Analysis,” by Lowell Dittmer, which was published in Journal of Chinese Political Science (Vol. 10, No. 2, 2005), and “China’s Economic Policy Towards Taiwan: An Empirical Analysis,” by Joseph Y. S. Cheng and Kan Chak-yuen, originally published in China aktuell (5/2005): 32–48, are republished here. Shiping Hua
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Joseph Yu-shek Cheng is Chair Professor of Political Science and coordinator of the Contemporary China Research Project, City University of Hong Kong. He is the founding editor of the Hong Kong Journal of Social Sciences and The Journal of Comparative Asian Development. He has published widely on political development in China and Hong Kong, Chinese foreign policy, and local government in southern China. He has recently edited a volume on China’s Challenges in the Twenty-first Century. Lowell Dittmer, Professor of Political Science at the University of California at Berkeley and editor of Asian Survey, has contributed to and edited Sino-Soviet Normalization and Its International Implications (1992), China’s Quest for National Identity (with Samuel Kim, 1993), China Under Reform (1994), Liu Shaoqi and the Chinese Cultural Revolution (rev. edn, 1997) (with Haruhiro Fukui and Peter N. S. Lee), Informal Politics in East Asia (2000), and many other studies. His most recent book is South Asia’s Nuclear Security Dilemma: India, Pakistan, and China (Armonk: M.E. Sharpe, 2005). Hsin-Huang Michael Hsiao is Executive Director, Center for AsiaPacific Area Studies (CAPAS) and Research Fellow, Institute of Sociology at Academia Sinica, Taiwan. He is also Professor of Sociology, National Taiwan University. His most recent books include Green Blueprint: Toward Local Sustainable Development in Taiwan (coauthor, 2005), Notebook on Taiwan’s Five Challenges (2005), Taiwan and Southeast Asia: Go-South Policy and the Vietnamese Spouses (editor, 2004), and Chinese Enterprise, Transnationalism, and Identity (coeditor, 2004). Shiping Hua is Associate Professor of Political Science and Director of the Center for Asian Democracy at the University of Louisville, Kentucky. He is also the President of the Association of Chinese Political Studies, the United States (2004–2006). Dr. Hua is Professor in Affiliation with Peking University and Renmin University of China. He was Asian Policy Studies Fellow at the Woodrow Wilson Center for International Scholars during the 2004–2005 academic
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years. His most recent books are Political Civilization and Modernization in China (ed. with Yang Zhong), (World Scientific Press, 2006), Chinese Political Culture (1989–2000) (ed. M.E. Sharpe, 2001), and Scientism and Humanism: Two Cultures in PostMao China (1978–1989) (the State University of New York Press, 1995). He has completed his new book, Chinese Utopianism: A Comparative Study of Reformist Thought in China, Japan and Russia. He is currently editing or co-editing four volumes of academic works, “China in the 21st century: Challenges and Opportunities” for Palgrave; “New Dimensions in China’s Foreign Policy,” for Lexington Press Major Issues in Western Political Science, for Peking University Press, a special issue on China’s rise in the twenty-first century for Journal of Comparative Asian Development. Quan Jing is a career diplomat with the Chinese Ministry of Foreign Affairs. From September 2004 to July 2005, he was a Visiting Fellow in the Center of Northeast Asia Policy Studies (CNAPS) at Brookings Institution, Washington. He was the first government official from China to participate in the CNAPS Fellows Program. “Militarization of the Taiwan Strait Issue” is a survey paper written by Quan Jing during his stay at the Brookings Institution. Previously, he worked on security issues at the U.S. Affairs Division, Ministry of Foreign Affairs of China, from October 2002 to September 2004. He also worked as a political officer in the Chinese Embassy in Thailand from May 1998 to September 2002. Quan Jing graduated from Xi’an Foreign Studies University in 1997 and joined the foreign service that same year. Chak-yuen Kan is a part-time lecturer at the Department of Business Administration, Faculty of Commerce, Chu Hai College, Hong Kong. His research interests include economic relationships among China, Hong Kong, and Taiwan. Charng Kao is a Professor and Dean of the College of Humanities and Social Science, National Dong Hua University in Taiwan. He received a Ph.D. from the State University of New York at Binghamton in 1989. He was formerly a Research Fellow and Director of the First Institute of Chung Hua Institution for Economic Research in Taipei, Taiwan. His areas of research include mainland China’s economy, economic relations between Taiwan and mainland China, and labor economics. Scott L. Kastner is an Assistant Professor in the Department of Government and Politics at the University of Maryland, College Park. During the 2005–2006 academic year, he was a Visiting Research Fellow in the Princeton-Harvard China and the World Program at the Woodrow Wilson School of Public and International Affairs at Princeton
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University. He received his Ph.D. in Political Science from the University of California, San Diego, in 2003. His main research interests include international relations, international political economy, and relations across the Taiwan Strait. His work has recently appeared in Comparative Political Studies, International Studies Quarterly, and Security Studies. He can be reached at
[email protected]. Gang Lin is Professor and Executive Associate Director of the Center for Taiwan Studies at the Shanghai Jiao Tong University’s School of International and Public Affairs. He served as Program Associate in the Washington-based Woodrow Wilson Center’s Asia Program (1999–2005), President of the Association of Chinese Political Studies (1998–1999), and taught at American University (1999) and Johns Hopkins University (2001). He has coedited China after Jiang (Stanford, CA: Woodrow Wilson Center Press & Stanford University Press, 2003), Transition toward Post-Deng China (Singapore University Press, 2001) and Prospects for Cross-Taiwan Strait Developments (Hong Kong: Asia Sciences Press, 2000), coauthored Taiwan’s Political Transition (Hong Kong: Social Sciences Press, 1997), and contributed numerous articles and book chapters. His research interests include China’s political development, Taiwan’s domestic politics and cross-Strait relations, U.S.-China relations, and democracy and democratization. He received his Ph.D. in Political Science from Pennsylvania State University (1997), MA in Taiwan Studies from Xiamen University (1984), and BA in History from Fujian Normal University (1982). Lynn T. White III teaches in the Woodrow Wilson School and Politics Department at Princeton University, frequently visiting the University of Hong Kong’s Centre of Asian Studies for research. His books include Careers in Shanghai, and Policies of Chaos, which explores the causes of Shanghai’s Cultural Revolution during the 1960s. Unstately Power follows these studies into the era of China’s reforms and into Shanghai’s hinterland. For each period, White explains political patterns by looking both at policies/norms and at unintended factors, both for individuals and for larger sizes of collectivity. He is now writing a book comparing the effects of rural modernization (and new money) on local politics in four East and Southeast. Asian contexts: Taiwan before 1973, the Yangzi Delta from 1971 to the mid-1980s, Thailand before 1997, and the Philippines, where such modernization has not occurred despite democratic habits for most of a century. He has also written articles on Hong Kong politics, relations across the Taiwan Strait, reforms of functionalist methods, and other subjects. Lynn’s CV and a resource
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called “Contemporary China: A Book List” can be found on his homepage http://www.wws.princeton.edu/lynn/chinabib.pdf. Dr. Larry M. Wortzel is a retired U.S. Army colonel who served two tours of duty as a military attaché at the American Embassy in China. He is a Visiting Fellow at the Heritage Foundation and is a Commissioner on the U.S.-China Economic and Security Review Commission, established by the U.S. Congress. Andrew Nien-Dzu Yang is on the faculty of National Sun Yat-sen University since 1986, and is the Secretary-General of Chinese Council of Advanced Policy Studies (CAPS), a nonprofit independent thinktank since 1991 in Taipei, Taiwan, ROC. He has trained as a Security Study Specialist, particularly in the area of military competition and military balance in East Asia, People’s Liberation Army’s modernization, and its impact on East Asia security. Phillip Yang is a Professor at the Department of Political Science of the National Taiwan University. He teaches and researches in the areas of Taiwan and Asia-Pacific security and cross-Strait issues. He is also the founder and administrator of the Taiwan Security Research (TSR) website, www.taiwansecurity.org. He received his Ph.D. from the University of Virginia, Charlottesville. He can be reached at 21, Hsu Chow Road, Taipei, Taiwan 100 or
[email protected]. Qingmin Zhang is an Associate Professor at the Department of Diplomacy, China Foreign Affairs University in Beijing. His research interests include Chinese Foreign Policy, Theories of Foreign Policy Decision Making, and U.S. Foreign Policy. He is the author of U.S. Arms Sales Policy toward Taiwan: A Decision-Making Perspective (2006), China’s Foreign Relations (2003), and many academic journal articles, coeditor and contributor to several other books, and member of the editorial board of Foreign Policy Analysis. He has been a Fulbright Visiting Scholar at the Sigur Center for Asian Studies at George Washington University’s Elliot School of International Affairs from 2004–2005. He received his doctorate from China Foreign Affairs University and his Masters Degree from Brigham Young University Utah.
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I Shiping Hua
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aiwan leader Lee Teng-hui visited Cornell University in 1995, a watershed event that changed Beijing’s position toward Taipei. Before 1995, Beijing had tried to reunify with Taipei; after Lee Teng-hui’s visit, Beijing seemed to have shifted its policy emphasis to preventing Taipei from becoming independent. In other words, before 1995, Beijing had wanted to change the status quo at the Taiwan Strait, but ever since this watershed event, Beijing has wanted to keep the status quo. The posture of Taipei seemed to move in the opposite direction: before 1995, the status quo mentality on the island was more dominant; after 1995, the tendency toward independence became more obvious. For the United States, the status quo has been the preferred situation since 1972, when President Richard Nixon visited Beijing to establish the new policy toward Taiwan. This book explores the complex interactions among the three key players on the Taiwan issue since Lee’s visit. Different perspectives have been examined not only in terms of the three parties, Beijing, Taipei, and Washington, but also in terms of the different perspectives within each party, although this situation is not obvious in Beijing. We have gathered four authors from each of the three places to explore the Taiwan issue from the perspectives of international politics, domestic politics, economics, and security. The aim of this book is to make contributions to international relations theories, to East Asian studies, and to a peaceful settlement of the Taiwan issue. Theoretically, the triangular relationship of BeijingTaipei-Washington represents international relations of a particular nature. The people on both sides of the Taiwan Strait are ethnic Chinese. Therefore, when exploring the relationship among the three parties, a cultural element has to be considered. In addition, Taiwan has official diplomatic relations with only about two dozen small countries in the world.
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Methodologically, a comparison of the views of those from Beijing, Taipei, and Washington at the tenth year anniversary of Lee’s visit to the United States will enrich our knowledge of the issue from a unique perspective. From a pragmatic perspective, it is constructive to explore these scholars’ perspectives on this issue at a time when the atmosphere at the Taiwan Strait is tense. Differences among the three parties and within each party are natural. The purpose of this book is to let key scholars in all three places share their different viewpoints and also to open the channels of communication. It is my belief that scholarly understanding of the Taiwan issue from different perspectives will increase the chance for a peaceful solution to the issue.
B From Beijing’s perspective, factors that have affected the Taiwan issue include transition of power in political leadership, the Cold War, the dynamics in Taiwan, and China’s recent rise as a potential world power. Chinese politics after 1949 has been generational, and each generation of Chinese leaders has exhibited distinct characteristics in its policy orientations. The first generation of Chinese leaders represented by Mao Zedong adopted a radical policy toward Taiwan, that is, the mainland will “liberate” Taiwan primarily through military means. For Mao, Taiwan was not only the unfinished business of the Chinese civil war between the Communists and the Kuomingtang (KMT) but also part of the Cold War between the West and the communist block. Beijing captured Dachen island in 1955 and bombed Jinmen (Quemoy) and Mazu (Matsu) in 1958. The second generation of leaders who came to power in 1978, represented by Deng Xiaoping, adopted a more flexible policy orientation toward Taiwan, that is, the mainland would reunify with Taiwan largely through political means. Deng’s more moderate Taiwan policy was consistent with his capitalist-oriented reforms. The new policy orientation was set in motion by “A Message to Compatriots in Taiwan” by the Standing Committee of the Fifth National People’s Congress in January 1979. Thereafter, Beijing extended a few peaceful overtures toward Taiwan in the 1980s, including Ye Jianying’s “Nine-Point Speech” in 1981. Ye was then chairman of the National People’s Congress. These were moves by the Beijing government to reunify China through peaceful means. Jiang Zeming, who represents the third generation of Chinese leaders, came to power in 1989. Most observers do not find significant changes regarding Beijing’s Taiwan policy in comparison with that of
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the second generation. The continuity of peaceful overtures by Jiang regarding the Taiwan issue was reflected in Beijing’s white papers on Taiwan in 1993 and Jiang’s “Eight Points” in 1995. For the possible peaceful reunification between the two sides of the Taiwan Strait, two officially sanctioned unofficial organizations, the Association for Relations across the Taiwan Strait (Hai Xie Hui), headed by the former Shanghai mayor Wang Daohan, and the Strait Exchange Foundation (Hai Ji Hui), headed by Koo Chenfu, were founded in 1991. Noticeable changes did not come until 1995, when Lee Teng-Hui visited Cornell University, an act that disappointed the Beijing leaders about the prospect of a peaceful reunification. Lee’s background as a native-born Taiwanese reinforced Beijing’s worry. Thereafter, the policy preference of the Beijing leaders seemed to shift toward preventing Taiwan from becoming independent, using force if necessary. China’s fourth generation of leaders, represented by Hu Jintao, who came to power in 2002, did not seem to take any drastic policy change regarding Taiwan in comparison with Jiang. While there seems to be a consensus among the Chinese leadership to be tough regarding the Taiwan issue, to reunify with Taiwan anytime soon does not seem to be a top priority by the new leadership. This is so in spite of the fact that China’s domestic politics has become less radical. According to Chu Shulong, from Tsinghua University in Beijing, a noticeable change in the Sixteenth Party Congress held in 2002 was that all “antis” were missing from the party documents, a situation that symbolizes the further deradicalization of Chinese domestic politics.1 Before that, the Chinese Communist Party’s key documents always contained “antis,” such as “anti-imperialism,” “anticapitalism,” and so on. In fact, to be negative is an important symbol for all totalitarian regimes.2
T From the Taipei perspective, the Taiwan issue has been influenced by the Chinese civil war, the Cold War, the economic takeoff of Taiwan starting in the 1960s, and more recently, the democratization and indigenization of Taiwan politics. Following the defeat by the communists in 1949, about two million KMT followers fled to Taiwan and thereby established a new government. Beijing’s attempt to conquer Taiwan was blocked by the breakout of the Korean War in 1950, when the United States sent in the Seventh Fleet to patrol the Taiwan Strait. To protect Taiwan from being attacked by the mainland, Taipei and Washington signed a
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security treaty in 1954. In addition, with the support from Western countries, especially from the United States, Taipei was able to occupy until 1971 a seat in the United Nations that represented all of China. Ever since he fled to Taiwan in 1949, Chiang Kai-shek had tried to conquer the mainland. This goal was seriously pursued, especially at times when Beijing had major domestic difficulties, such as the ThreeYear Famine (1959–1962). The goal was gradually given up with the passing of time, especially after Henry Kissinger’s visit to Beijing in 1971 and Taipei’s loss of the seat at the United Nations in the same year. The United States established formal diplomatic relations with Beijing and terminated formal diplomatic relations with Taipei in 1979. Having been frustrated by external relations and acting in response to economic developments in East Asia, the Taipei ruling elites shifted their attention to economic development which brought in miraculous results. The economic takeoff started in the 1960s also set off political and social changes in Taiwan that had a great impact on the island’s relationship with the mainland. With the passing away of the KMT leader Chiang Kai-shek in 1975, his son and premier since 1971, Chiang Ching-kuo, became the president. Toward the end of his life, Chiang Ching-kuo lifted marshal law in 1986, releasing many political prisoners, an act that effectively led to the establishment of the opposition Democratic Progressive Party (DPP). The political liberalization by Chiang Ching-kuo, who died in 1988, went hand in hand with Taiwan’s economic achievements. The Taiwan experience in this regard seems to have confirmed modernization theory: economic development plays a crucial role in democratization. Democratization was also accompanied by the indigenization of Taiwan politics. Lee Teng-hui, the first native-born president, was elected in 1992. This indigenization immediately had an impact on the relations between the two sides of the Taiwan Strait. Lee announced in 1992 that Taipei no longer considered itself in a hostile situation with Beijing, effectively ending Taipei’s goal of conquering the mainland. The democratization and indigenization of Taiwan politics went a step further in 2000 when Chen Shui-bian, a native-born DPP leader, was elected president. Chen won a second term in 2004 with a very small margin. DPP, which was established only two decades ago, won 38 percent of popular votes and 35 percent of seats in the legislature in 2004 compared to the KMT, which won 35 percent of votes and 31 percent of seats.3 Going hand in hand with political, economic, and social changes, people’s attitudes in Taiwan also changed in the direction of moving
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away from the mainland. In 1992, 25 percent of people in Taiwan identified themselves as Chinese while 17 percent identified themselves as Taiwanese. In 2004, only about 7 percent identified themselves as Chinese while 40 percent identified themselves as Taiwanese.4 In 2002, about 10 percent of people in Taiwan wanted to be independent immediately; in 2004, about 20 percent wanted to become independent immediately.5 Although the island has been drifting away from the mainland politically, people from both sides of the Taiwan Strait have become increasingly close economically. Lien Chan, then Taiwan’s premier, said in 1995 that “Taiwan’s economic future depends largely on China.”6 The economic ties between the mainland and Taiwan have become even stronger in the last decade.
W The key factors that have influenced the United States’ policy orientation have been international rather than domestic politics. The two major events that have affected Washington’s Taiwan policies are the cold war and the September 11 terrorist attack on the World Trade Towers in New York in 2001. At the early stage of the Cold War, Taiwan was regarded by some in the United States as an “unsinkable aircraft carrier” that could be used to stop the spread of communism in Asia and to contain Beijing. The United States opened its door to communist China in 1972 in order to avoid fighting against the two major communist giants, the former Soviet Union and Beijing, at the same time. The United States also had an urgent need to open dialogue with Beijing because of its involvement in Vietnam. Beijing welcomed the friendly overtures from Washington, largely due to its confrontation with the former Soviet Union. It took seven years after Nixon’s visit to Beijing for the two countries to establish formal diplomatic relations. The main problem was Taiwan. The foundation of the Beijing-Washington relationship in the last Three decades was laid in 1972 by Chinese Premier Zhou Enlai and the US National Security Adviser Henry Kissinger, when the two countries reached an agreement on “one China.” Beijing insisted that there was only one China and that Taiwan was a renegade province. The position of Washington was that the United States had no objections to the notion of “one China” since it was shared by the Chinese on both sides of the Taiwan Strait. The main concern of the United States was peace: Washington does not care what the solution is regarding the Taiwan issue as long as it is resolved peacefully.
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This is a major difficulty between Beijing and the United States. Beijing views the Taiwan issue as a domestic one and believes it has the right to resort to force to solve the problem if necessary. Beijing swears that it will use force under certain circumstances, such as if Taiwan possessed nuclear weapons, or if Taiwan declared independence, or if Taiwan allowed foreign powers to station troops in Taiwan. The two countries narrowly avoided disasters in 1982 when they reached an agreement with regard to the U.S. sale of arms to Taiwan. With the end of the Cold War, China’s strategic importance declined for Washington, and correspondingly there was a louder voice in the United States in support of Taiwan. The relations between Washington and Beijing were on a bumpy road regarding Taiwan until the September 11, 2001 terrorist attack. The United States was reluctant to confront the Islamic extremists and a rising China at the same time. In spite of twists of this kind, the United States for the most part has tried in the last few decades to keep the status quo at the Taiwan Strait through a game of ambiguity. Washington has kept both Beijing and Taipei in the dark regarding what the United States would do in the event of an attack on Taiwan by the mainland. From the U.S. perspective, if Beijing assumes that the United States would not intervene militarily in such an attack, Beijing would be more likely to use force; if Taipei assumes that the United States would definitely intervene militarily in such an attack, Taipei would be more likely to drift toward independence. Comparatively speaking, domestic politics plays a less significant role in the United States’ formation of its Taiwan policy than it does for Beijing or Taipai. In the view of Harry Harding, there was little difference in terms of Washington’s policy on Taiwan between the Clinton administration and the George W. Bush administration.7 It looks like most people among the three parties want the status quo. According to public opinion polls, 80 percent of the people in Taiwan do not want to become independent immediately.8 Beijing’s desire to keep the status quo is recognized. Henry Kissinger recalled recently that while Mao said to him in 1972 that Beijing could wait for 100 years before the solution of the Taiwan issue, Jiang Zemin told him jokingly 23 years later that China could wait for another 77 years.9 James Kelly, Assistant Secretary of State for East Asian Affairs, noted recently that China had shown maturity.10 Washington has good reason to keep the status quo at the Taiwan Strait. In the words of Bob Sutter, the United States remains economically dominant and China depends on U.S. trade. In addition, the U.S. security presence is welcome in Asia. The United States’
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power in Asia is strong, and Asian countries that are preoccupied by domestic problems do not trust each other. The U.S. debate about how to treat China was over because of September 11.11 The status quo is preferred by the Southeast Asian nations as well. In the words of Chan Heng-chee, Singapore Ambassador to the United States, the Bush administration has handled the Taiwan issue well so far. Because of the common interest in keeping the peace at the Taiwan Strait, U.S.-China relations are the best now than ever before.12 In view of Taipei’s move toward independence—in the last three years, those who want to become independent immediately have increased from about 10 percent of the population to about 20 percent— Washington has increasingly distanced itself from Taipei, according to Harry Harding.13 Washington seems to realize that the status quo is hard to keep. In the words of James A. Leach, Chairman of the Congressional Subcommittee on Asia and the Pacific, “The Taiwan Strait was unbelievably dangerous. There are no moderates in Beijing.”14
S C The first part of the book consists of four chapters written by authors based in China who look at the Taiwan issue from the perspectives of international relations, China’s domestic politics, economics, and security. Focusing on the role played by the United States in the Taiwan issue, Lin stresses the “dilemma” for Washington and Beijing, a situation that bars a perfect solution. In the event of a possible attack from Beijing, Washington has to make the choice between fighting a war with Beijing or giving up Taiwan. And Beijing cannot “liberate” Taiwan by force without jeopardizing its relations with Washington. Viewing the Taiwan issue from the perspective of Beijing’s domestic politics, Qingmin Zhang argues that the Beijing leaders are restrained by political and economic factors. Unlike Mao and Deng, the current Chinese leaders do not have the charisma that could enable them to pursue policies regardless of opposing views. In addition, Beijing’s priority to develop the country’s economy also binds the hands of the leaders, because the mishandling of the Taiwan issue will surely hurt China’s economic development. Based on solid statistical analysis, Joseph Y. S. Cheng and Kan Chak-yuen argue that the economic exchanges between the mainland and Taiwan have reduced tensions at the Taiwan Strait, implying that the Beijing strategy of using economic exchange to “win over” Taiwan seems to have worked. This is so in spite of the resistance by some leaders in Taipei.
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Quan Jing has seen a militarization of the Taiwan issue in recent years. Viewing the increasing tendency for independence on behalf of Taipei, Beijing has increased its military forces to deter that outcome. Meanwhile, Washington has upgraded its arms sales and has intensified military ties to Taiwan. Jing has made some policy recommendations to lower the militarization at the Taiwan Strait. The second part of the book consists of four chapters written by scholars based in Taiwan. Philip Yang argues that although Beijing, Taipei, and Washington desire the status quo, the three parties have different understandings of what status quo means. Although many factors affect the Taiwan issue, the main factor is Taiwan’s internal development. Hsin-Huang Michael Hsiao and Jiann-Fa Yan argue that the democratization and indigenization of Taiwanese politics is the major factor driving Taiwan’s drift away from the mainland. They argue that China’s threat to use force has been counterproductive for keeping the status quo at the Taiwan Strait, because it only makes the people in Taiwan more independence oriented. Charng Kao argues that both the mainland and Taiwan benefit from economic exchanges between the two sides of the strait; the two economies are not only competitive but also complementary. He, however, laments the politicization of these economic exchanges that does more harm than good to the two economies. Andrew N. D. Yang assesses Taiwan’s capacity to defend the island in the event of a possible attack by Beijing in the form of an air attack, blockade, and amphibious and airborne operations. He demonstrates how Taiwan can defend itself from the perspectives of weapons upgrades and institutional enhancements. The third part of the book is written by scholars based in the United States. Lynn T. White III looks at the Taiwan issue from the perspective of the interests of the three parties. He is optimistic about the resolution to the Taiwan issue, partly because the United States’ difficult job in both defending Taiwan’s liberalism and developing good relations with China may become easier if China continues to move politically in the direction of a pluralistic society. In a departure from White’s analysis based on national interests, Lowell Dittmer explores the triangular relationship from the structural perspective: the United States’ relationship with Taiwan connects not only the small triangle of Beijing-Taipei-Washington but also the big triangle of BeijingMoscow-Washington. If Washington’s relationship with Moscow deteriorates, its relationship with Beijing would likely get better, a situation that would in turn hurt its relationship with Taipei. Scott L. Kastner agrees with Cheng and Kao that the economic exchanges between the two sides of the Strait are politicized and have
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not brought about corresponding political integration. Indeed, he suggests that the short-term economic exchanges may paradoxically make political integration less likely. But he also argues that these dynamics are likely to change over the long run, and that economic exchanges might eventually help to facilitate closer political relations. Larry Wortzel calls for closer military cooperation between the United States and Taiwan and urges Taiwan to share a bigger role in its own defense. He does not have much hope for Beijing because of the latter’s communist political system. This book is closely connected with my experience as an Asian Policy Studies Fellow at the Woodrow Wilson International Center for Scholars and George Washington University (GWU) during the 2004–2005 academic year and my duty serving as president of the Association of Chiese Political Studies (ACPS). My experience at the Wilson Center and GWU exposed me to many policy-oriented discussions that had not been the focus of my previous academic life. As the ACPS president, I have had the opportunity to work with the scholars from mainland China and Taiwan in addition to my American colleagues. The majority of the chapters in this book were presented at the Eighteenth Annual Convention of the Association of Chinese Political Studies in San Francisco, July 30–31, 2005.
N 1. Chu made the remark at the Sixteenth Annual Meeting of the Association of Chinese Political Studies held in Knoxville, Tennessee, April 4–6, 2003. 2. Carl J. Friedrich and Zbigniew K. Brezinsky, Totalitarian Dictatorship and Autocracy (Cambridge, MA: Harvard University Press, 1965). 3. Based on data from www.Taiwan-DC.org and www.answer.com 4. Ibid. 5. Ibid. 6. Roy, China’s Foreign Relations, p. 202. 7. Harry Harding, “George W. Bush and Asia: An Assessment,” Woodrow Wilson International Center for Scholars, Washington DC, November 9, 2004. 8. Vincent Wei-cheng Wang, “Taiwan’s Legislative Yuan Elections: Will the Second Shoe Drop?” Woodrow Wilson International Center for Scholars, Washington DC., December 1, 2004. 9. Henry Kissinger made the remark at the conference held in September 2004 at the Woodrow Wilson International Center for Scholars on the recent declassified CIA documents, “National Intelligence Council,” Tracking the Dragon: National Intelligence Estimates on China during the Era of Mao, 1948–1976 (Washington DC: National Intelligence Council, 2004).
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S H 10. “George W. Bush and Asia: An Assessment,” Woodrow Wilson International Center for Scholars, Washington DC, November 9, 2004. 11. Ibid. 12. Ibid. 13. Ibid. 14. Ibid.
R Barnett, Doak. U.S. Arms Sales: The China-Taiwan Tangle (Washington, DC: Brookings Institution, 1982). ———. The FX Decision: “Another Crucial Moment” in U.S.-China-Taiwan Relations (Washington, DC: Brookings Institution, 1981). Bush, Richard C. At Cross Purposes: U.S.-Taiwan Relations Since 1942 (Armonk, NY: M.E. Sharpe, 2004). Chiu, Hungdah. The Taiwan Relations Act and Sino-American Relations (Baltimore: School of Law, University of Maryland, 1990). ———. China, the United States, and the Question of Taiwan (New York: Praeger Publishers, 1973). Clarke, Adam W., ed. Taiwan-China: A Most Ticklish Standoff (Huntington, NY: Novinka Books, 2001). Cohen, Jerome Alan. Taiwan and American Policy: The Dilemma in U.S.China Relations (New York: Praeger Publishers, 1971). Deng, Yong and Fei-ling Wang. In the Eyes of the Dragon: China Views the World (Lanham, MD: Rowman & Littlefield, 1999). Dickson, Bruce, J. and Chien-min Chao. Assessing the Lee Teng-hui Legacy in Taiwan’s Politics: Democratic Consolidation and External Relations (Armonk, NY: M.E. Sharpe, 2002). Downen, Robert L. Of Grave Concern: U.S.-Taiwan Relations on the Threshold of the 1980s (Washington, DC: Center for Strategic and International Studies, 1981). Garver, John W. Faceoff: China, the United States, and Taiwan’s Democratization (Seattle: University of Washington Press, 1997). Gibert, Stephen, P. and William M. Carpenter. America and Island China: A Documentary History (Lanham, MD: University Press of America, 1989). Gong, Gerrit, ed. Taiwan Strait Dilemmas: China-Taiwan-U.S. Policies in the New Century (Washington, DC: Center for Strategic and International Studies, 2000). Herschensohn, Bruce, ed. Across the Taiwan Strait: Democracy: The Bridge between Mainland China and Taiwan (Lanham, MD: Lexington Books, 2002). Hsieh, John Fuh-sheng. China-Taiwan Relations: The Odds against Changing the Status Quo (Singapore: East Asian Institute, 2002). Hsiung, James, and King-Yuh Chang. Congress, the Presidency, and the Taiwan Relations Act (New York: Praeger Publishers, 1985.) Kintner, William R. A Matter of Two Chinas: The China-Taiwan Issue in U.S. Foreign Policy (Philadelphia: Foreign Policy Research Institute, 1979).
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Lasater, Martin L. The Taiwan Conundrum in U.S.-China Policy (Boulder, CO: Westview Press, 2000). ———. The Taiwan Issue in Sino-American Strategic Relations (Boulder, CO: Westview Press, 1984). Lasater, Martin and Parris Chang. If China Crosses the Taiwan Strait: The International Response (Lanham, MD: University Press of America, University Park, PA: Center for East Asian Studies, Pennsylvania State University, 1993). Lee, Lao To. The Reunification of China: PRC-Taiwan Relations in Flux (New York: Praeger Publishers, 1991). Li, Xiaobing, Xiaobo Hu, and Yang Zhong. Interpreting U.S.-China-Taiwan Relations: China in the Post-Cold War Era (Lanham, MD: University Press of America, 1998). Metzger, Thomas A. The Unification of China and the Problem of Public Opinion in the Republic of China in Taiwan (Stanford, CA: Hoover Institution, 1992). Montaperto, Ronald N. “One China” and Relations across the Taiwan Strait (Washington, DC: Institute for National Strategic Studies, National Defense University, 2000). Romberg, Alan D. Rein In at the Brink of the Precipice: American Policy toward Taiwan and U.S.-PRC Relations (Washington, DC: Henry L. Stimson Center, 2003). Roy, Denny, China’s Foreign Relations (Lanham, MD: Rowman & Littlefield Publishers, 1998). Shlapak, David A., David T. Orletsky, and Barry A. Wilson. Dire Strait?: Military Aspects of the China-Taiwan Confrontation and Options for U.S. Policy (Santa Monica, CA: Rand, 2000). Sheng, Lijun. China’s Dilemma: The Taiwan Issue (Singapore: Institute of Southeast Asian Studies, 2001). ———. China and Taiwan: Cross-Strait Relations under Chen Shui-bian (London & New York: ZED Books and Singapore: Institute of Southeast Asian Studies, 2002). Tai, Paul, ed. United States, China, and Taiwan: Bridges for a New Millennium (Carbondale, IL: Public Policy Institute, 1999). Wang, Meiling. The Dust That Never Settles: The Taiwan Independence Campaign and U.S.-China Relations (Lanham, MD: University Press of America, 1999). Wheeler, J.W., ed. Chinese Divide: Evolving Relations between Taiwan and Mainland China (Indianapolis, IN: Hudson Institute, 1996). Zagoria, Donald S. Breaking the China-Taiwan Impasse (Westport, CT: Praeger Publishers, 2003). Zhao, Suisheng, ed. Across the Taiwan Strait: Mainland China, Taiwan, and the 1995–1996 Crisis (New York: Routlege, 1999).
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P
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PERSPECTIVE
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FROM
BEIJING
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T H E T A I WA N D I L E M M A I N U.S.-PRC R E L AT I O N S Gang Lin
In their policies toward Taiwan, both Washington and Beijing have
been faced with a dilemma over the last three decades. For the United States, the dilemma is that it cannot recognize diplomatically both the People’s Republic of China (PRC) and Taiwan and has to make a reluctant choice between the two parties. For the PRC, the dilemma is that it cannot use force to “liberate Taiwan” without jeopardizing its normal relations with the United States. As a compromise, the United States switched its diplomatic recognition from Taiwan to the PRC while maintaining substantial unofficial relations with Taipei and adhering to the principle of peaceful resolution of the Taiwan issue. At the same time, Beijing advocated peaceful reunification of China while retaining military means as the last resort to prevent Taiwan from moving toward de jure independence, particularly in the wake of the 1995–1996 Taiwan Strait crisis. Although China’s reunification remains Beijing’s long-term goal, its policy priority has shifted since 1995 from achieving instant unification to preventing Taiwan from becoming independent. Such a strategic change was first revealed in Jiang’s Eight Points on cross-Taiwan Strait relations in January 1995 and further displayed in the following years. Consequently, the United States also changed its policy on the Taiwan issue from “strategic ambiguity” to “strategic clarity.” If President Clinton’s 1998 “three nos” remarks were partly motivated by Beijing’s strong reaction against Lee Teng-hui’s U.S. trip, then-President Bush’s 2003 warning against Taiwanese leaders’ unilateral attempt to change
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the status quo was attributable to the seemingly unstoppable momentum of referenda and “constitutional reengineering” for independence on the island. As the smallest player in the Washington-Beijing-Taipei triangle, the government in Taiwan in recent years has ironically taken an offensive strategy to change the status quo. It has paradoxically argued that what Taipei has done is to maintain the status quo as defined by the island: that is, Taiwan is an independent sovereign state and thus deserves international recognition and constitutional rectification. Taipei’s desperate efforts at pushing the one-China envelope via diplomatic breaking through or self-declaration, however, have prompted Beijing and Washington to reach a tacit consensus on maintaining the status quo, featuring Beijing’s missile deployment along the coast of the Taiwan Strait and Washington’s “aggressive diplomacy” against Taiwan’s independence and PRC’s military action. This chapter attempts to answer the following questions regarding the Taiwan dilemma in U.S.-PRC relations. What is the dilemma in the U.S. policy toward Beijing and Taipei? Can the United States maintain an evenhanded and consistent policy on cross-Strait affairs? Is the status quo along the Taiwan Strait beneficial to mainland China? Is it possible to maintain the status quo? What are the implications of Beijing’s policy shift on U.S.-China relations? How is the Taiwan issue related to China’s recent ascendance on the international arena?
O RIGIN
OF THE
D ILEMMA
The Taiwan dilemma is inherent in U.S.-PRC relations. When the two countries established formal diplomatic relations in 1979, the United States acknowledged that there is but one China and Taiwan is a part of China, and it regards, at least diplomatically, the PRC as “the sole legal government of China.”1 Under Beijing’s pressure, Washington severed its diplomatic ties with Taipei, abolished the U.S.-Taiwan Military Mutual Defense Treaty, and withdrew American troops from the island. However, Washington has made it clear that the Taiwan question should be settled peacefully by both sides of the Taiwan Strait and that any attempt by Beijing to do otherwise would be a threat to regional stability and U.S. national interests. Simultaneously, Beijing changed its policy from liberating Taiwan to peaceful unification and tacitly allowed, though openly opposed, the United States to maintain a quasi-official relationship with Taiwan, including U.S. arms sales to Taiwan. Although Beijing always claims that Taiwan is China’s domestic issue and that it is within Beijing’s jurisdiction to decide whether or not to employ military means against Taiwan, it has to consider the U.S. factor on such a sensitive matter.
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The U.S. dual-track policies toward the PRC and Taiwan, together with its tactics of strategic ambiguity regarding American obligations to come to the defense of Taiwan, have helped to maintain the status quo across the Taiwan Strait since 1979. While the Taiwan Relations Act (TRA) does not legally mandate that the United States come to the rescue of Taiwan if it is attacked, it does infer that were the PRC to attempt to settle the Taiwan question by force, the United States would react accordingly.2 In other words, the U.S. one-China policy is subject to the principle of peaceful resolution, and Washington does not regard the Taiwan issue as purely a Chinese domestic affair. Taiwan’s process toward political democratization since the mid1980s has posed a new challenge to U.S. dual-track policies toward Beijing and Taipei. If a freely elected government in Taiwan were to declare independence in the future, the United States might find it difficult to explain to the American people why it should not recognize a sovereign Republic of Taiwan.3 On the other hand, Taiwan’s dramatic democratic transition since the mid-1980s has increased political gaps between the two sides of the strait and made it extremely difficult for Taipei to strike a deal with Beijing on reunification without the Taiwanese people’s consent. Corresponding to Taipei’s assertive announcement of its independent sovereignty over the island, an increasing number of people in Taiwan have identified themselves as Taiwanese rather than Chinese in the past decade, resulting in Beijing’s rethinking of the feasibility of peaceful unification.4 If Beijing resorts to military means to settle the Taiwan issue or Taipei continues to gradually pursue de jure independence and eventually crosses Beijing’s red line, Washington will have to make an unpleasant choice between fighting with Beijing or giving up Taipei. Another potential problem inherent in Washington’s dual-track policies is how to define and maintain the status quo. Such an openended question has informed U.S. policy debate and adjustment stimulated by the changing global situation and cross-Strait relations. To make things more complicated, both Taipei and Beijing have tried to manipulate their relations with the United States and to move the power balance across the Taiwan Strait in their favor. Taipei wants the United States to support its demand for more international space, while Beijing either asks the United States to leave the Taiwan issue to the Chinese themselves or asks for U.S. support for an early reunification of China.5 Beijing and Taipei’s different expectations for the role of the United States in cross-Strait relations, combined with various interest groups, value preferences, and strategic calculations among the American people, have contributed to an inconsistent U.S. policy toward the PRC and Taiwan since the end of the Cold War.
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E VENHANDED P OLICIES ? The first half of the 1990s witnessed the best period of WashingtonTaipei relations in the past two decades. While the collapse of the Soviet Union reduced, at least temporally, the PRC’s strategic importance to the U.S. policy-makers, the June 1989 incident in the mainland and the 1980s democratic transition on the island have reshaped American public opinion in favor of the island. Consequently, the first Bush administration decided to upgrade Washington-Taipei relations by supporting Taiwan’s entry to the GATT, selling 150 F-16 fighter planes to Taiwan, and allowing U.S. cabinet-level officials to visit the island. This trend continued during the Clinton administration. Because of Clinton’s subordination of foreign policy to domestic issues in his first term, members of Congress gained leverage on the president on Taiwan issues in return for their support of him on domestic issues. Under congressional pressure, the White House announced a number of policy adjustments on Taiwan in the fall of 1994: (1) a change in the name of Taiwan’s office in the United States from the Coordination Council for North American Affairs to the Taipei Economic and Cultural Representative Office, (2) further relaxation of limitations on mutual visits of high-ranking officials between the United States and Taiwan, and (3) support for Taiwan’s legitimate role in appropriate international organizations that do not require statehood.6 In 1995, the White House was dragged into a decision to accept Lee Teng-hui’s private visit to Cornell University because the overwhelming majority in Congress resolutely supported Lee’s trip, thanks to Taiwan’s successful lobbies in the United States. Taipei’s pragmatic diplomacy, unbounded by the one-China doctrine and capped by Lee Teng-hui’s 1995 Cornell trip, exposed the weakness of U.S. dual-track policies and prompted another round of U.S. policy adjustment in the second half of the 1990s. While the 1995–1996 Taiwan Strait crisis aroused American sympathies toward Taiwan’s security, it also reminded Washington of the continuing centrality of the Taiwan issue in U.S.-PRC relations7 and highlighted the priority of a peaceful settlement of the Taiwan issue. After a policy review and heated public debates in the immediate aftermath of the Taiwan Strait crisis, the second Clinton administration adopted a policy of comprehensive engagement—rather than antagonistic confrontation and containment—to seek Beijing’s cooperation in regional and global security affairs. Under this strategic framework, Washington subtly adjusted its position on Taiwan affairs, despite its oral iteration of policy continuity. Washington discouraged Taipei’s
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pragmatic diplomacy by setting new limitations on Taiwanese leaders’ activities in the U.S. right after the Taiwan Strait crisis. A transit visa for Vice President Lien Chan in early 1997 carried a restriction of no meeting’s with American officials and no public events. Similar limitations applied to Lee Teng-hui’s transit stopover in Hawaii en route to Central American countries in September 1997. Even worse, right before Lee’s stopover, U.S. Assistant Secretary of State Stanley Roth declared that the U.S. decision to permit Lee’s 1995 trip was a serious mistake.8
C LINTON ’ S N EW A PPROACH Clinton’s new approach to Beijing and Taipei was informed by the assumption that China can be remolded, or be helped to evolve, into a more agreeable nation by a more realistic U.S. policy. It reflects the thinking of certain liberal elements in the American-China policy community, who believe China is already on its way toward being another capitalist and democratic country.9 President Clinton asserted during his 1998 trip to Beijing that he believed Chinese President Jiang Zemin held a vision to bring China into democracy in the twenty-first century, probably encouraged by Beijing’s decision to give live TV coverage of political dialogue and debate between the two leaders. It is worth noting that Clinton made a verbal announcement of the “three nos” regarding U.S. policy toward Taiwan during the same trip,10 an announcement acclaimed by Beijing but one that aroused great concern in Taipei. It was not so dramatic for Clinton to reiterate that the United States would not support Taiwan’s independence, “two Chinas,” or “one China and one Taiwan.” But it was the first time for an American president to announce that the United States does not support Taiwan’s entry into the world organizations that require statehood, the third “no” in Clinton’s “three nos” formula. As previously stated, the 1994 Taiwan Policy Review indicates that the United States would support Taiwan’s participation in international organizations for which statehood is not required. While these two statements do not necessarily contradict each other, the latter seems less irritating to Taiwan, despite the fact that the U.S. Department of State has not provided much assistance for Taiwan’s participation in nongovernmental organizations. From Taipei’s perspective, Clinton’s open assertion of the “three nos” commitment, especially the third “no,” suggests that Taiwan has been clearly denied its statehood by the most powerful political leader in the world.
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Another sign of alteration is Clinton’s remarks on China’s peaceful reunification. Speaking at Beijing University on June 29, Clinton declared that the reunification of China and Taiwan should occur by peaceful means and the United States had encouraged the cross-Strait dialogue to achieve that. Such a remark displayed a subtle but significant departure from previous U.S. policy guidelines—what concerns the United States is supposed to be a peaceful settlement of the Taiwan issue, regardless of whether the result is unification or independence. Naturally, Clinton’s remark aroused Beijing’s excitement and Taiwan’s apprehension, although neither side was quite sure whether Clinton had just inappropriately revealed his personal preference or had intentionally suggested a policy option open to the United States. Even policy makers and analysts inside the Washington beltway had different interpretations of the significance of Clinton’s remarks.11 The undisputable change was in American attitudes toward crossStrait negotiations. Since the 1995–1996 Strait crisis, the implication of Taipei’s unilateral diplomatic pursuit without Beijing’s accommodation has aroused great concern among American congressmen, policy makers, and scholars.12 Contrary to U.S. policy of “no intervention, no encouragement, and no mediation” regarding cross-Strait negotiations during the 1980s, the second Clinton administration encouraged Beijing and Taipei to resolve their disputes, including the issue of Taiwan’s international status, through political negotiation. Kenneth Lieberthal, who suggested both sides of the Strait reach an interim agreement on an equal footing and maintain the status quo within a loose framework of one China for 50 years,13 was appointed senior director of Asian-Pacific Affairs in the National Security Council immediately after Clinton’s 1998 China trip. His initiative proposal of reaching an interim agreement between the two sides of the Taiwan Strait was followed by a series of similar suggestions raised by U.S. government officials and influential scholars. Some American policy analysts suggested Beijing should help Taipei to join certain international organizations by initiating a revision of the relevant rules that stipulate the organizational requirement of statehood.14 Contrary to the Clinton administration’s policy adjustment, a majority of Congress members continued to express their strong support of Taiwan by overwhelmingly passing Senate Concurrent Resolution 107 and House Concurrent Resolution 301. These resolutions make it clear that it is the expectation of the United States that the future status of Taiwan will be determined by peaceful means and that people on both sides of the Taiwan Strait should determine their own futures. In other words, the Taiwanese people have a right to determine their own future without the threat of outside influence
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or the use of force. The U.S. Congress also expresses support for Taiwanese membership in international organizations and affirms the United States’ commitment to make ballistic missile defense systems available to Taiwan. Discrepancy between the opinions of the administration and Congress reflects the U.S. dilemma in choosing between Taiwan’s long friendship and Beijing’s global cooperation, which is vividly demonstrated by the following argument: American policy toward China should be “fully aware of China’s history, pride, nationalism, as well as its century-long quest for territorial unity and economic modernity,” but this does not mean that the U.S. should automatically acquiesce to China’s claims over Taiwan.15
U.S. policy in this triangular U.S.-PRC-Taiwan relationship is complicated because Taiwan is demanding a sovereign status internationally and Beijing is strongly nationalistic about its claim to Taiwan.16 While the U.S. goal is to maintain a balance between Beijing and Taipei, Clinton’s policy in his later years obviously tipped the balance in favor of China.
B USH ’ S A GGRESSIVE D IPLOMACY During the early months of the George W. Bush administration, Washington regarded the PRC as a strategic competitor—rather than a strategic partner—of the United States. With such policy orientation, Taiwan was considered a traditional ally of the United States. In the wake of the April 2001 airplane collision over the South China Sea, President Bush announced that the United States would do whatever it takes to help defend Taiwan. Meanwhile, Washington increased arms sales to Taiwan by offering an unprecedented deal. Since September 11, however, the U.S. policy toward the PRC has changed from “congagement to engagement.”17 China is now seen as the “strategic cooperator” of the United States. The increasing cooperation of these two countries on the global antiterrorist war as well as on regional security issues, highlighted by three summits between President Bush and Chinese President Jiang during October 2001, February 2002, and October 2002, as well as-then Vice President Hu Jintao’s trip to the United States in April 2002, have sent a warning signal to Taipei, who feared that Washington might sacrifice Taiwan for the sake of the PRC. In fact, Washington has developed closer relations with both Beijing and Taipei simultaneously since late 2001. Taiwan’s defense minister and first lady visited the United States during 2002, and military exchanges significantly increased between the two parties. Finally, Chen Shui-bian’s stopover
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in New York in early November 2003 was unprecedented since Taiwan’s diplomatic relations with the United States was cut off in 1979. Although the Bush administration tries to maintain a balanced approach toward both Beijing and Taipei and to encourage a peaceful resolution of the Taiwan issue, Beijing and Taipei have different expectations of the possible role played by Washington. Taipei fears that peaceful resolution would be a nickname for peaceful unification, as peaceful separation of Taiwan from the mainland is out of the question due to Beijing’s steadfast position. On the other hand, Beijing would consider peaceful resolution a nickname for long-lasting separation, as Taiwan would not accept unification with the mainland in the foreseeable future, and Washington would not push Taipei to accept Beijing’s one-China precondition for opening the cross-Strait dialogue. Since Beijing strongly opposes Taiwan’s de jure independence and Taipei refuses to be unified by the mainland under the current conditions, maintaining the status quo becomes the best choice for Washington. However, this is not an easy job. For many years, Washington has adopted a policy of “strategic ambiguity.” The principal advantage of this U.S. policy is that Washington can decide whether or how to become involved in a possible war between China and Taiwan. Should war occur, Washington can make decisions based on (1) which side of the Taiwan Strait takes the first strike, (2) military balance between the two sides in the early stage of the possible war, (3) international reaction toward the war, and (4) the U.S. global strategy at that time. Its principal disadvantage, however, is that (1) Washington may have to be ready to support Taiwan’s independence, as chosen by the Taiwanese people, and therefore engage a war with China provoked by Taiwan; and (2) Washington may have to swallow Beijing’s swift victory over Taiwan, even if the war is not provoked by Taipei’s unilateral action to change the status quo. Because Washington’s possible reaction to the war is ambiguous, such a policy might misguide people into wishful thinking on both sides of the Taiwan Strait. Some in Taiwan might expect the United States to protect Taiwan under any conditions, and they might therefore pursue Taiwan’s independence without much concern. Some in mainland China might expect the United States to stay away once it faces a real war between the two sides of the Taiwan Strait. The rationale behind this strategy, however, is that Washington can send different signals to the two sides. For Taipei, the message is that Taipei cannot rely on U.S. military protection in a war with mainland China, even if such a war is not provoked by Taiwan’s movement to de jure independence. For Beijing, the message is that the PRC has to prepare to fight with the United States when taking military action,
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even if it is against Taiwan independence. Through intimate channels, the different messages can reach decision makers on both sides. Despite conflicting messages, the rational supporting strategic ambiguity is that war planners on both sides of the Taiwan Strait have to prepare for the worst case scenario. The U.S. dual-track policies and tactics of strategic ambiguity have helped to maintain the status quo across the Taiwan Strait. As long as Beijing does not use military means against Taiwan and Taipei does not promote de jure independence, Washington does not need to make an unpleasant choice between fighting with Beijing and giving up Taiwan. The problem is how to define and maintain the status quo. Such an open-ended question, and Beijing and Taiwan’s different expectations on Washington’s proper role in cross-Strait affairs, have posed a dilemma to the United States in maintaining an evenhanded and consistent policy on cross-Strait affairs. Taipei’s desperate movement toward independence since 2003 has posited a grave challenge to the policy of strategic ambiguity. The Lee administration’s strategic priority in pursuing Taiwan’s “creeping independence” was meant to achieve a diplomatic breakthrough, reaching a peak at Lee’s 1995 Cornell trip. In contrast, the Chen administration’s strategy in “pushing the envelope” is principally around issues of a new constitution, public referenda, name rectification, and so on. Although Washington’s support is critical for Taipei’s achievement in pursuing external recognition, it is not clear whether the United States can effectively stop Taiwan from unilaterally taking such inward-oriented actions as amending its constitution and political structure. Indeed, there was a danger during President Bush’s—as well as Chen’s—first term that Taiwan’s movement toward de jure independence might result in a war across the Taiwan Strait. Since Bush’s second term, however, Taiwan’s movement toward independence has lost its momentum. The unstable cross-Strait relations have prompted Washington to adopt a policy of “strategic clarity.” This strategy can be interpreted in two ways. First, the United States will do whatever it can to help Taiwan defend itself against the mainland, even if the war is provoked by Taiwan’s independence movement. The advantage of such “clarity” is to deter Beijing from using military means, but it may nevertheless encourage Taipei to push the envelope and eventually cause a war between China and the United States. Second, the United States makes it clear to Taipei that Washington’s commitment to Taiwan’s security is not a blank check. In Harry Harding’s words, Washington makes only a “conditional
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commitment” to Taiwan’s security. The advantage of this “clarity” is to deter Taipei from legally declaring independence, but it may encourage Beijing to attack Taiwan, for the Taiwanese leaders have already repeatedly said that Taiwan is an independent sovereign state, separated from the mainland since 1999. One senior expert defined “conditional commitment” as policy clarity with “operational ambiguity,” because it is difficult to define what “Taiwan independence” really means in the eyes of Washington. Washington’s definition might be very different from what Beijing or Taipei perceives. Because Washington is more concerned with Taipei’s unilateral change of the status quo since two years ago, “conditional commitment” has gained much more support than other options in Washington. Strategic clarity, operational ambiguity, conditional commitment, and “aggressive diplomacy” against any unilateral change of the status quo across the Taiwan Strait have become watchwords for many policy makers and advisors in Washington.
B EIJING ’ S C ONFIDENCE IN M AINTAINING THE S TATUS Q UO Beijing was very eager to resolve the Taiwan issue in the 1980s, when the late Deng Xiaoping considered China’s reunification as one of the three major tasks of the government. During that period, military means were reserved not only for fighting against Taiwan’s possible independence but also for pushing the then-ruling party (Nationalists, or Kuomintang) to talk with the central government in Beijing. Starting from 1990, military means has been reserved for preventing Taiwan’s separation from China only, including foreign powers’ interference of the island. But Beijing was still concerned that Taiwan might eventually drift away if the status quo remains for a long period. In the wake of the 1995–1996 Taiwan Strait crisis, Lee Teng-hui’s 1999 remarks on “special state-to-state relations” between Taiwan with China, and Chen Shui-Bian’s election as president in March 2000, Beijing seemed to believe that Taipei was unlikely to realize instant independence through significant diplomatic achievements, legal declaration, or power transfer into the hands of the pro-independent DPP. It also seemed to believe that time was on Beijing’s side. From these assumptions, Beijing insisted on Taipei’s acceptance of the oneChina principle as the precondition for opening bilateral political dialogue; it increased military and diplomatic pressures against Taipei’s gradual movement toward independence and marginalized Taiwan’s international status, and it promoted economic and cultural exchanges across the Taiwan Strait. The DPP’s victory in the 2001
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Legislative Yuan elections once prompted Beijing to engage with the ruling party conditionally. However, such a tactic was quickly stopped after President Chen defined the cross-Strait relationship as “one country on each side” in the summer of 2002. Toward the March 2004 election, the ruling party’s advocacy for referendums and a new constitution, reflecting both its campaign strategy and the evolution of a Taiwanese national identity, sent a shockwave to Beijing, whose worries were only deepened by Chen’s reelection and the DPP’s new campaign for name rectification and its goal to make Taiwan a normal state by 2008. Whether Taipei will eventually cross Beijing’s “red lines” by holding a referendum on the independence/unification issue and making a brand-new constitution have aroused great concern in China. As China’s Taiwan Affairs Office Minister Chen Yunlin pointed out, once the Pandora’s box of referendum is opened, separatists for Taiwan’s independence will push for a new constitution (through a referendum) in 2006, and implement it in 2008, thus creating a “normal and complete country” for Taiwan. These steps are considered by Beijing as Chen Shui-Bian’s timetable for Taiwan’s independence.18 Thus, three days prior to Chen’s May 20 inaugural speech, Beijing issued a statement on May 17, 2004 articulating two options for Taipei: to accept Beijing’s demands or to become involved in a war with the mainland. The statement concludes as follows: The Taiwan leaders have before them two roads: one is to pull back immediately from their dangerous lurch toward independence, recognizing that both sides of the Taiwan Strait belong to one and the same China and dedicating their efforts to closer cross-Strait relations. The other is to keep following their separatist agenda to cut Taiwan from the rest of China and, in the end, meet their own destruction by playing with fire.
To augment the two options of either peace or war, Beijing announces “five nevers” and points out seven areas within which the two sides can work within the one-China frame. The “five nevers” read thus: Beijing will never make a compromise on the one-China principle, never give up its efforts at opening peaceful negotiation with Taiwan, never change its sincerity to work with the Taiwanese people for peaceful development across the Taiwan Strait, never soften its will to maintain China’s national sovereignty and territory integrity, and never tolerate “Taiwan’s independence.”
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The “seven areas” for cooperation proposed by Beijing include the following: 1. Resuming cross-Strait dialogues and talks; through equal negotiations, formally ending hostilities between the two sides; establishing a mechanism of trust in the military field; and setting up a framework for peace, stability and development 2. Maintaining close relations cross the Taiwan Strait in an appropriate way and timely resolving problems resulting from cross-Strait exchanges 3. Opening comprehensive and direct “three links” (postal, trade, and transportation) across the Taiwan Strait 4. Establishing closer economic partnership arrangements (CEPA) and increasing access to mainland markets for Taiwanese 5. Deepening various exchanges, increasing mutual trust, and accumulating consensus between people of the two sides 6. Creating a peaceful atmosphere across the Taiwan Strait so that the Taiwanese pursuit for social stability and economic development can be achieved 7. Resolving appropriately the issue of the international living space of the Taiwan region through negotiations. Some observers contrasted the “five nevers” with the “seven areas,” considering the former as hard and the latter as soft. But if one reads the “five nevers” carefully, it is noticeable that “peaceful negotiation” and “peaceful development” have quietly replaced “peaceful unification” as two key points here, a new sign of Beijing’s deemphasis of its unification goal amid its growing concern of Taiwan’s immediate independence. Indeed, the word “unification” appears only once in the whole statement—when it is said that China will try its best to approach the prospect of peaceful unification, while peace, stability, and development have become three key words for a “bright prospect” (heping wengding fazhang de guangming qianjing). Although Beijing insists on its own position on the one-China principle, it only asks Taipei to recognize that both the mainland and Taiwan belong to one and the same China, rather than using Beijing’s language. This implies that Taipei can refer to the constitution of the Republic of China to claim its sovereignty over the mainland. Although such a claim might symbolically challenge Beijing’s legitimacy as a true representative of China, both domestically and internationally, it would not constitute an immediate threat to Beijing as Taiwan’s independence would. Ironically, while the PRC declares that the ROC was “overthrown” in the civil war and refers to the island as
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“Taiwan,” Beijing feels more at ease when Taiwan refers to itself as the ROC because that name, at least, implies a connection to China.19 This position would preserve the “prospect of peaceful unification” for the future and, more importantly, save Beijing’s face in the international arena at present.
B EIJING ’ S R ATIONALE FOR M AINTAINING THE S TATUS Q UO Beijing’s changing priority from pursuing quick unification in the 1980s to maintaining the status quo—or peace and stability, in Beijing’s words—is not only stimulated by Taipei’s growing assertion of statehood but also justified by China’s domestic needs. Beijing has long considered China’s domestic economic development a top priority. In recent years, economic prosperity has become one of the principal sources of the regime’s legitimacy. Indeed, establishing a well-off society within the “twenty-year opportunity period” has become Beijing’s top priority, as specified in Jiang Zemin’s report to the Sixteenth National Party Congress in the fall of 2002. Such a developmental goal requires a peaceful international environment. A war across the Taiwan Strait will damage Beijing’s image as a peacefully rising power and harm Beijing’s relations with its neighboring countries, particularly Japan and ASEAN countries. China may even confront a military conflict with the United States. Although “the Chinese people are ready to shed blood and sacrifice their lives to defend the sovereignty and territorial integrity of the motherland,”20 Beijing will not sacrifice its long-term modernization goals for a war against Taiwan unless Taipei legally separates Taiwan from China. Moreover, despite Beijing’s distrust of the Chen administration, its motivation to attack Taiwan has been moderated by military factors. It would be difficult for Beijing to conduct a large-scale surprise attack on Taiwan with missiles and air power, followed up with an airborne and amphibious assault, even if U.S. combat forces did not intervene in the conflict. If the PRC relied on a ballistic missile attack or a naval blockade to coerce Taiwan, then the United States would have time to make any necessary military response.21 In recent years, military balance across the Taiwan Strait has gradually tilted favorably toward the mainland. Nevertheless, it is estimated that Beijing needs at least several years to achieve decisive superiority over the Taiwanese military. In Beijing’s calculations, enhanced military forces and deployment of missiles opposite Taiwan are not sufficient to take over Taiwan easily, but they are necessary either to prepare for the worst or to maintain an efficient deterrent against a Taiwanese declaration of independence.22
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Since peaceful unification is not an achievable goal in the short term, maintaining the status quo and the prospect of unification in the future has become Beijing’s second-best choice. While China’s February 2000 White Paper on the One-China Principle and the Taiwan Issue listed Taipei’s indefinite rejection of political talks with Beijing (the so-called third if ) as one condition for China’s use of military means, the Chinese leaders quickly interpreted the language as a reaction against Lee Teng-hui’s “two-states” remarks.23 To further soften the harsh tone of the “third if,” Qian Qichen remarked in September 2001 that as long as Taipei agreed to solve the Taiwan issue under the one-China principle, Beijing had the patience to wait.24 This suggests that as long as the status quo is maintainable, Beijing is not eager to take Taiwan back in the short term. Having demonstrated Beijing’s bottom line to Taiwan as well as to the world, Beijing feels it is unnecessary to talk too much about military options on public occasions. At a meeting commemorating the eighteenth anniversary of the issuing of Jiang’s Eight Points, Qian Qichen continued his previously softening tone on Taiwan, without mentioning that Beijing would not renounce military means against Taiwan’s independence or foreign intervention of Taiwan. This does not suggest, of course, that Beijing has given up military means. As Robert Ross observed, in the absence of a Taiwan declaration of independence, China prefers to maintain the status quo and an international environment conducive to economic and military modernization.25 In order to maintain the status quo, Beijing is employing, as it always did, both hard and soft tactics, including military threats, diplomatic pressure, economic inducement, and cultural appeals. The core issue here remains how to define Taiwan’s independence. From Beijing’s perspective, the status quo means Taiwan is not—or should not become—an independent sovereignty internationally, even though Beijing is unable to challenge Taipei’s de facto sovereignty over domestic affairs on the island. Taiwan’s comprehensive reelection of the Legislative Yuan, getting rid of those senior members originally elected in 1940s China, was hailed by Lee Teng-hui as the landmark for the beginning of the Second Republic, but probably did not qualify, from Beijing’s perspective, as the island’s de jure independence. The direct election of a president and the abolishment of Taiwan’s provincial government were both interpreted by Beijing as Taipei’s movement toward independence, but Beijing can still comfortably assume that Taiwan is part of China and not yet an independent state. Even though Taiwanese leaders from Lee Teng-hui to Chen Shui-bian have repeatedly claimed that Taiwan is an independent sovereignty and
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called Taiwan and the mainland two states, Beijing remains tolerant as long as Taipei does not change its national title and as long as the ROC’s sovereignty and territory constitutionally include the mainland. Maintaining legal linkage between the two sides of the Taiwan Strait, however symbolically, seems to be Beijing’s bottom line in dealing with Taipei’s brinkmanship toward independence. As a reaction against Taipei’s push for independence and the growing Washington-Taipei military ties, China’s adoption of the antisecession law in March 2005 triggered a dramatic March 26 demonstration that involved several hundred thousand Taiwanese people on the island. However, the number was less than many observers had expected, and Beijing’s reaction did not result in Taipei’s counteraction and a real crisis across the Taiwan Strait. Despite previous verbal reaction against Beijing, Taipei failed to take more provocative actions by legislating an antiannexation law or holding a referendum on such an issue. Meanwhile, the opposition Kuomintang’s Chairman Lien Chan and the People First Party Chairman James Soong both paid their first trips to the mainland in April and May 2005, respectively. While the Chen administration revealed mixed feelings toward the opposition parties’ preemptive trips, Washington appreciated these developments and encouraged Beijing to have direct dialogue with Taipei without preconditions.
C OMANAGING THE TAIWAN I SSUE Beijing’s policy shift from pushing for instant unification to maintaining the status quo has created new grounds for cooperation between the United States and mainland China. Although Beijing still claims the Taiwan issue belongs to China’s domestic affairs, international factors, particularly the U.S. factor, have become important determinants of China’s Taiwan policy making. This trend can be traced to 1998, when Jiang Zemin stated that the Taiwan issue is an issue related to the United States in the end. In the wake of Lee Teng-hui’s remarks of state-to-state relations with China, and Chen Shui-bian’s announcement of one state on each side, Beijing put great pressure on the United States through diplomatic channels, urging the United States to push Taipei back to the one-China box. Consequently, Beijing made a relatively restrained response to Chen’s one country on each side remarks. This restraint demonstrated Beijing’s growing confidence of the common interests between the United States and China in opposing Taiwan’s independence. Similarly, during Jiang Zemin’s October 2002 trip to President Bush’s Crawford farm, he informally
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proposed to reduce China’s missile deployment on Fujian Province in exchange for U.S. reduction of arms sales to Taiwan. When Taipei began to promote referendums in summer 2003, Beijing immediately sent Chen Yunlin, Minister of the Taiwan Affairs Office of the State Council, and Zhou Mingwei, vice minister of the same office, to the United States to express Beijing’s position on this issue. As Beijing specified during the trip, Once the “Pandora’s Box” of referendum is open, the separatist forces on Taiwan will move inexorably down the road of holding a referendum for Taiwan’s independence . . . If an independence referendum should take place, such a major incident will undoubtedly subject China-U.S. relations to serious damage and directly harm U.S. interests . . . When the United States expects China to support its policies of national interests in major international affairs, it should not ignore China’s core interests. We hope that the United States will fully realize the end of the Taiwan authorities’ push for a referendum and the harm and danger it entails, and refrain from sending any more wrong signals to the separatist forces in Taiwan.26
When Chen Yunlin visited Washington again during February 2004, he asked once more for “the United States to adhere to its position of opposing any referendum that would change Taiwan’s status, lead to Taiwan’s independence, or increase tension across the Taiwan Strait, and of opposing Taiwanese leaders’ speech and acts aimed at unilaterally changing the status quo.”27 He also hoped the United States would openly state its clear opposition to Taiwan’s March 20 referendum. The uniqueness of this diplomatic approach is that Beijing clearly asks the United States to respect China’s core interests as a return for China’s support for the United States in international affairs. In the past, China usually asked the United States to abide by the three communiqués and not support Taiwan’s independence or sell arms to the island. In other words, Beijing’s old approach was to expect the United States not to do something, rather than doing something positively for China. The only exception in the past was that Deng Xiaoping twice asked the United States to facilitate Beijing-Taipei negotiations by playing a mediator role during the mid-1980s, which was the best period in U.S.-China relations. Among other things, Beijing’s international approach toward the Taiwan issue is motivated by its changing perceptions of China’s new role in world affairs, reflecting China’s growing awareness of itself as a rising power in regional and global affairs. The international war on terrorism and the North Korean nuclear crisis have provided Beijing
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valuable opportunities to exert its political influence in the world and work together with the United States. Beijing believes that peace and development are still the basic features of the modern world. The goal of Beijing’s foreign policy is to maintain world peace and promote mutual development. Regarding its foreign relations priorities, the Chinese government used to list developing countries first, neighboring countries second, and developed countries last. In Jiang Zemin’s report at the Sixteenth National Party Congress, however, relations with developed countries were listed first, followed by that of neighboring countries and developing countries. There were at least three rationales behind this subtle change. First, in order to promote economic growth, China needs capital and technology from developed countries. Second, China’s entry into the World Trade Organization (WTO) may increase its competition with developing countries in terms of labor-intensive industries. Third, because of China’s growing economic strength and the ruling party’s orientation toward elitism, Beijing has developed a kind of consciousness of great power and become inclined to join the world club for rich countries. Beijing’s priorities in domestic and international affairs, including its priority in maintaining the status quo across the Taiwan Strait for the immediate future, make China less inclined to resort to military force and more inclined to seek U.S. cooperation in preventing Taiwan’s independence. It is worthwhile to note that when China’s Taiwan Affairs Office Minister Chen Yunlin visited Washington in February 2004, his speech was titled “The Chinese Government Striving for Maintaining Peace and Stability in the Taiwan Strait Region.” Although the term “unification” did appear several times in Chen’s speech, he made it clear that Beijing’s major goal was to maintain peace and stability, as well as the prospect of peaceful unification (emphasis added). During U.S. Vice President Dick Cheney’s April trips to China, Beijing convinced him that China would resort to military means should Taiwan cross the red lines of independence. In Beijing’s calculation, the United States and other great powers may not really support China’s unification, regardless of whether they are peaceful or not, but they are likely to endorse China’s efforts at maintaining the status quo of the cross-Taiwan Strait relations as far as Beijing articulates its position forcibly. Recent developments in the Washington-Taipei interaction seem to have given some credit to Beijing’s new approach. Apart from President Bush’s stern rebuke in December 2003 of Chen Shui-bian for giving the impression of being “willing to make decisions unilaterally that change the status quo” on cross-Strait relations, Secretary of State Colin Powell openly stated that the United States did not support Taiwan’s March 20
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referendum, and another senior U.S. administration official, Ford Hart, director of Asian Affairs, hoped Taipei would refrain from provoking a confrontation with mainland China through pressing for a new constitution prior to the election.28 Probably corresponding to Beijing’s concern about the prospect for peaceful unification, a senior U.S. administration official said that it would be wise for President Chen if he made it clear in his May 2004 inaugural speech that Taipei did not exclude the unification option for the future.29 Since Beijing and the United States have the same goals and comment interests (initially defined by Beijing, of course), Beijing has reason to expect U.S. support on the Taiwan issue for the foreseeable future and is thus inclined to comanage the Taiwan issue with the United States.
C ONCLUSION : T OWARD A W IN -W IN -W IN S OLUTION ? One positive development across the Taiwan Strait in recent years is the growing consensus of the three parties on maintaining the status quo, even though their interpretations of the status quo are not the same. As discussed above, Taiwan’s movement toward independence has lost its momentum since the beginning of 2005, due to Beijing’s strong opposition and Washington’s reaction. On the other hand, Beijing has accepted the status quo as the second-best choice in light of the immediate danger of Taiwan’s drifting away and Washington’s clear opposition to any unilateral change of the status quo. In addition, Washington’s conditional commitment to Taiwan’s security is helpful in maintaining the existing triangular relationship. Although Beijing insists that Taipei has to accept the one-China principle as the precondition for opening official dialogue, Taipei (as well as Washington) believes the two sides of the Taiwan Strait should talk without any preconditions. Such symbolic disputes on the preconditions for talk have revealed the two sides’ bargaining strategies and realistic calculation of the possible substantive result of the talks. Taiwan always fears that once it accepts the one-China framework, however ambiguously defined, the island will lose substantial bargaining power on the negotiating table. In a similar way, Beijing fears that talking with Taipei without the one-China framework would entail Taipei’s endless demands regarding Taiwan’s international status. Probably both sides never expect that they would strike a package deal through political dialogue. It is too early for the United States to worry that the cross-Strait dialogue may eventually lead to China’s reunification. It might be easier for Washington to accept political integration between the two sides in the form of a Chinese confederation.
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At any rate, the United States will continue to encourage the crossStrait dialogue, not so much for finding a final solution as establishing a formal communication channel to prevent miscommunication between the two sides of the Taiwan Strait, which could result in war. This may not be a bad thing. Since both sides of the Strait have different understandings of the meaning of one-China, it may be wise for them to set aside political disputes temporarily and develop closer economic and cultural relations by opening the three direct links.
N 1. For a full text of the 1978 communiqué, see Harry Harding, China and U.S. Normalization and Beyond (New York: Foreign Policy Association Inc., 1979), pp. 8–9. 2. Speech by U.S. Senator Craig Thomas at Woodrow Wilson Center conference on “U.S.-China Relations since the End of the Cold War,” May 9, 2000. 3. Donald S. Zagoria, “The Prospects for U.S.-Taiwan Relations,” Paper presented at the Conference on the Clinton Administration’s Policy toward the PRC and Taiwan, sponsored by the Center for East Asian Studies, the Pennsylvania State University, February 5, 1994. 4. On March 12, 1990, Beijing made it clear that military means were retained for two purposes only: to prevent Taiwan’s independence and foreign forces’ invasion of Taiwan. However, in the White Paper issued on February 21, 2000, Beijing shifted back to its old tune in the 1980s—if Taipei refuses to talk with Beijing on unification indefinitely, it will resort to tough measures, including military means, against Taiwan (May 17, 2004 statement). 5. Gang Lin and Xiaobo Hu, “US-China Relations and the Taiwan Factor,” Journal of Contemporary China (November 1999). 6. “Adjustments to U.S. Policy toward Taiwan Explained,” Background Briefing, Department of State, September 7, 1994. 7. Chas. W. Freeman, Jr. “Preventing War in the Taiwan Strait,” Foreign Affairs 77, no. 4 (July/August 1998): 6. 8. For Stanley Roth’s talk, see World Journal, August 2, 1997. 9. Byron S.J. Weng, “The Taiwan Issue in U.S.-China Relations,” paper presented at the symposium on U.S.-China Relations at the Turn of the Century, cosponsored by the Association of Chinese Political Studies and the Center for Strategic and International Studies, Washington, DC, May 21–22, 1998. 10. The “Three Nos” refers to the U.S. policy that states, “We don’t support independence for Taiwan, or two Chinas, or one Taiwan, one China. And we don’t believe that Taiwan should be a member in any organization for which statehood is a requirement.”
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T W O S T E P S F O R WA R D , O N E S T E P B A C K : D O M E S T I C P O L I T I C S A N D PRC’ S “D UA L -T R A C K ” T A I WA N P O L I C Y
Qingmin Zhang
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ross—Taiwan Strait relations over the last decade have been the most turbulent since the late 1950s. The policy of the People’s Republic of China (PRC) toward Taiwan during this period has witnessed a process of stepping forward and backward: In response to the moves toward independence taken by the Taiwan authorities, the PRC first pushed forward for reunification by declaring that if Taiwan refuses to negotiate for a peaceful settlement, the Chinese government will adopt all drastic measures possible, including the use of force, to realize the goal of reunification. But five years later, the PRC stepped back from that eagerness by adopting the antisecession law to keep the status quo. These policies of the PRC, which have evolved from emphasis on military means (1949–1979) to an emphasis on peaceful means (1979–1995), came to an era of ‘dual-track’ policies— peaceful integration and military coercion—giving each equal emphasis to further the goal of reunification. The dual-track policies are immediate reactions to Taiwan’s independence moves, but they are becoming increasingly constrained by recent changes taking place in the mainland: less charismatic leadership, the pressure for sustained economic development, demands for transparency in an era of information globalization, rising popular nationalism, and so forth. This chapter
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first traces the development of the PRC’s Taiwan policy in the last decade, then discusses its main features, and finally analyzes the major constraints and influences on the PRC’s Taiwan policy.
M AKING D ETERRENCE C REDIBLE : F ROM M ILITARY TO P OLITICAL TO L EGAL M EANS The PRC’s Taiwan policy shifted fundamentally from “liberation of Taiwan” to “peaceful reunification” in 1979. This latter policy, known as the “one country, two systems” formula, resulted from and is an important part of China’s overall policy reorientation, which has included a domestic shift from politics being in command to economics being in command, a general opening to the outside world, and, in particular, the normalization of Sino-U.S. diplomatic ties in 1979. When the PRC publicly presented these new policies during the Twelfth Chinese Communist Party (CCP) National Congress, Deng Xiaoping put forward three major tasks for the party and the country in his opening remarks: economic construction; reintegration of Chinese territory, including Taiwan; and opposition to hegemony to maintain world peace. He said that economic construction is the key since it is the foundation on which the other two tasks can be accomplished.1 These major tasks remained to be accomplished and are still the fundamental policy guidance for China in the twenty-first century.2 With the shift in its general policies, the PRC tried to create a peaceful international environment and promote cross-Strait economic and social integration as well as cultural and personal exchanges. Such policy stems from the belief that a peaceful international environment would facilitate China’s economic modernization and change the balance of cross-Strait power structures in favor of the mainland. An increase in China’s aggregated national power and, more directly, closer economic and social ties between the two sides of the Taiwan Strait will benefit and help accelerate eventual reunification of Taiwan with the mainland. There were developments that were conducive to peaceful reunification in the late 1980s and early 1990s. A big breakthrough was made in cross-Strait relations when the mainland’s Association for Relations across the Taiwan Strait (ARATS) and Taiwan’s Strait Exchange Foundation (SEF) reached a verbal agreement in November 1992 that the two sides of the Strait adhere to the one-China principle. The agreement, which was later called the “1992 consensus,” led to a series of icebreaking cross-Strait meetings. But at the same time, Taiwan leader Lee Teng-hui gradually deviated from the one-China
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stance, first to the position that the two sides are “two governments,” then to “two reciprocal political entities,” and finally to “Taiwan is already a state with independent sovereignty.” In reviewing the stormy history of cross-Strait relations and the various proposals that Beijing had advanced over the years on January 30, 1995, President Jiang Zemin of the PRC put forward, eight proposals on developing cross-Strait relations, thereafter called Jiang Badian or Jiang’s Eight Points. The Eight Points suggested new modalities of cross-Strait discussions, trade, and exchanges that would build on a common cultural heritage, take steps toward ending the state of hostilities, and create a mutually acceptable basis for reunification that took into account Taiwan’s reality.3 This conciliatory proposal did not anticipate a “speedy” reunification; rather, it sought only agreement on a transitional framework that would stabilize the status quo and facilitate economic exchanges. Most strikingly, the proposal for the first time called for the two sides of the Taiwan Strait to have equal negotiation, a break from Beijing’s long-term emphasis of dialogue between the central government (Beijing) and a local government (Taipei). The Eight Points from then on have been the guiding principles of the PRC’s policy on cross-Strait relations. But the moves toward independence made by Taipei since the mid-1990s broke the mainland’s balanced policy of simultaneously creating a peaceful international environment and pursuing peaceful reunification through cross-Strait exchanges. It prompted the mainland to consider the tradeoffs between its different goals, that is, choose either economic construction at the cost of Taiwan independence, or reunification with Taiwan through force at the cost of economic construction. The developments in the PRC’s Taiwan policy over the last decade show that the PRC is trying to attain both of these goals, and each major independence step in Taiwan has led to different PRC measures of deterrence. Its policy has evolved from military coercion to political deterrence and finally to preemptive action by adopting the antisecession law. Three Major Steps Taken A. Military Coercion—Military Exercises
Lee Teng-hui’s independence moves began in the early 1990s when positive development in cross-Strait relations had been made. Lee’s moves included his initiative for Taiwan to join the United Nations as a sovereign state since 1993 and his endeavors to obliterate the Chinese identity of the Taiwanese people, especially young people, and their identification with the mainland.4 The first remarkable step was his interview
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with the Japanese journalist Ryutaro Shiba in April 1994, in which he compared himself to Moses, saying that he would lead his followers to escape from Egypt, cross the Red Sea, and build another country in another place.5 Beijing’s concern with Lee was exacerbated by the changes with U.S.-Taiwan policies during the same period. The Bush administration, in violation of the U.S. pledge in the 1982 U.S.-China arms sales communiqué to reduce the quality and quantity of U.S. arms sales to Taiwan, sold Taiwan 150 F-16 fighters in September 1992. Two years later, the Clinton administration revised upward the U.S. “unofficial” relations with Taiwan, the biggest policy adjustment to U.S.-Taiwan relations since the normalization of U.S.-PRC relations. These concerns increased when the United States allowed Lee Teng-hui to visit his alma mater, Cornell University, in 1995. The U.S. decision, apparently forced by Congressional resolutions that were very much influenced by a strong and efficient lobby from Taiwan, not only reversed more than 25 years of U.S. diplomatic precedent but broke the Clinton administration’s fresh promises to their Chinese counterpart that the United States would not allow Lee’s visit to the United States since doing so would not be consistent with the “one-China policy.”6 What’s more, Lee used the visit as a platform to further his Taiwan independence goal and pushed Taiwan’s claim to separate sovereignty status by referring to the “Republic of China” more than half a dozen times, the “Republic of China on Taiwan” nine times, and his “country” or “nation” almost a dozen times, in spite of the U.S. explanation to China that Lee’s visit would be strictly private and that he would not be allowed to engage in political activities.7 Lee’s provocative act and U.S. inaction to constrain him were interpreted by the PRC as Taiwan independence forces “colluding with foreign forces” to create “one China, one Taiwan.”8 Beijing felt the necessity to check Lee’s separatist momentum, communicate Beijing’s grave concern over Washington’s “interference in China’s internal affairs,” and demonstrate Beijing’s commitment and determination to prevent Taiwan independence by any means. While continuing to emphasize the importance of economic links across the Strait, Beijing started with a propaganda campaign criticizing Lee as a traitor to the Chinese nation and then cancelled the second round of semiofficial cross-Strait talks, which were originally to have taken place in July 1995.9 The climax of this campaign happened in July and August, when the People’s Liberation Army (PLA) conducted significant military exercises involving missile launches and live-fire tests in areas within 100 miles of Taiwan, the first of its kind since 1949. To deter Taiwan from taking further
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independence moves, Beijing launched another round of missile tests and military exercises in March 1996. This military exercise was carried out prior to Taiwan’s presidential elections in an attempt to discourage Taiwan’s electorate from voting for a pro-independence candidate. The consequences of Beijing’s military coercion in Washington and Taipei have been studied in detail, and their effects have received mixed evaluations.10 Some scholars consider the 1995–1996 missile tests a turning point, a shift of Beijing’s reunification policy “from peaceful inducement to threat of force;” others regard it a change from “peaceful offense to coercive diplomacy.”11 In hindsight, the military exercises demonstrated that the mainland’s Taiwan policies, which have evolved from emphasis on military means (1949–1979) to an emphasis on peaceful means (1979–1995), reached an era of giving “dual-track”— peaceful integration and military coercion—equal emphasis to further the goal of reunification. That is, the new policy is to pursue peaceful reunification if possible, but use force if necessary. The dual tracks have been substantiated with clear parameters since then. B. Political Prevention—Promulgation of the Second White Paper on Taiwan The 1995–1996 Taiwan Strait crisis impeded but did not stop the dialogue and exchange between the two sides of the Taiwan Strait. The visit of Koo Chenfu, head of SEF, to the mainland, which was scheduled in July 1995, was postponed to October 1998. Koo traveled to Beijing, held talks with Vice Premier Qian Qichen, and met with Wang Daohan, head of Association for Relations Across the Taiwan Strait (ARATS) in Shanghai. The Wang-Koo meeting reached an agreement to hold further political and economic dialogue, to carry out more exchanges between their respective organizations, and to strengthen assistance in case of “incidents concerning the lives and property” of people from across the Strait. Most important, Wang accepted Koo’s invitation to pay a return visit to Taiwan in the fall of 1999. At the same time, the PRC was encouraged by the recovery of Hong Kong in 1997 and the upcoming return of the exercise of sovereignty over Macau in 1999 that a similar reunification with Taiwan by the one-country, two-systems formula would be possible. Lee was concerned that the upcoming Wang-Koo talks would draw Taiwan closer to the mainland and that the United States would support any positive agreement from their talks, given President Clinton’s three nos speech in the mainland early that year.12 He lost no time to stop this momentum. In May 1999, he published his book
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The Road to Democracy, advocating the division of China into seven regions, each enjoying “full autonomy.”13 Two months later, on the eve of Wang Daohan’s return visit to Taiwan, Lee, in an interview with a German Radio Deutsches Welle correspondent, directly challenged the “one-China principle,” saying that the amendment of the ROC constitution in 1991 had transformed cross-Strait relations into “state-tostate relations,” or “at least special state-to-state” relations. He in effect denied that they represented either an internal relationship between a legitimate government and a renegade group or domestic relations between a central government and a local government within one China.14 This so-called “two-states theory” was a watershed in PRC’s perception of Lee that further convinced the PRC that Lee had “become the general representative of Taiwan’s separatist forces, a saboteur of the stability of the Taiwan Strait, a stumbling-block preventing the development of relations between China and the U.S., and a troublemaker for the peace and stability of the Asia Pacific region.”15 Criticism of Lee in the mainland escalated to a storm of condemnation, and the semiofficial dialogue between the two sides of the Strait was again derailed. It could be argued that Lee was a secessionist by nature due to his childhood indoctrination by the Japanese colonialists in Taiwan, as most mainland editorial criticism alleged. Or it could also be argued that those harsh criticisms of Lee contributed to his further clinging to a Taiwan-independence line, which Lee became even more determined to pursue. His picking of Lien Chan as his successor within the KMT split the party, and then his supporting of Chen Shui-bian, candidate of the independent Democratic People’s Party (DPP), helped the independent DPP win the 2000 Taiwan presidential election. The PRC seemed to lose patience with peaceful reunification this time. In February 2000, just before Taiwan’s presidential election, the Taiwan Affairs Office (TAO) and the Information Office of the State Council issued the second white paper on Taiwan, which charged that Lee’s “two-states theory” was just the culmination of his unremitting betrayal of the one-China principle and that if Taiwan denied the one-China principle and tried to separate Taiwan from the motherland, “the premise and basis for peaceful reunification will cease to exist.” Most strikingly, this paper laid out three conditions, which, if realized, would require nonpeaceful means to reunify Taiwan with the mainland: [I]f a grave turn of events occurs leading to the separation of Taiwan from China in any name, or if Taiwan is invaded and occupied by foreign
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countries, or if the Taiwan authorities refuse, sine die, the peaceful settlement of cross-strait reunification through negotiations, then the Chinese government will only be forced to adopt all drastic measures possible, including the use of force, to safeguard China’s sovereignty and territorial integrity and fulfill the great cause of reunification.16
The third “if” has been interpreted as Beijing’s timetable for Taiwan’s reunification with the mainland. It was a big and ambitious step forward from the PRC’s earlier policy of patience on reunification. Zhang Minqing, the spokesperson of TAO, explained this step-forward process in the following ways: First, the reunification of Taiwan with the mainland is a national issue, and it has come to a new era in implementing this task after Hong Kong and Macau were both returned to the motherland; second, the Taiwan issue was becoming more and more complicated as Taiwan independence forces have time and again jeopardized the sovereignty and territorial integrity of the motherland and destroyed the basis for peaceful reunification, and certain external anti-China forces were interfering in China’s reunification affairs; it is better to be earlier than later on the reunification issue; third, our party and the government have set it as one of the three major tasks to realize the goal of national reunification.17
Preemptive Legal Means—Adoption of the Antisecession Law Chen Shui-bian won the 2000 Taiwan presidential election by a very small margin. While many in the West acclaimed the peaceful power transition from the ruling KMT to opposition DPP in Taiwan, Beijing became concerned with the grim future of cross-Strait relations. TAO issued a statement saying the election in Taiwan was a local election and does not change the fact that Taiwan is part of China, and that the mainland would “listen to what Chen says, and watch out for what he does.”18 The change from candidate Chen to President Chen moderated his independent stance. He laid out his guidelines for cross-Strait relations in his inaugural address on May 20 in a conciliatory way: “[A]s long as the CCP regime has no intention to use military forces against Taiwan, I pledge that during my term in office, I will not declare independence, I will not change the national title, I will not push for the inclusion of the so-called state-to-state description in the Constitution, and I will not promote a referendum to change the status quo in regard to the questions of independence or unification.”19 Chen tried to be conciliatory in his inaugural address, but it turned out to be only in words, not in deeds, which confirmed
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Beijing’s concern. Chen did not and has not accepted the PRC’s precondition for cross-Strait talks, that is, the one-China principle; instead he insisted that “one China” is not a principle but a topic for cross-Strait negotiation. While denying the 1992 consensus and the one-China principle, the DPP government has taken concrete measures to implement its Taiwan independence agenda: internationally, by pushing hard to buy advanced weapons, using dollar diplomacy to buy diplomatic recognition, and endeavoring to rectify Taiwan’s name to make Taiwan a “normal” and “complete nation”; and, domestically, by pushing for desinicization by revising Taiwan’s history textbook and changing the curriculum to cut Taiwan’s cultural connections with the mainland, to mention only a few examples. What shocked the mainland was Chen’s public speech to a meeting of pro-Taiwan independence activists in Tokyo via video link in early August 2002, in which he claimed that “China and Taiwan, on the opposite sides of the Taiwan Strait, are two countries on each side.” He, for the first time, asked for a referendum in Taiwan to decide the island’s future, breaking his pledge in his 2000 inaugural address. The PRC’s TAO immediately warned that “holding a referendum on reforming the constitution is an extremely dangerous move” and that “if the Taiwan authorities collude with all separatist forces to openly engage in pro-independence activities and challenge the mainland and the one-China principle, the use of force may become unavoidable.” This warning was later rephrased as “Taiwan independence means war.”20 When pressured not to have a referendum on the constitution, Chen narrowed the topic of referendum to a symbolic “defensive referendum” alongside the “presidential” polls on March 20, 2004, to set precedence for future referenda. He won another term for presidency by a razor-thin margin, but only 45 percent of voters cast ballots for the so-called defensive referendum, which did not meet the operative threshold of 50 percent. Just before Chen’s second inaugural, the PRC’s TAO was authorized to issue a statement on cross-Strait relations that said the PRC “will never compromise on the one-China principle, never give up our efforts for peace negotiations, never falter in our sincere pursuit of peace and development on both sides of the Strait with our Taiwan compatriots, never waver in our resolve to safeguard China’s sovereignty and territorial integrity, and never put up with ‘Taiwan independence.’ ” The statement offered two different options for Taiwan leaders: “One is to pull back immediately from their dangerous lurch toward independence, recognizing that both sides of the Taiwan Strait belong to the one and same China and dedicating their efforts to closer cross-Strait
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relations; the other is to play with fire and attempt to cut Taiwan away from China.”21 Chen was not discouraged by the failure in the defensive referendum, nor was he dissuaded by PRC threats. He insisted on a plan of constitutional “reengineering”—writing a new “constitution” in 2006 and introducing a new “Taiwan constitution” in 2008, a timetable for Taiwan independence in Beijing’s eyes. Beijing was further alarmed when the battle for the 2004 Legislature Yuan election in Taiwan drew near. It worried that if the secessionist pangreen camp gained majority in the election, Chen would be able to implement this plan of “constitutional reengineering.” This time the PRC preempted with the adoption of the antisecession law, which was passed almost unanimously by the PRC National People’s Congress in 2005. Article 8 of the law read, “In the event that the ‘Taiwan independence’ secessionist forces should act under any name or by any means to cause the fact of Taiwan’s secession from China, or that major incidents entailing Taiwan’s secession from China should occur, or that possibilities for a peaceful reunification should be completely exhausted, the state shall employ nonpeaceful means and other necessary measures to protect China’s sovereignty and territorial integrity.”22 At the same time, PRC president Hu Jintao reiterated more explicitly and in a higher profile Beijing’s “four nevers” stance in the May 17 statement.23 Scholars as well as politicians who followed the cross-Strait development paid attention to Article 8 of the antisecession law that legalized the use of force by the PRC against Taiwan, a stance as old as the Taiwan issue itself. But not enough attention has been paid to the fact that the law neither mentions any timetable for Taiwan reunification nor the one country, two systems formula, a position the PRC has insisted on for more than two decades. The law explains in details for the first time the status quo and provides the conditions for using force. This represents a step back from the timetable policy enshrined in the third “if” of the second white paper on Taiwan to a position of maintaining the status quo. Major Features of PRC’s Deterrence Three patterns come from tracing the development of the PRC’s policy on cross-Strait relations in the last decade. First, any strong drive in Taiwan for Taiwan independence would create an equally or even stronger drive in the mainland for reunification. The mainland’s policies of military coercion, political deterrence, and legal preemption were all results from or reactions to Taiwan’s independence moves.
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Without Lee Teng-hui’s visit to the United States, there would have been no military exercises in the Taiwan Strait in 1995–1996; without Lee’s “two-states theory,” the mainland would not have promulgated the second white paper. The antisecession law was crystallized by Chen Shui-bian’s announcement for constitutional reengineering. The measures the PRC has taken are different but the goal remains the same—to prevent Taiwan from being ceded from the mainland. The changes in strategy were simply to make deterrence credible. Second, the PRC’s Taiwan policy has undergone a process of stepping forward and background. The late PRC leader chairman Mao Zedong said in his talks with Henry Kissinger in the 1970s that the mainland could wait for one 100 years before reunification is realized, and the PRC did not mention any timetable for reunification in the 1980s and 1990s. Jiang’s Eight Points reiterated Beijing’s patience. But after Lee’s visit to the United States, a Jiefangjun bao (PLA Daily) editorial warned that China’s “peaceful way” to “terminate the nation’s bitterness,” that is, separation, did not mean that the process of peaceful reunification “can be delayed indefinitely.” This was a first indication that Beijing was losing patience and had become eager to realize reunification in the face of Taiwan’s provocative independence move.24 After Lee’s two-states theory, the mainland felt that it was more urgent to realize the task of reunification and made clear that it could not wait long.25 The third “if” in the white paper on Taiwan represented a bold step forward in the mainland’s Taiwan policy to realize reunification. But five years later, the antisecession law retreated from the position of eagerness by providing a condition for using nonpeaceful means. This was made clearer in the agreement between CCP Secretary General Hu Jintao and Taiwan’s People First Party (PFP) Chairman, James Soong, which was reported as “no independence, no use of force.”26 By doing so, the PRC had shifted its policy from a timetable for reunification to maintaining the status quo. The Chinese government explained, “The Taiwan question is one that is left over from China’s Civil War of the late 1940s. Owing to many complex factors, the two sides of the Taiwan Strait are yet to be reunified. But the fact that Taiwan is part of China and both the mainland and Taiwan belong to one and the same China remains unchanged.”27 Third, the major element of the mainland’s Taiwan policy, which this chapter characterizes as “dual track,” became clearer over the last decade. From 1949 to 1979, the PRC’s Taiwan policy had given prominence to the “liberation” of Taiwan. Since 1979, the prominence changed to “peaceful reunification,” though Beijing has never renounced using force when necessary. As scholars who considered
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1995 a change with the PRC’s Taiwan policy pointed out, “peaceful method and military means” and “peaceful offense and coercive diplomacy are two sides of the same policy coin.”28 Unlike the early periods when only one “track” was given emphasis, the “two tracks” or “two sides” have been given equal emphasis since 1995 and have been substantiated and clarified as “the soft becomes softer, the hard becomes harder.” Beijing explained the dual track in a dialectical way: Peaceful reunification is the goal while military deterrence guarantees that the goal will be realized peacefully. Committing itself not to use force on the Taiwan issue will “tie the hands of the Chinese government and in the end make peaceful reunification impossible.”29 This chapter has so far elaborated the development of one track— the military track—as most researchers have mainly focused on this aspect. The other track—peaceful means or conciliatory methods, which have been emphasized equally if not more by the PRC—have been overlooked. The first white paper on Taiwan in 1993 says, “There is only one China in the world, of which Taiwan is an inalienable part. The Government of the People’s Republic of China has been recognized by the United Nations and throughout the world as the sole legitimate government representing the entire Chinese people.”30 In his meeting with a group of Taiwan journalists in August 2000, thenVice Premier Qian Qichen said, “There is only one China in the world; the mainland and Taiwan both belong to the one and same China; China’s sovereignty and territorial integrity is not to be separated.”31 What Qian Qichen said implied that what the “one China” is or will be is open for negotiation and is not necessarily the PRC—it is not necessarily Taiwan becoming a part of the PRC. Article 2 of the antisecession law formalized Qian Qichen’s proposal, which provides that “there is only one China in the world. Both the mainland and Taiwan belong to one China. China’s sovereignty and territorial integrity brook no division.” The other points that have not been paid due attention, or neglected, constituted the major parts of the 2000 white paper on Taiwan and the major content of the antisecession law, which proposed or provided means for promoting cross-Strait relations. The third “if” in the white paper and Article 8 of the antisecession law have dominated the discussions of the two documents. Beijing has done a lot with the other track. For instance, soon after the adoption of the antisecession law, CCP Secretary General Hu Jintao invited Taiwan’s two biggest opposition party representatives, Chairmen Lien Chan and James Soong, to visit the mainland. Both visits led to a consensus on a wide range of issues.32 What’s more, since their visits, Beijing has taken further steps to encourage cross-Strait cooperation. Measures after Lien’s visit
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include the donation of a pair of pandas to Taiwan compatriots and the decision to expand access of Taiwan fruits to the mainland and to allow mainland residents to travel to Taiwan on sightseeing tours.33 Measures after Soong’s visit include more convenient entry for Taiwanese into the mainland, equal tuition for Taiwanese students who enroll in mainland schools of higher learning, and the gradual opening of the employment market for Taiwan residents.34 This peaceful integration “track” has achieved a lot in the last decade. For instance, cross-Strait economic, cultural, and personal exchanges have become stronger rather than weaker in spite of political stalemate, military tensions across the Strait, and Taiwan authorities’ “jieji yongren [don’t be hasty and be patient]” caution on Taiwan’s investment in the mainland. According to the statistics of the PRC’s TAO, the total volume of cross-Strait trade has reached $78.33 billion in 2004, accumulating a total of $404.575 billion since cross-Strait trade began in 1987. Taiwan has invested 64,626 projects in the mainland with more than $79.9 billion total volume of contracted investment and $39.6 billion actual investment.35 Taiwan travelers paid more than 2.73 million visits to the mainland in 2003; the number of Taiwanese visits to the mainland since 1987 had reached 33,885,252 by 2004; and more than half a million Taiwanese live on the mainland every day,36 more than the number in the Taiwanese military forces.
D OMESTIC C ONSTRAINTS AND G OVERNMENT S TRATEGIES Scholars studying cross-Strait relations have tried to discover how the mainland’s domestic politics influence the PRC’s Taiwan policy. Some use the “two-level-game” framework to study the interaction between domestic politics and the bargaining between the two political entities on the two sides of the Taiwan Strait.37 Others try to untangle the structure of the PRC’s Taiwan policy making in order to unveil its dynamics.38 Still others try to analyze the influence of different domestic factors on the PRC’s Taiwan policy.39 Foreign policy theorists have pointed out that the “numerous domestic and international factors that influence foreign policy decisions must be channeled through the political apparatus of a government which identifies, decides, and implements foreign policy.” Margaret Hermann call this apparatus “ultimate decision units,” which help shape the substance of foreign policy behavior. They identify three decision-making units: the predominant powerful leader, the single group, and the coalition of autonomous actors.40 This study found that the decision units or
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channels through which domestic factors exert their influence on the PRC’s Taiwan policy have changed with the passage of time and domestic politics has influenced Beijing’s Taiwan policy making differently over time. Constraints on Leaders Weak Political Leaders The PRC’s Taiwan policies during Mao’s time, and to a lesser extent in Deng’s times, were mainly made by a predominant leader, who is, according to Hermann, “a single individual that has the authority to commit the resources of a country or a nation in response to a particular problem.” The leader, suggests Hermann, “has the power to make the choice concerning how government is going to respond to that problem,” and “others cannot reverse his or her decision.”41 Mao personified this type of leadership. He initiated and orchestrated every step that the PRC took against Taiwan in his time. In critical moments, like the second Taiwan Strait crisis in 1958, he demanded to be updated every half hour regarding the developments in the Strait and wrote personally the declaration to Taiwan compatriots that was announced in the name of the Chinese defense minister.42 In his time, Deng put forward his idea of “one country, two systems” not in a formal policy document but in his casual talk with Winston Yang (Yang Liyu), a Chinese-American professor from Seton Hall University.43 The formula came from a summation of Deng’s separate talks with members of a Hong Kong industrial and commercial delegation and some prominent Hong Kong figures.44 The policy was later refined and substantiated by the Chinese Government. Post-Deng leaders, including Jiang Zemin and Hu Jintao, lacked the authority that Mao and Deng enjoyed, but they were constantly involved due to the sensitivity of the Taiwan issue. Beijing’s Taiwan policies have been made through a group, with Jiang Zemin and now Hu Jintao as the core, with much input from different actors. Mao’s authority came from his leadership role in the Chinese Revolution, whereas Deng’s authority came less from his revolutionary experience than from the success of his policy of reform. Leaders from Jiang’s generation have not and will not enjoy such political capital and have been much more constrained by domestic factors. Winning Taiwan reunification would credit them with enough political credential to enable them to be compared with Mao and Deng, while allowing Taiwan to go independent would not only threaten to remove them from their “throne” but also tie them with the loss of Taiwan in Chinese history. As one Chinese-American scholar wrote, “Beijing’s leadership
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has been acutely sensitive to issues of sovereignty and regime legitimacy. Therefore, no Chinese leader, conservative or reformer alike, can afford to be cast as ‘lishi zuiren’ (a person condemned by history) not acting to prevent the split of the nation. Such an appellation would be a lethal blow to any leader.”45 Robert Suettinger, an American China watcher, concurs: “The question of ‘Taiwan Independence’ is more than just a matter of ‘sovereignty, unity, and national dignity’—symbolic issues on which no party leaders can appear irresolute. It is now a matter of leadership legitimacy—PRC leaders cannot afford to be seen as backing down on the issue.”46 Another speculation about the effect of weak leadership on the PRC’s Taiwan policy could be used to explain the step forward in 2000 and step back five years later from the generation change of leaders in Beijing. During Jiang’s term as CCP Secretary General and President of the PRC, China’s economy sustained a high growth rate, which was largely attributed to Deng’s policy of reform since 1978 and further propelled by Deng’s South tour speech in 1992.47 If Taiwan reunification could be realized, or big steps could be made on cross-Strait relations, or Taiwan independence could be successfully checked, it could give Jiang a lot of credit for which he would be remembered in Chinese history. The timetable of the white paper could be explained as a demonstration of Jiang’s eagerness to achieve that goal before his retirement. When Hu came to power, as a younger generation leader, he did not have the anxiety and eagerness to push forward with this policy, because doing so would put him in a corner without any latitude of flexibility. After reappraisal of the situation, his government adopted the antisecession law. The rigidity of the mainland’s Taiwan policy also reflects the constraints Jiang and Hu face on the Taiwan issue. Leaders in Beijing owe their legitimacy and power not to constituency support but to their patronage relationship with their predecessors, who selected them as successors. Since no leaders since 1949 have renounced the use of force on the Taiwan issue, the erosion of authority of current leaders and the dependency of their legitimacy on their faithfully inheriting their predecessors’ lines prevent them from making any big policy shift or changes. This explains from the leaders’ perspective the rigidity of the mainland’s Taiwan policy on the one-China principle and the policy of not renouncing the use of force. Domestic Economic Considerations Another constraint on current Chinese leaders is the prominence of economic construction to the PRC. Since Deng Xiaoping put forward the three major tasks in early 1980, economic construction has been
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the most important and vital goal, with everything else subordinate to it. Economic construction is premised on a peaceful and stable environment, and reducing tensions across the Taiwan Strait has been part of the endeavor. The economic goal set in 1978 was to quadruple the 1980 gross domestic product (GDP) by 2000. Soon after the 1989 turmoil in Beijing and the collapse of East European socialist countries, Deng told Chinese leaders that China should keep a low profile in international affairs and keep on concentrating on economic construction. He said that if China could realize the year-2000 goal (which has subsequently been accomplished) and the goal of economic modernization by the middle of the twenty-first century, the superiority of socialism could be verified.48 Deng’s idea was later translated into a clear goal in the second stage of China’s economic construction: doubling the 2000 GDP by 2010 and quadrupling it by 2020. By 2050, China’s per capita income should be close to that of moderately developed countries. The Taiwan issue concerns China’s territorial integrity and sovereignty, but leaders in Beijing are clear that only economic success could win people’s support and save the system as well as their own political fate. PRC leaders cannot afford to fail in either task. Success in accomplishing one task will facilitate the accomplishment of the other; but there could be a conflict between attempting to accomplish these two tasks simultaneously. Using force against Taiwan would very likely bring China into war with the United States, jeopardizing the peaceful environment that is vital for China’s economic construction; and failure in economic development will undermine the legitimacy of the CCP. But to put economic modernization ahead of sovereignty and territorial integrity would possibly lead to Taiwan’s independence, which would also weaken the legitimacy of the party and potentially lead to its removal from power. The debate about whether economic construction comes first or whether territorial integrity takes precedence over economic construction has never reached a consensus. The 2008 Olympics will offer an opportunity to test how the PRC will balance these two goals. Considering the Olympics a momentum to prop up its economy and improve China’s national image, the PRC is determined to make it a great success. The Taiwan leaders who seek Taiwan’s independence understand the significance Beijing attaches to the Olympics; and there has been talk that the Taiwan authorities might use the Olympics as an opportunity to realize the goal of Taiwanese independence by introducing a new constitution for Taiwan. To Beijing, Taiwan and territorial sovereignty are more important than the Olympics. The PRC’s leadership is not prepared to let Taiwan become independent for the sake of having a successful Olympics and has made it
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very clear that Taiwan’s reunification with the mainland is one of the PRC’s major tasks; the Olympics is not. The fact that using nonpeaceful means would disturb China’s economic construction has constrained Beijing’s choices regarding Taiwanese independence. The different means of deterrence Beijing has adopted in the last decade show that Beijing is using every means possible to prevent Taiwan from seeking de jure independence, and at the same time it is trying hard to avoid any policy that could jeopardize the peaceful environment for its economic modernization. Domestic Strategies and Their Impact on Taiwan Policy Robert Putnam used the phrase “two-level game” to analyze the interaction between domestic politics and foreign policy and has discussed domestic strategies politicians use to gain the support for foreign policy.49 Refining Putnam’s two-level game, Joe Hagan points out that political leaders facing domestic constraints have two political imperatives in mind: one is to build a coalition for the policy, and the other is to retain power. To meet these two imperatives, foreign policy makers, as political leaders, would resort to three different domestic strategies, which in turn could affect the foreign policy results differently. The three strategies are accommodation, insulation, and mobilization.50 To find out how China’s domestic politics influences the mainland’s Taiwan policy, this section looks at whether and/or how the Chinese leaders use these three strategies, and how these strategies affect China’s Taiwan policy. In so doing, I do not mean to say that the PRC’s policy on cross-Strait relations is foreign policy per se, for Taiwan is not a sovereign state, and the PRC’s policy toward Taiwan is to prevent Taiwan from becoming such. A. Accommodation and Bureaucratic Politics
According to Hagan, the strategy of accommodation, which could be accomplished through bargaining and controversy avoidance, is prevalent among leaders within countries where different views exist on an issue. Many scholars who study mainland China’s Taiwan policy have tried to employ this method in their study of the PRC’s Taiwan policy. They locate different views among Chinese leaders and elites in an attempt to analyze how these differences affect the mainland’s Taiwan policy. For instance, Michael Swaine argues in his detailed studies on Beijing’s Taiwan policy decisionmaking that different views did exist among Chinese bureaucracies prior to every major shift of the mainland’s Taiwan policy. For example, before Jiang’s Eight Points were put forward, three different views existed among elites and
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decisionmakers. Many strategists within the military and various tough-minded civilians in both the Ministry of State Security and the Foreign Ministry’s research institutes argued that China should attempt to accelerate the reunification process by seeking to strictly limit Taiwan’s international options and placing great pressure (including military coercion) on Taiwan to enter into meaningful reunification tasks. A second group, including many civilian researchers, as well as strategists and officials in the Taiwan Affairs Leading Small Groups and in Fujian Province argued for the need to gradually move through at least two stages to resolve the Taiwan issue—stage one involves the signing of a peace agreement between the two sides of the Strait, and stage two involves discussion of reunification. A third group, a minority of strategists and policy officials in both civilian and military research institutes, proposed a reactive stance, seeking only to prevent Taiwan independence. But it was not until Jiang Zemin consolidated his power did he begin to think about a new policy. Jiang’s Eight Points in 1995 reflected more of the gradualist position.51 He also said before the 1995–1996 military exercises that civilian Foreign Ministry officials tended to stress the need for tough political and diplomatic responses. In contrast, other leaders from the military “suggested a significant military dimension to any response, possibly including missile ‘tests.’ ”52 Quansheng Zhao, a Chinese-American scholar, also sensed the different views among Chinese leaders based on his participation in two conferences on the mainland and his discussion with high-ranking Chinese governmental officials. He supported the view by pointing out that a hard-liner recommended a policy option of “xiepo [to rely on military strength to force a change] in order to force Taiwan to stop its drift toward Taidu (Taiwan independence)” while a soft-liner proposed that the mainland “should emphasize economic integration and avoid making military threats toward Taiwan.”53 Taiwanese scholar Szu-Chien Hsu tried a similar, but more nuanced, approach to study the domestic factors and their influence on China’s Taiwan policy.54 If these scholars are correct and differences did exist among Chinese leaders, the current dual track—peaceful means of economic integration and military deterrence—reflected the two views and could be considered as, in Hagan’s terms, an accommodation or compromise between the two lines, and the step-forward, step-back process could also be explained as a result of one faction’s victory or dominance over another. For such sensitive issues as the sovereignty and territorial integrity of Taiwan, consensus used to come from the paramount leader, but nowadays, without a paramount leader, consensus most likely results from a process of consultation. Different opinions are natural among
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different people, but whether different views among Chinese decision makers on the Taiwan issue have affected the PRC’s Taiwan policy in the same way that differences in bureaucratic political perspectives and conflict affect U.S. foreign policy decisions is a puzzle entailing two possible assumptions.55 The first assumption is the utility of the bureaucratic political model in studying mainland’s Taiwan policy, at least today. Due to the sensitivity of the Taiwan issue and the political atmosphere in the mainland, even the CIA China analysts feel that there are no “credible reports of differences with the leadership on the (Taiwan) policy issue itself.”56 So far, no Chinese scholars have done any research in this regard, and Chinese scholars basically repeat and paraphrase their government’s policy on the Taiwan issue. For the same reason no scholar outside the mainland who has tried to do so has offered sources of evidence; and no scholar drawing conclusions from field interviews in China has revealed who was interviewed or which particular leader or group of leaders held particular views on the Taiwan issue. Most scholars have inferred that different people or organizations held certain views from the notion of “where you stand depends on where you sit,” and that certain policies could enhance certain factions’ access to budgetary resources and redistribution of power.57 Most use words and phrases like “as expected,” “possibly,” “speculating,” and so on. Inferences without hard evidence call into question the utility of the bureaucratic political model in studying the PRC’s current Taiwan policy. The other assumption is the lack of bureaucratic struggle in the PRC’s Taiwan policymaking process. As You Ji argued, the bureaucratic perspective “exaggerates the divisiveness of the Taiwan issue in Chinese elite politics,” and “Taiwan in strife for independence was a factor helping the top Chinese civilian and military leaders to agree to a common response, rather than dividing them.” He pointed out after detailed study that “the PLA war game (in 1995–1996) was the outcome of Beijing’s new Taiwan consensus.”58 Even Swaine, who has revealed the different views among Chinese leaders on the Taiwan issue, concludes his research by saying, “Chinese leadership as a whole is in agreement on the basic assumptions underlying Taiwan policy. Although political and bureaucratic interests serve as a basis for debate in a consensus-oriented policy-making process, such differences have largely arisen over timing and the emphasis, not fundamental directions. Efforts to explain the evolution of China’s grand strategy toward Taiwan in terms of struggles between sharply opposed personal or bureaucratic factions (for example, Jiang Zemin versus Qiao Shi or PLA versus Jiang and the Foreign Ministry) greatly exaggerate
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the level of contention, overlook the basic consensus among Chinese elites on grand strategy toward Taiwan.”59 With consensus on the goal, the only difference, if there is one, is on the means and ways to realize that goal, and this would not affect the nature and result of the final policies. My personal experience supports the latter explanation: that is, that preventing Taiwan from separating from the mainland has become a magnet reuniting the Chinese as a nation. Voices expressed through the Internet are mainly calls for national reunification, and even Chinese democrats in the exile community believe in reunification more than they believe in democracy—though they emphasize a strong relationship between the two.60 What most Chinese care about is whether their leaders would take any measures to keep China reunited. They do not care what measures their leaders take. The question on the accountability of this approach leads to other strategies—insulation and mobilization. B. Impossibility of Insulation and Absorbing Popular Input
The second strategy political leaders facing domestic constraints choose is insulation, the essence of which is that political leaders deflect or reduce domestic constraints on their foreign policy options. This may involve “ignoring opposition challenges, suppressing opponents entirely, or co-opting them with political favors or concessions on other policy issues,” or even overriding strong policy opponents.61 The Taiwan issue is too salient in China, with too much interest both in the media and among scholars, from the elites to the general public, to be insulated from the public. This is especially so in an age of globalization, when information penetrates borders and spreads around the globe in a short time. The channels of access to information also provide vehicles for people to express their own personal views. Transparency has become a common desire in social life. In the past, policies on Taiwan were made in Beijing without any input from or knowledge of the public. Leaders made decisions and presented them to the public. This pattern is being challenged in a time of globalization. For instance, whereas there were only 186 newspapers and a handful of magazines and broadcast outlets in 1978, China has, as of 2003, 2,119 newspapers, 9,074 journals, 1,123 publishing houses that publish 190,391 kinds of books a year, 2,262 television stations, and a growing proliferation of cable TV outlets.62 Most of these outlets no longer receive full financial support from the government and must rely on advertising revenue to survive and grow. In addition, China ranks first in telephone sets and has 269 million cellular phone users.
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More important, the number of Internet users in China has exploded in ten years to 87 million by June 30, 2004.63 Popular access to the Internet not only widens the channels for the Chinese to get information and increases the information they enjoy, but it also provides safe and free channels for them to air their views on various issues. The Taiwan issue is one of the most eye-catching issues. Highly nationalist calls for reunification have become a staple on China’s rapidly growing Internet. It is very difficult, if not impossible, for any leaders in Beijing to insulate this issue from the public by ignoring or suppressing opposition. What the PRC has been doing in recent years is to take the initiative to absorb ideas and wisdom from the public. In order to meet these new challenges Jiang Zemin put forward what was later called sange daibiao (three represents) in a grand ceremony in memory of the eighteenth anniversary of the CCP. That is, the party must always represent the development trend of China’s advanced productive forces, the orientation of China’s advanced culture, and the fundamental interests of the overwhelming majority of the Chinese people.64 Lidang weigong, zhizheng weimin (dedicating to the interests of the public and governing for the people) has become the ideological guideline for all works of the party and the government in PRC. The bottom-up process in the adaptation of the antisecession law is an example of government co-opting ideas that are popularly expressed. For instance, the decision of the 1995–1996 military exercise was made in a closed atmosphere without any public knowledge until the exercises took place; the second white paper on Taiwan in 2000 had little input from the public; and both decisions were made through an up-to-down process. The antisecession law was proposed and initiated from the bottom and adopted at least symbolically through a democratic process since it was the first time the PRC’s National People’s Congress, the highest power organ according to the PRC’s constitution, got involved in the process of decision making on Taiwan. Though no mainland media covers it, the bottom-up process of adopting the antisecession law was widely reported outside the Chinese mainland. When Premier Wen Jiabao visited Great Britain in May 2004, some overseas Chinese there reportedly first proposed to Wen the suggestion of passing a reunification law in order to prevent Taiwan from seeking independence. Later on, media in Hong Kong and other places reported that a big symposium on the Taiwan issue was convened in Beijing in late September 2004. One consensus that came out of the conference also called for a law on reunification to realize reunification of Taiwan with the motherland, or check Taiwan independence. Another consensus from the symposium was reportedly
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a new framework of Taiwan policy, that is, zhengqu tan, zhunbei da, bupa tuo (strive for negotiation, prepare for war, and do not be afraid of procrastination). Bupatuo reflected a new assessment of the situation and different approach from that of the 2000 white paper, and it was later incorporated into the antisecession law. The two consensuses later became the major and new content of the antisecession law, which was passed with only two abstentions by the PRC-NPC in March 2005.
C. Mobilization and Nationalism
The third strategy leaders resort to in making external policy when facing domestic constraints is mobilization, which includes legitimization of the regime and policies through (1) appealing to nationalism and imperialist themes, or scapegoating or bashing foreign elements; (2) showing that the leaders have special capacity and wisdom for maintaining the nation’s security and international security; and/or (3) diverting attention away from divisive domestic problems.65 Appealing to nationalism and showing that only the CCP has the capacity and wisdom to save China from imperialist aggression and exploitation and safeguard China’s sovereignty and territorial integrity have always been a theme in Beijing’s Taiwan policy. Nationalism has recently become a hot topic in studies of China’s foreign policy as well its Taiwan policy. Different scholars focus on different aspects of Chinese nationalism. But no matter what aspect is considered, it is propelled by two myths in Chinese history—the 2000-year grandeur and the 100-year humiliation in recent history, as John Garver pointed out. The consistent theme of Chinese nationalism has been to blot out the humiliation and restore China to its rightful place as a great and respected power.66 Such themes began to appear in the late Qing Dynasty and remain unchanged today. The rise of the CCP was closely related to such a theme. Without the CCP there would be no new China has been a common theme in the PRC’s education. Students are taught that it was under the leadership of the CCP that the Chinese people overthrew the so-called Three Big Mountains (imperialists, feudalists, and bureaucratic capitalism) that stood on the backs of the Chinese people. Reunification of Taiwan will not only put an end to the history of humiliation but restore China’s grandeur first in size and even more so in economic and security terms. So it has been considered an unfinished task of the party, the government, and the people in the mainland to reintegrate the Chinese territory. The preamble of the constitution of the PRC states, “Taiwan is part of the sacred territory
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of the People’s Republic of China.” When asked by the American TV correspondent Mike Wallace, “What’s in it for Taiwan to be reunified with the mainland,” the late Chinese leader Deng Xiaoping replied, “First of all, it is a national question, a question of national sentiments. All members of the Chinese nation want to see China reunified. The present state of division is contrary to our national will.”67 The white paper says, “It is the lofty duty of the entire Chinese people, including our compatriots in Taiwan, to accomplish the great task of reunifying the motherland.” Those who promote independence in Taiwan have been condemned as traitors to the Chinese nation. Fending off foreign interference and safeguarding China’s sovereignty and territorial integrity has been one of the sources of legitimacy of the PRC and a tool of the government to mobilize people’s support for its Taiwan policy since 1949. Every military preparation or action against Taiwan was preceded or accompanied by political offense, a demonstration of Chinese strategy of wengong wubei (military preparedness must be accompanied by political campaign). The 1954 Taiwan Strait crisis and the 1958 bombard of Jinmen (Quemoy) and Mazu began with newspaper editorials with titles such as “We Must Liberate Taiwan” followed by many democratic party and civil organizations’ statements that support the government’s decision.68 In the last decade the PRC has once again resorted to this means to mobilize the Chinese people’s support to its Taiwan policy in particular and the government in general. The 1995–1996 military coercion was preceded by a rhetorical campaign condemning Lee Teng-hui. Statistics show that more than 400 articles were published criticizing Lee Teng-hui in the mainland by mid-August 1995.69 The political prevention in 2000 was accompanied by similar PRC propaganda. Careful scholars have noticed that there was comparatively less propaganda and media condemnation in the mainland before the antisecession law was adopted in 2005, a symbol of moderation or retreat from an earlier position of impatience. Chinese leaders, in order to check Taiwan independence, have once again reiterated their determination and uncompromised stance and have been bashing foreign interference. Announcements such as “[Chinese people] will never compromise the firm stance of adhering to the one-China principle,” they will “never tolerate Taiwan independence,” or “[I]f pro-independent forces take reckless moves to create major separatist incidents, we will crush their attempts resolutely, thoroughly, and at any costs” have been common themes in the Chinese government’s policy statements and governmentcontrolled media when it comes to the Taiwan issue. These annunciations were first targeted at Taiwan independence forces and foreign
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interference in China’s internal affairs. At the same time, they inflated the hopes and expectations of the people for their government on the Taiwan issue. Mobilized Chinese people not only expressed their determination as means of support and loyalty to the government policy but demanded their government to take efficient measures to realize the goal of reunification. The strong commitment of the government and the high expectation of the people reinforce each other: the former must be lived up to, and the latter must be met if the situation calls for it. This has put the Chinese government in a position where they cannot change their policy at all. When it comes to concrete policy, the public cares about nothing but what their government has done to stop Taiwan independence. The leaders’ concern is not what strategies will work but whether their lines are hard enough to live up to the hopes and the expectations of the people. If they failed, they could say they buneng (did but failed), but if they buwei (did not do), they will be blamed. As one mainland scholar said about the pressures the Chinese government faces on the Taiwan issue, “[N]o pressure can be larger than the pressures Chinese leaders face on the Taiwan issue. Given this pressure, they have very little latitude. Even if we suppose that there are two options (hard and soft) they use tough measures, . . . and the leader fails to resolve [the problem], he is justified. But if [he] uses too much honey, and he fails, you are regarded as guilty by all future generations.”70 In this way the rigid Taiwan policy of the PRC is a result or more precisely the victim of its mobilization and propaganda strategy on the issue. The process of stepping forward and backward in PRC’s Taiwan policy, which has been substantiated in both its military deterrence and peaceful integration in the last decade, demonstrates that leaders in Beijing, lacking political capital and charisma, find themselves in a two-level-game situation in handling the Taiwan issue. Constrained by more and more domestic factors, the PRC leaders have frequently resorted to such strategies as absorbing new ideas from the intellectuals, paying more attention to the voices of the general public, mobilizing Chinese nationalism, and making policy through a more democratic process. These strategies in turn affect the process of the decision making and the results of the PRC’s Taiwan policy. These domestic changes in the mainland have made the PRC’s Taiwan policy decisionmaking process less personalized and more sophisticated. On the positive side, these changes make the PRC’s Taiwan policy more stable and less likely to undergo abrupt changes; but the downside is that it also makes any policy innovation difficult. So the PRC’s current Taiwan policy is not expected to see any major change, and the dual track will continue before the two sides of the Taiwan Strait are reunified.
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N 1. Han Nianlong, ed., Dangai zhongguo waijiao (Contemporary Chinese Diplomacy) (Beijing: China Social Science Press, 1987), p. 37. 2. “Zeng Qinghong Outlines CPC’s Major Tasks”: Zeng speaks at the Opening Ceremony of the Third International Conference of Asian Political Parties (ICAPP), http://www.china.org.cn/english/ government/105937.htm, accessed on May 6 2006. 3. Jiang Zemin, “Jixu cujin zhongguo de tongyi (Continue to Promote the Reunification of China),” Beijing, January 30, 1996, and “Wei zuguo tongyi daye de wancheng er jixu fendou (Continue to Struggle for Accomplishing the Great Cause of National Reunification), People’s Daily, January 31, 1996, p. 1. 4. During Lee Teng-hui’s 12 years in power, the percentage of people in Taiwan who considered themselves as solely Chinese dropped from 48.5% in January 1993 to 13.1% in mid-1999. Those who considered themselves Taiwanese rather than Chinese increased from 16.7% to 44.8% during the same period. Quoted in Sheng Lijun, China and Taiwan Cross-Strait Relations under Chen Shui-bian (Singapore: Institute of Southeast Asian Studies, 2002), p. 2. 5. Suisheng Zhao, ed., Across the Taiwan Strait (New York and London: Routledge, 1999), p. 7. 6. Alan D. Romberg, Rein In at the Brink of the Precipice: American Policy toward Taiwan and U.S.-PRC Relations (Washington DC: The Henry Stimson Center, 2003), p. 164. 7. Ibid., p. 166. 8. Editorial: “Wei zuguo tongyi de weida shiye zuochu gongxian (Making Contributions to the Great Cause of the Motherland’s Reunification),” Jiefangjun Bao (PLA Daily), January 30, 1996, p. 1 9. The policies adopted by Beijing after Lee Deng-hui’s visit were summarized by Michael Swaine in his article, “Decision-Making Regarding Taiwan, 1979–2000,” in ed., David Lampton, The Making of Chinese Foreign and Security Policy (Stanford, CA: Stanford University Press, 2001), pp. 320–321. 10. Examples among others are Robert Ross, “The 1996 Taiwan Strait Confrontation: Coercion, Credibility and Use of Force,” International Security, 25, no. 2 (Fall 2000): 112–23; Robert Sutter, U.S. Policy toward Taiwan: An Introduction to the Role of Interest Groups (Boulder, CO: Rowman & Littlefield Publishers, Inc., 1998), chap. 5. 11. You Ji, “Changing Leadership Consensus,” and Suisheng Zhao, “Changing Leadership Perceptions,” in Suisheng Zhao, ed., Across the Taiwan Strait (New York and London: Routledge, 1999), pp. 78, 99–100.
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12. President Clinton stated during his visit to Shanghai in 1998 that he did not support “Taiwan independence,” “two Chinas,” “one China, one Taiwan,” or Taiwan’s entry into any international organization whose membership required statehood. 13. Lee further elaborated this point in his book Taiwan de zhu zhang (Taiwan’s Viewpoint) (Taipei: Yuanliu Publishing House, 1999), p. 241. 14. Linda Chao and Ramon Myers, The Divided China Problem: Conflict Avoidance and Resolution, Hoover Institution Essays in Public Policy no. 101 (Stanford, CA: Hoover Institute, 2000), p. 3. 15. The TAO and the Information Office of the PRC State Council, “yige zhongguo yuanze yu Taiwan wenti (The One-China Principle and the Taiwan Issue)” (White Papers On Taiwan Issue), February 2000. 16. Ibid. 17. News Brief of the State Council’s TAO, Nov. 27, 2002, PRC TAO’s website at http://www.gwytb.gov.cn/xwfbh/xwfbh0.asp?xwfbh_ m_id18, accessed on May 6, 2006. 18. zhonggong zhongyang Taiwan gongzuo bangongshi jiu Taiwan diqu chansheng xinde lingdaoren fabiao shengming (the Taiwan Affairs Office of the CCP Central (Committee issues statement on the creation of new leaders in Taiwan areas)
19.
20.
21.
22.
23.
http://www.gwytb.gov.cn/ zywg/ zywg0.asp?zywg_m_id101, accessed on May 6, 2006. “Chen Shuibian fabiao jiuzhi yanshuo (Chen Shuibian delivers inaugural address),” http://www.chinataiwan.org/web/webportal/ W2001821/A2013246.html, accessed on May 6, 2006. “Chen Shuibian de duli lichang keneng daozhi zhanzheng (Chen Shui-bian’s Independence Stance May Trigger War),” People’s Daily, November 20, 2003; “Independence Declaration Leads to War,” China Daily, November 19, 2003. The Office for Taiwan Affairs under the Central Committee of the Communist Party of China (CCCPC) and the Taiwan Affairs Office of the State Council were authorized to issue a statement on current cross-strait relations on Monday, May 17, 2004. http://www. gwytb.gov.cn:8088/detail.asp?tableheadlines&titleHeadlines&of fset300&m_id154, accessed on May 6, 2006. English version of the Antisecession Law can be accessed at http://english.people.com.cn/200503/14/eng20050314_176746. html. PRC President Hu Jintao elaborated the four points before the PRC adopted the antisecession law, “Hu Jintao jiu xin xingshixia fazhan liang’an guanxi tichu sidian yijian (Hu Jintao proposed four points on developing cross-strait relations under new situation)” which can be accessed at http://www.gwytb.gov.cn/zyjh/zyjh0.asp?zyjh_m_id 1046.
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Q Z 24. Editorial: Jiefangjun Bao (PLA Daily) January 30, 1996. 25. Hu Siyuan and Zhu Xueyi, “Dasui ‘taidu’ yituo jutong de huanxiang (Smashing ‘Taiwan independence’s’ illusion of refusing reunification by ‘procrastination, ’ ”) zhongguo guofangbao, China National Defense News, February 25, 2000. 26. h t t p : / / n e w s . x i n h u a n e t . c o m / m i s c / 2 0 0 5 – 0 5 / 1 3 / c o n tent_2953921.htm. dalu zhuanjia: ‘hu-song hui” gongba ‘budubuwu’ shishanyi (mainland experts: the declaration of ‘HuSong meeting’ sends out goodwill by ‘no independence, no using of force’), , accessed on May 6, 2006. 27. Wang Zhaoguo explains the antisecession law to the NPC, March 8, 2005, accessed at http://politics.people.com.cn/GB/1024/ 3226944.html, accessed on May 6, 2006. 28. You Ji, “Changing Leadership Consensus,” and Zhao, “Changing Leadership Perceptions,” in Zhao, ed., Across the Taiwan Strait, 78, pp. 99–100. 29. Yang Fuchang, ed., Contemporary China and Its Foreign Policy (Beijing: World Affairs Press, 2003), p. 341. 30. The TAO and the Information Office of the PRC State Council, “Taiwan wenti yu zhongguo de tongyi (The Taiwan Question and Reunification of China),” White Papers On Taiwan Issue, September, 1993. 31. Peng Ming, “Taiwan da ngju fa weixian xinhao (Taiwan Authorities Send Out Dangerous Signals),” Global Times, September, 2000. 32. The Hu and Lian agreement can be accessed at http://www.gwytb. gov.cn/zyjh/zyjh0.asp?zyjh_m_id1070; The Hu and Soong agreement can be accessed at http://www.gwytb.gov.cn/zyjh/zyjh0. asp?zyjh_ m_id1077. 33. See the PRC’s TAO office website at http://www.gwytb.gov.cn/ zyjh/zyjh0.asp?zyjh_m_id1071. 34. See the PRC’s TAO office at website http://www.gwytb.gov.cn/ zyjh/zyjh0.asp?zyjh_m_id1075; Xing Zhigang, “Hu, Soong join hands for Strait peace,” China Daily, May 13, 2005. 35. See the PRC’s TAO office website at http://www.gwytb.gov.cn/ lajmsj.htm. 36. See the PRC’s TAO office website at http://www.gwytb.gov.cn/jlwl/ rywl1.htm. 37. Jih-wen Lin, “Two-Level Games Between Rival Regimes: Domestic Politics and the Remaking of Cross-strait Relations,” Issues and Studies, 36, no. 6 (November/December 2000): 1–26. 38. Examples like Swaine, “Decision-making Regarding Taiwan,” in Lampton, The Making of Chinese Foreign and Security Policy, 289–310; George W. Tsai, “The Making of Taiwan Policy in the Mainland: Structure and Process,” Issues and Studies, 33, no. 9 (September, 1997): 1–30. 39. Szu-Chien Hsu, “The Impact of the PRC’s Domestic Politics on Crossstrait Relations,” Issues and Studies, 38, no. 2 (March 2002): 130–164.
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40. Margaret Hermann and Charles Hermann, “Who Makes Foreign Policy Decisions and How: An Empirical Inquiry,” International Studies Quarterly 33 (1989): 361–387; Margaret Hermann, Charles Hermann, and Joe Hagan, “How Decision Units Shape Foreign Policy Behavior,” in Charles Hermann, Charles Kegley, Jr., and James Rosenau, eds.,New Directions in the Study of Foreign Policy (London: Allen and Unwin, 1987), pp. 309–336. 41. Margaret G. Hermann, “Leaders and Foreign Policy Decisionmaking,” in ed., D. Caldwell and T. McKeown, Diplomacy, Force and Leadership, (Boulder CO: Westview Press, 1993), p. 79. 42. Ye Fei, “Maozhuxi Zhihui women paoji jinmen (Chairman Mao is directing us to bomb Jinmen),” in People’s Daily, December 24, 1993; Mao Zedong Waijiao Wenxuan (Mao on Diplomacy) (Beijing: CCP Central Documentation Press and World Affairs Press, 1994), pp. 358–359. 43. Deng Xiaoping, “Zhongguo dalu yu Taiwan heping tongyi de qianjing (Perspectives peaceful reunification between the Chinese mainland and Taiwan),” June 26, 1983, in Deng Xiaoping Wenxuan (Selected Works of Deng Xiaoping) (Beijing: People’s Press, 1993), vol. 3, pp. 30–31. 44. Deng Xiaoping, “Yige guojia, liangzhong zhidu (One Country, Two Systems),” Deng Xiaoping Wenxuan, pp. 58–59. 45. Quansheng Zhao, “Regime Change and the PRC’s Taiwan Policy in the DPP Era,” East Asia, 20, no. 3 (Fall 2003): 65. 46. Robert Suettinger, “Leadership Policy toward Taiwan and the United States in the Wake of Chen Shui-bian’s Reelection,” China Leadership Monitor, no. 11 (Summer 2004), p. 8. 47. In January 1992 at the crucial juncture of China’s reform and opening up program, Deng paid an inspection tour to south China where he delivered a series of speeches that further propelled China’s reform and opening up to the outside. See Selected Works of Deng Xiaoping, vol. 3, pp. 370–383. 48. Deng Xiaoping, “Gaige kaifang zhengce wending, zhongguo dayouxiwang (If the policy of reform and opening remain stable, China is of great hope),” September 4, 1989, Selected Works of Deng Xiaoping, vol. 3, p. 320. 49. Robert D. Putnam, “Diplomacy and Domestic Politics: the Logic of Two-level Games,” International Organization, 42, no. 3 (1988): 427–469. 50. Joe Hagan, “Domestic Political Explanation in the Analysis of Foreign Policy,” in ed., Laura Neack, Jeanne A. K. Hey, and Patrick J. Haney, Foreign Analysis, Continuity and Change in Its Second Generation (Englewood Cliffs, NJ: Prentice-Hall, 1995): 117–143. 51. Swaine, “Decision-Making Regarding Taiwan,” in The Making of Chinese Foreign and Security Policy, pp. 316–317. 52. Ibid., p. 323. 53. Quansheng Zhao, “Regime Change and the PRC’s Taiwan Policy in the DPP Era,” East Asia, 20, no. 3 (Fall 2003): 69–70. Hsu, “The
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54.
55. 56. 57. 58. 59.
60.
61.
62. 63.
64. 65. 66. 67. 68. 69.
70.
Impact of the PRC’s Domestic Politics on Cross-Strait Relations,” p. 137. Halprin Murton, Bureaucratic Politics of Foreign Policy (Washington DC: Brookings Institution, 1976); Graham Allison, Essence of Decision, Explaining the Cuban Missile Crisis (Boston: Little Brown, 1971). Suettinger, “Leadership Policy toward Taiwan,” p. 8. Ibid.; Hsu, “The Impact of the PRC’s Domestic Politics on CrossStrait Relations,” p. 136. You Ji, “Changing Leadership Consensus,” in Across the Taiwan Strait, pp. 77 and 93. Swaine, “Decision-Making Regarding Taiwan,” in The Making of Chinese Foreign and Security Policy, p. 334. Chinese dissident Shu Shaozhi is quoted as writing so by different scholars, quoted in Shelley Rigger, “Competing Conceptions of Taiwan Identity,” in Zhao, ed., Across the Taiwan Strait, p. 234. Hagan, “Domestic Political Explanation in the Analysis of Foreign Policy,” in Foreign Analysis, Continuity and Change in Its Second Generation, pp. 129–132. China State Statistics Bureau, Zhongguo tongji nianjian (China Statistic Year Book 2004) (Beijing: China Statistics Press, 2004), pp. 844–846, 853. China National Net Information Center (CNNIC) “The 14th Internet Development Survey Reports,” July 20, 2004. Jiang Zemin’s Speech at the Conference in Memory of the EightyYear Anniversary of the Founding of the CCP, Beijing, July 1, 2001, quoted from People’s Daily July 2, 2001. Hagan, “Domestic Political Explanation,” pp. 129–131. John Garver, The Foreign Relations of the People’s Republic of China (Prentice Hall, NJ: Englewood Cliffs, 1993), pp. 20–28. Deng Xiaoping, Selected Works of Deng Xiaoping, vol. 3, p. 170. Qu Xing, Zhongguo waijiao wushinian (Fifty Years of Chinese Diplomacy) (Najing: Jiangsu People’s Press, 2000), p. 182. (Hong Kong) China News Analysis, September 15, 1995, p. 1, quoted in Suisheng Zhao, p. 113. James Mulvenon, “The PLA, Chen Shui-bian, and the Referenda: The War Dogs That Didn’t Bark,” Hoover Institute, Stanford University, China Leadership Monitor (Summer 2004), no. 10. David Lampton, ed., The Making of Chinese Foreign and Security Policy in the Era of Reform, p. 15.
Acknowledgments: I would like to thank Shiping Hua, Eric Hyer, and Michael Glosny for their helpful comments and suggestions.
R Caldwell, D. and T. McKeown, eds., Diplomacy, Force and Leadership (Boulder, CO: Westview Press, 1993).
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Chao, Linda and Ramon Myers, The Divided China Problem: Conflict Avoidance and Resolution, Hoover Institution Essays in Public Policy, no. 101 (Stanford, CA: Hoover Institute, 2000). Deng, Xiaoping, Selected Works of Deng Xiaoping (Beijing: People’s Press, 1993). Han Nianlong, ed., Contemporary Chinese Diplomacy (Beijing: China Social Science Press, 1987). Lampton, David, ed., The Making of Chinese Foreign and Security Policy (Stanford, CA: Stanford University Press, 2001). Garver, John, The Foreign Relations of the People’s Republic of China (Englewood Cliffs, NJ: Prentice-Hall, 1993). Hermann, Charles, Charles Kegley, Jr., and James Rosenau, eds., New Directions in the Study of Foreign Policy (London: Allen and Unwin, 1987). Neack, Laura, Jeanne A. K. Hey, and Patrick J. Hane, eds., Foreign Analysis, Continuity and Change in Its Second Generation (Englewood Cliffs, NJ: Prentice-Hall, 1995). Qu, Xing, Fifty Years of Chinese Diplomacy (Najing: Jiangsu People’s Press, 2000). Romberg, Alan D., Rein In at the Brink of the Precipice: American Policy toward Taiwan and U.S.-PRC Relations (Washington DC: The Henry Stimson Center, 2003). Sheng, Lijun, China and Taiwan: Relations under Chen Shui-bian (Singapore: Institute of Southeast Asian Studies, 2002). Yang, Fuchang, ed., Contemporary China and Its Foreign Policy (Beijing: World Affairs Press, 2003). Sutter, Robert, U.S. Policy toward Taiwan: An Introduction to the Role of Interest Groups (Boulder, CO: Rowman & Littlefield Publishers, Inc., 1998). Zhao, Suisheng, ed., Across the Taiwan Strait (New York and London: Routledge, 1999).
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C’ E P T T: A E A J o s e p h Y. S . C h e n g a n d Chak-yuen Kan
I NTRODUCTION Since the release of “A Message to Compatriots in Taiwan” by the Standing Committee of the National People’s Congress (NPC) in January 1979, the Chinese leadership has adopted the long-term objective of “peaceful reunification” in guiding cross-Strait relations.1 In the new constitution of the People’s Republic of China (PRC) in 1982, a new provision was added: Article 31 stipulates that special administrative regions may be established when necessary, and “the system to be instituted in special administrative regions shall be prescribed by law enacted by the NPC in the light of specific conditions.”2 The establishment of special administrative regions and the subsequent “one country, two systems” formula were designed to apply to Hong Kong, Macau, and Taiwan. In terms of economic exchanges and trade across the Taiwan Strait, Beijing has always hoped to promote direct links with Taiwan to facilitate its policy of peaceful reunification. On the other hand, largely because of political and security considerations on the part of Taiwan, direct links in trade, mail, and transport have not been achieved. The
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absence of such direct links, however, has not prevented the rapid expansion of trade and investment across the Taiwan Strait since the mid-1980s, especially after the southern tour of Deng Xiaoping in 1992. In April and May 2005, Lien Chan, chairman of the Kuomintang, and James Soong, head of the other opposition party, the People First Party, visited China and held discussions with the top Chinese leaders, thus opening up new opportunities for cross-Strait dialogue. This chapter analyzes China’s economic and trade policies toward Taiwan, as well as the economic, trade, and investment activities across the Taiwan Strait since the early 1990s. The authors have secured unpublished trade data from the Census and Statistics Department of the Hong Kong government, and the data shed light on Hong Kong’s intermediary role in cross-Strait economic exchanges. They also help to analyze whether Hong Kong’s intermediary role will be adversely affected if direct links between mainland China and Taiwan are realized. There is naturally a concern that Hong Kong’s intermediary role will then be replaced by the ports on both sides of the Taiwan Strait (a substitution effect), but there is also considerable optimism that Hong Kong will benefit from a continuing expansion of economic exchanges between mainland China and Taiwan (an income effect).
C HINA’ S E CONOMIC AND T RADE P OLICY T OWARD TAIWAN Within the general approach of peaceful reunification, Jiang Zemin indicated in his political report to the Sixteenth National Congress of the Communist Party of China (CPC) in November 2002 that “the basic pattern and development trends regarding cross-Strait relations have not changed.” In the eyes of the Chinese leadership, its Taiwan policy must be in accord with the nation’s central task, that is, economic construction: the two fundamental approaches, reform, and opening up to the external world, as well as the upholding of the four cardinal principles. In terms of actual application, Jiang Zemin’s Eight Points program enunciated in 1995 offers a clear explanation. On the issue of Taiwan’s international space (the second point of Jiang’s Eight Points program), the Chinese authorities set a limit allowing only informal (minjian) economic and cultural relations between Taiwan and foreign countries. Under the “one China” principle, they accept Taiwan’s participation in international economic organizations such as the Asian Development Bank (under the name of Taipei, China) and the Asia-Pacific Economic Cooperation forum
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(under the name of Chinese Taipei), and they strongly object to Taiwan’s diplomatic activities, which are perceived as promoting “two Chinas” or “one China, one Taiwan.” Regarding issues relating to cross-Strait economic and trade links (the fifth point of Jiang’s Eight Point program), the Chinese leadership indicates that it would strongly promote economic flow and cooperation across the Taiwan Strait in support of economic development in mainland China and Taiwan in the twenty-first century. It believes that the realization of direct trade, mail, and transport links is based on objective economic needs and is in accord with the interests of Beijing and Taipei. The Chinese authorities perceive the promotion of the establishment of such direct links as part of their policy to push for peaceful reunification. On one occasion, the then Vice Premier Qian Qichen indicated that the “three links” were an economic issue and therefore could avoid involvement of the one-China principle. He even suggested that the negotiations could be conducted between local governments, enterprises, and trade associations on either side of the Taiwan Strait. He hastened to add, however, that civil-aviation and marine-transport routes had to be treated as domestic, not international, routes, though domestic routes could be more flexibly designated as special routes. During the visits to mainland China by Lien Chan and James Soong in April and May 2005, some consensus had been reached on the economic and trade relations across the Taiwan Strait, though the opposition party leaders had no authority to conclude formal agreements. In the meeting between Hu Jintao and Lien Chan on April 29, issues of a common market across the Taiwan Strait, exports of fruits from Taiwan to mainland China, and so forth were discussed. In the following meeting between Hu Jintao and James Soong on May 12, discussions were also held on the issues of a free-trade area across the Taiwan Strait, individual tourists traveling to Taiwan from the mainland, the expansion of agricultural exports to the mainland from Taiwan, the realization of direct flights across the Taiwan Strait in 2006, and so on. While the expansion in economic interaction, cultural exchange, and social communication probably cannot end the security and political conflicts between mainland China and Taiwan, they can certainly contribute to a reduction of tension in the strategic area.3
T AIWAN I NVESTMENT
IN
M AINLAND C HINA
Before the era of economic reforms and opening up to the external world in mainland China, Taiwanese businessmen had already invested in the mainland under various covers. The investment projects, however, were of very small scale. Since Beijing’s adoption of
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economic reforms and an open-door policy, and especially after relaxing foreign exchange controls, allowing the Taiwan people to visit their relatives in the mainland by the Taiwan authorities in 1987, and Beijing’s releasing the ‘Regulations Encouraging Investment by Taiwan Compatriots’ in July 1988, Taiwanese investment in the mainland began to expand rapidly. Such investment flows were subsequently further encouraged by various preferential measures offered by the Chinese authorities, including the establishment of “Taiwan Businessmen Investment Areas.” Production networks and Chinese social networks were significant additional factors leading to the rapid increase of Taiwan investment in mainland China.4 According to a study by Taiwan’s Mainland Affairs Council, Taiwan investment in mainland China amounted to US$100 million at the end of 1987; in the following two years, investment increased by about US$500 million per annum. At the end of 1990, Taiwan investment in mainland China rose to US$2 billion.5 Table 3.1 provides a set of detailed statistical data on Taiwan investment in mainland China in the period 1979–2004, based on official Chinese sources. On a cumulative basis, actual Taiwan investment in the mainland amounted to US$39.605 billion, 7.07 percent of total foreign direct investment (US$560.387 billion), and it ranked fourth at the end of 2004. In terms of the number of projects (64,188), Taiwan investment ranked second, indicating that the amount of investment per project was slightly below average. Table 3.2 provides the data on the regional distribution of Taiwan investment in mainland China according to statistics from Taiwan authorities. At the end of 2004, Jiangsu (including Shanghai), Guangdong, and Fujian were the leading destinations of Taiwan investment; they attracted 43.28 percent, 28.89 percent, and 8.45 percent of total Taiwan investment in the mainland, respectively, on a cumulative basis. In terms of the number of projects, Guangdong was ahead of Jiangsu, indicating that investment projects in Jiangsu were generally larger in scale. Table 3.3 indicates the distribution of Taiwan investment in mainland China by economic sector. As expected, Taiwan investment has concentrated on electronics and electrical appliances, basic metals and metal products, and chemicals, amounting to 34.05 percent, 8.98 percent, and 6.79 percent of the total investment, respectively, in the period 1991–2004. In terms of the number of projects, electronics and electrical appliances, basic metals and metal products, and precision instruments were the leading sectors. As a result of China’s impressive economic growth and its entry into the World Trade Organization (WTO), foreign investment in
Table 3.1 Mainland China Foreign Capital Inflow by Country (Area) at the End of 2004
Country (Area) HK USA Japan Taiwan British Virgin Islands Singapore South Korea UK Germany France Macau Canada Australia Malaysia Thailand Others Total
Projects
Contracted Amount (US$ billion)
Average Contracted Amount (US$ million)
68
1979—2004 (cumulative)
2004
Realized Amount (US$ billion)
Ratio of Realized to Contracted Investment (%)
Projects
Contracted Amount (US$ billion)
% of Total
Average Contracted Amount (US$ million)
Realized Amount (US$ billion)
% of Total
Ratio of Realized to Contracted Investment (%)
14,719 3,925 3,454 4,002
50.138 12.165 9.162 9.306
3.406 3.099 2.653 2.325
18.998 3.941 5.452 3.117
37.89 32.40 59.50 33.50
239,228 45,265 31,855 64,188
464.651 98.609 66.650 79.335
42.38 8.99 6.08 7.24
1.942 2.179 2.092 1.236
241.574 48.028 46.845 39.605
43.11 8.57 8.36 7.07
51.99 48.71 70.29 49.92
2,641 1,279
19.396 4.423
7.344 3.458
6.730 2.008
34.70 45.41
11,518 13,150
81.408 47.991
7.43 4.38
7.068 3.650
36.895 25.539
6.58 4.56
45.32 53.22
5,625 488 608 289 715 995 736 352 162 3,674 43,664
13.911 1.284 2.282 1.230 1.891 2.202 2.052 1.300 0.794 21.937 153.473
2.473 2.631 3.753 4.255 2.644 2.213 2.789 3.693 4.904 5.971 3.515
6.248 0.793 1.058 0.657 0.548 0.614 0.663 0.385 0.179 9.236 60.627
44.91 61.76 46.38 53.41 29.00 27.88 32.28 29.62 22.49 42.10 39.50
32,753 4,344 4,112 2,591 9,122 7,852 6,809 3,240 3,537 28,901 508,465
50.564 21.292 17.995 9.145 13.978 14.035 12.045 8.458 7.116 103.078 1,096.350
4.61 1.94 1.64 0.83 1.27 1.28 1.10 0.77 0.65 9.40 100
1.544 4.902 4.376 3.529 1.532 1.787 1.769 2.611 2.012 3.567 2.156
25.935 12.231 9.909 6.805 5.738 4.527 4.084 3.471 2.727 46.473 560.386
4.63 2.18 1.77 1.21 1.02 0.81 0.73 0.62 0.49 8.29 100
51.29 57.44 55.06 74.41 41.05 32.26 33.90 41.04 38.32 45.09 51.11
Sources: National Bureau of Statistics of China, comp., China Statistical Yearbook, various issues (Beijing: China Statistics Press, various years); Department of Trade and External Economic Relations Statistics, National Bureau of Statistics of China, comp., China Foreign Economic Statistical Yearbook, various issues (Beijing: China Statistics Press, various years); and Ministry of Foreign Trade and Economic Cooperation, ed., Intertrade, various issues (Beijing: Intertrade Publication, various years).
Table 3.2 Approved Investment from Taiwan in Mainland China by Province, 1991–2004 1991–2003 (cumulative)
Cases Jiangsu and Shanghai Guangdong Fujian Zhejiang Hebei Shandong Sichuan Hubei Liaoning Hunan Others Total
8,589 10,585 4,194 1,622 1,999 788 446 464 483 276 1,705 31,151
Amount (US$ million)
% of Total Amount
14,189.7 10,512.3 3,031.8 2,051.3 1,665.3 582.9 391.9 316.2 346.3 148.9 1,072.1 34,308.7
41.36 30.64 8.84 5.98 4.85 1.70 1.14 0.92 1.01 0.43 3.12 100
2004
Cases
639 461 591 95 72 25 23 14 5 11 68 2,004
1991–2004 (cumulative)
Amount (US$ million)
% of Total Amount
Cases
Amount (US$ million)
3,661.8 1,403.1 452.8 689.5 161.9 138.5 99.4 115.8 25.3 19.2 173.6 6,940.9
52.76 20.22 6.52 9.93 2.33 1.99 1.43 1.67 0.36 0.28 2.50 100
9,228 11,046 4,785 1,717 2,071 813 469 478 488 287 1,773 33,155
17,851.4 11,915.4 3,484.6 2,740.7 1,827.2 721.4 491.3 431.9 371.6 168.0 1,245.7 41,249.2
% of Total Amount
43.28 28.89 8.45 6.64 4.43 1.75 1.19 1.05 0.90 0.41 3.02 100
Notes: Figures include reports and approvals granted after actual investment had been made, according to Article 35 of “Act Governing Relations between Peoples of the Taiwan Area and the Mainland Area” (Taipei: Mainland Affairs Council). Online: http://www.mac.gov.tw/english/english/foreign/law1. htm (accessed 30 August 2005). Figures do not add up exactly due to rounding up. According to the Taiwan authorities, Shanghai is part of Jiangsu. Source: Investment Commission, Ministry of Economic Affairs, Taiwan, Statistics on Overseas Chinese & Foreign Investment, Outward Investment, Mainland Investment, The Republic of China (Taipei: Investment Commission, Ministry of Economic Affairs, 2004).
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70
Table 3.3 Approved Investment from Taiwan in Mainland China by Economic Sector, 1991–2004
Electronics and Electrical Appliances Basic Metals and Metal Products Chemicals Plastic Products Precision Instruments Nonmetallic Minerals Food and Beverage Processing
1991–2003 (cumulative)
2004
Cases
Amount ($ million)
% of Total amount
Cases
Amount ($ million)
5,578
10,999.9
32.06
431
2,698 1,938 2,603
2,962.7 2,349.8 2,307.9
8.64 6.85 6.73
2,887
1,894.3
1,388 2,433
1991–2004 (cumulative) % of Total Amount
Cases
Amount ($ million)
% of Total Amount
3,044.0
43.86
6,009
14,043.9
34.05
143 85 94
741.0 451.5 277.0
10.68 6.51 3.99
2,841 2,023 2,697
3,703.7 2,801.3 2,584.9
8.98 6.79 6.27
5.52
111
307.9
4.44
2,998
2,202.3
5.34
1,723.2
5.02
47
421.3
6.07
1,435
2,144.5
5.20
1,844.3
5.38
34
89.6
1.29
2,467
1,933.9
4.69
Transport Equipment Textiles Machinery Equipment Aquiculture and Forestry and Fishery and Animal Husbandry Industry Services Others Total
994 1,155
1,320.9 1,298.1
3.85 3.78
64 32
259.4 147.5
3.74 2.12
1,058 1,187
1,580.3 1,445.6
3.83 3.50
1,214
1,157.4
3.37
105
163.8
2.36
1,319
1,321.1
3.20
528 1,628 6,107
205.2 1,163.6 5,081.3
0.60 3.39 14.81
5 241 612
3.7 264.9 769.1
0.05 3.82 11.08
533 1,869 6,719
208.9 1,428.5 5,850.4
0.51 3.46 14.18
31,151
34,308.6
100
2,004
6,940.7
100
33,155
41,249.3
100
Notes: Figures include reports and approvals granted after actual investment had been made, according to Article 35 of “Act Governing Relations between Peoples of the Taiwan Area and the Mainland Area” (Taipei: Mainland Affairs Council). Online: http://www.mac.gov.tw/english/english/foreign/law1. htm (accessed 30 August 2005). Figures do not add up exactly due to rounding up. Source: Investment Commission, Ministry of Economic Affairs, Taiwan, Statistics on Overseas Chinese & Foreign Investment, Outward Investment, Mainland Investment, The Republic of China (Taipei: Investment Commission, Ministry of Economic Affairs, 2004).
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J . Y. S . C C . Y. K
China has increased rapidly in recent years. In 2004, actual foreign investment in China reached US$60.627 billion, 14.13 percent higher than in 2003. Taiwan’s investment in mainland China has been expanding in a significant manner also. Despite the political difficulties in 2004, Taiwan’s investment in mainland China rose from US$4.594 billion in 2003 to US$6.94 billion in the following year; the number of investment projects also increased from 1,837 to 2,004. Investment from Taiwan continues to focus on the Yangtze River Delta and the Pearl River Delta; in 2004, 52.76 percent of the investment funds went to Jiangsu and Shanghai, 20.22 percent to Guangdong, and 9.93 percent to Zhejiang. In terms of economic sectors, the trends remain unchanged. In 2004, 43.86 percent of Taiwan’s investment in mainland China went to the manufacture of electronics and electrical appliances, 10.68 percent to basic metals and metal products, 6.51 percent to chemicals, 6.07 percent to nonmetallic minerals, and 4.44 percent to precision instruments. In 2004, major investment projects from Taiwan in mainland China included a semiconductor manufacturing facility in Shanghai by Taiwan Semiconductor Manufacturing Company, Ltd., which planned to invest US$371 million in three years. AU Optronics Corporation also requested to increase investment in its manufacturing plant in Suzhou by US$100 million. Taiwan Formosa Plastics Group indicated its plan to enhance investment in its polypropylene manufacturing facility in Ningbo by US$69 million; Taiwan Honhai Technology Co., Ltd. similarly spent US$68 million more on its subsidiary’s, Hon Fu Tai Electronics, plant in Yantai through a third country source, while Taiwan Hsing Ta Cement Co., Ltd. invested US$60 million in a cement plant in Huangshi. It appears that Taiwan investment in mainland China has been continuing unabated. In the past two decades or so, Taiwan businessmen have experienced keen competition in their investment ventures in mainland China. They gradually appreciated that cooperation among themselves would enhance their chances of survival. This sense of solidarity has spread among all Taiwan businessmen in mainland China, though perhaps more so in the Yangtze River Delta. In early 2005, a group of Taiwan businessmen formed the Shanghai Taibao Liansuo Qiye Jiameng Xiehui (Shanghai Taiwan Compatriots Chain Enterprises Alliance Association). The association, representing a strategic union among Taiwan businessmen in Shanghai, successfully involved over 60 famous chain-enterprise brands from Taiwan operating in Shanghai, such as Zhenguo Kafei, Yonghe Dawang, and so on. These Taiwan chain-enterprise groups would coordinate their franchise locations to generate an effect of mutual support. At the other end,
C ’ E P T T
73
relaxation of restrictions on foreign investment to meet the requirements of China’s WTO membership has also offered Taiwan investors opportunities to act as sole proprietors instead of having to form joint ventures with local partners. This has been a stimulus to increase investment from Taiwan. China’s WTO membership involves a commitment to liberalize its trade regime—that is, to offer foreign enterprises a level playing field vis-à-vis domestic enterprises in the foreign trade sector. In fulfilling this commitment, Chinese authorities will have to lower tariffs on over 7,000 items of imports and to liberalize its economic environment, including opening up the domestic market, relaxing restrictions on foreign investment, and revising relevant statutes and regulations. With the exception of the 218 items that remain monopolies in the hands of state-owned enterprises, other commodities may be freely introduced into China, subject to meeting the stipulations of the relevant statutes and regulations. Foreign enterprises no longer have to depend on Chinese enterprises or joint ventures with local enterprises to serve as their sales agents, thus avoiding concessions in trade interests. These changes offer new business opportunities for foreign enterprises but also exacerbate competition among them. Taiwan enterprises in mainland China will face the same challenges. Trade relations between the PRC and Taiwan as WTO members are not yet well defined; obviously trade will further increase when political ties across the Taiwan Strait improve. In February 2004, Chinese Premier Wen Jiabao indicated the need to restrain the overheated economy in China through macroeconomic adjustment and controls (hongguan tiaokong). In April 2005, Premier Wen further stated that strong measures had to be adopted to cool down the overheated economy, generating strong responses in the Asian stock markets and foreign exchange markets. Prices of basic metals were also depressed. Such an impact fully demonstrated the increasing weight of the Chinese economy in the international market. The general view among Taiwan investors was that a soft landing was to be welcomed. There was widespread concern that a bubble had been created because of the sharp rises in the prices of raw materials, energy, and real estate in the last two years. The experience also strengthened the view that the integration of the economies across the Taiwan Strait meant that long-term stable growth of the economy in mainland China would be an important factor affecting the health of the Taiwan economy. Another significant factor has been the Olympic Games to be held in Beijing in 2008. The event involves substantial investment in infrastructure, especially transport and logistics projects, as well as
74
J . Y. S . C C . Y. K
investments in environmental protection, tourism facilities, exhibition facilities, and so forth. It is also expected that consumption will steadily expand in China in the coming years, especially of food, apparel, and digital products in the retail sector. As Taiwan investors take a longterm view regarding the mainland China market, they tend to give high priority to the expansion of their respective market shares.
I T T S H K In the analysis of trade across the Taiwan Strait through Hong Kong, besides the entrepôt trade or reexports whose value has been released as official statistics by the Hong Kong government, the physical weight of another element, transshipment trade, has also been released as official statistics by the Hong Kong government. The latter has not been treated as part of Hong Kong’s gross domestic product (GDP).6 Table 3.4 attempts to make a comparison between reexports (entrepôt trade) and transshipment trade. Entrepôt Trade Entrepôt trade has been an important form of trade across the Taiwan Strait. Table 3.5 offers the data on its historical development, covering Table 3.4 Comparison Between Reexports and Transshipment Trade
1 2 3 4 5
Item for Comparison
Reexports
Transshipment Trade
Recipient of merchandise Considered part of domestic trade? Number of times of going through customs Value of merchandise
Domestic purchaser Yes
Overseas purchaser No
Twice (upon entry and exit) Declared
Nil
6 7
Financial procedures and insurance Time required Cost
8 9
Form of trade Contractual relations
Twice Relatively higher (mainly transport cost and transaction cost) Indirect trade Two contracts are involved, but they may be concluded at different times
Unknown (only the weight is declared) Once Relatively lower (mainly transport cost)
Direct trade Only one is involved
(Continued)
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Table 3.4 Continued Item for Comparison
Reexports
Transshipment Trade
10
Settlement of payment
Payment settled indirectly in third country
11
Confirmation of destination
12
Merchandise third country?
Payment settled directly between exporter and importer Destination confirmed beforehand Merchandise passing through third country without unloading
13
Risks
Destination may not be confirmed beforehand Merchandise unloaded in third country without further action or with slight processing, then transported to the importing country Relatively higher Relatively lower
Source: Kan Chak-yuen, Juqizhong de Jingji Jinsanjiao—Zhongguo Dalu, Xianggang (The Emerging Economic Golden Triangle—Mainland China, Hong Kong and Taiwan) (Taipei: Yongye Chubanshe, 1994), p. 27.
Taiwan’s exports to mainland China through Hong Kong, mainland China’s exports to Taiwan through Hong Kong, their respective annual growth rates, and Taiwan’s trade balance. The shares of these trade flows as percentages of Taiwan’s exports and imports are also tabulated. The development of entrepôt trade across the Taiwan Strait may be divided into six periods: (1) before 1979, the period of prohibition; (2) 1979–1983, the period of preliminary development; (3) 1984– 1986, the period of development; (4) 1987–1997, the period of stable growth; (5) 1998–2001, the period of low tide; and (6) 2002–2004, the period of substantial development. Between 1970 and 1978, entrepôt trade across the Taiwan Strait amounted to US$194.63 million; Taiwan’s indirect imports were a mere US$194.51 million; and its indirect exports to mainland China were as low as US$0.12 million. Taiwan suffered a trade deficit. Prohibition was a result of sharp political confrontation; neither Beijing nor Taipei tolerated exchanges of any kind across the Taiwan Strait. The beginning of the era of economic reforms and opening to the outside world in mainland China as well as the release of the “Message to Compatriots in Taiwan” by the Standing Committee of the NPC marked the beginning of a thaw in relations across the Taiwan Strait.
Table 3.5 Entrepôt Trade Across the Taiwan Strait through Hong Kong, 1993–2004. Unit: US$ million
76
Total Trade
Year 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989
Amount 1.80 2.52 7.94 16.77 21.41 25.68 41.09 30.65 46.77 77.80 311.20 459.30 278.50 247.70 553.20 1,102.70 955.60 1,515.50 2,720.90 3,483.40
Annual Growth Rate (%) — 40.00 215.08 111.21 27.67 19.94 60.01 25.41 52.59 66.35 300.00 47.59 39.36 11.06 123.33 99.33 13.34 58.59 79.54 28.02
Taiwan’s Exports to Mainland China through Hong Kong
Amount — — — — 0.01 0.01 0.02 0.03 0.05 21.50 235.00 384.20 194.50 157.90 425.50 986.90 811.20 1,226.50 2,242.20 2,896.50
Annual Growth Rate (%) — — — — — 0 100.00 50.00 66.67 42,900.00 993.02 63.49 49.38 18.82 169.47 131.94 17.80 51.20 82.81 29.18
Mainland China’s Exports to Taiwan through Hong Kong
% of Taiwan’s Exports
Amount
Annual % of Growth Rate (%)
— — — — a a a a a 0.13 1.19 1.70 0.88 0.63 1.40 2.21 2.04 2.30 3.70 4.38
1.80 2.52 7.94 16.77 21.40 25.67 41.07 30.62 46.72 56.30 76.20 75.20 84.00 89.90 127.80 115.90 144.20 288.90 478.70 586.90
— 40.00 215.08 111.21 27.61 19.95 59.99 25.44 52.58 20.51 35.35 1.31 11.70 7.02 42.16 9.31 24.42 100.35 65.70 22.60
Taiwan’s Imports 0.11 0.13 0.31 0.44 0.30 0.43 0.54 0.35 0.42 0.38 0.39 0.35 0.44 0.44 0.58 0.58 0.60 0.83 0.96 1.12
Trade Balance of Taiwan 1.80 2.52 7.94 16.77 21.39 25.66 41.05 30.59 46.67 34.80 158.80 309.00 110.50 68.00 297.70 871.00 667.00 937.60 1,763.50 2,309.60
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
4,043.60 5,793.10 7,406.90 8,689.00 9,809.50 11,457.00 11,300.00 11,458.90 10,018.97 9,803.07 11,573.70 10,504.80 12,019.80 13,950.40 17,247.28
16.08 43.27 27.86 17.31 12.90 16.79 1.37 1.41 12.57 2.15 18.06 9.24 14.42 16.06 23.63
3,278.30 4,667.20 6,287.90 7,585.40 8,517.20 9,882.80 9,717.60 9,715.08 8,364.10 8,174.87 9,593.10 8,811.50 10,311.8 11,789.4 14,761.9
13.18 42.37 34.73 20.63 12.28 16.03 1.67 0.03 13.91 2.26 17.35 8.15 17.03 14.33 25.21
4.88 6.12 7.72 8.93 9.15 8.84 8.38 7.95 7.56 6.72 6.47 7.17 7.90 8.17 8.48
765.40 1,126.00 1,119.00 1,103.60 1,292.30 1,574.20 1,582.40 1,743.82 1,654.87 1,628.20 1,980.50 1,693.30 1,708.10 2,161.10 2,485.38
30.41 47.11 0.62 1.38 17.10 21.81 0.52 10.20 5.10 1.61 21.64 14.50 0.87 26.52 15.01
1.40 1.79 1.55 1.43 1.51 1.51 1.56 1.52 1.58 1.47 1.41 1.58 1.52 1.70 1.48
2,512.90 3,541.20 5,168.90 6,481.80 7,224.90 8,308.60 8,135.20 7,971.26 6,709.23 6,546.67 7,612.60 7,118.20 8,603.70 9,628.30 12,276.52
Note: “a” indicates that the figure is smaller than 0.01. Sources: Census and Statistics Department, Hong Kong Special Administrative Region and Department of Statistics, Ministry of Finance, Taiwan.
77
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J . Y. S . C C . Y. K
Entrepôt trade began to emerge. In 1979, Taiwan’s reexports to mainland China through Hong Kong sharply rose to US$21.5 million from US$50,000 in the previous year. Between 1980 and 1983, mainland China’s reexports to Taiwan continued to increase, despite a small decline in 1981. At the same time, Taiwan’s reexports to mainland China expanded even more rapidly. As a result, Taiwan began to secure a trade surplus from 1980 onwards. In the period 1984–1986, Taiwan’s reexports to mainland China experienced sharp fluctuations, though the total value of the indirect trade continued to rise substantially and Taiwan’s trade surplus also continued to expand. The fluctuations were probably the result of an announcement made by the Chinese authorities in June 1985, when they stopped the purchase of consumer goods from Taiwan and limited the indirect imports of goods from Taiwan to entering through only Fujian and Hainan. The period of 1987–1997 represented a decade of consistent growth in indirect trade across the Taiwan Strait, although the trade volume slightly declined in 1996. Mainland China’s reexports to Taiwan steadily increased in the period, with the exception of 1992 and 1993, which showed a slight drop. At the same time, Taiwan’s reexports to mainland China rose every year, and the same applied to its trade surplus (with the exception of 1996 and 1997). It was significant that though the Tiananmen incident in 1989 and Lee Teng-hui’s informal visit to the United States in 1995 caused serious setbacks in cross-Strait relations, the indirect trade had not been adversely affected in a marked manner. The decade of stable growth was followed by a short period of low tide. In the period of 1998–2001, indirect trade in either direction across the Taiwan Strait adjusted downward every year, with that in 1998 showing a sharp decline, though there was a rebound in 2000. This was obviously the impact of the Asian-Pacific financial crisis that began in July 1997. There was, however, substantial development in economic exchanges across the Taiwan Strait between 2002 and 2004. As a result of the PRC and Taiwan joining the WTO in December 2001 and January 2002, respectively, indirect trade in either direction across the Taiwan Strait expanded rapidly, and the total value of the indirect trade showed double-digit growth in all three years (see tables 3.5, 3.6 and 3.7). Transshipment Trade Since 1983, the Census and Statistics Department of the Hong Kong government has been collecting data on transshipment trade across
Table 3.6 Taiwan’s Major Exports to Mainland China, 2004
Rank
HS Code
1
85
2
90
3
84
4 5 6 7 8 9 10
39 72 29 54 74 59 55
Items Electrical equipment and accessories Optical, photographic, and related equipment and accessories Mechanical appliances and accessories Plastics and plastic products Steel Organic chemicals Artificial silk fibers Copper and copper products Textile products for industrial use Artificial cotton fibers Total
Amount (US$million)
Growth Rate over 2003
% of Total Exports
14,043.0
25.7
25.1
5,737.8
80.7
51.3
5,646.3 4,518.4 2,539.5 1,813.8 1,274.7 1,075.6 701.6 599.8
11.0 29.9 0.2 63.7 8.7 52.0 0.7 7.0
17.7 41.1 35.6 44.2 35.9 51.2 44.3 33.8
37,950.5
27.8
Notes: The HS coding system has been applied since June 1995. Figures do not add up exactly due to rounding up. Sources: Census and Statistics Department, Hong Kong Special Administrative Region and Department of Statistics, Ministry of Finance, Taiwan.
79
Table 3.7 Taiwan’s Major Imports from Mainland China, 2004 Growth Rate over 2003
80
Amount (US$million)
% of Total Imports
Rank
HS Code
1
85
Electrical equipment and accessories
4,745.8
39.1
11.3
2
84
Mechanical appliances and accessories
3,332.9
32.5
13.8
3
72
Steel
1,459.2
328.8
15.1
4
27
Mineral fuels, lubricants, and related materials
1,034.6
57.8
4.8
5
90
Optical, photographic, and related equipment and accessories
999.4
115.9
8.2
6
29
Organic chemicals
367.7
44.7
4.8
7
76
Aluminium and aluminium products
328.6
121.5
16.5
8
39
Plastics and plastic products
303.4
58.3
6.7
9
25
Rocks, lime, and cement
268.0
32.6
40.8
10
87
Automobiles, parts, and accessories
230.3
58.9
6.6
13,069.9
57.7
Items
Total Note: Figures do not add up exactly due to rounding up. Source: Directorate General of Customs, Ministry of Finance, Taiwan.
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81
the Taiwan Strait through Hong Kong. As transshipment trade does not have to go through customs, the value of the merchandise does not have to be declared, and the data are limited to weight, volume, and commodity structure. The transshipment trade data collected by the Shipping and Cargo Statistics Section of the Census and Statistics Department were not released annually before 1997, and the authors were only able to examine the complete data at the department (see Table 3.8). It was noticed that in terms of the weight of the merchandise in transshipment trade from Taiwan to mainland China through Hong Kong, there were declines in 1984 and 1985; in fact the amount in 1985 represented the lowest point throughout the years of the transshipment trade. These declines were mainly due to restrictive policies on the part of the Chinese authorities to cool down the overheated economy in mainland China in these years. Since 1986, transshipment trade across the Taiwan Strait through Hong Kong had been increasing every year until 2003, with greater increases in 1986, 1988, 1989, 1991, and 1992. The Asian-Pacific financial crisis,
Table 3.8 Transshipment Trade Across the Taiwan Strait through Hong Kong, 1993–2004 Transshipment Trade Transshipment Trade from from Taiwan to Mainland Mainland China to Taiwan China through Hong Kong through Hong Kong Year 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Total
Amount Annual Amount Annual Amount Annual (in kilotons) Growth Rate (in kilotons) Growth Rate (in kilotons) Growth Rate 1,152 1,227 1,718 1,988 2,453 2,717 3,590 4,371 5,195 5,910 5,765 5,401
— 6.5 40.0 15.7 23.4 10.8 32.1 21.8 18.9 13.8 2.5 6.3
221 442 557 626 758 873 962 1,002 1,107 1,480 1,540 1,345
— 100 26.0 12.4 21.1 15.2 10.2 4.2 10.5 33.7 4.1 12.7
1,373 1,669 2,275 2,614 3,211 3,590 4,552 5,373 6,302 7,390 7,305 6,746
— 21.6 36.3 14.9 22.8 11.8 26.8 18.0 17.3 17.3 1.2 7.7
Note: The Census and Statistics Department of the Hong Kong Government has begun collecting data on transshipment trade across the Taiwan Straits through Hong Kong since 1983. Figures between 1993 and 1999 cover only maritime transport; figures from 2000 onward cover maritime and river transport. Source: Shipping and Cargo Statistics Section, Census and Statistics Department, Hong Kong Special Administrative Region. The statistics in this table are not available to the public; they were acquired by the authors through special request.
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however, did not seem to have a major impact on the transshipment trade, as transshipment trade from Taiwan to mainland China through Hong Kong grew to 23.4, 10.8, and 32.1 percent in the years of 1997, 1998, and 1999, respectively. The growth continued in the following three years: 21.8 in 2000, 18.9 in 2001, and 13.8 percent in 2002. There were declines, however, in 2003 and 2004. Regarding transshipment trade from mainland China to Taiwan through Hong Kong, the amounts in 1983 and 1984 showed increases, while those in 1985 and 1986 indicated declines. From 1987 to 2003, there was growth every year, mainly because the Taiwan authorities had adopted more liberal policies toward indirect imports from mainland China since 1987. It is interesting to note that neither the Tiananmen incident nor the Asian-Pacific financial crisis had any noticeable adverse impact on this indirect trade flow. In 2004, transshipment trade from mainland China to Taiwan through Hong Kong dropped by 12.7 percent after a long period of continuous growth. Statistics of Trade across the Taiwan Strait So far, the statistics of the value of trade across the Taiwan Strait in this chapter have been based on the figures of the entrepôt trade through Hong Kong.7 However, as economic and trade exchanges across the Taiwan Strait continue to expand, a number of factors have to be considered. In the first place, because of transport costs and legal restrictions on the part of the Taiwan authorities, some Taiwan businessmen put down in their customs declarations Hong Kong instead of mainland China as the final destination of their merchandise. Some of this merchandise went into mainland China through Hong Kong but did not stay in Hong Kong, and some of this merchandise went into mainland China through other places. Hence, the customs authorities of Hong Kong as well as Taiwan failed to compile accurate statistics on trade across the Taiwan Strait. As Taiwan investment in mainland China continued to increase, the discrepancies in the statistics also expanded, especially because transshipment trade from Taiwan to mainland China, whether through Hong Kong or not, continued to rise. Hence, it is no longer appropriate to use the figures of the entrepôt trade through Hong Kong as the basis of the value of trade across the Taiwan Strait. According to the authors’ interviews of Hong Kong’s shipping companies, Taiwan businessmen had already begun to ship their merchandise to mainland China via Naha and Ishigaki-jima Island in Japan, and Pusan, Kunsan, and Mokpo in South Korea since 1993 or so.
Table 3.9 Comparisons of Trade Statistics and Assessment Across the Taiwan Strait from Various Sources, 1989–2004. Unit: US$ million Statistics from Hong Kong Government
Statistics From Taiwan Customs
Statistics from PRC Customs
Assessment of Mainland Affairs Council, Taiwan
Year
Exports
Imports
Total Trade
Exports
Imports
Total Trade
Exports
Imports
Total Trade
Exports
Imports
Total Trade
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
2,896.5 3,278.3 4,667.2 6,287.9 7,585.4 8,517.2 9,882.8 9,717.6 9,715.1 8,364.1 8,174.9 9,593.1 8,811.5 10,311.8 11,789.4 14,761.9
586.9 765.4 1,126.0 1,119.0 1,103.6 1,292.3 1,574.2 1,582.4 1,743.8 1,654.9 1,628.1 1,980.5 1,693.3 1,708.1 2,161.1 2,485.4
3,483.4 4,043.7 5,793.2 7,406.9 8,689.0 9,809.5 11,457.0 11,300.0 11,458.9 10,019.0 9,803.0 11,573.6 10,504.8 12,019.9 13,950.5 17,247.3
— — — 1.1 16.2 131.6 376.6 622.9 627.8 834.7 2,539.5 4,217.5 4,745.6 9,945.0 21,417.3 34,046.7
— — 597.5 747.1 1,015.5 1,858.7 3,091.4 3,059.8 3,915.4 4,110.5 4,522.2 6,223.3 5,902.2 7,947.7 10,960.5 16,681.6
— — 597.5 748.2 1,031.7 1,990.3 3,468.0 3,682.7 4,543.2 4,945.2 7,061.7 10,440.8 10,647.8 17,892.7 32,377.8 50,728.3
— 2,255.0 3,639.0 5,881.0 12,933.1 14,084.8 14,783.9 16,182.2 16,441.7 16,629.6 19,537.5 25,497.1 27,339.4 38,063.1 49,632.3 64,778.6
— 319.7 594.8 698.0 1,461.8 2,242.2 3,098.1 2,802.7 3,396.5 3,869.6 3,951.7 4,994.9 5,000.2 6,585.9 9,004.7 13,545.2
— 2,574.7 4,233.8 6,579.0 14,394.9 16,327.0 17,882.0 18,984.9 19,838.2 20,499.2 23,489.2 30,492.0 32,339.6 44,649.0 58,637.0 78,323.8
3,331.9 4,394.6 7,493.5 10,547.6 13,993.1 16,022.5 19,433.8 20,727.3 22,455.2 19,840.9 21,312.5 25,009.9 21,945.7 29,465.0 35,357.7 44,960.4
586.9 765.4 1,125.9 1,119.0 1,103.6 1,858.7 3,091.4 3,059.8 3,915.4 4,110.9 4,522.2 6,223.3 5,902.2 7,947.7 10,962.0 16,678.7
3,918.8 5,160.0 8,619.4 11,666.6 15,096.7 17,881.2 22,525.2 23,787.1 26,370.6 23,951.8 25,834.7 31,233.2 27,847.9 37,412.7 46319.7 61,639.1
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Notes: Exports in the table refer to exports from Taiwan to Mainland China, and imports in the table refer to imports from Mainland China to Taiwan. Statistics from Taiwan Customs tend to underestimate the actual amount of trade across the Taiwan Straits. Regarding exports, manufacturers/exporters often reported Hong Kong as the destination, instead of reporting mainland China as the ultimate destination. Regarding imports, because of various restrictions imposed on imports from mainland China by the Taiwan authorities, some goods from mainland China probably had been smuggled into Taiwan or entered Taiwan through fraudulent certificates of origin. The latter phenomena probably have been less significant in recent years, because of much relaxation of restrictions against imports from mainland China by the Taiwan authorities. In the past the People’s Republic of China (PRC) Customs did not seriously investigate the issues of genuine producer countries and ultimate consumption countries, and simply relied on the sources of imports and destinations of exports as statistical standards. As a result, its statistics tended to overestimate China’s trade with Hong Kong, and underestimate China’s trade with other countries because Hong Kong was falsely reported as the source of imports and the destination of exports due to its free trade policies. Since 1993, it has made adjustments and improved the reliability of its statistical data.
Table 3.10 Share of Cross-Straits Trade in Hong Kong’s Entrepôt Trade and Transshipment Trade, 1990–2004
Transshipment Trade
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Hong Kong
Cross-Straits Trade through Hong Kong
Entrepôt Trade
Transshipment Trade
Entrepôt Trade
Share of Cross-Straits Trade in Hong Kong’s Total (%)
Year
Amount (in kilotons)
Annual Growth Rate
Amount (in US$ billion)
Annual Growth Rate
Amount (in kilotons)
Annual Growth Rate
Amount (in US$ billion)
Annual Growth Rate
Transshipment Trade
Entrepôt Trade
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
7,231 8,532 8,774 9,360 13,152 17,096 16,577 17,585 21,109 26,766 31,652 35,292 40,694 46,112 50,479
— 18.0 2.8 6.7 40.5 30.0 3.0 6.1 20.0 26.8 18.3 11.5 15.3 13.3 9.5
53.076 68.569 88.567 105.541 121.528 142.624 152.020 159.556 148.615 151.077 178.425 170.188 183.280 207.788 242.709
— 29.2 29.2 19.2 15.1 17.4 6.6 5.0 6.9 1.7 18.1 4.6 7.7 13.4 16.8
93 433 1,083 1,373 1,669 2,275 2,614 3,211 3,590 4,552 5,338 6,253 7,390 7,305 6,746
— 365.6 150.1 26.8 21.6 36.3 14.9 22.8 11.8 26.8 17.3 17.1 18.2 1.2 7.7
4.043 5.793 7.406 8.689 9.809 11.457 11.300 11.458 10.019 9.442 11.574 10.504 12.019 13.950 17.247
— 43.3 27.8 17.3 12.9 16.8 1.4 1.4 12.6 5.8 22.6 9.2 14.4 16.1 23.6
1.3 5.1 12.3 14.7 12.7 13.3 15.8 18.3 17.0 17.0 16.9 17.7 18.2 15.8 13.4
7.6 8.4 8.4 8.2 8.1 8.0 7.4 7.2 6.7 6.2 6.5 6.2 6.6 6.7 7.1
Note: Figures between 1990 and 1999 cover only maritime transport; figures from 2000 onwards cover maritime and river transport. Source: Census and Statistics Department, Hong Kong Special Administrative Region.
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An examination of Table 3.9 may offer some illustrations of such discrepancies. In 1993, Hong Kong customs statistics showed that the indirect trade across the Taiwan Strait amounted to US$8.689 billion, while Taiwan’s Mainland Affairs Council estimated the trade to have a value of US$15.097 billion. In 2001, the two sets of figures were US$10.5 billion and US$27.8 billion, respectively; the latter assessment was 1.65 times higher than the Hong Kong customs figures. The increase in the discrepancy was mainly due to the increase in transshipment trade across the Taiwan Strait through Hong Kong, as well as the increase in goods reaching the other side of the Taiwan Strait through ports such as Pusan in South Korea without unloading and changing ships. In 2004, while the Hong Kong Customs and Excise Department reported the indirect trade across the Taiwan Strait to be worth US$17.2 billion, the assessment of Taiwan’s Mainland Affairs Council registered US$61.6 billion (see Table 3.10), 3.58 times the former figure, reflecting that the discrepancy had been expanding.
C The major purpose of this chapter is to present the actual data on the economic exchanges across the Taiwan Strait through meticulous collection and tabulation from various sources. Relative to the existing literature, this set of statistics is perhaps the most comprehensive and up-to-date. The basic analysis of the statistical data also highlights the broad trends and issues involved. The Chinese leadership’s basic position is to achieve peaceful unification of Taiwan while retaining the military option as an ultimate resort and as a means to exert pressure on Taiwan. The expansion of economic exchanges across the Taiwan Strait has strengthened the Chinese leaders’ confidence, for they expect that economic integration will help to provide the foundation for peaceful reunification. This confidence in turn will persuade Chinese leaders to reduce their dependence on military means. This economic integration is perhaps most vividly demonstrated by the over one million Taiwanese working and living in China today as well as another million staying in mainland China on short-term visits. Taiwan leaders, and especially the Chen Shui-bian administration and the DPP, perceive the increasing economic dependence of Taiwan on mainland China as an erosion of Taiwan’s long-term security. The Lee Teng-hui administration and its successor have attempted to limit Taiwan investment in mainland China—controversies over the establishment of eight-inch-wafer-fabrication facilities in the mainland by Taiwan investors and Taiwan Formosa Plastics Group’s proposed petrochemical
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complex in Zhangzhou, Fujian are obvious cases in point. Lee Tenghui’s encouragement of Taiwan investment in Southeast Asia in the mid1990s failed to dampen the attraction of the Chinese market. Today, few in Taiwan want to see a deterioration in cross-Strait economic exchanges, for the adverse impact will hurt almost all Taiwanese people. As the PRC and Taiwan have joined the WTO, direct trade across the Taiwan Strait is expected to be realized sometime in the future. At present, the realization of direct trade across the Taiwan Strait is not expected to have a major economic impact on Hong Kong, which has been serving as the intermediary in the indirect trade between mainland China and Taiwan. In economic terms, the realization of direct trade will generate a substitution effect and an income effect. In the initial stage, direct trade means that merchandise crossing the Taiwan Strait no longer has to pass through Hong Kong. This substitution effect obviously has a negative impact on the Hong Kong economy. In the longer term, it is hoped that the expansion of economic exchanges across the Taiwan Strait, stimulated by the realization of direct trade and accompanied by an improvement of the political climate, will generate an income effect that will benefit Hong Kong. Taiwan’s investment in the Pearl River Delta Region has been increasing, and in many ways, it is still more convenient for Taiwan merchandise to go through Hong Kong to reach the Pearl River Delta Region. It is still uncertain whether the sum of the substitution effect and the income effect will be positive or negative for Hong Kong. It is difficult to predict whether the proportion of Taiwan investment in mainland China going to Guangdong will continue to increase, though the absolute amount will likely rise for a considerable period of time. In general, Hong Kong expects to secure a declining share of the businesses generated by the fast-expanding economy in mainland China and hopes that the actual amount of its share will nonetheless continue to expand. Taiwan’s substantial economic interests in the mainland offer the Chinese leadership ample opportunities to strengthen its united front work in Taiwan. The business community in Taiwan will be an effective lobby for Beijing to the extent that it will seek liberalization measures to facilitate economic exchanges across the Taiwan Strait. This in turn should deter the Chen Shui-bian administration from challenging the basic position of the Chinese authorities, thus leading to an escalation of tension between Beijing and Taipei. The policy orientations of the Taiwan business community will certainly influence party politics in the island through campaign finance and other means. It is less clear how coastal provinces in mainland China benefiting from the economic flows across the Taiwan Strait will influence the Taiwan policy of the Chinese leadership.
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In sum, improved economic relations across the Taiwan Strait have reduced tensions and have generated vested interests that should help to avoid military confrontation.
N 1. Zhang Linzheng, professor of political science at National Taiwan University, participated in a forum on “The Political and Economic Prospects Across the Taiwan Strait After the Visits of Lien Chan and Soong Chu-yu to Mainland China” in Hong Kong on May 19, 2005. She considered that the chances of realizing the three direct links across the Taiwan Strait in 2006 would be very low, and she therefore believed that Hong Kong, for the time being, would not have to worry about its intermediary role in the economic relations across the Taiwan Strait. 2. Lin Zhong-biau and Kan Chak-yuen, Zhongguo Dalu 2010 Nian zhi Jingji (The China Economy by 2010) (Taipei: Mainland Affairs Council, Taiwan, 1999), pp. 86–87. 3. Günter Schucher, “Peace by Means of Rapprochement? On the Impact of Social Integration in Shaping Cross-Strait Relations,” in Günter Schucher and Margot Schüller, ed., Perspectives on Cross-Strait Relations: Views from Europe (Hamburg: Institute of Asian Affairs, 2005), p. 114. 4. Margot Schüller, “Cross-Strait Economic Interaction: The Role of the Business Community as a Driving Force for Bilateral Economic Relations,” in Schucher and Schüller, Perspectives on Cross-Strait Relations, p. 90. 5. Kan Chak-yuen, “Xianggang zai Liangan Jingji Jiaoliu de Zhongjie Diwei: Shizheng Fenxi (Hong Kong’s Intermediary Role in Economic Exchanges Across the Taiwan Strait: an Empirical Analysis),” Zhongguo Dalu Yanjiu (Mainland China Studies) 36, no. 11 (November, 1993): 69–81. 6. Census and Statistics Department, Hong Kong Special Administrative Region, Hong Kong Shipping Statistics, various issues (Hong Kong: Census and Statistics Department, various years). 7. Available literature, almost without exception, analyzes the indirect trade across the Taiwan Strait based on the statistics on the cross-Strait entrepôt trade released by the Hong Kong government.
C
M T S I Quan Jing
O
ver the past decade, China has seen the growing danger of an independence movement by Taiwan and has increased its forces to deter that outcome. To counter China’s military preparation, the United States has upgraded its arms sales and has intensified military ties with Taiwan. Militarization alongside a political stalemate and an economic interdependence, characterizes the current cross-Strait relations. Given the uncertainty of Taiwan’s plan to reengineer its constitution, the Taiwan issue has become viewed as having a high possibility of military conflict that could potentially involve the United States. Although this issue is essentially a political one, “military might,” as Alan Romberg observes, “certainly plays a role for all parties involved.” A failed attempt to force a solution through military means would set off reverberations for decades to come.”1
C’ P T Q In 1979, based on the premise that economic and social ties could eventually lead to reunification, China changed its policy on Taiwan from “liberation” to “peaceful reunification.” Owing to relatively stable cross-Strait relations until 1995, a sustained relaxation of military confrontations across the Strait had existed. China’s lowered priority for military spending had resulted in neglected military modernization. After Lee Teng-hui’s trip to the United States in 1995 and the
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1996 Taiwan Strait crisis, Beijing realized that the danger of an independent Taiwan was looming large and if forced to go to war, there were many gaps in its military capabilities. Lee Teng-hui’s “two-States theory” in 1999, Chen Shui-bien’s victory in the 2000 Election, Chen’s “one country on each side of the Strait” in 2002, and the so-called creeping independence encouraged by Lee and Chen have together convinced Beijing that political campaigning, propaganda barraging, or merely displaying force cannot stop the separatist movement. Improved American security assistance to Taiwan further reinforces Beijing’s suspicions that the United States is actively working to prevent mainland China from unifying with Taiwan, and that it will never abandon its long-term strategy of “use Taiwan to contain China.” Eventually, the conclusion was drawn that the better China prepares for a military struggle, the more likely it will gain a peaceful reunification. The ultimate solution to the Taiwan issue relies on China’s own strength. Adhering to the peaceful reunification policy, China reserves the right to use force in the case of a grave turn of events leading to the separation of Taiwan from China. In recent years, China has stepped up its efforts to modernize its military capabilities by increasing its forces opposite Taiwan. Nevertheless, one of China’s top priorities is economic growth. It considers the first 20 years of the twenty-first century as a period of important strategic opportunity that it should capitalize on to accomplish its main goal to build a prosperous society. A peaceful periphery is foremost needed. Furthermore, as long-term indicators appear to favor the mainland, China believes reunification is a way to make itself stronger and more respected, but not at the expense of exhausting itself unnecessarily through a war. Therefore, China’s military buildup opposite Taiwan is not preparing to adopt a military option for reunification but rather to credibly prevent Taiwan from taking audacious moves toward independence. Although Chinese leadership remains prepared to use all means necessary to prevent Taiwan’s independence, they believe that the military option should be secondary to the full exploitation of political and economic incentives and thus would only be used as a last resort. In November 2003, Chen Shui-bien put forward his controversial proposal to hold a referendum in conjunction with Taiwan’s election on March 20, 2004, adopt a new constitution through referendum on December 10, 2006, and enact the new constitution on May 20, 2008, which would turn Taiwan into a “normal, complete, and great state.” Beijing read this proposal as a clear timetable for independence as by changing the definition of the territory or the foundation of
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sovereignty, and hollowing out the “one China” concept or endorsing “one country on each side,” a new constitution would certainly lead to a legal Taiwan independence. Different from previous responses such as displays of force and verbal warnings, Beijing adopted a calm, prudent, and low-key approach to Taiwan’s elections while simultaneously strengthening efforts to urge the U.S. restraint of Taipei. Chen’s razor-thin reelection in March 2004 had increased Beijing’s frustration and anxiety to a great extent. Although cross-Strait economic relations were strong, the proposition that economic benefits would eventually lead to political integration was doubted. Speculation surrounded the role and ability of the United States in dissuading Taiwan against separation. A strong and rapid movement among the general public and overseas Chinese urged the Chinese government to resolutely smash the separatists’ arrogance and stop Taiwan from moving toward legal independence. On May 17, 2004, China’s Office for Taiwan Affairs issued a statement on cross-Straits relations. The first sentence stated “to put a resolute check on the ‘Taiwan independence’ activities aimed at dismembering China, and to safeguard peace and stability in the Taiwan Straits are the most pressing tasks before the compatriots on both sides of the Straits.” This signified the end of China’s previous policy of “listening to Chen’s words and watching his deeds.” Preventing Taiwan from becoming legally independent has emerged as one of the most urgent national security concerns for China. Beijing realized that in order to achieve this objective, it would need to mobilize all possible resources and adopt more proactive policies. On March 14, 2005 China’s National People’s Congress (NPC) ratified the antisecession law of which, the highlight—Article 8-says in the event that the “Taiwan independence” secessionist forces should act under any name or by any means to cause the fact of Taiwan’s secession from China, or that major incidents entailing Taiwan’s secession from China should occur, or that possibilities for a peaceful reunification should be completely exhausted, the state shall employ nonpeaceful means and other necessary measures to protect China’s sovereignty and territorial integrity. For the first time, China has formally adopted legal means for the purpose of curbing Taiwan independence. China is aware that economic growth and social development could better facilitate eventual peaceful reunification by generating and accumulating adequate resources for such a process. At the same time, China has to take military readiness as the most reliable way to prevent the worst-case scenario. Therefore, China’s policy is to try its best with the utmost sincerity to realize the peaceful solution of the Taiwan question, but would never tolerate “Taiwan independence.”
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T U.S. S R T U.S. security relations with Taiwan generally consist of three elements: arms sales to Taiwan (hardware), military-to-military relations with Taiwan (software), and U.S. security commitments to Taiwan. These elements are each connected to one another. Arms sales are part of military-to-military relations. Military exchanges are often implemented in the name of arms sales. And U.S. security commitments are strengthened, conveyed, and materialized through arms sales to Taiwan and improved U.S. military relations with Taiwan. According to Deputy Assistant Secretary of Defense Richard Lawless, this relationship “seeks to reverse the trend in its ability to defend itself and if deterrence fails, Taiwan, supported by the United States and its allies, must be prepared to defeat the PRC’s use of force.”2 Arms Sales In 1979, as a precondition for the normalization of diplomatic relations with China, the United States agreed to remove its troops from Taiwan and terminate the 1954 Mutual Security Treaty (MST). As a consequence, military cooperation decreased markedly.3 Arms sales became the most preferred and direct way for the United States to maintain security relations with Taiwan. The 1979 Taiwan Relations Act (TRA) stipulates that the United States should “provide defense articles and defense services in such quantity as may be necessary to enable Taiwan to maintain a sufficient self-defense capability.” However, U.S. concern about the Soviet Union gave China the leverage to demand an end to U.S. arms sales to Taiwan. China and the United States signed the third joint communiquéon August 17, 1982, in which the United States pledged its commitment to gradually reduce its arms sales to Taiwan and the reduction would lead, over a period of time, to a final resolution of the issue.4 Since then, the United Stats has always tried to maintain a delicate balance between ensuring Taiwan’s security and developing U.S.-China relations. On the one hand, it sells weapons to Taiwan to bolster Taiwan’s defense, deter China’s possible use of force, and ensure U.S. security interests. On the other hand, arms sales were restrained in order to maintain normal relations with China and not to unnecessarily provoke China. The third U.S.-China joint communiquéand the TRA provided a contradictory framework in which the United States could flexibly interpret its actions and adapt accordingly regarding its relations with mainland China and Taiwan.5
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The end of the Cold War has made China less useful to the United States as a military ally and more useful as a potential threat in order to justify U.S. military spending.6 In recent years, the increase in China’s military capabilities has reinforced U.S. suspicion of China’s peaceful reunification policy and has led the United States to the conclusion that the military balance across the Strait has appeared to be in favor of the mainland. In a few years, China may acquire many more advantages with which to coerce, intimidate, or attack Taiwan; thus, it is essential for the United States to increase Taiwan’s military force and local defense capabilities as well. In 2001, the Bush administration came to office with a deep suspicion of China’s growing power, and for this reason, leaned heavily toward Taiwan, and viewed China as a strategic competitor instead of a strategic partner, signaling Bush’s stance toward China as tough realism. Besides the intense lobbying pressures from defense contractors and Congress on the Bush administration to make more decisions in favor of Taiwan, the EP-3 incident had suddenly damaged U.S.-China relations. In April 2001, the Bush administration gave its approval to sell to Taiwan eight diesel-electric submarines, four Kidd-class guided missile destroyers, twelve P-3C patrol and antisubmarine aircrafts, and other sophisticated weapons. It was the largest arms sale the United States has ever made since the senior President Bush’s decision to sell 150 F-16 fighters, worth U.S.$5.9 billion, to Taiwan in 1992. Particularly significant were the submarines that had previously been deferred by preceding administrations because they were viewed as offensive rather than defensive weapons. The Bush administration also ended the practice of employing an annual review to determine Taiwan’s defense needs and adopted an “on an as-needed basis” policy that creates a more flexible, convenient, and inconspicuous Taiwan arms procurement process.7 Furthermore, since 2001, Taiwan has been encouraged to buy additional advanced weapons including the PAC-3 antimissile system, Apache helicopters, and AGM-88HARM antiradiation missiles. Military-to-Military Relations After the 1996 Taiwan Strait crisis, the United States realized the possibility of deficiencies in coordinating with the Taiwan military, in the case of a conflict with China, would render less effective joint efforts and an increased likelihood of accidents. Thus, the United States rejuvenated its military ties with Taiwan. In addition to hardware transfers, over the last four years, the Bush administration has significantly expanded military-to-military relations with Taiwan, “ostensibly in the name of defense of Taiwan, but unmistakably also in
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pursuit of the perceived need to prepare for the possibility of a broader U.S.-China strategic rivalry extending well beyond the Taiwan issue.”8 In 2001, U.S. military officers observed Taiwan’s Hankuang 17 annual exercise for the first time since 1979.9 Since then, the U.S. military has sent several teams to Taiwan to observe military exercises, assess armed forces, help Taiwan integrate weapons systems, improve software and command and control, and create direct links for sensitive data between the two militaries. Meanwhile, the United States invited heads of Taiwan’s military and its services, as well as ranking officials in charge of security affairs, to visit the United States to attend events such as the U.S.-Taiwan Defense Summit, the Monterey Talks, and the Annual Military Review Talks. This allowed a working visit by Taiwan’s defense minister to the United States for the first time since Spacing 1979, which symbolized one of the most important policy changes yet.10 In September 2002, Congress passed the Foreign Relations Authorization Act, Fiscal Year 2003, which requires the U.S. government to treat Taiwan “as though it were designated a major non-NATO (North Atlantic Treaty Organization) ally f‘or purpose of the transfer or possible transfer of defense articles or defense services’. Upgrading military ties with Taiwan was written into the legislation. Through a variety of forums and communication channels, the Pentagon supports Taiwan in developing an integrated national security strategy, a joint doctrine, and integrated capabilities for training, employing, and sustaining joint forces.11 Some observers argue that a pattern of combat interoperability is being established between the two militaries and a de facto U.S.-Taiwan military alliance is taking shape. Security Commitment In April 2001, in an interview with ABC’s “Good Morning, America,” President Bush said that the United States would do whatever it took to help Taiwan defend itself. This was the strongest security commitment ever made by any American president to Taiwan, although Bush quickly retracted his statement a few hours later, saying he had not changed the long-standing U.S. policy on Taiwan. With regard to what specific actions the United States would take in a potential cross-Strait military conflict, since the 1950s, the United States has maintained a policy of strategic ambiguity that does not clearly lay out a possible response should the situation in the Strait become militarily confrontational so as not to give any advantage to either China or Taiwan. Therefore, Taiwan cannot assume that the United States will
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defend it under any and all circumstances, nor can China assume that the United States will stand by if it decides to attack Taiwan.12 This allows the United States to deal with each contingency as it presents itself and gives the U.S. latitude to adapt itself to the changing situation, as it cannot determine its actions until it has all the details. Although the TRA says that the United States would consider any hostile actions directed against Taiwan as a threat to the peace and security of the Western Pacific area and of grave concern to the United States, it provides one option for policy makers: any U.S. response to a threat to Taiwan’s security must be a joint decision between the President and Congress. The United States has never formally committed itself to Taiwan’s defense. Even in the 1996 Taiwan Strait crisis, the dispatch of two carrier groups to the waters of Taiwan by the Clinton administration demonstrated Washington’s security commitment to Taiwan, yet adhered to the concept of strategic ambiguity refusing to comment on specific actions the United States would take. As Andrew Scobell notes, “Indeed, ambiguity does not refer to doubts about whether the United States is committed to Taiwan’s security; rather, the ambiguity refers to what precisely would trigger U.S. intervention and what the nature of that intervention would be.”13 Based on the concept of strategic ambiguity, for many years the United States has adopted the policy described as dual deterrence, namely deterring China from using force and deterring Taiwan from independence. As Richard Bush suggests, “What it seeks to constrain vis-à-vis Taipei are political initiatives that provoke Beijing to the point that the latter concludes that it must use force to block a separatist trend. What it seeks to constrain vis-à-vis Beijing is military coercion against Taiwan, either as a response to Taiwan’s political initiatives or because it loses patience in the quest for unification.”14 Given the constantly evolving circumstances, the dual deterrence policy sometimes shifts its focus from deterring Taiwan from independence, such as President Clinton’s “Three Nos” policy, to deterring China from using force, such as President Bush’s whatever it took, which observers also translate as a shift from strategic ambiguity to strategic clarity, either in favor of China, or in favor of Taiwan. In fact, the rapidly deepening U.S.-Taiwan security relationship in recent years has resulted in the fading of the strategic ambiguity that had previously marked American policy. It is no longer ambiguous whether the United States would get involved militarily should China adopt a military option for reunification or launch an unprovoked attack against Taiwan. The only ambiguity left is how and to what extent will the
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United States involve itself if Taiwan made clear steps toward independence and China responded militarily. Understandably, the U.S. security relationship with Taiwan— particularly arms sales—has provoked tensions with China. More surprisingly, it has produced disputes between Washington and Taipei and within Taiwan.
D P The U.S.-China Disputes China largely blames arms sales to Taiwan, a tangible aspect of U.S. support, for Taiwan’s resistance to reunification.15 Since normalization, this has been the most controversial and intractable issue between China and the United States. In Beijing’s view, as the United States remains the main obstacle to China’s long-dreamt national reunification, Taiwan operates as an unsinkable carrier of which the United States prevents China from being a unified and strong socialist country. Beijing also believes that the fundamental goal of the United States is to maintain a situation of “no reunification, no independence and no war”—a permanent separate status of Taiwan. China is apprehensive about the U.S. TMD (Theater Missile Defense) program in the west Pacific, which will greatly nullify China’s missile capabilities and deterrence, and is even more worried that the United States might include Taiwan into the system, thus denying China’s effectiveness of the missile deterrence against Taiwan independence. After September 11, upon the newly found, strategic common ground on the war against terrorism, along with nonproliferation and the North Korean nuclear issue, China and the United States have engaged themselves in favorable cooperation and the bilateral relations speedily improved. President Bush changed his tone and termed the Sino-U.S. relationship as candid, constructive, and cooperative and called China a partner in diplomacy. President Bush and the U.S. government have reiterated many times that the United States does not support Taiwan’s independence. Secretary of State Colin Powell even claimed that relations with China are the best they have been since 1972. But the Taiwan issue, specifically the recent robust U.S. military assistance to Taiwan, still remains the principal dispute between the two countries. China’s policy intentions can also be described as dual deterrence, namely deterring Taiwan from moving toward independence, including energizing the United States to restrain Taiwan, and deterring the United States from providing advanced weapons and from formalizing military relations with
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Taiwan. In view of the complex and innumerable political and diplomatic bargains between China and the United States, arguments always fall into three issue areas: 1. Supremacy between the TRA and August 17 Joint Communiqué: The United States argues that it has to provide defense articles and services to Taiwan according to the TRA, as it is the American law. China argues that the three Sino-U.S. joint communiqués are the political foundations and guidelines for the development of SinoU.S. relations and that the United States clearly pledges in the August 17 communiquéto reduce arms sales to Taiwan, and therefore, the United States should not use the TRA, a domestic law, as an excuse to dodge its international obligations and commitments. 2. Political signals to Taiwan: The United States believes that a secure and confident Taiwan is more capable of engaging in political interaction and dialogue with the mainland, and that the signals transmitted to Taipei through arms sales is that America’s commitment to Taiwan remains steadfast and strong. In China’s view, which is just the opposite, arms sales have sent the wrong signals to Taiwan separatists. It makes them feel more confident and secure to move further down the road to independence. They take the U.S. security guarantee for granted in thinking that the United States will protect them under any circumstances. Thus the U.S. indulgence will actually endanger the cross-Strait peace and finally hurt its own interests. 3. Cause of tension: The United States argues that China’s rapid missile deployment targeting Taiwan is destabilizing the cross-Strait region and that it requires a measured response on the part of the United States. China argues that others have no right to interfere in how China deploys military strength on its own national territory; deploying missiles is needed for deterring the separatist movement, as well as safeguarding the security, sovereignty, and unification of the country. Separatists’ activities aiming at splitting Taiwan from China remain the root of the cross-Strait’s tension and the greatest threat to peace and stability in the region. If there had been no danger or threat of Taiwan independence, the missile deployment would have been of no necessity.16 In June 2004, Taiwan’s Executive Yuan adopted a special budgetary program for the purchase of 8 submarines, 6 PAC-3 antimissile systems with 388 missiles and 12 P-3C antisubmarine aircrafts from the United States, involving a total amount of NT 610.8 billion (US$18.2 billion). Such a large budget aroused great anxiety on the part of China. When
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the then-U.S. National Security Advisor Condoleezza Rice visited China in July, Chinese leaders urged the United States to honor its commitment to “adhere to the one-China policy, abide by the three joint communiqués and not support Taiwan independence,” and to stop selling advanced weapons to Taiwan. One U.S. observer stated, “The substance of such comments [by China] was not new, but the tone was unusually firm and uncompromising.”17 Through a series of bilateral meetings and other communication channels, Beijing has spared no efforts to urge the United States to stop arms sales and check Taiwan’s move toward independence. On the one hand, Washington reiterated that it remains committed to the one-China policy based on the three joint communiqués and the TRA, does not support independence for Taiwan, and opposes any unilateral moves that would change the status quo. On the other hand, it insisted that the continuous sales of appropriate defensive military equipment to Taiwan is in accordance with the TRA and that arms sales to Taiwan are merely a response to the rapid increase of missile deployment toward Taiwan by China. China views the Taiwan issue as the most sensitive and important issue in Sino-U.S. relations and considers U.S. arms sales to Taiwan as challenging and threatening to its core interests. China is aware that it does not have veto power over this issue. However, if China is forced up against a wall (for instance, if the United States decides to sell Taiwan Aegis destroyers, on which Beijing had drawn a red line), China would most likely take countermeasures premised on the belief that the long-term benefits of the actions outweigh the costs, even at the costs of Sino-U.S. relations. That could potentially lead to an explosive situation. In an era of cooperation and mutual benefits, any abrupt setbacks of the U.S.-China relations would inevitably harm both sides’ tangible interests as well as strategic priorities. No other existing issue could do as much damage as quickly to U.S.-China relations as the Taiwan issue. A U.S. arms sale to Taiwan embodies the greatest potential for reversing and damaging the existing sound trend of the bilateral relations. Disputes in Taiwan Arms procurement has been highly politicized in Taiwan over the last four years. After the Democratic Progress Party (DPP) government controlled Taiwan’s executive branch in 2000, the former ruling party Kuomintang (KMT) and the KMT-breakaway party People First Party (PFP) joined together in opposition to form an alliance and gained a majority of seats in the legislature. The opposition alliance’s desires
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to boycott and embarrass the DPP government have always led to internal strife and debate over legitimate questions concerning price, suitability, and capability of weapons to purchase. Moreover, Taiwan’s economy has suffered a downturn in recent years. The public as a whole evinces little support for any significant increases in defense spending. They argue billions of dollars spent on arms procurement should be taken away for other uses having far greater benefits to the economy and to the public. In mid-2003, after two years of deliberation and debate, the Legislative Yuan finally passed a bill approving funding for the Kidd-class destroyer program, but only after the Taiwan military agreed to cut back the budget for the program. As soon as the Taiwan Executive Yuan adopted the special budget in June 2004 for purchase of submarines, PAC-3 antimissile systems and P-3C antisubmarine aircrafts, there was a heated debate over whether Taiwan could afford or even needed those weapons. Observers and some politicians accused the United States of using Taiwan’s strategic vulnerability to profiteer, as the price tag was outrageously high. Each submarine was priced at US$1.5 billion, which was nearly five times that of the international market. Some perceived it as a form of insurance payment to the United States, rather than a needed selfdefense investment. The DPP government had to lobby very hard in order to persuade the public and the Legislative Yuan to accept and approve the budget. Taiwan’s Ministry of National Defense claimed that Taiwan must strengthen its defense capability in the face of the mainland’s mounting military threat and if the arms were purchased, Taiwan would have 30-years of safety. On September 14, 2004, the Legislative Yuan resumed session during which it was expected that the special budget with a reduction of US$3 billion would be approved. However, 11 academicians from the Academia Sinica, 150 retired generals and several university presidents protested this budget proposal. On September 25, over 10,000 protesters holding banners reading “education, development, social welfare, not military purchases,” marched through the streets of Taipei to call upon the government to abandon the arms purchase. On October 24, nearly one thousand others joined a demonstration launched by the Antiarms Purchasing Alliance in Kaohsiung, a southern city of Taiwan. The general public had three major doubts concerning the budget. First, the government would finance the budget by selling stateowned land and issuing state stocks and bonds, exhausting the people and draining the treasury. The budget should be used for more urgent issues such as education and disaster relief. Second, those weapons would not be delivered to Taiwan until after 2010. If the mainland
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decided to attack Taiwan, they would not wait for Taiwan to receive its weapons. It is a hypothetical and irresponsible assurance that the purchase would provide the island thirty years of safety. And third, the arms purchase might provide the mainland with an excuse to increase its military power, and eventually it would lead to an arms race. If the mainland continues to deploy missiles and the United States continues to sell weapons to Taiwan, in this arms race, how much and for how long could Taiwan afford to purchase U.S. weapons? Who would be the final loser? They argued that Taiwan’s security relies not only on arms but also on political, economic, social, and psychological attributes, the cross-Strait issue is not a military issue but a political one. Political efforts, not military efforts, should always be the first option. Confrontation should be replaced by negotiation, and hostility should be dissolved through communication. As all parties were gearing up for the Legislative Election in December 2004, the opposition alliance blocked the budget and subtly turned it into a political issue. It became an election issue, a gun versus butter debate, which would help the opposition alliance in the upcoming election. The intense lobbying for the bill by the Chen administration and the arguments against the bill from the public had created the first significant public debate on defense policies in Taiwan.18 These debates, together with the victory by the opposition alliance in the December Legislative Election, reflect to some extent the common aspirations of the Taiwanese people on stable cross-Strait relations, the status quo and economic development. U.S.-Taiwan Disputes With regard to U.S. dual deterrence policy, militarily, Washington wants Taiwan to efficiently improve its defense capabilities so as to have the capabilities to stave off the mainland’s potential use of force, and if not, to at least sustain itself for one or two weeks before American intervention. Politically, Washington warns Taiwan not to take any political initiatives that would trigger turbulence across the Strait and drag the United States into an unnecessary conflict with China. These two intentions by the United States have not been well reciprocated by Taipei. In 1991, Taiwan formally dropped its policy of armed confrontation with the mainland. Arms purchased from the United States have been essentially used for political purposes, to underpin its refusal of the one-China principle, support building a new Taiwan identity, and provide a basis for further distancing itself from China. Nevertheless, since 2001, except for the purchase of four Kidd-class destroyers and
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two long range Early Warning Radar Systems (approved by the Clinton administration in 1999), there has not been much progress in Taiwan’s procurement of those big-ticket items offered by the United States. Apart from an inner political conflict, a sagging economy, and a limited defense budget, Taipei’s intention on defense is also a contributing factor. As the United States has no formal defense alliance with Taiwan and has never pledged use of American military forces in the cross-Strait conflict, U.S. security commitments are much more important than weapons themselves for Taiwan. President Bush’s “whatever it took” proved to be a misstep, which led Taipei to believe that there was less of a need to spend its limited resources on procurement of those big-ticket items since the United States would protect Taiwan no matter what sparked the conflict, and a relatively weak Taiwan would increase the chance of direct U.S. military involvement. Furthermore, after Chen Shui-bien took office in 2000, Taiwan’s military changed its defense strategy from resolute defense and effective deterrence to effective deterrence and resolute defense, and quietly adopted the concept of offshore engagement, winning a decisive battle outside of Taiwan.19 Therefore, the DPP government emphasized on acquiring weapon systems that actually give Taiwan offensive and preemptive striking capabilities, such as ballistic and land-attack cruise missiles, joint direct attack munitions (JDAM) and Aegis destroyers. These weapons would be capable of standoff strikes against the Chinese mainland and act as a cost-effective means of deterrence. They would not be used just for symbolic political purposes.20 Taiwan’s slowness and reluctance in procurement of those bigticket items have aroused suspicions in Washington that Taiwan is attempting to avoid high defense costs by relying on the assumption that the United States would come to their aid if a crisis occurred with the mainland. Washington is upset that Taiwan is not prepared to buy the weapons that it had been requesting from the United States for years, which shows that there is a surprising lack of interest, on the part of Taiwan, to invest in the necessary defense capabilities. Although the DPP government finally adopted a special budget that would fund further arms purchases, it has faced protracted debates and politically driven opposition, as occurred with the controversial decision to acquire Kidd-class destroyers. Indeed, Washington is highly concerned that major future arms procurement processes will face the same challenges. The arms sales issue itself will not be the cause of long-lasting or serious damage to the U.S.-Taiwan relationship, but it is one of the
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several postwar incidences that have exposed the mild, yet persistent, undercurrents of mutual suspicions and conflicting interests.21 Given the U.S. role as Taiwan’s ultimate security guarantor and as its key influence on Taiwan’s political and security landscapes, the DPP government cannot risk damaging U.S.-Taiwan relations by disregarding U.S. offers for too long. It will continue to push the special budget and eventually buy most of the weapon systems that the United States has offered. Now, it is only a question of price and time. Taiwan has relied on the United States for security since1950 and will continue to do so. On the other hand, a consensus has emerged within the U.S. government that Taipei’s political initiatives might spin out of control and create a crisis between the United States and China. This inference remains one of the main challenges facing the DPP government. On December 9, 2003, President Bush used unprecedented blunt language that singled out Taiwan: “The comments and actions made by the leader of Taiwan indicate that he may be willing to make decisions unilaterally to change the status quo, which we oppose.” On April 21, 2004, James Kelly, Assistant Secretary of State, pointed out that “a unilateral move toward independence will avail Taiwan of nothing it does not already enjoy in terms of democratic freedom, autonomy, prosperity, and security.” He also noted there are limits on what the United States will support as Taiwan considers changing its constitution.22 In the foreseeable future, U.S. strategic security priorities will be to engage itself in a difficult war against terrorism worldwide, expand democracy in the Middle East, and resolve the Iran and the North Korean nuclear issues. China’s cooperation and coordination are foremost needed. The United States wishes to avoid any cross-Strait turbulence and conflict. Thus far, Taiwan’s pro-independence politics have fostered an unusual symmetry in Beijing and Washington’s policies toward Taiwan. China’s strategy of “use the United States to curb Taiwan” has been quite effective. From President Bush’s “what ever it took” to “which we oppose” attitude, the gravity of the U.S. dual deterrence policy has somewhat shifted to deterring Taiwan from independence. The Bush administration in the second term might be watching more closely Taiwan’s trend and prepare to intervene with strengthened efforts and clearer signals. As long as Taipei is not able to convince both Washington and Beijing that its political agenda is nothing more than pursuing good governance, America’s vigilance and resentment may exist for quite a long time. This would further deepen Washington’s distrusts toward Taipei, and to some extent, deteriorate the U.S.-Taiwan relationship and even U.S. commitments to Taiwan.
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T S D P S The DPP government knows that by continuing to realize its political initiatives, it may run the risk of alienating the United States (Taiwan’s only real protector in the world) and starting a military conflict with the mainland. The opposition parties in the legislature may limit its agenda as well. Meanwhile, mainland China is growing rapidly and long-term indicators do not seem to favor Taiwan. The window of opportunity is closing quickly. It feels obliged to consolidate the Taiwanese separation identity, reengineer the constitution, and turn its political agenda into a fait accompli while the mainland is neither strong enough nor able to react comprehensively due to its economic construction and the 2008 Beijing Olympic Games.23 Taipei also has suspicions that Washington would, someday, either by accident or design, abandon Taiwan or sacrifice Taiwan’s interests given the evolution of U.S.-China relations. Consequently, it needs to push as much as it can to achieve, at best, the long dream of de jure independence, which would at least establish an advantageous basis for future negotiations with mainland China. The DPP government may slow down or somewhat compromise its agenda, but is not likely to change its course significantly. Beijing knows that a war with Taiwan would gravely hurt its relations with the United States, its economic construction, and other domestic priorities. If it continues military preparations targeting Taiwan, the United States will take that as proof and incentive to further strengthen its security relations with Taiwan, which would not only weaken China’s military capabilities, but would also embolden Taipei to further drift away or even make reckless attempts for independence. In addition, Taipei may continue to mobilize anti-Chinese feelings and pro-independence sentiments by putting increased emphasis on the mainland’s military threat. However, the Taiwan issue not only upholds China’s sovereignty and territorial integrity, but also symbolizes the revival of the Chinese nation. It is closely related to historical humiliation and realistic regime legitimacy, on which no Chinese leadership can compromise or appear irresolute. No Chinese government can risk the permanent loss of Taiwan. Although Beijing wants the United States to keep Taiwan’s trend in check, it also has a suspicion that as long as there is no real danger of war, the United States really wishes to see Taiwan separate from China permanently and will continue to indulge the creeping independence or socalled peaceful independence. For Beijing, total military readiness is the only reliable way to prevent the worst. At best, it may readjust its
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military posture opposite Taiwan, but it is not likely to slow or cease preparations for a military struggle. If Washington continues to provide military assistance to Taiwan, it risks damaging the U.S.-China relations and encouraging Taiwan to move further toward independence. In a world where China ceased to cooperate with or actively opposed U.S. international actions, it would be much more difficult and dangerous to implement U.S. foreign policy bilaterally, regionally, and globally. A Taiwan moving closer to permanent legal separation from China would greatly increase the possibility of the United States being dragged into war. Nevertheless, arms sales to Taiwan serves the United States long-term strategic interests, as well as vast commercial interests. Washington believes that it could boost Taiwan’s defense capabilities while discouraging it from independence, and that there is no direct consequence between U.S. military assistance to Taiwan and Taiwan’s move toward independence. Washington will strengthen its efforts to control Taipei, and might be scrupulous on its security commitment and military assistance to Taiwan. However, unless dramatic changes warrant a significant policy shift, the United States is unlikely to stop arms sales or use it as leverage to rein in Taipei given its domestic political dynamics and suspicions of China’s military modernization. As each side has little room for compromise, and no side can easily change its course, a vicious circle has developed. Beijing sees Taipei moving toward independence, and thus increases its military capabilities as a deterrent. Washington feels obliged to bolster the island’s defense and maintain the cross-Strait military balance in order to counter China’s use of force. Whether the United States encourages it or not, with the American security guarantee, Taipei further distances itself from the mainland and drives toward its own goals. Consequently, this circle repeats itself. All three players are preventing or preparing for their own worst-case scenarios. For Taiwan, it is being swallowed by the mainland. For China, it is losing Taiwan permanently. And for the United States, it is involvement in an unnecessary war with China. But not one of them seems to be in control of the situation, in the sense that actions of any one side could result in the other two reacting quite strongly. It is no doubt that the arms race is heating up. The Chinese military is using Taiwan’s arms acquisition and separatist activities to press for more sophisticated weapons and more military buildups as countermeasures. To counter China’s military modernization, the United States has offered to sell more advanced weapons to Taiwan and further strengthen security relations with Taiwan. Such an arms race creates a sense that a cross-Strait conflict or a conflict between China
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and the United States is inevitable, accumulating hostilities across the Strait, deepening suspicions toward one another, complicating political efforts, and significantly increasing the possibility for accidents. If China had failed to acquire U.S. assistance in dissuading Taipei from moving toward legal independence, or if it had interpreted a serious encroachment on the one-China principle, there are reasons significant enough for China to exhibit its political will, or even to use nonpeaceful means, in response to provocative actions and statements. It might opt to use a series of carefully orchestrated crises in an attempt to create sudden or prolonged tensions that would not only threaten pro-independence forces, but would also compel the United States to more severely reverse Taipei’s move. This is a low-risk strategy, but not risk-free, as no one for certain can control the tension level or dominate the escalation process. If Taiwan had sufficient offensive weapons and preemptive striking capabilities, driven by the offshore engagement strategy, it might initiate hostilities or take preemptive actions against what it perceives as an imminent military strike by the mainland. If perceptions are wrong, a mini crisis could lead to an unwanted escalation and even an all-out war.24 Although Beijing has no illusions with regard to America’s commitments to Taiwan’s security, the Chinese leadership would almost certainly use nonpeaceful means to avoid the loss of Taiwan if it concluded that no other alternative existed, even if its chances of prevailing in such a conflict were low.25 Should that be the case, the United States could not make a credible threat serious enough to deter China from using force, and would probably be obliged to involve itself in such a conflict to avoid the deterioration of its commitment, reputation, and strategic domination in East Asia, even if it is unwilling to do so. Such U.S. involvement would be more complicated and difficult than one might expect. In any conflict between the two big powers, escalation to nuclear war is an ever-present danger.26 Capability can influence intention, but it does not limit or determine intention. A weaker opponent’s strong motivation might compensate for its inferior capabilities, and thus lead it to vigorously counterattempts at coercion. Crisis deterrence, based on military balance and calculation of cost and gain, will not necessarily work in the case of the Taiwan Strait issue. Although weapons can hardly solve the Taiwan issue, military buildups will continue to be the primary way for all parties to show their resolve and to prepare for the worst. Although the very large and growing trade, investment, cultural exchange, and people-to-people exchange across the Strait, and the sound and mature U.S.-China relations together build up constituencies for interdependencies and
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restraint, the cross-Strait situation could quickly deteriorate if either side perceives that the other has made a provocative statement or action. At present, the major threat is Taiwan’s pursue of de jure independence and its potential to create a crisis between the United States and China. If the United States shows greater willingness to check Taiwan’s trend toward independence, then this will help ease Chinese anxiety as well as tensions across the Strait. Washington should play a more proactive role to influence Taiwan’s move and send clear message to Taiwan’s leaders that they should stop bringing Taiwan toward independence and if Taiwan provokes a conflict with mainland China, the United States will not act. Both China and the United States see the resolution of the issue as reflecting seriously on their credibility as great powers. In the event of an independent Taiwan, it would not likely happen as an abrupt declaration, but rather as a culmination of small steps.27 The United States repeatedly states that it does not support Taiwan independence, but to what extent it would tolerate it remains ambiguous. China states that it will resort to nonpeaceful means if there is Taiwan independence, but what constitutes Taiwan independence? Article 8 of the antisecession law still keeps the red line quite ambiguous. Although each side believes it has sent clear signals, the other side often misinterprets them. Ambiguities on both sides, China’s definition of Taiwan independence and United States’ tolerance of creeping independence leaves much room for misperceptions and misinterpretations that increases the dangers of conflict. For example, in terms of Taiwan’s constitutional reengineering, China might draw a conclusion that the new constitution would establish legal Taiwan independence and it has to resort to force, while the United States might disagree and read it as democratization and governance reform. Therefore, it is necessary for the United States and China to have a regular and permanent crisis prevention/management channel so that through close and efficient communication and discussions, rather than reiterations of official statements, both sides would be in the position to anticipate and head off any statements, policies, and actions that would be likely to increase tensions or create a crisis.28 It is conventional wisdom that it is the improved political and economic interactions that offers the best possibility for restraint and a favorable resolution to Taiwan Strait issue. Taiwan’s opposition parties’ visits to the mainland in 2005 were helpful to improve mutual understanding and trust between the two sides of the Strait. But realistically, to resume political talks between the Chinese government and the Taiwan authority in the very near future will not be easy.29
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The tables may be turned around in the low-politic areas in crossStrait relations. The three direct links (direct exchange of mail, trade, air, and shipping services), once in place, may produce unbelievable positive impacts on cross-Strait exchanges in areas such as trade, foreign direct investment, culture, education, and marriage, thus providing more incentives for stability and rapprochement of cross-Strait relations. Both sides need to take a long-term view and show more flexibility to break the prolonged impasse in the negotiation of direct links. Although basic decisions rest in the hands of Beijing and Taipei, Washington is expected to play an encouraging or facilitating role. The military conflict across the Strait is actually a conflict between China and the United States. Deepening military-to-military exchanges and institutionalizing the confidence building measures (CBM) between the United States and China, for instance, setting up a hot line between the two militaries would eliminate suspicions and miscalculation and significantly help prevent crises. In October 2002, China’s thenPresident Jiang Zemin announced the possibility of redeploying missiles away from Taiwan if the United States were to curtail its arms sales to Taiwan.30 Beijing’s offer suggests for the first time that China may be willing to engage in a dialogue on reversing the trend toward militarizing cross-Strait relations. This potential opening should be fully explored by the Bush administration.31 If tensions decreased and political confidence emerged, the process of beginning a dialogue across the Strait on military restraint or establishing the CBM could itself be the single most important result.32 Taiwan’s security depends, in the end, on its ability to work out a mutually satisfactory relationship with the mainland.33
N 1. Alan D. Romberg Rein In at the Brink of the Precipice: American Policy toward Taiwan and U.S.-PRC Relations (Washington, DC: Henry L. Stimson Center, 2003) p. 220. 2. Statements by Deputy Assistant Secretary of Defense Richard Lawless at the Congressional Hearing by U.S.-China Economic and Security Review Commission, February 6, 2004. 3. Dennis Van Vranken Hickey, “Continuity and Change: The Administration of George W. Bush and U.S. Policy toward Taiwan,” Journal of Contemporary China, 40, no. 13 (August 2004): 461–487. 4. In the August 17 Communiqué, the United States made the following commitments: first, it does not seek to carry out a long-term policy of arms sales to Taiwan, the U.S. arms sales to Taiwan will not exceed, either in qualitative or in quantitative terms, the level of those supplied in the years following the establishment of diplomatic relations
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6. 7. 8.
9. 10.
11.
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13. 14.
15. 16. 17.
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between the United States and China; second, it intends to gradually reduce its sale of arms to Taiwan; and third, the reduction of arms sales will lead, over a period of time, to a final resolution of the issue. Meanwhile, the United States gave the six assurances to Taiwan, particularly, not to set any date to end arms sales to Taiwan and not to consult with China over the specifics of any weapons sale to Taiwan prior to making that sale. Wei-Chin Lee, “U.S. Arms Transfer Policy to Taiwan: from Carter to Clinton,” Journal of Contemporary China, 23, no. 9 (2000): 53–75. James H. Nolt, “U.S.-China-Taiwan Military Relations,”Foreign Policy in Focus, 5, no. 11 (April 2000). Shirley A. Kan, “Taiwan: Major U.S. Arms Sales Since 1990,” Report for Congress, December 2, 2002. Greg Austin, “China’s Perceptions of Cross-Strait Relations: Needing a Small Leap of Sideways!” paper presented at an international conference on “Exploring Federalism and Integration: The EU, Taiwan, and Korea” (Berlin, Germany) October 26–27, 2002. Chung Kuo Shih-Pao (China Times in Taiwan), July 18, 2001. The United States allowed Tang Yiau-min, Taiwan’s so-called Defense Minister, to visit Florida on March 9, 2002 for the “US-Taiwan Defense Summit 2002.” This was the first invited formal visit to the United States by Taiwan’s Defense Minister since the severance of their diplomatic ties. Tang held long talks with Deputy Secretary of Defense Paul Wolfowitz, which was also the first formal meeting between their high-ranking military officials in 23 years. Prepared statement of Peter W. Rodman, Assistant Secretary of Defense for International Security Affairs before the House International Relations Committee, April 21, 2004. Philip Yang, “Doubly Dualistic Dilemma: U.S. Strategies towards China and Taiwan,” paper presented at the International Conference on Prospects of the Taipei-Washington-Beijing Relations, The Brookings Institution, The Center for Strategic and International Studies (CSIS), and Foundation on International & Cross-Strait Studies, May 23, 2004. Andrew Scobell, “China and Strategic Culture,” http://www. strategicstudiesinstitute.army.mil., May 2002. Richard Bush, “The Ordeal of Dual Deterrence: the United States between Taiwan and China,” paper presented at “The Military Balance and Decision Making across the Taiwan Strait” Conference, St. Antony’s College, Oxford University, United Kingdom, February 27–28, 2004. Denny Roy, “U.S.-Taiwan Arms Sales: The Perils of Doing Business with Friends,” Asia -Pacific Center for Security Studies, 3, no. 3 (April 2004). Observation of the author when working in the Chinese Ministry of Foreign Affairs. Ted Galen Carpenter, “China’s Taiwan Policy and America’s Difficult Choices,” http://www.newsbull.com, August 10, 2004.
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18. David G. Brown, “China-Taiwan Relations: Unproductive Military Posturing,” article on website of the Pacific Forum CSIS. 19. Sheng Lijun China and Taiwan: Cross-Strait Relations under Chen Shui-bian (London & New York: ZED Books and Singapore: Institute of Southeast Asian Studies, July 2002), pp. 99–100. 20. Ivan Eland, “The China-Taiwan Military Balance: Implication for the United States,” Foreign Policy Briefing, 74, no. 9(February 5, 2003). 21. Denny Roy, “U.S.-Taiwan Arms Sales: The Perils of Doing Business with Friends.” 22. Statement of Assistant Secretary of State James Kelly on Hearing of House International Relations committee, April 21, 2004. 23. Yasuhiro Matsuda, “PRC-Taiwan Relations under Chen Shui-bian’s Government: Continuity and Change between the First and Second Terms,” presented at the Brookings-FICS conference “TaipeiWashington-Beijing Relations after the Presidential Election,” Taipei, May 23, 2004. 24. Peter Brookes, “U.S.-Taiwan Defense Relations in the Bush Administration,” http://www.heritage.org, November 14, 2003. 25. Michael Swaine, “Trouble in Taiwan,” Foreign Affairs (March/April 2004). 26. Eland, “The China-Taiwan Military Balance: Implication for the United States.” 27. Andrew Peterson, “Dangerous Games across the Taiwan Strait,” The Washington Quarterly, (Spring 2004): 23–41. 28. In 2005, China and the United States had held two rounds of Strategic Dialogue on a range of political, security, and strategic issues. Deputy Secretary of State Robert B. Zoellick was the head of the U.S. delegation, and Chinese deputy foreign minister Dai Bingguo was his counterpart. Regular meetings between the two countries have never been held at such a level. 29. Cross-Strait political talks broke off immediately after Li Teng-hui’s “two states theory” in 1999. Beijing insisted that only if Taipei recognizes the one-China principle or the 1992 consensus could talks be resumed. Chen Shui-bien might fear that the one-China principle will undermine his whole negotiating position and predetermine the outcome, and accepting the 1992 consensus would end up being a back-door acceptance of the one-China principle. 30. John Pomfret, “China Suggests Missile Buildup Linked to Arms Sales to Taiwan,” Washington Post, December 10, 2002. According to some U.S. observers, primarily, the United States considered it as nothing more than a political gesture to gain some diplomatic high ground or a strategy to create disputes between the United States and Taiwan. Later, it realized this suggestion was serious. However, the United States has shown little enthusiasm, as it believes that any reductions or withdrawals of Chinese missile deployments could be quickly reversed while the process of U.S. arms sales to Taiwan would be hard to restore if ever stopped.
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31. Michael Swaine, “Reverse Course? The Fragile Turnaround in U.S.China Relations,” Policy Brief, Carnegie Endowment for International Peace, February 22, 2003. 32. It is well known that CBM could be a useful means to reduce mutual suspicion, ease the tension and prevent crises across the Strait. It is encouraging that the mainland, Taiwan, and the United States prefer and suggest establishing CBM across the Strait. Nevertheless, CBM depends not only on trust, but also on predictability of behavior or policy in a positive direction and avoidance of undermining moves of the other side’s confidence. The CBM could be set up only if the two sides across the Strait established certain political confidence between each other through political dialogue. 33. Chas. W. Freeman, Jr. “Preventing War in the Taiwan Strait: Restraining Taiwan—and Beijing,” Foreign Affairs, (July/August 1998).
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he past decade has seen vibrant development in Taiwan’s democratization process—direct presidential elections have been held regularly since 1996, and in 2000 there was a change of the ruling party, the first time in more than half a century since the nationalist government retreated to the island. An attendant occurrence on the island was the emergence of two competing Taiwanese identities— the native Taiwanese versus the status quo Taiwanese identities— that have contradicting views on cross-Strait relations but share a similar conception of the island as a de facto sovereignty. The democratic mechanism allowed and brought the struggles between the two identities into the policy-making process, and, unprecedentedly, Taiwan’s domestic politics has dictated the island’s foreign policy as well as its interactions with China in the last ten years. Public resentment at international isolation compelled the Taiwanese government to strive for diplomatic breakthrough while in the cross-Strait relationship China was forced to respond passively to Taiwan’s initiatives, which were generally the result of developments in the island’s domestic politics. To rein in the wild card that Taiwan had become, Beijing turned to Washington—Taipei’s only ally—for cooperation in managing the hardly unusual dire situation in the Taiwan Strait. As a result, the U.S. role in cross-Strait affairs increased dramatically during the period of
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interest of this research. The three players, Beijing, Taipei, and Washington, all proclaimed to seek the maintenance of the status quo in this area, but in the end each found that the others had very different conceptions of what this meant.
D T I Taiwan is hailed as a major success story of democratization. It lifted martial law and the ban on political parties and press freedom in 1987, and during the following decade, Taiwan accomplished its democratic reform step by step by holding elections of the Legislative Yuan, Taiwan’s parliament, and conducting a direct presidential election in 1996. The second direct election of the president and vice president, which took place on March 18, 2000, marked the first alternation of ruling political parties, it was also a peaceful transition of power. The formation of the Taiwanese identity developed together with the process of democratization. The author argues that the Taiwanese identity is less about certain unique language, culture, or ethnicity than about Taiwan’s reaction under its democratic mechanism toward the island’s international status and cross-Strait tensions. Currently, two types of Taiwanese identities are taking shape: a native Taiwanese identity (or local Taiwanese identity) and a status quo Taiwanese identity. Both identities can be regarded as “Taiwan-centered national identities”1that view Taiwan as being de facto separated from and independent of mainland China. Though both the groups seem to be on the same page with international politics, the two identities have different perceptions toward Taiwanese domestic politics and crossStrait affairs. The native Taiwanese identity emerged as a reaction against an authoritarian era under which local culture and identity were suppressed. The shift was from anti-authoritarianism to anti-KMT [Kuomingtang]. Later on, in the face of China’s military threats and diplomatic isolation, the focus was switched again: to stand up against China’s hegemony. Native Taiwanese identity is the core value and principle for the Democratic Progressive Party (DPP) and the Taiwan Solidarity Union (TSU) comprising the pan-green camp. They favor a sovereign Taiwan and, if security conditions allow, de jure independence. The status quo Taiwanese identity is a response to the emergence of local Taiwanese identity. Under the idea of “Taiwan first,” it stresses the importance of maintaining the status quo and keeping up economic development. As it concentrates on current interests and future prospects, it incorporates more pragmatic viewpoints. Status
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quo Taiwanese identity is supported by the KMT and the PFP (People First Party), which comprise the pan-blue camp. It tries to preserve the identity of the Republic of China and wants to see the de facto autonomy remain unchanged. The differences between the two identities represent a major source of conflict and a power struggle within Taiwanese domestic politics. Native Taiwanese identity, strongly supported by Lee Teng-hui, has apparently become the cornerstone of the Chen Shui-bian administration and is forging Taiwanese nationalism. Polls have shown an increase in the numbers of people that see themselves as Taiwanese rather than Chinese. The status quo identity is strongly supported by the KMT/PFP policy position, which also emphasizes the need to maintain the current political status quo across the Taiwan Strait, while they are more willing to negotiate with Beijing on economic linkages. From a certain angle, then, Taiwan itself can be seen as a special type of non-status-quo country, or discontented political entity, based on its continued dissatisfaction with the existing limits placed on it by the international community and countries in the East Asia region. While aspiring to be a truly sovereign, independent, democratic, and economically vibrant nation, Taiwan is nevertheless not recognized by a single country in the region. With the progress of Taiwan’s democracy and the rise of a Taiwanese identity, the Taiwanese public, whether harboring native or status quo Taiwanese identities, has become dissatisfied with the current international and regional situation of Taiwan. As mentioned in the following discussion of Taiwan’s external and international participation, Taiwan wants to reject the military threat and international isolation imposed by mainland China. The desire to be a fully-recognized state and to acquire a complete international persona is encouraged and endorsed by Taiwanese politicians, especially those who possess native Taiwanese identity, and by the two directly elected presidents, Lee Teng-hui and Chen Shui-bian.
T’ F R I P In the late 1980s, Taiwan’s diplomatic relations with other nations and participation in international intergovernmental organizations were so few as to be merely symbolic in number. This was a direct result of the international isolation imposed by the Beijing government. Taiwan was known as an international orphan or pariah state. Paradoxically, when the world praised Taiwan’s stable democratic
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transition, Taipei’s official relations with other governments and participation in international intergovernmental organizations were thoroughly blocked by Beijing and the rigid Westphalian sovereign state system. In spite of these difficulties, following economic development and political democratization, Taiwan began its struggle to redefine its position on the world stage. By 1988, the year Lee Teng-hui succeeded Chiang Ching-kuo as the ROC president, merely 22 countries recognized Taipei. Lee soon employed a new foreign policy of pragmatic diplomacy, which created a functional complex of economic aid, trade and investment, arms purchases, and nongovernmental and informal diplomacy. Specifically, pragmatic diplomacy aims at (1) the advancement of formal diplomatic ties, (2) the establishment and promotion of substantive relations with nonhostile nations, and (3) active participation in international organizations and activities.2 The result of the pragmatic diplomacy brought Taiwan back to the international stage, though in a private and nongovernmental capacity, and the world has also gradually recognized the de facto existence of an independent Taiwan. Furthermore, Lee’s pragmatic diplomacy also looked for circumventing Beijing’s formula of the one-China principle in the international community, hoping to create a different framework in which the international community could acknowledge Taiwan’s de facto independence. President Chen Shui-bian followed Lee’s approach of enhancing Taiwan’s international status and has gone one step further by initiating more foreign strategies aimed at enhancing the legitimacy of Taiwan’s democratization and independence. Following Lee’s initiative to reenter the United Nations in 1993, which received wide bipartisan support on the island, the Chen government sternly continued efforts to campaign for UN membership as well as membership in other international organizations, such as the World Health Organization (WHO), even though the chance of success remains low due to Beijing’s powerful influence in the international community. As of May 2005, Taiwan maintains formal diplomatic relations with 26 countries, most of which are developing nations in Latin America and Africa who are politically insignificant actors in the international community. It also maintains substantive ties with over 140 countries and territories. Taiwan is the fourteenth largest trading country in the world in 2000, is extensively involved in multilateral economic activities, and is willing to share its successful development experience with other countries. Regarding its involvement in international organizations, Taiwan has obtained membership in 22 intergovernmental organizations,
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including the World Trade Organization (WTO), the Asia Pacific Economic Cooperation (APEC), and the Asian Development Bank (ADB). It also has observer status or associate membership in 14 intergovernmental organizations, including the Competition Committee of the Organization for Economic Cooperation and Development (OECD), and the Inter-American Development Bank (IDB). “Chinese Taipei” is the name used by participating international organizations when recognizing Taiwan’s membership. The term was first used in Taiwan’s participation in the Olympics and at APEC. However, Taiwan sits in the Asian Development Bank as “Taipei China,” a name that the island is much less willing to accept. As for Asia-Pacific security dialogue, Taiwan is kept outside of the ASEAN Regional Forum (ARF) and has only been able to join second-track security dialogue, such as the Council for Security Cooperation in the Asia Pacific (CSCAP), in the capacity of “scholars” or “individuals.” The diplomatic struggle between Beijing and Taipei has until now been a zero-sum game. Even though Taipei now actively seeks the possibility of being recognized dually with the mainland, Beijing normally has more leverage in maintaining its strategy of internationally isolating Taiwan. Economic aid, loans, and humanitarian and technical assistance are widely used by both sides as diplomatic tools to achieve the goal of winning diplomatic recognition. The Taipei government has used its economic power to support diplomatic relations—employing foreign aid and investment polices as tools to create and consolidate its official relations with its allies and friends in Central America and Africa. However, the development of democratization means increasing legislative supervision of external affairs and economic aid as well as the participation of NGOs in diplomatic activities, and public opposition and resentment to this “money diplomacy” has become so strong as to leave Taipei very uncertain as to the policy’s positive outcome. Accompanying its democratic transition and consolidation, Taipei has found new avenues available to enhance its foreign relations, such as NGOs, human rights issues, and democratic diplomacy. It was the Lee Teng-hui administration that started shifting focus to using NGOs and human rights issues in promoting Taiwan’s external relations with the objective to construct a benign external environment for Taiwan’s new international status and participation.3 President Chen Shui-bian further promoted these democracy-afforded initiatives and institutionalized mechanisms to shape the global discourse to be more favorable for Taiwan’s foreign relations. Taiwan has also used its relatively stable democratic transition and consolidation as
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a basis on which to build international support for its legitimate sovereign existence.4
C D C-S R Lee Teng-Hui Era (1995–2000) In the early 1990s, the leadership transition in both sides of the Taiwan Strait provided an overarching environment conducive to a cross-Strait détente. Despite the lack of formal contact at the beginning, informal communication through emissaries opened the door to various meetings between Taiwan’s Straits Exchange Foundation (SEF) and China’s Association for Relations Across the Taiwan Strait (ARATS). The mode of communication effectively reduced crossStrait tensions. Therefore, even though Taiwan’s then-President Lee Teng-hui’s initiation of pragmatic diplomacy and leanings toward the Taiwan independence movement indeed raised caution in China’s leaders, relations between Taipei and Beijing remained stable and were improving. Under such an atmosphere, Jiang Zemin on January 30, 1995 made an eight-point proposal, the so-called Jiang’s Eight Points, suggesting that the two sides of the Taiwan Strait start negotiations “on officially ending the state of hostility between the two sides and accomplishing peaceful reunification step by step.”5 However, Lee’s subsequent visit to the United States in the summer of 1995 proved to be a watershed in this critical relationship. Essentially, Beijing has never trusted Lee Teng-hui even while recognizing him as the most important factor in solving cross-Strait problems. As a response, Beijing decided to block all dialogue channels between themselves and Taipei. This was first signaled at the deferment of the second Koo-Wang talk, originally scheduled for July 20, 1995. Beijing meanwhile launched military brinkmanship via provocative missile tests and live-fire exercises between July 1995 and March 1996. Lee’s U.S. visit brought two far-reaching influences to cross-Strait relations. The visit first made Beijing realize the rise in sentiment toward Taiwan independence and the concurrent difficulties in reunification. As a result, Beijing started to devote more energy to preventing de jure Taiwan independence and sustaining the status quo, rather than pursuing a quick reunification. The latter change in Beijing’s strategy toward Taiwan came about in the latter half of the 1990s, as Suisheng Zhao argues, through a combination of military coercion and peaceful offense. Military coercion refers to the use of
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military exercises or threats of force as the strategy of coercive military brinkmanship, while peaceful offence refers to the implementation of economic and cultural exchanges as well as negotiations between the two sides.6 During this period, the military exercises became a political instrument for the purpose of urging Taipei to halt what Beijing perceived as independent tendencies, and they served as a warning to the United States to stop what Beijing also saw as intervention in China’s internal affairs. Arguably, Lee’s two most prominent accomplishments during his presidency were the democratization of the island and the promotion of a separate Taiwanese identity, both of which risked irritating China. In attempting to strike a delicate balance between advancing goals and securing the island, Lee used two different tactics. One tactic during much of Lee’s tenure was to prioritize democratization (even after consolidating his own power) in order to ward off a premature unification-independence dogfight. Another was to internationalize the Taiwan issue.7 Steven Goldstein would thus argue that Taipei’s mainland policy during Lee Teng-hui’s second term in office could be characterized as pseudo-engagement, which meant to buy time and security in the cross-Strait interaction while understanding the major irreconcilable differences between the two governments across the Taiwan Strait.8 This modus operandi was also manifest in Lee’s inaugural speech after his victory in Taiwan’s first-ever direct presidential election in 1996, in which he proclaimed that “the Republic of China had always been a sovereign state, and it was not necessary to pursue Taiwan independence, but Taiwan would continue to promote pragmatic diplomacy to ensure national dignity and space for further development.” Among all the developments in cross-Strait relations during Lee’s presidency, one of the most remarkable is the continuous increase in economic interaction across the Taiwan Strait. In September 1996, President Lee announced his new economic policy, “no haste, be patient.” Part of the intention of this policy was to slow down Taiwan’s overdependence on mainland China in trade and investment so as to maintain the island’s economic autonomy and to avoid the so-called hollowing effect. Another part was to fend off the possibility of integration between Taiwan and the mainland before internationalization of the cross-Strait issue9 so that Taiwan’s security could be preserved. Beijing of course perceived the “no haste, be patient” guideline as a general and continual regress of Lee’s policy, which was aimed at maintaining economic leverage in minimizing the mainland’s efforts at reunification. Nevertheless, the cross-Strait economic integration only accelerated in the past decade despite Lee’s eagerness to step on the brake.
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Changes in the overarching environment facing the two sides of the Taiwan Strait opened a small door to a thaw of the relations in the 1997–1998 period. Externally, Beijing’s strategy to bring pressure on Taiwan through great powers such as the United States and Japan had made some advance while Taiwan’s pragmatic diplomacy seemed to reach its limit. Internally, Jiang consolidated his power in China while Taiwan’s DPP kept making inroads in the island’s elections, making the party a potent alternative to the ruling KMT. Beijing would rather deal with the KMT, which at least still clings to the name “China.” The DPP’s development in Taiwan forced Beijing to forgo its initial insistence that cross-Strait talks would only be resumed after Lee’s departure.10 Beginning in 1997, therefore, both sides began to hint, through formal and informal channels, at the possibility of resuming negotiations in early 1998. At the Fifteenth Party Congress held in September 1997, Chinese President Jiang Zemin called on Taiwan to conduct political negotiation and suggested the possibility of reaching an agreement to terminate the state of hostility. Taiwan responded favorably to China’s proposal to resume negotiations and to include a peace agreement in the negotiating agenda. In October 1998, the second Koo-Wang talk was held on mainland China. Koo Chen-fu, chairman of Taiwan’s SEF, led a Taiwanese delegation to meet with his Chinese counterpart Wang Daohan, head of the ARATS, in Shanghai and later with Jiang Zemin in Beijing. If part of the rapprochement in 1997–1998 had to be attributed to Jiang’s desire for a personal legacy on national reunification, then Lee, who was also approaching the end of his presidency, was considering his own legacy as well, just in a very different direction. On July 9, 1999, facing Wang’s upcoming return visit to Taiwan, Lee Teng-hui proposed his special state-to-state relationship to redefine Taiwan’s political status and to deter pressures from the United States to negotiate an interim agreement between Beijing and Taipei. Though Taipei’s Mainland Affairs Council Chairman Su Chi later announced that Taiwan would not amend its constitution and would not change its laws regarding its cross-Strait status, he proclaimed that Taipei would not retract President Lee’s special state-to-state statement. Beijing’s response to the special state-to-state comment was furious, canceling Wang’s planned visit and resorting again to military threats (most notably during Taiwan’s 2000 presidential election campaign). The special state-to-state comment also prompted a heated policy debate within China.11 The hardliners, who argued that the Taiwan issue could not remain unsettled indefinitely, eventually gained the upper hand and called for new measures to handle the
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problem. Their argument was incorporated into Beijing’s White Paper on the One-China Principle and the Taiwan Issue, promulgated on February 21, 2000. Within the White Paper, Beijing for the first time stipulated that if Taiwan indefinitely rejected reunification talks, Beijing would have to use certain coercive measures, including military force, to resolve the problem. On the whole, the cross-Strait relationship under President Lee Teng-hui went through a major structural change in which Taiwan’s domestic politics started to play just as equal a role as United States or China’s policy statements did. The two most significant developments accompanying the democratic transition were a steady increase in Taiwan independence sentiments and the gradual erosion of popular support for the ruling KMT. The latter corresponded to an increase in support for the pro-independence DPP. After the 1996 missile crisis and the direct presidential election, the rise of the Taiwanese identity was further encouraged. Lee’s appeal to the public for not merely advancing political objectives but also consolidating his own power, not to mention the KMT’s responses to the DPP’s legitimacy challenges, introduced factors of domestic politics into the realm of cross-Strait policy making. One could therefore observe an ebb and flow in crossStrait relations that might be traced back to domestic volatilities. Such occurrences were unprecedented in the pre–Lee Teng-hui era. At the end of Lee’s presidency, it was generally thought that he would likely to continue to play a role in the cross-Strait affairs and that his personal, political, and institutional relationship with whomever succeeds him as Taiwan’s president would continue to be a factor in Taiwan’s domestic approach to cross-Strait relations. Chen Shui-bian’s First Term (2000–2004) Chen Shui-bian, former Mayor of Taipei and candidate for the proindependence Democratic Progressive Party (DPP), won the presidential election in March 2000 and, on May 20, 2000, was sworn in as the tenth president of the Republic of China on Taiwan. Chen’s victory formally ended more than 50 years of Kuomintang (KMT) rule. It was a victory unexpected by most Taiwanese people and even the DPP itself. The DPP came to power lacking experience in running the central government and dealing with cross-Strait relations. When Chen took over the presidency and the control of government, which had been dominated by the KMT for more than five decades, the immediate and short-term objective was to safeguard domestic political stability. Cross-Strait relations under the first Chen Shui-bian administration can be divided into three major phases: pragmatic, revisionist, and
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nationalistic. The first one and a half years of his first term in office, from May 2000 to September, 2001, were known for his pragmatic and conciliatory approach toward mainland China. During this period, President Chen announced the well-known “Five Nos” policy— the idea of political integration and the initiation of the mini three links. The driving force behind his policies was the desire to create favorable domestic and cross-Strait environments in hopes that they would make the historic power transition go smoothly. In the first one and a half years until late 2001, cross-Strait military tension had been defused. Much of this should be attributed to Chen’s pragmatism in dealing with cross-Strait issues. The first noted manifestation of such an adjustment was Chen’s proclamation in his inauguration speech of the well-known “Five Nos” that showed his effort in seeking stable relations with China. Chen first pledged to “defend the Constitution of the Republic of China and secure its sovereignty.” He also emphasized that “as long as the Chinese Communist Party (CCP) regime has no intention to use military force against Taiwan,” he would do the following: 1. Not declare Taiwan independence 2. Not push forth the inclusion of the so-called state-to-state relations description in the constitution 3. Not endorse a referendum on independence or unification 4. Not change Taiwan’s formal name 5. Not abolish the National Reunification Guidelines It was obvious that when assuming his new role as leader of the central government after the KMT’s 50-year rule, Chen’s intention was to avoid excessively provoking the PRC in the beginning of his new administration. Chen’s cross-Strait policy, exemplified in his first cabinet, emphasized his middle-of-the-road strategy—moving from DPP’s traditional pro-independence position toward a more central or neutral position, at least for the short term. By declaring the conditional “Five Nos” policy toward mainland China, Chen hoped to pass any possible blame for causing a cross-Strait stalemate and prevent Beijing from taking military action.12 In a follow-up move, President Chen made another significant gesture in his first New Year Address in January 2001 with the suggestion of a possible cross-Strait political integration at some point. By referring to the politically loaded one-China term as a question for the future, Chen mentioned in the address the prospect of Taiwan’s eventual political integration with mainland China. He proclaimed that “the integration of our economies, trade, and culture can be a starting
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point for gradually building faith and confidence in each other. This, in turn, can be the basis for a new framework of permanent peace and political integration.” In addition to the above-mentioned measures, Chen also backed China’s bid for permanent normal trade relations with Washington, its drive to enter the WTO, and its successful campaign to bring the 2008 Olympic Games to Beijing. Moreover, Taipei also permitted reporters from the PRC to be stationed in Taiwan and had promised to ease restrictions on travel by mainlanders to the island. The DPP governmental officials professed that these policies and gestures proved that Chen was determined to engage Beijing and to try to improve cross-Strait ties. It should be fair to say that although crossStrait relations remained in a stalemate following Chen’s inauguration, tensions between Taiwan and China did quickly subside during this period of pragmatism, and there was no imminent threat of a military crisis. To be sure, Chen’s administration deserved some credit for its handling of relations with Beijing in the foregoing first phase; however, despite Chen’s conciliatory rhetoric and unilateral goodwill gestures, cross-Strait relations experienced no breakthroughs. In the second phase, from October 2001 to April 2003, Chen’s cross-Strait policy was known for his revisionist or increasingly provocative approach. From the rejection of the 1992 consensus to the statement of “one country on each side,” Chen shifted his previous stance to reveal his policy plan and appeal to his constituents. These measures were seen as a deviation from his previous good-will gestures and a return to the fundamental stance of the pro-independence agenda of the DPP Chen’s shift of position was explained as an election strategy. From the beginning of Chen’s presidency, a war of words over the one-China issue has been a major gap and dispute not just between Taipei and Beijing but also between the Chen administration and opposition parties in Taiwan. In the press conference marking his first month in office, President Chen said that he was willing to discuss the issue of a “future one China.”13 Since then, the official assertion of the Chen administration had become one that claims there exists no socalled one China but that Taipei is willing to negotiate the issue during cross-Strait dialogue. On October 22, 2001, Chen publicly rejected the 1992 consensus while campaigning in Hualien County for DPP candidates for the year-end Hualien County magistrate and legislative elections. Chen criticized the opposition parties for trying to force him to accept the 1992 consensus. “The oppositionists have pushed me to accept the 1 ‘ 992 consensus,’ o ‘ ne country, two systems,’ and the o ‘ ne China’
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principle. Accepting those conditions will be selling out Taiwan, eliminating the Republic of China,” Chen said. To accept the consensus, according to the president, is to take the one country, two systems promoted by Beijing, which says that Taiwan would be granted partial sovereignty if Taiwan agreed to unify with mainland China. Chen therefore argued that accepting the 1992 consensus was tantamount to betraying the self-ruled island.14 Chen maintained that Beijing’s insistence on the one-China principle as a precondition for resuming talks had become an obstacle to dialogue. He explained that no document could be found about the 1992 consensus; instead, Chen talked about the 1992 spirit—the spirit to negotiate without any preconditions—as the basis for the resumption of dialogue between Beijing and Taipei. On August 3, 2002, in a videoconference address to independence supporters in Tokyo, Chen explained his administration’s view of Taiwan’s sovereignty saying that “there is one country on each side” of the Strait. Chen went on to underline the urgency of Taiwan’s adopting referendum legislation. Chen’s remarks sparked criticism from his domestic opponents, caught Washington and Beijing by surprise, and raised questions about whether he was backing away from the “Five Nos” commitments in his inaugural address. Governmental officials in Taipei soon were sent out in fire-extinguishing tasks to assure concerned parties that the policy had not changed. The third phase refers to Chen’s campaign period for reelection in 2004, primarily from May 2003 to March 2004, in which his increasingly nationalistic and pro-independence actions demonstrated his sensitivity to the needs of his base of support. With the announcement of his plans for constitutional revision and a defensive referendum, Chen changed his stance to consolidate his supporters and to increase anti-China/pro-Taiwan sentiment, in order to boost his prospect of reelection. The referendum brings up issues of cross-Strait relations and Taiwan’s security, that is, increased weapons sales and the peace framework. President Chen said that Taiwan’s security was undermined by Beijing’s oft-repeated threat to attack, as symbolized by the 496 missiles it had pointed at the island. Chen therefore decided to hold a referendum on whether or not to demand that China withdraw ballistic missiles targeting Taiwan and promise not to use force against Taiwan.15 He described the election-day referendum as an attempt to safeguard Taiwan’s sovereignty and security. The defensive referendum was also closely linked with the new constitution issue. The defensive referendum was viewed as a test or prelude for holding a referendum on a new constitution in the near future.
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President Chen has said he wants to hold another referendum by the end of 2006 on rewriting the island’s constitution. In retrospection of cross-Strait relations during Chen’s first presidential term, this chapter finds that the development and dynamism of relations between Beijing and Taipei during this period were mostly caused by Chen’s changes in policy. Correspondingly, China’s crossStrait policy was primarily passive to Chen’s initiatives. Factors contributing to such a reactive attitude may include lessons learned from past experience: Bush’s support of Taiwan security in the formative days, and more importantly, Beijing’s obsession with its own power transition. However, the explanation of Chen’s changes in his crossStrait policy should go beyond the election strategy. This chapter argues that currently there exist two Taiwanese identities, which are the structural factors that allowed Chen to shift his policy and benefit from those changes. Finally, this chapter observes that the U.S. role in the Taiwan Strait has seen an unprecedented expansion during President Chen’s first tenure, evident in Beijing’s efforts to put pressure on Taipei through Washington during Chen’s reckless push for referendum and constitutional reforms.
T C-S S Q It seems that Beijing, Taipei, and Washington have all agreed to maintain the status quo in the Taiwan Strait. The problem is that all three have different definitions and perceptions of what consititutes the status quo. Beijing insists on the one-China principle, which states that Taiwan is part of one China. By insisting on a static status quo, Beijing in fact tries to prevent Taiwanese independence from receiving more domestic and international supports. Taiwan regards itself as an independent sovereign state and rejects any form of reunification with the current regime in Beijing. The United States wants to maintain a peaceful status quo and warns against any unilateral action that may alter that status quo. Furthermore, though the United States has a one-China policy, Washington insists that differences between the two sides of the Strait should be worked out peacefully. China’s Static Status Quo Beijing conceives the cross-Strait status quo as a prolonged conflict occasioned by the Chinese civil war in the last century. Such a definition is in essence a static description of the status quo and is employed to legitimize Beijing’s treasured one-China principle and its claim over Taiwan. By politicizing the one-China principle, Beijing has cut off any
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possibility for change in the cross-Strait status quo by making the principle a premise of almost all cross-Strait issues and limiting opportunities for Taiwan to participate in international affairs. This static definition of the status quo borders on a containment strategy aimed at marginalizing Taiwan and eventually reunifying the island with the mainland. This is why even after the SARS epidemic in early 2003, and amid fears of another major outbreak, Beijing still rejected the idea of giving Taiwan observer status at the WHO, even though WHO membership is not exclusive to sovereign nations. The legitimacy of the communist regime is intertwined with preventing Taiwan independence, and the status quo Beijing wants is one where Taiwan remains as it is now but must move as soon as possible toward reunification. When Taiwan was still ruled by the two Chiangs, the one-China issue referred to the competition between Taiwan and the mainland over which government legitimately represented the whole of China. On January 30, 1995, when Jiang Zemin set the tone for his crossStrait policy in his so-called Jiang’s Eight Points, he followed suit, mentioning at the very beginning the importance to adhere to the one-China principle, which stated that there is only one China and Taiwan is part of China. Combined with implicitly inferring or explicitly asserting via international propaganda that the People’s Republic of China is the only legitimate government representing the whole of China, Beijing achieved its aim of debasing Taiwan to only a local government under its authority. Meanwhile, sheltered by the so-called 1992 consensus, in which both sides agreed to allow each to create its own wording for the content of the purported one China, then Taiwanese president Lee Tung-hui’s various initiatives—such as pragmatic diplomacy and the bid to return to the UN—might have aroused caution, but Beijing was not particularly worried about Taiwan declaring independence.16 This was exhibited by Beijing’s array of efforts before 1995 to facilitate cross-Strait contact and pave the way for eventual political talks on unification and was dramatized by the title of Jiang’s 1995 speech, which read “Continue to Promote the Reunification of the Motherland.” Since then, however, a series of developments, beginning with Lee Teng-hui’s U.S. visit in mid-1995 to the special state-to-state delineation of cross-Strait relations in 1999, only saw Taiwan gradually drifting away from the motherland. Jiang’s eight points fell on Taiwan’s deaf ears, and the popularity of Lee’s course exposed the lack of enthusiasm on the island for Beijing’s one-China definition of the status quo as well as its formula of one country, two systems. The debacle came when proindependent Chen Shui-bian was elected president of Taiwan in 2000, to some extent forcing Beijing to reflect and adjust its one-China tenet.
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Consequently, in the second half of 2000, Beijing signaled its shift and rephrased the one-China principle to read, “There is only one China in the world; both the mainland and Taiwan belong to the same o ‘ ne China’; China as an integral whole can’t be separated in sovereignty or territory.” This statement was dubbed the new three-section delineation of the one-China principle. The modification somewhat made Taiwan an equal to the mainland, in order to ease the island’s doubt about oneChina and make it more inclusive and, thus, more acceptable to the Taiwanese people. On March 11, 2003, the PRC’s new president, Hu Jintao, also incorporated this three-section delineation into his four points on Taiwan-related work, indicating that such a description of the status quo would at least continue to be employed by Beijing for a while. From 1995 to present, Beijing’s definition of the status quo has taken a step closer to pragmatism, but this by no means represents a compromise on the one-China issue or its use as a premise of any cross-Strait talks. We might simply put the status quo in Beijing’s definition as a tentative period before the reunification of the country. From Beijing’s point of view, the unification of Taiwan and the mainland is the only road ahead; thus, Taiwan’s rejection of one China and the pursuance of a separate identity are therefore viewed as actions unsettling the status quo. Taiwan’s Dynamic Status Quo As mentioned above, the perception of the one-China issue and the definition of status quo incubated a qualitative division between the two sides of the Taiwan Strait only after Taiwan slid into international apartheid in the 1970s and began democratization shortly thereafter. The United States’ severing of diplomatic ties with the island dealt a fatal blow to Taipei and forced the nationalist government to reconsider its strategies for survival and its conception of cross-Strait relations. On the one hand, Taiwan claimed itself to be an independent country separate from communist China in order not to provide the PRC with justifiable excuses to absorb the island through the assertion that it was a Chinese internal affair. On the other hand, the authoritarian nationalist party embarked on measures of enlarging political participation and a series of moves of localization, liberalization, and democratization in order to buttress its legitimacy of rule on the island. In May 1991, the first native Taiwanese president, Lee Teng-hui, declared the end of “the period of national mobilization for suppression of the communist rebellion,” signaling Taiwan’s formal renouncement of sovereign claim over the mainland. This action was also a step ahead to proclaim the island a de facto independent state
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because “just as Taipei did not rule the Chinese mainland, Beijing did not rule Taiwan.”17 The 1992 consensus embodied this new status quo that Taipei tried to portray. At that time, it was safe to say that Taiwan still adhered to the one-China principle although Lee’s administration claimed that this China was a divided China with the PRC on the mainland and the ROC on the island of Taiwan. The two should be considered sovereign political entities and on equal footing even though Taiwan promised an eventual reunification with the mainland.18 Since then, however, the forces brought about by the democratic mechanism gradually nurtured a separate Taiwan identity, meanwhile sidelining the one-China aspect of Taiwan’s cross-Strait policy. These forces included (1) the demand of the island’s citizens for international standing parallel to Taiwan’s growing economic strength in the 1990s, (2) the competition facing the ruling KMT that resulted from the independence course professed by DPP as an alternative future for the island, and (3) President Lee’s own historical perspectives on Taiwan’s destiny. Lee’s overwhelming victory in the 1996 presidential election, despite Beijing’s saber rattling, squarely manifested the public’s support of Lee’s pursuance of a more assertive Taiwan and their abhorrence of the mainland’s meddling in the island’s affairs. In 1999, perceiving a tilt toward Beijing in Washington’s crossStrait policy and facing the possibility of being pressed by the United States to enter into political negotiation with the mainland with an inferior status, Lee openly relinquished the one-China principle and redefined relations between Taipei and Beijing as affairs between two Chinese states (the special state-to-state relationship).19 The opposition DPP has never loved the one-China principle, and since it took over the throne from the KMT in 2000, the dispute over the oneChina issue has festered to become the source of the continuing crossStrait stalemate. As early as 1991, the DPP adopted the so-called independence plank in its party charter, overtly pushing for the establishment of a sovereign Republic of Taiwan. Later, in an obvious attempt to strike a balance between the party’s long-held independence positions and to assure moderate voters of the party’s ability to handle cross-Strait issues, the DPP approved the Resolution on Taiwan’s Future in 1999. The resolution stated that Taiwan is a sovereign and independent country not subject to the jurisdiction of China (by any definition) even though it is called ROC under its current constitution. It further prescribed that any change in this independent status quo needs the consent of all residents of Taiwan by means of plebiscite. The spirit of the resolution also underlined Chen Shui-bian’s one-country-on-each-side assertion of 2002.
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Taiwan’s official definition of the cross-Strait status quo nowadays is that the island is a sovereign independent state not subject to the rule of any other countries, such as the PRC, or China in general. Unification with the Chinese mainland is at best one of the various options of Taiwan’s future and is to be decided by all the residents of the island. This viewpoint is by and large supported by the Taiwanese public, as observed in a series of opinion polls. From 1996 to 2002, the percentage of people in Taiwan who identify themselves as Chinese has declined from 20.8 to 7.9 while the percentage of those who say they are simply Taiwanese or both Taiwanese and Chinese has climbed from 35.7 to 38 and from 40.5 to 50.6, respectively.20 A further survey finds that while about two-thirds of residents in Taiwan reckon that Taiwanese culture is part of Chinese culture, roughly 80 percent of them identify only the island as their own country and only the Taiwanese as their compatriots.21 The finding affirms that most people in Taiwan view the island as politically independent of the mainland and suggests that China today has transformed more into a cultural rather than political motherland. Much of the debate and confusion in Taiwan nowadays is about the future relations with the mainland, not about the status quo of the island, and somewhat to Beijing’s disappointment, according to the foregoing survey, only a quarter of people in Taiwan at the moment support the idea of sooner or later unification.22 On the whole, we might conclude that Taiwan’s conception of cross-Strait status quo is dynamic, reflecting the need to respond to the pressure of both external and internal regime survival. Nevertheless, it is worthwhile to note that the quoted survey finds that 35.5 percent of people in Taiwan are still undetermined about future cross-Strait relations. This portion of the public should parallel Yun-han Chu’s category of open-minded rationalists who would shift their favor of unification or independence according to external conditions.23 Given the dynamic nature of Taiwan’s perception of the status quo, this sizable buffer leaves room for Beijing to promote its unification efforts and might indicate latitude for the two sides to look for a possible middle ground in their dispute.
The U.S. Response: A Dual Strategy Washington has gradually come to believe that President Chen’s own interpretation of the status quo is aimed at redefining the current situation, which is opposed by the United States. The assertion that Taiwan is an independent sovereign nation is used to establish a
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Taiwan national consensus, generate media coverage from the international press, and legitimize Taiwan sovereignty. However, the United States does not support China’s static definition of the status quo either, which is utilized to further contain and marginalize the island. If Taiwan and China’s status quo strategies are both pursued, then a dangerous situation will have been created because the dynamic and static manipulations of the status quo will be in conflict, setting the stage for a major instability in the region. Therefore, in maintaining the current status of cross-Strait relations, the United States has adopted a clear dual-strategic policy of military and political balance and deterrence. One aspect of playing the part of balancer is to maintain a military balance between the two sides through arms sales to Taiwan and strengthening the island’s defenses. By providing sufficient weaponry to Taiwan, on the one hand, and not ruling out the possibility that the United States might send troops to defend the island, on the other, Washington achieves its goal of mitigating the deteriorating military balance in the Taiwan Strait. Another aspect is the political balancing act—utilizing diplomacy with Taipei and Beijing to express a strong resolve to uphold cross-Strait peace. Taking the defensive referendum issue in 2003–2004 as an example, the Bush administration expressed its concerns to Beijing and Taipei that Washington opposed any unilateral change to the peaceful status quo. While publicly questioning Taiwan’s motivation in holding the defensive referendum, Washington also warned Beijing not to use force across the Taiwan Strait unilaterally. To put it another way, the United States quelled the passion of the pro-independence movement in Taipei so as to not provoke Beijing, but simultaneously the United States must reassure Taiwan that democracy on the island will be safeguarded, hence maintaining the political balance. As for the dual deterrence strategy, America clearly conveys to both sides of the Strait that it opposes any unilateral action to change the status quo. Any such action would warrant a political or possibly military response. The U.S. attempts at dual deterrence in the cross-Strait arena usually focus on the concept of strategic ambiguity. A variation of this concept is to say that the United States has a policy of strategic clarity and tactical ambiguity. Under the strategy of dual deterrence, Washington always tries to remind both Taiwan and China that peace is the key U.S. interest in the Strait and the region. Therefore, Taiwan cannot assume that the United States will defend it under any and all circumstances, nor can China assume that America will not be involved should it decide to attack Taiwan. In other words, America’s goal is peace and stability, but it will not define in advance the precise steps it will take in order to achieve that objective. Regarding U.S.
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policy toward China, the United States has combined promises not to support Taiwan independence and to limit arms sales to Taiwan while threatening the possibility that it will intervene on Taiwan’s behalf if China launches an unprovoked attack. As for Taiwan, the United States has combined promises to aid in Taiwan’s self-defense capabilities, coupled with veiled but implicit threats to reconsider security and diplomatic support for Taiwan if Taipei moves to unilaterally alter the status quo. Therefore, other than its standpoint of no military action by China, no Taiwanese independence, Washington’s policy actually consists of preventing either side from defining or legalizing the status quo. Taking things too far or harboring different intentions will only serve to foster misunderstanding.
C R The magnitude of Taiwan’s growing economic interdependence with China and China’s complete willingness to use force to resolve the socalled Taiwan issue have far-reaching and paradoxical implications for Taiwan’s identity building. Taiwan’s self-identity and democratization grow stronger by the day, and the Taiwanese government is stepping up efforts to enlarge its international role and increase its participation in international organizations. The development of Taiwanese identity, both native and status-quo leaning, reflects the emotion of dissatisfaction and frustration of the Taiwanese public. Taiwan’s diplomatic relations remain symbolic in number as a result of Beijing’s strategy of international isolation. Following Lee Teng-hui’s pragmatic diplomacy and Chen Shui-bian’s WHO and democracy diplomacy, Taiwan began its struggle to redefine its position on the world stage, and the world has gradually recognized the de facto existence of an independent Taiwan. However, the diplomatic struggle between Beijing and Taipei remains a zero-sum game. Looking back on the cross-Strait relations of the past decade, changes in China-Taiwan relations have been determined by three important factors: Beijing’s policy on Taiwan, Washington’s cross-Strait policy, and Taiwan’s internal politics. By and large, it is mainly Taiwan’s internal political environment that has complicated the situation. With the rise of the Taiwanese identity and its dominance in domestic elections, Taiwan’s policy toward mainland China depends on the dynamic changes of its internal politics. Therefore, Beijing’s policy toward Taipei was more reactive than initiative during this period of time. It seems that maintaining the status quo in the Taiwan Strait has become the overlapping consensus among Beijing, Taipei, and Washington, even though all three have different ideas about the
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status quo. By insisting on the one-China principle, Beijing wants to maintain a static status quo and prevent de jure Taiwan independence. For Taipei, cross-Strait status quo is dynamic, reflecting the need to respond to the pressure of both external and internal regime survival. It, therefore, is Washington’s policy to prevent either side from defining or legalizing the status quo so that things won’t be taken too far, thus fostering misunderstanding.
N 1. T.Y. Wang and I-Chou Liu, “Contending Identities in Taiwan: Implication for Cross-Strait Relations,” Asian Survey, 44, no. 4 (August 2004): 568–590. 2. T.Y. Wang, “Taiwan’s Foreign Relations under Lee Teng-Hui’s Rule, 1988–2000,” American Asian Review, 20, no. 1 (Spring 2002): 71–107. 3. Chen Jie, “The Influence of Democracy on Taiwan’s Foreign Policy,” Issues and Studies, 36, no. 4 (July/August 2000): 31–32. 4. Wei-chin Lee, “Field of Dreams: An Overview of the Practice and Study of Taiwan’s Foreign Policy,” Issues and Studies, 40, nos. 3 and 4 (September/December 2004): 137–182. 5. The white paper issued by the information office of the PRC State Council, “The Taiwan Questions and Reunification of China,” China Daily, September 1, 1993. 6. Suisheng Zhao, “Military Coercion and Peaceful Offence: Beijing’s Strategy of National Reunification with Taiwan,” Pacific Affairs, 72, no. 4 (Winter 1999/2000): 495–513. 7. Chia-lung Lin and Bo Tedards, “Lee Teng-hui: Transformational Leadership in Taiwan’s Transition,” American Asia Review, 20, no. 2 (Summer 2002): 87–93. 8. Steven M. Goldstein, “Terms of Engagement: Taiwan’s Mainland Policy,” in ed., Alastair Iain Johnston and Robert Ross, Engaging China: The Management of an Emerging Power (London and New York: Routledge, 1999), pp. 79–80. 9. Lin and Tedards, “Lee Teng-hui: Transformational Leadership” 93. 10. Zhao, “Military Coercion and Peaceful Offence,” 506–509. 11. Xiaobo Hu and Gang Lin, “The PRC View of Taiwan under Lee Tenghui,” American Asian Review, 20, no. 1 (Spring 2002): 128–151. 12. See Willem van Kemenade, “Taiwan: Domestic Gridlock, Cross-Strait Deadlock,” Washington Quarterly (Autumn 2001): 55–70; see also “Five No’s Puts Ball in PRC Court,” Taipei Times, May 22, 2000. 13. “Trend Emerging on Chen’s Statements,” Straits Times, June 21, 2000. 14. “Debate over 1992 ‘One China’ Consensus Rages On,” Taipei Times, October 24, 2001. 15. On January 16, 2004, Chen announced the two questions of the nowrenamed “peaceful referendum.” The first and main question was “Should mainland China refuse to withdraw the missiles it has
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16. 17. 18. 19.
20.
21. 22. 23.
targeted at Taiwan and to openly renounce the use of force against us, would you agree that the government should acquire more advanced antimissile weapons to strengthen the country’s self-defense capabilities?” The second question, clearly intended to attract moderate Taiwan voters, as well as allay concerns in Washington and Beijing, read, “Would you agree that our government should engage in negotiations with mainland China to establish a peace and stability framework for cross-Strait integrations in order to build a consensus for the welfare of the peoples on both sides of the Strait?” Chi Su, Brinkmanship: From Two-States-Theory to One-Country-onEach-Side (Taipei: CWGV Publishing, 2003), p. 20. (in Chinese). Wang, “Taiwan’s Foreign Relations under Lee Teng-Hui’s Rule,” 78. Ibid., 78–79; Su, Brinkmanship, pp. 16–21. Julian Baum, Shawn W. Crispin, and Lorien Holland, “Upping the Ante,” Far Eastern Economic Review, 162, no. 29 (July 22, 1999): 18–19. Yun-han Chu, “Taiwan’s National Identity Politics and the Prospect of Cross-strait Relations,” Asian Survey, 44, no. 4 (July/August 2004), 501–502. Wang and Liu, “Contending Identities in Taiwan,” 574–576. Ibid., 584–585. Chu, “Taiwan’s National Identity Politics,” 503–506.
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T ’ N N I, D P, C -S R Hsin-Huang Michael Hsiao and J i a n n - F a Ya n
I The identity issue in Taiwan has attracted a great deal of attention in recent years. Notably, at each election in Taiwan, much observation and commentary in both domestic and international media has centered on the development of identity politics. Indeed, identity has been one of the pivotal factors in electoral mobilization in Taiwan since the 1980s. However, it is necessary to investigate this development from a historical and dynamic approach. Analytically, collective identity in Taiwan can be categorized as both ethnic and national identity (Hsiao and Wan, 1998). In other words, one’s identity includes a sense of belonging to one’s nation as well as to one’s ethnic group. Though nationhood and ethnicity are different, they have a close and intertwined affinity. Similar ethnic identity does not necessarily lead to the same national identity, and several different ethnic identities can forge a shared nationhood. The Taiwanese population can be conventionally classified into four major ethnic groups: indigenous Austronesian peoples (2 percent; with 12 distinct tribes), Hakkas (15 percent; immigrated in past centuries
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from certain regions of Guangdong Province on the mainland), Hoklos (70 percent; also known as Hokkien; immigrated in past centuries from regions in the mainland’s Fujian Province), and mainlanders (13 percent; immigrated from various parts of China between 1945 and 1949). A larger split is also often identifiable between indigenous Austronesian, Hakkas, and Hoklos, on the one hand, who are conveniently called the Taiwanese; and the mainlanders, on the other.1
T S M T I The groundwork for the current ethnic issue in Taiwan was laid by the arrival of the KMT-led Republic of China (ROC) regime in 1945, which immediately labeled the Taiwanese as people of “this province” (ben sheng) as compared to people from “other provinces” (yai sheng) all over China. Furthermore, another historical source of current social tensions is undoubtedly the decades of white terror—with fear, frustration, humiliation, and hatred imposed on local Taiwanese first by the massive slaughter of the February 28 incident in 1947 and the subsequent repression and many other human rights violations. During the martial law period of nearly four decades, the KMT played on ethnic divisions within Taiwanese society, brewing a degree of mutual suspicion among the Hoklo, Hakka, and indigenous Austronesian peoples. This negative policy has resulted in considerable social cleavage and public resentment during the past decades. During the Cold War, Taiwan underwent internal structural changes with little disturbance from without, especially from China. Since Chiang Kai-shek implanted the ROC regime in 1949, Taiwan, as an American ally, began gradually evolving toward a market economy. Although the KMT has maintained its authoritarian rule over Taiwan under Chiang, a democracy movement slowly took root, especially after his death in 1974. At the end of 1987, his son, Chiang Chingkuo, finally lifted the martial law due to great pressure from many organized social protest movements, and Taiwan began a profound political democratization. In 1986, Taiwanese dissidents had organized the Democratic Progressive Party (DPP), the island’s first opposition party (Hsiao, 2001). A few years later, in 1991, Lee Teng-hui, Taiwan’s first native-born president, announced a formal end to civil war with Communist China. This truce was the first major step in a series that would eventually slice all the artificial ties with the mainland, freeing Taiwan to chart its own course and solidify its own political identity. This process was described as the “liberation of the Taiwanese.”2 As a result, the issue of being Taiwanese or Chinese
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became a focal point of public discourse. Language became a badge of identity, with the ability to speak the native languages, either Hoklo (also known as Hokkien or Minnan) or to a lesser extent Hakka, became a proxy to distinguish between those who had been on the island for hundreds of years and those who came to Taiwan with Chiang Kai-shek in 1949 (Lee, 2005). In Lee Teng-hui’s definition, Taiwan had been colonized by a series of outside regimes, including the Spanish, the Dutch, the Ming Dynasty, the Ching Dynasty, and the Kuomintang (KMT) regime. In this typology, the first indigenous regime was born only after 1996, the year that Taiwan held its first direct presidential election. The concept of outside regime evokes an in-group consciousness, especially among people who share the experience and memories of both Japanese colonialism and the February 28 incident. For decades, the KMT government tried to forcibly indoctrinate all citizens in Taiwan with the belief that Taiwan was part of China and the Taiwanese were only an offspring of the Chinese lineage. However, the flourishing of Taiwan democracy since the early 1990s has lifted many taboos on political discussion, and mythical elements in the official presentation of national identity have been refuted. Ordinary people have been freely considering forging a unique Taiwanese identity with its own cultural heritage (Hsiao, 1998). The sense of a Taiwanese identity separate from the Chinese identity has thus emerged. For example, time-series polling conducted by National Chengchi University showed that as of December 2004, 43.7 percent of respondents identified themselves as Taiwanese-only, up from 17.3 percent in the first such poll in June 1992. Over the same period, those identifying themselves as Chinese-only dropped from 26.2 percent to 6.1 percent. The two lines almost crossed in June 1996, when 21.4 percent of respondents identified as Chinese and 26.2 percent as Taiwanese. The statistical data show that the sense of Chinese identity has shrunk sharply, while the Taiwanese identity has expanded remarkably. However, it is worth noting that the category of both Taiwanese and Chinese has remained relatively steady, fluctuating between 40 percent and 50 percent in 12 years; the poll showed that it was 45.4 percent in June 1992 and 44.4 percent in December 2004.3 Based on these empirical observations, although most mainlanders still identify themselves as Chinese, the percentage of Hoklos and Hakkas who identify themselves as Chinese is shrinking. Further polling data reveals that a significant number of Taiwanese would support “conditional independence” if it could be achieved peacefully. They would only consider “conditional unification” if China and
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Taiwan became “compatible economically, politically and socially” (Hsiao, 2002). Elections, in which political power finds its own market, are the primary internal drivers for the process of Taiwanese identity. The primary cleavage in Taiwan’s politics remains the identity issue; within the political spectrum, people are divided into green and blue camps instead of Left and Right. Green is the color of the DPP, and the green camp advocates a Taiwanese identity (it is often simplistically referred to as pro-independence). Blue is the color of the KMT, and the blue camp advocates a more-or-less Chinese identity (and is similarly labeled pro-unification). Certainly, ethnic tension in the political sphere of life, especially during elections, is still tenacious. Ethnic tension is often worsened by dividing views on national identity, in which both pan-green and pan-blue supporters have different prospects toward the relationship between Taiwan and China. The rise of China and the increase of exchanges across the Taiwan Strait have to a certain extent blurred the delimitation between Taiwan and China. In addition to internal drivers, the rise of Taiwanese identity has its own external structural background. Due to active international exposure, more and more Taiwanese have become self-conscious of their own collective identity, especially in face of the Chinese threat and Taiwan’s isolation in the world arena. The rise of China has severely constrained Taiwan’s international space, stimulating the emergence of a stronger Taiwanese consciousness. The resentment of Taiwanese, especially those pro-independence Taiwanese, toward any kind of Chinese identity has been reinforced by China’s ceaseless threatening acts. Notable among these have been the missile tests during the 1996 presidential election, the verbal threats during the 2000 presidential election, and the humiliation heaped upon Taiwan within international society, such as the callous refusal to allow discussion of observer status for Taiwan in the World Health Assembly (WHA) during the outbreak of the SARS epidemic in 2003. This oppression from China has alienated most Taiwanese citizens from a Chinese identity. Meanwhile, the group with the strongest ties to China—those born on the mainland—is aging and dying off. Democratic reforms have given people the freedom to question Chiang Kai-shek’s version of Taiwanese history and have inspired new pride in the island (Hsiao, 1998). A related factor has been the emergence of meddling by Beijing authorities into Taiwan’s internal politics, which has intensified along with Taiwan’s democratic development. As a result, the question of whether politicians or parties love Taiwan has been raised by the
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green camp in challenge to the Blue camp, an activity that only deepens the cleavage. Nevertheless, it was not simply generated by Green politicians; in fact, such slogans or questions had already existed in Taiwanese society. Green politicians at most only exploited and perhaps reinforced them. The rising political market for such slogans has both social and political implications: the social elements favoring Chinese identity are shrinking due to strong demand of most Taiwanese for a self-identity for their own country. And that in turn deteriorated cross-Strait relations in the eye of Beijing as well as perpetuated anti-Chinese political sentiment among the Taiwanese citizens. It is also undeniable that the Beijing authorities have consistently favored and even supported the candidates of the pan-blue camp in the past two presidential elections, thus feeding a reasonable doubt among the pan-green camp on the degree of adherence to a “Taiwan first” national identity among leading politicians in the pan-blue camp. Lien and Soong’s welcome visits in China in May 2005 further indirectly reinforced pan-green’s suspicion. The expression of love for Taiwan becomes a common offensive question to challenge the panblue camp by the pan-green camp. In fact, some verbal attacks have even exacerbated the seemingly ‘ethnic relations’ between mainlanders and nonmainlanders. As history has shown, Taiwan’s ethnic and political issues have been intertwined once again, which has reduced the national identity issue into a morass of ethnic contradictions at the level of collective sentiment held by the mainlanders (Hsiao, 2002). In essence, the question of whether one loves or sells out Taiwan lingers somewhere between ethnic grouping and nationality. Proindependence advocates have made conscious efforts to shift and upgrade the focus from ethnicity to nationality. They are driven by the longing for an independent country for Taiwan. They also believe that the sense of common destiny among different ethnic groups has crystallized. A new fusion of ethnicity has been formulated based on a clearer overall delimitation between Taiwan and China. To claim Taiwan to be an independent state, even under its official name ROC, has already become a strong political appeal in the face of China’s attempts to annex Taiwan. Clearly, economic centripetal and political centrifugal forces coexist among the dyad relations between Taiwan and China (Hsiao and So, 1998). The commercial ties across the Taiwan Strait are becoming interdependent. China also serves as a major destination for Taiwanese goods; China has replaced the United States as the number one source for Taiwanese exports. However, the increase in economic exchange and integration has not brought about better human
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contact and political trust across the Taiwan Strait. In Taiwan, the discrepancies of national identity mixed up with ethnic divisions remain tenacious. China has continuously intended to suppress Taiwan’s presence in the international community, sparking growing anger among Taiwanese and creating worries that Taiwan’s economy may become marginalized in the future. Many Taiwanese citizens tend to believe that China will not rule out the possibility of using force to take over Taiwan. More and more Taiwanese increasingly dislike and distrust the mainland, and the two sides of the Strait are drifting apart despite closer economic ties over the past 15 years. Under these complicated, subtle, sensitive, and sentimental circumstances, different political and social groups have come to define Taiwan’s relations with China in a contradictory and even disruptive way inside Taiwan.
T D R T’ P The reelection of President Chen Shui-bian and Vice President Annette Lu of the DPP with 50.12 percent of the 12.9 million votes cast on March 20, 2004 as well as the adherence by many KMT politicians to a Taiwan-first identity reflected the achievement of a growing consensus in society for Taiwan’s own national identity. The pan-blue camp also appeals for a Taiwan-first identity but fails to manifest it as a national issue, preferring to retain the older ethnic-based discourse. The pan-blue camp has also been pushed into the corner by two other forces: China from outside and the pan-green camp inside Taiwan. As part of the activities for the 2004 presidential election, the 228 Hand-in-Hand Rally became a very joyful mass participation event, in which over two million Taiwanese joined hands across the entire country. The rally showed that the shadow of the February 28 incident was finally gone. The Taiwanese people are trying to go beyond it to create a new meaning of February 28 by putting aside the internal ethnic differences and focusing on the new threat from China. However, the pan-blue camp deliberately stayed away from the above event, lingering on commemorations of the incident of February 28 itself. Though it was its tactical mobilization concern, the pan-blue camp failed to catch the main current of the rise of Taiwanese identity. In contrast to the pan-green camp’s appeals of protesting Chinese missiles in the 228 Hand-in-Hand peace rally, the pan-blue camp promoted reconciliation among Taiwan’s four major ethnic groups through a torch relay and a blood donation drive.
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This was only the most obvious sign that, during the election campaign, the pan-blue camp showed its relative weakness in ideological mobilization. Chen Shui-bian argued for the concept that “Taiwan is Taiwan; China is China,” while Lien Chan advocated Taiwan First under the framework of a greater China. No less damaging was the fact that Lien’s concession would lead the international community to believe that the KMT agreed with Beijing on the key principle of the status of Taiwan as being part of China. Only in the last phase of the 2004 presidential campaign, intentionally or not, did Lien promise to shift his position from a commitment to eventual unification to accepting an open-ended solution, including the independence option. Nevertheless, although Lien and Soong tried to draw a clear-cut line between the pan-blue camp and the PRC, they never claimed Taiwan as an independent sovereign state. For them, Taiwan is not a country. They might love Taiwan, but they remain reluctant to recognize Taiwan as a country independent of China. The gunshot attacks on Chen and Lu on March 19, on the eve of polling, shocked not only Taiwan, but also China as well as the international community. It was a historic event in Taiwan’s political history of democracy. The pan-blue camp had first optimistically expected to win the election, but when the votes were counted, the Chen-Lu ticket had won by an extremely narrow margin of 29,518 votes over Lien and Soong. In the wake of this disappointment, many KMT-PFP supporters felt that they had been cheated by the underhanded tactic of Chen-Lu being wounded in a staged attack in order to solicit sympathy votes. The pan-blue camp launched a series of large-scale demonstrations the next day, with Lien, Soong, and other leading pan-blue figures openly expressing suspicion of a political conspiracy behind the gunshot injuries to the president and vice president. These protests and the turmoil they generated seemed to throw Taiwan’s democratization into chaos. The pan-blue camp, including Lien himself, even refused to recognize Chen’s legitimacy as president. On March 26, China issued a strong warning on Taiwan’s internal confrontation over the results of the presidential election. Beijing’s strong wording seemed to signify a change in strategy from passive observation to active intervention. Beijing tried to renounce Chen’s legitimacy by condemning the publicizing of electoral results by Taiwan’s Central Election Commission. Ironically, Beijing’s action was strongly condemned not only by the pan-green camp but also by the pan-blue one. The latter had to rebuke Beijing in order to escape being tagged with the pro-China label.
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In reality, Taiwan has never been ruled by Beijing, but Beijing claims that Taiwan is part of China. What China can do is only to exercise stick-and-carrot plots to manipulate Taiwan’s domestic politics. This strategy is unrealistic, especially when the Taiwanese have increasingly educated themselves to be the masters of their own destiny. China is China, Taiwan is Taiwan has become a common understanding as well as a collective mind-set among many Taiwanese. Though the majority here are ethnic Chinese—speaking Mandarin— they refuse to identify themselves as politically Chinese. However, the fact is that they are truly Taiwanese in political sense. As a matter of fact, the outcome of the 2004 presidential election signifies that the social basis for the two-camp competition, that is, the blue versus the green, is over. It deserves observing whether camps can be reorganized into two parties. The pan-blue camp’s improper strategy of protests after the 2004 presidential election appeared to lead to the pan-green camp’s expansion into the new territory of middle voters. The pan-blue camp faced additional difficulties due to Lien and Soong’s ambiguous and indecisive attitudes in party assets and reforms, as well as power succession. To make matters worse, there emerged fierce fights inside the KMT and the PFP for party resources and ruthless rivalry between the KMT and the PFP for legislative seats. Some legislators from KMT’s local factions even maintained that as the presidential election is over, the KMT and PFP should go their separate ways and both Lien and Soong should resign as party chairmen, retire from politics, and allow the younger generation to take over.4 It was then assumed that the KMT and PFP would lose seats in the December 2004 legislative election, and the proportion of pro-unificationists in the population would be shrink simultaneously.5 Chen and the DPP were supposed to enjoy a golden opportunity to consolidate the support of swing voters for the 2004 legislative election. However, in Taiwan, presidential, legislative, and local politics have their separate and unique nature. It was argued that it was too soon to discount the pan-blue camp.6 Furthermore, as the 2004 legislative election was on, Chen made a tactical error by shifting the campaign emphasis to rectify the name of Taiwan. The United States sent very strong words to express its concerns while China was worried over any possible consequences. This reawakened anxiety among swing and conservative voters, who either sided with the conservative KMT or simply stayed at home. The DPP’s share of the vote in the December legislative election dropped from 37.2 percent in 2001 to 34.7 percent in 2004, while the KMT increased from 23 percent in 2001 to 33.2 percent in 2004, with the PFP dropping from 24.2 percent in
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2001 to 17.2 percent in 2004.7 In terms of seats, the DPP actually gained two, the pan-green camp gained one in total, and the pan-blue camp lost one in total. The pan-blue still clung on to its slim majority in the legislature and maintained its power to hamper the ruling party’s administration. Therefore, the result was generally seen to be a setback for Chen and the DPP right after the victory of 2004 presidential election.
C’ A M A T Beijing has always been eager to incorporate Taiwan under China’s control. However, this certainly causes a great deal of awkwardness. Any attempt to subject a relatively free and energetic system to a nonfree system can only be an absurd arrangement. Hong Kong is an ample showcase. This is the root cause of Beijing’s sensitivity and antagonism toward Taiwan’s democratization, and it has only been exacerbated by the rise of national identity in Taiwan’s domestic politics. Beijing considered the defensive referendum conducted together with the presidential election in 2004 as a sort of proxy independence referendum and thus accused Taiwan’s DPP government of approaching closer to the core of sovereignty issues. Indeed, the rhetoric of the pan-green camp did frame the election as a vote for Taiwan against China, or to be precise, for the Taiwanese identity. In the eyes of the pan-green camp, Taiwan was only associated with the ROC and it had no ties whatsoever with the PRC. They believe that according to the UN Charter on self-determination, Taiwan’s sovereignty should belong to its people.8 On the national identity stand, Beijing is, to a certain extent, much more comfortable with the pan-blue camp. With the increase of its national strength, Beijing is trying to use economic leverage to boost cross-Strait exchanges in order to strengthen the Chinese connection in Taiwan. Lien and Soong maintained that China and Taiwan can jointly create peace and promote development and prosperity. China has so far refused to negotiate with the DPP until it accepts the one-China principle and acknowledges that Taiwan is part of China. Despite some difference, Beijing is closer to the KMT than to the DPP. Beijing’s intervention into Taiwan’s domestic affairs by warning against Taiwan independence pushed the pan-blue camp into a corner. In order to square the circle of retaining the loyalty of its local supporters while not challenging the one-China principle, Lien declared that his version of one China actually means the ROC. In order to cope with the referendum, rather than advocating a “no” vote, which
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would have been politically unacceptable, the KMT called for a boycott, raising procedural objections to the poll. The pan-blue camp’s boycott unfortunately conveyed a distorted message to the international community that Taiwanese people had not reached domestic consensus and were even shy to speak out for their own sovereign independence. Certainly, many Taiwanese people have difficulty in understanding why the pan-blue camp courts Beijing authorities at the risk of sacrificing Taiwanese autonomy, freedom, and democracy. Many Taiwanese people even felt odd when Lien and Soong fell on their knees and kissed the land on the eve of the presidential election. Considering how often they waved the flag of C ‘ hinese nationalism,’ many wondered whether they really love Taiwan. Although the DPP won the 2004 presidential election, the pan-green camp failed to break the Blue majority in the December 2004 legislative election. Although some commentators considered that this result might relieve China’s anxiety, Beijing remained anxious toward the steady rise of Taiwanese identity. Beijing appeared to have lost its confidence in steering the direction of cross-Strait relations over the years. In the past decades, Chinese leaders have pursued national unification with Hong Kong, Macao, and Taiwan. Hong Kong and Macao were returned to China in 1997 and 1999, respectively. The formula “One Country, Two Systems” proposed by Deng Xiaoping was China’s guiding principle for the solution of peaceful unification. Then Deng’s successor Jiang Zemin proposed his eight-point proposal. It was expected that Chinese President Hu Jintao would also feel the need to do something after he took power. The enactment of the antisecession law was to signal Hu’s ambition to start his new era for a new resolution of cross-Strait relations. Against this background, in December 2004, after Taiwan’s legislative election, the Chinese government submitted to the National People’s Congress a proposal for the antisecession law aimed at Taiwan. This law was duly passed on March 8, 2005. By the end of February, a poll showed that 82.3 percent of Taiwanese opposed such a law as an excuse for China to use force again Taiwan. Sixty-five percent viewed this to be detrimental to future cross-Strait relations, and 74.1 percent did not believe, as claimed by China, that such law would not violate Taiwanese interests and rights (IIR, 2005). As this process was underway, on January 1, 2005, Hu pledged that China would make its best effort to achieve peaceful unification but would not allow Taiwan to split away from China by any means. On January 29, the successful holding of two-way, nonstop chartered flights
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for the Lunar New Year holiday offered some space to imagine a potential breakthrough on the issue of direct flights and their subsequent consequences of cross-Strait exchanges. But this positive development did not preclude or postpone the passage of the antisecession law. If all these actions are taken together, it is obvious that Beijing has been exercising carrot-and-stick tactics to press Taiwan into accepting its unification formula. Carrots included cross-Strait chartered flights and subsequent proposals to expand their use for holidays. Another was the proposal to open up the Chinese market for agricultural produce from southern Taiwan. Sticks included the response to the January Chen-Soong 10-point declarations, by only reiterating its opposition to Taiwanese independence. The biggest stick was the passage of the antisecession law itself to suffocate Taiwan’s legitimacy in the international arena. By enacting the antisecession law, Beijing is trying to define what it is meant by the status quo and also to establish a legal basis for its future invasion of Taiwan. The antisecession law marked Beijing’s most aggressive attempt to designate itself as the sole arbitrator for relations between Taiwan and China. The move itself can be seen as a unilateral change of the status quo. Such law can be also regarded as a move by Beijing to use a legalistic means to check any possible development of Taiwan’s constitutional reforms. For most Taiwanese, especially for the pan-green camp, this is another unfriendly and provocative act. Besides, the antisecession law serves as propaganda and a diplomatic leverage to counter the United States, where there exists a feeling of uneasiness and threat against China’s advancement and expansion into East Asia by means of its deployment of missiles along China’s southeastern coastline. It is suspected that China is also engaged in a dualistic carrot-and-stick deceit with other Asian countries. If Taiwan were unified with China, especially if it occurred through Chinese military force, a domino effect would ensue. The next to submit to China’s wishes would be Southeast Asian countries in which overseas Chinese dominate the economy. The South China Sea would literally become China’s sea. Since the Chinese government dealt with the law-making process in a secretive manner, Taiwan or international media could hardly obtain inside information. More and more speculation was in the air. The opposition parties in Taiwan blamed the ruling DPP party for the responsibility in causing China to enact such a law. From a tactical point of view, China had been successful in making the antisecession law mysterious. In terms of psychological warfare, China even successfully created an atmosphere of instability, uncertainty, and anxiety across the Taiwan Strait. This was part of the
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package of China’s legalistic, psychological, and media strategies of coercing Taiwan into gradual unification.
T O P’ A B T C The move to legislate the antisecession law ignited stronger antiChina resentments from the Taiwanese independence advocates. The necessity of enacting an antiannexation law was even widely advocated among the pan-green camp. In a January interview by a Japanese media delegation, published in the Mainichi Shimbun, President Chen Shui-bian warned that if China’s National People’s Congress passed the law, it might force the Taiwan government to put forth an antiannexation law as a retaliatory counteraction, involving referendums.9 This was the strongest reaction toward the law from Taipei, and it happened while a Taiwanese delegation was in Washington to defend the Taiwanese position against the law. However, in order to abide by the commitment between Taiwan and the United States to stabilize cross-Strait relationships, the DPP did not take countermeasures. As a matter of fact, the United States as well as Japan clearly expressed their grave concerns and objections toward China. They insisted that the status quo across the Taiwan Strait should be maintained without unilateral change by either side. The United States called on Taiwan and China not to make provocative steps or statements and expressed its wish to see constructive dialogue between the two sides.10 The European Union also expressed similar concern. However, the government’s official self-control did not mean that the civil society should be insensitive, inactive, or quiet. On March 26, hundreds of thousands of protesters, led by the pan-green camp and 34 civil groups and joined by over 500 other groups, took to the streets of Taipei to protest the law. It was the largest single-venue street demonstration in the history of Taiwan (except the February 28, 2004 hand-in-hand rally that mobilized more people). Even though there were different groups with different concerns, there was a unified demand to make Taiwanese people’s voices heard by the whole world. Since no major accidents or conflicts were reported, it was seen as a successful democratic achievement to be promoted to the world. It was said that the peaceful and rational protests even astonished Chinese officials in Beijing. Furthermore, splendid slogans along the way, such as “Defend the freedom of Taiwan” and “Taiwan is not part of China,” effectively negated all China’s efforts to incorporate Taiwan into its control. Beijing’s strategic error has made the oneChina myth seem absurd to the international community.
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Like its reaction to the 2004 February 28 island-wide rally, the pan-blue camp did not participate in this street demonstration. Taipei Mayor Ma Ying-jeou of the KMT even made a cynical comment after the demonstration that it gathered only 275,000 protesters, attempting to reduce it to below the size of the pan-blue’s final postelection rally in March 2004. Ma’s comments angered the public. The media were filled with complaints and blames over Ma coming from every corner of the society. Basically, the pan-blue camp continued its dual strategy of questioning Chen’s political legitimacy and appeasing Beijing. By earning special hospitality to visit China, the pan-blue camp hoped to play an active role in cross-Strait issues. From Beijing’s side, the international condemnation led by the United States after the passage of the antisecession law gave China a strong incentive to change its negative image. Beijing intended to use pan-blue visits to create a more favorable environment for Beijing as a peacemaker. Therefore, the visits of the two heavyweights of the pan-Blue camp, Lien Chan, and James Soong, were scheduled for late April and mid-May 2005, respectively. The KMT praised Lien’s visit to China as a sort of groundbreaking step for bridging cross-Strait relations. Showing a very soft attitude, China announced the return of Lien with three gifts: a pair of giant pandas, concessions on fruit imports, and on tourism. The KMT regarded it as a victory to win peaceful relations across the Taiwan Strait. Lien commented that the eight-day visit was happy, smooth, and successful. Lien believed that “calling for giving priorities to the interests and well-being of the people will be a trend supported by both the 23 million people in Taiwan and the 1.3 billion people in the mainland.” Lien even confessed that his visit aimed to seek the third KMT-CCP cooperation to contain Taiwan independence.11 On this, Lien seemed to take sides with the CCP, while treating the DPP as his enemy. Although Lien was warmly welcomed in China, he was denounced as a traitor by pro-independence advocates back home, as pan-green suspected that Lien got benefits but sold out Taiwan’s national interests. The DPP preferred to label his visit a trip of surrender. When Lien admitted that he would ally with the CCP to oppress Taiwanese independence, he already sacrificed the rights of free choice by Taiwan’s citizens. When Lien in China accused Taiwan of degrading democracy, he really blinded himself to the undemocratic reality of China. Soong did not get any better deal from China; indeed, his situation was even worse. He strongly echoed Chinese authorities in maintaining his objection to Taiwan independence, two Chinas, and one Taiwan, one China. Before even beginning to bargain, Soong cut
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down his price to the same bottom line with Beijing. Although Soong tried skillfully to enunciate the very words “Republic of China,” the Chinese government undertook a series of measures to counter him, including canceling his speech at Nanjing Airport and its live report, and muting his sensitive wordings.12 On May 12, Hu and Soong finally came out to redefine the cross-Strait relations as two shores, one China. Basically, both Lien and Soong were greatly entertained by Chinese government, but at huge cost to themselves and to Taiwan. The fact of Taiwan’s sovereign independence was not put before the Chinese leaders to respond to. The timing of their visits was also moved ahead by two months in order to play into the May elections for the national assembly, which were to accomplish constitutional reforms. The meetings between Beijing leaders and Lien or Soong were intended by China to manipulate Taiwan’s electoral outcomes. At least they shifted Taiwan’s media interests from the May 14 assembly election and the subject of constitutional reforms. However, the Lien-Soong visits turned out to be counterproductive to the blue-camp electoral performance in assembly elections. More than 80 percent of the public claimed no impact from the China visits on their voting decision, and more than 40 percent commented that Lien’s and Soong’s visits did not help cross-Strait relations (Taiwan Thinktank, 2005). The strong demand of engaging China from the pan-blue camp weakened the strong protests against China from the pan-green. China has now initiated a united front campaign through which it aims to divide the Taiwanese. The coalition between the pan-blue camp and the CCP has obscured the collective resentment created by the antisecession law. With the pan-blue camp’s acquiescence, China successfully got rid of the blame and generated a new wave of China fever. As stipulated in the antisecession law, Beijing authorities strongly request that both sides encourage and facilitate exchanges and cooperation through realization of relaxing personnel exchanges: opening up the three links and exchanges in education, science and technology, culture, health and sports, and so on, and cooperating in combating crimes. The underlying explanation for the pan-blue’s behavior is related to the overall context of the interweaving of ethnic identity and national identity in Taiwan’s political development. The change of power in 2000 seemed to have doomed the Chinese-centric identity to fade away in the long run, and the DPP’s further triumph in the presidential elections in 2004 underlined the predominance of the Taiwanesecentric camp. Faced with such a rise of Taiwan identity, the pan-blue camp has been pushed into a corner and is forced to find a way out. Therefore, the Chinese-centric camp is trying to leverage Beijing’s external influence into Taiwan’s domestic political rivalry. Lien and
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Soong have made great efforts to break through the shrinking Chinese-centric political influences in Taiwan. To the KMT, Taiwanese investors are the possible target for such tactics, although in fact there is as yet no concrete evidence of such pro-blue camp voting behavior among Taiwanese businessmen in China. The pan-blue emphasis on economic issues is also designed to earn more votes from Taiwanese expatriates in China. Above all, they even signed press communiqués or unofficial agreements with Chinese President Hu Jintao in order to undertake a pseudo-political connection.
T R N T I U C-S F Former President Lee Teng-hui coined the phrase “new Taiwanese” to include the mainlanders and their offspring. This new phrase has to a certain extent reconciled ethnic tensions but does not eradicate contradictions along the green–blue political divide. Lee strongly asserted that the difficult problem is that Taiwanese subjectivity is not imbedded in people’s minds but originates in the education system itself.13 The education system was long distorted by pro-unification identity so that Taiwan as a land for the people living here has been greatly neglected. Echoing Lee’s comments, Chen maintained that he would insist on the consciousness of Taiwanese subjectivity while seeking reconciliation with opposition parties. Cooperation between Chen and Lee has helped uphold Taiwanese identity. At the same time, a tactical alliance between Beijing and the pan-blue camp would prolong the strength of Chinese identity in Taiwan. Therefore, in the foreseeable future, Taiwan may see increasing friction in the struggle between Taiwanese identity and Chinese identity. And China will play an increasingly visible role in such domestic political struggling in Taiwan. National unification has been a historical mission for Chinese leaders. From Beijing’s geostrategic viewpoint, incorporating Taiwan into China is not merely a sentimental matter but is part and parcel of China’s opposition to U.S. hegemony. Taiwan has been a key spot of the first island chain for U.S. predominance in Asia. China sees reunification as essential to China’s return to great power in Asia. The peaceful reunification; one country, two systems formula plays a guideline for Beijing to pursue national unification with Hong Kong, Macao, and, Taiwan. Hong Kong and Macao were returned to China in 1997 and 1999, respectively. For Chinese leaders, the next will be Taiwan. Though in Beijing’s mind Taiwan may enjoy a much more flexible model of one country, two systems than Hong Kong, China will not tolerate Taiwan independence. The line was expressed clearly by Jiang
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Zemin in 2004: “China is willing to exert the utmost sincerity and the utmost efforts to realize peaceful reunification, but does not allow anybody to separate Taiwan from the motherland in any form.”14 Beijing has devoted huge resources in providing tax breaks and other perks to lure Taiwanese investment into China. It is evident that a major part of its motivation is the long-term drive to achieve political unification or annexation of Taiwan as part of China. China’s soft approach is seen as a softer and more flexible way to isolate the independence advocates from the rest of the Taiwanese people. This has created a sense of instability, uncertainty, and even anxiety in Taiwan. China has recently also been very sensitive and antagonistic toward Taiwan’s further democratization. Above all, Taiwan’s determination to revise the constitution is felt in Beijing as sensitive and provocative, because it seems to hinder its pursuit of national unification. As a matter of fact, Beijing has criticized every one of Taiwan’s revisions of the constitution during the past decade. In fact, it is true that the rise of Taiwan’s new national identity has increased concomitantly with the deepening of democratization. Hence, democratization has been making Taiwan drift further away from China, and it would conversely push China to be more impatient toward Taiwan. The status quo has never been static. However, the U.S. government reiterates its opposition to any unilateral change of the status quo, based on the three communiqués and Taiwan Relations Act. The United States continues to reaffirm its stance on a one-China policy to calm Beijing authorities, on the one hand, and reemphasizes its obligations over Taiwan, on the other. The United States expresses its hope that both sides of the Taiwan Strait act prudently. In practice, since Taiwan is outside the reach of Chinese politics or administration, the status quo ought to be interpreted as sovereign independence. Certainly, it should be understood that China has no legitimate cause to launch a war against a democratic and free country like Taiwan. China should be warned that if the Taiwan Strait becomes involved in war, economic disaster will strike the Asia-Pacific region and, consequently, lead to social and political turmoil (Hsiao and Lee, 2005). History shows that the Chinese government is quite alienated from any genuine understanding of the Taiwanese mode of thinking. In Beijing’s thought, it is not even necessary to do so because Taiwan is only a province of China and Taiwanese are only a small portion of the huge Chinese population. To independence-minded Taiwanese, any reconciliatory options toward China will be just unrealistical wishful thinking. The Taiwanese have to rely on themselves in striving for the sound development of Taiwanese identity. China’s threat and its intention to isolate Taiwan in the world arena has further awakened Taiwanese consciousness (Yan, 2004).
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For any democratic country, the issue of national identity should be democratically tackled and resolved. A pluralistic expression and free choice of identities must be well protected. From without, China’s attempt to define Taiwan and Taiwan’s status has seriously violated Taiwanese citizens’ rights. However, the Chinese on the mainland have been indoctrinated with a perception of China’s long history: united China is strong, disunited, weak (Jakobson, 2004). The arrogant Chinese nationalism may either seriously undermine Taiwan’s national identity or conversely ignite a further uprising toward a new Taiwanese identity. As observed, it is quite true that both Chinese and Taiwanese nationalisms have been on the rise. Nationalism is not something that economic benefits from mutual exchanges can help to overcome (Dubois, 2005). It is urgent for both sides or even the United States to construct a framework or a mechanism to help to avoid the coming clash of nationalisms in the Taiwan Strait and to somehow steer the uncertain future of Taiwan-China relations.
N 1. Shih, Cheng-Feng, “Ethnic Identity and National Identity—Mainlanders and Taiwan-China Relations,” http://www.isanet.org/noarchive/ shih.html (Date visited: July 3, 2005). 2. Oliver, Jeff, “We Are Taiwanese, We Are Chinese,” see http:// www.worldpress.org/Asia/2064.cfm. (Date Visited: April 15, 2005). 3. Election Study Center, “Changes in the Taiwanese/ Chinese Identity of Taiwanese as Tracked in Surveys,” National Chengchi University, 1992–2004. Also, see: http://www.taipeitimes.com/News/ADS/ Inside/taipei/click”\t”_new. (Date visited: July 3, 2005) 4. h t t p : / / w w w. t a i p e i t i m e s . c o m / N e w s / t a i w a n / a r c h i v e s / 2004/04/04/2003116606/print. (Date visited: April 4, 2004). 5. http://www.etaiwannews.com/Focus/2002/01/12/1010806889. htm. (Date visited: January 12, 2002) 6. Cerello, Rosanne M., 2004, “Chen’s Win: A Questionable Mandate for an Uncertain Future.” Asian Affairs, 22, no. 88 (2004): 88. 7. h t t p : / / w w w. e t t o d a y. c o m / c a s e / p o l i t i c / e l e c t i o n 2 0 0 4 / location01/index1.htm. (Date visited: July 3, 2005). 8. Lee, Yung-chih, 2005, “A Study of the Legitimacy of ConstitutionMaking in Taiwan from the Perspective of Popular Sovereignty,” in A New Constitution for Taiwan, ed.Taiwan Advocates (Taipei: Taiwan Advocates, 2005), p. 193. 9. http://www.etaiwannews.com/Editorial/2005/01/27/ 1106791525.htm. (Date visited: January 27, 2005). 10. http://www.buzztracker.org/2005/02/24/cache/474224.html. (Date visited: February 23, 2005). 11. http://www.chinataiwan.org/web/webportal/W2037304/ A83968.html. (Date visited: April 29, 2005).
D P C - S R 151 12. http://en.wikipedia.org/wiki/Talk:Republic_of_China. (Date visited: May 30, 2005). 13. http://www.epochtimes.com.tw/bt/5/4/30/n906133.htm. (Date visited: July 3, 2005). 14. http://www.chinaembassy.org.il/eng/63931.html. and http:// english.peopledaily.com.cn/200404/14/eng20040414_140345. shtml. (Date visited April 14, 2004).
R Dubois, Emmanuel. 2005. “A Window of Opportunity for a Cross-strait Rapprochement”, in Asia Affairs, No.24, pp. 69-72. Hsiao, H. H. Michael. 1998. “Normative Conflicts in Contemporary Taiwan”, in The Limits to Social Cohesion, edited by Peter L. Berger, pp. 320–351. Boulder: Westview Press. Hsiao, H. H. Michael. 2001. “Social and Cultural Transformation in Taiwan since the 1980s”, in Taiwan’s Economic Success since 1980, edited by ChaoCheng Mai, pp. 156–228. Cheltenham, UK: Edward Elgar. Hsiao, H.H. Michael. 2002. “Changes in Ethnic Consciousness under Taiwan’s Democratic Transformation”, in Hong Kong Journal of Sociology, No. 3, pp.19–50. Hsiao, H. H. Michael and Alvin So. 1998. “An Anatomy of the Chinese Triangle: The Dynamics of the Economic Centripetal and Political Centrifugal Forces”, in Hong Kong Journal of Social Sciences, No. 12, pp. 131–154. Hsiao, H. H. Michael and Po-San Wan. 1998. “Political Transformation and Changes in Collective Identity: A Comparison of Taiwan and Hong Kong”, in The Changing Faces of Chinese Societies, edited by S. K. Lau, et al., pp. 207–255. HK: HK Institute of Asia Pacific Studies, The Chinese University of Hong Kong. IIR (Institute of International Relations). 2005. “Taiwanese Public Opinion on Anti-secession Law”. Taipei: National Cheng-Chi University, March 2. Jakobson, Linda. 2004. “Taiwan’s Unsolved Status: Vision for the Future and Implication for the EU Foreign Policy”. Helsinki: Finnish Institute of International Affairs, FIIA Report 8. Lee, Ming-Yu. 2005. The “Stateness” of Taiwan (ROC) Revisited: A Search in the Context of Language, MA Thesis, Graduate Institute of National Development, National Taiwan University. Taiwan Thinktank. 2005. “Public Opinion on Lien - Soong’s China Visits and National Assembly Election”. Taipei: Taiwan Thinktank, May 18. Yan, Jiann-Fa. 2004. “Taiwan Government’s Political and Economic Challenges in Coping with Globalization and Regionalism”, in Globalization and Regionalism in East Asia, edited by Borivoj Hnizdo, pp. 202–211. Prague: Institute of Political Science, Charles University, Czech Republic.
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E I B T M C I I B E Charng Kao and We n - T h u e n Wa n g
I Since the early 1980s, economic exchanges between Taiwan and mainland China has reached significant levels. This increasing interaction is partly the result of mainland China’s economic reform policy, which has been ongoing since the late 1970s, and China’s plan to develop its economy by opening up the country to the outside world. Enhanced cross-Strait exchange has also been due to mainland China’s more moderate stance regarding Taiwan, a stance that was gradually adopted beginning in 1980. With economic and political aims in mind, the Beijing authorities have encouraged bilateral trade between the two sides of the Taiwan Strait and have made great efforts to induce Taiwanese enterprises to invest there. The stance adopted by the Taiwan authorities in response to mainland China’s advances was predictable: in the beginning, they refused to compromise, negotiate, or have contact with the Chinese Communist Party, though later they gradually relaxed restrictions. Economic exchange between the two sides then developed quickly, with Hong Kong serving as a convenient transfer port. On the Taiwan
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side, various economic and noneconomic factors, such as the removal of exchange controls, the appreciation of the NT dollar, and the labor movement, encouraged Taiwanese small- and medium-sized enterprises to invest across the Strait. Obvious geographical advantages, cheap labor, and nationalist sentiment also attracted Taiwanese enterprises to invest in mainland China. This chapter investigates the trends and characteristics of economic exchange across the Taiwan Strait. It consists of four sections in addition to the introduction and the concluding remarks. The section titled “Characteristics of Bilateral Indirect Trade” analyzes the nature of and trends in bilateral indirect trade between Taiwan and mainland China, the next section examines the development of Taiwan’s investment in mainland China, while sections entitled “Interaction between Trade Investment” and “Mutual Benefits of Taiwan and Mainland China” investigate the impacts of economic exchange across the Taiwan Strait on both sides, including the evolution of the relationships between trade and investment, division of labor, and macroeconomic effects.
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Because no official commercial relations exist between mainland China and Taiwan, the bulk of the trade carried on between them takes the form of indirect trade that goes through other countries or regions—also known as “triangular trade.” In addition to trade via Hong Kong, Taiwan and mainland China also indirectly trade through Japan, South Korea, Singapore, Guam, and other third parties. There is, moreover, a so-called minor trade, which actually takes place directly between the two sides. Indirect trade routed via Hong Kong has the largest share, at more than 80 percent of the total trade between Taiwan and mainland China before the mid-1990s,1 while it has declined in recent years. Table 7.1 shows the development of indirect trade between Taiwan and mainland China in the period 1991–2004. It can be seen that the total value of the trade amounted to only US$8.1 billion in 1991. However, such trade has grown rapidly and progressively since then, amounting to a total of US$61.6 billion in 2004, a near eight-fold increase over the course of the 1991–2004 period. This rapid increase in two-way trade between the two sides of the Taiwan Strait was largely due to the sharp growth in exports from Taiwan to mainland China beginning in the early 1980s. As shown in Table 7.1, mainland China’s exports to Taiwan increased from US$1.126 million in 1991
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Table 7.1 Commodity Trade between Taiwan and Mainland China From Taiwan to Mainland China Export US$ Million 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
6,928.3 9,696.8 12,727.8 14,653.0 17,898.2 19,148.3 20,518.0 18,380.1 21,221.3 26,144.0 24,061.3 29,465.0 35,357.7 44,960.4
Growth rate(%) 66.1 40.0 31.3 15.1 22.1 7.0 7.2 10.4 15.5 23.2 8.0 22.5 20.0 27.2
From Mainland China to Taiwan Import US$ Million
Growth rate(%)
US$ Million
Growth rate(%)
Taiwan’s Trade Balance US$ Million
1,126.0 1,119.0 1,015.5 1,858.7 3,091.3 3,059.8 3,915.3 4,110.5 4,526.3 6,223.3 5,902.0 7,947.7 10,962.0 16,678.7
47.1 0.6 9.3 83.0 66.3 1.0 28.0 5.0 10.1 37.5 5.2 34.7 37.9 52.2
8,054.2 10,815.8 13,743.3 16,511.7 20,989.6 22,208.1 24,433.3 22,490.6 25,747.6 32,367.3 29,963.4 37,412.5 46,319.7 61,639.1
63.1 34.2 27.1 20.1 27.1 5.8 10.0 8.0 14.5 25.7 7.4 24.9 23.8 33.1
5,802.4 8,577.8 11,712.3 12,794.3 14,806.8 16,088.5 16,602.7 14,269.6 16,695.0 19,920.8 18,159.3 21,517.3 24,395.8 28,281.7
Source: Board of Foreign Trade, Ministry of Economic Affairs, ROC.
Total Trade
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to US$16.7 billion in 2004, reflecting a 15-fold increase, or a 21.2 percent annual growth rate, over the 1991–2004 period. During the same period, mainland China imports from Taiwan increased from US$6928.3 million to US$45 billion, reflecting a six-fold increase, or about a 14.2 percent annual growth rate. As a result of the trade developments, Taiwan and mainland China have become very important to each other as partners. While the figure of US$8.1 billion in 1991 represented a mere six percent of the total imports and exports of each party, in 2004 the proportion had decreased to 5.4 percent of total trade in the case of mainland China, and to 18.0 percent in the case of Taiwan. Currently, Taiwan ranks fifth among mainland China’s trade partners while mainland China ranks third among those of Taiwan. In terms of exports, mainland China ranks first among Taiwan’s partners. The overall characteristics of indirect trade across the Taiwan Strait can be generally summarized as follows. First, the rapid increase in total trade between the two sides was due mainly to a sharp increase in exports from Taiwan to the mainland, which began in the early 1980s. The reason for this shift lies in the different policies that have been adopted over time by the two sides. In particular, Taiwan has imposed controls on imports from the mainland, holding the rate of increase in imports from the mainland below that of exports to the mainland. These restrictions have been gradually relaxed since 1985. Second, the mainland has continued to record a large trade deficit with Taiwan since 1980, and indeed the trade imbalance is getting larger. As shown in Table 7.1, the deficit was about US$5.8 billion in 1991, US$16.1 billion in 1996, and over US$28.3 billion in 2004. As a result of this persistent imbalance, the mainland accumulated a trade deficit of US$229.6 billion over 1991–2004. Although some of this is due to restrictions on imports by the Taiwanese side, it is also attributable mainly to the lack of competitive products on the mainland. Third, although total trade between Taiwan and mainland China grew rapidly at an average annual rate of 17 percent between 1991 and 2004, at times it dropped off or stagnated in response to fluctuations in mainland China’s domestic economy. In fact, these trade fluctuations were partly related to changes in the global economic situation. For instance, during 1997–1998 and in 2001, indirect exports from Taiwan to the mainland decreased considerably. These reductions can be attributed to a depression in the international economy. Due to the 1997 financial crisis, many Southeast Asian countries reduced imports from the mainland, thus decreasing the exports of mainland China’s processing manufacturers, who in turn decreased their demand for raw materials imported from Taiwan. Taiwan’s
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gradual relaxation of restrictions governing indirect trade was another factor that contributed to the increase in trade in the later period. Finally, the growth in indirect trade between the two sides had led to an increase in interdependence.2 Specifically, one can see from the increases in the share of Taiwan’s exports (from 9.1 percent in 1991 to 25.8 percent in 2004) and the share of Taiwan’s imports from the mainland (from 1.8 percent to 9.9 percent of total imports during the same period; see Table 7.2) that Taiwan is gradually becoming dependent on the mainland for exports and imports. As for mainland China, its degree of dependence on Taiwan for exports increased from 1.6 percent in 1991 to 2.8 percent in 2004, while for imports the degree of dependence increased from 10.9 percent to 14.4 percent during 1991–1997, and then decreased to 8 percent in 2004 (see table 7.2). Comparing the degree of dependence across the Strait, we find that Taiwan was more dependent on mainland China than the mainland was on Taiwan.
T’ I M C According to mainland China’s official reports, Taiwan’s investment in the mainland took place in the early 1980s. However, the volume of investment projects did not significantly increase until 1988, when the Taiwan government permitted visits of Taiwan residents to mainland relatives. The increase may in part be attributed to the removal of controls on foreign exchange in Taiwan in 1987. It was likely that the regulations with regard to investment encouragement promulgated by the Beijing authorities in July 1988 also played a role. Taiwanese investment increased to about 3,884 different projects in 1991, with a total contracted and realized value of US$3.54 billion and US$869 million, respectively, according to official mainland figures. These figures continued to grow as cross-Strait tensions eased. The growth rate peaked over the period from 1992 to 1993, and since then Taiwan’s investment in the mainland has increased at a decreasing rate, while it recovered in 2000. By the end of 2004, Taiwanese enterprises had invested a total of 64,626 different projects, with a total contracted and realized value of US$79.9 billion and US$ 39.6 billion, respectively (see Table 7.3). In Table 7.3, we find that the share of Taiwanese investment has been around 7 percent on average, in terms of the value of contracts, and around 12 percent on average, in terms of the number of cases contracted, over the past two decades. As a contributor of foreign capital, Taiwan’s investment has played an important role to the mainland.
Table 7.2 Trade Interdependence between Taiwan and Mainland China From Taiwan to Mainland China
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
From Mainland China to Taiwan
Total Trade
% of Taiwan’s Total Exports
% of Mainland China’s Total Imports
% of Taiwan’s Total Imports
% of Mainland China’s Total Exports
% of Taiwan’s Total Trade
9.1 11.9 14.9 15.7 16.0 16.5 16.8 16.6 17.5 17.6 19.6 22.6 24.5 25.8
10.86 12.03 12.24 12.67 13.55 13.79 14.41 13.11 12.81 11.61 9.88 9.98 8.57 8.01
1.8 1.6 1.3 2.2 3.0 3.0 3.4 3.9 4.1 4.4 5.5 7.1 8.6 9.9
1.57 1.32 1.20 1.54 2.08 2.03 2.14 2.24 2.32 2.49 2.22 2.44 2.50 2.81
5.8 7.1 8.5 9.3 9.8 10.2 10.3 10.4 11.1 11.2 13.0 15.4 17.1 18.0
% of Mainland China’s Total Trade 5.94 6.53 7.02 6.98 7.47 7.66 7.51 6.94 7.14 6.82 5.88 6.03 5.44 5.34
Sources: Board of Foreign Trade, Ministry of Economic Affairs, ROC.
157
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Table 7.3 Development of Taiwan’s Investment in Mainland China Value: US$ million Contracted case Case 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
3,884 10,314 21,262 27,509 32,287 35,471 38,485 41,455 43,954 47,062 51,276 56,129 60,624 64,626
Growth rate(%) — 165.6 106.1 29.4 17.4 9.9 8.5 7.7 6.0 7.1 9.0 9.5 8.0 6.6
Contracted value Share(%)
Value
9.2 11.4 12.2 12.4 12.5 12.5 12.6 12.8 12.9 13.0 13.2 13.2 13.0 12.7
3,537 9,180 19,045 24,440 30,217 35,358 38,172 41,154 44,528 48,570 55,484 62,224 70,782 79,935
Growth rate(%) — 156.7 109.7 28.3 23.6 17.0 8.0 7.8 8.2 9.1 14.2 12.1 13.8 12.9
Realized value Share(%) 6.1 7.8 8.3 7.8 7.5 7.4 7.2 7.0 7.1 6.9 7.2 7.2 7.3 7.3
Note: All figures are accumulated figures. The share is the percentage of mainland China’s accumulated foreign direct investment. Source: China Foreign Economic and Trade Statistical Yearbook, various issues, State Statistical Bureau, PRC.
Value 869 1,919 5,050 8,449 11,611 15,086 18,375 21,290 23,889 26,085 29,165 33,135 36,512 39,623
Growth rate(%) — 120.8 163.2 67.3 37.4 29.9 21.8 15.9 12.2 9.6 11.4 13.6 10.2 8.5
Share(%) 3.2 5.0 7.7 8.5 8.4 8.4 7.9 7.6 7.4 7.0 6.9 7.0 6.9 7.01
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The reasons behind the rapid increase in Taiwan’s investment in mainland China over the years are examined below. First of all, during the 1980s, Taiwan found itself facing rising wages, labor shortages, an increase in labor-management disputes, difficulties in securing factory sites due to pollution problems, and higher land prices, among other deteriorating conditions regarding investment and operations in Taiwan. As a result of these disruptions, Taiwan’s labor-intensive industries suffered a loss of competitiveness and began shifting their operations overseas. Second, the incentives for investment established by mainland China were a critical factor in attracting Taiwanese companies to invest there. The Beijing authorities offered preferential treatment, with numerous cities and provinces setting up special investment zones that granted Taiwanese investors many privileges, including tax exemption or reduction. The third factor was the change in the international economic environment in the 1980s. On the one side, some newly industrializing countries had rapidly developed and emerged as strong competitors in what were traditionally international markets. On the other side, many of the industrialized countries began imposing restrictions on trade in order to protect their native industries. As an export-oriented economy, Taiwan encountered increasing challenges with regard to export expansion and hence to economic growth. Many of Taiwan’s labor-intensive industries, which had lost their comparative advantage in the world market, began to invest overseas. For Taiwanese businesspersons, who could enjoy the advantages of geographical proximity and an identical linguistic and cultural background, the investment opportunities in mainland China looked more attractive. It is worth noting, however, that with the rapid increase in Taiwanese investment in mainland China, the characteristics of the investment have changed over the past two decades. Current investment trends are marked by the following features. First of all, as shown in Table 7.4, the major industries of investment to mainland China have changed. In the early stage of the 1990s, 94 percent of the investments were from manufacturers, in which electronics and electrical appliances got the highest proportion (14.2 percent), while plastic products and food-and-beverage processing were the second and third largest industries, sharing 12.4 percent and 10.9 percent, respectively (see Table 7.4). The fourth to eighth largest industries took at least five percent, ranking as precision instruments (8.6 percent), basic metals and metal products (7.7 percent), textiles (6 percent), chemicals (5.6 percent), and nonmetallic minerals (5.4 percent). Most of the investment projects fall within the labor-intensive categories.
160 Table 7.4 Taiwan Approved Investment in Mainland China by Industry Amount: US$ million –1993 Industrial classification Manufacturers Food and Beverage Processing
Amount 3,371.1
1994–1997 %
Amount
93.9 6,896.7
%
1998–2004 Amount
90.5 27,074.6
%
2004 Amount
90.1 37,342.4
% 90.5
390.3
10.9
718.1
9.4
825.6
2.8
1,933.9
4.7
Textile
215.4
6.0
408.1
5.4
822.0
2.7
1,445.6
3.5
Wearing Apparel and Accessories
126.0
3.5
125.6
1.6
318.5
1.1
570.1
1.4
Leather, Fur Products
61.2
1.7
96.6
1.3
189.2
0.6
347.0
0.8
Wooden and Bamboo Products
159.0
4.4
213.4
2.8
458.9
1.5
831.4
2.0
Paper Products and Printings
103.5
2.9
172.9
2.3
640.7
2.1
917.1
2.2
Chemicals
202.0
5.6
513.9
6.8
2,085.4
6.9
2,801.3
6.8
Rubber and Products
165.7
4.6
224.6
3.0
525.1
1.8
915.4
2.2
Plastic Products
443.4
12.4
548.8
7.2
1,592.8
5.3
2,584.9
6.3
Nonmetallic and Minerals
195.6
5.4
549.2
7.2
1,399.7
4.7
2,144.5
5.2
Basic Metals and Metal Products
276.5
7.7
731.2
9.6
2,696.0
9.0
3,703.7
9.0
71.5
2.0
296.6
3.9
953.1
3.2
1,321.1
3.2
Machinery Equipment Electronics and Electric Appliances
511.1
Transportation Equipment
141.4
3.9
413.2
5.4
1,025.7
3.4
1,580.3
3.8
Precision Instruments
308.5
8.6
360.8
4.7
1,533.0
5.1
2,202.3
5.3
218.5
6.1
721.8
9.5
2,966.6
9.9
3,906.9
9.5
3589.6
100.0
Nonmanufacturers Total
14.2 1,523.7
20.0 12,009.1
7618.5 100.0 30,041.2
Source: Investment Commission, Ministry of Economic Affairs, ROC.
40.0 14,043.
34.1
100.0 41,249.3 100.0
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Moreover, the majority of these operations are export-oriented instead of being geared toward the local market. Since the mid-1990s, Taiwanese investment to mainland China has shown a gradual concentration of industrial distribution. The investment share of the leading industry, electronics, and electrical appliances, increased to 20 percent in the period of 1994–1997 and then went up to 40 percent during 1998–2004. While the industries with investment shares of more than five percent had no big changes during 1994–1997, they had decreased to only four industries during 1998–2004: basic metals and metal products (nine percent), chemicals (6.9 percent), plastic products (5.3 percent), and precision instruments (5.1 percent). Essentially, over the past two decades, the most favored industries for Taiwanese investment toward mainland China are electronics and electrical appliances, basic metals and metal products, and chemicals and plastic products. Electronics and electrical appliances outperformed all other industries, implying that more and more high-tech and capital-intensive industries have invested in the mainland in recent years. Second, investment sites were concentrated in the coastal regions in the early 1990s. However, these sites started gradually spreading toward inland provinces from the coast and from the south to the north. That is, the locations of investment sites are diversifying. According to Beijing’s official records, in the early 1990s, Guangdong and Fujian were the two most favorite locations to Taiwanese Direct Foreign Investment (FDI) firms. These two provinces add up to 50 percent of total investment in mainland China. In the most recent period, Jiangsu, Shanghai, and Zhejiang the (so-called Yangtze River Delta) added together have attracted more than 50 percent of total new investment, while Fujian and Guangdong dropped to less than 40 percent.3 Third, the scale of investment has changed from small-sized to medium- and large-sized. For new projects, the size of investment has on average increased and, for those already there, Taiwan-funded enterprises have increased their investment or upgraded their facilities. Table 7.3 shows that, from 1995 to 2004, the average investment scale increased steadily from US$0.88 million to US$1.17 million. Fourth, the pattern of investment has changed. In the early stages, most investors formed joint ventures or cooperative enterprises. Now they have developed a preference for wholly owned enterprises. Another trend worth noting is the increase in joint investment by groups of Taiwanese companies instead of the individual companies. Fifth, the type of investment has upped from the simple transfer of old and outdated equipment to the use of completely new production
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lines, and from labor-intensive assembly-and-processing industries to higher-level, capital-intensive industries. Sixth, investments have gone to more sectors. Within the manufacturing sector, investment has expanded to include the chemicals, building materials, electronics components, electrical appliances, vehicle spare parts, calculators, NC machine tools, machinery, and other technology-intensive industries. Investment is increasing not only in the manufacturing field but also in real estate and public services, department stores, commercial tourism, and agriculture. Seventh, investment behavior has altered. In the early stages, Taiwanese investors engaged mainly in rapid-return, short-term projects in rented factory premises. In recent years, however, they have tended to make more long-term investments—for example, from 20 to 50 years in duration—and are now more likely to lease land to build their own factories.
I T I The analysis discussed in the earlier section shows that indirect trade across the Taiwan Strait and Taiwanese investment to mainland China have grown as political hostilities between the two sides eased. We find that indirect trade has grown since the early 1980s but that investment did not increase rapidly until the late 1980s. This phenomenon can be explained by Mundell’s theory4—that is, the trade in goods and the trade in factors are substitutable. The different resource endowments between the two sides can only be exploited by the trade in goods. This is because, in the early stages of the past two decades, factors could not flow between the two sides. In recent years, however, the trade in factors has partly substituted for the trade in goods between the two sides, because restrictions on the movement of production factors have been relaxed, especially in regard to the movement of Taiwanese capital to mainland China. It should be pointed out that the substitution is limited. According to economic interaction trends, Taiwanese investment toward mainland China seems to be complementary with the development of the trade in goods between the two countries. This phenomenon coincides with Agmon’s theory5—that is, investment and trade with other countries are complementary. Specifically, enterprises investing in mainland China usually purchase machine equipment and materials in Taiwan because of their proximity to the parent companies and because the less-developed economy of mainland China is unable to supply quality goods. This inference is supported by many previous
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studies of Chung-Hua Institution for Economic Research.6 Charng Kao points out that enterprises investing in mainland China do so basically to expand the production capacity of their parent companies.7 When investment in mainland China increases, the demand for machine equipment, parts, and materials will increase, and trade is then enhanced. The traditional Heckscher-Ohlin-Samuelson trade theory holds that production-factor endowment determines the comparative advantage and structure of trade, which develop interindustry trade. However, it should be noted that when a significant difference exists in the economic development and technology level of two countries, then intraindustry trade must exist between them due to the externalities of economic scale and product differentials. Accordingly, the commodity trade between Taiwan and mainland China must consist of interindustry trade and intraindustry trade. There exists a difference in the natural resource and production-factor endowments of the two sides, and there is a significant difference in the technology and development levels of the two sides. Thus, it is difficult for us to judge intuitively in Taiwan and mainland China’s case whether the interaction between the commodity trade and capital flow is complementary or substitutive. According to H.G. Grubel, P.J. Lloyd, and P.K.M. Tharaken, economic integration among trade partners cannot raise the degree of interindustry specialization, rather, it increases the volume of intraindustry trade—that is, for a particular commodity, both importing and exporting are in progress.8 Using Grubel-Lloyd’s method, Lin, Kao, and Hwang assessed the intraindustry index between Taiwan and mainland China and found that in the bilateral trade of the two sides, there exists both inter and intraindustry trade.9 They also point out that, at present, interindustry trade is more significant than intraindustry trade, though the latter has been coming into prominence in recent years. Intraindustry trade has relevance to economic development, market scale, and trade obstacles. Product difference, scale economy, oligopoly behavior, and production technology also affect the level of the intraindustry trade index between countries. The continual increase in intraindustry trade between Taiwan and mainland China is mainly attributable to differences in the level of production technology and to product differences. In order to gain a better idea of the competitive-collaborative relationship between Taiwanese industry and mainland Chinese industry, the Harmonized System (HS) two-digit classification is used as the basis for industry classification in examining the changes in intraindustry trade between Taiwan and mainland China over the period 1995–2004.10 Table 7.5 shows the HS two-digit classification of the intraindustry trade index for twenty industries between Taiwan and mainland China. These
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data show that the level of integration between Taiwan and mainland China has been increasing. In the last ten years, the intraindustry trade between Taiwan and mainland China has reached a relatively high level, including animal/vegetable fat products, precious metal products, transport equipment, and other miscellaneous products. In 2004, the intraindustry trade index for all of these products exceeded 40 percent. The level for electronics and machinery products was also pronounced. Most of these are industries in which there has been considerable Taiwanese investment in mainland China, thus illustrating that Taiwanese outward investment does promote integration between Taiwan and mainland China. The typical pattern goes as follows: Capital flows from Taiwan into mainland China, leading to increased capital goods and materials exports from Taiwan to mainland China. This consequently results in more semimanufactured goods and finished products being exported from mainland China to Taiwan and/or to other third parties. Taiwanese investment in mainland China is therefore essentially an expansion of the business of Taiwan-based parent companies. The investments must therefore in turn accelerate the growth of the intraindustry trade between the two sides.
M B T M C Cross-Strait Division of Labor in Industry With the expansion of bilateral trade and economic exchanges, the industrial division of labor across the Strait has become closer. Taiwan’s investment activities in mainland China are basically further expansions of production activities of parent companies in Taiwan. Therefore, the investment will certainly drive the development of cross-Strait bilateral trade, especially that of intraindustry trade. The typical pattern is as follows: As invested capital is being transferred to mainland China from Taiwan, capital goods, parts and accessories, industrial raw materials, and so forth in Taiwan are consequently exported to China. Finally, the semifinished or finished products are sold back to Taiwan. According to an official survey, we have learned that firms investing in mainland China adopt mainly a horizontal division of labor, particularly those producing identical products.11 Firms adopting a horizontal division of labor differentiate between the products produced in Taiwan and those in mainland China. Normally, products still manufactured in Taiwan have a higher level of quality and added value. Firms adopting a vertical division of labor primarily use
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Table 7.5 Changes in Intraindustry Trade Index for Taiwan and China
Vegetable Products Animal/ Vegetable Fat Products Food, Beverage, Tobacco, etc. Mineral Products Chemical Products Plastics and Rubber Products Leather and Fur Products Wooden Products Pulp and Paper Products Textile Products Footwear, Headgear, Umbrellas, etc. Vement Ceramic and Glass Products Precious Metal Products Metal Products Electrical and Machinery Products Transport Equipments Precision Instruments Miscellaneous Products Art and Antiques Others Total
1995
2000
2001
2002
2003
2004
11.52
22.54
17.96
11.58
12.08
17.79
5.40
12.81
23.37
32.79
64.21
57.85
28.60 17.74 25.65
17.97 10.84 23.49
25.79 5.24 19.86
15.80 5.08 19.30
17.83 5.05 20.05
22.89 3.81 19.23
4.86
5.64
5.07
4.99
5.84
8.06
7.82 34.77
7.01 33.17
10.96 30.32
12.85 26.91
19.78 28.65
14.41 20.35
14.43 5.22
19.85 4.83
20.11 4.69
20.05 6.31
24.31 7.10
24.19 7.90
39.03
40.84
37.40
24.45
17.37
13.72
23.22
20.64
14.90
14.19
13.05
18.89
14.80 16.34
29.65 10.98
30.11 11.48
29.90 12.23
52.08 13.07
50.28 18.89
23.96
26.65
27.39
28.05
29.54
30.30
22.39
30.52
38.79
43.51
32.57
42.88
36.28
24.14
17.89
11.06
16.28
18.59
44.31 45.82 0.00
50.55 10.71 20.05
53.94 65.13 21.79
48.44 23.30 83.88
50.70 10.63 25.49
46.30 7.16 4.96
17.00
18.29
18.57
19.61
21.48
22.93
Source: Calculated from WTA China database.
the model of Taiwan upstream (produce and provide components and parts and semifinished goods) and China downstream (assemble and produce finished goods). The special industrial network proper to firms has a noticeable impact on the pattern of industrial division of labor across the Strait. On the one hand, in the early days of Taiwan investment in mainland
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China, as a result of continuing to use the original industrial network for purchasing and marketing, the vertical division of labor has in consequence grown significantly. On the other hand, also due to the industrial network in operation, suppliers of raw materials or semifinished products (whether actively or passively) then follow downstream manufacturers and invest in mainland China, producing and supplying on the spot. Therefore, the division of labor in manufacturing industries across the Strait is scaled down. In other words, after investing in mainland China, Taiwanese investors have established a new system of supply chain, and hence the interrelation between the enterprises themselves and the suppliers in Taiwan has loosened. The most obvious industries reflecting this phenomenon are found in miscellaneous products, rubber and plastic products, household electrical appliances, and wooden products, showing the elevated level of localization of Taiwan-invested enterprises in mainland China.12 In recent years, the model of “Taiwan taking order, and mainland China exporting goods” (Taiwan jiedan, dalu chukou, ) has become increasingly common. As a result, the industrial division of labor across the Strait has tended to develop toward the pattern of a vertical one in production and marketing. With an abundant labor supply and low-priced land, mainland China has become the most important production site for Taiwanese firms in the global deployment. With gradual shrinkage of production activities, the business focus of the parent companies in Taiwan is being transferred, stage by stage, to strengthen logistics management, such as marketing, research and development, and financial allocation. A survey executed by the Statistics Section of the Ministry of Economic Affairs in 2000 showed that some 10 percent of the firms investing in mainland China have completely stopped their production activities, among which the outward-investing firms in the leather and fur industry have the highest percentage (about 45 percent) of no production department in Taiwan. In addition, such labor-intensive industries such as furniture and fixtures, wood and bamboo, and rubber and plastics represent approximately 20 percent.13 According to surveys conducted by the Statistics Section of the Ministry of Economic Affairs over the years, we have noticed a year-by-year increase in firms ending their production in Taiwan after investing in mainland China while still keeping other businesses and activities. Contributions to Taiwan’s Economy As a result of the augmentation of the scale of cross-Strait economic exchanges, the economic integration of Taiwan and mainland China has grown deeper, which basically offers more benefit than harm to
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Taiwan’s economic development. For example, in terms of bilateral trade, Taiwan’s export expansion to mainland China favorably promotes the development of the overall economy and Taiwan’s industries, while Taiwan’s imports from mainland China can supplement the supply shortage, especially imports of semifinished products of manufacturers, thus lowering production costs and enhancing competitiveness in international markets. In addition, Taiwan has enjoyed a trade surplus in bilateral trade across the Strait, with the scale showing an increasing tendency year after year. In recent years, the level of Taiwan’s trade surplus to mainland China has gone beyond that of overall foreign trade. According to 2004 statistics, Taiwan’s trade surplus to mainland China totaled US$28.3 billion, whereas the trade surplus in overall foreign trade was worth only US$6.2 billion. From 1980 to 2004, the total amount of Taiwan’s trade surplus to China reached US$239.7 billion. We can thus see the importance of mainland China’s domestic market to Taiwan’s creation of trade surplus. As for the development of Taiwanese investment in mainland China, outward investment theoretically has both advantages and disadvantages on the home-country economy; however, the final net effect is unpredictable.14 Nevertheless, according to studies by Tian-jy Chen and Ing-hua Ku, even though the investments of Taiwanese firms to mainland China do cause an adjustment of domestic product lines, it does not necessarily bring industries to consequence of hollowing out.15 On the contrary, it helps upgrade the industrial technology and reinforce the competitive advantages of individual enterprises in the international markets. Kao found that, according to the overall economic performance of Taiwan and Taiwanese enterprises’ strategy of division of labor across the Strait, after investing in mainland China most of the division of those Taiwanese parent companies that have kept producing have in general seen growth in capital, total sales, and profitability.16 The production activities of these firms rarely adopt a vertical division of labor across the Strait. Although the adoption of a horizontal division of labor is more common, the commodities produced in Taiwan mostly have higher added value. A clear distinction exists between commodities produced in Taiwan and those in mainland China. There is no direct competition between them. In accordance with the observation of business activities, subsidiaries in mainland China merely deal with production, while parent companies in Taiwan are mostly in charge of collection and analysis of market conditions, new product development, product design and testing, research and development, marketing, and so forth. This phenomenon shows that Taiwanese investment in mainland China does not totally replace its investment in Taiwan.
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According to Kao, investment in mainland China by Taiwanese in the past had indeed caused a production shrinkage of certain traditional labor-intensive manufacturers in Taiwan.17 For industries like electrical and electronics machinery, chemicals, basic metal products, and so forth, the invested amount in mainland China over the years has been rather considerable. However, it not only did not shrink the output of such industries in Taiwan but also, contrarily demonstrated rapid growth. Apparently, the investment in mainland China does not have many, or perhaps no, negative effects on the scale of business of these industries. Furthermore, we have learned that the main reason is that a clear distinction exists between commodities produced in Taiwan and those in mainland China, and there is no direct competition between them. In order to keep up competitive advantages, the firms invested in the mainland pay more attention to research and development in Taiwan’s parent companies and, as a result, promote the upgrade of Taiwan’s industries. In addition, the rapid growth of newborn industries has filled in the break resulting from the industrial exodus, and the rearrangement of resources has positive effects on the transformation and the upgrade of Taiwan’s industry. Influences on Mainland China’s Economy Contributions of Taiwan’s investment in mainland China to the host economy are chiefly noticeable in capital formation, technology transfer, labor force employment, industrial production, balance of payments, and so forth. From the point of view of capital formation, since the mid1990s, Taiwan’s realized investment in mainland China amounted around US$3.2 billion per year, which is about 1 to 1.2 percent of the capital formation in mainland China per year. However, in certain individual provinces, particularly Fujian, Guangdong, Jiansu, and Shandong, where Taiwan investors are concentrated, the percentage is probably a bit higher than that of the average in all of mainland China.18 Taiwanese direct investment helps develop mainland China’s capital formation, at the same time bringing in advanced technology and modern knowledge of management. Having global business strategies in mind, Taiwanese-invested enterprises, allying with multinationals, have massively shifted part of the processing and assembling activities of the international industrial chain to mainland China, which consequently has significant contributions to mainland China’s elevation of its manufacturing ability, the amelioration of industrial structure, and the expansion of exports. Taiwanese investors in mainland China adopt mainly an exportoriented business model, positioning mainland China as a production
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site—that is to say, in general the raw materials needed for manufacturing and intermediate goods are purchased offshore and finished products are sold in international markets. In mainland China, this kind of business model is called “Both Ends Abroad” (Liang-To Chai Wai, ). In early phases, the industries invested in were concentrated in traditional labor-intensive processing industries such as garments, toys, textiles, and leather products. Since the mid-1990s, the production of intermediate goods and the assemblage of finished goods of high-tech industries, such as electronics and electrical appliances, office supplies, telecommunications equipment, and computers have prospered in the Pearl River Delta and the Yangtze River Delta. According to mainland China’s official statistics, the export value of foreign-invested enterprises represents about two-thirds of its gross export value.19 Provided that the accumulated amount of Taiwan’s investment totaled approximately 10 percent of the total foreign direct investment in mainland China, the contribution of Taiwanese investors to mainland China’s export trade is around six percent. As a matter of fact, considering that most of the Taiwan investments are export-oriented, different from that of most multinationals there (mostly domestic sales), and that the total invested amount of Taiwanese investors estimated by Beijing officials is lower than the actual value (because many investments take the form of indirect investment and are registered in other countries or regions), the contribution of Taiwanese investment to mainland China’s export expansion should be more than six percent. According to a field survey, the accumulated (realized) amount of Taiwanese investment in mainland China totaled around three times more than the figures announced by Beijing officials.20 On the basis of these 2004 statistics, and considering that Taiwan-invested enterprises tend toward exports, the contribution of Taiwan investment to mainland China’s total export is estimated at about 20 percent, or around US$120 billion. Taiwanese-invested enterprises in mainland China import most of their industrial raw materials, semi-finished goods, and parts and components needed for manufacturing export commodities from East Asia countries. Taiwan, Singapore, and South Korea are the main suppliers of goods imported. Mainland China’s export expansion boosts the rapid import growth from East Asia countries, and therefore mainland China has gradually become the main market of the export items of these countries. In the meantime, mainland China has gradually expanded into the production sites of Taiwan and other East Asia countries. Apparently, mainland China’s continuous expansion in foreign trade has resulted in the rearrangement of the economic and trade territory of East Asia (and even that of the world). For Taiwan, investment
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increases Taiwan’s exports to mainland China. With the transfer of production sites from Taiwan to mainland China, export performance has rapidly followed suit. Mainland China has replaced the United States as the most important trading partner of Taiwan. Products made by Taiwanese enterprises previously labeled “Made in Taiwan” are now labeled “Made in China.” The target markets are still those international markets of Europe, the United States, and so on. The most typical example is the IT industry. Taiwan stands for an important production site of the global electronics and information industry. Its division of labor of industrial networks is rather complete and specialized, playing the role of designing and manufacturing supplier in the global value chain. In recent years, in order to meet the demands for product variety and to respond to price competition in the market of terminal products, production sites are migrating progressively. Mainland China, with the economic advantage of an abundant factor endowment, has become the first choice for Taiwan’s outward investment.21 According to 2004 statistics, for instance, some Taiwanese IT products, such as notebook computers, motherboards, and LCD monitors, have a global market share of up to more than 70 percent. The market share of some other IT products, such as desktop computers, CD-ROM drives, and digital cameras, are up to 30 to 40 percent. However, about 80 percent of those products’ production capacity, which plays a decisive role in the global market, are deployed in mainland China. The investment scale of Taiwan’s IT industry has been continuously augmenting, thus contributing to the fact that mainland China has become the second largest country of the IT industry in terms of output in the world.22 The investment of Taiwan’s IT industry in the east and south areas of mainland China has created efficient production-supporting networks and complete industrial clusters.
C R Based on the analysis, in this chapter, we find that, since the early 1980s, economic exchanges between Taiwan and mainland China have developed very rapidly. Cross-Strait economic relations have become increasingly correlated. On the one hand, the degree of interdependence of cross-Strait bilateral trade has continuously risen, while, on the other hand, the integration of cross-Strait industries has reached a higher level, and the system of industrial division of labor has gradually been established. The cross-Strait economic interactions are not only competitive but also complementary. This developing trend has more benefits than disadvantages in terms of the influence on the economic and industrial development of Taiwan and mainland China.
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From a future perspective, the situation of cross-Strait economic interactions, competitive and complementary at the same time, will expectedly continue. Under the impact of globalization, mainland China and Taiwan should be further integrated into the global economy, yet the pressure of international market competition will also be higher than before. Since the cross-Strait economic integration has relatively deepened, Taiwan should participate actively in the international division of labor, take account of the use of economic resources and market in the mainland, build (under the new pattern of international division of labor) a more efficient system of division of labor across the strait, and search for favorable advantages for Taiwan industries’ development under new circumstances. In a trend toward globalization, the international division of labor in industries has become increasingly subtle and complex, while the adjustment of Taiwan’s industrial structure is still underway. As for mainland China, on account of the complementary economic advantages across the Strait and of the benefits to mainland China’s industrial development derived from the division of labor created by cross-Strait economic exchanges over the past years, mainland China shall in the future, on the basis of a solid groundwork, actively encourage industrial exchanges and cooperation across the Strait, attract Taiwanese investors, promote to create more densely networked cross-Strait industrial division of labor, and elevate the international market competitiveness. In the end, however, cross-Strait economic and trade relations have not yet been normalized. Because over the past two decades the authorities on both sides of the Taiwan Strait have greatly politicized bilateral economic exchanges and have intervened and sometimes even brought economic issues as bargaining chips into the political wrestling arena, the benefits of cross-Strait economic integration have not been fully realized. As international competition grows keener under the trend of globalization and the economies of both sides of the Taiwan Strait face stronger challenges, the authorities of both sides should avoid political confrontation, strive to create a peaceful atmosphere across the Strait, actively promote normalized cross-Strait trade and economic exchanges in order to further economic integration, and create—through a tightly correlated division of labor and cooperation—competitive advantages in the international markets.
N This chapter is part of the project granted by the National Science Council, Republic of China (NSC 93-2416-H-259-013). The author would like to express his thanks for the support of the National Science Council.
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1. For more details, see Chung-Hua Institution for Economic Research, A Study of Economic Exchanges between Taiwan and Mainland China: Current Situation and Perspectives (Taipei: Chung-Hua Institution for Economic Research, 1992), pp.14–16. 2. Taiwan’s (mainland China’s) degree of export dependence is equal to the value of exports from Taiwan to mainland China (from mainland China to Taiwan) divided by the total value of Taiwan’s exports (mainland China’s)∑100%; the formula for degree of import dependence is similar. 3. Almanac of China’s Foreign Economic Relations and Trade (Beijing: National Statistical Bureau, various issues). 4. In his analysis of international factor mobility under the Heckscher-Ohlin framework, Mundell (1957) concludes that the trade in factors may be substituted by the trade in goods. Mundell emphasizes that when production factors are allowed to move freely, the volume of the commodity trade is reduced as the movement of production factors increases. 5. I. Agmon, “Direct Investment and Intra-industry Trade: Substitutes or Complements?” in ed., H. Giersch On the Economics of Intra-industry Trade (Tubingen: J. C. B. Mohr, 1979), pp. 49–62. 6. Chung-Hua Institution for Economic Research, An Investigation of Foreign Direct Investments in Mainland China (Taipei: Chung-Hua Institution for Economic Research, 1994, 1997) (in Chinese). 7. Charng Kao, Trade, Investment and Economic Interdependence Across the Taiwan Strait (paper presented at International Symposium of Global Thinktank Forum, Shenzehn, 1999). 8. H. G. Grubel and P. J. Lloyd, Intra-Industry Trade (London: Macmillan Press, 1975); P. K. M. Tharakan, “The Economics of Intra-industry Trade: A Survey,” in ed., P. K. M. Tharakan Intraindustry Trade (North-Holland, 1983), pp. 1–34. 9. Nancy Y. J. Lin, An Empirical Study of Taiwan’s Intra-industry Trade: Comparing between Overall and toward Mainland China (Taipei: Chung-Hua Institution for Economic Research, 1994) (in Chinese); Charng Kao and Jr-Tsung Hwang, “An Investigation on the Economic Exchanges between Taiwan and the Mainland,” in ed., Kwang-shen Lew, Economic Interaction between Taiwan and the Mainland: Worries and Opportunities (Hong Kong: Chinese University Press, 1995), pp. 95–120. 10. The G-L index defined by Grubel and Lloyd is used to measure the intra-industry trade:
冤
Bij 1
兩Xij Mij 兩
冥 100
(Xij Mij)
Here, Bij lies between 0 and 100, and Mij and Xij are the value of imports of product j from country i and of exports of product j from country i. The closer Bij is to 100, the closer the value of imports of product i and exports of product i are for country j. That is to say, the
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11.
12.
13.
14.
15.
16.
17. 18.
19. 20. 21.
22.
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higher the level of intra-industry trade is, the higher the level of complementarity between the industries in the two countries will be. By contrast, the closer Bij is to zero, the lower the level of intra-industry trade will be for that industry, and the less significant the relationship between the industries in the two countries will be (either because they are in competition with one another, or because one country does not produce the product in question). It is a yearly survey, named Survey on Overseas Investment of the Manufacturing Industry in Taiwan, conducted by the Statistics Section, Ministry of Economic Affairs, ROC. 2000. Charng Kao, “Localization of Taiwanese Manufacturers in China and Its Impact on Taiwan’s Economy,” Review of Taiwan Economics, 7, no. 1 (2001): 138–173. For more details, see Survey on Overseas Investment of the Manufacturing Industry in Taiwan, published by the Statistics Section, Ministry of Economic Affairs, ROC, 2000. Theoretically speaking, one point of view considers that capital outflow could cause a crowding-out effect against domestic investment and that the exodus of industries could prompt industrial hollowingout, which is unfavorable to Taiwan’s economic growth, while another believes that outward investment benefits the extension and expansion of Taiwan’s economic power, in favor toward the upgrade and transformation of Taiwan’s industrial structure. Both of them have their rationality, and there is basically no definite conclusion. Tian-jy Chen and Ing-hua Ku, Foreign Direct Investment and Industrial Restructuring: The Case of Taiwan’s Textile Industry (paper presented at East Asian Economic Seminar, Osaka, Japan, 1998). Charng Kao, Trade, Investment and Economic Interdependence Across the Taiwan Strait (paper presented at International Symposium of Global Thinktank Forum, Shenzehn, 1999). Ibid. Charng Kao and Wei-ru Chen, Taiwan and Hong Kong Enterprises in Guangdong and Fujian: Economic Contributions to Local Economy (paper presented at the Second International Symposium on South China’s Economic Growth and Its Economic Relation with South Asia, Hong Kong, 1997). Almanac of China’s Foreign Economic Relations of Trade (Beijing: National Statistical Bureau, 2005). Fortune China Monthly 100 (June 2002): 22–23. Chung-Hua Institution for Economic Research, How to Utilize the Strength of Overseas Taiwanese Enterprises to Sustain Taiwan’s Economy (Taipei: Chung-Hua Institution for Economic Research, 2003) (in Chinese). According to estimates, about 70% of the output of mainland China’s IT products are made by multinational companies, among which 70% is produced by Taiwanese-invested enterprises.
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B Agmon, I. “Direct Investment and Intra-industry Trade: Substitutes or Complements?” in On the Economics of Intra-industry Trade, ed. H. Giersch (Tubingen: J. C. B. Mohr, 1979), pp. 49–62. Chen, Tian-jy and Ing-hua Ku, Foreign Direct Investment and Industrial Restructuring: The Case of Taiwan’s Textile Industry (paper presented at the East Asian Economic Seminar, Osaka, Japan, 1998). Chung-Hua Institution for Economic Research, An Investigation of Foreign Direct Investments in Mainland China (Taipei: Chung-Hua Institution for Economic Research, 1994, 1997) (in Chinese). Chung-Hua Institution for Economic Research, A Study of Economic Exchanges between Taiwan and Mainland China: Current Situation and Perspectives (Taipei: Chung-Hua Institution for Economic Research, 1992) (in Chinese), pp. 14–16. Chung-Hua Institution for Economic Research, How to Utilize the Strength of Overseas Taiwanese Enterprises to Sustain Taiwan’s Economy (Taipei: Chung-Hua Institution for Economic Research, 2003) (in Chinese). Grubel, H. G. and P. J. Lloyd. Intra-Industry Trade (London: Macmillan Press, 1975). Kao, Charng and Jr-Tsung Hwang. “An Investigation on the Economic Exchanges between Taiwan and the Mainland,” in ed., Kwang-shen Lew, Economic Interaction between Taiwan and the Mainland: Worries and Opportunities (Hong Kong: Chinese University Press, 1995), pp. 95–120. Kao, Charng, The Impacts of Taiwan’s Manufacturing Investment toward China on Taiwan’s Economy, Journal of National Cheng-Chi University 73 (1996): 209–234. Kao, Charng, Trade, Investment and Economic Interdependence across the Taiwan Strait (paper presented at The International Symposium of Global Thinktank Forum, Shenzehn, 1999). Kao, Charng, “Localization of Taiwanese Manufacturers in China and Its Impact on Taiwan’s Economy,” Review of Taiwan Economics, 7(1) (2001): 138–173. Kao, Charng and Wei-ru Chen, Taiwan and Hong Kong Enterprises in Guangdong and Fujian: Economic Contributions to Local Economy (paper presented at the Second International Symposium on South China’s Economic Growth and its Economic Relation with South Asia, Hong Kong, 1997). Lin, Nancy Y. J. An Empirical Study of Taiwan’s Intra-industry Trade: Comparing between Overall and toward Mainland China (Taipei: ChungHua Institution for Economic Research, 1994) (in Chinese). Mundell, R. A., “International Trade and Factor Mobility,” American Economic Review 47 (June 1957): 321–35. Tharakan, P. K. M. “The Economics of Intra-industry Trade: A Survey,” in Intra-Industry Trade, pp. 1–34.
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T ’ P B ’ M A A n d r e w N . D . Ya n g
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ow to defend Taiwan against possible or imminent military attacks from China is a pivotal issue for 23 million people living on the island and a daunting task for the armed forces of Taiwan. Taiwan’s political and military leaders are faced with the following challenges: (1) China’s ever-increasing modernization of hi-tech weapon systems; (2) China’s adoption of new strategies and tactics—including a series of exercises aimed at paralyzing Taiwan’s key economic, political, and military installations and putting Taiwan’s key interests in grave danger; and (3) China’s attempts to force Taiwan to come to China’s political terms for final settlement of enduring cross-Strait disputes. Taiwanese political and military leaders have thus engaged in a series of upgrades to Taiwan’s defensive capabilities in the last decades in order to reassure both domestic and international communities that Taiwan not only possesses determination but also the ability to deter and defeat any future Chinese military attacks. To provide a better understanding of how Taiwan’s capabilities can effectively deter and defeat Chinese military attacks, this chapter examines several key aspects of Taiwanese modernization in the context of perceived possible attacks from China. First, we look at Taiwan’s recent military upgrades aimed at coping with China’s ability to launch precision bombardment over the island. This analysis focuses on the potential for long-range precision air strikes, naval blockades, and amphibious landing and special force attacks. Second, we examine institutional improvements in military-crisis management
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aimed at avoiding an all-out cross-Strait conflict. This analysis also pays attention to policy guidelines and institutional mechanisms aimed at deescalating tensions in a crisis situation.
C C’ U M F T Whether the People’s Republic of China (PRC) is to use military means to achieve its political objective of unifying Taiwan depends on its perception of political developments in Taiwan over the issue of sovereignty. Since the establishment of the PRC in 1949, the Beijing government has upheld the policy of unifying Taiwan, which is considered an integral part of Chinese sovereignty, either by peaceful means or by the use of force if necessary. Disputes over the political control of Taiwan between the Republic of China (ROC) government in Taipei and PRC’s government in Beijing resulted in military conflicts in offshore islands close to China’s mainland between 1954 and 1958, and also resulted in a military crisis in the Taiwan Strait in 1996, when Taiwan was conducting its first direct election of a president since 1950. The potential military conflict between the two sides of the Taiwan Strait is directly linked to the disputes over the sovereignty issue. Beijing considers Taiwan an integral part of Chinese sovereignty and offers Taiwan the peaceful unification formula of one country, two systems, a model that allows Taiwan to maintain its current autonomous status and all aspects of governmental functions while accepting Beijing as the central government of all of China after unification. Taiwan insists, however, that it is already an independent sovereign state and its future should be decided by all citizens in Taiwan rather than Beijing. Taiwan is willing to engage in peaceful dialogue or negotiation to solve the sovereignty disputes and future political integration with the mainland on equal footing and insists that resolution over political disputes should receive Taiwanese assent. Beijing interpreted Taiwan’s insistence on sovereignty as stalling the unification process, and during the last decade it reacted to Taiwan’s rejection to compromise under the one country, two systems unification formula as with an ever-increasing military buildup in preparation for war against Taiwan independence. Beijing stated its determination to use force to deter independence, in the latest PRC national report, published in December 2005. It also emphasized the use of nonpeaceful means to solve the political disputes in the approved antisecession law of March 2005.
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Hence Beijing’s preparation to use military means to solve the sovereignty disputes over Taiwan is clearly identified. The distinct tasks of Beijing’s armed forces, the People’s Liberation Army (PLA) in a future war against Taiwan are five-fold: ●
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Eliminate Taiwan independence forces and uphold the territorial integrity of China. Replace Taiwanese authority with one compatible with PRC interests. Eliminate Taiwanese defense capabilities and cut off its defense links with the United States. Restore order by coercing the population to accept the imposed political arrangements. Minimize the PRC’s war casualties.
Except for the third aim, the others stand in tremendous tension with one another. Replacing a democratically-elected government could trigger mass uprisings in Taiwan, unless the PRC directly commits massive forces and puts down popular resistance quickly, actions that risk rising casualties and strong international intervention. But without ensuring territorial integrity, other aims will be imperiled. This is a war-planning problem the PRC must solve. The complexity of the PRC’s war tasks contrast dramatically with Taiwan’s single objective: survival. For a government in Taiwan that should choose to declare outright independence, mere survival amounts to victory. For the PRC, simply destroying the regime that favors independence does not guarantee success. For the PRC to achieve all its military tasks, it needs to exert sufficient destructive power on the Taiwanese armed forces and command/control systems in order to demoralize the military and destroy the political will of the population. Therefore, the PRC’s strategy must have two key elements. The first is the rapid isolation and destruction of Taiwan’s national authority. The second is the rapid introduction of a credible replacement government. If the first objective is achieved without the second, then territorial integrity cannot be guaranteed. Any outcome in which regime change is not rapidly effected endangers the PRC’s war mission, as does any outcome in which regime destruction does not set the stage for rapid achievement of the other goals. Therefore, the PRC’s aims must be built on the confidence that the Taiwanese national command authority can be rapidly eliminated, that an able command authority cannot be restored, and that the Taiwanese armed forces will not resist effectively.
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P M C A The kind of military threat that Beijing may pose against Taiwan will be guided by its effort to establish capabilities for winning a local war under hi-tech conditions. Under this military strategic principle, the PLA will focus on the enhancement of preemptive strike and quickstrike capabilities and emphasize the improvement of tactics, combat skills, and technology in order to achieve air superiority and control of the air and sea in the Taiwan Strait. The perceived modes of Chinese strike operations are melded into three phases: ●
●
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Phase 1: a sudden, overwhelming attack on the critical strategic and military targets using air power and special forces designed to force a rapid conclusion to the war; Phase 2: an effective naval blockade of major ports, to be followed by an extended air campaign designed to cripple Taiwan economically and militarily; Phase 3: an amphibious landing to facilitate a multidivisional armored and mechanized attack on the political center.1 Phase 1: Air Attacks2
To launch a sudden, overwhelming air strike over Taiwan, the PLA needs to achieve capabilities of conducting precision strikes over critical Taiwanese military and strategic targets, such as command, control, and communication centers, radar and early warning stations, air force bases, air systems, key railway and road links, critical power supply systems, and oil and ordinance depots. It must disrupt the Taiwanese command and control system early in the campaign and do so sufficiently in order to reduce the Taiwanese leadership’s ability to organize and direct a coherent resistance. For this purpose, the PLA devoted impressive efforts, either through self-development or by acquiring from abroad long-range precision-strike weapon systems, such as short-range ballistic missiles (SRBMs) and land attack cruise missiles (LACMs). Currently, the PLA has deployed over 700 DF-15 and DF-11 SRBMs in coastal provinces facing Taiwan. According to U.S. estimates, they are becoming increasingly accurate and lethal against Taiwanese key installations. Furthermore, the PLA has successfully developed various types of LACMs that will be operational in 2006–2007 and are considered to be the tool to conduct decapitation operations. To enhance the
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effectiveness of air strikes over Taiwan, the PLA Air Force has acquired advanced fighter aircraft, such as SU-27, SU-30 MMK, J-10, and FB-7A, as platforms to facilitate missile strikes and to win air superiority in the Taiwan Strait. Taiwanese Countermeasures to Air Attacks Taiwan’s main task is to protect its command-and-control system from being disabled by PRC air strikes. For this purpose, the ROC armed forces’ countermeasures are based on two elements. The first is to strengthen the protection of the critical command, control, and communication centers. The other is to modernize and improve its air defense system. To achieve the first objective, the ROC armed forces have introduced the multibillion Resolute Project (Bo Sheng) to integrate the command, control, and communication systems of the three services, to enhance the electro-countermeasure (ECM) and electro-counter-countermeasure (ECCM) ability of C4ISR, and to consolidate infrastructure in protecting those command and control assets. The consolidation and improvement efforts are not only meant to make those assets survive precision air strikes but also to enhance their capability to survive an electromagnetic strike and cyber warfare.3 Resolute Project also covers integration of long-range early-warning radars due to be installed in 2006–2007: the air force’s Change Wang (Strengthen Net) system, the naval Da Chen system, and E2-T AWACS so as to provide sufficient early warning capability in meeting missile strikes. The improvement of C4ISR and air capability has been integrated into the MND’s “10-year (2000–2010) consolidation and improvement plan”4 and subject to further improvement and upgrade depending on the requirement of expanding air. For example, consolidation of C4ISR could incorporate or integrate Hwa Wei (China) II photo reconnaissance satellite built by the National Science Research Council to downlink real-time images of PLA missile battery activities so as to enhance reliability of intelligence analysis.5 To further improve air capability, a new missile command has been established directly under the supervision of the General Staff Department (GSP) since early 2004.6 The missile command is to direct ground missile batteries made up mainly of the following: the U.S. Hawk system, locally developed Tien Kong-I and II systems, three batteries of Patriot PAC2-plus acquired in 1997 (planned to be upgraded to PAC-3 level later on) and six batteries of Patriot PAC-3 systems currently awaiting budget approval, naval air systems provided by four Kidd-class destroyers purchased in 2003 that would be operational in 2006–2007, and other air systems currently under
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Air Force Command. The new missile defense command is meant to simplify the chain of command so as to create a timely and adequate response to a possible air strike across the Strait. To further enhance counter-air strike capability, the local ChungShan Institute of Science and Technology (CSIST), a research and development unit, is also in the process of upgrading the Tien Kong II missile to the Tien Kong III antimissile system. Tien Kong III was successfully test-fired in 2001–2002. It is believed to be ready for operational deployment in the near future. However, Taiwan still lacks an effective missile defense system to intercept the PRC’s SRBMs reliably. To fill this gap, the Ministry of National Defense (MND) seeks the Naval Area Defense (NAD) system based on the Aegis-equipped Arleigh Burke class destroyers. Although this request has not been accepted by the United States, the latter has offered four Kidd-class destroyers equipped with the New Threat Upgrade and Standard II air defense systems instead. Once delivered and deployed, the Kidd-class destroyers will provide a much more effective air defense for the ROC Navy. Nevertheless, the ROC will continue to secure the Aegis system, because without it Taiwan feels it will still lack a sufficiently effective defense against China’s SRBM strikes.7 In terms of protecting its valuable advanced fighter aircraft from PRC air strikes, the ROCAF has strengthened the protection of air force bases in the western coastal region. New hangars and tunnels that can withstand precision bombing have been constructed. In addition, two relatively recent air force bases with hardened underground shelters were constructed in eastern Taiwan in the early 1990s. Surrounded and protected by mountains, these bases can shelter at least one-third of the fighter aircraft currently in service. If and when required, the air force’s Mirage 2000–2005 interceptors and F-16 multirole fighters can be deployed in these well-protected bases and continue to fight for air superiority.8 In order to fend off the PRC’s preemptive air strikes, the ROC armed forces are currently working closely with the U.S. military to enhance their joint operation command, control, communication, and intelligence system (C4ISR). Under Resolute Project II, the joint operation combining the existing Da Chen, Chang Wang, and Bo Sheng into an integrated command and control system will be created to provide fast and direct links between the High Command and basic combat units to ensure rapid responses to the changing war situation.9 This joint operation command-and-control system will be protected by electronic countermeasure and electronic counter-countermeasure devices to enhance capability against electromagnetic attacks.
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Challengesto air attack: The challenge to the PRC’s air attack is whether it can rule the sky over Taiwan. To achieve this, the PLAAF must effectively destroy most of Taiwan’s key air defense assets, command and control centers, and most of the air force bases. In order to do so, defense planners in Beijing must gain the element of surprise, which requires the PLA to compromise the Taiwanese advanced early warning and surveillance systems, C4ISR, and communication networks. In addition, it has to fend off successfully the more sophisticated and advanced U.S. surveillance and intelligence gathering systems and cut off communication and intelligence links between the United States and ROC armed forces. Without achieving these objectives, the effect of a PLA air attack will be limited. To the Taiwanese, the challenge will be preserving its scarce and valuable air defense assets as well as sustaining its command, control, and joint operation networks while countering massive air attacks. Equally important, the leadership in Taiwan will have to maintain confidence and order in Taiwan after SRBM bombardments. The resilience of the general public and willingness to live life as normal as possible are also critical to ensure their defense forces can launch effective counterattacks and regain air superiority. Phase 2: Blockade A naval blockade is a reasonable war scenario immediately after initial air attacks. It would be a logical step to take in preparing the ground for PLA amphibious and airborne operations. A blockade also serves the purpose of cutting off outside assistance by closing Taiwan’s oceanic lines of communication and supplies. A possible PRC blockade will be conducted mainly by submarines, which will be used to lay mines at crucial waterways near harbors such as Kaohsiung, Keelong, Suao, and the Tsoying naval base. The PLA Navy’s 40 or so Kilo-, Song-, and Ming-class diesel-electric submarines, which are equipped with mines and missiles, will be deployed for such tasks. Taiwanese Counterblockade and Antisubmarine Warfare (ASW) Capability Since 1992, the ROC Navy has put increasing emphasis on antisubmarine warfare capability to counter and to deter a blockade. Several billion dollars worth of ASW weapon systems and platforms have been purchased from the United States. They include 28 S-70C (M) antisubmarine helicopters, eight Knox-class frigates, and four minesweepers. To further enhance the ROC Navy’s ASW capability, the Bush administration
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further approved the sale of a large quantity of naval systems and platforms in April 2001. They include eight diesel-electric submarines, twelve P-3C Orion ASW aircraft, four Kidd-class destroyers, and eight CH-53 minesweeping helicopters. These newly-approved ASW systems will form the backbone of ROC Navy’s ASW capability in the next ten to twenty years.10 Deployed with previously acquired ASW systems, these new weapons will greatly enhance Taiwan’s ASW capability not only in the vicinity of waterways to key harbors but also in the general region of the Taiwan Strait and its neighboring waters. Furthermore, despite the fact that U.S. shipyards no longer build diesel-electric submarines, the Bush administration is committed to help Taiwan procure eight modern submarines, possibly from allies in Europe. Challenges to Blockade: To China, a successful blockade of Taiwan will require preempting or foiling a counteroffensive and/or an amphibious attack against its naval bases from the Taiwanese. For these purposes, submarines alone would not be adequate. A blockade must therefore be backed up by air superiority in order to neutralize Taiwan’s ability to counterattack and cut off its badly needed supply of material and other essentials from abroad. The Taiwanese have an objective that is practically the exact opposite. It is to preempt or destroy a PRC amphibious attack, for which it would have to either destroy the PLA bases for such an operation by launching amphibious attacks on them or destroy the PLA invasion fleet in the strait. To be able to do either or both effectively, the Taiwanese would need to neutralize a PLA blockade using submarines as the main instrument. Phase 3: Amphibious and Airborne Operations Amphibious and airborne operations will require successes in the initial air attacks and the naval blockade. They would only be launched on the assumption that Taiwan’s capability to resist had already been severely degraded. Phases 1 and 2 have in fact been constructed on the basis of two key hypotheses. They are that the ROC’s direct command and control capability would be shattered by air attacks, and once this has happened, Taiwan’s forces would be unable and/or unwilling to resist stubbornly. An amphibious assault would be carried out with hovercraft and wing-in-ground effect landing craft (WIGELC) that could ferry 10,000–15,000 marines and special operation forces and their hardware. An airborne operation would most probably involve the PLA’s fifteenth Airborne Corps dropping, in the first instance, three regiments of airborne troops from their newly acquired Russian-made IL-76
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Candid transports to attack one of the air force bases in western Taiwan.11 The objective of the initial amphibious and airborne operations is to secure suitable landing sites to enable large number of ground forces and heavy equipment to be deployed. Once this objective has been achieved, a decisive ground attack would follow. Taiwanese Counterattack In assessing Taiwan’s ability to counterattack in such circumstances, one needs to work on the assumption that its command-and-control system survived the initial air attacks, its ground forces have managed to remain in combat formation, their mobility remains undamaged, and they remain loyal to Taiwanese political leadership. However, it is assumed that most of Taiwan’s air defense system would be compromised, and its Marine Corps unable to launch counter amphibious attacks as a result of an effective PLA blockade. In other words, Taiwan’s control and command system functioned well enough to be able to direct ground forces to counterattack quickly against the small PLA landing forces on the ground. Taiwan’s ground forces have undergone major streamlining and restructuring recently. As a result, its first-line land force has been reorganized into 20 composite brigades equipped and trained to conduct two-dimensional operations. Each brigade is constituted by five to eight thousand soldiers and is equipped with good transportation and communication gears, its own logistic support network, air defense systems such as the Stingers shoulder-launched missiles, artilleries, armor units, and mobile radar systems. It is also supported by OH-58D survey helicopters, AH-1W Cobra assault helicopters, and AH-64D Apache Longbow attack helicopters. All of them are equipped with TOW (tube-launched, optically tracked, wire-guided) and Hellfire antitank missiles. Each brigade is a formidable and effective unit against a lightly armed landing force on the ground. Taiwan’s ability to counterattack on the ground is also enhanced by the deployment of CH-47 heavy-lift helicopters, which should enable the rapid deployment and reinforcement of individual brigades. Quick and effective resumption of the command and control system, directing remaining air defense and air force assets to support ground counterattacks, is key to defeat PLA landing forces and drive them offshore.
D T E C M M In circumstances of assessing PLA’s military maneuvers, exercises, and activities across the Taiwan Strait, it is important to identify exactly
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whether these military postures would lead to tension escalation, potential crisis, or a real crisis and whether emergency reaction mechanisms should be activated to cope with the situation and report to the commander in chief and the president, in getting effective responses to the contingency. In a potential military escalation possibly leading to a crisis situation, the Ministry of National Defense (MND) will activate emergency reaction mechanisms in accordance with the Regulations of Coping with Surprise Situation in the Period of Regular Combat Readiness and immediately proceed with militarycrisis-and-threat assessment to identify trends of crisis development. The Minister of the National Defense and General Chief of Staff then immediately report to the president through the chain of the command. The president, after receiving a situation-assessment report and recommendations for crisis-management options, either directly orders the minister to implement measures dealing with the situation or calls an emergency conference of the National Security Council (NSC) in order to reach more comprehensive decisions in coping with the potential military threats (see figure 8.1). In the processes of identifying the nature of a threat, intelligence gathering and intelligence assessment are vital to decisions regarding emergency-response mechanisms. The ROC’s military intelligence operations possess the capability to detect nearly all air, sea, and ground PLA military activities including SIGINT intelligence 250 km inside PRC southwest coastal provinces. Human intelligence networks are also deployed inside China to compensate gaps of intelligence analysis. For example, in the case of the March 1996 PLA missile exercises near Taiwan, instead of receiving prior notice from the PRC in realizing the exercise zone and possible missile target designation, the MND activated the emergency reaction mechanism and reported to the president, seeking decisions on subsequent responses. At that time, former president Lee immediately ordered an upgrade of the level of combat readiness that included 24-hour standby combat alert of the armed forces and the issuance of live ammunition to ground forces stationed at offshore islands, including Penghu, Kinmoy, and Matzu, in order to meet possible attacks from the PRC. President Lee also immediately called an emergency conference at the NSC, which was attended by the Vice President, Premier of the Executive Yuan, Secretary General of the NSC, Minister of National Defense and the Chief of the General Staff Minister of Finance, Minister of Economic Affairs, Minister of Foreign Affairs, Minister of the Interior, Director General of the Mainland Affairs Council, and the Director General of the National Security Bureau (NSB). The meeting was to make decisions on all internal and external emergency-response
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Clear indication or actual operation in preparing attack on Taiwan
MND holds emergency operation conference report to the secretary general of the NSC advising the president holding an emergency conference at the NSC
NSC Conference MND briefs the NSC regarding possible hostile operations, enemy strength and weakness, existing ROC war fighting capability and implementation of enhancing war fighting capability
NSC discussion of issues such as probability of ending war, international response, people’s will, effect of national mobilization, and end result of the conflict, etc.
Presidential Decision Making negotiation (end war)
primarily rely upon political and diplomatic negotiation, combat readiness as back up and secondary
stalling (no decision)
engaging war
a. recommend issuing Martial Law and declare national emergency, activate mobilization system; b. activate joint operation command center to direct war; c. coordination with other government task forces to support combat operation; d. mobilization of population to support war campaign.
Figure 8.1 Decision-Making Process of ROC’s Defensive Operation NSC: National Security Council; MND: Ministry of National Defense. Source: The Ministry of National Defense, Taiwan, ROC, 2004.
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recommendations suggested by responsible government departments and on interagency task force operations. The emergency-response actions were carried out without declaring a national emergency in accordance with the National Emergency Act. The crisis management mechanism during the 1996 missile exercises was to maintain social and economic order so as to ensure that people would be able to live as normal a daily life as possible. There was brief period of panic in financial markets that resulted in a stock market crash by over 1,000 points. The foreign currency exchange was met with excessive demand and was stabilized by emergency supply of hard currencies. The military stayed fully alert and kept very close watch on the PLA air force activities in the coastal region. At the same time, preventive diplomacy also took place in Washington DC along with U.S. intervention in managing the crisis. The tension was then deescalated following PRC’s decision to call off subsequent missile exercises in the Strait, and preventive diplomacy seemed to be effective in persuading both sides of the Taiwan Strait to exercise restraint, thus enabling the situation to return to the status quo. A case of potential or near crisis such as the 1996 missile exercises requires multilateral approaches and efforts to deescalate the tension or to break away from brinkmanship. However, to defuse military tensions, an efficient and accurate intelligence assessment is absolutely indispensable in order to avoid miscalculation and to initiate compatible rules of engagement when implementing the emergency-reaction mechanism. In order to cope with rapidly changing threat scenarios based on the assessment of the PLA’s strike capability, the MND has revised the three-phase (i.e., regular, alert, and combat) combat readiness regulation and replaced it with two-phase (regular readiness and emergencyreaction readiness) readiness regulations in late 2003.12 At the same time, three new regulations for dealing with peace-time emergencyreaction procedures, wartime defensive-operation readiness, and combat operation procedures were also issued. Rules of engagement in confronting a real military threat (see Figure 8.2) are also being issued. The fundamental principle of rules of engagement in a real military threat is “do not fire back unless being fired upon,” and the order to engage the enemy and the threat is directed by the President to the Minister of National Defense.13 For example, the statement of special state-to-state relations between two sides of the Taiwan Strait made by former president Lee on July 9, 1999 was immediately responded to by the PRC, ordering the fighter aircrafts patrolling the PRC’s southwest coastal airspace to cross the middle line.14
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Engagement Requirements a. fight with resolve b. extensive maximum restraint, refrain from starting a war c. be patient, always look at big picture
Engagement Principles a. do not provoke b. do not escalate c. deescalate hostility
Guidelines of Rules of Engagement
Advise Principles a. do not intimidate b. do not retreat c. do not show weakness
War Preparation Method actively prepare for war with maximum concealment from the enemy
Policy Guidance do not fire unless being fired upon
Figure 8.2 Rules of engagement. Source: The Ministry of National Defense, Taiwan, ROC, 2004.
The ROC air force fighter jets patrolling the area were constantly in high alert. It requires very precise intelligence assessment about those unusual and perhaps provocative or hostile maneuvers and provides pilots exact orders of engagement. Had not the fundamental principle of do not fire until being fired upon been issued, it could easily have triggered serious incidents if not a real crisis with pilots of both sides continuously facing this near real-threat situation.
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O A A F E D What has been put forward in the above analysis represents the most likely scenario of military conflict between the two sides of the Taiwan Strait. Other scenarios can be constructed, and there can be numerous variations within a basic scenario. The three phases of combat operation outlined in this chapter can in fact take place in sequence or simultaneously. It depends on the assessment of offensive/defensive capabilities by those concerned and what political objectives are set for the forces. Instead of continuously enhancing effective capabilities and war-fighting/war-prevention crisis-management mechanisms, Taiwan at the same time is also putting efforts into developing offensive countermeasures in an attempt to destroy the PLA’s war-fighting facilities on the mainland. It is hoped that this will force the Chinese to adopt an exit strategy and end the conflict.15 The aim of developing offensive countermeasures is to neutralize sources of PLA attacks. The MND has submitted a letter of request for price and availability data to the U.S. Department of Defense for the AGM-88C High Speed Anti-Radiation Missile (HARM) and the GBU-31 Joint Direct Attack Munition (JDAM) for the ROC’s existing inventory of bombs. Such weapons and munitions are often characterized as offensive in nature and could be controversial in terms of restriction of the type of weapon systems sold to ROC by the United States in accordance with regulations of the Taiwan Relations Act (TRA). Despite the sensitivity of selling offensive weapons to Taiwan, the track record of U.S. arms sales to Taiwan clearly indicates the ROC has acquired offensive weapon systems from the United States in the past. With the sale of F-16 fighter aircraft to the ROC in the 1990s, the United States also sold GBU-12 500-lb pave way and 2000-lb GBU10 bombs to Taiwan. In 1999, the United States released the AGM-65 Maverick air-to-ground missile to the ROC air force. Furthermore, the United States also released the software and hardware necessary to convert the ROC’s existing inventory of Harpoons into land-attack cruise missiles. This capability, called Coastal Target Suppression, puts precision GPS receivers onto each missile, allowing it to go after targets in southwest coastal regions of PRC provinces facing Taiwan. There are reasons for the ROC’s need for HARM. First, it would enable suppression of the PLA’s ship-based radar systems and provide ROC Navy’s future P-3 Orion maritime patrol aircraft more freedom to operate. Without the ability to suppress the PLA’s Navy air, such as the naval version of the HQ-9 air missile, Taiwan’s P-3s would operate in a very dangerous threat environment. Second, HARM would enable
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suppression of the PRC radars that are supporting air strikes against Taiwan. The PLA air force and naval air operations are highly centralized and dependent on ground air command and control for coordination and direction of complex strike missions. This air control depends on radar relay for situational awareness. Disrupting the air controller’s source of information can disrupt the PLA’s ability to conduct strikes against Taiwan. Third, suppression of the PLA’s air defenses would be necessary to enable the ROC to conduct strike operations against key installations of the PLA’s SRBM batteries with minimal losses. Key installations would include command and control centers and logistical support stations. Going after SRBM’s support systems would achieve better effect than going after missile launchers. The idea is to go after that backup installation in the most cost-effective way possible. In addition, HARM would enable suppression of surface-to-air missile systems operating along the PRC’s southeast coast. For example, during the annual military exercise, Han-Kuang 18 in 2002, the ROC air force, after surviving simulated PLA missile and air strikes, attempted to conduct a major air campaign against key targets on PRC’s coast and was applying about 90 percent of its surviving F-16 fleet. They lost 70 percent of their F-16s to the PLA air defense. The main reason is the lack of suppression of enemy air capability, including HARM, land attack cruise missiles, and airborne SIGINT platforms that could provide operating parameters of radars operating along the coast. The ROC’s interest in JDAM is twofold. First, the ROC would reduce the risk of collateral damage by using precision-guided bombs. JADM kits would enable the bombs to hit their target instead of hitting innocent people and facilities. Second, using smart bombs would mean that the ROC air force would only have to make one mission over a specific target, hence reducing the risks. Other domestic efforts in enhancing Taiwan’s offensive countermeasures against the PRC’s strikes are also in progress. The CSIST is in the process of upgrading the Shung-Fong II antiship missile to the Shung-Fong 2E land-attack cruise missile (LACM) and Shung-Fong III supersonic antiship and antiland missile systems.16 The idea is to suppress and retaliate against the PLA’s coastal key installations, command-andcontrol centers, and SRBM systems with long-range precision-guidance munitions and reduce the risks of air strike operations. Shong-Fong 2E LACM and Shong-Fong 3 supersonic antiship and antiland missiles would probably have a range exceeding 200 km and would be launched by air, sea, and land platforms. At the same time, the National Science Research Council also confirmed that it is collaborating with CSIST in research and development of medium-range ballistic missiles (exceeding 1,000 km) so as to enhance the ROC’s offensive operation to PLA key targets inside China.17
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It is abundantly clear that preventing outright military confrontation in the Taiwan Strait is serving the best interests of not only China and Taiwan but also the entire Asia Pacific region. The primary objective of the Taiwanese is to deter and suppress the PLA’s attacks on Taiwan. The aim of Taiwan in its improvement of national defense is to send a clear and unmistakable message to Beijing that the people and the armed forces in Taiwan are determined to confront Beijing’s military attacks with whatever means available. It also sends a message that Taiwan will not initiate a war against Beijing in the first place, and Beijing would encounter a devastated setback should it decide to strike first. The aim of Taiwanese modernization, with increasing emphasis on building offensive capabilities, is to express its intention to initiate retaliatory measures on mainland targets in order to compromise Beijing’s war effort against Taiwan. Should Taiwan’s military assets largely survive the PLA’s all-out attacks, it can employ its effective system and launch offensive operations to regain control over the Taiwan Strait. This will frustrate Beijing’s wish for a short war and will provide scope for the international community to intervene.
N 1. According to the ROC Ministry of National Defense, Taiwan’s most likely military threats from the PRC include the following: ●
●
●
Military intimidation, including large-scale exercises close to Taiwan, and enhanced psychological harassment and/or missile exercises near Taiwan aimed at creating maximum economic and social disturbances. Limited military action to force a political settlement, which may include air attacks, sea blockade, missile attacks on strategic targets, and attacking/occupying some of the offshore islands. All-out invasion under high-tech conditions, which includes air attacks, naval blockade, and amphibious landing operations.
These are standard war-game scenarios practiced by the ROC armed forces. “Assessment of Models of PRC’s Invasion on Taiwan,” a report given by Minister of National Defense Tang Fe at the National Defense Committee, Legislative Yuan, Legislative Gazette, 88, no. 55–52, (December 15, 1999): 387–396. 2. This air-attack scenario is made after taking into account the advanced technology and weapon systems China had developed and acquired from Russia and other countries, the lessons the PLA reportedly gained from the U.S. air campaigns in Kosovo and in the Gulf War, as well as new air war tactics developed by the PLAAF. According to the Intelligence Department of the ROC’s Ministry of National Defense, the PLA Air Force conducted a major exercise of an attack air group
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4. 5.
6.
7.
8.
9. 10. 11. 12.
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(AG) in its full order of battle and supported by a support air group (SG) for the first time in July 2002. The AG composed frontline fighters, which attacked the mock enemy at intervals of 180–300 seconds in cooperation with the SG. The SG was a composite group made up of reconnaissance, air defense suppression, electronic jamming, and AWACS units, and it carried out its missions at intervals of 120 seconds. According to an intelligence officer of the MND, the PLA has already completed precise location surveys of the five military air fields and four air-defense missile bases in Taiwan’s western coastal areas and had fed precise positioning data for these military facilities into its fighter-borne computers. See ETToday.com, http://www.ettoday.com/2002/ 09/14/303-135/331.htm (Accessed on September 14, 2002). Part 2: National Security and Defense Policy, chap. 4: National Defense Policy and Military Strategy, Ministry of National Defense National Defense Report 2002, Rep. of China (Taipei: Ministry of National Defense, 2002), pp. 71–72. Former Minister Tang Yao-ming’s report at the Legislative Yuan, Legislative Gazette, 91, no. 62 (2) (November 2, 2002), pp. 198–203. According to the National Science Research Council, the Hwa Wei Satellite project is conducted by the Office of Space and Satellite Programs NSRC and began in 1996. Meant mainly for scientific research purposes, the Hwa Wei II Satellite focuses on agricultural surveys and remote sensing of the earth. However, the dual-use image technology can be used for military purposes. The satellite was launched in late 2003. “The Report on C4ISR Capability and Evaluation of National Military Science and Technology Policies,” Technology and Information Committee, Legislative Yuan, in Legislative Gazette, 88, no. 28 (May 29, 1999): 182–183. Missile Command was established on April 1, 2004 as part of the restructuring and consolidation reform conducted by the MND in accordance with the new law. Legislative Gazette, 93, no. 30, (June 6, 2004): 278. In August 17, 2002, Premier Yiu Xi-kung announced that the ROC government will spend 700 billion Taiwan dollars from 2006 to 2016 on defense acquisition; the priority goes to acquiring Aegis platforms. Freedom Daily, August 18, 2002, p. 4. The ROC Air Force constructed a new Chia Shang Air Force Base in Hwalian, eastern Taiwan, in the early 1990s. It is surrounded by high mountains and faces the eastern Pacific Ocean. The geographic conditions make it difficult to be attacked by air from forces based on mainland China. This author made a visit to Chia Shang Base in 1998, and saw huge underground hangars inside the mountain. China Times, August 12, 2002, p. 1. Legislative Gazette, 88, no. 55–52 (December 15, 1999): 391–392. Mei Ling, “PLA’s amphibious landing capability development,” in Studies on Chinese Communism, vol. 35, no. 4, April 15, 2001, 55–64. National Report, 2004, published in November 2004.
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13. Legislative Gazette, 93, no. 32 (June 16, 2004): 131. 14. The so-called middle line was actually the patrol route of the U.S. Seventh Fleet in its mission of patrolling the Taiwan Strait since 1950s. It was a symbol of deterring the use of force by the two sides of the Taiwan Strait. Legally speaking, the middle line no longer exists after the United States cut off its diplomatic relations with the ROC in January 1979 and terminated the U.S.-ROC treaty by the end of 1980. Both Beijing and Taipei never formally agreed on the middle line. It has since become a muted understanding to avoid misunderstanding and miscalculation. 15. The Ministry of National Defense is very prudent about the approach of developing offensive capability. Officially, the military insists that the objective of modernization in the future is not to develop offensive capability; instead, it meant to change the rules of engagement that when facing a PLA threat, the ministry intends to launch offensive operations against targets in the mainland in order to deter follow-up attacks. 16. Minshen News, July 3, 2005, p. 1. According to the report, CSIST has successfully test-fired Shung-Fong 2E LACM with ranges up to 500 km. 17. Wu Mao-Qun, Chairperson of the National Science Research Council, admitted during a Q & A at the Legislative Yuan subcommittee meeting on October 11, 2004 that the Council is currently evaluating the feasibility of developing medium-range missiles and is collaborating with CSIST in missile development. China Times, October 13, 2004, p. 4.
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ill the authorities on Taiwan and the Chinese mainland find a more stable way to relate to each other in the future? This question may be asked as a matter of forecasting. It stirs various patriotic passions and state interests in those two places and also in another, the United States, which has been an extrinsic but crucial actor in the Taiwan Strait for almost six decades. The first step in an attempt at analysis might be to summarize the interests, including the passions, in each of these three places. The next step would be to find whether there is any way to meld these interests. Then it should be possible to find whether political forces in Beijing, Taipei, and Washington would allow the melding of these interests. There is no sure basis to assume that avoidance of war will, under all circumstances, be the top priority of each of these three actors. Each of them now benefits immensely from peace over Taiwan. Beijing refuses, however, to forswear coercion if the island secedes from “China,” a term that is defined in all three places with strategic ambiguity.1 A few on Taiwan say they are willing to follow the existential bravery of past nations that have fended off stronger armies (as the Finns fought Stalin before World War II).2 “Peace in East Asia” has been put, by the Americans, as a goal in every relevant document they sign—but neither Chinese who criticize U.S. weapons sales nor Taiwanese who seek such
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arms are sure that peace (rather than sales profits) is the top aim of all Americans. The interests in all three places are complex.
C I A S: A P F National pride in China because of recent economic growth, combined with a sense of long-term national humiliation (guochi) because of Western and Japanese incursions, makes educated Chinese particularly patriotic. Sinologues, thinking internationally from Western examples or else emphasizing endogenous Chinese responses to pluralized decentralization, usually stress the role of the state in developing such patriotism.3 Other scholars put less stress on the government as a mobilizer of nationalism, pointing out its dangers to bureaucrats.4 Through either of these lenses, Taiwan is at or near the top of China’s patriotic agenda. Jiang Zemin described unification with Taiwan as “our dignified wish, an extremely important and holy mission.”5 Practically all mainland elites—in government or in dissent—agree that Taiwan is Chinese. Taiwan’s recent democratization is seen by some mainland conservatives as a threat to their own status that requires a continuance of Chinese claims to the island.6 Many mainlanders are envious of Taiwan’s economic, political, and cultural successes. This People’s Republic of China (PRC) awareness of Taiwanese wealth and freedom undermines the Communist Party more than it persuades mainlanders that Taiwan is not Chinese. Unification with Taiwan would overall be bad, not good, for the Chinese Communist Party (CCP).7 Of course, the party leaders cannot say that openly; but in organizational terms, it is a true irony—and some official advisors are honest enough to say it unofficially but very clearly. Coercive unification with Taiwan would cause major international problems for the PRC unless Taiwan provoked an invasion by removing the name China (Zhonghua) from the constitution of their Republic of China (ROC).8 Peaceful unification would probably bring even larger problems—for the CCP, though not for China— because any conceivable terms the Taiwan would accept include continuation of their island’s current democratic elections to an effective executive and legislative offices. PRC President Jiang Zemin, in a formal 1995 speech, indicated that a Taiwan in China would retain its own army and that the People’s Liberation Army (PLA) would not send troops to the island.9 Although Jiang repeated Deng Xiaoping’s one country, two systems mantra, this arrangement is crucially different from Hong Kong’s or
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Macau’s systems, which host soldiers under Beijing’s command and lack local armies. Nonetheless, China has every reason to be confident about unification in the long run. The PRC now has an economy a dozen times the size of Taiwan’s, expanding quickly.10 It has a population 60 times that of the island, and a territory more than 260 times larger. The growth of China’s economic product has been faster than of its military power, but China will become stronger. Beijing leaders’ proud expectation of this change, together with the CCP’s lesser confidence that incorporation of Taiwan could be compatible with maintenance of party dictatorship, is a basis for possible PRC patience about resolving its territorial claim on Taiwan. China in recent years has oscillated between carrots and sticks, trying to prevent Taiwan’s secession from China rather than trying seriously to unify with the island.11 The international environment, as well as events in Taiwan politics, provides grist for both hardliners and softliners in Beijing. It is relatively difficult, because of Communist Party discipline, to document disagreements or uncertainties among PRC policy makers. The open environments of Taipei or Washington, where politicians often benefit from differences between each other more than from the contents of their policies, could not be a more stark contrast. In all three capitals, political disagreements lead to ambiguities that pose as statesmanship. Pretended wisdom in foreign policy often reflects benefits to politicians of delaying decisions because of purely domestic fissures. This phenomenon is clear in the arrangements the PRC has made for its largely frustrated diplomacy concerning Taiwan. In international forums, PRC diplomats stress that China has just one government. But toward the island across the Strait, Beijing’s position is somewhat different; even the 2005 Antisecession Law’s Article 7 calls for “negotiation on an equal footing between the two sides.” Taiwanese scholars affiliated with Chen Shui-bian have claimed that his first inauguration caused a relaxation of Beijing’s policy, so that “in dealing with cross-Strait relations ‘one China’ does not refer to the PRC—Taiwan and the Mainland are both parts of China.”12 Beijing’s concurrent interests are to limit Taiwan’s external diplomacy and also to negotiate with the island’s leaders. So, the equal footing or sole government rhetoric varies with the identity of Beijing’s interlocutor, more than it varies with time. Another interlocutor PRC elites know they have, despite difficulties in communication, is the majority of Taiwan’s citizens. After countereffective PRC attempts to influence Taiwan presidential elections in 1996 and 2000, Beijing has clearly accorded more
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importance to the island’s public opinion. The good news, from a mainland viewpoint, is that still only a minority of islanders favor declaring the “Republic of Taiwan” independent. Some Chinese leaders understand that rash action on their part could quickly change this in favor of Taiwanese separatism. The Chinese army could rather easily impose a damaging partial blockade against Taiwan’s trade. But thereafter, it could not surely take the island. The blockade would affect Taiwan’s insurance rates and hurt the island’s vulnerable economy. It would not win a strategic victory for China if the United States intervened. A military plan might include marine mines and armed missile strikes outside Keelung and Kaohsiung harbors, where unarmed PRC practice missiles have already landed.13 Such measures in the foreseeable future, if not provoked by previous actions from Taipei and if the PRC remains authoritarian, would (no matter what anybody wants) more probably lead to limited international recognition of a Republic of Taiwan— and to broken Sino-American relations—than to the island becoming part of China. So the main emphasis in China’s current policy is to prevent Taiwan renouncing options of future unification. The PRC discourse against secession is in practice favorable to Taiwan, because its premise is that the island has not seceded even though Beijing does not control it. The Antisecession Law, adopted in March 2005 by the National People’s Congress in Beijing, threatens coercion if “secessionist forces should act under any name or by any means to cause the fact of Taiwan’s secession from China, or that major incidents entailing Taiwan’s secession from China should occur, or that possibilities for a peaceful reunification should be completely exhausted.”14 PRC statements that an indefinite delay of negotiations would justify war are almost surely efforts to mollify Chinese patriots rather than to specify policy. War might come from acts by any of the three main parties, but the chance is practically nil that it would break out any time soon merely from continuation of the status quo. This antisecession law was apparently intended to shore up Hu Jintao’s reputation as a patriot on the Taiwan issue. Its importance was within mainland politics, particularly because Jiang Zemin had been unable to stanch gradual Taiwanization. Yet, as the name of the law implies, Hu knows he faces the same constraints. Unification is not on Hu’s immediate agenda (although as late as 2003, it may have been there).15 The Antisecession Law is a bone that the party’s leaders threw to China’s dogs of war, and they did so because a war would be countereffective. China’s leaders will not put themselves in the position of the Argentine patriots who attacked the Malvinas/Falklands.
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At least most of them will not. On July 14, 2005, Major General Zhu Chenghu referred to Taiwan in a speech organized by the PRC Foreign Ministry, saying that “War logic dictates that a weaker power needs to use maximum efforts to defeat a stronger rival . . . If the Americans draw their missiles and position-guided ammunition [not necessarily nuclear] on to the target zone on China’s territory, I think we will have to respond with nuclear weapons . . . Of course, the Americans will have to be prepared that hundreds of cities will be destroyed by the Chinese.”16 He also envisioned “the destruction of all the cities east of Xian,” although the reason for this geographical limit was unclear. This statement stirred interest among academic students of asymmetric power, but as policy it is self-discrediting. Belief is destroyed by protesting too much. Independence-minded Taiwanese, who are the implicit allies of hawks in Beijing such as Zhu, saw the benefits to themselves in this calculated and possibly careerist outburst. Members of the U.S. House of Representatives called on China to sack this officer. Actually, they should have been reassured. By exceeding the limits of usefulness in Realpolitik, Zhu unintentionally confirmed that approach to policy, which serves America, the nation with the stronger military. Initiating nuclear war against the United States or its naval units is not a believable policy, because it would lead to no victory. The notion that a splendid first strike can defeat an enemy quickly has, in the past, sometimes preceded actual hostilities that the initiators later lost. The German General Staff used new tanks in its Schlieffen Plan attack through Belgium at the start of World War I. Japanese planners were proud of their airplane-dropped torpedoes in 1941.17 Yet, they did not win their wars. American generals thought their new shock-and-awe tactics, which defeated Iraq’s army, would awe the Sunnis permanently. Beijing superpatriots overestimate what their missiles can actually accomplish for China’s ends, and they underestimate the extent to which democracies will defend each other. Hu Jintao has followed Jiang Zemin in asserting civilian control of officers—with considerable success, if the absence of any generals on the Standing Committee of the Politburo is a reliable indication.18 (Taiwan, where Chen Shui-bian has structured the officer corps to his own liking, is a comparable case.) This is important in view of the now-global dependence of China’s economy. American ships would not, if war broke out, be near Taiwan. About half of China’s oil imports come from the Persian Gulf.19 Allah the Bountiful happens to have put most of the planet’s proven oil reserves, to which China needs access for sustaining its growth, in locations from which the
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U.S. Navy could interdict Chinese tankers. Neither the Americans nor the Chinese planned this geology, but it has become a factor in foreign policies. The frustration in Beijing’s elite about their inability to attract Taiwan by using sticks, rather than carrots, is especially felt by soldiers. China has net gains from a peaceful rise rather than a warlike one. Peace is the international requisite for solving many PRC domestic problems. Zheng Bijian derides the model of “old industrialization . . . characterized by rivalry for resources in bloody wars and by high investment, high consumption of energy, and high pollution.” His new model is a “society of thrift,” including the savings that come from external peace.20 The Dean of Peking University’s School of International Affairs writes that China “must maintain a close relationship with the United States if its modernization efforts are to succeed . . . . War between China and the United States would be a nightmare, and both sides will try hard to avoid it.”21 Open statements of foreign policy are less diverse from Beijing than from either Taipei or Washington, because the latter are democracies with many voices that are official (but not all executive). The CCP leaders are clear that their current priority is peace. Taiwan has had difficulties making an equally univocal response.22 Politics is seldom unanimous anywhere, but it is very divided on the island.
T I A S: A P S I Taiwan elites seem almost unanimously to recognize a long-term security threat from the mainland and also their own cultural identity as Chinese. They lack consensus on whether this cultural link implies anything political. Few in Taiwan trust proposals for administrative unification with the PRC, especially while China remains Leninist, because of a sense that the CCP would want to expand to Taiwan that method of organizing control of politics, and especially to expand such manipulation to the island’s executive and military authorities. President Chen Shui-bian has directly said that he will “reject any proposal that is premised on ‘unification.’ ”23 He will not be president forever; however, the meaning of unification depends on terms, and Chen comes from a generation of Taiwanese elites, some of whom were exiled, jailed, or tortured by Chiang Kai-shek’s Kuomintang (KMT) mainlanders. That age cohort will later pass from Taiwan’s political scene. Younger leaders may decide to remember them with respect, while also trying to deal with the island’s security problem.
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Mass surveys have asked the following two questions to separate the symbolic and pragmatic bases of political identity on Taiwan: (1) “Some people think that if Taiwan after independence could maintain a peaceful relationship with the Chinese communist government, then Taiwan should become an independent country—do you agree?” and (2) “Some people favor the idea that if Taiwan and China were to become comparably developed in economic, social, and political terms, then the two sides of the Strait should be united—do you agree?” Responses from individuals could be cross-tabulated. A rising plurality of respondents has claimed a nonexistential national identity, favoring Chinese unification after cross-Strait disparities were lessened but also favoring Taiwan independence if this could be safe. The polls on this topic also show a slow rise of independence sentiment. An increasing minority of respondents have been consistent independentistas (one-tenth in 1992, 21 and 22 percent in 1996 and 1998, 24 and 26 percent in 2000 and 2003, respectively) opposing unification even after future PRC liberalization and favoring Taiwan independence if the island could then avoid war with the mainland. A decreasing minority of respondents have been consistent unificationists (38 percent in 1992, 17 percent in 1996 and 1998, 19 and 18 percent in 2000 and 2003) favoring unification after PRC political change and opposing Taiwan independence even if the island could then remain safe. The central view, however, was to prefer concrete benefits over abstract identity symbols of either the Taiwanese or Chinese kinds. This position, agreeing to independence if it could be safe and also agreeing with unification if China became like Taiwan, garnered 25 percent in 1992, 39 and 36 percent in 1996 and 1998, 34 and 22 percent in 2000 and 2003.24 Among elites, not ordinary citizens, patriotic symbols tend to trump economic benefits when political identity is at issue. Intellectuals in Taiwan and the PRC talk mainly about abstract nationalist ideals, not the issues of daily life that are more salient for most people. Intellectuals tend to glorify identity (rentong). When researchers look at the ways most Taiwanese actually identify themselves, they sometimes admit their distress at the careful reticence of the model answer. Most on the island are willing to be politically part-time Chinese, so long as that choice cannot hurt them; but they have also in recent years become more distinctively Taiwanese. They have been affected by events extraneous to their intentions.25 Taiwan voters’ interests are far less abstruse than educated writers’ discourses imply. A strong majority wishes to leave the question of Chinese or Taiwanese ultimate sovereignty undecided for a long time, in part
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because of knowledge that the premise of peaceful independence is dubious.26 This stance is compatible with a temporary truce between Taipei and Beijing, by which the mainland would not pursue force while the island would not pursue independence during a cooling-off period. The KMT Central Policy Council in 1996 commissioned a group to write a draft peace accord with the PRC. This included a clause that separatism might be diffused (huajie).27 Nothing came of the initiative, however. The PRC did not respond to it.28 China’s elite may at some point realize that it will need either faster democratization or more enforceable conditions in an agreement with Taiwan, in order to slow many islanders’ impulses toward separatist symbols short of changing the government’s name. President Chen added the word Taiwan after Republic of China on the island’s passports in 2003, and also on his own presidential office website in 2005.29 Putting a place on a passport issued by local authorities, or including it in the basic law that constitutes their offices, does not imply sovereignty. Hong Kong passports, HK government websites, and that city’s Basic Law certainly mention Hong Kong (as well as the PRC). Passports and official sources in Taiwan, like the constitution there, mention the ROC, and the China (Zhonghua) part of this designation should raise confidence in Beijing for the future, simply because the mainland is so much larger and the “C” in ROC suggests future possibilities even though it avoids current commitments. October 10 is the ROC’s national day, and President Chen in his speech that day in 2004 tried to square the ROC name with Taiwan’s distinctiveness. He said the state had developed in four phases: Sun Yat-sen founded it in 1910, when it had no relation to Taiwan. In 1949, Chiang Kai-shek brought it to the island. From 1988 to 2000, Lee Teng-hui led an ROC in Taiwan. Chen claimed that since his own victory in 2000, “the ROC is Taiwan, and Taiwan is the ROC.”30 There is still a “C” in that, however. Most countries regard the PRC as the successor state to the ROC. The United States formally regards sovereignty over Taiwan as yet not quite determined, although it recognizes that Chinese on both sides of the strait think the island is in China.31 When mainland officials use the term “one-China” with foreigners, they mean the PRC. When they use this term with Taiwanese, however, they often say they mean some China of the future, rather like a Buddha Maitreya, that can later come to include the mainland and the island. Taiwan’s current politicians reduce their security by rejecting the futuristic interpretation out of hand. The full-fledged independentistas among them could accept a one-China-is-the mainland view.
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Nonetheless, even Chen Shui-bian as head of the independenceminded Democratic Progressive Party (DPP) must reject that for nonsymbolic reasons: it would irresponsibly reduce Taiwan’s safety—and also, the ROC’s Jinmen (Quemoy) and Mazu are by everyone’s account in Fujian, not Taiwan. Taiwanese realize that most foreign governments (although not formally the United States) have vouched to Beijing that the island is part of China. Aside from America, the only state that could materially aid Taiwan if it wished is the previous colonial power there, Japan. Parris Chang, a sometime academic and DPP politician who in 2005 served on Taiwan’s National Security Council, claimed that Japan’s joint statement that year with the United States “is a promise to defend Taiwan from an attack by China.”32 This was wishful thinking on the part of a serious separatist. The word “Taiwan” appears just once in this ministerial statement, in Point Ten, that also includes a laundry list of other places (North Korea, Russia, Southeast Asia, and even the Northern Territories of Japan). American and Japanese officials said they will “encourage the peaceful resolution of issues concerning the Taiwan Strait through dialogue.”33 Militarists in Beijing nonetheless suggested such words were something like a promise to defend Taiwan. Arms profiteers in the United States might also welcome the business of preparing for such conflict, though not an actual outbreak of war. The reasons in all cases are domestic, not external. Japanese are increasingly antiChinese and vice versa, but that does not mean Japan (violating its constitution) will soon use its own forces to leap into battle with its most important Asian neighbor, when the Japanese national interest in such action is mixed at the least. Taiwan cannot depend on the rearrival of Japan. The pan-blue camp won a slight majority in the latest Legislative Yuan elections, but that coalition and the independence-minded pangreen election ended with almost exactly their previous number of seats. Pan-blue had about 52 percent of the voters, pan-green had about 45 percent, and about seven percent were independent.34 Taiwan’s electorate is rather evenly divided, and random factors (individual candidates’ campaign abilities, the infamous quasi-assassination of Chen Shui-bian in 2004, and others) often determine who wins. The result is that either coalition can effectively veto major changes. The electorate has made the politicians check each other.35 Chen Shui-bian in August 2005 acknowledged this: “It is impossible to write a new constitution and adopt a new name for Taiwan . . . . I can’t do it. And former President Lee Teng-hui couldn’t do it during his twelve years in office.”36
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The ROC constitution theoretically provides the possibility of cohabitation when a president of one coalition faces a legislative majority from another. The president appoints and dismisses premiers but needs parliament to approve policies and budgets. The president may also dissolve the diet and call new elections if legislators do not cooperate—and this turns out to be the crucial power. High campaign costs (NT$42 m. for an average candidate, according to a 2003 survey) and the uncertainty that many incumbents face under a single nontransferable, multicandidate-district voting system makes legislators shy of elections.37 The structured incentives of Taiwan’s particular democracy discourages policy compromise between coalitions when one is executive, and the other is legislative, and they have similar levels of electoral support. The PRC might have more influence on this closely-divided polity, but only if Beijing were more forthcoming with terms for Taiwan that the islanders knew could be guaranteed by their own or external forces. PRC-ROC relations are institutionalized, but they have been mostly economic and studiously informal. Contacts have been through two foundations, the mainland’s Association for Relations Across the Taiwan Strait (ARATS, Haixiehui) and the island’s Straits Exchange Foundation (SEF, Haijihui). The respective governments control them, but they are officially unofficial. These agencies readily send each other faxes about business deals, occasional hijackings, and other matters not fully under the control of either government. Thus far, they have not been mandated to negotiate political questions. Diplomats from the two sides may not talk, because they do not recognize each other. Political parties can confer more freely. Outgoing KMT leader Lien Chan visited the mainland and shook hands on television with CCP leader Hu Jintao on April 29, 2005. They “pledged to work together to undermine Taiwan’s independence movement,” although Lien avoided disclaiming Taiwan sovereignty and knew that the KMT would suffer in elections if he did so. A joint communiqué upheld the 1992 consensus that allows “free and separate interpretations” of the term “one China.” It also vaguely expected “peace and stability in the Taiwan sea.”38 They did not set a future date by which they expected cross-Strait issues to be solved. Ma Ying-jeou, who once defeated Chen Shui-bian for the Taipei mayoralty and calls himself a new Taiwan person (xin Taiwan ren), although his family were mainlanders, took over the KMT leadership. Ma favors ROC-PRC reconciliation on terms favorable to the island. He is the most obvious pan-blue candidate for president in 2008. In order to win, however, he would have to keep both the KMT’s alliance
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with the People First Party and the faith of a sufficient number of Taiwanese that he will work for the island’s stability, not for its surrender to the CCP.39 Any ideology subsists in a material context. Business interests on Taiwan have moved an unwilling state toward more accommodation with China.40 Seven-tenths of all goods made in Taiwan-owned mainland factories are finally sold in the United States. Most of the remaining three-tenths goes to other democracies. Taiwan provides capital and managers; PRC workers make the products; America is the market.41 Taiwan’s trade surplus with the mainland has often been about two-thirds of the entire value of cross-strait trade.42 Political conflict has an inhibiting effect on trade and investment in the mainland, despite the fast rise of those indices.43 Local governments in China violate PRC regulations by giving sweetheart deals to investors from the lost province, the baodao that has so much money, despite official PRC denials of such practice. Taiwan’s economy is also linked to markets outside China, often in three- or many-sided exchanges of capital, labor, or marketing expertise that involve multiple countries. These politics and economics are connected, but not in any monotonic way. Taiwan’s security is economic, at least as much as it is military. These two aspects are connected, because support of Taiwan’s defense needs is scarcely sustainable along with the island’s economic prosperity. Taipei has been unable to produce all the equipment it would require to defend itself, and foreign weapons procurement has been very expensive. One estimate of the budget for arms purchases abroad in the mid-1990s ran at an annual rate of more than three times the total domestic cost of maintaining Taiwan’s military.44 PRC pressures against countries and companies that make arms sales to the ROC have meant, in effect, that Beijing and Taipei bid against each other. The prices rise, and Taipei has been increasingly reluctant to pay them. Taiwan’s DPP has a political-economic problem that is parallel to the CCP’s desire for exports to America that help maintain Party legitimacy in China. Chen Shui-bian faces pressure from Taiwan industries to invest in the mainland. He needs cross-Strait ties to pull the island out of its economic doldrums. But high-tech investments may strengthen China’s military and threaten Chen’s apparent political program.45 The island’s democracy is what most protects it. Any identity has multiple aspects. Taiwan has traditions of frontier pioneering, patriarchal clannism, and a Chinese-Japanese history that make it unique46— and it also now has a start at democracy, despite the partialness that is entirely typical of such beginnings. Identity over the long haul
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particularly reflects the aspects that make it last, and in Taiwan these now include democracy.
A I S: A P D H Most Americans presume that any group, including the Taiwanese, should ideally have a right to self-determination if they wish it. (This wish, because most Taiwanese still do not reject their option of Chinese identity at least in cultural terms, is currently uncertain.) But any right implies a corresponding parallel duty, in this case the obligation to make any decision for independence sustainable over the long term—by those who decide it alone. They do not have an obvious right to call in others, for example, Americans, to defend the option, unless it is also in the others’ own interest. Defense of Taiwan’s liberalism is in the U.S.’s interest because the global military prestige of democracies is at stake. Also, the United States can garner major benefits from having decent relations with China. Unbounded defense of Taiwan as a strategic asset or as a nonChinese sovereignty (as distinct from a liberal place) is not on balance in the American interest because the island is claimed by a major state with which, if current trends persist, the United States may later be able to establish a stable relationship. The PRC is changing pell-mell, albeit the direction of change is not yet entirely certain. A former National Security Advisor, Samuel Berger, asked in a speech at the Council on Foreign Relations in New York: “Can China successfully make the next great leap toward a modern economy in the information age without producing the result of empowering its people, further decentralizing decision making, and giving its citizens more choice in their lives?” He answered his own question, “Possible, but I doubt it.”47 Berger was in a Democratic administration, but the Republicans who followed him have been at least as hopeful about democratizing the globe. U.S. interests for preserving Taiwan’s democracy, while encouraging China’s political development, are based in two factual correlations: First, large modern countries are liberal states.48 Second, liberal democracies have a track record of not attacking each other.49 These two correlations are not desiderata but facts. China’s economy has been growing steadily (to about $5,000 real purchasing power per head—or well over $1,000 in unadjusted GDP/capita).50 If the current rate continues, in a few years, China
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would achieve a per-capita income level at which, unless China disproves a pattern observable in all other large industrial nations, it would become stable as a democracy if PRC elites decided for that regime type as a way to moderate their own contending interests. At China’s medium level of modernization, authoritarian regimes preserve themselves as well as democratic ones, presuming their economies perform satisfactorily. Adam Przeworski and Fernando Limongi note on the basis of exhaustive statistical research that, “dictatorships are exceptionally stable in this range. . . . The emergence of democracy is not a by-product of economic development. . . . Only once it is established do economic constraints play a role: the chances for the survival of democracy are greater when the country is richer.”51 The United States has strong material and long-term interests in China’s democratic evolution. If America can, over the next two or three decades, prevent a major war with China over Taiwan, then China’s internal changes by the end of that time are likely, on international evidence from past patterns, to make subsequent SinoAmerican relations peaceable. The democratic peace is not a mere theory or hypothesis. It is a finding: Stable democracies do not attack regimes that maintain their own type. They have not done so for the whole modern period since a large number of democracies emerged in the world; infact, the analysis may be extended back for almost 200 years in the nineteenth century. Stable liberal states have initiated frequent bloody wars, but not against each other.52 No theoretical reasons for this fact are indisputable. Some arguments against the finding as an hypothesis may reflect deeply held views that, for some cosmic reason perhaps inherent in a supposed hierarchal or elitist makeup of universal nature, it should not be true. But it is factually true.53 The confidence that these data generate is thorough only because no cases convincingly violate the conjecture. There are too few instances to know whether the finding affects civil wars, such as between the PRC and ROC—it probably does not hold in such cases—but about clearly international conflicts, it is a fact without counterexamples. Authoritarian countries that are arguably in the process of democratization (the PRC is the globe’s largest example) tend statistically to be bellicose, although they become more pacific toward liberal states when democracy seems irreversible.54 Culture or geography may or may not be relevant to any theory explaining the finding, but wars between democracies have occurred in no world region.55 Also, international institutions can engage nonliberal countries in peace mechanisms and thus aid the nonviolent resolution of disputes regardless of
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state forms. But democracies need nothing more than their mutual liberalism to get along nonviolently, even when they have radically different levels of objective power. So, if the United States remains a democracy and China’s elite decides to develop liberalism with Chinese characteristics, presuming they continue to have differences in proportion to their dimensions, stable PRC democracy would mean savings from avoidance of war. So the United States has a concrete Realpolitik interest in China’s democratization. Liberal states in general are less likely to waste future lives and treasure if other powerful states join their regime type—and China is now the strongest intentional nondemocracy on this planet. If Chinese leaders should ever make their own decision for more (always partial) democracy, as some Chinese political thinkers have long wished, a sensible forecast is not just that the Americans would be ideologically delighted, but that they would save real costs. They would also get out of the business of helping the Taiwanese defend that island’s democracy. Presumably that transition would be gradual, involving cross-Strait talks in which the Taiwanese would get more enforceable terms than Beijing has yet specified. The United States does have a one-China policy, an eventual rather than current commitment that serves American interests.56 China’s democratization is the threat to Taiwan’s future sovereignty. As Zheng Yongnian suggests with reference to China, states’ policies emerge from the problems and opportunities they face.57 This applies to the United States too. American calculations concerning Taiwan are not just about the lively democracy there now, but also about concrete U.S. benefits from possible future liberalism in China. There would be big reductions of likely costs for America if China’s internal politics were to head in a more provably representative direction. The democratic peace finding would not be so credible a basis for U.S. foreign policy if it were just an hypothesis or potentially true theory, rather than an empirical finding. It is said to be controversial because it seems populist. Elites fearing even a slight loss of power do not like it, although every democracy in the world is only semisovereign.58 As a fact, the liberal peace finding is uncontroverted and accurate. Jack Snyder argues that democracy incites nationalism—and this is true of Taiwan’s democratization. Leaders such as Chen Shui-bian may favor elections not just on normative grounds, but also in part because of the particular local ethnic benefits they get from them.59 Taiwanese are an 86 percent majority on the island. Other benefits are external, from the United States, at least so long as China remains authoritarian. It is never surprising that leaders favor regime types from which they benefit.
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The same logic can be applied to the mainland. Accredited engineers and statist intellectuals in a strong party network currently rule China. Differences within those elites, especially between inland and coastal leaders such as Hu Jintao and Zeng Qinghong, imply policy choices simply because China is a huge country with a diversifying economy. Despite traditions of hierarchy, leaders there might later decide to pluralize more explicitly if they saw benefits to themselves from channelling their rivalries into elections of more temporary governors.60 Deng Xiaoping once claimed that, “if our one billion people jumped into multiparty elections, we’d get chaos like the ‘all-out civil war’ we saw during the Cultural Revolution.”61 This claim is self-serving on behalf of statist intellectuals. The Cultural Revolution became chaos when local groups adopted policies of classifying people with labels, scaring them with violence, and subjecting them to bosses that the state itself had used to consolidate socialism.62 Taiwan is not a vital U.S. interest (as mainland militant intellectuals correctly claim). But democracy is. The United States has stationed no military bases or troops on Taiwan, and America has an officially unofficial foundation, rather than a diplomatic embassy, to maintain contact there. Taiwan’s security and commerce are dependent on the island’s main links, which are to China and America and are informal. (The ROC’s embassies in Funafuti, N’Djamena, and Yaren District do not directly protect the island.63) Chinese democratization would eventually end the U.S. defense commitment to the island. Taiwanese fear to plan for this. But U.S. policy at present is also based on American interest in the democracy of the Taiwanese people— partly because they can, if they choose, be members of a nation important to others because of the amoral fact that it is the world’s most populous. America needs to keep faith with Taiwan’s democracy among the many democracies with which the United States is aligned. In Asia alone, four of these have formal security arrangements with the United States: Japan, South Korea, the Philippines, and Thailand. Despite what military budgeteers aver, uniformly in Beijing and Taipei and Washington, the strategic value of Taiwan to America is its current liberalism, not the island as an unsinkable aircraft carrier. Just as the PRC and ROC are politically divided on these issues, so is the United States. Some Americans see a strategic interest in mobilizing against the domestically useful adversary of China. Some Chinese find the same use, within their own polity, of stressing threats from Japan and the United States.64 A July 2002 Pentagon report, for example, noted that the Chinese army had “an increasing number of credible options to intimidate or actually attack Taiwan.” Chinese Foreign
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Ministry spokesman Kong Quan countered with a claim that China’s military “budget is the lowest among the world’s major countries.” A Chinese Academy of Social Sciences analyst, Hong Yuan, said the Pentagon report was “a pretext [for the United States] to sell advanced weapons to Taiwan, which is a reflection of the interests of the American military-industrial establishment.”65 This last analysis hits the mark. (President Dwight Eisenhower was an early critic of the autonomous power of the military-industrial complex.) And repetitions of rhetorical tension help military budgeteers. Essentially the same drama, involving many of the same actors, was played again after another Pentagon report in 2005 that said the same thing, met the same response in Beijing, and supported the continuing no-peace-no-war equilibrium across the Strait. Many jobs and political benefits flow to the actors from maintaining preparation for strife, even though most of them in Beijing, Taipei, and Washington do not want or expect it to erupt into war. A “Taiwan caucus” of members of the U.S. House of Representatives, which a journalist called “a pro-Taiwan group,” became concerned in 2005 that the pan-blue majority in the Legislative Yuan might scuttle a special ROC budget that had been proposed to buy made-in-USA weapons. So they contacted KMT head Ma Ying-jeou, who reassured them somewhat.66 But was this group of Americans solely pro-Taiwan or at least as basically in favor of arms sales? U.S. weapons manufacturers face an era when the nation’s most obvious opponents, in al-Qaeda, are relatively inexpensive to fight. They need a credibly large external enemy for commercial and production-economy reasons. Osama bin Laden, if he could be located, might justify the funding of just one cruise missile or drone. China, however, is the world’s most populous nation and fastest-rising power. Its military adversary, Taiwan, is a place where arms may be sold. Observing the behavior of U.S. legislators, it would be hard to distinguish their interest in freedom from their interest in profits for their constituent corporations. They are not as proTaiwan as some in Taipei aver, nor as anti-China as some in Beijing say. They are also pro-money. Planning for war is big business. Americans have ideas, as well as material interests, even though this analysis stresses the concrete aspects because they can be better understood internationally. It nonetheless must be acknowledged that, just as Chinese in Mao’s time had an ideology strongly denigrating capitalism, Americans have long had one distrusting communist governments that still are ideally dictatorships. Liberalism and imperialism have been closely, albeit uneasily, intertwined for two centuries.67 Representative Frank Wolf (R-Virginia) once opined, “I am convinced the Chinese government cannot last much longer.” Representative Tom Lantos (D-California, an immigrant from Communist Hungary)
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has promised, “We shall not rest until China becomes a free and open democratic society.”68 Journalist Harry S. Rowen boldly responded to his own question, “When will China become a democracy? The answer is around the year 2015. Some might think such a prediction foolhardy, but it is based on developments on several fronts . . . the growth of grassroots democracy; the struggle toward a rule of law; and the liberalizing of the mass media.”69 Rowen did not explain by what exact mathematics he derived the 2015 date, although comparative international evidence supports the trend he predicted. Some argue that America has, by now, an ideal moral obligation not to abandon Taiwan. Yet the United States joined originally with Chiang Kai-shek as a Chinese, an ally against Japan during World War II. Many Americans were led, with Henry Luce’s help, willfully to misunderstand President Chiang as a Chinese democrat. Later, in the context of the Cold War, U.S. statesmen as different as Kissinger and Carter saw that America’s interest was not entirely to abandon China. On Taiwan, Lee Teng-hui and Chen Shui-bian later wanted to abandon political aspects of their Chineseness while keeping U.S. protection. There are many abandonments in this history. The element that the United States is least likely to let go is a commitment to maintaining and spreading democracies—not just for normative reasons, but because democracies muddle through their differences rather than attacking each other, and thus save mutual costs. The aim in this analysis of U.S. interests is predictive, not prescriptive. In particular, it would predict the likely action of any U.S. constitutional commander in chief (Republican or Democratic) to “do what it takes” to help defend Taiwan’s liberalism so long as China’s state form may remain authoritarian—but not later. America’s Chinese interlocutor displays, in this respect, at least two major ironies: First, the PRC maintains an ideally “dictatorial” regime, even though peasants or workers in that country vouch it is no longer “of the proletariat.” It is an authoritarianism of intellectuals who have been trained as engineers, often called technocrats.70 Most of its adherents privately admit this is a transitional regime and China is likely later to become more democratic (with Chinese characteristics). If PRC elites find it in their own interests to channel their disputes by legitimating some rulers in time by competitive elections, for example, they could retain other rulers in other ways. (A legislative upper house, for example, might be formed among members chosen by some post-Confucian modernized examination or intellectual credentialling system.71) Educated engineers are still in charge and will largely control the rate of change, but really their motto is apres nous, le deluge.
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A second irony is that technocrats as uncharismatic as Jiang Zemin and Hu Jintao have already begun approving somewhat broader political representation. “Peaceful evolution” is still a pejorative phrase among PRC conservatives, but they overemphasize change as chaos. Recently, Hu Jintao has been less tolerant of dissent than his predecessor Jiang Zemin usually was. Hu has sponsored a campaign to criticize neoliberalism. He has taken many measures to strengthen the CCP internally, rather than to encourage other groups to monitor the party’s operations.72 These campaigns can be seen, however, against the background of longer-term pluralization (not yet much democratization) at local levels in the PRC’s past three decades. The technocrats nonetheless know that new industrial and commercial wealth means new local governors. They now admit capitalists (politely rechristened entrepreneurs) as communists. This makes the party more representative. China’s elites may later, on their own initiative, give more voice to nonintellectuals and to other kinds of citizens including more Southerners, workers, and traders like most of the people on Taiwan. China’s democratization, if PRC elites allow it and if a future U.S. president expects it to be then probably irreversible, would cause serious cross-Strait negotiations. The U.S. Navy, under such circumstances, would not be needed to keep Taiwan’s liberalism safe—or at least, the American president would predictably monitor that situation. If its sure deterrence of war in the Taiwan Strait was ineffective, the United States would lose political influence globally among its democratic allies. No American president will likely allow this to happen—but the deterrence is of authoritarianism, not of China. Washington does not care as much about the island of Taiwan as Beijing does. But American policy makers care a great deal about the principle that democracies support each other. Liberalization in Beijing, if it occurs, would at first cut two ways as regards China’s external relations. American evaluations of the PRC regime would improve. Taipei elites would realize more clearly that they have a long-term security problem they cannot solve alone and that the United States has an interest in fostering decent links with China. But another possibility is that democratization in China could make Beijing leaders more chauvinistic, more insistent on recovery of the lost province, and less risk-averse in that patriotic cause. Bellicosity sometimes rises when elections give power to expansionists who pound patriotic drums. (Hitler is the worst example, the United States during the Spanish-American war era is an earlier one, and there are many others.) This evolution would make a PRC-ROC deal on unification harder to reach. It is crucial for Sino-American relations that
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U.S. deterrence of cross-Strait war remain credible so long as Taiwan remains the ROC and until China’s regime-type changes enough to obviate the likelihood of this kind of regress. Between Taiwan’s current democracy and China’s possible future state-level democratization, no link is sure. Pejorative spins of news from Taiwan provide rich material for China’s antipopulists, who report Chen Shui-bian’s legalisms and Taiwan’s money politics with glee. PRC intellectuals decry Taiwan’s black money politics (heijin zhengzhi) as a reason to reject democracy. Unlike either Karl Rove or Karl Marx, they do not understand that popular voting gives an advantage to those who control enough capital to buy elections.73 The hegemonist account of America’s implementation of its own tangible interest in supporting Taiwan’s liberalism provides grist for the antidemocratic mill in Beijing. Patriotic desires to unify with Taiwan will arguably not, in China, be a net factor either for or against a more liberal state there. Democratization in China would almost surely not reduce the mainland’s claim to Taiwan. As Nancy Bernkopf Tucker claims, future liberalism in China, if it emerges, would make the PRC no more willing to let Taiwan go. It might also have limited direct effects on Taiwan’s willingness to unify.74 But it is insufficient to analyze the East Asian actors as if they operate in a vacuum. A change of regime type in China would affect them through its effects on U.S. policy. America may, in the Far East if not in all parts of the world, serve its own interests. It is likely to be able to preserve Taiwan’s liberal structure while waiting out the decisions of China’s elite about mainland governance structure. Will China’s democratization, if it emerges from domestic Chinese politics, come at a later time than America’s ability to continue to deter cross-Strait war? The probable answer is that CCP leaders (already divided on policy issues between coastal and inland politicians, for example) will benefit at some point from allowing more political pluralization—and U.S. military strength is not growing more slowly than China’s. Authoritarian regimes often overestimate the extent to which their control systems work efficiently. Since 1989, the Chinese Communist Party has kept up with its governance quandaries extraordinarily well.75 But huge problems loom: fiscal bankruptcy in townships, a demographic disaster as the one-child generations are short of women and will have too many aged dependents, uncertainty about how Hu’s successor can be chosen, and other difficulties. Intraparty unanimity decision rules are unlikely to solve these.76 Citizens without choices are hard to mobilize behind policies in which they have no sense of ownership. CCP reformers will need all the legitimacy they can get, and winning a real election
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would not hurt. America’s deterrent might well outlast China’s authoritarianism. Washington need not insult Beijing leaders for their patriotism, and Americans have much international diplomacy and business to transact with China; so the U.S. executive branch cannot always stress that the PRC regime structure is still incompletely reliable. Likewise, Washington need not insult Taipei leaders for loving their island, and Taiwan itself must find some way eventually to live with its big neighbor. Washington’s future behavior is very easy to guess, though some of its reasons remain inexplicit in public. Any American president will order the navy to defend Taiwan as a democracy (presuming it does not provoke its rival) until Beijing changes enough to bode democracy for the people of the mainland and island alike, including the rights of peaceable speech. This strategy presumes the United States will follow its own real interests as politely but surely as possible. The strategy would be discreet, not ambiguous. To implement such policies, any U.S. president might say or continue to say two apparently contradictory things in public: 1. That a crucial U.S. interest is peace in the Taiwan Strait, and that America will “do what it takes” to defend Taiwan’s democracy unless the ROC declares independence by taking the “C” out of its name officially; 2. That the U.S. has an eventual one-China policy, with the substance of that term to be decided entirely by Chinese, and this policy will be further implemented when the American president deems the PRC to be moving in an irreversibly liberal direction. These points would reduce somewhat the strategic ambiguity that U.S. statespeople have previously praised. That would be beneficial, because it would reduce the chance of accidental war. The United States in its own interest should let Beijing and Taipei know what the American red line definition of Taiwan’s non-Chinese independence is, because that event would contravene American interests. The red line should be the removal of the term China, Zhonghua, from the name of the state in the island’s constitution. Taiwan’s keeping its future Chinese option open is important to the United States, which must get along with China. If the Taiwanese expect the Americans to continue a defense of their liberalism as long as China keeps an authoritarian structure that is unfair to some of its own citizens, the islanders owe the Americans considerable care. They have the option of declaring a Republic of Taiwan and then trying to defend it over the long term by themselves.
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That would perhaps be a brave course, and Americans have no standing to oppose it as such, even though it should end any expectation of defense help to Taiwan in view of overall U.S. interests. It would be an unwise course since the non-Chinese Taiwan possibility is as existential for most Chinese as it is for some Taiwanese. China would not cease to apply military pressure if a Republic of Taiwan declaration caused the Americans to abscond from an unnecessary war, started contrary to their interest and advice. Beijing, also, should be clear what event would constitute Taiwan independence in American eyes—lest it take U.S. strategic ambiguity to mean a broader definition and an earlier uninhibited chance for blockade of the island or attack on it. Some ambitious politicians, intellectuals, and soldiers in Beijing will take almost any news from Taiwan (or no news; or from America or Japan) as a reason to pressure the island militarily. They must be stymied, if only out of concern for less hotheaded patriots who are their political rivals in Beijing. U.S. deterrence of war in the Strait would be strengthened by more clarity on the definition of independence. One China is not inherently an American business. The emergence of a liberal China, however, would be a positive and concrete U.S. interest as a matter of Realpolitik, not just moralizing. Beijing elites will rightly point out that this American position is imperialist.77 When Beijing technocrats understand the objective benefit to the United States that a peaceful evolution of their own regime would cause—even as China in the future becomes much stronger—they will see the link between U.S. policy and U.S. interests. America does not need a China that is weaker than itself. It needs a regime type in China with which it can stably get along.
D W E C T I The Taiwanese say they already have independence. The government in Beijing claims they do not, but the Chinese value that the Taiwan government still calls itself the Republic of China. Both authorities have some or many attributes of sovereignty. So, it is easy for politicians on each side, who benefit from the tension-without-war equilibrium, to insist that political talks must be government-to-government. Americans have also tended to presume this. Kenneth Lieberthal envisions “confidence-building measures in the security arena, provision for increased economic and political contact across the strait, and consideration of more international space for Taiwan”—which are excellent aims full of devilish details.78
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He proposes “having Beijing and Taipei negotiate a twenty-to-thirty year ‘agreed framework.’ ”This makes much substantive sense, because both sides have preponderant interests in peace. Time can do much to settle the issues between them. An initial problem is: How could they negotiate with each other? What titles could the negotiators have, representing agencies without any official recognition between themselves? Sovereignty is not food to eat. It shelters no one from the rain. The external protector of the ROC is not among the few nations that recognize it. If Taipei decided to compromise its remaining symbols of sovereignty—only in exchange for PRC recognition of local control of an army sufficient to assure that Taiwan people will continue to rule Taiwan, as Beijing at least rhetorically avers they should—then the resulting stability would be a practical benefit to the island. The Taiwan Relations Act, a domestic U.S. law, would be unaffected. Realist theories of international politics underplay East Asian norms that may stabilize asymmetry and even in modern times make it more acceptable. Of course, there can be no return now to a traditional emperor-centered East Asian world order, because separate sovereignty is too useful a notion for leaders. Nonetheless, echoes of old norms have found modern uses within China, justifying the technically nonfederal relations between Beijing and Hong Kong, for example. Other versions of such norms might prove useful later to establish a future firmer political link between Chinese and Tibetans.79 A yet looser formula might, eventually, connect mainland China with Taiwan. The simplest way to begin, in a future year when both sides may wish that, would be to begin simply. That means starting informally, with “track two” diplomacy that avoids sovereignty issues. Time alone is likely to solve the dispute as China pluralizes and Taiwanese memories of Chinese repression under the Chiangs fade further into the past. Specific terms for any kind of link between the island and the mainland may get in the way of the higher priority need to specify a cooling-off period, with an end date. That year is the only important substantive provision in an initial arrangement. Until such a future date, moderates in their domestic polities could demand that their less patient rivals (mainlanders who want to invade, or Taiwanese who want to renounce Chineseness) delay their opportunisms. The more war-prone faction on each side may be overconfident of the eventual moral rightness of its position. So it might be brought around to accepting such a delay. Yet by then, China may be more liberal and Taiwan more security-conscious. This would allow a longer-term, more detailed arrangement later.
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The former ARATS and SEF chiefs, Wang Daohan and Koo Chenfu, held talks in 1993 and 1998, but the government leaders on each side were disinclined either to stop the cross-Strait dialogue formally or to make the compromises needed for a security agreement. These foundations’ future leaders might meet and declare they both expect, by some date they could set within three to five decades, an unspecified crossStrait accommodation, subject to interim negotiations at a pace within that whole period to be decided by further agreements. They would predict, in public and to each other, an interim truce lasting a specified number of decades, agreeing that Taipei forswear declaring independence from China, and Beijing forswear pursuing force against Taiwan, at least for that set period of time. This truce proposal differs from harder-to-negotiate settlement plans that have been suggested by Kenneth Lieberthal and Joseph S. Nye, Jr.80 An unofficial expression would avoid any symbols of PRC or ROC sovereignty. Its purpose would be to give Beijing reformers and Taipei moderates crucial arguments to delay opportunistic proposals by their domestic rivals in each camp. The United States cannot speak for either of these two sides, but it might increase their incentives to take this step if Americans— perhaps even the president—made clear that the United States would support it. SEF and ARATS currently still shy away from politics. In August 2005, SEF received NT$100 million to expand its operations. Its board was expanded from 25 to 43 members, “with all kinds of political views to represent all of Taiwan’s society.” At the same time, however, Taiwan’s lawyer-president was apparently concerned that the expansion of SEF’s frequent and quasi-consular functions might become increasingly political. He proposed a “peace commission” in addition, with which Beijing may well refuse to negotiate. As SEF head, Jan Jyh-horng said, “Chen’s peace commission will be official; we are unofficial.”81 Many in Taipei have cautioned against haste in dealing with the larger mainland. A minimalist truce for three or five decades would comport with such advice. They also know that such an arrangement would be highly compatible with U.S. policy, which is based on an uncertain but hopeful expectation of regime-type improvement in China. Especially if this does not occur within the designated decades, Taipei acquiescence to a truce that prevents the independence option then would doubly confirm the U.S. defense—and after that time too, if the Americans do not deem PRC authoritarianism to have waned irreversibly. All parties must sense, however, that such an arrangement would be unacceptable in Beijing if there were no possibility of continuing
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political talks, at least on an unofficial equal footing basis, during the truce period. So the ARATS and SEF heads (or those of similar organizations, if the old ones must stick to business only) might also confirm that they would continue to talk, without any further commitments. It may be useful already to moot possible later terms, either within or after a truce period. These are speculations, and no foreigner will determine such matters—but the two sides are not, at least in some of their stated positions, infinitely far apart. For instance, Beijing and Taipei might start, perhaps through their officially unofficial foundations, with Jiang Zemin’s 1995 Eight Points on unification terms82— but then add one more point: that Taiwan’s constitution not be a National People’s Congress law, as Hong Kong’s constitution is, but instead that it be passed and interpreted on the island. That would mean the commander in chief of Taiwan’s separate army would really be under Taiwanese control—as Jiang implied but did not detail. The Americans would not change their avowals about keeping peace, which reek of imperialist intervention but should also raise Taiwanese confidence in negotiation with a stronger PRC and should thus moderate Taiwanese separatism that disserves long-term U.S., as well as Chinese, interests. As China changes, in its continued ascent, Taiwanese and American leaders will reckon that evolution in figuring their own gains and losses. This suggestion, specifying who makes the constitution on Taiwan, would add essential credibility to Jiang’s Eight Points. He didn’t exclude it. Taiwanese haven’t asked for it, although their own long-term security interests should later impel them to do so.83
W W P B P F P PRC militarists would almost surely oppose a formal or informal truce because their budgets and political influence would be lessened by peace. If the Beijing leadership’s main interest is to retain the domestic political effects of PRC freedom to threaten Taiwan, rather than to maximize the chance of peaceful unification with Taiwan, then Beijing will reject a truce. Do the leaders there prefer Leninist centralism, or do they prefer unification with people who, under the right terms, might willingly be Chinese? They have been unpatriotically ambiguous about this. A future reform leadership in China might be more effectively nationalist. The current DPP top elected leaders would also probably reject a truce plan, because at least some of them still hope to declare nonChinese independence by provoking the PRC into violence without
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ending the U.S. defense umbrella. Like the extremists in Beijing, they disbelieve that the Americans will act in the long-term U.S. interest. No truce agreement is likely soon, certainly not before 2008. Such a plan could not be implemented without support from Taiwan’s president, and Chen Shui-bian is almost certain not to agree with anything like it. After 2008, however, Taiwan will have a new president (as will America), and movement toward some agreement may not be impossible. Hu Jintao might also reject such a proposal at present, but his options are limited. He could make a legacy for himself, and almost surely in some form assure future Chinese accommodation with the island, if he agreed to it. Militarists in Beijing and separatists in Taipei benefit from cross-Strait tensions below the level of war. Arms sellers in Washington also benefit from pushing their wares on Taiwan, quite aside from any view of China. These implicit allies would all oppose a truce. Maintaining these opportunisms over time is not difficult. Beijing insists that Taipei accept a one-China principle prior to negotiations. But any interpretation of that one-China norm (except on an equal footing basis, so that the sides could agree to disagree on its exact meaning) makes it inherently a final status issue. The matter will eventually be solved not because of any abstract definition, but on situational grounds: China is bigger than Taiwan, and it may in the future become less authoritarian so that the United States need not so quickly rush to protect its own interests in the ordinary liberal rights of Taiwan. The PRC could be more confident that its future power, minus the likelihood that superior force would be used against that power, can determine an eventual outcome that is satisfactory to China—and can achieve that more surely than any logical or diplomatic principle could. Taiwan’s liberalism, combined with its Chineseness, is the main problem for the CCP. The PRC elite is largely antidemocratic at present, but it is also schizophrenic about populism in the long term. They call their state a People’s Republic. The PRC constitution suggests in some places that it really ought to protect individuals’ rights. Article 35, for example, guarantees “freedom of speech, of the press, of assembly, of association, of procession, and of demonstration.” Many other articles (1, 24, and 51, for example) undermine this notably shy liberalism. But for the eventual future, many leaders think, as Sun Yat-sen and other tutelage theorists did, that the people ought to have more say. It is easy to make fun of ideals that are written into constitutions, including the U.S. one, that begin with no implementation at all.84 But modern Taiwan would be very difficult to include under the PRC constitution as it is now interpreted, and
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less difficult to include there if its constitution were an island affair. For example, after a unification agreement was signed, would nonviolent advocacy of Taiwanese independence land islanders in jail? (Nonviolent advocacy of unification does not do so currently in Taiwan.) Many on the island think liberal provisions such as those used in Hong Kong would be especially weak protection after the lost province were lost no more. Actual trends seem to be heading toward a peacefully pluralizing China. If Japan keeps its peace constitution, if Taiwan refrains from declaring independence even while remaining autonomous, and if the United States remains true to its avowed aim of keeping peace in East Asia, then statespeople should be able to avoid wars and foster prosperity. They can do this until China’s elites decide to make that regime more representative in a way that is better evidenced and periodically proven, involving a greater variety of people. China is culturally civilized. China and Taiwan can expand this civilization in the future, as they have done in the past.
N 1. See http://www.china.org.cn/english/2005lh/122724.htm., e.g., Strategic ambiguity is usually a U.S. self-congratulation, but Beijing’s 2005 antisecession law does not unambiguously def ine the China from which Taiwan might secede. It specifies that Beijing could directly negotiate reunif ication with Taipei on an equal footing, but also insists that the People’s Republic (including Taiwan) is the only sovereign/superior Chinese entity. Taiwan’s ambiguity is whether it will be politically Chinese or not. 2. See Zhang Xucheng [Chang Hsü-ch’eng, Parris Chang], “Taiwan ‘Fenlan hua’?” (The “Finlandization” of Taiwan?), Ziyou (Freedom), Taipei, August 4, 1997, p. 23. 3. The comparative approach is exemplified by John Fitzgerald, “The Nationless State: The Search for a Nation in Modern Chinese Nationalism,” in ed., J. Unger, Chinese Nationalism (Armonk: Sharpe, 1996). The endogenous approach is best seen in Zheng Yongnian, Discovering Chinese Nationalism in China: Modernization, Identity, and International Relations (Cambridge: Cambridge University Press, 1999). 4. Peter Hays Gries, China’s New Nationalism: Pride, Politics, and Diplomacy (Berkeley: University of California Press, 2004). 5. James Kim, “An Uneasy Place: Tides of Sea Change Tug at Island’s Self-Determination,” USA Today, June 30, 1998, p. 1B. 6. John W. Garver, Face Off: China, the United States, and China’s Democratization (Seattle: University of Washington Press, 1997). 7. This statement came, in August 2005, from a highly distinguished PRC professor whom the present author met.
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8. This is also known by expectant separatists and some others as the ROCOT (Republic of China on Taiwan). That term offends mainland diplomats, although it still contains a “C” (in the English version), evidently referring to Chinese identity. No usages of the names of any regimes in this chapter are prescriptive; they are all meant only as descriptive and unofficial. 9. For Jiang’s speech, see O. Schell and D. Shambaugh, eds., The China Reader (New York: Vintage, 1999), p. 497. 10. Calculated from 2004 PPP GDP estimates by the U.S. Central Intelligence Agency; see http://www.cia.gov/publications/factbook/ geos. entries for China and Taiwan. 11. Zhao Suisheng, “Military Coercion and Peaceful Offence: Beijing’s Strategy of National Unification with Taiwan,” Pacific Affairs, 72, no. 4 (Winter 1999–2000495–512). 12. Chen-yuan Tung, “An Assessment of China’s Taiwan Policy under the Third Generation Leadership,” Asian Survey, 65, no. 3 (May–June 2005):345–346. Italics in original. 13. Taiwan’s navy in 2005 held drills that “hunted mock Chinese submarines trying to block” Kaohsiung Harbor. “Taiwan Stages Military Drill,” Agence France Press, August 4, 2005, http:// taiwansecurity.org/AFP/2005/AFP-040805.htm. 14. The law’s wording, which can be accessed at http://www.china. org.cn/english/2005lh/122724.htm is vague enough to meet Washingtonian standards of strategic ambiguity. It is, however, about secession as a permanent change rather than the status quo as a standing provocation. 15. According to one report, “When Hu Jintao met Chinese-American community leaders during his visit to the United States two years ago, he said Beijing was seriously considering drafting a new National Unification Law. Such a unification law would mandate reunif ication, and perhaps by a specific time schedule.” Chen Yali and Eric Hagt, “Anti-Secession Law: Provocation or Compromise?” China Brief 5:1 January 4, 2005, p. 1. 16. Jonathan Watts, “Chinese General Warns of Nuclear Risk to US,” Guardian, July 16, 2005, http://www.guardian.co.uk/ print/ 0,3858,5240632–108142,00.html, accessed August 30, 2005. 17. These cases were pointed out to the author by Lyle Goldstein. 18. Li Cheng and Lynn White, “The Sixteenth Central Committee of the Chinese Communist Party: Hu Gets What?” Asian Survey, 43, no. 4 (July–August 2003): 553–597. 19. David Zweig and Bi Jianhai, “China’s Global Hunt for Energy,” Foreign Affairs (September–October 2005): 28. 20. Zheng Bijian, “China’s ‘Peaceful Rise’ to Great-Power Status,” Foreign Affairs (September–October 2005): 18–24. 21. Wang Jisi, “China’s Search for Stability with America,” Foreign Affairs (September–October 2005): 39 and 46.
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22. Robert Sutter, “China’s Good Neighbor Policy and its Implications for Taiwan,” Journal of Contemporary China, 13, no. 41 (November 2004): 717–731. 23. Anon, “Chen Updates Cross-strait ‘Guidelines,’ ” Taipei Times, August 7, 2005, http://taiwansecurity.org/TT/2005/TT-070805. htm, accessed August 30, 2005. 24. This writer is grateful for a personal e-mail from the surveyor, Wu Nai-teh, of September 6, 2005. See also his “Forming a New Nation: Ethnic Identity and Liberalism in Taiwanese Nationalism,” paper for the XVII Congress of the International Political Science Association, August 1997, and a personal e-mail communication on the July 1997 survey. A logical fourth possibility, from “just say no” citizens tired to being cajoled by PRC and ROC politicians trying to push them into purely symbolic positions, opposed both unification with a liberal China and independence without a military threat: only 3% in 1996, up to 6% and 7% in 1998 and 2000, then jumping to 16% in 2003! Wu Nai-teh’s polling, with large samples and low rates of nonresponse, is state-of-the-art. This surveyor tends personally to be pro-independence, and it is a credit to his professionalism that he constructs and reports his polls irrespective of that view. [Would that all political scientists had such integrity]. 25. Lynn White and Li Cheng, “China Coast Identities: Region, Nation, and World,” in Samuel S. Kim and Lowell Dittmer, eds., China’s Quest for National Identity (Ithaca: Cornell University Press, 1993), pp. 154–193. 26. Data from the 1997 poll by the National Sun Yat-sen University. These status-quo respondents have different preferences about how the sovereignty issue ought eventually to be decided (for China, for independence, never, or undecided). About four-fifths like the current situation. 27. Dr. Lin Cheng-yi of the Academia Sinica, Taipei, once told the author that this draft truce was called a heping xieyi caoan and was sent to the Chinese Academy of Social Sciences in Beijing, which had not yet replied. See also Dr. Lin’s paper on “Confidence-Building Measures in the Taiwan Strait,” which cites a report in the KMT’s newspaper, Zhongyang ribao, July 19, 1997, p. 10, and Robert A. Manning and Ronald Montaperto, The People’s Republic and Taiwan (Washington: Strategic Forum, National Defense University, 1997), p. 3. 28. When the Dalai Lama indicated that he would agree to a one country, two systems formula for Tibet, the Beijing response was that such arrangements were only available to Hong Kong, Macau, and Taiwan (which are ethnic Han Chinese areas). Zheng Yongnian, Discovering Chinese Nationalism, p. 95. 29. “ ‘Taiwan’ Added to ‘Republic of China’ on Website,” Straits Times, Singapore, August 1, 2005, accessed August 30, 2005. 30. “Chen Expounds ‘Four Phases of ROC’ Theory,” Taiwan News, August 3, 2005, http://taiwansecurity.org/TN/2005/TN-030805. htm, accessed August 30, 2005.
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31. Presidential statements do not, under U.S. law (as distinguished from international law) bind Americans as treaties ratified by the Senate would, and formally the United States has still not rescinded a position expressed in Ely Maurer, “Legal Problems Regarding Formosa and the Offshore Islands,” US State Department Bulletin, November 20, 1958, reprinted in Jerome Cohen and Hungdah Chiu, eds., People’s China and International Law (Princeton: Princeton University Press, 1974), pp. 144–145. The Shanghai Communiqué and Carter-Hua Communiqué acknowledge or recognize a Chinese position on the issue, without unambiguously specifying the U.S. position—but also without getting into an unnecessary argument about symbols of a non-American nationality. 32. “Parris Chang Says the U.S., Japan will Defend Taiwan,” Central News Agency, August 14, 2005, http://taiwansecurity.org/CNA/ 2005/CNA-140805.htm, accessed August 30, 2005. 33. “Joint Statement, U.S.-Japan Security Consultative Committee, February 19, 2005,” http://www.jda.go.jp/e/pab/joint/ 20050219.htm, accessed August 30, 2005. 34. The author is indebted to his colleague, Professor Christopher Achen, a voting-behavior specialist who watched polls and rallies on Taiwan in December 2004, for insights on this topic. 35. The close blue–green division of Taiwan’s electorate was also evident in the March 2004 poll when Chen won the presidency over Lien Chan by a razor-thin 0.2% margin. A survey of Taiwanese a year later, asking whether Chen Shui-bian was the legal president had well over half either saying no or refusing to answer, and another small fraction said “the question doesn’t matter.” The still-unsolved nonfatal shooting of both Chen and his running mate just before the vote clearly determined the election’s outcome—as many Taiwanese in both camps apparently know, although many do not want to speak of it. Emile C. J. Sheng, “A Retrospective Analysis of the Taiwan 2004 Presidential Election,” American Journal of Chinese Studies (June 2005): 39. 36. Jane Richards, “SEF Gets NT$100 mil.,” China Post, August 12, 2005, Http://taiwansecurity.org/CP/2005/CP-120805.htm, accessed August 29, 2005. 37. Da-chi Liao and Herlin Chien, “Why No Cohabitation in Taiwan? An Analysis of the Republic of China’s Constitution and Its Application,” China Perspectives 58 (March–April 2005):55–59. 38. Joseph Kahn, “China Warmly Welcomes Taiwan Opposition Leader,” New York Times, April 29, 2005. 39. http://taiwansecurity.org/News/2005/CD-200825.htm, “Ma Has Big Role,” China Daily, August 20, 2005. 40. Leng Tse-kang, The Taiwan-China Connection (Boulder: Westview, 1996), p. 13. 41. Lynn White, “Taiwan and Globalization,” Asian Perspective, 23, no. 4 (October 1999): 97–141.
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42. Calculated from data in Sun Zhaozhen, “2001 Saw Increase in Economic and Trade Interdependence between Mainland China and Taiwan,” Zhongguo xinwen she, February 3, 2002, in FBIS China Daily Report, February 5, 2002. Joseph Cheng, Cal Clark, Ramon Myers, and others have written about ROC-PRC economic ties. 43. This relies partially on unpublished research by Han Lheem. P, presuming the current author has understood him correctly. 44. Interpreted from figures in David Shambaugh, “Taiwan’s Security: Maintaining Deterrence Amid Political Accountability,” in Contemporary Taiwan, special issue of China Quarterly 148 (December 1996): 1297. 45. Chien-min Chao, “National Security vs. Economic Interests: Reassessing Taiwan’s Mainland Policy under Chen Shui-bian,” Journal of Contemporary China, 13, no. 41 (November 2004): 687–704. 46. Robert P. Weller, Alternate Civilities: Democracy and Culture in China and Taiwan (Boulder: Westview, 1999), p. 143. 47. Quoted in Patrick Tyler, “Clinton Bets the Farm on China,” International Herald Tribune, July 2, 1997, p. 6. 48. This refers to countries with more than ten million citizens and GDP (in terms of per-capita purchasing power) higher than approximately US$8,000, or very roughly one-third that if the measurement is in unadjusted GDP. The generalization above is not challenged by the fact that some large democracies, such as India, are poor. The vocal but small exception, Singapore, is a city having one-quarter of 1% China’s population—and severe potential danger to the state from domestic or regional ethnic conflict. Other merely apparent exceptions include oil sheikdoms, also with small populations. United Nations Development Program (UNDP), Human Development Report, 2004 (New York: Oxford University Press, 2004), p. 139. Table 9.1 uses 2002 figures, in which we find Taiwan might replace nonsovereign Hong Kong near Rank 23. 49. For concise summaries of conflicting views that refine each other, see Debating the Democratic Peace, Michael Brown, Sean M. Lynn-Jones, and Steven E. Miller, eds. (Cambridge: MIT Press, 1996). That protodemocracies tend to be warlike is disputed in Bruce Russett and John Neal, Triangulating Peace (New York: Norton, 2001). 50. UNDP economists estimate that in 2002 China’s unadjusted GDP per-capitawas US$989, and its purchasing power parity equivalent was US$4,580. By the middle of the decade, these figures would be greater. The article in the next footnote offers a threshold over which democratic governments, once established, have not been overthrown—but the PRC elite has not yet formed such a government, and after it does, that threshold number would have to be adjusted for inflation. Human Development Report, 2004, (New York: Oxford University Press, 2004), p. 185. 51. Adam Przeworski and Fernando Limongi, “Modernization: Theory and Facts,” World Politics 49 (January 1997): 170 and 177.
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52. Michael Doyle in Debating the Democratic Peace, Michael Brown, Sean M. Lynn-Jones, and Steven E. Miller, eds., pp. 11–12, lists 118 major international (not civil) conflicts since 1817, some of them involving multiple states; and pp. 7–8 lists states that maintained liberal regimes. 53. Jack Levy has famously pronounced the democratic peace “as close as anything we have to an empirical law in international relations.” “Domestic Politics and War,” in R. I. Rothberg and T. K. Rabb, eds., The Origin and Prevention of Major Wars (Cambridge: Cambridge University Press, 1989), p. 88. 54. This is relevant to the PRC—and suggests a danger for Taiwan. Edward Mansf ield and Jack Snyder, “Democratization and the Danger of War,” International Security, 20, no. 1 (Summer 1995): 5–38; also Andrew Enterline, “Driving while Democratizing: A Rejoinder to Mansfield and Snyder,” International Security, 20, no. 4 (Spring 1996): 183–207; and Michael Doyle, Ways of War and Peace (New York: Norton, 1997). 55. Opponents of the finding enjoyed testing a McDonald’s peace hypothesis (that no country with a McDonald’s store fought any other)—until this was disproven by a recent conflict. Such studies may have shown less about politics than about the existential views of researchers. McDonald’s flips hamburgers, but regimes are the units that make war or peace. Recent research has looked at conflicts of various sizes, showing that democracies go to war as often as other regimes—although not against each other, and often against weaker states. Tests of the democratic peace finding are summarized in Henry S. Farber and Joanne Gowa, “Polities and Peace,” International Security, 20, no. 2 (Fall 1995): 123–146. 56. Would the date at which the U.S. president deems China irreversibly liberalizing precede, or follow the date at which the American navy can prevent a successful PRC attack to take the ROC? It is argued here that China is changing so fast the political regime-type-change year is likelier to come first and the military balance-of-forces-change years later. 57. Zheng Yongnian, Discovering Chinese Nationalism, passim. 58. In no country does the democratic principle of governance prevail in the politics of corporations, churches, schools, universities, or other power networks. E.E. Schattschneider, The Semi-Sovereign People: A Realist’s View of Democracy in America (Hinsdale: Dreyden Press, 1975). 59. Karl Mannheim, Ideology and Utopia (London: Routledge, 1936) wrote about ideologies whose false aspects their advocates tend to ignore because of the immediate functional benefits of belief. Franz Schurmann, Ideology and Organization in Communist China (Berkeley: University of California Press, 1966), cited Mannheim and called these “practical ideologies.” Some benefits to Taiwan’s Democratic Progressive Party politicians of their emphasis on democracy are ideological in this sense. Similarly, some benefits of
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61.
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63. 64.
L W antidemocratic belief among Chinese Communist Party leaders and other mainland intellectuals lie in the probability that electoral nosecounting would not return them to power (mere businessmen would buy some elections). The practical benefits of allegedly cosmic beliefs qualify, although they do not deny, the sincerity of political creeds. For example, the DPP leaders may also be genuine modern populists, and the CCP leaders or other mainland intellectuals may also see a value in having smart people running the government. Their public interests become nearly inextricable from their particular careerisms. The now-classic analysis is Dankwart Rustow, “Transitions to Democracy,” Comparative Politics, 2, no. 3 (April 1970): 337–363, showing that economic development and social pluralization do not automatically produce democracy without elite decisions favoring liberalism. This finding is refined by Adam Przeworski, who indicates that the strong factual correlation between rich and democratic polities results from the unlikelihood that a liberal state (which its leaders must previously have agreed to establish) will be overthrown, e.g. by a coup, when per-capita income exceeds a certain threshold. China is nearing that level and may well attain it within a decade. Adam Przeworski and Fernando Limongi, “Modernization: Theories and Facts,” World Politics, 49 (January 1997): 155–183. The best comparative evidence says that the only question—a big one—is whether China’s elites will decide to resolve their own differences by means of fair elections that legitimate temporary rulers. Cultural arguments against the probability of such a choice may seem overwhelming but may also be mistaken (as they were in other countries that later became democratic, e.g., Spain in the mid-1970s, Thailand in the early 1990s, or many other examples). Recent CCP norms specifying generations of leaders whose elders are supposed to retire, reducing the number of soldiers among top leaders, and favoring promotions of economic technocrats with administrative experience in provinces may suggest a sensitivity in China’s elite to the modern issues that Rustow, Przeworski, and their predecessors such as S. M. Lipset raise. For statistical evidence on recent Party norms, see Li Cheng and Lynn White, “The Sixteenth Central Committee,” pp. 553–97. Quoted from Deng in Ian Buruma, Bad Elements (New York: Random House, 2001), pp. xix. However, the current author agrees with only some statements in this book. Lynn White, Policies of Chaos: Organizational Causes of Violence in China’s Cultural Revolution (Princeton: Princeton University Press, 1989). These are, respectively, the seats of government of Tuvalu, Chad, and Nauru. For historical background on this phenomenon in both countries, see Thomas J. Christensen, Useful Adversaries (Princeton: Princeton University Press, 1998).
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65. Willy Wo-Lap Lam, “Beijing Warns U.S. over ‘Wrong Signals,’ ” July 15, 2002. http://www.taiwansecurity.org/CNN/2002/ CNN-071502.htm, accessed May 4, 2006. 66. “Ma Says He is Not Against Arms Deal,” Central News Agency, August 7, 2005, http://taiwansecurity.org/CNA/2005/CNA070805. htm, accessed May 4, 2006. 67. Recent research by Sankar Muthu and Jennifer Pitts has thrown light on the close but uneasy link between imperialism and nineteenth century liberalism (especially as espoused by J. S. Mill and Tocqueville). There is undoubtedly an ideological component of the U.S. imperialism that dare not speak its name as regards Taiwan and China. But unlike concrete correlations in the peace finding and the fact of liberalism in large rich states, no Asian can be expected to embrace imperialism—as the current author does not while acknowledging the factual findings described in the text. Concerning past imperialist liberals and misgivings about what liberals have done, see Sankar Muthu, Enlightenment against Empire (Princeton: Princeton University Press, 2003), and Jennifer Pitts, A Turn to Empire: The Rise of Imperial Liberalism in Britain and France (Princeton: Princeton University Press, 2005). Muthu and Pitts are colleagues of the current writer and are married to each other. 68. “U.S. House Marks Tiananmen Amid U.S.-China Tension,” Reuters, Washington DC, May 26, 1999, http://www.insidechina.com/ news.php3?id 70386. 69. Henry S. Rowen, “The Short March: China’s Road To Democracy,” The National Interest 45 (Fall 1996): 61. 70. For tables on this, see Cheng Li and Lynn White, “The Sixteenth Central Committee,” p. 562. 71. For some experimental ideas, see Daniel A. Bell, East Meets West: Human Rights & Democracy in East Asia (Princeton: Princeton University Press, 2000), esp. chap. 5, “Democracy with Chinese Characteristics,” pp. 277–336. 72. Joseph Fewsmith, “China Under Hu Jintao.” http://www. chinaleadershipmonitor.org/20052/jf.html, accessed May 4, 2006. 73. Hong Kong tycoons, fearful that political populism would raise taxes, have influenced PRC elite thinking against democracy. This is ironic because they have enjoyed local success financing a large HK political party (the Democratic Alliance for the Betterment of HK) whose main mandate is to garner workers’ electoral support for politicians who in practice support capital against labor. Elections do not hurt people with money, which is used to buy them. Lynn White, “The Appeals of Conservatives and Reformers in Hong Kong,” in Lee Puitak, ed., Hong Kong Reintegrating with China (Hong Kong: Hong Kong University Press, 2001), pp. 3–38. 74. Tucker’s contribution in her edited volume, Dangerous Strait: The U.S.-Taiwan-China Crisis (New York: Columbia University Press, 2005).
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75. Dali L. Yang, Remaking the Chinese Leviathan (Stanford: Stanford University Press, 2004). 76. Susan L. Shirk, The Political Logic of Economic Reform in China (Berkeley: University of California Press, 1993), esp. chap. 7 on “delegation by consensus,” pp. 116–128. 77. A merely tangential point is the oddity of this critique coming from the world’s oldest empire that still includes some Tibetans and Uyghurs who protest repression. See fn. 63 and works by Muthu and Pitts. 78. Kenneth Lieberthal, “Preventing a War over Taiwan,” Foreign Affairs (March-April 2005), p. 61. 79. The author owes this idea to his friend, Brantly Womack, who has informally suggested a possible asymmetric stability within the PRC as regards Tibetans. 80. Kenneth Lieberthal, “Cross-Strait Relations,” paper for a conference on “The PRC After the Fifteenth Party Congress,” Taipei, February 1998, p. 1; and Joseph S. Nye, Jr., “A Taiwan Deal,” Washington Post, March 8, 1998. All such official ideas run a severe risk that the Asian parties will not agree precisely because the proposals are formally governmental. 81. Jane Richards, “SEF Gets NT$100 mil.,” China Post, August 12, 2005, http://taiwansecurity.org/CP/2005/CP-120805.htm, accessed May 4, 2006. 82. On January 30, 1995, Jiang said Taiwan as a special administrative region (with terms somewhat different from Hong Kong’s) would “enjoy legislative and independent judicial power, including that of final adjudication [not subject to NPC refinalization, as in HK?]. It may also retain its armed forces [with a commander-in-chief truly chosen in Taiwan?] and administer its party, governmental, and military systems by itself. The central government will not station troops or send administrative personnel there.” Answers to the questions in brackets after Jiang’s words were not precluded by what he said. No Taiwanese negotiator has yet ventured to ask them. For Jiang’s speech, see The China Reader, p. 497. 83. If Beijing rejected the notion that Taiwan’s constitution should be generated and interpreted on the island, Jiang’s guarantee of a separate Taiwan army and of the PRC statement that the Taiwan people should govern Taiwan would lack implementing institutions. Beijing could not ask the Taiwanese to repeal the U.S. law that would continue to protect their freedoms during their negotiation for a liberal deal. 84. “We the people” in the United States Constitution, e.g., did not at first include women, blacks, or men without freehold land—who were, actually, most of the people. See the historical realist approach in E. E. Schattschneider, The Semi-Sovereign People, p. 114: “Somewhere along the line the owners of the government decided to read the Constitution as if it were a democratic document.”
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B , C, T: A T A Lowell Dittmer
American policy toward the China-Taiwan issue is, along with its divided allegiance to Israel and its oil-rich Islamic neighbors in the Middle East, one of the most sensitive, potentially volatile, and yet also stubbornly insoluble problems that has plagued Washington since World War II, surviving even the rise and fall of the Cold War. The China-Taiwan embroilment, a relic of the unfinished Chinese civil war that has continued to rankle with varying degrees of intensity since that time, may be divided into (at least) two phases. In the first, Washington took sides in the dispute, supporting Taiwan as a bastion of freedom opposed to communist tyranny and rising to its defense when the mainland threatened to force the issue in 1954–1955 and 1958 (though in recognition of power realities, never supporting reciprocal nationalist aspirations to “recover the mainland”). In the second phase, the United States attempted to back off and download the unification dilemma to the two principals that had most at stake in the relationship, encouraging them to work out their own solution. The first period coincides with the ascendancy of the nationalist regime in Taiwan in the global arena, when it could claim, with U.S. support, to represent “China” in the UN and other such international governmental organizations (IGOs)—although even then the People’s Republic of China (PRC) was a more important strategic actor in any substantive sense. The second period coincides with the rise of the PRC to a dominant formal position corresponding to its growing economic and military power, claiming the diplomatic recognition of
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most countries in the world as well as full membership in virtually all IGOs and INGOs (International nongovernmental Organization), pushing Taiwan out of most international fora and indeed to the margins of the international arena, using every means short of war to induce the island state to abandon its pursuit of independence and to negotiate reunification with the mainland. The American attempt to transfer responsibility for a real solution to the dilemma to the two principals in the early 1970s was both partly successful and tantalizingly incomplete. It was successful in the sense that by shifting responsibility for reunification to Beijing and Taipei, American policymakers could lower the bar for foreign policy success from reunification to simply preventing either side from violently disrupting the status quo (the sole condition Washington placed on its abdication from the issue). In the short term, it meant that by formally abandoning its support of Nationalist China’s increasingly hopeless claims to represent China in the world, the United States was able to establish a strategic relationship with the PRC deemed far more useful in countering Soviet advances than was Taiwan. Yet by not entirely abandoning the island state even after severing formal ties with Taipei (including their Mutual Defense Treaty, or MDT), Washington was able to maintain positive relations with both sides, shifting its role from patron to power balancer. Thus in 2004, Secretary of State Colin Powell claimed the best Sino-American relationship since normalization, even as the Bush administration developed strategic coordination with Taiwan to a level unprecedented since abrogation of the MDT. This diplomatic solution was frustratingly incomplete in a number of ways. First, while Taiwan’s simultaneous embrace of localization and democratization at the end of the 1980s coincided with a de facto renunciation of efforts to unify China under nationalist auspices, this left the initiative in the hands of the larger, and potentially more powerful but (then) economically less advanced side of the Strait. PRC efforts at peaceful reunification, while largely successful at promoting economic integration and initiating promising diplomatic contacts in the early 1990s, proved unable to surmount the barriers of mutual suspicion or offer a sufficiently enticing political formula to instigate serious discussion of peaceful political reunification. Disappointed and frustrated by this failure, Beijing periodically revived its option to resort to force that had two adverse consequences: a backlash against the mainland among the Taiwanese electorate, and an American reinsertion into the dispute on behalf of Taipei in the name of preserving the peace. The PRC leadership would then blame these adverse repercussions on American intervention, resulting in the deterioration of Sino-U.S. relations.
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Thus Washington’s opt-out solution, emphatically unsatisfactory from either Beijing’s perspective (as the island remained politically autonomous) or even from Taipei’s (as formal independence, international diplomatic recognition, and participation in international fora remained largely beyond its grasp), was also not entirely successful from an American perspective: for so long as the two were at each other’s throats, the possibility of war in East Asia, ultimately implicating the United States and possibly Japan, remained a dangerously live option. Although the two sides had their respective perspectives on who or what was at fault, both agreed that the American promise to extract itself from the Strait tangle had been somewhat illusory. This chapter reexamines American policy toward China, Taiwan, and their ambivalent bilateral relationship since Washington’s shift from strong (but not unconditional) support for Nationalist China to the role of balancer in the early 1970s. The basic criteria for evaluation of this policy is whether it is beneficial to American national interests, although this assessment cannot be made without consideration for developments in China and Taiwan and in their bilateral relationship, all of which impinge upon those interests. Thus we look at the relationship from a strategic triangular perspective.1 It is triangular in the sense that each actor’s relations with the other depend upon its relations with the third. Given a choice between positive and negative relations, there are logically only four possible permutations in a strategic triangle (see Figure 10.1). It is strategic in its focus on security—in fact one of its distinguishing features has been the apparent irrelevance of domestic economic and cultural evolution on triangular dynamics. In these respects it is like the Great Strategic Triangle (GST). But in most other respects, what we might call the Taiwan mini-triangle is quite different—the imbalance of power among the three actors being among the most obvious. The United States has been the consistent pivot of this triangle (unlike the GST), on the one hand due to its disproportionate economic and strategic weight, on the other because of the pivotal role it has played in determining the relationship between the other two actors. Throughout the postwar period, Washington has been the principal if not the sole guarantor of Taiwan’s national security, and during certain crucial periods the United States has also interceded in support of China’s national security (while at other times it has been the main threat to PRC security). The triangular interdependencies— Taipei’s need for U.S. support to retain its independent existence, Beijing’s need of U.S. acquiescence to be able to pressure Taiwan, Washington’s need of a balance between the two to maintain the status quo—has locked the three together in a complex, ambivalent embrace.
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232 ______ Amity ............ Enmity
Unit-Veto Triangle
Romantic Triangle
Stable Marriage
Menage a trois
Figure 10.1 Logic of the strategic triangle.
The Taiwan triangle may be analyzed from both structural (synchronic) and chronological (diachronic) perspectives. From a structural perspective this triangle is not global, like the GST, but specific to a particular geographic area and issue complex—Washington need not take Taiwan into consideration in its policy toward Paris or Brasilia, for example, or even Moscow—it is limited to the issue of the relationship between China and Taiwan. Yet at the same time it is not independent of the international context within which it is nested: this dependency was very clear at the time of Soviet-American bipolarity, but it also remains a factor since the end of the Cold War. The essential structure is that of a romantic triangle, that is, a rivalry between Beijing and Taipei that is basically insurmountable because of the nature of the demands each places upon the other. Washington is thus in a “pivot” position, having better relations with both “wings” than they have with each other. This structure may shift to a considerable extent over time without altering its basic configuration—domestic economic development or arms acquisitions may change the triangular balance, or extra-triangular factors may cause the pivot to shift temporarily from one wing to the other to maintain a balance. The distribution of benefits within this triangular configuration, however, also accrues disproportionately to the pivot, which thus has a structural incentive to maintain the configuration.2 Yet so long as the configuration is maintained, the basic problem on which the triangle is
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based—the contested independence of Taiwan—cannot be resolved, and so both “wing” players may be conceived to have an interest in transforming this configuration into some other triangular configuration or even to dissolve the triangle altogether (though whether either wing has this actual preference at any given time would depend on the alternatives realistically available and the risks and benefits associated with each.) This chapter consists of the following sections: In the first, we present an overall periodization of the triangle, including a capsule narrative of developments during each period. In the second, we consider in greater detail the most recent period, from 2000 to the present, coinciding with the rise of new leaderships in both Taipei and Washington.
E T T Since its shift from unequivocal support for Taipei in favor of a role as pivot in a strategic mini-triangle, Washington’s relationship to Beijing and Taipei has gone through two major permutations: during the Cold War phase, from 1971 through 1989, Washington’s geostrategic position was dictated essentially by international balance-of-power considerations, and the triangular configuration was hence heteronomous. Beginning in the early 1990s, the collapse of the European Communist Party-states weakened the international system constraints by eliminating the pressure of bipolar competition, leaving the Taiwan triangle free to find new strategic footing. During the Cold War, Washington’s primary concern was with the bipolar balance of power, meaning that Soviet-American relations tended to dictate the form and disposition of all subordinate alliance systems: even the attempt to form a nonaligned bloc was implicitly oriented to the bipolarity from which it was trying to break free. The Soviet Union appeared to be approaching or, according to some commentators, to have achieved strategic parity with the United States and began taking a more active role in promoting socialist regimes in Afghanistan, Angola, Nicaragua, and other poor countries in the Third World. Meanwhile, China’s threat to the international order seemed to American strategists to have subsided, as first signaled by the decline in Chinese support for the Vietnamese insurgency after 1972. This was partly due to the increasingly embittered Sino-Soviet split: As most communist regimes or parties in the Third World and elsewhere shifted allegiance to Moscow, they became for that reason less attractive to Beijing, and the PRC began to deemphasize the export of revolution (without abandoning loyal friends such as Albania or North Korea). Through its 1971–1972 opening to the PRC, the United
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States was able to exploit this bilateral antagonism in a “romantic triangle” that improved relations with both Moscow and Beijing while containing further escalation of the Cold War, facilitating withdrawal from Vietnam and a more modest military commitment in the Pacific. The price of this strategic demarche was the first Shanghai communiqué, which implicitly defined Taiwan as being in China’s legitimate sphere of influence while refusing to renounce the use of force to defend it (as China refused to renounce the use of force to regain it). In the course of the decade that followed, Sino-American relations improved slowly but steadily in the face of the ongoing Soviet strategic arms buildup and proxy initiatives in the Third World, culminating in diplomatic recognition in January 1979, the conditions of which were set forth in the second communiqué. Washington’s embrace of Beijing and abandonment of Taipei had two important consequences. First, Taiwan was placed in a position of growing international isolation and vulnerability that provided a major incentive for it to redefine its legitimacy. Previously based on Chinese nationalism, viz., on the one-China principle as in the Republic of China (indeed, in 1971 Taipei declined a chance for continued representation in the UN because of the nationalist commitment to one China), Taipei found this claim to be recognized by an ever shrinking minority of the international community. Yet the regime’s identity was still “Chinese” and the independence option did not exist for it. The diplomatic isolation of Taiwan began with its displacement by Beijing in the UN in October 1971, followed by its expulsion from all other affiliated agencies and from a series of IGOs as Beijing challenged its credentials there. Taipei was able to maintain full diplomatic relations with only about two dozen countries, mostly small states with little political influence. Although the United States was among the last to make the formal shift from Taipei to Beijing, it had clearly been the U.S. opening that launched the train of recognitions that Washington boarded in January 1979. The loss of a nationalistic raison d’etre was a major factor in stimulating Taiwan’s search for democratic legitimacy. Democratization aligned the country with approved Western values, specifically with the United States, which under U.S. Presidents Carter and Reagan was placing increasing emphasis on democracy as an ideological banner for international leadership. Second, Beijing’s successful debut on the international stage endowed the CCP leadership with the requisite self-confidence to launch bilateral reunification proposals of unprecedented magnanimity (accompanied, however, by an equally successful drive to isolate Taiwan in the international arena). This two-pronged strategy aimed at making Taiwan’s independent existence uncomfortable and
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ultimately untenable while making its reunification with the mainland maximally attractive. The bombing of Jinmen (Quemoy) and Mazu (Matsu) officially ceased on January 1, 1979, and on the same day (coinciding with official normalization of Sino-American relations) the Standing Committee of the National People’s Council (NPC) issued “A Message to Compatriots in Taiwan.” This message inaugurated the call for santong siliu (three links and four exchanges). Later in the year, the offer was made more generous, with assurances that Taiwan could retain its own local economic and political arrangements: now it was the “three upholdings, three links, and four exchanges.” Although the message was in the realm of “people-to-people” diplomacy, addressed to Taiwan compatriots, it also suggested talks between the PRC government and the Taiwan authorities. Taiwan responded with its “three nos policy” [san bu]: no contact, no compromise, no negotiation. But China, rather than taking umbrage at this rejection, proceeded to make additional proposals along the same lines, as they also had their eyes on an American audience. This was followed (in a September 30, 1981 interview by Ye Jianying with the New China News Agency (NCNA)) by a nine-point initiative, the highlight of which was to “assure” Taiwan’s future status as a Special Administrative Region with a “considerable degree of autonomy,” including its own administrative personnel and military, and a “guarantee” that the central regime would not interfere in local affairs. (It was, however, implicit that Taiwan must give up sovereignty and recognize Beijing as the central authority.) Beijing also offered high positions to Taiwan officials in the PRC administration (e.g., Bo Yibo promised Chiang Ching-kuo a post “higher than a vice-premier’s”), leaving open the possibility of another coalition government. The Reagan administration responded positively: Secretary of State Alexander Haig “expressed open approval . . . of Beijing’s nine-point framework . . . seeming to stop just short of publicly advising Taiwan to change course and at least explore the proposal.” The third major CCP conceptual innovation, the “one country, two systems” idea, implicit in the two earlier proposals but now spelled out more fully as a solution not only to Taiwan but also to Hong Kong and Macao, was made by Deng himself in a meeting with a visiting Chinese-American academic. The major innovation was formal recognition of the legitimacy of two systems, already implicit in the 1979 and 1981 proposals. With the introduction of “one country, two systems,” Beijing’s spate of policy innovation seems to have expended itself. There has been very little change in PRC Taiwan policy between the nine-point and six-point initiatives in 1981 and 1983 and Jiang Zemin’s eight-point initiatives presented in January 1995 (which proposed a summit
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between top leaders, and in cautious and symbolic form suggested the possibility of mutual disavowal of force). Far more frustrating from Beijing’s perspective was congressional passage of the Taiwan Relations Act (TRA), under which (from Beijing’s perspective) the United States continued to give Taiwan more comprehensive protection than under the 1954 Mutual Defense Alliance, and the continuation (after a one-year hiatus) of U.S. weapons sales to Taiwan, a state it no longer formally recognized. After several years of leaning to China’s side, abandoning Taiwan, and focusing on efforts on countering Soviet advances under U.S. Presidents Ford and Carter, Ronald Reagan in his 1980 presidential campaign criticized Carter’s China policy on behalf of Taiwan (specifically suggesting that diplomatic relations be restored to Taipei, in the form of “an official liaison office”).3 This precipitated a postelection Chinese counterattack in which Beijing not only adamantly refused any such adjustment but focused strong criticism of continuing U.S. arms sales to Taiwan (which the State Department had hoped to allay by offering simultaneous arms sales to the PRC). The arms sales issue was resolved in August 1982 in the third of the three communiqués (1972, 1979, 1982), which have (along with the TRA) since defined Sino-American relations vis-à-vis Taiwan. Paragraph 6 was decisive, promising to reduce and eventually to end sales gradually over time “as the situation permits.” In Paragraph 7, American weapons sales were called a “legacy of history” that “after a period of time will lead to a final solution.” The August 17 communiqué came as a great shock to Taiwan, which had considered Reagan a “friend,” but Taiwanese anxieties were subsequently assuaged by oral issuance of “six assurances,” which promised that the United States Had not agreed to set a date for ending arms sales to the Republic of China. Had not agreed to hold prior consultations with the People’s Republic of China regarding arms sales to the Republic of China. Would not play any mediation role between the People’s Republic of China and the Republic of China. Would not revise the Taiwan Relations Act. Had not altered its position regarding sovereignty over Taiwan. Would not exert pressure on the Republic of China to enter into negotiations with the People’s Republic of China.4
Issuance of the third communiqué was followed by greater stability within the strategic triangle, for several reasons. In the United States, Secretary of State Haig, a former Kissinger aide and a consistent disciple of his views on the China factor, was replaced by George Shultz,
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who made a significant departure from the Kissinger line in favor of greater emphasis on cultivating existing U.S. alliances with Japan and other traditional allies on the Asian rimland. Shultz brought in new people (many of them specialists on Japan), including Richard Armitage, Paul Wolfowitz, and others (many of who would later become known as “neoconservatives”), in support of this reorientation, which without retreating to containment or abandoning the opening to China, somewhat lowered the level of expectations with regard to China’s strategic importance. The global Cold War was Washington’s chief concern, and after Vietnam, Asia was no longer strategically relevant. Meanwhile, Beijing also shifted course at the Twelfth Party Congress to an “independent foreign policy,” accepting Moscow’s invitation to launch semiannual normalization talks and shifting to a more equidistant position between Moscow and Washington. In triangular terms, from 1982 until the completion of Sino-Soviet normalization in May 1989, Beijing moved into the pivot position, cultivating better relations with Moscow than the two superpowers had with each other, as Soviet-American relations broke down in a revived Cold War cum arms race to acquire cruise missiles, mobile ICBMs, MIRVs, and finally Star Wars. Beijing was now in a position to place military budget priorities last among the Four Modernizations (after the 1979 Vietnam War) and focus efforts on domestic economic reform. Meanwhile, Taiwan, in the sunset years of Chiang Ching-kuo, shifted from localization (bentuhua, or the recruitment of Taiwanese officials to KMT (Kuomintang) and government positions) to finally accepting multiparty electoral democracy by the end of the decade. In foreign affairs, Taipei remained stymied, indignantly spurning U.S. encouragement to entertain an opening to its rival claimant to national identity (though private business began to explore Beijing’s offers) while fighting a losing battle for recognition abroad. Taiwan’s options were predetermined by the ethnic mix of its leadership and by the diplomatic competition for recognition, which locked it into the national identity it claimed to represent. Thus, although its economy continued to grow vigorously, Taiwan remained a passive and apparently impotent participant in the mini-triangular game. The collapse of the Soviet bloc ended the Cold War with the disintegration of one of the “poles”—at first politically, fragmenting into 14 separate republics, and then over the next decade economically as well, as the GDP plummeted. Although Beijing’s security position was significantly improved by the dissolution of its major national security threat and challenger for leadership of world communism (although Sino-Soviet normalization had ostensibly already resolved these issues), it also found itself ostracized from international society
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in the wake of the governmental massacre of democracy protesters in Tiananmen Square on June 4, 1989. Chinese ideologues blamed the collapse of the Soviet Union, about which they had decidedly mixed feelings, on an American “peaceful evolution” strategy of devastating effectiveness, apprehending that the United States might shift its focus next to China in a “new Cold War.” Meanwhile, Chiang Chingkuo died in Taipei, bequeathing leadership of this incipient democracy to an unprepossessing academic politician of Taiwanese descent named Lee Teng-hui, who promptly set about reforming Taiwan’s political system. This epochal combination of events conspired to elevate the importance of the Taiwan triangle in Sino-American relations for the following reasons: First, the collapse of the Soviet Union and with it the bipolar balance of terror that had framed international relations for the past four and half decades of course made the China “card” superfluous in Washington, just as it made friendship with the United States redundant for China’s security, and the GST hence collapsed. Even if the new Russian Federation and China continued to collaborate (as indeed they did), they could no longer excite great American security concerns amid the triumphalism that followed its windfall Cold War “victory.” Thus the GST, defying all attempts at revival (strategic partnership, friendship alliance, etc.), went into the strategic trashcan— and with it the strategic imperative for Sino-American cooperation. The moral revulsion raised by the Tiananmen Incident exacerbated American misgivings about collaboration with the PRC, and by the early 1990s Sino-American relations were on the rocks, as incoming President Bill Clinton, a campaign critic of George H. W. Bush’s mollification of the “butchers of Beijing,” tried in 1994 to extort Chinese compliance with Western human rights norms by threatening withdrawal of Most-Favored Nation (MFN) treatment. Meanwhile the advent of democracy in Taiwan gave the small island state a crossover appeal to Western liberals as well as hard-line cold warriors, and Lee Teng-hui took advantage of Taiwan’s newfound popularity to launch a diplomatic revolution of “pragmatic diplomacy,” “vacation diplomacy,” and “dollar diplomacy” to gain greater international recognition. At the same time, democracy unleashed Taiwanese capitalism to go offshore (aided by U.S. pressure to revalue the currency and alleviate its trade imbalance5), and Taiwan began to respond in spirit to open “three links” (indirectly, through Hong Kong) with the mainland, resulting in an economic integration that accelerated rapidly through the turn of the millennium with little regard for electoral vicissitudes. While Taiwan had found an answer to the ideological vacuum left by the end of the Cold War in democracy, China responded to analogous
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ideological anxieties (referred to as a “crisis of faith”) to redefine its own legitimacy beyond Marxism-Leninism, and lacking interest in democratization in the wake of the Cultural Revolution and Tiananmen, the CCP turned to nationalism as a new basis. This, together with the successful retrocession of Hong Kong and Macao, whetted Chinese appetites for the recovery of Taiwan. At the same time, the rapid increase in economic growth rates unleashed by the reforms helped generate a sense of arrival at the promised land of modernity and entitlement to full national self-realization, promising either to make reunification a more attractive option for Taiwan to pursue peacefully or to provide the military capital for Beijing to pursue through force or intimidation if ultimately necessary. The new era has also exposed Taiwan to new dilemmas. Taiwan is in an anomalous position, straddling two boats going in different directions: the United States (which had committed itself in the first communiqué to the proposition that Chinese in Taiwan were committed to one China) was relied upon as an ultimate security guarantee, and Taipei’s pursuit of status in the international arena also constrained it to embrace its given (Nationalist Chinese) identity. Meanwhile, the new democracy’s quest to redefine its identity by unleashing its electoral majority of hitherto politically oppressed natives (benshengren, whose families had lived on the island for centuries) resulted in a growing trend toward ethnopolitical identification as “Taiwanese,” with scant interest in reunification. So long as Taiwan’s national security and international status was at risk, resolution of the national identity dilemma between identification with “China” or “Taiwan” had to be placed on hold. The eclipse of the strategic triangle and the advent of a burgeoning and mutually profitable commercial relationship to the mainland functioned to reduce the threat to national security in a practical sense, though Beijing refused in principle to renounce its sovereign right to resort to force. This threat alleviation permitted the island state to revive its search for national identity in the cauldron of democratic controversy. Democratic reform came in part to avert the international isolation into which Beijing’s spectacular entree to the diplomatic arena in the early 1970s had forced Taiwan, and so it is in a way perfectly natural that democratization should also propel Taiwan into a struggle against high odds to regain legitimacy in international forums. This quest is a function of the resurgence of nationalism based no longer on a national historical legacy but rather on subethnic solidarity, as symbolized by the rise of the DPP as the most potent challenger of KMT hegemony. The economic opening to the mainland counteracts the political thrust of democratization, offering the island its first realistic
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avenue to national unification since the PRC’s acquisition of nuclear weaponry. The upshot for Taiwan is that the period since 1989 has been not only one of political emancipation but also one of profound ambivalence, as a now liberated economy seems to pull the island back into the mainland’s dynamic economic orbit while nationalistic surges lure the electorate in search of international recognition. In the context of a collapsed strategic triangle and a revived Chinese mini-triangle animated by the irrepressible economic upsurge of China and the expanded array of options available to Taiwan, Washington discovered new options but found no new strategic calculus to decide meaningfully among them. China and the United States no longer needed each other strategically, or at least not with the same urgency, and in the wake of Tiananmen, the illusion that China and the United States were on convergent ideological roads was dispelled. Taiwan in contrast made dramatic progress toward democracy, and seemed unlikely to pose the future threat to U.S. strategic interests in the region that many anticipated from China. On the other hand, China was clearly the largest and likely in due course to become the most powerful country in the most populous and dynamic region in the world, whose cooperation would become increasingly necessary to U.S. strategic interests. The Clinton administration handled this situation with an ambivalence frequently rationalized among policy analysts (though not among the Clinton people) by the term “strategic ambiguity.” This refers to the policy of keeping the ultimate goals of American foreign policy vis-àvis the Taiwan Strait issue deliberately shrouded in uncertainty: on the one hand, the United States refused to say what it would do in the event of a Chinese resort to force (even during the height of the 1995–1996 crisis, administration spokesmen refused to say that the United States would defend Taiwan if China attacked).6 On the other hand, what the United States would do if Taiwan declared independence was also undisclosed. The intended impact of this dual uncertainty was to deter advocates of a one-sided or violent solution to the Taiwan issue from pressing their case, thereby moderating behavior between the wings and leading to a peaceful resolution. In the wake of the Strait crisis, this policy came under critical reconsideration. Critics pointed out that it did not function as advertised, as partisans on either side of the spectrum were not deterred but sought to probe the limits of uncertainty: Taipei was first to do this with its salami-slicing approach to independence (Taiwan was independent since the successful 1911 Nationalist Revolution, the 1999 statement that relations across the Strait were between two states with special characteristics, etc.), and Beijing responded with its war games and
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missile shots, seeking means of military intimidation short of war. Although the immediate American response to the crisis was that China’s brinkmanship was more provocative and dangerous than Taiwan’s creeping (but never consummated) independence, the Clinton administration bought into the Chinese argument that Lee’s tactics had so intolerably flustered Beijing that it had to draw a red line. Thus during the waning years of the 1990s there was growing divergence between U.S. public opinion (led by the Republican opposition), which continued to regard China as the major threat to peace, and the administration’s determination to muzzle Lee the troublemaker and propitiate Beijing (e.g., the exchange of presidential summits, Clinton’s “three nos,” public repudiation of “liangguo lun”).
T G W. B E The turn of the millennium seemed at the outset to presage a new departure for the Taiwan triangle, as new leadership coalitions took command in the United States, Taiwan, and eventually in China. The election of George W. Bush (by a very slender and contested margin) brought to power a new team that quickly departed from its mild campaign rhetoric to launch a new foreign policy premised on unblushing acceptance and optimal exploitation of America’s premier position as sole superpower to reorient the rest of the world in directions compatible with U.S. national interests (and universal moral imperatives, assumed to be equivalent). With regard to China and Taiwan, the underlying assumption was that Taiwan was good but small and of marginal utility, whereas China was bad but large and too powerful to attack or coerce. Thus in the first 18 months, the Bush administration disavowed Clinton’s “three nos,” allowed officials on both sides to visit each other’s buildings, and fly their national flags, and also allowed Taiwan’s leaders to conduct longer transit visits (including speeches!) on U.S. territory. China was clearly not a “strategic partner”; indeed the administration initially saw neither moral advantage nor strategic utility in collaborating with this emerging threat, as the new defense minister proposed a redeployment of U.S. military forces from Europe to Asia and the administration reinstated the Shultz strategy of relying on U.S. allies on the Asian rimland while keeping China at bay. The China-Taiwan standoff was now defined in terms of “strategic clarity,” as Bush promised in one of his first press conferences that the United States would do “whatever it takes to defend Taiwan” in the event of a Chinese invasion (subsequently rephrased by administration spokesmen as whatever it takes to help Taiwan defend itself, bringing the statement back into conformity
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with the TRA and with previous policy). This new policy direction was brought to a head in April 2001 by the Hainan incident at the beginning of the month and by an arms sale of unprecedented size and expense (estimated at US$15–18 billion, depending on the exchange rate) to Taiwan at the end of it. Hainan was seized upon as a pretext to discontinue further military-to-military cooperation with China, and Chinese opposition to the arms sale resulted in concealing future such discussions from public scrutiny (though Beijing continued to voice its objections at every meeting). Opposition to this downwardspiraling relationship might have been anticipated from the business community, which continued to view the PRC as a promising economic frontier, but unlike Clinton’s 1994 crusade on behalf of human rights, Bush’s policy reorientation focused solely on security without directly impinging economic concerns, not giving the business community any opening to enter the debate. The election of Chen Shui-bian in a close race in which opposition was split by the defection of James Soong from the KMT resulted in Beijing’s worst nightmare: the rise to power of a party directly descended from the previously-outlawed Taiwan independence movement. This outcome was greeted with much more equanimity by the Bush administration, which shared the DPP’s ideological suspicions of the PRC if not its continuing dream of national self-determination. The triangle was prevented from transforming from its romantic configuration to a Taiwan-American marriage by three factors. First, China promptly joined the War on Terror after 9/11, and it also joined the World Trade Organization (WTO) and numerous other multilateral forums, reorienting its foreign policy toward what became known as a “peaceful rise” [heping jueqi], meant to assure the international community that China’s arrival was not intended to disrupt the status quo (as had the previous rise of Germany, Japan, and the Soviet Union). Indeed Beijing became actively involved in reinforcing the regional status quo by setting up and hosting the six-party talks to negotiate an attempted divestiture of North Korea’s nuclear weapons project. Second, Chen Shui-bian launched his new administration by forswearing in his “Five Nos” any attempt to revise the constitution or declare independence except under emergency circumstances,7 also proclaiming his readiness to engage in bilateral talks without preconditions (omitting however any commitment to “one China,” in deference to his party’s fundamentalists). Third, the Bush administration, announcing clearly that none of its policies was intended to threaten China’s interests, continued active political summitry and consultation with the PRC leadership (meanwhile, the American market remained wide open). Thus rather than an anti-China marriage, this was
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a romantic triangle tilted toward Taipei, as Taiwan-American military consultations became more active than at any time since abrogation of the MDT (with hundreds of U.S. military officers stationed in Taiwan at any given time) while military relations with the PRC remained suspended. What gave it the tilt was the anticommunist ideological affinity between Chen and Bush, and what gave it the continuing romantic configuration was the apparently irreconcilable antagonism between Beijing and Taipei, allowing Washington to play tertius gaudens. This antagonism persisted throughout the first two years of the Chen administration, despite Chen’s (admittedly timid and hedged) attempts to brook the gulf with various proposals—cross-Strait leadership summit talks without preconditions, a European-style common market, and “three small links.” Bush encouraged Beijing to accept Chen’s offer to talk, without, however, adjuring Taipei to accept Beijing’s one-China precondition (or the 1992 compromise version thereof), as had the Clinton administration. While Beijing discontinued its provocative missile tests and public warnings to the Taiwan electorate, and undertook minor adjustments in the phrasing of the required one-China principle, it did not deign to respond to any of Chen’s proposals. Beijing’s leaders were no doubt preoccupied with stage-managing their own delicate generational leadership succession, but Taipei seems to have construed silence as rejection (or worse) and to have taken umbrage. At least that is one possible interpretation of Chen’s turn in the summer of 2002 from attempts at reconciliation to a revival of projects apparently aimed at realization of the DPP’s old dream of national self-determination: Thus in the latter part of that year he introduced his yibian yiguo [one country on either side of the Strait] formulation, and proclaimed his desire to resolve the future of Taiwan through national referendum. When the KMT-led pan-blue opposition majority in the Legislative Yuan pointed out that this contradicted his promise in the Five Nos to have “no referendum or plebiscite on sovereignty issues,” Chen eventually agreed in November 2003 to limit referendums to issues of national security, cooperated in passing a referendum law on that basis, then promptly introduced a “defensive referendum” to focus on the Chinese missile buildup across the Strait. This innovative tactic placed China in a highly invidious context in a domestic election, yet Beijing (being unwilling to withdraw the missiles) was unable to respond without fulfilling Chen’s dire prophecies. The KMT-PFP fusion ticket declined to contest the referendum issue, apparently considering it too popular to contest. Although Beijing rose to the bait with vague threats to deter the idea of a constitutional referendum, it relied principally on an appeal to the United States, with which Beijing was then
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usefully cooperating in holding the six-power talks on the North Korean issue. Thus George W. Bush stood with Premier Wen Jiabao in a joint appearance in December 2003 to publicly denounce Chen’s move as a unilateral attempt to change the status quo. True, Bush denounced “any” such unilateral attempt, but he was after all standing with Wen Jiabao, and he added that “the comments and actions made by the leader of Taiwan indicate that he may be willing to make decisions unilaterally to change the status quo, which we oppose.”8 Other (more diplomatic) warnings were relayed to Chen—the United States was now fully engaged in Iraq and did not need another Strait crisis—but he ignored them all. Although both propositions failed (due to the high threshold for passage), the referendum issue may well have been decisive in driving Chen’s very narrow victory over Lien and Soong, and Chen is keeping that option open for future use. Whereas Bush’s stand on the referendum issue would suggest another triangular shift from its Taiwan tilt to the pro-Beijing tilt similar to the shift that followed the Strait crisis of the mid-1990s, the picture since March 2004 has been mixed. Cross-Strait relations, albeit replete with lively developments, remain essentially blocked. In the postelection euphoria, Chen repeated his vow to “make constitution through referendum” by 2006 and carry out the “new constitution” in 2008, but this earned sharp reproof from U.S. Assistant Secretary of State James Kelly that “US support for Taiwan on constitution revision is limited,” while Deputy Secretary of State Richard Armitage publicly denied any legal obligation under the TRA to defend Taiwan in the event of an attack. The United States appeared to be returning to strategic ambiguity, refusing to say whether they would defend Taiwan in the event of attack, refusing to say what they would do if Taiwan declares independence. Meanwhile, despite the DPP’s unexpected failure to win a majority in the December 2004 Legislative Yuan elections, China’s NPC proceeded to pass an antisecession law (ASL), which was deeply offensive to Taiwan’s electorate, no less for its denial of the country’s current sovereignty claims than for its attempt to foreclose future options. Although the antisession law’s phrasing was moderately phrased and contained no new threats, its legislative hardening of the existing threat to use force was disquieting to the international community, earning censure from the U.S. State Department and contributing to the European Union’s failure to rescind its 15-year embargo on PRC weapons sales. Yet the impact of this public relations blunder was mitigated by the announcement in by Lien Chan and James Soong that they had accepted invitations to visit the PRC, which they then visited to great acclaim (with apparently limited impact on their domestic political standing in Taiwan) in April–May 2005. The Republican establishment,
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which had been split by George Bush’s public censure of Chen Shuibian and Chen’s disregard of that advice, has never fully recovered its pro-Taiwan glow. Is this the same old story of the electoral cycle driving a new president to the right (anti-PRC), only to have the State Department’s strategic imperatives and Commerce Department’s economic interests drive it back to the left (anti-Taiwan)? Not quite; military cooperation with Taiwan remains so intensive (and virtually nonexistent with the PLA) that independence advocates have been given confidence to press their case. Yet although Taiwan has been America’s second best customer (after Saudi Arabia) for defense equipment and services every year for the past ten years, there is bipartisan discontent in Washington (even in Congress, normally Taiwan’s bedrock) over Taipei’s failure to finalize purchase of the 2001 arms package four years later (due no doubt to partisan stalemate in the Legislative Yuan). Compensating somewhat for Washington’s annoyance with Taipei has been growing U.S. irritation with Beijing, partly over the continuing deadlock of the Six Party Talks but mostly with regard to economic issues (e.g., the flood of textile imports since expiry of the multifiber agreement, the enormous current account deficit, and China’s energy and natural resource buying binge).
C Throughout the Cold War, the Taiwan triangle was functionally dependent on the dynamics of the GST. This “dependency” was not as complete as in Min Chen’s “compounded” triangle, in which a subordinate actor (viz., Vietnam) is dependent upon (and seeks to manipulate) all three principals.9 In contrast to the case of Vietnam, the Soviet Union never had a direct role in the Taiwan triangle, lacking diplomatic relations with Taiwan. Taipei was dependent only on the relationship between the other two members of the strategic triangle. Thus the Taiwan triangle is directly dependent upon only one bilateral “wing” of the larger triangle and indirectly dependent upon the other two wings (insofar as the latter affect the former). This may be depicted as in Figure 10.2. “Dependency” implies that SinoAmerican relations are causally affected by the dynamics of the GST and in turn have an important causal impact on relations within the Taiwan mini-triangle. To be specific, whenever Sino-Soviet relations were positive, resulting in deteriorating Sino-American relations, this was in turn conducive to positive Taiwan-American relations within the mini-triangle, as the United States reached out for allies to counter the geopolitically formidable Sino-Soviet bloc. If SinoAmerican relations improved, on the other hand, either because of the
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deteriorating Sino-Soviet relations or Soviet-American polarization (or both), Taiwan-American relations could be neglected, because they were no longer strategically “needed.” Thus the Taiwan triangle evolved very much in tandem with the Great Strategic Triangle (GSP) throughout the Cold War. Since World War II, the two linked triangles went through five permutations (dates approximate): the Sino-Soviet “marriage” against a U.S. “pariah” (1949–1959); a “unit-veto” triangle (1959–1970); the Nixon-Kissinger “romantic” triangle, 1971–1978; Sino-American quasi-marriage, 1978–1982; Sinocentric romantic triangle, 1982–1987, and menage a trois, 1987–1991 (see figure 10.3). From the perspective of Taiwan’s security, the decisive watershed was 1971, which marked a structural shift of the Sino-American “wing” from negative to positive. Following triangular logic, Taiwan-American relations were consistently positive during the period of Sino-American polarization in the 1950s and 1960s, while their deterioration, culminating in the severing of formal diplomatic and defense ties in 1979, coincides with the period of SinoAmerican detente in the 1970s and 1980s (see figure 10.4). The end of the Cold War marked a structural watershed. The collapse of the GST (as illustrated by Washington’s indifference to the Sino-Russian “strategic partnership”) allowed the mini-triangle to become autonomous, not closely linked to the global balance of power but chiefly dependent upon its internal dynamics. Within the mini-triangle the various bilateral relationships have also changed. The three “wings” became at least initially somewhat more equilateral (as Taiwan’s ideological attractiveness and diplomatic freedom of maneuver enhanced its weight, while Tiananmen protests and the collapse of the GST diminished that of the PRC); but most notably, the China-Taiwan wing, previously atrophied after decades of mutual hostility, became more substantive with the opening of cross-channel
Soviet Union
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Compounded Triangle Taiwan Figure 10.2 The Chinese dependent triangle.
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Figure 10.3 “Great” strategic triangle: 1949–1991.
trade, investment, tourism, and even quasi-formal diplomatic links. Washington became ensconced in the position as “pivot,” where it has remained since 1990, in part because of the revived threat of crossStrait warfare, in part because the United States still has both a security commitment to Taiwan (the TRA) and shared strategic interests with the PRC, plus extensive economic interests in each, despite being normatively bound to the phasing out of the triangle, as betokened by the “one China” principle and the promise (in the third communiqué) eventually (and provisorily) to discontinue all arms sales. To some degree, the mini-triangle seems to have become a sort of localized functional substitute for the GST. Whereas in the 1970s and 1980s, the United States used the “China card” to counter Soviet ambitions, since the end of the Cold War, Washington has to some
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extent shifted to the “Taiwan card” and the rhetoric of values (human rights, democracy) to regain some of its lost triangular leverage vis-à-vis a now more autonomous and far more powerful PRC. As a classic pivot, Washington retains better links with both Beijing and Taipei than the two wings have with each other and is hence in a position to mediate the relationship. This has led to the suspicion, particularly in Beijing, that Washington “plays” the Taiwan-China split to its own strategic advantage. Indeed, it is inherent in the structure of a romantic triangle that the pivot has this capability: while previously Washington’s support for Beijing was enhanced by perception of the Soviet Union as a mutual threat, to the degree that Washington views Beijing as a new threat superseding that of the former Soviet Union, its support for Taiwan tends to be enhanced. (Of course this also works the other way—PRC threats to Taiwan may trigger U.S. perception of China as a threat.) On the other hand, to the extent that Washington values or needs Beijing’s support, it tends to view Taipei as a provocative troublemaker. Thus the persistent (but not invariable) tendency since the end of the Cold War has been for U.S.-Taiwan relations to be the mirror opposite of U.S.-China relations. The only way the two wings could conceivably escape such manipulation would be to come to some mutual understanding. Yet precisely because neither wing is capable of resolving their rivalry, the United States also becomes the target of outraged demands and accumulated triangular frustrations. For Beijing, U.S. interference, real or imagined, allows the CCP leadership to plump “nationalism,” and demand more control over Taiwan, and put an end to outside interference. If American complaints about human rights, arms sales, intellectual property rights violations, or the trade imbalance become too shrill or tiresome, Beijing can always raise the Taiwan issue, turning the tables and shifting from “demandee” to “demander.” In Taipei, domestic economic and political achievements add fuel to the hunger for national security and international status, which triggers PRC putdowns and threats to invade, which in turn call for a U.S. military response. Thus, how the United States adjusts the delicate balance between the two wings has become increasingly sensitive. We have devoted most of our exposition to structural analysis, with a snapshot approach to each triangular permutation, but here we undertake a preliminary analysis of the diachronic dimension. Triangular chronological dynamics are still inadequately understood, particularly since the collapse of the GST deprived the mini-triangle of an external driver. Since the Cold War, the mini-triangle has been highly stable, held in tow by the irresolvable contradiction between the “two Chinas.” The two wings’ best case scenarios are essentially
B , C , T US
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Figure 10.4
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Taiwan 1990–2005 Triangular Dependency.
incompatible, Beijing preferring that Taiwan becomes another Chinese SAR under the one country, two systems formula, Taipei in turn preferring to become part of a loose Chinese confederation (at best) but only after the PRC becomes more like the ROC. This leaves the United States at pivot in a position to gate keep any triangular change, because without U.S. support neither wing responds favorably to the other. As the party most interested in revision of the status quo, Beijing has usually (though not always) taken the initiative in triangular dynamics, if possible with the gatekeeper’s imprimatur, awaiting Taipei’s response. A typical triangular dynamic since the Cold War has been for Beijing to launch an initiative that then gathers momentum for awhile and for Taipei then to blow it up, touching off Beijing’s angry response, thus bringing in Washington and derailing the initiative. This happened twice in the 1990s, first with the postTiananmen thaw (growing tourism, trade, “mainland fever,” Taiwan’s “Guidelines for National Unification,” cross-Strait talks) that was derailed by Lee’s Cornell visit, leading to the 1995–1996 Strait crisis. The second was the 1998 Koo visit, that was derailed by Lee’s “twostates theory.” This pattern is no doubt one of the reasons there have been no fresh initiatives from Beijing. One possible reason for Taipei’s spoiler role (aside from the possibility of a disinclination to accept Beijing’s reunification terms) is that cross-Strait truce initiatives have consistently exempted the international arena, where fierce competition continues unabated (and Taipei has for the most part been
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losing), with a consequent tendency to transpose competition from one arena to the other. A second cyclical dynamic is driven by American presidential elections, which have since the Cold War tended to generate anticommunist sentiment exacerbating Sino-U.S. competition, which is then in due course alleviated by trade and security concerns for which Beijing’s cooperation is deemed essential, ushering in Sino-U.S. detente. This was the pattern in both the early 1990s and the early 2000s, as early confrontation (involving human rights/MFN and the Hainan incident, respectively) segued inconclusively into greater economic and strategic cooperation. Although there is no demonstrable triangular relationship between these two patterns, the periods of Sino-U.S. confrontation have tended to correlate with cross-Strait detente, as one might logically expect. But none of these cyclical dynamics has been strong enough to culminate in a transformation or collapse of the triangle. This is a source of frustration to those who consider the triangle problematic, consisting of, on the one hand, reunification advocates on both sides of the Strait (but disproportionately on the mainland side at this time), and advocates of Taiwan independence in Taiwan on the other. The first solution, reunification, would collapse the triangle into a bilateral relationship, which would according to optimists be positive (the major source of frustration having been removed), and according to pessimists be hostile (revved-up competition between two now more nearly equals rivals with incompatible material and ideal interests). The second would lead to continuing (likely intensified) triangular competition among China, the United States, and a now independent Taiwan, in which the United States either continues to defend Taiwan (SinoTaiwan marriage) or abandons it in favor of detenté with a rising China. In view of the inability of cyclical patterns to transform the triangle, those hopeful of a resolution place their hopes in three longer-term secular trends. (Here it is worth noting at the outset that trends can quickly be derailed—remember Khrushchev’s confident predictions that communism would “bury” capitalism?) One of these is diplomatic competition: Taiwan has essentially lost the battle for formal recognition in the international arena, still being recognized by two dozen or so mostly small countries in the world whereas most of the other 170 or so recognize the PRC. Will Taiwan throw in the towel if and when that number is reduced to the low single digits, or is down to zero? Certainly Taiwan’s “face” might then be said to have been “lost,” but Taiwan’s Ministry of Foreign Affairs need not necessarily close up shop at this point. Also, Taiwan has over a hundred quasi-diplomatic international relationships, ranging from trade
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missions or tourist offices at the low end to something very close to formal relations with the United States and Japan, and these seem to be fully capable of negotiating trade disputes, handling visas, and conducting other necessary diplomatic functions. Thus Beijing might then be obliged to transpose the fight to the elimination of quasidiplomatic ties as well, demanding of all countries that recognize Beijing that they now divest themselves of all informal relations with Taiwan as well. Such face fights however cost time, money, and diplomatic effort, and risk generating a sentimental backlash—in the countries involved and certainly in Taiwan itself. A second long-term trend has been the growing tendency for Taiwanese born in succeeding generations to identify themselves with their land of residence and not with their ethnic origins (which, for over 98 percent of the population, is Han Chinese). This tendency has been increasing steadily over the past decade, according to a 2002 public opinion survey on the island, lending confidence to advocates of Taiwan independence, who have undertaken various desinification measures to accelerate this trend.10 Whereas empirical support for the existence of this trend is very strong, and if it is based simply on the passage of time it can be expected to intensify, but until we know more about its causal dynamics we should be cautious about how long it will last. Beijing is presumably betting that a third trend—economic growth—will trump generational rift. China’s growth rate has been exceeding that of Taiwan of late, particularly since 2000, whether as measured in conventional GDP or more comprehensively.11 It is worth noting that there is no detectable direct impact of this on triangular relations, which have been exclusively strategic (either by consensus or because the actors have found no way to turn economic advantages to strategic account without self-risk). But there are several indirect implications. First, faster GDP growth entails faster growth of arms spending, leading either to the eventual strategic preponderance of the faster grower or to spending the slower into bankruptcy as it struggles to keep up strategically with a shrinking budget. And there are indications that this has been occurring in the past decade or so, as China’s arms budget had become the third or fourth largest in the world while that of Taiwan has shrunk 25 percent over the past five years.12 A second indirect implication of faster CNP growth is that it leads to crossStrait economic integration, contributing to a mutual but (in view of the unequal size of the two economies and the greater vulnerability of the foreign investor) asymmetrical dependency. The third indirect implication is that unequal growth rates subliminally suggest an answer to the old teleological question: which country has time on its side? There are anecdotal indications that this too is
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happening: younger generation Taiwanese visitors to China come home convinced that middle-class living standards in Shanghai are now higher than those in Taipei, national per capita income measures to the contrary notwithstanding, and hundreds of thousands of Taiwan’s ablest professionals have been voting with their feet, moving permanently to the mainland. In a purely impressionistic, unscientific sense, the sum impact of these three trends suggests that time is now on the side of the mainland, if they have the patience to wait. But again, the future is certainly not predictable with any certainty. For the time being, Washington remains securely ensconced at pivot, leaning one way or the other depending on its strategic, economic, and domestic constituency needs. The objective interest of the pivot (whatever its declaratory policy) is in “balancing” the status quo. The most plausible candidate for transformation is not the pivot but upgrading the bilateral relationship between the two wings (i.e., the “Hong Kong model”), to which Washington can in principle take no exception. That minuet however takes two to dance, and Beijing’s patience with a reluctant partner, worn thin in the short term by the provocations of Lee Teng-hui and Chen Shui-bian, sporadically gives way to outbursts of rage and threats. Yet unleashing coercive diplomacy has also not been to Beijing’s advantage, nor is it likely to become so in the foreseeable future: although the tipping point in the balance of power between the PRC and ROC is visible within the decade, the more relevant question is when U.S. air and naval power can be defeated or deterred, and this seems a bit further off. If we are correct in surmising that time is now on Beijing’s side, it behooves the latter to play a waiting game. If waiting brings political liberalization, then that would be advantageous to Taiwan as well. For the integrative dynamic to work, it a modicum of patience and sensitivity will be required on both sides of the Strait, resisting nationalistic politicization of the issue to give diplomacy adequate space to explore the prospects of compromise and to build meaningful political and military insurance arrangements.
N 1. On triangular analysis, see L. Dittmer, “The Strategic Triangle: An Elementary Game-Theoretical Analysis,” World Politics, 33, no. 4 (1981): 485–516; for its application to the China-Taiwan issue, see L. Dittmer, “Policy Implications of Cross-Strait Relations for the United States,” paper presented at Cross-Strait Relations and Policy Implications for the Asia-Pacific Region, conference sponsored by Institute for National Policy Research, International Convention
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3.
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8. 9.
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Center, Taipei, March 27–29, 1995; Yu-Shan Wu, “Exploring Dual Triangles: The Development of Taipei-Washington-Beijing Relations,” Issues and Studies, 32, no. 10 (December 1996): 26–52; and Yu-Shan Wu, “From Romantic Triangle to Marriage? Washington-BeijingTaipei Relations in Historical Comparison,” Issues & Studies, 41, no. 1 (March 2005): 113–161. Because the Taiwan romantic triangle is an analytic construct whose existence is unacknowledged and perhaps unrecognized among policymakers, there is no consensus on the U.S. preference for its pivotal role in it. Thus Wu refers to the United States as an “unintended” pivot (which can in fact be verified by interviews with U.S. diplomatic officials). Yu-Shan Wu, “The Unintending Pivot: The U.S. in the Washington-Taipei-Beijing Triangle,” paper presented at the 28th Sino-American Conference on Contemporary China, Duke University, June 12–14, 1999. There is also a school of thought that in view of the recurrent pressure placed upon Washington by each wing player in search of support to pressure the other wing, collapse of the marriage into a bilateral relationship between the United States and a Greater China (viz., reunification) would, ceteris paribus, be far less trouble and no loss to U.S. interests. Alan D. Romberg, Rein in at the Brink of the Precipice: American Policy toward Taiwan and U.S.-PRC Relations (Washington, DC: Henry L. Stimson Center, 2003), pp. 111–112. Harvey Feldman, “Taiwan, Arms Sales, and the Reagan Assurances,” American Asian Review, 19, no. 3 (Fall 2001): 75–101. It would appear that the formulation the Reagan administration gave Taiwan in the July 26 “non-paper” is even stronger: “If there is any change with regard to the peaceful solution of the Taiwan issue, then the U.S. commitments would become invalidated.” U.S. pressure to correct the trade deficit intensified in the late 1980s, and by 1992 Washington was satisfied the goal had been reached. Martin L. Lasater, The Changing of the Guard: President Clinton and the Security of Taiwan (Boulder, CO: Westview, 1995), pp. 98–99. Dennis Van Vranken Hickey, “The Taiwan Strait Crisis of 1996: Implications for U.S. Security Policy,” in Suisheng Zhao, ed., Across the Taiwan Strait: Mainland China, Taiwan, and the 1995–1996 Crisis (New York: Routledge, 1999), pp. 277–297. Chen’s “Five Nos” were (1) no declaration of Taiwan independence, (2) no change of Taiwan’s official designation as the Republic of China, (3) not to insert the “state to state theory” [liangguo lun] into the constitution, (4) no referendum or plebiscite on sovereignty issues, and (5) no plan to abolish the “Guidelines for National Unification” and the National Unification Council. As quoted in Michael D. Swaine, “Trouble in Taiwan,” Foreign Affairs, 83, no. 2 (March/April 2004): 39–49. Min Chen, The Strategic Triangle and Regional Conflicts: Lessons from the Indochina Wars (Boulder: Lynne Rienner, 1992), pp. 2–14.
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10. For example, see T. Y. Wang and I-chou Liu, “Contending Identities in Taiwan: Implications for Cross-Strait Relations,” Asian Survey, XLIV, no. 4 (July/August 2004): 568–591. 11. For a detailed comparison in terms of an index of Comprehensive National Power, see Wu, “From Romantic Triangle to Marriage?” 147–150. 12. If we focus exclusively on official statistics (which understate Beijing’s expenditures by a factor of 2 to 12), Taipei was able to keep pace with Beijing’s military spending until around 1996; thereafter Beijing’s arms spending increased disproportionately, more than doubling Taipei’s arms budget by 2002. Keith Crane et al., Modernizing China’s Military: Opportunities and Constraints (Santa Monica, CA: The RAND Corp., 2005), p. 134.
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R P C E I M C- T R Scott L. Kastner
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hen Taiwan President Lee Teng-hui traveled to Cornell University in 1995, economic relations across the Taiwan Strait were already burgeoning. Capitalizing on mainland China’s cheaper labor and economic reforms, Taiwan’s labor-intensive industries had flocked to the mainland following the 1987 lifting of martial law in Taiwan and the subsequent decision to legalize indirect economic ties with China. Trade between the mainland and Taiwan grew from under US$1 billion in 1986 to over US$22 billion in 1995.1 While initial Taiwan investments in China were primarily undertaken by small, labor-intensive industries, by the mid-1990s an increasing number of Taiwan’s larger firms began to invest in the mainland, attracted by deepening reform and a rapidly growing economy.2 Chinese officials welcomed and encouraged these trends, believing that economic integration would help facilitate cross-Strait political integration. Economic ties across the Taiwan Strait have continued to expand in the ten years since Lee’s trip. Trade, still dominated by Taiwanese exports to the mainland, ballooned to nearly US$62 billion in 2004, and mainland China is now Taiwan’s largest trading partner.3 Investment flows have likewise grown rapidly—much more rapidly than official statistics suggest4. Though official Taiwanese and mainland statistics place
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accumulated Taiwanese investment on the mainland through September 2004 at US$39.1 billion, many estimate that Taiwanese investments in China actually exceed US$100 billion.5 During the late 1990s, the nature of Taiwan investments in China also shifted toward more capitalintensive and high technology sectors. By 2000, over half of Taiwan’s investments in China were in the electronics industry.6 Despite the continued deepening of the cross-Strait economic relationship over the past decade, the spillover into the political arena that Chinese officials had hoped for has thus far failed to materialize. During the 1990s, Lee Teng-hui steadily distanced himself from the idea that Taiwan is a part of China—culminating in his “two states theory” announced in 1999—even as cross-Strait economic ties blossomed under his presidency. Since then, Chen Shui-bian of the officially proindependence Democratic Progressive Party has twice been elected president, casting further doubt on assumptions that Taiwan’s economic dependence on China would undercut pro-independence sentiments on the island. Chen’s rhetoric on the island’s sovereign status—and in particular his refusal to endorse any version of a “one China” principle—has likewise undercut these assumptions. While these trends have been frustrating to Chinese officials,7 widespread optimism nonetheless persists among Chinese analysts that, over the long term, economic integration will help foster political rapprochement across the Taiwan Strait.8 Meanwhile, those who advocate Taiwan independence remain deeply suspicious of cross-Strait economic ties. Why does political conflict persist in mainland China-Taiwan relations despite the rapid growth in economic ties over the past two decades? And why do many on both sides of the Taiwan Strait nonetheless believe that, over the long term, economic integration will help to foster political integration between the two sides? These questions are addressed in this chapter. In the short run, increased cross-Strait economic integration— by raising the cost of military confrontation for both sides—makes it possible for Taiwan leaders to move farther in the direction of independence if they wish to do so. But over the long run, cross-Strait economic integration might promote more accommodating Taiwan’s policies by reducing the likelihood that Taiwan’s leaders will prefer greater independence to begin with. The author begins by introducing a simple model through which to view the cross-Strait political relationship.
C-S P R: A S C M The core issue dividing Beijing and Taipei has been one of sovereignty, which since the 1990s has centered on the extent to which Beijing
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does, or should, possess sovereignty over Taiwan and the status Taiwan should hold within the international arena. After the end of the Chinese Civil War, Chiang Kai-shek’s Nationalist regime in Taiwan still claimed to be the legitimate government of all of China; this claim remained largely unchanged through the 1970s, even following the ROC’s loss of the Chinese seat in the United Nations (1971) and the severing of diplomatic relations with the United States (1979). However, over the course of the 1990s, Taiwanese President Lee Teng-hui (1988–2000) came to reject the notion that Taiwan was a part of “one China,” and his successor, Chen Shui-bian, has flatly refused to accept Beijing’s precondition for talks: that he recognize some version of a one-China principle. Chen’s 2002 announcement that each side of the Taiwan Strait constitutes a separate country (yi bian, yi guo) and his more recent push to rewrite the island’s constitution underscore his position on the subject. Since the mid-1990s, mainland Chinese officials have denounced what they perceive to be a strategy of “creeping” independence in Taiwan, and they have repeatedly emphasized a willingness to go to war in order to prevent Taiwanese independence, even if doing so is extremely costly. While Beijing’s long-term goal is clearly unification, mainland China’s current preoccupation centers on deterring Taiwanese independence, or steps in that direction. Those steps can be legal—such as revising the island’s constitution in a way that downplays its links to the mainland—but might also include efforts by Taiwan’s government to build a distinct Taiwanese identity among the island’s citizens. Chinese leaders have thus emphasized that if Taiwan crosses some ambiguously defined redline—moving too far in the direction of independence—then the mainland will fight a war to “safeguard its territorial integrity.”9 The current cross-Strait relationship, therefore, resembles a simple take-it-or-leave-it bargaining game, in which one player makes an offer, and the second either accepts or declines that offer. In deciding whether to accept or decline, the second player compares the bargain being offered by the first player to the payoff they would receive if no agreement is reached. In the cross-Strait case, we might think of Taiwan as choosing a level of sovereign status, ranging from reunification to formal independence; Beijing, in turn, can either accept that decision or fight a war to try to attain something better. In deciding whether or not to accept Taiwan’s offer, mainland Chinese leaders would compare that offer to the expected outcome of war (minus the cost of fighting the war). Taiwan’s leaders, in turn, would be expected to choose a level of sovereign status that Beijing marginally prefers over fighting a war.10
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For a graphic representation of this model, consider Figure 11.1. Here, China’s payoffs are depicted on the vertical axis and Taiwan’s on the horizontal axis. China receives higher payoffs when Taiwan moves closer to unification, and lower payoffs as Taiwan moves in the direction of independence; for Taiwan, the payoffs are reversed. Each side’s utility for different levels of sovereign status for Taiwan, ranging from reunification to independence, is represented by the downward sloping diagonal line. Suppose that if the two sides were to fight a war. Taiwan’s status at the conclusion of the war would be defined by Point A (somewhere between formal independence and unification). Taiwan’s utility associated with outcome A is At, and China’s utility is Ac. War, however, is costly. As such, if the two sides fight a war that results in A, their actual utilities associated with that outcome are tempered by the costs they bear in fighting the war. Once those costs are factored in, Taiwan’s 1
A Taiwan’s costs of war China’s payoffs
B AC China’s costs of war BC
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Figure 11.1 A simple model of cross-Strait relations.
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actual utility for fighting is U, while China’s is BC. Therefore, China’s reversion point—the point at which it is indifferent between accepting the bargain proposed by Taiwan and fighting a war—actually lies at B. Any Taiwan status to the left of B (and, hence, closer to reunification than B) is preferred by China over fighting a war with Taiwan. On the other hand, China prefers to fight a war once Taiwan chooses a status to the right of B (and, hence, closer to independence than B). Taiwan thus chooses a level of sovereign status just to the left of B; this provides it with the maximum amount of sovereignty that does not provoke a war with Beijing. This model obviously simplifies reality. It makes several assumptions, including the following: the preferences of Taiwanese and Chinese leaders are exogenous and fixed; leaders on both sides act rationally; Taiwan’s utility for greater sovereignty increases at a steady rate, while China’s utility for greater Taiwanese sovereignty decreases at a steady rate; and both sides know, ex ante, the outcome of fighting a war and the costs both sides will pay in fighting. But the model provides a simple conceptual framework that helps explain the dynamics driving Taiwan’s sovereign status; as such, it serves as a useful starting point from which to consider the likely impact of increasing cross-Strait economic interdependence on that status. Later, some of these assumptions will be relaxed and will show how doing so changes the conclusions drawn from the model.
T I C-S E I T’ S S Chinese leaders have since the early 1980s encouraged increased economic integration across the Taiwan Strait. Beginning in 1980, for example, Taiwanese manufacturers were allowed to enter China duty-free.11 In 1988, Beijing went further in announcing the Regulations on Encouraging the Investment of Taiwan Compatriots, which provided special incentives for Taiwan businesses to invest in China, such as tax holidays and property transfer provisions.12 Both Jiang Zemin’s 1995 Eight Points and the 2005 antisecession law emphasized the importance of increasing cross-Strait economic integration. Moreover, China has frequently reassured Taiwanese investors that their commercial interests would be protected.13 Mainland authorities have likewise repeatedly criticized Taiwanese restrictions on cross-Strait commerce and have in particular called for the opening of direct links across the Taiwan Strait. Widespread sentiment clearly exists among Chinese officials and analysts that
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cross-Strait economic integration will, over time, make Taiwanese independence less feasible (and unification, perhaps, more likely). Not surprisingly, then, politicians in Taiwan who favor independence (or at least lean in that direction) tend to be suspicious of cross-Strait economic ties. During the 1990s, President Lee Teng-hui’s administration tried to slow the pace of economic integration with China. Lee’s Go South policy encouraged businesses to invest in Southeast Asia as an alternative to the mainland market; his Go Slow, Be Patient policy, adopted in 1996, imposed limits on the scale of mainland investments while banning investments outright in certain sensitive sectors (such as infrastructure). Though Chen Shui-bian’s government lifted the Go Slow policy in 2001, he has dragged his feet elsewhere; direct travel and trade across the Taiwan Strait continue to be prohibited, and Taiwanese firms have complained about the slow pace of liberalization in investment regulations.14 Given these expectations about the likely impact of economic interdependence, it is a little puzzling that political relations between Beijing and Taipei continue to drift further apart despite increasing cross-Strait economic ties. Even though trade between the mainland and Taiwan has doubled since he became president, Chen Shui-bian has pushed an agenda that clearly seeks to bolster Taiwan’s sovereign status. In addition to regular announcements that Taiwan already exists as a sovereign state and his “each side is a separate country” formulation, Chen has taken high profile trips to the United States (2003) and more recently to the Vatican (2005); has pushed for a new constitution for the Republic of China; called for a law that permits direct referenda, and then used a loophole in the law ultimately passed by the Legislative Yuan to hold a “defensive referendum” on the same day as the 2004 Taiwan presidential election; and used the issue of Taiwan’s identity as a key issue in the 2004 presidential and legislative elections. Does Chen’s behavior, and that of Lee Teng-hui before him, disconfirm any link between cross-Strait economic relations and the political relationship between Beijing and Taipei? Not necessarily. Consider again the model outlined in the previous section. Recall that China’s point of indifference between fighting a war and accepting Taiwan’s status lies at B, and that independencefavoring Taiwan leaders therefore choose a point marginally closer to unification than B. How, then, does increasing economic integration affect this equilibrium? If we assume that growing economic ties make war more costly (a reasonable assumption since trade would become much more risky, while investments would potentially be seized or destroyed15), then the
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counterintuitive effect of increased cross-Strait economic integration is to give Taiwan more leeway to drift toward independence. This result arises because Taiwan effectively has the power to determine its status unilaterally. China, in trying to deter Taiwan’s independence, is in a relatively passive position where it responds to (or accepts) actions taken by Taiwan that enhance its sovereign status. As the cost of fighting a war goes up for China, mainland leaders are willing to accept less favorable bargains in lieu of fighting. Figure 11.2 shows this result graphically. Increased economic ties cause the cost of war to increase for both sides. Once the added costs are factored in, Taiwan now favors all bargains to the right of U over fighting a war with Beijing. However, this shift to the left in Taiwan’s indifference point is not critical because Taiwan effectively sets the status quo. More importantly, Beijing is now willing to accept all bargains to the left of C rather than fight a war with Taiwan. As such, Taiwan can now move all the way to a point marginally to the left of C on the unification-independence continuum, meaning that China’s increased costs of war give Taiwan more freedom to move in the direction of independence than it held prior to cross-Strait economic integration.16 Notice that this result holds even if Taiwan’s costs of war increase more than those of mainland China. Officials in both Taipei and Beijing clearly recognize that as China’s costs of fighting a potential cross-Strait war increase, Taiwan has more freedom to inch in the direction of independence. For example, Lee Teng-hui has pushed for a new constitution and a change in the island’s official name, suggesting that a window of opportunity exists between now and 2010 to do so. Beijing, he argues, will be preoccupied with the 2008 Olympics and the 2010 Shanghai Expo, both of which are important to China’s economic prospects and international status; as such, it will not dare start a war because doing so would be too costly.17 Mainland leaders are likewise aware that factors increasing the potential costs of war for China may also make it easier for Taiwan to drift toward independence. As such, they have tried to downplay the costs of war relative to the importance that they place on the Taiwan issue. Indeed, mainland officials have declared that they are willing to pay “any costs” to check Taiwan independence.18 In short, to the extent that increasing economic flow across the Taiwan Strait raise the costs of fighting a cross-Strait war, they may actually facilitate moves by the island in the direction of independence. Furthermore, whether or not leaders on the two sides perceive this consequence of economic ties, it is clear that officials on both sides do
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Figure 11.2 The impact of increasing economic interdependence.
believe that factors increasing the costs of fighting a war more generally give Taiwan greater flexibility to move toward independence. This author does not wish to overstate my case here; he is not suggesting that Taiwan’s efforts over the past dozen or so years to enhance its sovereign status are primarily a result of growing cross-Strait economic ties. Other factors, such as a changing domestic political environment, are certainly more important in this regard.19 Rather, what he is suggesting is that given certain Taiwan preferences that diverge from those of the mainland, economic interdependence, at the margins, gives Taiwan more leeway to pursue those fixed goals. Looked at this way, that Taiwan has continued to drift away from the mainland politically even as the economic relationship continues to develop rapidly, is perhaps less of an anomaly than it may at first appear. Why, then, do mainland officials promote cross-Strait economic integration while pro-independence Taiwan officials oppose it?
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R M’ A A E E To this point, the asymmetric nature of cross-Strait economic integration has not been discussed because, in the model outlined, asymmetry is irrelevant. But it is clear that cross-Strait economic ties are unbalanced. In 2004, cross-Strait trade represented approximately 18 percent of Taiwan’s total trade, but only about five percent of mainland China’s total trade.20 Cross-Strait investment flows are even more imbalanced; in 2003, Taiwan’s approved investments in China represented nearly 60 percent of Taiwan’s total approved foreign investments, but Taiwanese investments in China represented only 7.44 percent of the mainland’s total inflows of foreign direct investment in that year.21 This asymmetry can impact Taiwan’s future policy choices in important ways once some of the assumptions of the model are relaxed. For example, lifting the assumption that both sides know the likely outcome of war and the costs both sides would pay in fighting (i.e., that both sides know the location of Point C in Figure 11.2) would raise the specter of miscalculation and hence make Taiwan more attentive to its own expected costs associated with fighting a war.22 Asymmetric economic relations suggest that U shifts to the left at a faster rate than CT shifts to the right; that is, the costs of war for Taiwan rise faster than the costs of war for China. A risk-averse Taiwanese leader will closely consider these growing downside risks of fighting a war, and will be less inclined to seize on the opportunity to move closer to independence that is afforded by growing economic links.23 But perhaps a more interesting possibility, and also one that policy makers on both sides of the Taiwan Strait sometimes cite, is that economic interdependence could, over time, reshape the preferences (or interests) of Taiwan’s leaders. As the economies of the two states become intertwined, those actors associated with the most integrated sectors should begin to view bilateral cooperation as more essential than before.24 Economic interdependence can thus generate new coalitions with international goals different from those held by preexisting coalitions. If economic integration is extensive, these new coalitions will grow larger, and will have the ability to influence state goals and perhaps effect a change in the makeup of the governing coalition itself.25 In this way, cross-Strait economic integration might decrease the likelihood that pro-independence politicians will rise to power in Taiwan. A similar transformation in goals is perhaps less likely in
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mainland China; because cross-Strait trade represents a much smaller share of China’s overall trade and economy than it does for Taiwan, the benefactors of such trade are simply less likely to be able to exert decisive influence over China’s foreign policy goals than might be the case for Taiwan.26 The extent to which economic interdependence will actually produce a transformative effect on Taiwan’s preferences, thereby trumping the processes described in the previous section, remains uncertain. There is no doubt that economic integration with China has generated a growing constituency in Taiwan with a direct stake in the crossStrait economic relationship. A 2004 Ministry of Economic Affairs poll found that nearly 77 percent of Taiwan’s manufacturers have investments in mainland China; only 18 percent invested in the United States, the second favorite location.27 A recent media poll likewise found that a majority of Taiwan-listed and over-the-counter companies surveyed had invested in mainland China in 2002.28 Taiwan’s government estimates that roughly one million Taiwanese currently live in mainland China; of these, about half are Taiwanese businesspeople, and their families make up much of the rest.29 Moreover, this constituency has, by and large, advocated a foreign policy less confrontational toward China than that of the current Taiwan leadership. The media poll of listed and over-the-counter companies found that 80 percent of those surveyed believed economic and political relations across the Taiwan Strait are closely related, and it is essential for Taiwan’s economy that political relations with China be improved. Meanwhile, 73 percent supported resumption of cross-Strait talks under the rubric of the 1992 consensus.30 Anecdotal evidence during the lead-up to Taiwan’s 2004 presidential election likewise suggests dissatisfaction within the business community about Chen’s confrontational cross-Strait policies. For example, noting that many corporations backed Chen in 2000, the Secretary-General of the Taiwan Businessmen’s Association in Dongguan (a popular investment locale for Taiwan firms) concluded that “they made a mistake and they see that cross-Strait relations have only got worse in the past four years.”31 Chang Yung-fa, the head of the Evergreen Corporation (Taiwan’s largest shipping company) and a supporter of Chen Shui-bian in 2000, refused to support Chen in 2004 citing the need “to build a peaceful, stable and harmonious cross-Strait relationship in order to . . . re-create Taiwan’s economic miracle.”32 While growing economic integration across the Taiwan Strait has certainly helped generate a large constituency in Taiwan that has a vested interest in stable cross-Strait political relations, what remains less clear is the extent to which this growing constituency will be able
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to reshape the island’s foreign policy goals. Certainly politicians have appealed to this constituency directly. In the 2000 presidential election campaign, all three main candidates—Chen Shui-bian, Lien Chan, and James Soong—promised to improve the cross-Strait political and economic environment. Chen, the least likely to take such a position given his party’s pro-independence platform, told a group of Taiwan businesspeople with interests in China that “the two sides should cooperate on a reciprocal basis and remove the political factors hampering their economic development.”33 In 2004, the pan-blue ticket of Lien and Soong made even broader appeals; they promised, for example, to help build schools to educate the children of Taiwan businesspeople in China so that those children would have the same education as children in Taiwan.34 Nonetheless, Chen won the election in 2004 despite losing support in the business community and the backing of some prominent magnates who had supported him in 2000.35 Indeed, while his cross-Strait policies have alienated much of the Taiwan business community, these same policies may have helped to bolster Chen’s support among more protectionist interests (such as farmers and relatively unskilled laborers) who are more concentrated in southern Taiwan.36 Perhaps more fundamentally, Taiwan public opinion polls provide little evidence of a major shift in public attitudes regarding reunification and Taiwanese identity that might serve as the basis for a future reconciliation in the primary objectives of the two sides. Approximately 61 percent of the island’s population favored maintaining the status quo in cross-Strait relations when polled in 1997, and that number remained the same in 2004. Those supporting unification (either as an ultimate or an immediate goal) dropped from about 20 percent to 14 percent, while those supporting independence (either immediately or as a long-term goal) grew from about 16 percent to 22 percent.37 Another poll found that in 1992, 26 percent of respondents considered themselves “Chinese,” 17 percent considered themselves “Taiwanese,” and 45 percent answered “both Chinese and Taiwanese.” By 2003, those answering “Chinese” had dropped to eight percent, whereas those answering “Taiwanese” had risen to 43 percent, the same percentage as those answering “both.”38 There is not yet clear evidence, then, that the growing economic integration across the Taiwan Strait is reshaping Taiwanese public opinion to bring it more in line with the goals of mainland China.39
C This chapter began with a paradox. On the one hand, mainland officials and pro-independence Taiwanese officials typically view
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cross-Strait economic integration as a factor likely to bring Taiwan closer into China’s orbit politically. As such Beijing has actively encouraged cross-Strait economic ties while Taiwan leaders have resisted those economic ties. But on the other hand, as economic ties have burgeoned in recent years, Taiwan has conversely drifted farther away from China in the political arena. The author has argued that these contradictory trends arise because the short-term effects of economic interdependence might differ from the longer-term consequences. In the short run, because war becomes more costly as economic ties increase, pro-independence Taiwan leaders can push farther toward their ideal point of Taiwanese independence. They know that, all else equal, it would take more to provoke a Chinese military response than before. In the long run, however, the preferences of Taiwan’s leaders may themselves be endogenous to the economic relationship; as ties expand, leaders advocating Taiwanese independence may simply be less likely to thrive in Taiwan’s political environment. This longer-term effect, of course, has not yet materialized, and whether it will ever materialize remains uncertain. More certain is that mainland Chinese officials—and many in Taiwan—believe that economic interdependence will likely have these longer-term consequences. Though the ultimate impact of economic integration on the cross-Strait political relationship remains unanswered, patterns in the cross-Strait case nonetheless carry with them implications for the U.S.-China relationship as well. First, just as in the short-term economic integration across the Taiwan Strait appears to give Taiwan more leeway in pursing a greater level of sovereign status, increasing economic integration between the United States and China may increase Beijing’s ability to pursue its goals that conflict with U.S. objectives. In other words, while economic engagement with China can act as a constraint on Chinese behavior (as often emphasized by proponents of economic engagement), it could also act to constrain the U.S. in its responses to Chinese actions because it increases the costs the United States would pay if serious conflicts were to arise. Over the long run, of course, other interdependence effects may come to dominate. The Taiwan Strait case suggests some caution here too, however; even though economic integration across the Taiwan Strait is extensive, and Taiwan has come to depend heavily on this relationship, clear transformative effects of economic interdependence have yet to take hold on the island. This suggests, in turn, that the threshold level of economic integration necessary for transformative effects to take hold is high—higher, perhaps, than is likely to be attained between two countries with large internal markets like the United States and China.
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N 1. Taiwan’s Mainland Affairs Council (MAC): www.mac.gov.tw (accessed April 27, 2006). 2. Yun-han Chu, “The Political Economy of Taiwan’s Mainland Policy,” Journal of Contemporary China, 6 (1997): 229–257. 3. Trade statistics available on the MAC webpage. See also Dow Jones, March 11, 2004, in Taiwan Security Research http://taiwansecurity.org/News/2004/DJ-110304.htm (accessed April 27, 2006). 4. This is because a large percentage of Taiwanese investments in China are illegal under Taiwanese law, and hence go unreported. 5. For the official figures, see the MAC webpage. The US$100 billion figure is a common estimate. See, e.g., “Taiwan Ends a Half-Century Freeze on Flights to China with a Trip to Shanghai,” New York Times, January 27, 2003, p. 2. 6. Wei-chin Lee, “The Buck Starts Here: Cross-Strait Economic Transactions and Taiwan’s Domestic Politics,” American Asian Review, 21, no. 3 (2003): 119. During the period 1991–1998, only 21% of Taiwan’s approved mainland China investments were in the electronics and electric appliances sector. See the MAC webpage. 7. James Mulvenon, “Anticipation is Making Me Wait: The ‘Inevitability of War’ and Deadlines in Cross-Strait Relations,” China Leadership Monitor, no. 12 (2004) http://www.chinaleadershipmonitor.org/ 20044/jm.html (accessed April 27, 2006). 8. This assessment is based on the author’s off-the-record interviews with analysts in Beijing in 2002 and Shanghai in 2004. 9. The recently passed antisecession law states that mainland China will use “non-peaceful means” to “protect China’s sovereignty and territorial integrity” in response to formal Taiwanese secession or in the event that “major incidents entailing Taiwan’s secession from China should occur, or that possibilities for a peaceful reunification should be completely exhausted.” The specific location of China’s redline— the point beyond which it prefers fighting a war to accepting Taiwan’s status—remains ambiguous. China is clear in stating that formal independence lies across that line, but it is unclear how far toward independence Taiwan can move before triggering a war (“major incidents” obviously leaves a lot of wiggle room). An English translation of the law is available at http://taiwansecurity.org/ News/2005/ CD-140305.htm (accessed April 27, 2006). 10. This application of a take-it-or-leave-it game follows: James Fearon, “Rationalist Explanations for War,” International Organization, 49, no. 3 (1995): 379–414. For a review of bargaining models of war, see Robert Powell, “Bargaining Theory and International Conflict,” Annual Review of Political Science, 5 (June 2002): 1–30. 11. Barry Naughton, “Economic Policy Reform in the PRC and Taiwan,” in Barry Naughton, ed., The China Circle: Economics and Electronics in
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13.
14.
15.
16.
S L . K the PRC, Taiwan, and Hong Kong (Washington, DC: Brookings Institution Press, 1997). Sumner J. La Croix and Yibo Xu, “Political Uncertainty and Taiwan’s Investment in Xiamen’s Special Economic Zone,” in La Croix, Michael Plummer, and Keun Lee, eds., Emerging Patterns of East Asian Investment in China: From Korea, Taiwan, and Hong Kong (Armonk, NY: M.E. Sharpe, 1995), pp. 126–127. For example, Tang Shubei, the then Vice-Chairman of the Association for Relations across the Taiwan Straits (ARATS), stated in 1995 that “under all circumstances, we will protect Taiwanese compatriots’ investment interests on the Mainland.” See ARATS Vice Chairman on Protecting Taiwan Investment. China Radio International. Foreign Broadcast Information Service-China (hereafter FBIS-China), April 24, 1995, p. 75. On the logic of Taiwan restrictions, and a critique of that logic, see Denny Roy, Cross-Strait Economic Relations: Opportunities Outweigh Risk (Asia-Pacific Center for Security Studies Occasional Paper Series, April 2004). For overviews of Taiwan restrictions, and their rationale, see Tse-kang Leng, “Securing Economic Relations across the Taiwan Straits: New Challenges and Opportunities,” Journal of Contemporary China, 11 (2002): 261–279; Karen M. Sutter, “Business Dynamism across the Taiwan Strait: The Implications for Cross-Strait Relations,” Asian Survey, 42, no. 3 (2002): 522–540; Scott L. Kastner, Commerce in the Shadow of Conflict: Domestic Politics and the Relationship between International Conflict and Economic Interdependence (Ph.D. Dissertation, University of California, San Diego, 2003); Paul J. Bolt, “Economic Ties Across the Taiwan Strait: Buying Time for Compromise,” Issues and Studies, 37, no. 2 (2001): 80–105; and Lee, “The Buck Starts Here”. Many have argued that increasing economic ties between countries reduces the probability of military conflict between them precisely because commerce makes war more costly. See, for example, Bruce Russett and John Oneal, Triangulating Peace: Democracy, Interdependence, and International Organizations (New York: Norton, 2001). For a discussion of this argument, see Jack Levy, “Economic Interdependence, Opportunity Costs, and Peace,” in Edward D. Mansfield and Brian M. Pollins, eds., Economic Interdependence and International Conflict: New Perspectives on an Enduring Debate (Ann Arbor, MI: University of Michigan Press, 2003). On this logic, see James D. Morrow, “How Could Trade Affect Conflict?” Journal of Peace Research, 36, no. 4 (1999): 481–489; and Erik Gartzke, Quan Li, and Charles Boehmer, “Economic Interdependence and International Conflict,” International Organization, 55, no. 2 (2001): 391–438. These authors argue that the increased costs of war associated with economic interdependence are not sufficient to reduce the likelihood of war, because states will simply increase their demands as war’s costs rise.
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17. “Time for Change, Lee Says,” Taipei Times, October 13, 2003, p. 1. Chinese officials reacted strongly, arguing that they would act to prevent Taiwanese independence even if it led to an Olympic boycott or resulted in extremely high economic costs. See “China’s Military Warns Taiwan,” Washington Post, December 4, 2003, p. A25. 18. Yan Xuetong, “Origins of the Policy to ‘Pay Any Price to Contain Taiwan’s Independence,’ ” China Strategy Newsletter, July 20, 2004, pp. 39–42. 19. Similarly, it may simply be that the increased costs of war associated with economic ties are small relative to the stakes being bargained over. If so, then economic interdependence would have minimal effects on cross-Strait bargaining. For a study that finds that economic interdependence, even when substantial, has minimal impact on highstakes bargaining between states and their willingness to run the risks of war, see Norrin M. Ripsman and Jean-Marc F. Blanchard, “Commercial Liberalism under Fire: Evidence from 1914 and 1936,” Security Studies, 6 (1996/1997): 4–50. 20. From the MAC webpage. Since China’s economy is much larger than Taiwan’s, the ratio of bilateral trade to GDP is also imbalanced. 21. MAC webpage. 22. Indeed, a growing body of literature finds that wars are often rooted in an inability of states to know ex ante how a war will end; states have incentives, e.g., to understate the costs they expect to bear in fighting so as to drive a better bargain. See, for example, Fearon (“Rationalist Explanations for War”); Gartzke et al. (“Economic Interdependence and International Conflict”); and Erik Gartzke, “War is in the Error Term,” International Organization, 53, no. 3 (1999): 567–587. 23. Bolt (“Economic Ties across the Taiwan Strait”), e.g., emphasizes these sorts of downside risks as economic interdependence grows in the cross-Strait case. 24. Ernst B. Hass, The Uniting of Europe: Political, Social, and Economic Forces 1950–1957 (Stanford: Stanford University Press, 1958). 25. On the effects of commerce on domestic political coalitions, see Ronald Rogowski, Commerce and Coalitions: How Trade Affects Domestic Political Alignments (Princeton: Princeton University Press, 1989). 26. On this logic of asymmetry, see Albert O. Hirschman, National Power and the Structure of Foreign Trade (Berkeley, CA: University of California Press, 1945), p. 29; Rawi Abdelal and Jonathan Kirshner, “Strategy, Economic Relations, and the Definition of National Interests,” Security Studies, 9, no. 1 & 2 (1999/2000): 119–156. Scholars often point to the preference-transforming potential of economic ties across the Taiwan Strait. See, for example, Sutter, “Business Dynamism”; Cal Clark, “Growing Cross-Strait Economic Integration,” Orbis, 46, no. 4 (2002): 753–766; and Steve Chan and Cal Clark, “The Mainland China-Taiwan Relationship: From Confrontation to
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27. 28.
29. 30.
31. 32. 33. 34. 35.
36.
37.
38.
S L . K Interdependence?” in Tun-jen Cheng et al., ed., Inherited Rivalry: Conflict Across the Taiwan Straits (Boulder: Lynne Rienner, 1995), pp. 47–62. Certainly the possibility that increased economic interaction would create vested interests in Taiwan who would lobby for more pro-mainland policies is the central reason Beijing encourages economic integration with Taiwan, as evidenced by the slogan yi shang cu zheng, yi min cu guan (influence government through business, influence officials through the people). See Suisheng Zhao, “Economic Interdependence and Political Divergence: A Background Analysis of the Taiwan Strait Crisis,” in Suisheng Zhao, ed., Across the Taiwan Strait: Mainland China, Taiwan, and the 1995–1996 Crisis (New York, NY: Routledge, 1999), p. 27. “Manufacturers Maintain China Focus,” Taipei Times, November 13, 2004, p. 10. The poll was conducted by the local TV station, TVBS. See “Business Dissatisfied with Government’s Mainland Policy: Legislators.” Taipei Central News Agency, April 25, 2002. In FBIS-China, April 26, 2002. “Losing Business,” Far Eastern Economic Review, February 19, 2004, p. 23. “Business Dissatisfied with Government’s Mainland Policy: Legislators.” The 1992 consensus, supposedly reached in negotiations at Hong Kong, held there to be one China, but each side had its own interpretation as to what “one China” meant. Chen Shui-bian’s government denied that such a consensus was ever reached. For a discussion, see Lee, “The Buck Starts Here,” pp. 138–139. “Business Leaders ‘Hold the Key to President’s Fate,’ ” South China Morning Post, February 10, 2004, p. 6. “Evergreen Tycoon Changes Support from Chen to Lien,” Taipei Times, March 20, 2004, p. 5. “Taiwan Presidential Candidate Calls for Closer Business Ties with China,” Agencé France Pressé, February 8, 2000. The Lien-Soong campaign printed a pamphlet for Taishang (Taiwan businesses in China) that had a long list of promises. In addition to Chang Yung-fa, several other prominent Chen supporters in 2000 kept a lower profile in 2004. Author’s interviews, Taipei, June 2004. Ming-chi Chen, “Sinicization and its Discontents: Cross-Strait Economic Integration and Taiwan’s 2004 Presidential Election,” Issues and Studies, 40, no. 3 & 4 (2004): 334–341. Poll conducted for the MAC and reported on its webpage. The 61% who favored the status quo includes both those who say they want to maintain the status quo indefinitely, and those who want to maintain the status quo for now and decide sometime in the future which path to pursue. Election Study Center, NCCU, Important Political Attitude Trend Distribution: http://esc.nccu.edu.tw/eng/data/data03–2.htm (accessed April 27, 2006).
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39. For a highly nuanced discussion of this question, see Yun-han Chu, “Taiwan’s National Identity Politics and the Prospect of Cross-Strait Relations,” Asian Survey, 44, no. 4 (2004): 484–512. Chu’s analysis using data from the Post LY-Election Survey (Years 1993, 1996, 1999, 2000, and 2002) shows that independence sentiments increased until the late 1990s, then backtracked a bit; support for reunification, meanwhile, declined until the late 1990s, then bounced back a small amount. Chu concludes that there is little evidence that economic integration is transforming Taiwan public opinion in a decisive way toward a pro-unification consensus. He does see an important transformative effect; however: growing economic integration—and the changed image of China as a vibrant economy to which Taiwan’s future will be hitched—has acted as a brake on the growth in a separate Taiwan identity.
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espite the global war on terrorism, Asia remains the most volatile area in the world.1 The possibility that North Korea could attack the South makes Asia volatile, as well as the possibility of a coup or economic collapse in North Korea. These issues keep defense planners thinking about contingencies in Northeast Asia. Of course, there are other serious concerns for the United States and its allies in the region, particularly Japan. The potential for war is high if China decides to make good its threats against Taiwan and attack that island. Beijing has made it clear that if Taiwan steps over some undefined line that Beijing interprets as moving too close to independence, China will use force. Such an eventuality would clearly bring a U.S. response, and because of American deployments in Asia, that response would probably involve Japan. The Taiwan Strait is not the only area of potential volatility around China. Two incidents in the last decade show the potential for a clash between the United States and China, even if the Taiwan Strait remains tense but free of war. On October 27, 2004, the U.S. aircraft carrier, Kitty Hawk, found itself shadowed by a Chinese Han—class nuclear submarine. The natural response by the Kitty Hawk carrier battle group was to begin its own defensive surveillance of that sub
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with carrier-based aircraft and surface ships.2 U.S. ships and aircraft got very close to the PLA (People’s Liberation Army) Navy’s sub, three Chinese fighter aircraft responded in an intercept flight, and the Han sub got to within 21 miles of the Kitty Hawk. A miscalculation could well have led to a clash. It is also hard to forget the tense weeks after April 1, 2001 when a Chinese fighter aircraft conducting an intercept of a U.S. reconnaissance plane in international airspace off the southern coast of China accidentally bumped the U.S. EP-3, causing the Chinese fighter to crash. The U.S. aircraft made an emergency landing on Hainan Island and the PLA apprehended the crew, held them for 12 days under interrogation, and held the aircraft for a considerable period. That incident ended peacefully, but tensions were high and the potential for military action was palpable.3 The United States maintains a strong forward military presence in the Pacific because of contingencies such as these. The Fifth Air Force with its two squadrons of F-16 and two squadrons of F-15 fighter aircraft are in Japan, along with reconnaissance, search and rescue, and airlift squadrons. Also in Japan, the U.S. maintains the Seventh Fleet with its aircraft carriers, nine other surface combatants, and an amphibious ready group. The navy presence in Japan includes a Marine Expeditionary Force of some 17,800 Marines and an air wing on Okinawa.4 The U.S. Army also maintains a Corps headquarters in Japan and a military intelligence group. The United States will reduce the 37,000 combat-deployed forces in South Korea to 24,000 over the next few years; these forces also are on hand in the region. There still is no peace treaty ending the Korean War, only an armistice. Thus, tensions remain on the Korean Peninsula. Because of that, in 2001, the U.S. Quadrennial Defense Review (QDR), apportioned more U.S. forces to Asia, recognizing the threat to American interests there.5 There are B-52 bombers in Guam along with eight U.S. submarines, which could respond to tensions in the Taiwan Strait or in Korea. Japan decided to examine the implications of a conflict in the Taiwan Strait for its own interests. During ministerial meetings on February 19, 2005, Japan’s Foreign Minister Nobutaka Machimura and Japan Defense Agency head Yoshinori Ohno met with their American counterparts, Condoleezza Rice and Donald Rumsfeld. The “two-plus-two” talks made it clear that a conflict in the Taiwan Strait would also affect the vital interests of Japan.6 South Korean political and military leaders are afraid of the American desire for “strategic flexibility” in the deployment of its forces. Ideally, in the event of a crisis elsewhere in Asia or even out of the
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region, the United States would like to be able to use part of its forces in South Korea to respond. Such an eventuality could mean that Seoul could be drawn into any conflict between China and the United States, such as if China attacks Taiwan. Practically speaking, as long as North Korea remains an overarching threat on the Korean Peninsula, the use of U.S. forces elsewhere is not likely. But China still has theater-level, nuclear-tipped ballistic missiles and cruise missiles it could use against U.S. forces in Korea though they might be used in a Taiwan contingency. Thus, the very existence of the presence of U.S. forces on South Korean soil means that any Chinese military action could affect Seoul.
A S A The United States frames its security policies in the Asia-Pacific region on principles that support freedom, protect the American people, and resist coercion. Thus policies that apply to the specific case of the democratic Republic of China (ROC), or the People’s Republic of China (PRC), are part of a broader architecture of policy designed around the most fundamental American values of freedom, democracy, free enterprise, and a strong national defense. Advancing economic freedom is also important to the United States. People who can make basic decisions about how to spend their money live that part of their lives free from the dominance of the state. Economic factors, therefore, have some bearing on security and national strategy. East Asia is also vital to the world economy. Much of the world’s trade by sea moves through the restricted waters of Southeast Asia. Ten years ago, the world worried about piracy or territorial conflicts interrupting shipping in Southeast Asia. Southeast Asia’s shipping lanes cater to nearly $600 billion worth of world trade.7 Today, the threat of terror makes security in Asian waters a major concern. Imagine what would happen if the sort of attack that occurred against the oil tanker off Yemen8 took place along the major shipping lanes of Southeast Asia by Islamic terrorists. It would disrupt the flow of about 75–80 percent of all of Asia’s oil needs and half of the world’s trade, all of which pass through the Straits of Malacca and surrounding Southeast Asian waters.9 South Asia is also an explosive region, figuratively and literally. India and Pakistan are in a nuclear standoff over Kashmir. This volatile conflict is not only about control of territory, but also over sectarian religious differences between Hindus and Moslems.10 Thus, the India-Pakistan rivalry has the potential to affect Central Asia and East Asia.
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Central Asia proved to be fertile ground on which to base a worldwide clandestine network of Islamic terrorists who deployed operational combat cells designed to attack Western values like democracy, the freedom to assemble and worship, and free trade.11 Pan-Asian Islamic movements in Central Asia seek to create orthodox Islamic states that would split parts of China, the Central Asian Republics, and even Turkey into a new sectarian states. Pan-Islamic movements in Southeast Asia would redraw the borders of Indonesia, Malaysia, Thailand, and the Philippines into new sectarian states.12 In Northeast Asia, security threats abound. China threatens to attack the democratic state of the ROC on Taiwan over the final resolution of the sovereignty of that island. China seeks to treat Taiwan as though it was a province of the mainland. North Korea still maintains a huge force on the border with South Korea, threatening the democracy in the south, the 42 million people in South Korea, and the lives of 37,000 American troops on that peninsula who are there to defend South Korea. China has between 125 and 175 nuclear-capable ballistic missiles that target Japan, Taiwan, U.S. bases in Asia, the Russian Far East, and India.13 North Korea has nuclear weapons and the means to deliver them.14 In addition, in Japan, despite the overwhelming majority of people who want to retain its peace constitution, a small but active group of ultra-rightists still talk about the development of an armed force that can project offensive power backed up by missiles, intelligence satellites, and nuclear weapons. The revelation in October 2002 by Pyongyang to Assistant Secretary of State James Kelly that North Korea had a second nuclear weapons program only fueled the arguments in Japan over acquiring offensive military capabilities. Europe and Latin America, meanwhile, do not present large-scale immediate security challenges to the United States or its allies. Africa is a chronic bed of instability, but not such a threat to United States’ interests or security that, with its allies, the United States is unable to manage contingencies there. Central Asia and the Middle East, however, remain volatile and of security concern to the United States. There should be no question, therefore, about why the United States apportioned to Asia. In The National Security Strategy of the United States of America, issued in September 2002, President George W. Bush made it clear that the uncertainties in Asia, including China’s future and China’s threats to Taiwan, required the United States to narrow American differences with China while maintaining a strong U.S. military.15
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A M F A Many people misunderstand the concept that more U.S. forces will be apportioned for Asia. The concept conjures up the image of thousands of ships, aircraft, and troops moving into the region. Apportionment, however, is really a term that is used by U.S. strategists and war planners, but does not necessarily deal with where troops are stationed. Instead, it means that plans will be developed for how troops will train, the speed and numbers that must be moved to a region, and how they will be supplied in the event they are deployed. When the term is misunderstood, concerns develop among American allies, and even among many Americans who are not familiar with military parlance. Moreover, many residents in Asia are not anxious to host more U.S. forces. In South Korea, for the most part, popular opinion supports a reduction of U.S. forces, not an expansion, even if South Koreans fear that not having American forces directly on the demilitarized zone means that the “trip wire” to trigger an American response to a North Korean attack will be removed. In fact, it is the alliance between the United States and the Republic of Korea that would trigger the American response to a war on the peninsula, not how many Americans were killed in the event of a North Korean attack. In Japan, the population of Okinawa, and most likely, the majority of the population, wants U.S. forces limited, if not reduced. The population of South Korea also is more interested in a reduction of U.S. forces than an expansion of the American military presence. Practically speaking, therefore, what does it mean to apportion more forces to Asia? “Apportionment” is a force planning and management term. Apportionment means that as American contingency planners, strategists, logisticians, and war planners think through future contingencies, they plan on devoting more forces from the United States to flow out to Asia rather than Europe. During the Cold War, the Pentagon apportioned stateside U.S. forces—air, ground, and sea— to a major contingency in Europe to defend against the Soviet Union and the Warsaw Pact. This also meant that airlift and sealift, as well as the prepositioning of war reserves (supplies), focused on Europe. The Quadrennial Defense Review (QDR) conducted during the first Bush administration changed that focus to Asia. The Bush administration continued its regional focus on Asia in the February 3, 2006 QDR. The 2006 QDR identified China as one of a few nations with the potential to challenge the United States militarily.
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Maintaining a stable balance in Asia is a complex task. The possibility exists that a military competitor with a formidable resource base will emerge in the region. In fact, in Congressional testimony, Porter Goss, the Central Intelligence Agency director, expressed his concerns to Congress about the potential for China to emerge as a major military competitor.16 There is also some disagreement between the State Department, the National Security Council, and the Pentagon over just how to characterize the potential for conflict scenarios with China.17 The East Asian littoral—from the Bay of Bengal to the Sea of Japan—represents a particularly challenging area. The distances are vast in the Asian theater. The density of U.S. basing and en route infrastructure is lower than in other critical regions. The United States also has less assurances of access to facilities in the region. This places a premium on securing additional access and infrastructure agreements and developing systems capable of sustained operations at great distances with minimum theater-based support.18 This means that in twenty-first century American military planning, fast sealifts and airlifts are focused on Asia, and material will be prepositioned there, but it does not mean that forces will move out to Asia. Clearly, more sealifts will probably be moved to Hawaii and the West Coast of the United States. It is also likely that more war reserve stocks will have to be moved closer to the Asia-Pacific region. Guam, Midway, and the Mariana Islands, all U.S. territories, can be used to preposition war reserves. Additional naval forces have already been sent to Guam. Allies in Asia can also help. Singapore, for example, constructed a port facility that will accept a U.S. aircraft carrier during a transit. Two air combat squadrons of fighters can also be accommodated in Singapore to support a transit or an operation in Asia. Australia already has allowed the United States to preposition equipment and supplies there. The United States is also likely to seek to negotiate in advance agreements about where American ships or aircraft can stop to refuel, take on supplies, or be repaired. It should be understood by U.S. allies in Asia, however, and by countries such as Vietnam and China, that the United States is not contemplating on reestablishing the sort of network of bases around Asia that it maintained during the Cold War and the Vietnam War. The post-Philippine base withdrawal slogan of “places not bases” is now American doctrine. It would be useful, for planning purposes, if agreements were made in advance to have designated places, with agreed security measures, for ship repairs, aircraft repairs, or refueling. Agreements on how legal matters involving visiting U.S. forces also are usually sought in advance of crises by the United States. As the U.S. Pacific Command in Hawaii
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(PACOM) and the Joint Staff develop and review new plans to support the National Security Strategy, PACOM will approach America’s friends and allies in Asia about where facilities might be found. The principal effects of the QDR’s recommendations about an increase in the forces apportioned for Asia will be invisible to most observers. The changes will take place in the contingency plans of navy fleets, Marine Corps Expeditionary forces, numbered air forces, and army divisions and corps. What America’s friends and allies can expect to see, rather than more forward-deployed troops, will be increased visits by planning staffs to discuss places that could be used for repair or resupply. There also will probably be an emphasis on agreeing in advance of any crisis on local contracting and how any visiting or transiting forces will be treated. Finally, American friends and allies in the region may well see requests for different forms of cooperative exercises in the region to ensure that American forces are able to operate together with friends and allies.
W T President Bush made a firm commitment on April 25, 2001, after 100 days in office, to “do whatever it took to help Taiwan defend itself” from the military threat by China.19 When he did this, he really stated succinctly what many Americans understood as the intent of the U.S. Congress when it passed the Taiwan Relations Act of 1979 (TRA). Although President Bush’s statement removed some of the ambiguity about how the United States might react to any Chinese military action against Taiwan, he still left himself a lot of flexibility. After all, the United States does not have any alliance with the Republic of China. The president later made it clear that the United States did not want to see Taiwan take any precipitous action to change the status quo between Taiwan and China. Even the TRA leaves some ambiguity about how and why the United States might react to any Chinese action in the Taiwan Straits. Among other things, the Taiwan Relations Act says thus: We will regard any attempt to determine the future of Taiwan by other than peaceful means, including boycotts or embargoes, as a threat to the peace and security of the Western Pacific area and of grave concern to the United States.20
The TRA also provides for the sale to Taiwan of “arms of a defensive character.”21 Thus, the arms sales packages approved for Taiwan under the TRA are designed to address specific threats posed by the
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military buildup of the Chinese People’s Liberation Army. Of course, as this chapter discusses later, the United States expects Taiwan to take actions to defend itself effectively and not merely to stand and wait for a U.S. response to any Chinese aggression. Congress also has taken other specific steps of its own to enhance Taiwan’s security. The 1998 Strom Thurmond Defense Authorization Act contained language directing the Department of Defense to study ways to protect deployed American forces, American allies in Japan and South Korea, and American friends like Taiwan against the ballistic missile threat from China. That was a very important step because it opened up U.S.-Japan defense cooperation on ballistic missile defense. The end of the Anti-Ballistic Missile Treaty between the United States and Russia in June 2002 paved the way for improved defense cooperation between the United States and its allies. The Japanese Diet, in December 2003, took decisive action to move from simple research on missile defense to deeper cooperation in research, production, and deployment as effective missile defenses come on line. Taiwan, however, has debated this issue in the Legislative Yuan. Still, there was some controversy in Asia about the 1998 Defense Authorization Act. The language in the act explicitly included Taiwan. The People’s Republic of China, immediately after the passage of the 1998 Defense Authorization Act, began to query American scholars about whether this meant a new U.S.-ROC Mutual Security Treaty. Beijing also began to pressure Tokyo and Seoul to ensure that both of those American allies carried China’s concerns to Washington. To this day, defense officials and Diet members in Japan continue to inquire about the intent of the language of the 1998 Defense Authorization Act. It is clear, however, that the intent of Congress was not to revive a mutual security treaty with Taiwan. But the PRC missile build-up opposite Taiwan and the use of missiles by the PRC in the 1995 and 1996 Taiwan Strait military exercises made Congress want to ensure that Taiwan is included in future arms sales, defense planning, and military assistance. In 2000, in reaction to what it perceived as reluctance by the Clinton administration to sell appropriate arms to Taiwan, and what legislators characterized as inadequate consultation with Congress, the U.S. House of Representatives passed the Taiwan Security Enhancement Act (TSEA). The TSEA repeated many of the basic provisions of the TRA, but directed the sale of certain “defensive goods and services” while also requiring that the Executive Branch undertake stricter consultation with Congress. The TSEA passed the House by a wide margin, but never made it to the Senate floor. This
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angered political leaders in China, but the House sent a clear message to the administration that the elected representatives of the American people strongly supported helping Taiwan to meet its defense needs. President Bush’s pledge to do whatever it takes to help Taiwan defend itself is important. The United States will provide all of the necessary goods and support for Taiwan to mount an effective defense if China attacks. That assumes, however, that Taiwan’s citizens will defend their own nation, the Republic of China; that Taiwan’s armed forces will mount a vigorous defense if attacked; that Taiwan’s military will procure appropriate defensive equipment; and that Taiwan’s legislature will fund those purchases. The pan-blue (Kuomintang and People First Party) political alliance in Taiwan has blocked the passage of a special defense budget 28 times since the Bush administration approved a defense package for Taiwan in 2001. Increasingly, members of Congress and American defense officials remind Taiwan’s political leaders that Taiwan must be prepared to defend itself.22 Congress also required the Department of Defense to provide annual reports on the military threat to Taiwan. The first of these reports, published in June 2000, was not particularly strong. It dealt with China’s strategy and acknowledged that “several developments in Chinese military operations in 1999 present challenges to Taiwan’s defense.”23 Its conclusions, however, were rather tentative. The latest report, issued in 2005, addressed (1) gaps in knowledge of China’s military power; (2) China’s grand strategy, security strategy and military strategy; (3) developments in China’s military doctrine and force structure to include developments in advanced technologies that would enhance China’s military capabilities; (4) China’s relations with the former Soviet Union; and (5) the security situation in the Taiwan Strait. The later report, published in July 2002, concluded that “Beijing is pursuing its long-term political goals of developing its comprehensive national power and ensuring a ‘strategic configuration of power;’ China’s defense modernization is heavily dependent on Russia; and China is developing advanced information technology and precision strike capabilities.”24 The 2002 report made it clear that China’s military buildup threatened the military balance in the Taiwan Strait. In 2001, Congress established the U.S.-China Security Review Commission to examine and make recommendations on potential threats to American security and the U.S. economy posed by increased trade with the People’s Republic of China.25 The first report by this commission, of which the author is a commissioner and a coauthor, published in July 2002, agreed in substance with the Department of Defense report that the military threat to Taiwan was increasing.26
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To date, however, the United States has taken no position on Taiwan’s sovereignty. A 1971 legal memorandum from the U.S. Department of State discussed the status of Taiwan in this way: The position of the United States was set forth by the State Department in connection with the 1970 Hearings before the Subcommittee on the United States Security Agreements and Commitments Abroad of the Senate Committee on Foreign Relations (91st Cong., 2d Sess.): Legal Status of Taiwan as Defined in Japanese Peace Treaty and Sino-Japanese Peace Treaty “Article 2 of the Japanese Peace treaty, signed on September 8, 1951 at San Francisco, provides that ‘Japan renounces all right, title and claim to Formosa and the Pescadores.’ The same language was used in Article 2 of the Treaty of Peace between China and Japan signed on April 28, 1952. In neither treaty did Japan cede this area to any particular entity. As Taiwan and the Pescadores are not covered by any existing international disposition, sovereignty over the area is an unsettled question subject to future international resolution. Both the Republic of China and the Chinese Communists disagree with this conclusion and consider that Taiwan and the Pescadores are part of the sovereign state of China. The United States recognized the Government of the Republic of Taiwan as legitimately occupying and exercising jurisdiction over Taiwan and the Pescadores.” The future relationship of Taiwan to mainland China and the resolution of disputes dividing the governments in Taipei and Peking involve issues that the United States cannot resolve. We have made clear that our primary concern is that these issues should be resolved by peaceful means, without resort to the use of force. Until such a resolution is achieved we may continue to deal respectively with the government of the People’s Republic of China and the Government of the Republic of China on matters affecting mutual interests, accepting the practical situation as we find it.27
This author believes that the United States has no fundamental interest in how the two “Republics of China” resolve their differences over sovereignty. It is in the American interest to insist that the resolution of those differences be agreed freely by the people on both sides of the Taiwan Strait without force or coercion. That is also essentially the official U.S. position on Taiwan. Of course, we must understand that today only citizens on one side of the Taiwan Strait can freely express their will. Policies that help Taiwan defend itself from coercion, and keep the United States with sufficient military strength to ensure the security and stability of the Western Pacific, therefore, are in America’s interest.
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In Taiwan today the people have the freedom to express their will about relations across the Taiwan Strait, either through a referendum or through support for a candidate from a political party that runs on a platform for one outcome or the other. Unfortunately, Beijing threatens to turn Taiwan into a “sea of fire” if Taipei’s citizens attempt a referendum. In China, a totalitarian state run by a communist party that insists on Marxist-Leninist principles such as “democratic centralism,” no such free expression of will is possible. The political system in China may allow “village elections,” but the Chinese Communist Party does not allow the free articulation of political interests by the people. There is no free press to debate the worth of ideas, there is no freedom to associate, and there is no means to support candidates for office from other parties. Thus, political parties that may seek alternative ways of resolving problems across the Taiwan Strait do not exist in China. Beijing’s 2004 antisecession law only exacerbated concerns in the United States and in Europe about China’s threats to use force. For America’s arms sale policy to be effective, there must be a military dialogue with Taiwan. The armed forces of the Republic of China have a number of ground, air, and naval systems that are of better quality than those of the PRC. However, the People’s Liberation Army has a better grasp of how to operate its armed forces in an integrated way in a modern war. Beijing may be incapable of manufacturing uniformly high quality modern military equipment, but China’s military leaders and planners at least have grasped the doctrines of joint warfare and modern war. The PLA’s acquisition program is also developing and fielding a combination of sensor systems, command and control equipment, precision weapons, and modern weapons platforms that can translate the intellectual grasp of warfare into the ability to wage war more effectively. With respect to Taiwan, it is not certain that either military leaders or the elected representatives of the people on Taiwan have a full grasp of why to acquire certain defensive systems and how to use modern weaponry effectively. Therefore, U.S. contacts with the ROC military should emphasize these things. Military-to-military contacts with Taiwan should be designed to produce an armed force that can deter Chinese aggression, effectively defend that island, and ensure that in the event the PRC uses force, the United States can meet its obligations under the Taiwan Relations Act.
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What do such policies mean from a practical standpoint for Taiwan? Increased visits by higher-level American military officers to discuss defense needs. Increased opportunities for training or meeting with Americans in the U.S. for Republic of China officers.
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Increased simulation training for its officers, perhaps with U.S. officers.
The author does not expect actual combined military field training or naval exercises between the U.S. and ROC forces. This might be desirable in principle, but in practice foreign policy considerations with China will likely preclude this unless China becomes much more hostile. As long as the PRC is a permanent member of the United Nations Security Council, with a veto, and a major world power, and the United States needs China’s UN vote, foreign policy consideration is likely to limit actual exercises. China’s UN Security Council seat also means that, as a practical matter, the United States must take Beijing into consideration if Washington seeks a UN resolution for a particular course of action. The debate for several weeks over a resolution on sending UN inspectors back into Iraq, which resulted in a resolution backing inspections, on November 8, 2002, is an example of how China cannot be simply ignored as the United States makes policy. Should Iraq continue to defy United Nations resolutions, President Bush has made it clear that the U.S. will act with its allies to disarm Iraq. Such a major military effort will challenge U.S. forces, which are already stretched thin in the war on terror.
T M T C O D N Without strong civilian leadership, it is unlikely that the Republic of China will achieve the type of integrated approach to defense planning that the island requires. By integrated, the reader should understand a joint approach to defense, in which all of the military services plan new systems, acquire them, and use them in a manner that implements a systematic defense plan. In his memoir on his years in the military, former chairman of the Joint Chiefs of Staff (JCS), General Colin Powell, pointed out that the chiefs of staff of the United States military services tend to reach agreement by “scratching each other’s backs.” Consequently, according to former JCS Chairman General David Jones, the president often gets information that is not of particular use, is not “crisp,” and does not respond to situations in a timely way. For Taiwan to achieve an agreed assessment of its future defense needs and to develop a military that meets those needs, it will require strong leadership and a clear set of joint, or integrated, requirements for plans, people, and equipment. Partisan wrangling in the Legislative
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Yuan between members of the Kuomintang and the Democratic Progressive Party has blocked movement toward purchasing in the defense package offered to Taiwan by President Bush in 2001. The Kuomintang and its pan-blue allies do this to weaken and oppose Chen Shui-bian for partisan political reasons. In addition, however, they simply believe that there are other approaches to the Taiwan Strait question. Former KMT leader Lien Chan visited China between April 26 and May 3, 2005 with a delegation of 60 KMT members. His pan-blue ally, James Soong of the People First Party, made a similar visit to China on May 5–12, 2005. Thus, in future Taiwan elections, there are serious alternatives being offered to voters on eventual outcomes in cross-Strait relations. The Taiwan armed forces also have debated internally what equipment they require. Despite the requests from Taiwan for weapons embodied in the Bush arms sales package, Taiwan’s military has made no fundamental decisions on the mix of aircraft, antisubmarine warfare equipment, and ground force equipment the ROC armed forces require. Nor has the ROC military made a firm decision on how deeply to invest in ballistic missile defense. The Legislative Yuan’s hesitation on a defense budget, therefore, is not merely an act of political defiance of Chen Shui-bian; it is also a serious debate over how to manage cross-Strait tensions. Facing a similar situation, the United States turned to a structure known as the Joint Requirements Oversight Council, or JROC. The Joint Requirements Oversight Council provides the secretary of defense with a coherent, independent, and unified military assessment and suggested architecture of cross-service defense requirements. More specifically, the JROC streamlines both the defense acquisition and force planning process. The council is tasked with assessing both existing and future war-fighting capabilities and prioritizing joint military requirements. The most important terms here are “coherent” and “cross-service requirements.” Any future planning system or strategy that fails to be “coherent,” or integrated and joint, will mean that each service chief in the Republic of China’s armed forces is simply staking a parochial position and “scratching the back” of another service chief for his “slice of the defense pie.” As far back as 1958, when addressing problems in joint defense planning in the United States, President Eisenhower said that the U.S. military amounted to “little more than a weak confederation of sovereign military units.” By that, Eisenhower meant that each service knew it had to interact within the Department of Defense, which had been formed 11 years earlier, but service decisions and planning were not really joint or integrated.
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It really was not until passage of the 1986 “Goldwater–Nichols Department of Defense Reorganization Act” that the services were required specifically by law to plan in a joint manner. Writing 13 years after the Goldwater––Nichols Act, former Secretary of Defense and nowVice President Dick Cheney said in the Naval Institute Proceedings that “each service wants to do its own thing, with its own authority.” It takes committed leadership at the executive level and strong oversight from an informed legislature before that tendency is brought under control. Prior to the Goldwater–Nichols Act, programming and budgeting authority in the United States rested with the individual services. Parochial service interests and competing programs often hampered the process and limited true joint collaboration. Furthermore, there existed no single authority to identify wasteful and duplicative programs in the U.S. military. The JROC eventually became the mechanism for forging consensus among the services on programming and budgeting issues. Fear of budget cuts has provided the chairman with the necessary leveraging tool to extract joint operational requirements from each of the services in a more collaborative and efficient environment. In short, service chiefs are forced to make program trade-offs that will better serve the joint vision. This is difficult stuff. At the U.S.–Taiwan Business Council Defense Conference in St. Petersburg, Florida, in 2003, this author commented that if you look at the agenda, it was entirely devoted to individual service breakout and planning sessions. There was no main session devoted to the joint or architecture requirements for the Ministry of Defense. The same problem affects Taiwan’s military. Senior defense officials are not setting priorities between services or for the Defense Ministry as a whole. Taiwan’s economy is straitened and its defense budget is tight. This makes it all the more important that Taiwan’s civilian leadership pressures the generals and admirals to review their strategic priorities in the face of the expanding threat from the People’s Liberation Army. Taiwan badly needs the Patriot Advanced Capability (PAC) air defense system. Instead of acting on this defense need, however, Taiwan’s Army prefers to procure traditional weaponry such as field artillery, antitank missiles, tanks, and costly Apache helicopters, while the Legislative Yuan is divided about what to buy. This is where a joint requirements council with teeth can make a difference for Taiwan. And this is where a strong civilian defense minister could make a difference. The army should begin work on real solutions to the most serious threats. The command, control, telecommunications, computers, intelligence, surveillance, and reconnaissance (C4ISR) infrastructure is
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perhaps the most vital area for creating a genuinely joint force. It is a complex program, but moving forward quickly in this area on as large a scale as possible will help interservice cooperation. Good C4ISR is also vital to ensuring interoperability with U.S. naval and air forces. This critical need requires greater attention and funding, even if that means dictating to Taiwan’s army, navy, and air force that they must fund specific C4ISR requirements. Rather than truly plunging into these important programs, Taiwan’s Defense Ministry has devoted small study-budgets to such projects. The appearance to the outside, and particularly to American decision-makers, is that Taiwan’s defense establishment is reluctant to make needed changes in order to improve efficiency and effectiveness. Taiwan also needs a survivable national command and control system with sufficient strategic and tactical warning of hostile action, and survivable national and defense information infrastructures. In addition to ensuring that Taiwan’s three services are interoperable and able to function as a team, Taiwan must be able to protect its critical civil infrastructure and ensure continuity of services to the government, military, and general populace. Succession of government plans are part of national command and control. It became clear in two sets of events that there is no organized, practiced method of succession of government in Taiwan. First, when Vice President Annette Lu and President Chen Shui-bian were shot and wounded in the 2004 presidential campaign, there was no clear line of succession as a matter of process in the event that both had been incapacitated or killed. Second, among the current concerns of the ROC’s-military is the possibility that the PLA would resort to some kind of “decapitation strategy” to kill senior leaders in Taiwan and paralyze the government. A clear succession of government system that Taiwan practices in exercises as a matter of routine in government-wide exercises would be useful for the ROC. The succession process should be institutionalized in law as well. Finally, it is critical that Taiwan develops a professional cadre of qualified civilians experienced in the management of defense affairs. It is imperative that the “iron rice bowl” of service parochialism be broken. Such reforms are as much in America’s interest as they are in Taiwan’s. A truly “joint” force for Taiwan will be more able to defend the island. The United States stands ready to help develop such a cadre.
C The national security of the United States relies on a sound economy, a strong military, individual freedom, and traditional values such as the freedom to worship as one pleases, a free press, and the freedom to
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associate. These are the liberties that the American Constitution seeks to guarantee to the people of the United States. These also are the values that Americans seek to extend to others in the world. Military means alone, however, will not guarantee security. Trade, international investment, and diplomacy are also important components of a national strategy. In the Taiwan Strait, and in cross-Strait relations, the United States is working with Japan, a democratic ally with strong interests in a peaceful outcome across the Strait, to meet the security challenges posed by China’s threats. The United States nurtured the creation of a democratic government in Taiwan after years of military dictatorship. U.S. interests (and those of Japan) lie in ensuring that this democracy in Taiwan is not crushed by a communist dictatorship, and that the eventual relationship between Taiwan and China is decided peacefully with the assent of the people on both sides of the Taiwan Strait.
N 1. Robert H. Scales, Jr. and Larry M. Wortzel, The Future U.S. Military Presence in Asia: Landpower and the Geostrategy of American Commitment (Carlisle, PA: Strategic Studies Institute, 1999). 2. www.globalsecurity.org on the Taiwan Strait and the Kitty Hawk, Incident. 3. Paul H. B. Godwin, “Decisionmaking Under Stress: The Unintentional Bombing of China’s Belgrade Embassy and the EP-3 Collision,” in Andrew Scobell and Larry Wortzel, eds., Chinese National Security Decisionmaking Under Stress (Carlisle, PA: Strategic Studies Institute, 2005), pp. 171–184. 4. These forces will be relocated to Guam over the next few years. 5. Quadrennial Defense Review (Washington, DC: Department of Defense, September 30, 2002), pp. 4–5. 6. www.japantimes.co.jp, October 30, 2005; Yale Global Online, www.yaleglobal.yale.edu, March 2, 2005. 7. Shishir Gupta, “India-U.S. Ties: Dramatic U Turn,” India Today, February 18, 2002, p. 58. 8. BBC News World Edition, “Craft ‘Rammed’ Yemen Oil Tanker,” October 6, 2002, 2156 GMT. 9. “Vital for U.S. to Engage in Southeast Asia, but Treat with Care,” The Straits Times, July 4, 2001; Brendan Pearson, “How Desperate Straits Threaten the World,” Australian Financial Review, May 13, 2002, p. 11. 10. “Kashmir and Pakistan: One Election that Wasn’t Rigged,” The Economist, October 12, 2002, p. 38. 11. “Special Report: The War on Terror, When Anger Joins Global Hate,” The Economist, October 19, 2002, pp. 23–26.
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12. John McBeth, “Weak Link in the Anti-Terror Chain,” Far Eastern Economic Review, October 24, 2002, pp. 14–21. 13. Report to Congress of the U.S.-China Security Review Commission: The National Security Implications of the Economic Relationship Between the United States and China, Pursuant to Public Law 106–398, October 30, 2000. Washington, DC: U.S.-China Security Review Commission, July 2002, p. 181. 14. Bill Gertz, “Lawmakers Ask Bush to End Accord,” The Washington Times, October 31, 2002, p. A17. 15. The National Security Strategy of the United States of America (Washington, DC: Department of Defense, July 2001). Hereafter cited as National Security Strategy. 16. Conn Hallinan, “Cornering the Dragon,” Asia Times, www.atonline. com, March 2, 2005. 17. Bill Gertz, “Inside the Ring,” The Washington Times, May 27, 2005. 18. Quadrennial Defense Review Report (Washington, DC: Department of Defense, September 30, 2001), p. 4. Hereafter cited as QDR. 19. “Good Morning America,” April 25, 2001, on http://abcnews. com/sections/GMA. 20. TRA, 22 U.S.C §3301 (2) (b) (4). 21. Ibid. Paragraph (b) (5). 22. Frustration in the United States is high, but Taiwan still spends about 2.8% of GDP on defense, higher than most American allies. 23. “Report to Congress Pursuant to the FY 2000 National Defense Authorization Act,” www.defenselink.mil/news/Jun2000/ china06222000.htm. 24. “Report to Congress Pursuant to the FY 2000 National Defense Authorization Act,” Department of Defense, July 2002. 25. 22 U.S.C.S 7002 (2001), created on October 30, 2000, by the Floyd D. Spence National Defense Authorization Act for 2001, Public Law 106–398. 26. Report to the Congress of the U.S.-China Security Review Commission: The National Security Implications of the Economic Relationship Between the United States and China (Washington, DC: U.S.-China Security Review Commission, July 2002). 27. Robert I. Starr, Legal Memorandum, Department of State. L:L/EA:RIStarr:cdj:7/13/71, “Legal Status of Taiwan”, July 13, 1971.
I
1992 consensus, 36–37, 123–124, 126, 128, 204 accommodation strategy, 50–53 ADB, see Asian Development Bank APEC, see Asia- Pacific Economic Cooperation ARATS, see Association for Relations Across the Taiwan Strait ARF, see ASEAN Regional Forum ASEAN, see Association of Southeast Regional Nations ASEAN Regional Forum, 117 AU Optronics Corporation, 72 Africa, 116, 117, 275 Agmon’s theory, 162–163 air force, 178–179, 180, 181, 182, 183, 186, 187, 188–189, 272–273, 278, 285, 286 al-Qaeda, 210 antiannexation law, 29, 138, 145, 149 Antiarms Purchasing Alliance, 98 Anti-Ballistic Missile Treaty, 279 antisecession law, 35, 37, 41, 43, 44, 45, 48, 54, 55, 56, 90, 105, 143, 144–145, 146, 147, 176, 197, 198, 244, 259, 282 armed forces, 179, 180, 184, 190, 196, 198, 203, 209–210, 218, 275, 280, 282, 284–285 Armitage, Richard, 237, 244 arms sales, 6, 8, 16, 18, 21, 42, 88, 91, 95, 96, 97, 99, 100–101, 103, 116, 124, 130, 131, 181–182, 188, 189, 195–196, 203, 205, 219, 232, 234, 236, 237, 242, 244, 245, 247, 248, 251, 278–279, 282, 283, 284
Asia-Pacific Economic Cooperation, 65–66, 117 Asian Development Bank, 65–66, 117 Asian-Pacific region, 78, 81–82, 117, 149, 190, 274, 277 Association for Relations Across the Taiwan Strait (ARATS), 3, 36, 39, 118, 120, 204, 217, 218 Association of Southeast Regional Nations (ASEAN), 27 asymmetric economic relations, 263 Austronesian peoples, 134–135 authoritarianism, 114, 127, 135, 198, 207, 208, 211, 212, 213–215, 216, 217, 219 autonomy, 40, 101, 115, 143, 176, 220, 231, 235, 246, 247–248 Beijing University, 20 Berger, Samuel, 206 Bijian, Zheng, 200 bilateral, antagonism, 138, 233–234; indirect trade, 152, 153–156, 163, 164, 170, 171; political dialogue, 24–25, 95, 97, 103, 263; relationship, 231, 242, 246, 250, 252; reunification, 234–235 Bin Laden, Osama, 210 bipolar balance, 233, 238 blue camp, see Kuomintang “Both Ends Abroad,” 169 “bright prospect,” 26 bureaucratic political model, 52, 55, 196 Bush, George H. W., 18, 92, 276
290
INDEX
Bush, George W., 6, 15–16, 21, 22, 23, 29–30, 31, 32, 38, 92, 93, 95, 100, 101, 106, 125, 130, 181–182, 230, 238, 241, 242–243, 244–245, 275–276, 278, 279–280, 284 Bush, Richard, 94 businesses, 72, 86, 145, 204, 237, 242, 259, 260, 265 businessmen, 66–67, 82, 148, 159, 212, 264, 265 CBM, see confidence building measures CEPA, see Closer Economic Partnership Arrangements CSCAP, see Council for Security Cooperation in the Asia Pacific CSIST, see Chung-Shan Institute of Science and Technology capital, 164, 167, 168, 205, 256 capitalism, 2, 3, 55, 210, 212, 238 Carter, Jimmy, 211, 234, 236 Central America, 19, 117, 233 Central Intelligence Agency (CIA), 52, 277 Chak-yuen, Kan, 7 Chan, Lien, 5, 7, 19, 29, 45, 66, 138, 140, 141, 142, 143, 146, 147, 148, 204, 244–245, 264–265, 284 Chen, Tian-jy, 167 Chen, Mi, 245 Cheney, Dick, 31, 285 Chen-fu, Koo, 3, 39, 120, 217, 249 Cheng, Joseph Y. S., 7 Chenghu, Zhu, 199 Chi, So, 120 “China is China, Taiwan is Taiwan,” 141 Chinese Government Striving for Maintaining Peace and Stability in the Taiwan Strait Region, The, 31 Ching Dynasty, 136 Ching-kuo, Chiang, 4, 116, 126, 135, 216, 235, 237, 238
Chu, Yun-han, 129 Chung-Hua Institution for Economic Research, 163 Chung-Shan Institute of Science and Technology (CSIST), 180 Civil War, China, 2, 3, 26–27, 44, 125, 135, 209, 229, 257 Clinton, Bill, 6, 15–16, 18, 19, 20, 21, 38, 39–40, 94, 100, 238, 240, 241, 242, 243, 279 Closer Economic Partnership Arrangements (CEPA), 26 Coastal Target Suppression, 188 coercive unification, see unification, coercive Cold War, 2, 3, 5, 17, 92, 135, 229, 232, 233, 237, 238, 245, 246, 247–248, 249, 250, 276, 277 command-and-control system, 179, 180, 183, 189, 286 commercialization, 138–139, 239, 259 Competition Committee of the Organization for Economic Cooperation and Development, 117 conditional, independence, 136–137; unification, 136–137 confidence building measures (CBM), 106 conservatives, 212, 237 constitution, 16, 23, 25, 26, 32, 40, 41–43, 44, 49–50, 54, 88, 89–90, 101, 102, 105, 122, 124–125, 128, 144, 147, 149, 196, 202, 203, 211, 214, 218, 219, 220, 242, 243–244, 257, 260, 261, 275, 287 containment, 18, 126, 237 Continue to Promote the Reunification of the Motherland, 126 controversy avoidance, 50–51 cooling-off period, 216 Coordination Council for North American Affairs, 18
INDEX Cornell University, 1, 3, 18, 23, 38, 249, 255 Council for Security Cooperation in the Asia Pacific (CSCAP), 117 Council on Foreign Relations, 206 creeping independence, 23, 89, 102–103, 105, 241, 257 “crisis of faith,” 238–239 crisis management, 186, 188 cross-service requirements, 284–285 cross-Strait, affairs, 17, 22, 23, 25, 31, 36, 64, 65, 78, 88, 96, 99, 106, 113–114; conflict, 96, 100, 101, 103–105, 118, 128, 156, 175–176, 201, 212, 213, 216, 219, 247, 284; dialogue, 20, 26, 32–33, 35, 36, 38, 40, 41, 42–43, 45, 46, 48, 50, 65, 118, 120, 121, 122, 123, 126, 128, 142, 212, 217, 249, 250, 259; economic exchanges, 65, 82, 105, 143–144, 152, 164, 170–171, 205, 256, 259; relations, 113, 114, 121–122, 124–125, 127, 130, 131, 137, 138, 143, 144–147, 197, 244, 249–250, 255, 257–258, 264, 265, 284; reunification, 40–41; status quo, 120, 125–126, 129 cultural exchanges, 1, 24, 28, 33, 36, 37, 42, 46, 65, 66, 104–105, 106, 119, 200, 206, 231 Cultural Revolution, 209, 239 culture, 114, 122–123, 129, 136, 147, 159, 196, 200, 207, 220 DPP, see Democratic Progressive Party Dachen Island, 2 Daohan, Wang, 3, 39, 40, 120, 217 “decapitation strategy,” 286 Defense Authorization Act (1998), 279 defense, 98, 100, 142, 177, 246; see also military
291
democracy, 19, 56, 101, 114, 115, 130, 131, 135, 136, 139, 143, 145, 146, 149, 150, 177, 196, 199, 200, 204, 205–206, 207–208, 209, 211, 213, 214, 234, 237, 238–239, 240, 247–248, 274, 275, 282 Democratic Progressive Party (DPP), 4, 24–25, 40, 41, 42, 85, 97–98, 100, 101, 102, 114, 120, 121, 123, 128, 135, 137–138, 139, 140, 141–142, 143, 144, 145, 146, 147, 148, 203, 205, 218–219, 239–240, 242, 243, 244, 256, 284 democratic, 115–116, 117, 121, 128, 138–139, 207, 208, 234 democratization, 3, 4, 8, 17, 18, 53, 54, 57, 105, 113, 114–115, 116, 119, 127, 131, 140, 142, 149, 196, 202, 206, 208, 209, 212, 213, 230, 234, 239 dependency, 232, 245, 256 deterrence, 95, 100, 104, 130, 211–212, 213–214 development, 8, 26, 31, 54, 75, 98, 116, 138–139,142 dictatorship, 197, 207, 210, 211, 216, 287 diplomacy, 15, 16, 18, 24, 45, 95, 113, 115–116, 117, 119, 130, 144, 186, 197, 204, 209, 219, 230, 235, 236, 237, 238, 244, 251, 252, 257, 287 diplomatic relations, 1, 4, 5, 15, 16, 19, 22, 24–25, 28, 30, 36, 39, 42, 45, 51, 65–66, 91, 95–96, 104–105, 116, 117, 131, 229–230, 231, 234, 235, 236, 246, 247, 250–251 direct competition, 168; investment, 168; links, 33, 64, 66, 86, 106, 259; trade, 86 dissidents, 135, 196 division of labor, 164–168, 170, 171
292
INDEX
domestic affairs, 134, 142; communities, 175, 252; factors, 36, 40, 46–47, 57; policies, 1, 3, 5, 6–7, 16, 17, 18, 27, 28, 29, 31, 46–47, 50, 148, 167; politics, 114, 115, 121, 122, 141, 142, 143, 148, 216, 244–245; priorities, 102, 125; problems, 50, 53, 55, 197, 200, 217; reform, 57, 231, 237 dual deterrence policy, 94, 95, 99–101, 129–131 dual-track policy, 17, 18, 23, 35, 39, 44–45, 51, 57 dual uncertainty, 240 “each side is a separate country,” 257, 260 East Asia, 1, 4, 5, 6–7, 40, 73, 104, 115, 144, 148, 169, 203, 209, 213, 216, 220, 231, 236–237, 241, 272, 273–276, 277, 278, 279 economic, achievements, 150, 201, 230, 248; advantages, 150, 170, 171, 201, 251; arrangements, 137, 21, 235, 242, 252; autonomy, 119; centripetal forces, 138–139; collapse, 149, 178, 272; command, 36; construction, 36, 37, 48–50, 65, 85, 102; dependence, 85, 156, 256; development, 4, 6–7, 8, 26, 31, 35, 48, 49, 55, 66, 67, 78, 89, 90, 99, 114–115, 116, 163, 166–167, 170, 207, 231, 232, 265, 266; environment, 73, 264–265; exchanges, 4–5, 6–7, 8, 9, 24, 26, 33, 37, 38, 39, 46, 64, 78, 82, 85, 86, 116, 117, 119, 138–139, 140, 152–153, 164, 166–167, 170; growth, 159, 196, 206, 237, 239, 240, 251, 256; incentives, 28, 89, 259; integration, 36,
51, 85, 105, 138–139, 163, 166–167, 171, 230, 238, 251, 255, 256, 259–260, 261, 262, 263, 264, 265–266; interaction, 119, 162, 170; interdependence, 88, 131, 259, 260, 262, 263, 264, 266; interests, 86, 245, 247; issues, 98, 99, 148, 245, 274; linkages, 66, 115, 263; markets, 171, 243, 266–267; miracle, 264; modernization, 28, 31, 36, 49, 50, 86; policies, 65, 73, 119; power, 117, 142, 229–230; prosperity, 5, 27, 31, 49, 128, 196, 261; reforms, 48, 66–67, 75–76, 152, 237, 255; relations, 65, 66, 67, 87, 90, 170–171, 204, 250, 255, 256, 262, 264, 266; ties, 36, 88–89, 139, 255, 265, 260–261, 262, 263, 266 Economic and Cultural Representative Office, 18 economy, 100, 115, 122–123, 135, 139, 144, 155, 167, 168, 171, 186, 197, 198, 199, 201, 205, 206, 209, 239–240, 255, 264, 274, 280, 285, 286–287 education, 46, 98–99, 106, 147, 148, 196, 265 Eight Points, 3, 15, 28, 37, 44, 50–51, 65, 66, 118, 126, 143, 218, 235–236, 259 Eisenhower, Dwight, 210, 284 elections, 113, 114, 119, 120–121, 123, 124, 125, 126–127, 128, 131, 134, 136, 137, 138, 139, 140, 141, 143, 146, 147, 176, 177, 196, 197–198, 203, 204, 208, 209, 211, 213–214, 230, 236, 237, 238–239, 240, 243, 245, 250, 252, 260, 264–265, 284 elites, 4, 31, 50–51, 52, 53, 196, 197, 199–200, 201, 202,
INDEX 207–208, 209, 211, 212, 213, 215, 219, 220 employment, 46, 168 Enlai, Zhou, 5 enterprises, 72–73, 152, 153, 156, 161–162, 167, 168, 169–170 entrepôt trade, 74–78, 82 environmental protection, 73–74 ethnic groups, 134–135, 137, 138, 139–140, 141, 208, 237, 251 ethnicity, 114, 134, 138, 239 Europe, 49, 136, 210–211, 233, 241, 242, 275, 276 European Union, 145, 244 Evergreen Corporation, 264 Executive Yuan, 96, 98, 184 exports, 74–75, 138–139, 153, 155, 156, 159, 161, 163, 164, 167, 168, 169–170, 255–256, 259 FDI, see Taiwan Direct Foreign Investment February 28, 1945 incident, see Hand-in-Hand Rally Fifteenth Party Congress, 120 “Five Nevers,” 25, 26 “Five Nos,” 122, 124, 242 Ford, Gerald, 236 foreign affairs, 237; aid, 117; exchange controls, 66–67, 186; intervention, 6, 28, 38, 56–57, 119, 196, 230–231, 248; investment, 67, 72–73, 106, 161, 169, 251, 263; policy, 18, 31, 46, 50, 52, 53–54, 55, 103, 113, 115–118, 197, 199–200, 208, 212, 230, 237, 238, 240, 241, 242, 264–265, 283; trade, 167, 169–170 Foreign Relations Authorization Act, 93 four exchanges, 235 Four Modernizations, 237 four nevers, 43 Fujian Province, 30, 51, 67, 78, 85–86, 135, 161, 168, 203
293
Garver, John, 55 GATT, see General Agreement on Tariffs and Trade GDP, see gross domestic product GSP, see General Staff Department GST, see Great Strategic Triangle General Agreement on Tariffs and Trade (GATT), 18 General Staff Department (GSP), 179 globalization, 35, 53, 170, 171, 199, 229 “Go Slow, Be Patient” policy, 260 “Go South” policy, 260 Goldstein, Steven, 119 Goldwater-Nichols Department of Defense Reorganization Act, 285 Goss, Porter, 277 Great Britain, 54 Great Strategic Triangle (GST), 231–232, 245, 246–247, 248 green camp, see DPP gross domestic product (GDP), 49, 74, 237, 251 growth rate, 155, 156, 168, 198, 251–252 Grubel, H. G., 163 Guam, 153, 273, 277 Guangdong Province, 67, 72, 134–135, 161, 167 Guidelines for National Unification, 249 Hagan, Joe, 50, 51 Haig, Alexander, 235, 236–237 Hainan incident, 78, 242 Hainan Island, 273 Hakkas peoples, 134–135, 136 Han incident, 272–273 Hand-in-Hand Rally, 135, 138, 139, 145, 146 Harding, Harry, 6, 7, 23–24 Hart, Ford, 32 Hawaii, 277–278 Heckscher-Ohlin-Samuelson trade theory, 163
294
INDEX
Heng-chee, Chan, 7 Hermann, Charles, 46–47 Hokkien, see Hoklos peoples Hoklos peoples, 134–135, 136 Hon Fu Tai Electronics, 72 Hong Kong, 39, 41, 47, 54, 65, 74–78, 79–82, 85, 86, 142, 143, 148–149, 152–153, 196–197, 202, 216, 218, 220, 235, 238, 239, 252 Hong Kong Census and Statistics Department, 65, 78, 81 Hong Kong Customs and Excise Department, 85 horizontal division of labor, 164, 167 Hsu, Szu-Chien, 51 Huangshi, 72 human rights, 117, 135, 238, 242, 247–248, 250 Hwang, Tsung, 163 IDB, see Inter-American Development Bank IGOs, see international governmental organizations INGOs, see international nongovernmental organizations IPR, see international, property rights identity issue, 113, 131, 134, 136, 137, 138, 139, 142, 143, 147, 149–150, 201, 205–206, 234, 237, 239, 251, 257 ideological anxieties, 238–239; attractiveness, 246; mobilization, 140 immigration, 134–135 imperialism, 3, 55, 210, 215, 218 imports, 75, 138–139, 155, 156, 163, 167, 169, 245, 259 independence, 1, 3, 5, 6, 7, 8, 15, 16, 17, 19, 20, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 35, 36–37, 38–39, 40, 41, 42, 43, 47, 48, 49, 50, 51, 52, 54, 56, 57, 89–90, 94, 95, 96, 97, 101, 102, 103, 104, 105, 114, 115,
116, 118, 119, 121, 122, 123, 124, 126, 127–128, 129, 131–132, 137, 138, 140, 142, 143, 144, 146–147, 149, 176, 177, 199, 201, 202, 203, 204, 206, 214, 215, 217, 230, 231, 232–233, 234–235, 239–240, 242, 244, 250, 251, 256, 257, 258, 259–260, 261, 262, 263, 265, 266, 272 independence movement, 23, 88, 118, 145, 149–150, 242, 245 “independent foreign policy,” 237 India, 274, 275 indirect, exports, 75; imports, 75, 78, 82 Indonesia, 275 industrial division of labor, 164–168, 170, 171 industrialization, 159, 161, 165–166, 168, 170, 200, 205, 206–207, 255 industry, 162, 163–164, 167, 168, 169, 170, 171, 255 instability, 130, 144–145, 149 insulation strategy, 50, 53–55 integration, 9, 35, 119, 163, 176, 238, 256 Inter-American Development Bank (IDB), 117 interdependence, 138–139, 170, 266 intergovernmental organizations, 115–117 international, affairs, 27, 28, 49, 51, 55, 65, 73, 96, 103, 126, 127, 134, 137, 144, 177, 200, 214, 232, 233, 263; arena, 116, 138, 215, 230, 234–235, 239, 249–250; balance of power, 233; community, 115, 138, 139, 140, 143, 145, 175, 190, 234, 242, 244; conflicts, 146, 196, 207; environment, 155, 159, 197; forums, 197, 230, 231, 239; governmental organizations (IGOs),
INDEX 229–230, 234; industrial chain, 168, 287; institutions, 207–208; isolation, 115, 131, 234, 239; markets, 159, 167, 169–170, 171, 214; nongovernmental organizations (INGOs), 229–230; organizations, 18, 19, 20, 21, 65, 115–117, 131; politics, 1, 5, 24–25, 29, 30, 31, 32, 114, 234; property rights (IPR) violations, 248; recognition, 16, 115–118, 125, 130, 131, 231, 238, 239–240 internationalization, 119 Internet, 53, 54, 202, 206 investments, 65, 66–67, 73–74, 82, 85–86, 104–105, 116, 119, 149, 153, 156, 159, 161, 162–166, 167–168, 169, 170, 171, 205, 247, 251, 255–256, 259, 260–261, 263, 264 Iraq, 199, 244 Islam, 6, 229, 274, 275 isolation, 113, 114, 138, 149–150, 177, 234–235, 239 Japan, 27, 38, 40, 42, 82, 136, 145, 153, 196, 199, 203, 205, 209, 211, 215, 220, 231, 236–237, 242, 251, 272, 273, 275, 276, 279, 287 Ji, You, 52 Jiabao, Wen, 54, 73, 244 Jiang’s Eight Points, see Eight Points Jiangsu Province, 67, 72, 161, 168 Jianying, Ye, 2, 235 Jinmen (Quemoy), 2, 56, 203, 235 Jintao, Hu, 3, 21, 43, 44, 45, 47, 48, 66, 127, 143, 147, 148, 198, 199, 204, 209, 212, 213, 219 Joint Chiefs of Staff, 283 Joint Requirements Oversight Council, 284 joint ventures, 73, 161–162
295
Jones, David, 283 Jyh-horng, Jan, 217 KMT, see Kuomintang Kai-shek, Chiang, 4, 135, 136, 138, 200, 202, 211, 216, 257 Kao, Charng, 163, 167, 168 Kaohsiung Harbor, 181, 198 Kaohsiung, 98 Keelong Harbor, 181, 198 Kelly, James, 6, 101, 244, 275 Kinmoy Island, 184 Kissinger, Henry, 4, 5, 6, 44, 211, 236–237, 246 Kitty Hawk incident, 272–273 Koo-Wang talks, 118, 120 Ku, Ing-hua, 165 Kuomintang (KMT), 2, 3–4, 24, 29, 40, 41, 65, 97–98, 114, 115, 120, 121, 122, 128, 135, 136, 137–138, 139, 140, 141–142, 143, 146, 148, 200, 202, 203, 204, 205, 210, 230, 231, 237, 239–240, 242, 243, 257, 265, 280, 284 labor, 164, 205, 265, division of, 164–168, 170, 171; disputes, 159; intensive industries, 159, 162, 166, 255; movement, 153, 164–167; reforms, 255 Lantos, Tom, 210–211 Latin America, 116, 275 Lawless, Richard, 91 Leach, James A., 7 leadership, 2, 3, 7, 24, 25, 35, 46–47, 48, 47–50, 51–52, 53, 54, 55, 57, 64, 65, 66, 85, 86, 89, 101, 102, 104, 118, 122, 147, 175, 178, 183, 197, 200–201, 208, 209, 212, 214, 216, 217, 218, 233, 234, 237, 238, 241, 243, 248, 256, 259, 261, 263, 264, 266, 273, 282, 283–284, 285
296
INDEX
Legislative Yuan, 24–25, 28, 43, 98, 114, 141, 142, 203, 210, 243, 244, 260, 279, 283–284, 285 legitimacy, 48, 56, 126, 127, 140, 144, 146, 211, 213–214, 234, 235 Lenin, Vladimir, 200, 218, 238–239, 282 liberalism, 86, 127, 201, 206, 207–208, 209, 210, 211, 212, 213, 214, 216, 219, 220, 238, 239–240, 252, 260 liberation, 2, 7, 15, 16, 36, 44, 88–89, 135–136 Lieberthal, Kenneth, 20, 215, 217 Limongi, Fernando, 207 Lin, Nancy Y. J., 163 Lloyd, P. J., 163 localization, 230, 237 Lu, Annette, 139, 140, 286 Luce, Henry, 211 MDT, see Mutual Defense Treaty MFN, see Most Favored Nation MND, see Ministry of National Defense Macao, 143, 148–149, 235, 239 Macau, 39, 41, 196–197 Machimura, Nobutaka, 273 Mainland Affairs Council, 184 “mainland fever,” 249 mainlanders, 135, 136–137, 138, 148 manufacturing, 162, 166, 168–169, 259, 264, 282 Marine Corps Expeditionary Force, 273, 278 martial law, 135, 255 Marx, Karl, 213, 238–239, 282 Marxism-Leninism, see Marx, Karl and Lenin, Vladimir Matzu Island, 184 Mazu (Matsu), 2, 56, 203, 235 media, 44, 53–54, 56, 114, 130, 134, 144, 145, 146, 147, 211, 219, 264, 286–287
Message to Compatriots in Taiwan, 2, 47, 64, 75, 78, 235 Middle East, 101, 199, 229, 245, 274, 275 middle-of-the-road strategy, 122 militarization, 88, 106, 203, 209, 218, 219 military, 28, 51, 85, 199, 200, 205, 209–210, 235, 275–276, 283–284, 285, 286; action, 122, 131, 186, 273; assessment, 280, 284; assistance, 95, 103, 234; attacks, 175, 176, 178, 190, 244; balance, 27, 92, 103, 130; buildup, 273, 279–280; capabilities, 92, 102, 206, 279–280; coercion, 18, 37–39, 43–44, 51, 94, 104, 118–119, 240–241; conflict, 46, 87, 88, 93, 102, 106, 118, 122, 123, 186, 188, 190, 256, 277; cooperation, 9, 21, 22–23, 26, 91, 242–243, 245; deterrence, 45, 51, 57; exercises, 38–39, 44, 88, 102,183–184, 279; force, 2, 3, 6, 7, 8, 15, 16, 17, 21, 22–23, 24, 27, 28, 31, 35, 39, 41, 42, 45, 48, 49, 51, 55, 56, 100, 104, 118–119, 121, 122, 131, 139, 143, 144, 149, 176, 180, 189, 215, 230, 234, 235–236, 238–239, 240, 241, 257, 260, 272, 274, 276, 278, 280, 282, 287; installations, 175; intelligence, 184, 186, 285–286; means, 23, 31, 35, 39, 130, 139, 177, 284; power, 197, 229–230; reconnaissance (C4ISR), 285–286; relations, 29, 92–93, 95–96, 243; response, 130, 248, 266; rules of engagement, 186–187; strength, 51, 96, 213, 281, 286–287; threats, 114, 120–121, 139, 178, 184, 186,
INDEX 209, 278, 280, 287; ties, 29, 92–93 military-to-military contacts, 282 military-to-military cooperation, 242 military-to-military exchanges, 91, 92–93, 106 Ming Dynasty, 136 Mingwei, Zhou, 30 Ministry of Economic Affairs, 166, 184, 264 Ministry of Finance, 184 Ministry of Foreign Affairs, 184, 250 Ministry of National Defense (MND), 180, 184–185, 186, 188, 285, 286 Ministry of the Interior, 184 Minnan language, see Hoklo Minqing, Zhang, 41 mobilization, 50, 53, 55–58, 127, 134, 139, 140 modernization, 4, 27, 89, 103, 175, 179, 190, 200, 207, 237, 239, 280 Monterey Talks, 93 Most Favored Nation (MFN), 238, 250 Mundell’s theory, 162 Mutual Defense Alliance, 235–236 Mutual Defense Treaty (MDT), 230, 243 Mutual Security Treaty (1954), 91, 279 NATO, see North Atlantic Treaty Organization National Chengchi University, 136 National Congress of the Communist Party of China, 65 National Emergency Act, 186 National Party Congress, 27, 31, 36 National People’s Congress, 2, 43, 64, 90, 143, 145, 198, 218 National Reunification Guidelines, 122
297
National Science Research Council, 179, 189 National Security Bureau, 184–185 National Security Council, 20, 184, 203, 277 National Security Strategy, 243, 274, 277–278 National Security Strategy of the United States of America, The, 275–276 nationalism, 21, 35, 54, 55, 57, 113, 115, 121–122, 124, 127, 138, 143, 150, 153, 196, 201, 208, 218, 229, 230, 234, 239–240, 242, 248 Nationalist Revolution, 240 Nationalists, see Kuomintang “Native Taiwanese,” 113, 114–115 naval, bases, 182; blockade, 181–182, 198, 215; power, 252 navy, 188–189, 199–210, 212, 272–273, 282 neoconservatives, 237 “New Taiwanese,” 148 Nine-Point initiatives, 2, 235–236 Ningbo, 72 Nixon, Richard, 1, 5, 246 “no haste, be patient” policy, 119 “no-peace-no-war” equilibrium, 210 normalization, 230, 237–238 North Atlantic Treaty Organization (NATO), 93 North Korea, 3, 30–31, 95, 101, 203, 233, 242, 243–244, 272, 274, 275, 276 Nye, Jr., Joseph S., 217 OECD, see Competition Committee of the Organization for Economic Cooperation and Development Ohno, Yoshinori, 273 Okinawa, 273, 276 Olympic Games, 49–50, 73–74, 102, 117, 123, 261
298
INDEX
One China, one Taiwan, 19, 38, 65–66, 146–147 One China principle, 5, 16, 17, 18, 19, 20, 22, 24, 25, 26, 28, 29, 32, 33, 36–37, 38, 40, 42, 45, 48, 56, 65, 66, 89–90, 97, 99–100, 104, 116, 121, 122–123, 124, 125–126, 128, 131–132, 142, 145, 149, 197, 202–203, 204, 208, 214, 215, 219, 234, 239, 242, 247, 256, 257 One China Principle and the Taiwan Issue, The (White Paper), 3, 28, 39–41, 44, 45, 48, 54, 55, 56, 121 “One country on each side of the Strait,” 25, 29, 37, 42, 89–90, 123, 124, 243 One country, two systems formula, 36, 39, 43, 47, 64, 123–124, 126, 143, 148–149, 176, 196–197, 235, 249 open-door policy, 66–67 operational ambiguity, 24 opposition party, 54, 66, 97–98, 99, 102, 105–106, 135, 144, 148 overheated economy, 73, 81–82 PAC, see Patriot Advanced Capability Air Defense System PFP, see People First Party PLA, see People’s Liberation Army PLA Daily, 44 Pakistan, 274 Parris, Chang, 203 Patriot Advanced Capability Air Defense System (PAC), 285 patriotism, 196, 198, 201, 212, 213, 214 peace, agreement, 51, 120; commission, 217; constitution, 275; framework, 124 peaceful, evolution, 26, 212, 238; independence, 102–103, 202; inducement, 39; integration,
35, 46, 57; international environment, 37, 49–50, 130; negotiation, 26; offense, 45, 118–119; relations, 146; resolution, 15, 17, 22, 35, 240; reunification, 17, 26–27, 28, 31, 32, 36, 37, 39, 40, 41, 43, 44, 45, 64–65, 66, 85, 88–89, 90, 92, 118, 143–144, 148, 149, 176, 196, 198, 218, 230 Pearl River Delta Region, 72, 86, 169 Peking University School of International Affairs, 200 Penghu Island, 184 People First Party (PFP), 29, 44, 65, 97–98, 115, 204–205, 280, 284 People’s Liberation Army (PLA), 38–39, 52–53, 177, 178, 179, 182, 183, 184, 186, 188–189, 190, 196–197, 272–273, 279, 282, 285 people-to-people diplomacy, 104–105, 235 per-capita income, 206–207, 252 Philippines, 209, 275, 277 pluralistic society, 8, 196, 213 polarization, 246 political achievements, 4–5, 196, 201, 248; arena, 266; arrangements, 95–96, 201, 235; atmosphere, 52, 86, 148, 201; centrifugal forces, 138–139; compatibility, 137; confidence, 106; conflicts, 66, 100, 148, 149, 205, 256; democratization, 135; deterrence, 37, 43–44; development, 103–104, 147, 176, 206; dialogue, 39, 51, 96, 103–104, 136, 215; environment, 262, 266; groups, 139; identity, 135–136, 201; implications, 138–139; initiatives, 89, 102; integration,
INDEX 9, 90, 122, 123, 256; interaction, 96, 105; negotiation, 128; relationship, 130, 264, 266; reunification, 230; system, 238, 282; ties, 73 politicization, 8–9, 252 populists, 213, 219 Powell, Colin, 31–32, 95, 230, 283 power, balance of, 246, 252; imbalance, 231; transition, 125 pragmatic phase, 116, 120, 121–122, 126, 131, 238 production, 162, 163, 166, 163 prohibition period, 75 pro-independence movement, 130, 138, 146, 265, 262, 263–264, 265–266 propaganda, 56, 57, 89, 126, 144 prosperous society, 89, 101, 142, 220 pro-unification, 141, 148 Przeworski, Adam, 207 Putnam, Robert, 50 QDR, see Quadrennial Defense Review Qichen, Qian, 28, 39, 45, 66 Qing Dynasty, 55 Qinghong, Zeng, 209 Quadrennial Defense Review (QDR), 276, 278 Quan, Kong, 209–210 Reagan, Ronald, 234 recognition, 216, 235, 237, 250 reconciliation, 139, 148, 149–150, 204–205, 243 reexports, see entrepôt trade reforms, 2, 65, 105, 114, 125, 138, 141, 144, 147, 213, 217, 237, 238, 239, 255 regime legitimacy, 47–48, 102, 129, 132, 136, 177, 207, 208, 211, 212–213, 215, 217, 220, 229, 234, 235 Regulations Encouraging Investment by Taiwan Compatriots, 67, 259
299
reintegration of territory, 36 Resolute Project, 179 Resolution on Taiwan’s Future, 128 reunification, 1, 2, 3, 15, 17, 20, 24, 32–33, 35, 36, 37, 39, 40, 41, 43, 44, 47, 48, 49–50, 51, 53, 54, 55, 56, 57, 88–89, 94–95, 118, 120, 121, 125, 126, 127, 128, 148, 230, 234–235, 239, 249, 250, 257, 258, 259 revisionist phase, 121–122, 123 Rice, Condoleezza, 97, 273 Road to Democracy, The, 39–40 Romberg, Alan, 88 Ross, Robert, 28 Roth, Stanley, 19 Rowen, Harry S., 211 Rumsfeld, Donald, 273 Russia, 8, 183, 203, 238, 246, 275, 279; see also, Soviet Union SAR, see Special Administrative Regions SARS epidemic, 126, 138 SEF, see Strait Exchange Foundation Schlieffen Plan, 199 Scobell, Andrew, 94 secessionist forces, 43, 90, 195, 197, 198 Second Republic, 28 security, 1, 6, 7, 18, 64–65, 85, 94, 96, 99, 101, 117, 124, 125, 131, 200, 201, 205, 209, 212, 216, 231, 237–238, 239, 242, 243, 246, 248, 274, 277, 279, 280, 286–287; agreement, 217; challenge, 18, 275; commitments, 23–24, 91, 103, 247; concerns, 250; interests, 218; relations, 91, 102; treaty, 3–4 self-determination, 142, 206, 242, 243 self-realization, 239 separatism, 89, 90, 102, 103, 127, 198, 202, 203, 218
300
INDEX
separatist movements, 25, 30, 38, 40, 42, 44, 56, 89, 90, 94, 96, 103–104, 202, 219 Seton Hall University, 47 “Seven Areas for Cooperation,” 26 Shandong Province, 168 Shanghai, 67, 72, 120, 161, 234, 252, 261 Shanghai Expo, 261 Shanghai Taiwan Compatriots Chain Enterprises Alliance Association, 72 Shi, Qiao, 52–53 Shiba, Ryutaro, 38 Shipping and Cargo Statistics Section of the Census and Statistics Department, 81 Shui-bian, Chen, 4, 21–22, 23, 24, 25, 27, 28–29, 31–32, 40, 41–42, 44, 85, 86, 89, 90, 99, 100, 115, 116, 117, 121–125, 126, 127, 128, 129, 131, 139, 140, 141, 142, 145, 146, 148, 167, 197, 199, 202, 203, 205, 208, 211, 213, 217, 219, 242–243, 244–245, 252, 256, 257, 260, 264–265, 284, 286 Shultz, George, 236–237, 241 Singapore, 153, 169, 277 Six-Point Initiatives, 236, 245, 235–236 Sixteenth National Party Congress, 3, 27, 31, 65 Snyder, Jack, 208 social, changes, 4–5; communication, 66; compatibility, 137; development, 90; groups, 36, 139; implications, 138; issues, 99; order, 186; protest movement, 135; stability, 26; tensions, 135, 149; terms, 201; ties, 36, 88–89; welfare, 98 socialism, 49, 95, 209, 233 Soong, James, 29, 44, 45, 46, 65, 66, 138, 140, 141, 142, 143,
144, 146, 147, 148, 242, 244–245, 264–265, 284 South Korea, 3, 82, 85, 153, 169, 209, 273–274, 275, 276, 279 Southeast Asia, 7, 86, 144, 155–156, 203, 260, 274, 275 sovereign independence, 17, 117–118, 125, 129, 140, 143, 147, 149 sovereignty, 24, 25, 26, 27, 28, 29, 36–37, 38, 39, 41, 42, 43, 45, 47–48, 50, 51–52, 55, 56, 89–90, 96, 102, 113, 115, 116, 119, 124, 126, 127–128, 130, 140, 142, 147, 149, 176, 177, 201–202, 204, 206, 208, 215, 216, 217, 235, 236, 239, 243, 244, 256–257, 258, 259, 260–261, 262, 266, 275, 281, 284 Soviet Union, 5, 18, 91, 195, 230, 232, 233, 234, 236, 237–238, 242, 245–246, 247–248, 276 Special Administrative Regions (SAR), 64, 235 Special Investment Zones, 159 sphere of influence, 234 stability, 26, 27, 73, 75, 78, 90, 96, 130, 145, 205, 207, 216 Standing Committee of the National People’s Congress, 2, 64, 75, 78, 235 Standing Committee of the Politburo, 199 state-to-state relations, 24, 29, 40, 41, 120, 122, 126, 128, 186 Statistics Section of the Ministry of Economic Affairs, 166 status quo, 1, 6, 7, 8, 15–16, 17, 20, 22, 23, 24, 27, 28, 29, 30, 31, 32, 35, 37, 41, 43, 44, 97, 98, 113, 114, 115, 118, 125, 129, 130, 131–132, 144, 145, 149, 186, 198, 230, 231–232, 242, 244, 249, 252, 261, 265, 278
INDEX Strait Exchange Foundation (SEF), 3, 36, 39, 118, 120, 204, 217, 218 strategic, advantage, 6, 18, 248; ambiguity, 15–16, 17, 22–23, 93–94, 130, 195, 214, 215, 240, 244; calculations, 17; clarity, 15–16, 23, 24, 94, 130, 241; competitor, 21; constituency, 252; cooperation, 250; coordinator, 230; flexibility, 273–274; incentives, 103; interests, 240, 247; parity, 233; partnership, 21, 238, 241, 246; priorities, 97; relationship, 230; security, 101; triangle, 239, 240, 245; value, 209; vulnerability, 98 Strom Thurmond Defense Authorization Act, 279 structural analysis, 8, 135, 248 Suao Harbor, 181 Suettinger, Robert, 48 Sutter, Bob, 6 Suzhou, 72 Swaine, Michael, 50–51, 52 TAO, see Taiwan Affairs Office TMD, see Theater Missile Defense TRA, see Taiwan Relations Act TSEA, see Taiwan Security Enhancement Act TSU, see Taiwan Solidarity Union Taiwan Affairs Leading Small Groups, 51 Taiwan Affairs Office (TAO), 25, 40, 41, 42, 46, 90 Taiwan Affairs Office of the State Council, 30, 31 Taiwan Businessmen Investment Areas, 67 Taiwan Businessmen’s Association, 264 Taiwan Central Election Committee, 140
301
Taiwan Direct Foreign Investment (FDI), 161 Taiwan First ideology, 138, 139, 140 Taiwan Formosa Plastics Group, 72, 85–86 Taiwan Honhai Technology Co., 72 Taiwan Hsing Ta Cement Co., 72 Taiwan Information Office of the State Council, 40 Taiwan Mainland Affairs Council, 67, 85, 120 Taiwan Policy Review (1994), 19 Taiwan Relations Act (TRA), 17, 91, 94, 97, 149, 188, 216, 235–236, 242, 244, 247, 278, 279, 282–283 Taiwan Security Enhancement Act (TSEA), 279 Taiwan Semiconductor Manufacturing Company, 72 Taiwan Solidarity Union (TSU), 114 Taiwan Strait, 1, 2, 3–4, 5, 7, 8, 16, 17, 20, 22, 23, 25, 26, 27, 29, 30, 31, 32–33, 37, 38, 40, 42, 44, 46, 49, 51, 57, 64–65, 73, 74, 90, 104, 113–114, 115, 118, 119, 125, 137, 139, 149, 153, 203, 240, 255, 272 Taiwan Strait crisis, 15, 18, 19, 20, 24, 39, 44, 47, 51, 54, 56, 88–89, 92–93, 94, 118, 121, 176, 186, 240, 241, 249 Taiwanese, 135–136, 138, 139, 141, 143, 145, 149–150, 152–153, 195–196, 198, 239, 251, 255–256, 259 Taiwanese identities, 113, 114–115, 119, 121, 136, 137, 138, 142, 143 technology, 53, 54, 117, 147, 163, 175, 202, 206, 256, 280, 285–286 Teng-hui, Lee, 1, 2, 3, 4, 15–16, 18, 19, 23, 24, 28, 29, 36–37, 38, 39–40, 44, 56, 78, 85–86,
302
INDEX
Teng-hui, Lee––continued 88–89, 115, 116, 117, 118–121, 126, 127, 128, 131, 135, 136, 148, 184, 186, 202, 203, 211, 238, 249, 252, 255, 256, 257, 260, 261 Ten Point declaration, 144 territorial integrity, 25, 27, 29, 36, 41, 42, 43, 45, 49, 51–52, 55, 56, 90, 102, 127, 177, 197, 257, 274 terrorism, 5, 6, 21, 30–31, 95, 101, 238, 242, 272, 274, 275 Thailand, 209, 274, 275 Tharaken, P.K.M, 163 Theater Missile Defense System, 95, 96 Third If, 28, 41, 43, 44, 45 Third World, 233, 234 Three Big Mountains, 55 three joint communiqués, 30, 38, 91, 96, 97, 149, 204, 234, 236–237, 239, 247 three links, 26, 65–66, 122, 147, 212, 213, 235, 238, 243 Three Nos, 15–16, 19, 39–40, 94, 235, 241 three represents, 54 three-section delineation, 127 Thurmond, Strom, 279 Tiananmen Square incident, 49, 78, 82, 237–238, 239, 240, 246, 249 totalitarianism, 282 tourism, 46, 66, 73–74, 123, 143–144, 146, 162, 247, 249, 250–251, 252, 260 trade, 6–7, 37, 46, 66, 74, 75, 106, 116, 119, 122–123, 152, 155, 162–164, 198, 205, 247, 249, 255, 260–261, 263, 264, 274, 275, 287; associations, 66; bilateral, 153, 156; concerns, 250; data, 81; deficit, 75, 155; development, 64–65, 155; disputes, 251; exchanges, 82,
104–105; export-oriented, 159; free, 66; imbalance, 155, 238, 248; indirect, 78, 85, 86, 162; interests, 73; interindustry, 163; intraindustry, 163–164; links, 66; missions, 250–251; partners, 163, 169–170; policies, 65; regime, 73; relations, 66, 123, 171; surplus, 78, 167, 205; triangular, 153 transition of power, 2, 114 transshipment mode, 74–75, 78–82, 83–85 triangular, balance, 232, 241, 245; change, 249; chronological dynamic, 248; competition, 250; compounded, 245; configuration, 232–233, 245; dependence, 248–249; dynamics, 249; frustration, 248; logic, 246; perspective, 231; relations, 251, 250; shift, 244; terms, 237; trade, 153 Tucker, Nancy Bernkopf, 213 Turkey, 275 Twelfth National Party Congress, 36, 237 Two Chinas, 19, 65–66, 146–147, 248 two level game, 46, 50 two-plus-two talks, 273 two reciprocal political entities, 37 two shores, one China, 146–147 two-states theory, 28, 40, 44, 89, 249 two track diplomacy, 45, 216 U.S. House Concurrent Resolution, 301, 20 U.S. Senate Concurrent Resolution, 107, 20 U.S.-China Security Review Commission, 280 U.S.-Taiwan Business Council Defense Conference, 285 U.S.–Taiwan Defense Summit, 93
INDEX U.S.-Taiwan Military Mutual Defense Treaty, 16 unification, 20, 22, 25, 27, 31, 41, 96, 119, 122, 124, 127, 129, 137, 140, 141, 143, 144, 145, 148, 149, 150, 176, 195–196, 197, 200, 201, 213, 218, 220, 229, 230, 239–240, 249, 252, 257, 258, 259–260, 261, 265 United Nations, 4, 37, 45, 116, 126, 142, 229, 234, 257, 283 United States Congress, 7, 18, 20–21, 38, 77, 92, 93, 94, 199, 210, 245, 277, 278–279, 280 United States Congressional Subcommittee on Asia and the Pacific, 7 United States Pacific Command, 277–278 vertical division of labor, 166, 167 Vietnam, 5, 233, 234, 237, 245, 277 WHA, see World Health Assembly WHO, see World Health Organization WTO, see World Trade Organization War on Terror, 242 weapon systems, see military attacks Western Pacific Region, 94 white terror, 135 Wolf, Frank, 210–211 Wolfowitz, Paul, 237 World Health Assembly (WHA), 138 World Health Organization (WHO), 116, 126, 131
303
World Trade Organization (WTO), 31, 67, 73, 78, 86, 117, 123, 242 World War I, 199 World War II, 195, 211, 229, 231, 246 Xian, 199 Xiaoping, Deng, 2, 7, 24, 30, 36, 47, 48–49, 56, 65, 143, 196–197, 209, 235 Yang, Winston, 47 Yangtze River Delta Region, 72, 161, 169 Yantai, 72 Yat-sen, Sun, 202, 219 Yibo, Bo, 235 Ying-jeou, Ma, 146, 204–205, 210 Yongnian, Zheng, 208 Yuan, Hong, 209–210 Yung-fa, Chang, 264 Yunlin, Chen, 25, 30, 31 Zedong, Mao, 2, 6, 7, 44, 47, 210 Zemin, Jiang, 2–3, 6, 15, 19, 21, 27, 28, 29–30, 31, 37, 44, 47, 48, 50–51, 52–53, 54, 65, 66, 106, 118, 120, 126, 143, 149, 196, 198, 199, 212, 218, 23–236, 259 zero-sum game, 117, 131 Zhang, Qingmin, 7 Zhao, Quansheng, 51 Zhao, Suisheng, 118 Zhejiang, 72, 161
