Australia and Taiwan : Bilateral Relations, China, the United States, and the South Pacific [1 ed.] 9789004224209, 9789004223462

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Australia and Taiwan

Australia and Taiwan Bilateral Relations, China, the United States, and the South Pacific By

Joel Atkinson

LEIDEN • BOSTON 2013

Library of Congress Cataloging-in-Publication Data Atkinson, Joel.  Australia and Taiwan : bilateral relations, China, the United States, and the South Pacific / by Joel Atkinson.   p. cm.  Includes bibliographical references and index.  ISBN 978-90-04-22346-2 (hardback : alk. paper) — ISBN 978-90-04-22420-9 (e-book) 1. Australia—Foreign relations—Taiwan. 2. Taiwan—Foreign relations—Australia. 3. Australia—Foreign relations—China. 4. China—Foreign relations—Australia. 5. Australia—Foreign relations—United States. 6. United States—Foreign relations—Australia. 7. Taiwan—Foreign relations—China. 8. China—Foreign relations—Taiwan. 9. Taiwan—Foreign relations—United States. 10. United States—Foreign relations—Taiwan. 11. East Asia—Strategic aspects. I. Title.  DU113.5.T28A75 2013  327.94051249—dc23

2012033980

This publication has been typeset in the multilingual “Brill” typeface. With over 5,100 characters covering Latin, IPA, Greek, and Cyrillic, this typeface is especially suitable for use in the humanities. For more information, please see www.brill.com/brill-typeface. ISBN 978-90-04-22346-2 (hardback) ISBN 978-90-04-22420-9 (e-book) Copyright 2013 by Koninklijke Brill NV, Leiden, The Netherlands. Koninklijke Brill NV incorporates the imprints Brill, Global Oriental, Hotei Publishing, IDC Publishers and Martinus Nijhoff Publishers. All rights reserved. No part of this publication may be reproduced, translated, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission from the publisher. Authorization to photocopy items for internal or personal use is granted by Koninklijke Brill NV provided that the appropriate fees are paid directly to The Copyright Clearance Center, 222 Rosewood Drive, Suite 910, Danvers, MA 01923, USA. Fees are subject to change. This book is printed on acid-free paper.

Contents Acknowledgments ...........................................................................................

ix

Introduction ......................................................................................................

1

PART one

History Chapter One Early Links: European Colonization to the Start of the Korean War ...................................................................................... Inter-Colonial Relations ............................................................................ World War II: Australian Thinking about Taiwan ............................ Taiwan Comes Under Chinese Nationalist Rule, 1945–1949 ..........

9 9 11 12

Chapter Two Early Cold War: Australia’s Taiwan Problem, 1950–1972 ....................................................................................................... Taiwan Moves into Focus ........................................................................ A Brief “Honeymoon” in Australia-ROC Relations ........................... The End of Australia’s Official Relations with Taipei, 1971–1972 ................................................................................................... From “Right to Self-Determination” to “Right to Separate Status” ........................................................................................................

38

Chapter Three Late Cold War: Australia’s Taiwan Opportunity, 1972–Early 1990s .......................................................................................... Closing the Door on the ROC, but not Taiwan ................................. Australia-Taiwan Relations Re-Considered ........................................ The Expansion of Australia-Taiwan Ties ............................................. Australia-Taiwan Relations Peak? .........................................................

41 41 47 52 56

17 17 27 31

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contents PART two

The Taiwan issue in Australia’s relations with China and the US Chapter Four Australian Policy Feels the Post-Cold War Squeeze, 1989–2001 ..................................................................................... Australia’s Taiwan Problem Redux ....................................................... The Howard Government Confronts China ....................................... China Redirects Australian Policy ......................................................... Sino-Australian Relations “Recovered” ................................................. Growing Challenges ................................................................................... Deus ex Machina: 9/11 ................................................................................

61 63 64 66 68 71 76

Chapter Five Australia Sidelines Taiwan, 2001–2007 ........................ 77 Australia Has its Cake and Eats it Too ................................................. 77 An Australian Foreign Minister Wavers on ANZUS in Beijing ..... 81 The Australian Government Steps Back .............................................. 85 US Still not Satisfied ................................................................................... 92 Inconvenient Democracy ......................................................................... 96 Selling a Benign China .............................................................................. 98 China’s Resilient Confidence in Australia ........................................... 101 “The Previous Balance has been Broken” ............................................ 108 Chapter Six Confronting China—With or Without Taiwan, 2007–2011 ....................................................................................................... Australia’s Own “Frenemy-ship” with China ...................................... The Largely Invisible Taiwan .................................................................. Sino-US Competition Laid Bare ............................................................. More Emphasis on Balancing ................................................................. Chinese Hopes and Fears for Australia ................................................ Australia Embraces the US “Pivot” ........................................................ Stormy Waters Ahead? ..............................................................................

111 112 116 117 120 126 130 133



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PART three

Australia-Taiwan relations in China’s shadow Chapter Seven Politics Meets Economics: A Focus on Bilateral Issues .............................................................................................................. High Level Visits .......................................................................................... Diplomatic Representation ...................................................................... Agreements and Dialogue ........................................................................ International Organizations .................................................................... Trade and Investment Flows ................................................................... State-to-State by Any Other Name ........................................................ Chapter Eight South Pacific Friction ..................................................... Australia and Taiwan on a Collision Course ...................................... Howard and Lee Teng-hui Governments Clash over Papua New Guinea ................................................................................ Australia’s Intervention in Solomon Islands ...................................... Chen Shui-bian at Odds with Australia ............................................... Taiwan’s “Shift in Diplomacy” ................................................................. Nauru Switches Back to Taiwan ............................................................. A South Pacific Partnership? ................................................................... The March 2006 Australian Senate Report ......................................... Wen Jiabao Visits the South Pacific ...................................................... Australia-Taiwan Tension Boils Over in Solomon Islands ............. Ma Ying-jeou Visits Australia .................................................................. Taiwan’s South Pacific Summit .............................................................. A Major Aid Scandal .................................................................................. Australia’s Continuing Problems in the South Pacific .................... A New Atmosphere under Rudd and Ma ............................................ An Australia-Taiwan Truce? ....................................................................

137 137 145 149 151 155 160 163 163 167 171 174 175 177 178 180 183 184 185 187 188 189 192 194

Conclusion Australia-Taiwan Relations in Perspective .................... 197 Australia-Taiwan Relations Defined ..................................................... 200 Future Prospects ......................................................................................... 201 References .......................................................................................................... 203 Index .................................................................................................................... 227

ACKNOWLEDGMENTS I am supremely grateful for Bruce Jacobs’ support and guidance. This book also benefited from the input of the late Dennis Woodward. He is sorely missed. Yuan Zaijun provided expert research assistance. Lin Ting-hui of Central Police University in Taiwan kindly provided his insightful published and unpublished research. I thank the many officials, politicians, journalists and scholars who generously made themselves available for interviews. These interviewees are not identified in the text in order to protect confidentiality. Finally, I gratefully acknowledge grant support provided by Monash University and the Taiwan Foundation for Democracy.

INTRODUCTION On one level, the Australia-Taiwan relationship is one of two countries that have a lot in common. Their populations are estimated to be roughly 22 and 23 million respectively (though Australia’s land area is 238 times larger). Both are relatively wealthy; Taiwan’s nominal GDP is estimated at US$504.6 billion and Australia’s at US$1.507 trillion. GDP per capita in purchasing parity terms is closer: US$37,900 for Taiwan and US$40,800 for Australia. Both are advanced economies with a high to very high proportion of labor employed in the service sector. China, Japan and the United States are the top three trading partners of both countries. There is also great economic complementarily and significant two-way trade between the two. The similarities continue in other areas, too. They are both liberal democracies, though Australia is one of the oldest and Taiwan one of the newest. Each spends 2–3% of GDP on defense. In terms of geopolitics, they are both “spokes” in the US-led “hub and spokes” East Asian security system. Historically and culturally, both are settler societies with indigenous minorities. Similarly, they were both born out of the age of European colonization and share a maritime orientation and history. Yet at another level, and despite these commonalties, the relationship between Australia and Taiwan is anything but routine. From Australia’s perspective, the bilateral relationship is in a class of its own in that China zealously leverages its considerable power to minimize Australian recognition of Taiwan’s sovereignty—often with consequences that are at once both bizarre and appalling. On the other hand, for Taiwan, Australia is unique or almost unique in being one of only two countries, along with Japan, that could conceivably assist the US in defending Taiwan from a Chinese attack. Australia’s role as an obstacle in Taiwan’s attempts to win diplomatic recognition from small and impoverished countries was also unparalleled in Taiwan’s experience. This book approaches this intriguing and multifaceted relationship from a historical perspective, divided into three parts. The first part looks at Australia-Taiwan relations to the end of the Cold War. This shared past is a largely ignored facet of both countries’ histories. Moreover, appreciating this history throws significant light on the Australia-Taiwan relationship of today.

2

introduction

A major flaw in an earlier attempt to tackle the history of AustraliaTaiwan relations, Gary Klintworth’s Australia’s Taiwan Policy, 1942–1992, was Klintworth’s conflation of Taiwan and the Republic of China (ROC) throughout the half century he covers. The controversy sparked by Democratic Progressive Party (DPP) presidential candidate Tsai Ying-wen’s statement that the “ROC is Taiwan and Taiwan is the ROC” in October 20111 is just one demonstration of the still problematic relationship between the ROC and Taiwan—even after two decades of democratization and “Taiwanization” of the ROC government. The distinction between the ROC and Taiwan during the dictatorial period was much starker. As the historical record makes clear, the Australian government was forced to treat Taiwan and the ROC as overlapping and intertwined yet fundamentally distinct objects of policy. For example, Australia was put in the frustrating predicament of fighting for a Taiwan seat at the UN while the ROC government did all it could to frustrate and ultimately defeat the attempt.2 While the ROC and Taiwan now overlap and intertwine more than ever before in terms of Australia-Taiwan relations, the two actually remain distinct—and freighted with different histories. Chapter 1 traces the preludes to the major themes of Australia-Taiwan relations that would become so important after the start of the Korean War. The chapter looks at early trade when Taiwan was part of the Qing Empire (and Australia was British), and the strategic connection between Australia and Japanese Taiwan during World War II. The chapter also notes the first Australian glimpses of Taiwan through the lenses of realpolitik and what could be described as idealpolitik or human rights following the ROC takeover of Taiwan in 1945. The Australian government would employ these prisms with much more frequency and urgency from the start of the Korean War in 1950 through to US President Nixon’s rapprochement with China in 1971. Chapter 2 follows the development of Australia’s response to the challenges of the Taiwan issue during this early Cold War period. As the chapter shows, Australian policy centered on an effort to create an independent Taiwan, either Taiwanese-majority controlled or an independent Republic of China on Taiwan ruled by the Chinese Nationalists and the mainland

1 Yan-chih Mo and Jake Chung, “Tsai affirms recognition of the ROC,” Taipei Times, 10 October 2011, http://www.taipeitimes.com/News/front/archives/2011/10/10/2003515353. 2 See pp. 32–36.



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Chinese minority. The Australian government variously pursued either or both of these alternatives in order to achieve wider policy goals of supporting the United States, minimizing contradictions between US China policy and the policies of the United Kingdom and other countries important to Australia, and bringing about a satisfactory accommodation with the PRC. This policy was bolstered by reference to the right of the people living in Taiwan to self-determination and a concern for their welfare. Chapter 2 concludes when the gap between the positions of China and the US narrowed sufficiently after their détente to allow Australia to make certain concessions to China over Taiwan without damaging its relationship with the US. This shift preceded the election of an Australian government strongly committed to building a friendly relationship with China. Australia and China then established official relations on 21 December 1972. Chapter 3 examines Australia’s approach to relations with Taiwan during the late Cold War, after it had dropped the long-held policy of advocating the international and mutual recognition of “one China, one Taiwan” or “two Chinas.” Compared to the early Cold War, China and Taiwan became much less important in US-Australia relations during this period. Australia increasingly viewed China as an important partner against the USSR and as a growing economic opportunity now unfettered by Sino-US confrontation. The Australian government quickly shed its commitment to self-determination for the Taiwanese, assisted by the previous abuse of the concept to deny the PRC recognition and as a prop for the dictatorial regime of Chiang Kai-shek. Support for the diplomatic recognition of Taiwan was pushed largely to the right-wing fringe. The sole link holding together the ROC and Australian governments was trade. Trade would then become a key driver in improving relations between Australia and a democratizing and Taiwanizing ROC government after the end of the Cold War. The rest of the book divides into different aspects the contemporary Australia-Taiwan relationship as it has developed from this history. Part 2 focuses on the role of Taiwan as an issue in Australia’s relations with China and the US. Part 3’s bilateral focus then brings Taiwan back to the foreground. Part 2 argues that Australia’s contemporary approach to the US-ChinaTaiwan Triangle in many respects can be seen as a continuum of Australia’s long standing effort to engage and balance against China. In the early Cold War period of Sino-US confrontation, the emphasis was obviously much more on balancing, with engagement nevertheless tempering this

4

introduction

policy in important respects. The second half of the Cold War when China and the US cooperated strategically against the Soviet Union was largely the reverse, with Australia’s focus very much on engagement, with balancing inconspicuous yet implicit in the continued US-Australia alliance. Hence throughout the Cold War, Australian policy essentially took shape within parameters set by the US and China (and the Soviet Union). Contemporary Australian policy continues to follow this pattern. The mix of cooperation and confrontation that has characterized Sino-US relations in the post-Cold War period has seen Australian policy follow a line much more evenly balanced between engagement and balancing.3 Through this period China’s economy and military power have grown rapidly, making both sides of this policy more fraught and urgent. As in the Cold War, Taiwan is a site where Australia both engages with and balances against China. A further continuity with the past is the Australian government’s effort to minimize Taiwan’s agency in the US-ChinaTaiwan triangle. For its part, Taiwan has democratized, Taiwanizing the ROC to the point that the ROC and Taiwan can in most respects be considered one and the same. Nevertheless, like their authoritarian and Chinese nationalist antecedent, successive governments of this “New Taiwan” have sought to maximize Taiwan’s agency and influence Australian policy through the levers of Australia’s democratic values and strategic and economic interests. Chapters 4–6 cover the more than 20 year period in which these evolving themes have characterized Australia-Taiwan relations in the context of the US-China-Taiwan triangle. During the timeframe covered in Chapter 4 (1989–2001), the benefit Australia derived from the economic growth of China began to increase greatly in both absolute and relative terms, while unchallenged US strategic dominance forestalled consideration of the implications of China’s “rise.” While the external environment was generally conducive to the goals of Australian policymakers, Chapter 4 nevertheless charts the development of inconvenient truths for the Australian government: the US and China were now strongly

3 The combination of engagement and balancing has variously been termed “hedging” or “congagement” (a portmanteau combining containment and engagement). For hedging see Evan S. Medeiros, “Strategic Hedging and the Future of Asia-Pacific Stability,” The Washington Quarterly, 29 (1) (2005). For congagement see Zalmay Khalilzad, “Congage China,” RAND, Document Number: IP-187, http://www.rand.org/content/dam/rand/pubs/ issue_papers/2006/IP187.pdf.



introduction

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“re-linked” in Australian foreign policy, and Taiwan had been re-activated as a pivot in Sino-US relations. Chapter 5 begins when the Australian government received some respite from the demands of the US-China-Taiwan triangle due to the increased cooperation between the United States and China following the 11 September 2001 terrorist attacks in the US. Australian support for the US’ wars in Iraq and Afghanistan allowed Canberra to further develop the strong alliance with the US, while simultaneously resisting the adoption of a common approach towards China over Taiwan. With the US more accommodating of both Chinese demands vis-à-vis Taiwan in the interests of securing China’s cooperation in the “War on Terror” and Australian “defections” over issues with China, Australia found itself extraordinarily free to oblige Beijing in sidelining Taiwan. This was particularly important to the Chinese government with President Chen Shui-bian challenging China’s goal of unification during this period. Australia was able to move simultaneously closer to the US and China as a result. Chapter 6 charts Australia’s emerging response to the even more profound shift in the US-China-Taiwan triangle as the world entered the worst economic crisis since the Great Depression from the end of 2007. This crisis has seen significant pressure develop within US politics to re-adjust the trade relationship with China to more benefit companies creating jobs for American workers. At the same time, the Chinese government released a huge stimulus package as global demand for Chinese exports declined sharply. China’s continued rapid growth encouraged Chinese policymakers and others to perceive a shift in the balance of power with the US. This spurred China to demand more international consideration for its interests, and to assert its territorial claims more aggressively. The US and many of China’s neighbors—including Australia—responded through drawing closer together. With the encouragement of much of the region, the US titled its China policy noticeably away from cooperation towards a greater stress on confrontation. Within this milieu, Australia began to place more weight on balancing over engagement in its own China policy than it had since at least 1996. Interestingly, Taiwan’s reaction to hardening Sino-US relations has been much more ambiguous. Following his election in 20 May 2008, President Ma Ying-jeou embarked on a series of China-friendly policies that apparently convinced policymakers in Beijing that cross-strait relations were on track for eventual unification. This meant that Australia and Taiwan became much less important to each other in terms of their relations with China and the US than the period covered in Chapters 4 and 5.

6

introduction

Part 3 revisits the development of the same contemporary post-Cold War period. However, this time the focus is on the bilateral links between Australia and Taiwan. Chapter 7 looks at various bilateral issues where politics meets economics. This chapter describes an Australia-Taiwan relationship that is surprisingly good—and surprisingly “normal.” The extensive economic links are typical of Australia’s relations with Northeast Asia, and proportionate to the size of Taiwan’s economy. There is also scant ideological friction in the relationship, with Taiwan and Australia sharing democratic and liberal values. Yet the relationship is at the same time surreally “abnormal” thanks to China’s unrelenting efforts to minimize Australian recognition of Taiwan’s sovereignty. This chapter looks at what this means in the areas of high level visits, representation, agreements and dialogue, international organizations, and trade and investment flows. Chapter 8 examines Australia and Taiwan’s relations in the South Pacific. The chapter shows that Australia and Taiwan have pursued different and often incompatible goals in this region. Australia has tried to use conditions placed on its considerable aid to its Pacific Islands neighbors to push them towards political stability and economic self-sufficiency. Taiwan has provided significant funds to these same polities in return for diplomatic recognition, effectively providing them with a cushion against Australian pressure. Until Taiwan’s recent tacit diplomatic truce with China, this contradiction in Australia and Taiwan’s respective national aims made this the most acrimonious dimension of the Australia-Taiwan relationship. Finally, the Conclusion brings together the various themes in this long, complex and wide ranging relationship in order to gauge its significance and future directions.

PART one

History

CHAPTER ONE

Early Links: European Colonization to the Start of the Korean War1 Australia and Taiwan had little to do with each other before the start of the Korean War in 1950. Nevertheless, there were noteworthy preludes to the major themes that would largely define Australia-Taiwan relations. The modest precursors of the contemporary trade relationship began based on economic complementarities and geographic proximity. The Second World War would then starkly demonstrate that the strategic fortunes of Australia and Taiwan were intertwined. Finally, Australia’s attitude towards the ROC takeover of Taiwan underlined that the major powers would largely shape the form Australia-Taiwan relations would take. The ROC government’s mistreatment of the Taiwanese also raised the issues of democracy, self-determination and human rights that would later infuse though never determine the relationship. Inter-Colonial Relations Contemporary Taiwan has its roots in the same European expansion into Asia that would also shape Australia. The Dutch began to colonize the island—named Formosa by the Portuguese—from 1624. The island’s Chinese name, “Taiwan,” likely originated from the indigenous-language derived name of the first Dutch settlement, Tayouan, near present day Tainan. The Dutch induced mainly Hokkien-speaking Han Chinese laborers from adjacent Fujian province in China to migrate to the island, and integrated Taiwan into a global trading network. Koxinga’s (Zheng Chenggong) forces took the island from the Dutch in 1662.2 The Manchu Qing displaced Koxinga successors in 1683. Taiwan essentially maintained its 1 Parts of Chapters 1 and 2 have been published in Joel Atkinson, “Australian Support for an Independent Taiwan Prior to the Recognition of the People’s Republic of China,” Australian Journal of Politics and History, 57 (1) (2011). 2 Koxinga’s father was a Chinese merchant and pirate, and later a Ming naval commander. His mother was Japanese. For the origins of Taiwan’s name see Shih-shan Henry Tsai, Maritime Taiwan: Historical Encounters with the East and the West, Armonk, New York: M.E. Sharpe (2009), p. 21.

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maritime orientation throughout these changes, whether through trade with the mainland or the wider world. The Dutch first arrived off the Australian coast in 1606; however, it was not until 1788 that the first British penal colony was established in Sydney.3 The British established their settlements in Australia with a comparable external maritime orientation to Taiwan, and Australia was integrated into Britain’s trade network. Unsurprisingly then, the first substantive interaction between Australia and Taiwan was commercial. Rival sugar refineries in Britain’s Australian colonies competed over raw stock from Taiwan in the 1870s, and Australia was the second largest foreign export market for Taiwanese sugar during 1890–94.4 Trade continued after the Qing ceded Taiwan to Japan in 1895 following the Qing-Japan war (1894–95). US consul Davidson recorded Australia as the seventh largest source of imports into Taiwan in 1900. British consuls in Tamsui noted the importation of Australian wheat in 1933, and reported that Australia received around 0.1% of Taiwan’s exports from 1934 to 1938, and that Australia’s share of Taiwan’s imports ranged from 0.08% to 0.001% during the same period.5 This limited commercial relationship was nevertheless sufficient for the Bank of Taiwan to operate in Australia. The exchange between Australia and Taiwan during this period was not exclusively commercial, with the Japanese colonial government quaintly seeking “scientific advice” from Australia on protecting wooden buildings from termites in 1909.6

3 According to Long, the British also “toyed with” turning Taiwan into a penal colony. See Simon Long, Taiwan: China’s Last Frontier, Hong Kong: Macmillan (1991), pp. 17–18. 4 Australia was nevertheless a minor buyer, with Japan taking 98.2 percent of Taiwan’s foreign exported sugar. For the 1870s see James W. Davidson, The Island of Formosa Past and Present: History, People, Resources, and Commercial Prospects, London: Macmillan (1903), p. 446. For 1890–94 see Gavin Marvin Davison, A Short History of Taiwan: The Case for Independence, Westport: Praeger (2003), p. 27. 5 NAA, A981: FORM 4, Ovens 1/17/1934, “Annual Report From Tamsui, Page 9,” British Consul A.R. Ovens, 17 January 1934. 6 NAA, A6661: 1273, Oshima, “White Ants- Enquiry from Governor of Formosa, Japan,” From G.K. Oshima to Office of the Governor General, 1909. This request seems to have been part of a study led by Japanese scientist Oshima Masamitsu. See Szu-Ling Lin and Chao-Ching Fu, “The Achievements of Research of Termites Prevention on Buildings During Japanese Colonial Period in Taiwan: The Research of Oshima Masamitsu’s Group and Kuliyama Shunichi,” Journal of Architecture (Taiwan), 53 (September) (2005).



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World War II: Australian Thinking about Taiwan Trade was interrupted when Australia went to war against Japan and its Taiwan colony on 7 December 1941. Japan used Taiwan as a springboard for its invasion south towards Australia, reaching as far as Indonesia and the Australian colony of New Guinea. Taiwan was also an economic asset and source of manpower fuelling Japan’s war effort. Although the Japanese had no immediate intention of invading Australia, the threat of invasion seemed very real to Australian policy-makers. Moreover, the Japanese overrunning of the European colonies to Australia’s north and the weakening of American naval power severely compromised the vital security and economic interests of Australia. As a result, Taiwan took on a lasting strategic significance for Australia. Australia discussed Taiwan with its allies, including the Republic of China. In a 6 April 1942 dispatch, Australia’s Minister to China, Frederic Eggleston, told British Secretary of State for Foreign Affairs Anthony Eden that he had discussed Formosan political movements with the Kuomintang (KMT) (Chinese Nationalist) government. He noted the KMT government’s reluctance to recognize “Formosan aspirations” and its expectation that Taiwan would “return to the fold” following the defeat of Japan.7 This was the year that the ROC government first asserted a claim to Taiwan.8 The following year, Eggleston suggested to Minister for External Affairs Herbert Evatt that “the old Japanese Empire, Manchuria and Formosa should be returned to China.”9 Eggleston’s view foreshadowed the 1 December 1943 Cairo declaration, in which US President Franklin Roosevelt and UK Prime Minister Winston Churchill stated their intention to “restore” Taiwan to the Republic of China. However, Evatt believed that the commitment to give Taiwan to the Republic of China should only have been made as part of a general post-war agreement.10  7 NAA, A981: FORM 1, Eggleston 6/4/1942, “Formosa General Information,” from F.W. Eggleston, Chungking, to A. Eden, 6 April 1942.  8 Richard C. Bush, At Cross Purposes: U.S.-Taiwan Relations Since 1942, Armonk, New York: M.E Sharp (2004), pp. 10–13.  9 DFAT Historical Publications Unit, “112 Eggleston to Evatt Dispatch 66 CHUNGKING, 2 February 1943,” National Australian Archives file: A4231, NANKING, 1943, http://www .info.dfat.gov.au/info/historical/HistDocs.nsf/vVolume/30089B0950B52E89CA256D3B0011 9026. 10 DFAT Historical Publications Unit, “18 Conference of Australian and New Zealand Ministers Proceedings of the Conference CANBERRA, 17–21 January 1944,” National Australian Archives file: A989, 43/735/168, http://www.info.dfat.gov.au/info/historical/HistDocs .nsf/vVolume/60F1FAFA4BB936E4CA256B7E001E5260.

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chapter one Taiwan Comes Under Chinese Nationalist Rule, 1945–1949

The United States handed Taiwan to the Nationalists following Japan’s defeat. Japanese forces on Taiwan formally surrendered to the Chinese on 25 October 1945.11 The 9 April 1946 “Australian Station Intelligence Digest” noted that disillusionment with Nationalist rule on Taiwan had developed into an “independence movement,” and predicted labor troubles and civil disturbance.12 Less than a year later, on 28 February 1947, an island-wide uprising began in Taipei.13 Australia’s chargé d’affaires in Nanking, Patrick Shaw, doubted Chiang Kai-shek’s claim that Taiwanese communists were behind the uprising.14 Shaw would later blame the revolt on the Nationalists’ “flagrant misrule”15 and treatment of Taiwan as a colony.16 Shaw speculated that the coming year might see “the authority of the National Government confined more and more strictly to the Yangtse valley, while local governments— Communist or otherwise—gain in autonomy and area.”17 However, the Taiwanese leading the uprising limited their aims to reforming the Nationalist administration and bringing about greater autonomy for Taiwan.18 The central government met this Taiwanese restraint with a brutal crackdown by troops brought over from the mainland.19 Shaw criticized the Chinese government’s handling of the revolt as displaying “a brutality which equaled and an ineptitude which exceeded

11 George H. Kerr, Formosa Betrayed, Boston: Houghton Miffin (1965), p. 78. 12 NAA, A1838: 519/1/1 PART 1, Australian Station Intelligence Digest 9/4/1946, “Extract from Australian Station Intelligence Digest, Present Conditions in Formosa, Page 3,” 9 April 1946. 13 See Tse-han Lai, H. Ramon Myers and Wei Wou, A Tragic Beginning: The Taiwan Uprising of February 28, 1947, Stanford: Stanford University Press (1991), pp. 99–140; Steven E. Philips, Between Assimilation and Independence: The Taiwanese Encounter Nationalist China, 1945–1950, Stanford: Stanford University Press (2003), pp. 78–81. 14 NAA, A1838: 519/1/2, Shaw 17/3/47, “Formosa- Chinese Occupation and February Riots,” From Patrick Shaw, Nanking, to Minister of External Affairs, 17 March 1947. 15 NAA, A1838: 519/1/2, Shaw 31/3/47, “Formosa- Chinese Occupation and February Riots,” From Patrick Shaw, Nanking, to Minister and Department of External Affairs and Department of Defence, 31 March 1947. 16 NAA, A1838: 519/1/2, Shaw 21/3/1947, “Formosa- Chinese Occupation and February Riots,” From Patrick Shaw, Nanking, to Minister and Department of External Affairs, 21 March 1947. 17 NAA, A1838: 519/1/2, Shaw 17/3/47. 18 Kerr, Formosa Betrayed, pp. 288–290. 19 See Lai, Myers and Wou, A Tragic Beginning: The Taiwan Uprising of February 28, 1947, pp. 141–167.



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that of the Japanese.”20 Shaw described Chinese government statements as “quite misleading,” reporting, “many thousands of Taiwanese, including high school students and peaceful civilians, were executed or killed by indiscriminate firing and many more thousands imprisoned with executions continuing.” Shaw also informed the Australia government of the intense “hatred of the Taiwanese for the Chinese Government” and their desire for a United Nations mandate for the island.21 Reports of the incident led to questions being raised concerning the Chinese government’s hold over the island at the Canberra conference on the Japanese peace settlement.22 The incident also sparked speculation within the New Zealand Department of External Affairs on “whether Formosa should be restored to China without conditions, or whether— since the Formosans are populous and relatively advanced people—their development to independence should be envisaged by giving the administration of the island to China subject to her negotiating a United Nations trusteeship agreement.” The New Zealand Department of External Affairs also speculated that, “in order to safeguard the Formosans” a condition might be placed on China to submit “reports on her administration of Formosa to the [UN] Trusteeship Council.”23 However, the possibility of an independent Taiwan does not appear to have been an actionable concern for Evatt, who did not reference the issue in his preliminary notes for the British Commonwealth conference on the Japanese peace settlement.24 The US persisted in its policy of making Taiwan part of the Republic of China.25 As of August 1947, the Australian government’s position was also that “Formosa and Pescadores [. . .] should be restored to China in accordance with the Cairo Declaration.”26 Australia aimed only to retain “the chain of islands between Japan and Formosa [. . . and] the chain of

20 NAA, A1838: 519/1/2, Shaw 21/3/1947. 21  NAA, A1838: 519/1/2, Shaw 31/3/47. 22 Eric Montgomery Andrews, Australia and China: The Ambiguous Relationship, Carlton: Melbourne University Press (1985), p. 128. 23 Robin Kay, Documents on New Zealand External Relations Volume III: The ANZUS Pact and the Treaty of Peace with Japan, Wellington: Department of Internal Affairs (1985), p. 107. 24 DFAT Historical Publications Unit, “355 British Commonwealth Conference Preliminary Notes on Provisional Agenda by Evatt CANBERRA, August 1947,” National Australian Archives file: A1068, ER47/31/34, i, http://www.info.dfat.gov.au/info/historical/HistDocs.nsf/ vVolume/2A662750E3D5DC4FCA256B7E00814420. 25 Kerr, Formosa Betrayed, pp. 326–330. 26 DFAT Historical Publications Unit, “355 British Commonwealth Conference Preliminary Notes on Provisional Agenda by Evatt CANBERRA, August 1947.”

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islands joining Japan to the Marianas [. . .] under the sovereignty or exclusive control of the United States.”27 This provision was intended to shield Australia from Japan into the future. With the Communists close to victory in the Chinese civil war, on 30 May 1949, Prime Minister Chifley told British Prime Minister Attlee, “nothing should be done which might tend to discourage the Chinese Communists from preserving and cultivating China’s normal contacts with Western countries.” For Chifley, Taiwan was an expedient in this cultivation of Communist China, and the preservation of Hong Kong as a crown colony: We understand that they [the Communists] have hinted that their attitude towards Hongkong [sic] will be determined by the attitude of Western countries towards Formosa [. . .] There should be little difficulty in convincing them that [. . .] we [the British Commonwealth] [. . .] already regard Formosa for all practical purposes as Chinese Territory and would not wish to interfere there in any way.28

This suggests Australian policymakers believed a change in control of Taiwan from the Chinese Nationalists to the Chinese Communists would not overly damage Australian interests in checking Japan. Moreover, Taiwan was clearly not seen as an impediment to recognizing the newly established People’s Republic of China. In December 1949, an Australian official traveled to Taiwan from Hong Kong. He reported that the “Formosans” were unlikely to turn Communist, that an independence movement continued to exist, and that a large section of the population would welcome the return of Japanese rule. He also relayed speculation that the morale of Nationalist troops on the island was declining.29 The Chifley Labor government continued to delay recognition of the Chinese Communists ahead of the 10 December 1949 elections due to domestic political reasons and the desire to not act in

27 DFAT Historical Publications Unit, “364 Evatt to Legation in Rio de Janeiro for Marshall Cablegram 45 CANBERRA, 2 September 1947,” National Australian Archives file: A1838, 538/1, ii, http://www.info.dfat.gov.au/info/historical/HistDocs.nsf/vVolume/ E3D8C015BBB25424CA256B7E00814EC6. 28 DFAT Historical Publications Unit, “283 Chifley to Attlee Message CANBERRA, 30 May 1949,” National Australian Archives file: A5954/1, 1412/8, http://www.info.dfat.gov .au/info/historical/HistDocs.nsf/vVolume/54F163EB901FCFE5CA256B7F000B641D. 29 NAA, A816: 19/306/203, Phillips 5/1/1950, “Formosa,” From J. E. Phillips, Hong Kong, to Secretary of External Affairs, 5 January 1950.



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advance of other non-communist countries.30 Following the election of a conservative government led by Prime Minister Robert Menzies, Australia forestalled recognition of the PRC out of consideration for the United States.31 Like the US, Australia anticipated that Taiwan would inevitably fall to the Communists.32 The United States made preparations to abandon the Nationalists in the first six months of 1950.33 On 5 January 1950 President Truman announced the United States would not aid the Nationalists militarily. On 7 June 1950, Secretary of State Dean Acheson publicly stated that the US would not use its UN Security Council veto to block a move to transfer Chinese representation in the United Nations to the PRC.34 While recognition of the PRC was unthinkable for the Truman administration, there was an expectation that a PRC military takeover of Taiwan would resolve the issue.35 Supporters of the Chinese Nationalists in the US Congress condemned the administration’s moves to abandon Chiang, and “took every opportunity to challenge Truman’s decision,” with one senator publicly arguing that abandoning Taiwan was inconsistent with the US’ commitment to defending Europe from Communist aggression.36 There was support for denying Taiwan to the PRC within the administration, too, with senior official Dean Rusk recommending that the US “draw the line” in Asia at Taiwan, use its navy and ground force to “neutralize” Taiwan, sponsor a coup to replace Chiang, and seek a UN trusteeship for the island.37 However, US policy would only move decisively towards denying Taiwan to the Chinese Communists following North Korea’s surprise invasion of South Korea on 25 June 1950, prompting the Truman administration to send the US Seventh Fleet into the Taiwan Strait to prevent a

30 Henry Albinski, S., Australian Policies and Attitudes Toward China, Princeton: Prince­ ton University Press (1965), pp. 40–45. 31  Stuart Doran and David Lee (eds), Documents on Australian Foreign Policy: Australia and the Recognition of the People’s Republic of China, 1949–1972, Canberra: Department of Foreign Affairs and Trade (2002), p. 12. 32 Albinski, Australian Policies and Attitudes Toward China, p. 65. 33 June M. Grasso, Truman’s Two-China Policy: 1948–1950, Armonk, New York: M.E. Sharpe (1987), p. 126. 34 Kerry Dumbaugh, “Taiwan’s Political Status: Historical Background and Its Implications for U.S. Policy,” Congressional Research Service, 3 November 2009, http://www.fas .org/sgp/crs/row/RS22388.pdf, p. 1. 35 Arnold A. Offner, Another Such Victory: President Truman and the Cold War, 1945– 1953, Stanford: Stanford University Press (2002), p. 342. 36 Grasso, Truman’s Two-China Policy: 1948–1950, p. 126. 37 Offner, Another Such Victory: President Truman and the Cold War, 1945–1953, p. 343.

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Communist attack on Taiwan.38 This move would force Australia to radically re-evaluate its policy towards Taiwan. By 1950, Australia had already glimpsed Taiwan through the prisms of trade, strategic interest, Realpolitik and human rights. These modest intersections in the histories of Australia and Taiwan foreshadowed much more significant interaction to come.

38 Dumbaugh, “Taiwan’s Political Status: Historical Background and Its Implications for U.S. Policy,” p. 1. The Seventh Fleet was also tasked with ensuring Nationalist compliance with an agreement to cease air and sea operations against the mainland.

CHAPTER TWO

Early Cold War: Australia’s Taiwan Problem, 1950–1972 Taiwan became one of Australia’s most important foreign policy issues after 1950. Until 1972, Australia would work to create an independent Taiwan, either controlled by the Taiwanese majority or an independent Republic of China on Taiwan ruled by the Chinese Nationalists and the mainland Chinese minority. At various stages the Australian government saw either or both of these options as the most feasible way to achieve wider policy goals of supporting the United States, minimizing contradictions between US China policy and the policies of the United Kingdom and other countries important to Australia, and bringing about a satisfactory accommodation with the PRC. Belief in the right of the people living in Taiwan to self-determination and a concern for their welfare also played an important role in justifying and vitalizing this Australian policy. Taiwan Moves into Focus Australia’s thinking about Taiwan shifted markedly with the outbreak of the Korean War and the US intervention in the Taiwan Strait. During the Second World War the US had eclipsed Britain as Australia’s most important security partner.1 The continued cultivation of this relationship and support for the US position in Asia were seen as vital to the post-war security of Australia, especially as the threat to Australia’s interests from the Soviet Union became increasingly apparent.2 Thus the American naval intervention in the Chinese civil war brought Taiwan to the forefront of Australian calculations on security—and by extension—relations with Asia, the US, and Australia’s other main security partner, Britain. Accordingly, the Australian government began to contemplate a future for Taiwan separate from the mainland. On 25 August 1950, Cabinet discussed the issue of Taiwan’s strategic importance, and whether it was

1 Gary Smith, Dave Cox and Scott Burchill, Australia in the World: An Introduction to Australian Foreign Policy, Melbourne: Oxford University Press (1996), p. 54. 2 See for example: Albinski, Australian Policies and Attitudes Toward China, pp. 76–78.

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worth defending.3 By 8 September 1950 the Minister for External Affairs, Percy Spender, was still undecided on the strategic importance of Taiwan, but suggested to Prime Minister Robert Menzies that Australia had two main objectives in regard to Taiwan: “Security against the Soviet” and “Steering a course which will not provoke Communist China into aggression against the Western powers.”4 He argued that to deny Taiwan to the PRC “for an indefinite period of time and under any circumstances” would “write off any chance [. . .] of diminishing Soviet influence over” the PRC.5 Spender also believed it would likely lead to military conflict between the PRC and the West. He argued: [T]he proper course is to place Formosa under a Commission of the United Nations pending [. . .] a plebiscite to determine whether the Formosans wished to become independent or to effect union with the mainland of China. When we consider Formosa’s checkered political history it is by no means certain that they would freely elect for union.6

While Spender acknowledged that UN “control presents administrative difficulties of great magnitude,” he could see no real alternative if conflict was to be avoided. Spender identified the Chinese Nationalists as the major obstacle: Chiang Kai Shek’s regime is rather lamentable to say the least. In any event it can hardly be said to represent a democratic choice of the Formosans. United Nations administration would require Chiang’s forces in that area either to be under United Nations control or else to be disarmed. The latter presents an obvious physical difficulty apart from the political problem of persuading American public opinion.

Spender believed that the Communists could possibly be persuaded to accept this “policy of neutralization” of Taiwan.7 Neutralization entailed extricating Taiwan from the Chinese civil war. The principal commitment made by the West to Taiwan forming part of China was the Cairo Declaration. On 22 September 1950 Australia told the US “Australia was not bound by the Cairo Declaration [. . .] and did not accept the United States[’] suggestion that Japan ‘accept the future decision of United Kingdom, U.S.S.R., China and United States with reference 3 Doran and Lee (eds), Documents on Australian Foreign Policy: Australia and the Recognition of the People’s Republic of China, 1949–1972, p. 23. 4 Ibid., p. 24. 5 Ibid., p. 24. 6 Ibid., p. 25. 7 Ibid., pp. 25–26.



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to status of Formosa.’”8 Spender was also willing to neutralize Taiwan by rejecting the Nationalists as the government of China ahead of reaching an understanding with the Chinese Communists. On 10 October 1950, he suggested to Prime Minister Menzies “unloading” the Nationalist “phantom Chinese Government” to “clear the way” for the later admission of the PRC to the UN.9 However, on 14 October Communist Chinese forces crossed the Yalu River into Korea.10 When Menzies replied on 21 October, he questioned if Spender’s suggestions were feasible, and argued, “this is not a matter on which it is desirable that Australia should take the lead.”11 Dean Rusk told Spender that the US view “on Formosa generally accorded with our own [Australia’s]. They did not want to be bound by the Cairo declaration which they regarded as invalidated by the events which have happened and expressed general agreement with the two objectives in respect of Formosa which I expressed in my cable to the Prime Minister before I left.”12 However, the US had abandoned speculation on removing Chiang Kai-shek’s government from Taiwan by 27 June and any efforts to set up a UN commission to study the Taiwan question by August–September.13 On 13 December 1950, Rusk told Australian officials, “the status quo in Formosa should be preserved” and the “views of the 8,000,000 Formosans would have to be taken into account before any thought were given to handing the territory to Communist China.” Rusk further stated, “it would not be a wise move to throw Chiang over since he was at least friendly to the allied cause and had a force of 500,000 troops at his disposal.”14

 8 DFAT Historical Publications Unit, “18 Cablegram From Australian Mission at the United Nations to Department of External Affairs, NEW YORK, 22 September 1950,” National Australian Archives file: A1838, 532/11, i, http://www.info.dfat.gov.au/info/historical/ HistDocs.nsf/vVolume/56D78A525D413F4BCA256CD90074EB59.  9 Doran and Lee (eds), Documents on Australian Foreign Policy: Australia and the Recognition of the People’s Republic of China, 1949–1972, p. 28. 10 Andrews, Australia and China: The Ambiguous Relationship, p. 154. 11  Doran and Lee (eds), Documents on Australian Foreign Policy: Australia and the Recognition of the People’s Republic of China, 1949–1972, p. 29. 12 DFAT Historical Publications Unit, “25 Cablegram from Spender to Watt, Ottawa, 3 November 1950,” National Australian Archives file: A1838, 535/6, i, http://www.info.dfat .gov.au/info/historical/HistDocs.nsf/vVolume/5F2D8A4E36CAB7F9CA256CD90074F4A6. 13 Bush, At Cross Purposes: U.S.-Taiwan Relations Since 1942, pp. 89, 92. 14 Doran and Lee (eds), Documents on Australian Foreign Policy: Australia and the Recognition of the People’s Republic of China, 1949–1972, p. 35.

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This continued American support for the KMT precluded Spender’s efforts to neutralize Taiwan. Spender feared “the intention of the Nationalist Government is not to resolve international difficulties but to exacerbate them, and that the Nationalists have a vested interest in a world war.” As such, Spender continued to seek the “derecognition” of the Chiang Kai-shek government regardless of when recognition of the PRC might proceed.15 He argued in a submission to Cabinet that “the continued recognition of the Chiang Kai-shek regime is a matter of sufficient importance for Australia to take an independent line, provided Australian action is taken at a point in time carefully chosen so as not to prejudice the fundamentally friendly relationships which exist between the United States and ourselves.”16 At Prime Minister Menzies’ direction, Cabinet did not consider Spender’s submission.17 On 27 April 1951, Richard Casey succeeded Spender as Minister for External Affairs. However, Spender continued to be involved in the issue as ambassador to the US.18 On 2 February 1953, the new US President Eisenhower stated that the Seventh Fleet had ceased “acting as a shield for communist China.”19 This was part of a significant strengthening of the relationship between the Nationalist government and the US.20 With the prospects for Spender’s suggested “unloading” of the Nationalists even more remote, on 10 February 1953, he told Casey that Australia should “give serious consideration” to suggesting that the US “aim at withdrawing recognition from the Nationalist Government [as the government of China] [. . .] and recognize it as the Government of Formosa.” Spender believed there were “clear dangers that the United States [. . .] may be ‘sucked into’ further involvement with China.”21 Casey rejected Spender’s suggestion as currently unacceptable to all parties, even Australia. Casey believed that if Australia “recognized a Government of Formosa in addition to a Government of China attacks by Formosa on China might have to be regarded as aggression.”22

15 Ibid., p. 38. 16 Ibid., p. 52. 17 Ibid., p. 54. 18 Andrews, Australia and China: The Ambiguous Relationship, p. 159. 19 Doran and Lee (eds), Documents on Australian Foreign Policy: Australia and the Recognition of the People’s Republic of China, 1949–1972, p. 57. 20 Bush, At Cross Purposes: U.S.-Taiwan Relations Since 1942, pp. 96–97. 21 Doran and Lee (eds), Documents on Australian Foreign Policy: Australia and the Recognition of the People’s Republic of China, 1949–1972, p. 60. 22 Ibid., pp. 61–62.



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The involvement of China in the Korean War had influenced Australia’s thinking in regard to the ROC regime and Taiwan. China’s intervention in Korea added to the Australian perception that Moscow and Beijing were working in cooperation.23 This meant that a war over Taiwan appeared to the Australian government to hold the strong possibly of escalating into a global conflict. Secondly, China’s ability to fight the US and its allies to a stalemate in Korea (and Chiang Kai-shek and his forces’ defeat in the Chinese civil war) suggested that the Nationalists would need massive support from the US and its allies in the event of war with the Communists. For these two reasons, the Korean War further clarified that any war started by the Nationalists would severely damage Australia’s interests. On the other hand, what Spender labeled China’s “aggression in Korea” suggested that China might engage in aggression elsewhere in the “Far East” like “Indo-China.”24 The Korean War also contributed to the Australian Cabinet’s shift during 1952–1953 away from regarding the USSR as the “only grave and immediate threat to Western democracy,” and Europe and the Middle East as the key areas needing protection from Soviet attack.25 For Australia, this aggressive and militarily potent China would now be viewed as a significant threat.26 Moreover, the intentions of the USSR and China in the AsiaPacific had become Australia’s first priority. This no doubt contributed to an increased Australian perception of Taiwan as a strategic asset to the West, even as the perceived liability posed by Chiang Kai-shek increased. A paper prepared by the UN Section of the Department of External Affairs in April 1953 concluded: “There appear to be very clear advantages in maintaining Chiang in Formosa in a capacity which will ensure the continuance of the Chinese Nationalist Forces as defenders of the island.”27 The dilemma for Australia was how to support the US in doing this without having the US commit to Chiang’s agenda of representing China.

23 Ibid., pp. 37, 62. 24 Ibid., p. 62. 25 David Lowe, “Percy Spender, Minister and Ambassador,” in Beaumont, Waters, Lowe and Woodard, (eds). Ministers, Mandarins and Diplomats: Australian Foreign Policy Making, 1941–1969, Carlton: Melbourne University Press (2003), p. 71. 26 Richard C. Smith, “The Long Rise of China in Australian Defence Strategy,” Lowy Institute for International Policy, April 2009, http://www.lowyinstitute.org/Publication .asp?pid=1023, p. 2. 27 Doran and Lee (eds), Documents on Australian Foreign Policy: Australia and the Recognition of the People’s Republic of China, 1949–1972, p. 68.

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Members of the Australian government continued to be concerned about the issues arising from pursuing a policy of preserving an independent state on Taiwan while supporting Chiang Kai-shek. In a 14 August 1953 submission to Cabinet, Casey stated: [T]he possibility exists of recognizing two Chinese governments, one of the Chinese mainland and the other of Formosa. The latter might possibly be under trusteeship. This however would not at this stage be acceptable to the Chinese Communists, though it might form a matter for negotiations. Yet another complexity about recognizing Chiang Kai-shek as the Government of Formosa, is that the Chinese are only a minority of the Island’s population, the Formosans being a different people.28

This issue had extra significance for Australia in terms of its relationship with Britain. London’s insistence that neither Chiang nor Taiwan should prevent a modus vivendi with China was a major point of divergence between Australia’s two main allies.29 Australia’s policy of seeking strong security co-operation with both the US and the UK compounded Australia’s reservations about Chiang, and gave extra urgency to Australian attempts to qualify US support for his regime. The US commitment to Chiang came to the fore when China began shelling the Nationalist-held island of Quemoy just off the mainland on 3 September 1954, beginning the almost nine-month Quemoy-Matsu Crisis.30 The US saw the PRC actions during this period as a major provocation, and possibly the start of an attempt to seize Quemoy. It reacted strongly, publicly raising the possibly of using nuclear weapons against China, and signed a mutual defense treaty with the ROC government. However, Chinese records show the Communists did not intend to take Quemoy, and viewed the episode as merely part of continuing tensions in an unfinished Chinese civil war.31 Australia’s policy during the crisis was to attempt to avoid war with China over the offshore islands in a way that “did not weaken the anticommunist position in Asia, did not fracture the United States-British Commonwealth alliance, and did not encourage the United States to

28 Ibid., pp. 70–71. 29 David Lee, “Australia and Anglo-American Disagreement over the Quemoy-Matsu Crisis, 1954–55,” Journal of Imperial and Commonwealth History, 23 (1) (1995), p. 105. 30 Also known as the First or 1954–1955 Taiwan Strait Crisis or Offshore Islands Crisis. 31 Gordon H. Chang and He Di, “The Absence of War in the U.S.-China Confrontation over Quemoy and Matsu in 1954–1955: Contingency, Luck, Deterrence,” American Historical Review, 98 (5) (1993), p. 1504.



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withdraw from a ‘forward’ position in Asia and particularly Formosa.”32 To this end, Australia had proposed that willing countries provide a military guarantee to Taiwan, to enable the withdrawal of Nationalist forces from the offshore islands while sustaining the morale of the “Government on Formosa,” and also preventing “the spread of fear in Asia.”33 Australia believed this would leave the way open “for an eventual settlement of the status of Formosa on the basis of the freely expressed wishes of the inhabitants.”34 Australia sought to make Chiang’s acquiesce to eventual self-government for the people of Taiwan a condition of the military guarantee. Prime Minister Menzies told the acting British high commissioner that it would be “made apparent to Chiang that he must move towards self-government so that the people of Formosa could ultimately have a say in the settlement of their own future.” According to Lee, “War over the offshore islands would never have been a casus belli for Australia, but the Menzies government was certain that it could secure Australian support for a war, on the side of the Americans, in defense of the right of the people of Formosa to self-determination.”35 Moreover, it would have overcome one of the major hurdles in bringing about Australia’s conception of an independent Taiwan—Chiang Kai-shek’s vehement opposition. However, according to Casey, the US did not meet the proposal with a favorable response, and in “any event, a decision by the United States would largely depend on the views of the Chinese Nationalists.” For its part, the UK was not prepared to provide a military guarantee to Taiwan because it would increase the possibility of its becoming involved in war with China, put an end to the possibility of negotiations with Beijing, risk being obliged to “prop up” Chiang, put Hong Kong at risk, and possibly alienate neutralist opinion.36 Australia also suggested that there be a “four-power conference” which might invite the PRC to discuss relevant issues. However, the proposal had not progressed very far due to the

32 Lee, “Australia and Anglo-American Disagreement over the Quemoy-Matsu Crisis, 1954–55,” p. 125. 33 Doran and Lee (eds), Documents on Australian Foreign Policy: Australia and the Recognition of the People’s Republic of China, 1949–1972, p. 118. 34 Ibid., p. 119. 35 Lee, “Australia and Anglo-American Disagreement over the Quemoy-Matsu Crisis, 1954–55,” pp. 108, 117. 36 Doran and Lee (eds), Documents on Australian Foreign Policy: Australia and the Recognition of the People’s Republic of China, 1949–1972, p. 101.

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“unwillingness of the United States.”37 With the US unwilling or unable to strong-arm Chiang into agreeing to self-government for the Taiwanese, the head of the Prime Minister’s Department, Allen Brown, was mostly right in arguing that in practice it was “impossible to distinguish between the principle of fighting to preserve the territorial integrity of Formosa and fighting to preserve the Chiang Kai-Shek regime.”38 However, one way it was possible to distinguish support for Taiwan and support for the Nationalists in practice was the regime’s unreliability as an ally in keeping Taiwan in the anti-Communist camp. On 21 February 1955, Defense Minister McBride had told Menzies, “we run the risk of losing Formosa sooner or later through Chinese on island giving up [and making a deal with the Communists] [. . .] I have been considering whether it was worth exploring [the] possibility with [the] Americans of developing a long-term plan for Formosa based on policy of Formosa for the Formosans.”39 The Quemoy-Matsu Crisis came to an end in late April. However, it had an enduring impact on Australia’s approach towards China and Taiwan. From May 1955 onwards, Australia viewed détente in the Taiwan Strait as permanent.40 Moreover, Australia had moved closer to the US position and further away from the British to a significant extent during the crisis. On 14 April, the Secretary of the External Affairs Department, Arthur Tange, warned of the “prospect of a far-reaching division” between Australia and the UK over China and Taiwan.41 The rationale for increasing support for the US at the expense of Britain was given additional impetus when the US refused to guarantee Australian forces in Malaya in 1955, which were there in support of British strategic plans. This prompted Australia to support the US strategic doctrine of defending the whole of nonCommunist Asia.42 Australia would also progressively abandon attempts to urge American recognition of the PRC.43 37 Ibid., p. 119. 38 Lee, “Australia and Anglo-American Disagreement over the Quemoy-Matsu Crisis, 1954–55,” p. 116. 39 Doran and Lee (eds), Documents on Australian Foreign Policy: Australia and the Recognition of the People’s Republic of China, 1949–1972, p. 97. 40 Lee, “Australia and Anglo-American Disagreement over the Quemoy-Matsu Crisis, 1954–55,” p. 125. Nevertheless, there was a second crisis over the Offshore Islands in 1958. 41 Doran and Lee (eds), Documents on Australian Foreign Policy: Australia and the Recognition of the People’s Republic of China, 1949–1972, p. 101. 42 David Lee, “The Liberals and Vietnam,” Australian Journal of Politics and History, 51 (3) (2005), p. 434. 43 Lee, “Australia and Anglo-American Disagreement over the Quemoy-Matsu Crisis, 1954–55,” p. 125.



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Australia nevertheless continued to aim for an outcome where the PRC and Taiwan were recognized as two separate countries, albeit with an increased acceptance that the future state on Taiwan would likely be governed by the KMT regime, at least for the short term.44 On 16 June 1955, Casey told Cabinet that Australia wanted to “separate Formosa in some way from the mainland.” As Taiwan and the mainland were already geographically and jurisdictionally separate, this meant having the Nationalists abandon their goal of retaking the mainland, and the Communists abandon their claim to Taiwan. Two months later Casey told Menzies: We want to be able to work to a position where there are “two Chinas.” Consequently, any act of recognition on our part should be of Peking as the Government of the mainland of China and we would then either recognize Chiang Kai-shek as the Government of a separate State, or else leave the status of Formosa indefinite, with Chiang Kai-shek as the de facto authority.45

A paper prepared by senior department official Thomas Critchley explained this Australian formula of support for Chiang: In order to deny Formosa to the Communists, Australia has sought to strengthen the international position of Formosa as much as possible [. . .] Australia does not aim, however, at propping up Chiang Kai-shek and his regime. We have been careful to avoid referring to Chiang in our statements supporting Formosa [. . .] we have suggested that a way should be left open for an eventual settlement on the status of Formosa on the basis of the freely expressed wishes of the inhabitants.46

However, this distinction between supporting Taiwan and supporting Chiang became increasingly blurred as Australia continued to move closer to the US position. A March 1959 brief prepared for Arthur Tange stated that “Australia is prepared to assist the Nationalists in all political ways to establish as secure an international position as possible.”47 Government ministers were also blurring the distinction. On 28 October 1960, Tange drew Menzies’ attention to Australian Attorney-General Garfield Barwick’s introduction of “a new element [. . .] into Australian consideration of the future of Formosa” during his speech to the UN General Assembly. According to Tange, Barwick implied that “Formosa was

44 The US was also open to this outcome in time, provided that the PRC change its behaviour. See Bush, At Cross Purposes: U.S.-Taiwan Relations Since 1942, p. 105. 45 Doran and Lee (eds), Documents on Australian Foreign Policy: Australia and the Recognition of the People’s Republic of China, 1949–1972, p. 126. 46 Ibid., p. 129. 47 Ibid., p. 163.

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and is part of that entity [Republic of China],” despite “our records [. . .] [not showing] that Australia has hitherto ever committed itself to the view that Formosa is part of China.”48 Tange argued that this statement would “make it more difficult for Australia to advocate the view that the people of Formosa have a right to determine a future as separate from China. Yet this appears at present to be the only practical alternative to eventual recognition of Peking as the government of the mainland and of Formosa.”49 Barwick later attempted to counteract his statement at the UN by clearly implying “self-determination for Formosa” in a statement to parliament.50 A brief for the Australian delegation to the ANZUS51 council meeting held 8–9 May 1962 indicates that Australia’s hopes for a separate future for Taiwan were focused on securing the continued membership of the ROC in the UN while bringing in the PRC. However, Australia continued to also entertain an “alternative approach to the problem of Formosa [. . .] that the island should be placed under United Nations protection for a period of time during which the islanders should have a right to selfdetermination.”52 Australia continued to see the concept of self-determination for Taiwan as the only feasible way of continuing to justify both US military support for Taiwan and a place for Taiwan in the UN. Menzies asked a gathering of Commonwealth prime ministers in July 1964, “What became of selfdetermination for the people of Formosa? Should we pay lip-service to self-determination when it suited us?”53 The same rationale of securing international support buttressed Australia’s resistance to establishing an embassy in Taipei. The Australian government believed that such a public show of support for the derided KMT regime would “separate ourselves further from some Asian Governments.”54

48 Ibid., p. 178. The Chifley government held the view that Taiwan should be “restored” to China as part of the pending Japanese peace settlement in accordance with the Cairo Declaration (see above). 49 Ibid., p. 180. 50 Ibid., p. 237. 51 The Australia, New Zealand, United States security alliance. 52 Doran and Lee (eds), Documents on Australian Foreign Policy: Australia and the Recognition of the People’s Republic of China, 1949–1972, pp. 220–221. 53 Ibid., p. 237. 54 Ibid., pp. 156–157.



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A Brief “Honeymoon” in Australia-ROC Relations The ROC was nevertheless working to have Australia establish an embassy in Taipei.55 Harold Holt replaced Menzies as prime minister on 26 January 1966, and Cabinet agreed on 17 May to establish an embassy in Taipei that year.56 Doran and Lee found no primary documentation to highlight the circumstances of this decision. Instead, they provide an “account commonly given by diplomats of the time [. . .] that Holt was persuaded by the ROC Ambassador [Chen Chi-mai] at a social occasion to make a personal undertaking to establish an embassy.”57 Andrews also gives this account.58 In a 8 May 1966 cable to MOFA, Chen Chi-mai said Holt had accepted his proposal after considering it and getting Cabinet’s agreement. According to Chen, Holt’s reason was Australia’s friendly relations with the ROC ( youyi guanxi).59 The Australian government had previously “received a number of approaches [. . .] seeking the negotiation of a trade agreement.”60 Taipei possibly saw this as an inducement, though there is no evidence it was a factor in Australia’s decision. The Department of External Affairs maintained that the move to open an embassy was not a “change of substance in our attitude towards Nationalist China (though some might interpret as such).”61 The Holt government’s friendlier attitude towards the ROC government62 was part of the progressive blurring of the distinction between support for Taiwan and support for the Nationalists, which likely reached a new level when Menzies left the scene. 55 MOFA archive, 010.2: 0001 File 230-P, Chen 9/11/1964 009030 From Chen Zhimai, Canberra, to Ministry, 9 November 1964, Aozhou Huifu Zai Tai Zhu Huashiguan (Australia Restores China Embassy in Taiwan). 56 For more on this decision and Australia’s embassy in Taipei see Jeremy E. Taylor, “The Reluctant Embassy: Establishing, Maintaining and Ending Australian Diplomatic Representation in Taipei, 1966–72,” Asian Studies Review, 33 (2) (2009). 57 Doran and Lee (eds), Documents on Australian Foreign Policy: Australia and the Recognition of the People’s Republic of China, 1949–1972, p. 265. 58 Andrews, Australia and China: The Ambiguous Relationship, p. 193. 59 MOFA archive, 010.2: 0001 File 230-P, Chen 8/5/1966 3365 From Chen Zhimai, Canberra, to Ministry, 8 May 1966, Aozhou Huifu Zai Tai Zhu Huashiguan (Australia Restores China Embassy in Taiwan). 60 NAA, A1838:763/1/1, Currie 17/3/66, “Possible Trade Agreement with the Republic of China,” From N.S. Currie to the Secretary, 17 March 1966. This ROC-Australia trade agreement, signed in Canberra 22 April 1968, entered into force the same day. 61 Doran and Lee (eds), Documents on Australian Foreign Policy: Australia and the Recognition of the People’s Republic of China, 1949–1972, p. 263. 62 Gary Klintworth, Australia’s Taiwan Policy 1942–1992, Canberra: Australian National University (1993), pp. 38–39.

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As such, the establishment of an embassy can be seen as the result of a longer-term shift. The Australian government was initially highly critical and dismissive of Chiang and the Nationalists. This attitude, close to that of the British, progressively gave way to friendliness and support more characteristic of the US. This shift seemingly corresponded with Britain’s diminishing global role and importance to Australian security.63 Whatever inspired Holt’s friendlier attitude towards the Nationalists, it was based on a mischaracterization. It would have little impact on the essentially tepid intergovernmental relations. As pointed out by Australia’s first ambassador to the ROC, Frank Cooper, superficially the ROC and Australia had much in common, but there was “a fundamental divergence of view in our respective attitudes towards Communist China which no amount of cordiality can entirely hide.”64 Australia aimed to come to an understanding with the PRC and maintain Taiwan as a separate state. In contrast, the Nationalists aimed to overthrow the Communists by force and rejected any permanent separation of Taiwan from the mainland. External Affairs Minister Hasluck experienced this disagreement first hand during a visit to Taiwan on 11 June 1966.65 According to Cooper, Australia’s main significance to the ROC government was ”the influence we exercise with our friends and allies and particularly with the United States.”66 When this influence was in a direction contrary to the aims of the Nationalists, the “brittleness of our [Australia’s] relations with the ROC” was revealed.67 The Nationalist government reacted angrily to Australia’s decision to recognize Outer Mongolia on 28 February 1967, which it still claimed as its territory. Australia was pilloried in Taiwan’s government-controlled press over the issue, including discussion of reprisals.68 Prime Minister Holt’s 4–6 April 1967 visit to Taiwan was also “boycotted” by Chiang Kai-shek’s son and minister of defense, Chiang Ching-kuo.69 When Holt made a statement on Australian television that Australia was not closed to recognition of China “if conditions [were] right . . . [if China accepted] certain international obligations, certain international codes of conduct [and] . . . an 63 Lee, “The Liberals and Vietnam,” p. 433. 64 Doran and Lee (eds), Documents on Australian Foreign Policy: Australia and the Recognition of the People’s Republic of China, 1949–1972, p. 274. 65 Ibid., pp. 265–266. 66 Ibid., p. 272. 67 Ibid., p. 271. 68 Ibid., pp. 270–271. 69 Ibid., p. 276. The first and last Australian prime ministerial visit to Taiwan/ROC.



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arrangement which will assure the future of Taiwan,” “a certain coolness could be detected in the [Australian] Embassy’s relations with [Nationalist] Chinese officialdom.”70 The ROC failed to deliver on promises to provide meaningful intelligence concerning the mainland.71 The ROC also “expressed open criticism of Australia’s grain exports to the Mainland.”72 According to Cooper, these were all ”discernable strains in our (superficially cordial) relations with the R.O.C.”73 Cooper quickly emerged as an ardent critic of the KMT government within the Department. In a dispatch to External Affairs Minister Hasluck on 24 April 1967, Cooper suggested: “Our political support for the R.O.C. . . . should not blind us to the unsavory features of K.M.T. rule, but rather [it should] . . . be based on the hope that ultimately the Taiwanese people will achieve by peaceful means a political voice in their country’s affairs commensurate with their numerical majority and economic status.”74 However, by November the following year, Cooper was expressing the view that the Taiwanese population need not impede an Australian accommodation with Beijing: “the Taiwanese would probably find it no more difficult to adapt themselves to a Communist regime than to the present Nationalist one.”75 Cooper believed that as the Taiwanese could not have an independent state, and as the Nationalists did not want one, Australia should abandon its “two China policy.”76 Cooper argued: “It is . . . unrealistic to contemplate an accommodation with Peking . . . the primary long term aim of our diplomacy in Asia . . . on the basis of two Chinas (or one China one Taiwan) which both sides specifically reject.”77 Before Cooper left Taipei in August 1969, he wrote a letter to Minister for External Affairs Gordon Freeth arguing, “[as] a separate status for Taiwan . . . would make political sense only if it could be shown that it represented independence for the Taiwanese . . . [and] there is no evidence to suggest that the Nationalists are as yet sufficiently farsighted as

70 Ibid., pp. 275–276. 71 Ibid., p. 277. 72 NAA, A1838:519/1/1 PART 3, ROC’s Relations with Australia, “Republic of China, Relations with Australia,” undated. 73 Doran and Lee (eds), Documents on Australian Foreign Policy: Australia and the Recognition of the People’s Republic of China, 1949–1972, p. 278. 74 Ibid., p. 273. 75 Ibid., pp. 283–284. 76 Ibid., p. 284. 77 Ibid., p. 286.

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to contemplate the sharing of political power with the Taiwanese . . . our China policy should be based on the essential hypothesis that Taiwan is part of China.”78 In a submission to Freeth, Deputy Secretary Laurence McIntyre noted Cooper’s suggestion “is not of course consistent with our long-standing policy that the people of Taiwan have the right to determine their own future.”79 Cooper’s replacement, Hugh Dunn, was more comfortable with Australian policy, even as the decisive issue of the ROC’s membership in the UN came to a head (see below). In a 12 February 1970 memorandum to Departmental Secretary Plimsoll outlining “Australian Interests in Taiwan,” Dunn argued: [O]ur interests are served by seeing Taiwan develop economically (and, one hopes, in time politically), as an independent entity until, by free choice and peacefully, the people on this island—both Taiwanese and mainlanders— opt for or against union with the mainland. Given the widening differences between Taiwan and the mainland . . . the possibility of a genuinely free choice being made in favour of union seems remote.80

However, Australian policy was not based on a commitment to the right of the people of Taiwan to self-determination. Rather, self-determination for Taiwan was principally an expedient through which Australia justified its support for US policies concerning China and Taiwan. Rapidly improving Sino-US relations meant that Australia would soon be—if it were not already—no longer obliged to antagonize Beijing through supporting the government in Taipei or the people of Taiwan in the interests of the relationship with the US. By December 1970 the Department’s Policy Planning Group was arguing that there was an urgent need to review Australia’s policy towards China “for four good reasons”: a) The essential reason is the growing acceptability of the PRC [.] b) [With the US’] gradual search for a détente with Peking . . . we will be left behind unless we too review our policy. c) Present international trade trends . . . threaten a breakdown of our traditional trading patterns . . . we should seek to expand our trade with other potential markets, one of the biggest of which is the PRC. d) Within Australia, support for the established policy of non-recognition of Communist China has weakened considerably.81 78 Ibid., p. 306. 79 Ibid., p. 309. 80 Ibid., p. 313. 81 Ibid., pp. 347–348.



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The Policy Planning Group suggested inter alia the government “begin moving towards an improvement of relations with the PRC . . . [and] gradually diminish diplomatic support for the ROC.”82 In addition, Australia should, “Stress Taiwan’s right to separate status rather than right to selfdetermination, pending a peaceful resolution of the problem between the two sides.”83 According to Assistant Secretary Robert Robinson, the Policy Planning Group’s suggestions were for “consultations with our friends,” not “unilateral use,” and the Department was still seeking a “political lead” to move the issue forward.84 The End of Australia’s Official Relations with Taipei, 1971–1972 The McMahon government’s political lead proved inadequate to improve relations with Beijing as it was not prepared to make concessions on Taiwan’s status. The Australian ambassador in Paris approached his PRC counterpart on 27 May and 2 July 1971 to “attempt to open a dialogue;” however, talks stagnated on Australia’s “two Chinas” or “one China one Taiwan” policy and Australia’s relations with the ROC.85 Although the Policy Planning Group had highlighted the considerably weakened domestic support for Australia’s non-recognition of the PRC, the support that did exist was still an important consideration for the government. A June poll had reported a clear majority of Australians (52 per cent) in favor recognizing both “Chinas.” Only 6 per cent wanted Australia to recognize the PRC instead of Taiwan.86 In particular, Prime Minister William McMahon sought to maintain the support of the Democratic Labor Party, which “insisted upon support for Taiwan against China at all costs.” This domestic political motivation would have been a cognitive dissonant factor in what Pitty called McMahon’s “myopia,”87 his failure to see that the Americans would move on their China policy without keeping Australia informed. Although Australia’s recognition of the ROC was thus still secure for the short term, the ROC was apparently concerned

82 Ibid., p. 354. 83 Ibid., p. 356. 84 Ibid., p. 359. 85 Ibid., pp. 452, 455–458, 485–486. 86 Edmund S.K. Fung, “Australia’s China Policy in Tatters 1971–72,” The Australian Journal of Chinese Affairs (10) (1983), p. 44. 87 Roderic Pitty, “Way Behind in Following the USA over China: The Lack of any Liberal Tradition in Australian Foreign Policy, 1970–72,” Australian Journal of Politics & History, 51 (3) (2005), pp. 441–442.

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enough to try to attract Australia “through commercial advantage” with an “unprecedented flurry” of requests to submit defense supply contract tenders during this period.88 From 9 to 11 July 1971, Henry Kissinger held talks in Beijing on behalf of US President Nixon. He assured PRC Premier Zhou Enlai that the US was “not advocating” a “two-Chinas” or “one China, one Taiwan” solution.89 Australia was informed of the visit, and US President Richard Nixon’s intention to visit Beijing the following year shortly before Nixon announced it on US television.90 The Nixon administration’s move caused considerable domestic embarrassment for the Australian government. Three days earlier, Prime Minister McMahon had strongly criticized opposition leader Gough Whitlam’s trip to China, which coincided with Kissinger’s. McMahon had accused Whitlam of associating with the “enemy,” in a move that would ”isolate Australia from our friends and others.”91 Nixon’s move also complicated Australia’s longstanding efforts to support the US in maintaining the ROC in the United Nations. Australia had made the original decision to follow the US on the issue of Chinese representation in the UN as early as 6 February 1950.92 However, Australia’s support for the ROC in the UN was limited in accordance with Australia’s policy of distancing itself from the Nationalist regime and ultimate aim of generating dual representation for China and Taiwan. This lackluster approach was not appreciated by the United States. On 10 November 1956, Casey stated, “I firmly believe we should agree to [the] American request for Australia to speak in support of the United States on Chinese Representation. I believe it would be most unwise to refuse. We have some ground to make up with the United States.” With the government in agreement, on 15 November Casey spoke in support of the US draft moratorium resolution postponing consideration of the issue of Chinese representation, which was subsequently adopted by the General Assembly.93

88 NAA, A1838:680/8/4 PART 1, Eastman 19/5/71, “Defence—Sale of Arms Republic of China Taiwan,” From A.J. Eastman to Minister of External Affairs, 19 May 1971. 89 Doran and Lee (eds), Documents on Australian Foreign Policy: Australia and the Recognition of the People’s Republic of China, 1949–1972, p. 503. 90 Ibid., p. 502. 91  Smith, Cox and Burchill, Australia in the World: An Introduction to Australian Foreign Policy, p. 38. 92 Doran and Lee (eds), Documents on Australian Foreign Policy: Australia and the Recognition of the People’s Republic of China, 1949–1972, p. 15. 93 Ibid., p. 140.



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By late July 1961, the US had convinced the ROC that this moratorium was no longer viable, and they adopted an “important question” approach, where Chinese representation would be a matter requiring a two-thirds majority in the General Assembly.94 The General Assembly voted in favour of this on 15 December 1961.95 Nevertheless, the ROC Ambassador was attempting to renew Australian support for the moratorium by August 1965.96 According to Australian records, the November 1965 tied vote in the General Assembly on a pro-Beijing resolution from Albania and others “demonstrated our [Australia’s] wisdom in stimulating prior tabling of our ‘important question’ resolution.” According to the Australian mission, “the American delegation remained to the end too optimistic about voting.”97 With this vote, the US and its allies had lost majority support for the “important question” resolution.98 Following the 1970 vote, Australia’s permanent representative to the UN, Laurence McIntyre, concluded, “this was the last year in which the standard exercise [the important question device] could be gone through with any sure prospect of success.”99 McIntyre argued, “The objective . . . is to try to devise a procedure, and the tactics to put it into effect, that would open the door for entry of the People’s Republic of China into the United Nations (and to the China seat on the Security Council ) while preserving separate membership, under whatever name, for the GRC [Government of the Republic of China] and Taiwan.” McIntyre stated this would “inevitably involve a confrontation with President Chiang Kai-shek and his administration.”100 The United States could no longer postpone this issue if it aimed to preserve a seat for the ROC in the UN. However, with President Nixon coming to an understanding with Beijing, the US’ commitment to preserving a ROC seat had become uncertain.101 On 22 July 1971, McIntyre stated there was “little question that President Nixon’s initiative . . . has caused a further sharp erosion of the ROC’s prospects of remaining in the UN.”102 On 2 August, the American

 94 Ibid., pp. 209–210.  95 Ibid., p. 259.  96 Ibid., p. 258.  97 Ibid., p. 259.  98 Ibid., p. 260.  99 Ibid., p. 338. 100 Ibid., p. 339. 101  Bush, At Cross Purposes: U.S.-Taiwan Relations Since 1942, pp. 116–117. 102 Doran and Lee (eds), Documents on Australian Foreign Policy: Australia and the Recognition of the People’s Republic of China, 1949–1972, p. 530.

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UN delegation discussed its strategy for keeping the ROC in the UN with Australian officials. The US had decided to put forward two resolutions, one making the expulsion of the ROC an “important question” requiring a two-thirds majority, and a second resolution calling for dual representation of the ROC and the PRC.103 Australia had earlier suggested the “important question non-expulsion” resolution,104 and supported this aspect of American tactics. However, the Australian delegation immediately questioned why the draft dual representation resolution had not included a statement indicating that China’s Security Council seat would be given to the PRC. They were told that this was to “propitiate the ROC” though “ultimate inclusion was by no means ruled out.”105 Australia did not believe in the efficacy of the dual representation resolution even with a Security Council seat clause, as it would not get voting priority ahead of the pro-PRC Albanian resolution.106 Australia sought two resolutions, one on the PRC’s entry and one on the ROC’s continuing membership.107 Australia believed this could be achieved by first winning the non-expulsion resolution, and then having separate votes taken on the two parts of the Albanian resolution (one calling for inclusion of PRC and one for expulsion of ROC). At the same time, Australia aimed to avoid “at least for the time being, getting into a position of sponsorship of particular drafts or, generally, of being an activist—in public—on the Chinese representation issue.”108 This was aimed at avoiding possible complications with Beijing. The US declined to use Australia’s suggested tactic of using two votes on a divided Albanian resolution, as it was not possible to “sell” to the American people. In addition, though the US State Department was “strongly” in favor of including a reference to the Security Council seat, it was still being left out due to ROC pressure. According to a US official, the “ROC argued . . . if reference to Security Council had to be included, then it should be done by someone other than United States.”109 With the US still reluctant to compel the ROC into a salvageable position, by 13 August 1971, Australian officials believed it was still unclear if

103 Ibid., p. 540. 104 Ibid., p. 562. 105 Ibid., p. 540. 106 Ibid., pp. 546–547. 107 Ibid., p. 546. 108 Ibid., p. 548. 109 Ibid., p. 551.



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the US “will make a real all-out effort on behalf of ROC at the UN.”110 Eventually the US added a Security Council clause to the resolution,111 with Chiang Kai-shek’s begrudging acquiescence.112 However, the ROC was still planning to vote against the resolution, and had directed its right-wing ideological allies to do likewise. According to the Australian count, there were seven of these countries planning to vote against the American dual representation resolution at the ROC’s direction.113 Australia had originally only been willing to co-sponsor the American resolutions if it was part of a “large and representative group.”114 However, concern from Australia’s ambassador to the US, James Plimsoll, that Australia should unconditionally co-sponsor the resolutions in order to protect the US alliance convinced Cabinet to jump on board.115 This vexed Secretary Waller, who blamed US “tardiness” for the failure to attract wider support for the resolutions.116 On the advice of the Department, Minister of Foreign Affairs Nigel Bowen recommended to Cabinet that Australia abstain from voting on the Albanian resolution if the important question resolution failed. This would avoid unnecessarily ruffling the PRC, without affecting the inevitable outcome of the resolution being carried.117 However, Cabinet decided to vote against the Albanian resolution.118 A later submission from Acting Secretary Shann argued that an Australian vote against the Albanian Resolution would not be an issue in future relations with the PRC provided the resolution carries (which it would if the important question resolution failed).119 Days before the General Assembly debate on Chinese representation, the Australian prime minister directly lobbied the Singaporean prime minister to give priority to the important question (non-expulsion) resolution in the voting.120

110 Ibid., p. 561. 111  J. Bruce Jacobs, “One China, Diplomatic Isolation and a Separate Taiwan,” in Friedman, (ed.) China’s Rise, Taiwan’s Dilemmas and International Peace, New York: Routledge (2006), pp. 92–93. 112 Bush, At Cross Purposes: U.S.-Taiwan Relations Since 1942, p. 117. 113 Doran and Lee (eds), Documents on Australian Foreign Policy: Australia and the Recognition of the People’s Republic of China, 1949–1972, p. 612. 114 Ibid., p. 600. 115 Ibid., pp. 604–605. 116  Ibid., p. 607. 117  Ibid., pp. 631–632. 118  Ibid., p. 643. 119  Ibid., pp. 637–638. 120 Ibid., p. 633.

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On 25 October, the General Assembly agreed to give priority to the important question resolution, which failed 59 votes to 55 including Australia, with 15 abstentions and two countries absent. The US then attempted to have the Albanian resolution divided into two parts but was defeated. Following a walk out by the ROC delegation, the Albanian resolution calling for the admission of the PRC and expulsion of the ROC passed 76 votes to 35 including Australia, with 17 abstentions.121 As Australia had predicted, the dual representation resolution never made it to the floor. Had the US accepted Australia’s suggestion that efforts should be focused on garnering votes for the important question resolution and splitting the Albanian resolution, the result presumably would have been tighter. With Nixon’s abandonment of the US’ attempt to create two mutually and internationally recognized states across the Taiwan Strait,122 and after the ROC left the UN, Australia was finally free to recognize the PRC (on terms acceptable to the PRC) without fear of damaging the US relationship.123 However, a central impediment for the McMahon government was the need to drop the conservative Coalition government’s long-held commitment to self-determination for Taiwan without appearing callous—or foolish. Public opinion was still a factor in government thinking, with a poll conducted shortly after US President Nixon’s announced his planned visit to China showed that while “for the first time in more than twenty years most Australians (56 per cent) favored recognizing the PRC as the government of China . . . the majority still did not want to ‘dump’ Taiwan.”124 On 11 November 1971, Deputy Secretary Shann told Bowen, “The Australian Government has often stated that it is anxious to preserve the rights of the 14 1/2 million people on Taiwan . . . an early decision to establish relations with Peking, and therefore to break off with Taiwan, might be criticized.”125 First Assistant Secretary Harold Anderson argued that it 121  Ibid., p. 643. 122 Bush, At Cross Purposes: U.S.-Taiwan Relations Since 1942, pp. 117–119. 123 Kendall argues that Australia’s recognition of the PRC was for the most part a personal decision of Labor Prime Minister Gough Whitlam. See Timothy Kendall, Within China’s Orbit?: China Through the Eyes of the Australian Parliament, Parliamentary Library (Australia), 1 August 2008, http://www.aph.gov.au/library/pubs/monographs/kendall/ kendall_monograph.pdf, p. 67. In fact, the shift in American policy made Australian recognition of China inevitable. 124 Fung, “Australia’s China Policy in Tatters 1971–72,” p. 44. 125  Doran and Lee (eds), Documents on Australian Foreign Policy: Australia and the Recognition of the People’s Republic of China, 1949–1972, p. 656.



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was easier for Australia to shift its position on Taiwan now than if Taiwan recognized itself as a separate state from the mainland.126 Following Nixon’s visit to the PRC in February 1972, which caused more acute embarrassment for the Australian government, Australia again tried to begin negotiations with the PRC in March without conceding the PRC’s claim to Taiwan, but China rejected these overtures.127 The mismatch between the transformed external basis of Australia’s China-Taiwan policy and an Australian government unwilling to make the required concessions to the PRC position for domestic political reasons was resolved when the Whitlam government assumed office on 5 December 1972, returning Labor to power after an interval of twentythree years. Negotiations with Beijing on recognition began almost immediately following the swearing in of the new government, with Whitlam pressuring the Department of Foreign Affairs to achieve a quick result with the PRC.128 Despite Whitlam’s prior statements endorsing the PRC’s claim to Taiwan, the Department was authorized to resist that claim during the negotiations.129 The Department provided the following account of the negotiations: [T]he principal point at issue in the four meetings in Paris was the status of Taiwan. The PRC began by asking us to recognize in the communiqué that Taiwan was a province of China—i.e., since we were ready to recognize the PRC Government as the sole legal Government of China, a province of the PRC. We began by putting forward the Canadian formula “takes note of the position of the Chinese government that Taiwan is an inalienable part of the territory of the PRC.” Although we argued hard on several occasions for this formula, it was rejected by the PRC, without giving us reasons. We for our part stood out against the wording suggested by China. The Chinese then suggested the British formula—”the Australian Government, acknowledging the position of the Chinese Government that Taiwan is a province of the PRC, has decided to remove its official representation in Taiwan on . . .” Eventually the formula in the communiqué was agreed.130

126 Ibid., pp. 665–666. 127 Ibid., pp. 721, 725. 128 Jacobs, “One China, Diplomatic Isolation and a Separate Taiwan,” p. 95. 129 Doran and Lee (eds), Documents on Australian Foreign Policy: Australia and the Recognition of the People’s Republic of China, 1949–1972, pp. 759, 827. 130 Ibid., p. 827.

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The relevant text in the communiqué read: The Australian Government recognizes the Government of the People’s Republic of China as the sole legal government of China, acknowledges131 the position of the Chinese Government that Taiwan is a province of the People’s Republic of China, and has decided to remove its official representation from Taiwan by. . . .132

Australian officials argued at the time: [The] formula is in our view closer to the Canadian than the British. “Acknowledges” is very similar to “takes note”: and there is no direct grammatical connexion, which there is in the British formula, between the territorial issue of Taiwan and the removal of official representation. (In our view, the removal of representation is a necessary consequence of recognizing the PRC Government as the sole legal Government of China, and has nothing to do with the territorial issue of Taiwan.)133

With the formula agreed, Australia and the PRC established diplomatic relations on 22 December 1972, and Australia’s official relations with the ROC came to an end. Australia’s relations with Taiwan, however, were only just getting interesting. From “Right to Self-Determination” to “Right to Separate Status” From the Korean War until recognition of the PRC in 1972, the Australian government sought a government in Taipei that would assert a de jure independent status for Taiwan—whether controlled by the Taiwanese majority or Chinese Nationalists that had dropped their claim to “Chinese” territory they did not control. Initial strong Australian support for a “Taiwanese” Taiwan gave way to increasing support for a “Chinese Nationalist” Taiwan. Australia advocated either or both conceptions of Taiwan independence through the principle of self-determination for the people living on Taiwan. However, principle did not drive Australian policy. Australia backed an independent state on Taiwan chiefly as a means to support the US. It was also variously an attempt to minimize contradictions 131 The term used in the Chinese text for both recognise and acknowledge was chengren 承认. 132 Doran and Lee (eds), Documents on Australian Foreign Policy: Australia and the Recognition of the People’s Republic of China, 1949–1972, p. 819. 133 Ibid., p. 827.



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over China between the US and the UK and other countries important to Australia, and bring about a satisfactory accommodation with the PRC. Moreover, support for Taiwan was a source of domestic political support for the conservative government during the period. After their détente, the gap between the positions of China and the US over Taiwan narrowed sufficiently to allow Australia to make concessions to China over the island without damaging its relationship with the US. This shift preceded the election of an Australian government strongly committed to building a friendly relationship with China, and Australia and China established official relations in late 1972. Australia subsequently dropped its policy of advocating the international and mutual PRC-ROC/Taiwan recognition of “one China, one Taiwan” or “two Chinas.” However, and what remains crucially relevant today, Australia did not concede the PRC’s assertion that Taiwan is its province, and has not endorsed this claim since. Nor has Australia ever accepted that the PRC has the right to resolve its claim to Taiwan through force.

CHAPTER THREE

Late Cold War: Australia’s Taiwan Opportunity, 1972–early 1990s Cooperation between the US and China against the Soviet Union re-shaped Australia’s relationship with Taiwan. China and Taiwan became much less important in US-Australia relations than during the early Cold War. Australia’s strategic interests in Taiwan were largely put on ice. Australia began to approach China as an important partner against the USSR and as a now clear cut economic opportunity. The Australian government shrugged off self-determination for the Taiwanese in the interest of the relationship with China, assisted by the abuse of the concept to deny the PRC recognition and as a prop for the dictatorial regime of Chiang Kai-shek. Support for the diplomatic recognition of Taiwan became mainly a right-wing fringe political position, and the ROC regime was shunned. The sole link holding together the ROC and Australian governments was trade. This trade relationship grew to become very significant. As Sino-US relations again underwent a major shift at the end of the Cold War in 1989–1991, and as the ROC began to both democratize and Taiwanize under President Lee Teng-hui, an Australia-Taiwan relationship emerged that was in many respects much friendlier and deeper than when Australia had maintained official diplomatic relations with Chiang Kai-shek’s government. Closing the Door on the ROC, but not Taiwan In June 1972, Australia’s last ambassador in Taipei, Hugh Dunn, had argued: [T]he maintenance of adequate trade channels between Australia and Taiwan should be regarded as the essential point in our future relationship with the ROC, and that there are adequate grounds to argue that maintenance of such channels means that we are not abandoning Taiwan. It is not irrelevant to comment that, in light of the restrictions and reservations we have for some time applied [to] the development of closer political or other ties with the ROC, this Embassy’s function has often seemed to me to be

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chapter three more that of a Trade Commission with political and economic reporting, and consular, functions than that of a normal Embassy.1

Australian exports to Taiwan had grown by 40% in 1971–72 to A$56 million, making Taiwan Australia’s 18th largest export market.2 Australia was even momentarily exporting more to Taiwan than China.3 Despite the Whitlam government’s hostility towards Taiwan, this Australia-Taiwan trade was able to continue to develop. The Whitlam government took the “general attitude” that “we should not make the position in respect of trade with Taiwan any more difficult than necessary to keep our commitments to China.”4 In other words of course, this meant that short of suffocating Australia-Taiwan trade, Canberra considered itself free to greatly restrict relations with Taipei in the interests of building a relationship with Beijing. The Australian government informed Taipei that intergovernmental communication would be limited to: Occasional discreet meetings between representatives taking place in Washington, as the need arises, to discuss technical matters—e.g. restraint arrangements—to facilitate the smooth flow of private trade. But if there is any publicity about such meetings, they will have to cease.5

Australia applied the same zeal to restricting its relations with Taipei in other areas. The Australian government banned its ministers from visiting Taiwan or transiting in Taiwan. In addition, no Australian citizen visiting Taiwan or transiting through Taiwan was allowed to use an Australian official or diplomatic passport.6 Initially, the government banned all public service personnel from traveling to Taiwan, even privately for holidays. Following exposure of the ban in the media and parliamentary question time, Canberra imposed no general restriction on private travel to Taiwan

1 Ibid., p. 738. 2 NAA, A1838:555/1/17 PART 1, Taipei Annual Review 1971–1972, “Annual Review of Australia/ROC Relations, November 1971–October 1972,” Australian Embassy, Taipei, October 1972. 3 Klintworth, Australia’s Taiwan Policy 1942–1992, p. 141. 4 NAA, A1838:519/3/1/13 PART 5, to Australian Embassy Peking 5/9/1973, “Taiwan Relations with Australia—Future Relationships with Taiwan,” From Department to Australian Embassy, Peking, 5 September 1973. 5 NAA, A1838:519/3/1/13 PART 3, to Taipei 12/1/1973, “Trade with Taiwan,” From Department to Australian Embassy, Taipei, 12 January 1973. 6 NAA, A1838:763/1 PART 10, Brady 8/12/1975, “Taiwan: Australian Policy,” From G.V. Brady to Australian High Commissions London, Ottawa, Wellington and Hong Kong, 8 December 1975.



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on members of the Australian public service or armed forces except for “members of the first and second division and comparable ranks in the armed forces.”7 Government officials were still obliged to check any plans for private travel to Taiwan with the Department of Foreign Affairs “to establish whether the planned visit might be misunderstood by the Chinese Government or otherwise give rise to possible embarrassment in Australia’s relations with China.” The Australian government also imposed conditions on ROC citizens visiting Australia: Private persons may make private visits to Australia, provided that they meet normal immigration requirements, hold ordinary passports, agree in advance that they cannot claim to represent “Taiwan,” the “Republic of China,” or “China” and agree not to indulge in any publicity in that regard.

In addition, Australia did not officially recognize ROC passports, but accepted these as proof of identity. Instead of visas, the Australian government issued “letters of authority” to ROC citizens entering Australia.8 Applicants had to apply for these through the Australian High Commission in Hong Kong.9 Senior officials from Taiwan were generally not allowed to visit Australia.10 However, the Pacific Basin Economic Council (PBEC) and opposition Member of Parliament Ian Sinclair inquired whether ROC Minister of Finance K.T. Li would be permitted to attend a PBEC meeting in Australia. Despite the Department of Foreign Affairs “not indicating approval likely,” the foreign minister agreed to Li’s entry during parliamentary question time. The Chinese embassy in Canberra and Foreign Ministry in Beijing objected, and Li’s entry was refused. Rich in irony, the department’s stated rationale was “effective compromise of Li’s unofficial status by publicity following Parliamentary question [sic].”11 Some “more junior officials in non-contentious areas” were permitted to enter Australia. “Private persons from Taiwan” were also allowed to attend conferences in Australia provided that representatives from China were not invited. Some specialists from Taiwan, with official connections  7 NAA, A1838:519/3/1/13 PART 5, Ministerial Submission 7/9/1973, “Private Visits to Taiwan,” Ministerial Submission from K.C.O. Shann, Australian Public Service, 7 September 1973.  8 NAA, A1838:763/1 PART 10, Brady 8/12/1975.  9 NAA, A1838:1500/2/62/4 PART 1, Dunn 16/1/1973, “Diplomatic Representatives AbroadTaiwan-Closure of Post,” From Hugh Dunn, Taipei, to Department 16 January 1973. 10 NAA, A1838:763/1 PART 10, Brady 8/12/1975. 11  NAA, A1838:519/3/1/13 PART 7, Summary Table, “Summary Table of Cases of Entry to Australia by Taiwan Passport Holders, from January 17 to August 20, 1973.”

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of minor significance were allowed to attend technical conferences in Australia.12 The Australian government’s fear of Chinese criticism over links with Taiwan saw the Foreign Affairs Department recommend against admitting a journalist with the Economic Daily News: Not because we would expect him to make trouble, but simply because his presence as a full-time correspondent, which is not essential to our trade with Taiwan, could come to cause us a degree of embarrassment in our relations with China which it is in our power now to prevent.13

Australia similarly sought to manage the issue of a ROC trade office to avoid a reaction from Beijing. Before Australia removed its embassy from Taipei the two sides had agreed that the ROC could establish a trade center in Melbourne. Staff were to be on ordinary passports and engage in trade promotion only.14 This office was established in Melbourne in September 1973 under the name Far East Trading Company (FETC).15 According to Australian records, the FETC was closely tied to the China External Trade Development Council (CETDC), a semi-official body handling trade with countries with which Taiwan has no diplomatic relations. A senior ROC minister headed the CETDC.16 ROC records show that the FETC was effectively integrated into the MOFA system. Australia refused Taipei’s first proposal for the FETC director due to his “substantial and long-term connection with the Foreign Ministry.”17 Another document listed the reason for rejection as “he was member of Taiwan Foreign Service until March 1973.”18 However, Australia agreed to the appointment of two other FETC employees despite their being career diplomats.19 The Australian government was concerned whether “these people or their companies breach the understandings regarding their position in Australia.” As a result, the office was warned against “engaging in political activities of any kind” and the Australian Security Intelligence 12 NAA, A1838:763/1 PART 10, Brady 8/12/1975. 13 NAA, A1838:519/3/1/13 PART 5, Anderson 16/8/1973, “Entry of Taiwan Passport HoldersPeng Sen-yen,” H.D. Anderson for the Acting Minister of Foreign Affairs, 16 August 1973. 14 NAA, A1838:1500/2/62/4 PART 1, Dunn 16/1/1973. 15 MOFA archive, 012: 0001 File 230–14 Tang 2/4/1974 102202 H.J. Tang, Melbourne, to Charles Court (letter), April 2, 1974, Zhongao Guanxi (China-Australia relations). 16 NAA, A1838:763/1 PART 10, Brady 8/12/1975. 17 NAA, A1838:519/3/1/13 PART 5, Anderson 16/8/1973. 18 NAA, A1838:519/3/1/13 PART 7, Summary Table. 19 NAA, A1838:519/3/1/13 PART 5, Anderson 16/8/1973.



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Organization (ASIO) monitored its activities.20 Nevertheless, the FETC did engage in political activities, such as congratulating Charles Court on his election as premier of Western Australia. FETC director H.J. Tang told Court, who had previously visited Taiwan, “I trust you will agree that we should aim not only at further expanding our two way trade, but at other links too, when the situation arises.”21 Despite its efforts to avoid issues with China, the Australian government experienced some discomfort when independent New South Wales Legislative Assembly member Douglas Darby, a zealous anti-communist, established an “office of the Australia-Free China Society” and its “consulate” in Taiwan. The Australian office issued letters of introduction which were transferred to a visa upon arrival in Taiwan.22 Prior to this, Taipei’s request that the FETC should be allowed to directly forward visa applications had been refused.23 Australians wishing to travel to Taiwan were obliged to apply through a ROC embassy in a third country, usually the Philippines. According to Darby, the “consulate” in Taipei provided “substitute consular services” to Australians in Taiwan.24 The Chinese requested the Australian government “intervene and take measures against Mr. Darby’s organization” despite the lack of a legal basis to do so. The Chinese suggested that at the very least the Australian government should issue a statement clarifying its position.25 Reflecting the adversarial view of Australia-ROC relations among Australian officials, departmental officer Burgess commented on the incident that Taipei “had some success using Douglas Darby whose ‘consulate’ on Taiwan has been something of an embarrassment to us with the Chinese.”26

20 NAA, A1838:763/1 PART 10, ASIO 10/8/1973, “Patrick SUN Pi Chi and TANG Hsien Jen,” From Director General of Australian Security Intelligence Organisaton to Secretary Department of Foreign Affairs, 10 August 1973. 21 MOFA archive, 012: 0001 File 230–14 Tang 2/4/1974 102202. 22 NAA, A1838:519/3/1/13 PART 9, Douglas Darby, “Letter from Australia-Free China Society President Dr. Douglas Darby M.P. to Australian High Commissioner, Hong Kong,” 1974. 23 NAA, A1838:1500/2/62/4 PART 1, Dunn 16/1/1973. 24 NAA, A1838:519/3/1/13 PART 9, Douglas Darby. 25 NAA, A1838:519/3/1/13 PART 7, Record of Conversation 19/2/1974, “Record of conversation of M.J. Cook and A.P. Godfrey-Smith with Chu Chi-chen, Counsellor, and Wang Chi-liang, Interpreter, Chinese Embassy, Canberra,” 19 February 1974. 26 NAA, A1838:519/3/1/13 PART 7, Burgess 8/3/1974, “Taiwan Relations with Australia— Future Relationships with Taiwan,” From J.R. Burgess, Canberra, to H.A. Dunn, Buenos Aires, 8 March 1974.

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Following de-recognition, Australia also began to act against the ROC in a general policy of supporting the “seating of China in international organizations.”27 Australia opposed “any moves of a procedural or other nature designed directly or indirectly to maintain Taiwan’s membership” in international organizations.28 Hence, the Australian government indicated it would support any challenge to expel the ROC from the Asian Development Bank.29 Australia’s position differed from the US, which at this point continued to “welcome” China into international organizations while maintaining membership for the ROC.30 In addition, Australia moved to check the ROC’s growing presence in the South Pacific where it could cause embarrassment for Australia with China. Before the break in official relations, the Australian embassy in Taipei had noted the ROC’s interest in the South Pacific, suggesting Australia “may have some political interests in the ROC’s potential as an aid donor nation; even now it aids regional countries including Fiji, Western Samoa and Tonga.”31 In December 1973, Australia advised the government of Papua New Guinea not to send public servants to Taipei, fearing China might make representations to Australia as the country responsible for PNG’s foreign relations.32 When the PNG government sought to recognize “two Chinas,” Australia attempted at a “ministerial and senior diplomatic level” to “explain that formal relationships with both China and Taiwan are, these days, not a practical international policy.” PNG decided to be cautious ahead of independence to avoid a Chinese veto at the UN.33 Nevertheless, a ROC official suggested that there was quite a good possibility of establishing relations with PNG following its independence, provided there were inducements ( youdao) and “vanguard plan” (xianfeng jihua) agricultural technical teams were sent to cultivate

27 NAA, A1838:519/11/1 PART 2, ROK/China Relations-ADB, “ROK/China Relations-Asian Development Bank,” From Department to Australian Embassy, Seoul, 18 April 1974. 28 NAA, A1838:519/11/1 PART 2, to Australian High Commission London 5/4/1974, “Formosa—Relations with International Organisations—United Nations,” from Depart­ ment to Australian High Commission, London, 5 April 1974. 29 NAA, A1838:519/11/1 PART 2, ROK/China Relations-ADB. 30 NAA, A1838:519/11/1 PART 2, from Australian Embassy Washington 2/4/1974, “Formosa—Relations with International Organisations—United Nations,” from Australian Embassy, Washington to Department, 2 April 1974. 31 NAA, A1838:555/1/17 PART 1, Taipei Annual Review 1971–1972. 32 Klintworth, Australia’s Taiwan Policy 1942–1992, pp. 69–70. 33 NAA, A1838:1500/2/62/4 PART 1, Port Moresby 1/7/1974, “Relations with China and Taiwan,” from Australian High Commission Port Moresby to Department 1 July 1974.



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“sentiments” (qinggan).34 However, whatever efforts were made failed to prevent Port Moresby from establishing relations with Beijing.35 In the words of a senior Australian official, Australia’s “consistent rebuffs . . . got the message across to them [Taipei] loud and clear,” Australia was not interested in any dealings with the Nationalist government beyond the bare minimum required to sustain trade. Nor was it interested in doing the ROC any favors in international organizations or in the South Pacific. According to the official, this stance saw Taipei not pursue “us as actively as we might have expected.”36 Following the Whitlam government’s electoral defeat, the conservative Fraser government (1975–1983) continued Australia’s very restrictive policy on relations with Taipei.37 In 1976, an Australian official met with a ROC official in Washington to discuss the issue of illegal Taiwanese fishing boats in Australian waters. Canberra sought prior approval for the meeting from Beijing,38 indicating the degree of concern to maintain a friendly relationship with China. Australia-Taiwan Relations Re-Considered Chiang Ching-kuo took over from his father Chiang Kai-shek as leader of the KMT regime from the early 1970s, and adopted a foreign policy based on “economics and trade-first diplomacy” or “substantive diplomacy.”39 Hsieh quotes a “close associate” of Chiang Ching-kuo as explaining that this policy aimed to use “trade [as a] weapon to win friends.”40 Such trade-based initiatives were not able to influence Australia’s stance on intergovernmental relations to any significant extent in the years immediately following the severance of diplomatic relations. This began to change as Taiwan emerged as a significant exporter of increasingly sophisticated manufactured goods and thus a growing importer of

34 MOFA archive, 012: 0001 File 230–14, Shen 1/1/1975 0014012 From Shen Jianhong, Huafu, to Ministry, 1 January 1975, Zhongao Guanxi (China-Australia relations). 35 See Chapter 8. 36 NAA, A1838:519/3/1/13 PART 7, Burgess 8/3/1974. 37 Garry Woodard, “Relations between Australia and the People’s Republic of China: An Individual Perspective,” Australian Journal of Chinese Affairs, (17) (1987), p. 146. 38 Klintworth, Australia’s Taiwan Policy 1942–1992, p. 73. 39 Weiqun Gu, Conflicts of Divided Nations: the Cases of China and Korea, Westport: Praeger (1995), p. 123. 40 Chiao Chiao Hsieh, Strategy for Survival: The Foreign Policy and External Relations of the Republic of China on Taiwan 1949–1979, London: Sherwood (1985), p. 249.

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raw materials, including Australian minerals. Combined with the rising value of Taiwan’s exports to Australia, this saw Australia’s trade with Taiwan surpass Australia’s trade with China in 1981–82.41 This commercial activity sparked growing Australian interest in broadening contacts with Taiwan.42 In 1981, an Australian government initiative saw the privately-run Australian Chamber of Commerce establish the Australian Commerce and Industry Office (ACIO) in Taipei.43 Headed by economist Bill Mattingly, the office engaged in business and trade promotion only.44 In late June 1981, the Fraser government began to allow ROC officials to issue visas for Australian tourists.45 The Hawke Labor government was elected in March 1983. The following year, Taiwan had become the 15th largest trading nation, and the 10th largest exporting nation in the world.46 Also in 1984, Premier Yu Kuo-hua formally introduced a policy of economic liberalization, and Taiwan’s market was opened up to increased foreign competition.47 By 1986, Taiwan’s macroeconomic conditions were providing an extra imperative to liberalize, and Taipei significantly reduced tariff levels, simplified import and export procedures, and relaxed trade licensing regulations.48 This allowed

41 Japan was initially central to the reorientation of the Australian economy. Japan became Australia’s second largest trading partner in the late 1950s. By 1971, Britain was taking only 7.5% of Australian exports. See David Martin Jones and Mike Lawrence Smith, “Misreading Menzies and Whitlam, Reassessing the Ideological Construction of Australian Foreign Policy,” The Round Table, 89 (355) (2000), p. 397. Australia resource exports then expanded to South Korea and Taiwan in the 1970s, and then other Asian countries and eventually China. See Ross Garnaut, “Australia and China: Risks in a Good Story: Speech delivered to the Committee for the Economic Development of Australia,” Rossgarnaut. com.au, 27 August 2004, http://www.rossgarnaut.com.au/Documents/Australia%20and% 20China%20-%20Risks%20in%20a%20Good%20Story%202004.pdf. 42 Gary Klintworth, “Australia-Taiwan: The Evolving Relationship,” in Klintworth, (ed.) Taiwan in the Asia-Pacific in the 1990’s, St Leonards: Allen & Unwin Australia (1994), pp. 270–271. 43 Klintworth, Australia’s Taiwan Policy 1942–1992, p. 78. 44 China Post, “Australian Office Celebrates 25 Years of Ties with Taiwan,” 19 August 2006, http://www.chinapost.com.tw/editorial/detail.asp?onNews=&GRP=i&id=88328. 45 Drew Cottle and Angela Key, “Douglas Evelyn Darby, MP: Anti-Communist Internationalist in the Antipodes,” Labour History, (89) (2005), p. 96. 46 Robert Ash, “Economic Relations Between Taiwan and Europe,” The China Quarterly, (169) (2002), p. 157. 47 Christopher M. Dent, “Taiwan’s Foreign Economic Policy: The ‘Liberalization Plus’ Approach of an Evolving Developmental State,” Modern Asian Studies, 37 (2) (2003), p. 469. 48 Ibid., p. 471.



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Australian agriculture into the previously highly protected Taiwan market, most notably beef in the mid-1980s.49 The opportunity the Taiwan market presented to Australian agriculture drove interaction between the Australian and ROC governments. Unlike mineral exports, Taipei was ambivalent towards Australian farm goods, and Australian exporters were competing with countries such as Canada and the politically influential United States. This meant that the Australian government had to make important concessions to Taipei. The political weight of Australian farmers and graziers spurred Canberra to find the necessary temerity vis-à-vis Beijing. The initiative was now with Taipei, which determinedly pressed for greater normalization of relations. In October 1989 Taiwan banned Australian beef imports worth A$100 million during a critical phase in negotiations over airlinks.50 By 1990, Australian Foreign Minister Gareth Evans was declaring that his government was engaged in “vigorous pursuit, through all means at its disposal, of trade and technical issues such as market access for beef, wheat and fresh fruit.” Canberra began seeking out “informal meetings” between Australian and Taiwan officials on these and related quarantine, taxation and customs issues.51 A collapse in Australia’s terms of trade in the mid-1980s increased the importance of Taiwan as an export destination. The Australian economic situation also increased the need for foreign investment, and Taiwan’s transformation into a net capital exporter provided a strong incentive for Canberra to improve the relationship. Taiwan’s increasingly affluent population was further seen as a potential boost for Australia’s tourism and education sectors. Movement towards expanding relations with Taiwan began in earnest when Foreign Affairs Departmental Secretary Stuart Harris (1984–1988) acknowledged the need for a trade strategy for Taiwan. According to Klintworth, this interest in “broadening relations with Taiwan was blocked by political and bureaucratic inertia;” however, the 1987–1988 amalgamation of the Department of Foreign Affairs and the Department of Trade substantially reconciled the government’s political

49 Vincent C. Siew, “A Cross-Straits Common Market: Working Together to Build Prosperity in the Asia-Pacific Region,” Cross-Straits Common Market Foundation, 11 September 2001, http://www.crossstrait.org/version3/subpage4/sp4-3.htm. 50 See Klintworth, Australia’s Taiwan Policy 1942–1992, p. 122. 51 Senate, “Appropriation Bill (No. 1) 1990–91: In Committee,” Senate Hansard, Australia, 12 November 1990, http://parlinfoweb.aph.gov.au/piweb//view_document.aspx? TABLE=HANSARDS&ID=220822.

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and economic viewpoints on Taiwan, setting “the stage for a greater flexibility and willingness by Canberra to deal with Taiwan.”52 Accordingly, DFAT’s 1987–88 Annual Report noted Taiwan’s growing foreign exchange reserves and policies that were aimed at stimulating domestic demand. The Australian government also began to quietly upgrade its presence in Taiwan, with an Austrade53 official “on leave” taking over the ACIO in 1988, and another official “on leave” sent to Taipei in 1989. In addition, visa protocols were streamlined, reducing waiting times from twenty working days to five.54 Canberra was given a further push to expand contacts with Taipei in 1989 when prominent economist Ross Garnaut published a report on Northeast Asia’s economic importance recommending clear rules for dealing with Taiwan within a “one-China framework.”55 Garnaut argued, “A great deal can be done to strengthen and broaden private relations between Taiwan and Australia . . . [and] it is in Australia’s interests to vigorously expand the Taiwanese relationship.” He recommended the expansion of non-official relations, increased non-official governmental support for the ACIO, direct airlinks, the removal of hindrances to trade such as clear protection for Taiwanese investment in Australia, support for Taiwan in GATT (later WTO), and talks on regional cooperation. The report received extensive publicity and increased Australian interest in Taiwan.56 However, the issue remained for Canberra of how to expand relations with Taiwan while avoiding a serious reaction from Beijing. Developments in China and Taiwan worked to mitigate this issue. Canberra enacted sanctions on China following the massacre that ended the Tiananmen Square protests in 3–4 June, halted high level visits, and provided support for the regular UN resolutions condemning China’s human rights record.57 This trough in Australia-China relations meant Canberra was appreciably less concerned with Beijing’s reactions. China’s sinking international reputation was contrasted by Taiwan’s rapidly improving image resulting from its increasing liberalization and democratization. Australia’s new view of Taiwan smoothed “the path for a 52 Klintworth, Australia’s Taiwan Policy 1942–1992, pp. 80–81. 53 Austrade is the Australian government trade and investment development agency. It is a statutory authority administered by DFAT. 54 Ibid., p. 84. 55 Ibid., pp. 82–83. 56 Ibid., p. 83. 57 Michael Wesley, “Australia-China,” in Taylor, (ed.) Australia as an Asia Pacific Regional Power: Friendships in Flux?, London: Routledge (2007), p. 66.



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multiplication of Australia-Taiwan connections at nearly all save ‘official’ levels.”58 This effect became more pronounced as Taiwan’s democratization progressed, transforming support for Taiwan from a minority on the political right, to a broad spectrum within Australian politics. In addition to the direct effect these developments in China and Taiwan had on Australia, they also created an international atmosphere disadvantageous to Beijing and beneficial to Taipei. This international shift enabled growing Australia-Taiwan ties to avoid and deflect opposition from Beijing through providing safety in numbers. In addition, China’s own contacts with Taiwan began to proliferate during this period, and Chinese protests over growing Australia-Taiwan ties appeared “increasingly pro forma” to Australian policymakers.59 Under Lee Teng-hui, the ROC government’s demands on Australia also became more manageable. Lee Teng-hui’s Taiwan did not seek to displace China’s relationship with Australia, but develop a separate relationship. Taipei approached this goal “pragmatically,” accepting less than official relations with Australia as a stepping-stone to greater recognition as a sovereign entity. This meant that an expansion of (“unofficial”) intergovernmental ties was now desirable for both Australia and Taiwan on mutually compatible terms. Again, these developments were transforming and expanding Taiwan’s international relations as a whole, further facilitating Canberra’s efforts to expand relations with Taipei. Developments in Taiwan’s relations with Europe were especially important. Trade liberalization had made Taiwan’s growing domestic market more accessible for European businesses, increasing Taiwan’s importance to European capitals. This European interest was greatly amplified by Taipei’s US$303 billion “Six Year National Plan for National Economic Development” (1991–1996), targeting the “Top Ten Emerging Industries” for development.60 One of the plan’s goals was improving Taiwan’s international relations, and it successfully prompted a chain reaction among European governments “willing to support their firms win a larger share of the contracts.”61 This increased the domestic pressure on Canberra to 58 Henry S. Albinski, “Taiwan and Hong Kong in Australian External Policy Perspective,” in Mackerras, (ed.) Australia and China: Partners in Asia, Melbourne: Macmillan Education Australia (1996), p. 31. 59 Klintworth, Australia’s Taiwan Policy 1942–1992, p. 104. 60 Dent, “Taiwan’s Foreign Economic Policy: The ‘Liberalization Plus’ Approach of an Evolving Developmental State,” p. 474. 61 Francoise Mengin, “A Functional Relationship: Political Extensions to Europe-Taiwan Economic Ties,” China Quarterly, (169) (2002), p. 148.

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expand the political relationship with Taiwan and avoid being left behind. Taipei intensified this pressure with an unabashed bandwagon strategy. In addition, by following European precedents on ministerial visits and other sensitive issues, Canberra was able to further reduce bilateral friction with Beijing.62 The Expansion of Australia-Taiwan Ties With these conditions in place, Australia-Taiwan political relations expanded quickly from 1989 to 1992. Taiwan’s announcement that China Steel Corporation was considering constructing a US$4 billion steel mill in Australia saw the Australian parliament pass an act to protect Taiwanese investment in December 1989:63 [This] Foreign Corporations (Applications of Laws) Act 1989 (Cth), provides that when an Australian court is called upon to apply a foreign law relating to a foreign corporation, it should apply “the law applied by the people in the place of incorporation regardless of whether the Australian government recognizes the government of the place in question.”

Although framed in general terms not referring to Taiwan, the act conferred to Taiwanese corporations the right to sue and be sued, and “to that extent Taiwanese investment in Australia [was] made more secure.”64 A commercial aviation agreement was then reached by Australia and Taiwan in March 1991.65 This was followed by various other agreements, with eleven concluded from 1992 to 1998. To assuage Beijing, these agreements were either concluded by non-governmental or quasigovernmental entities on both sides—so-called “façade agreements”—or were Memoranda of Understanding (MOUs). MOUs are not published in Australia’s official treaty list and do not confer official recognition; however, they are effectively treated as legally binding within the Australian system.66 Australia-Taiwan relations were further normalized when the

62 Klintworth, Australia’s Taiwan Policy 1942–1992, pp. 98–99, 118, 120, 122–125. 63 Andrew Godwin, “Legal Aspects of Australia’s Commercial Relationship with Taiwan,” Bond Law Review, 4 (1) (1992), p. 61. 64 Ivan Shearer, “International Legal Relations between Taiwan and Australia: Behind the Facade,” Australian Year Book of International Law, (21) (2000), p. 127. 65 Klintworth, Australia’s Taiwan Policy 1942–1992, p. 107. 66 Shearer, “International Legal Relations between Taiwan and Australia: Behind the Facade,” p. 123.



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Australian government lifted restrictions on non-lethal defense sales to Taiwan in 1992.67 Each country’s de facto diplomatic representation was also significantly upgraded. In 1990, the Australian Education Office in Taipei was opened to facilitate a growth in student numbers.68 In 1992, Canberra began the practice of sending a DFAT official to head the ACIO. Personnel numbers were also increased considerably that year, making the ACIO in Taipei the third largest representative office after the United States and Japan.69 The Australian government also set up the (now superseded) Taiwan Market Service (TMS) in Australia to assist exporters in the Taiwan market.70 The expansion of Taiwan’s representation in Australia was similarly rapid. Canberra had insisted on inserting a note alongside visas stating that no credit was lent to Republic of China passports and that the visa did not imply any recognition of the government.71 Taipei secured the note’s removal in 1991 through leveraging airlinks.72 In March that year, the Taipei Economic and Cultural Office (TECO) was permitted to open in Canberra.73 Taiwan’s representation had previously been restricted to Melbourne and Sydney, and had been required to use the obscure “Far East Trading Company” nomenclature (see above). The Canberra office was allowed to facilitate negotiations over trade-related matters and issue visas with a ROC stamp. In 1992, diplomatic privileges were extended to TECO personnel for the first time anywhere in the world.74 In 1995, the Australian parliament passed the Overseas Missions (Privileges and Immunities) Act 1995 (Cth), which allowed rights similar to diplomatic immunity to be accorded in Australia to representatives or entities not officially recognized by Australia as states. This act was first applied to the Hong Kong Economic and Trade Office in 1996, and to TECO in 1998.75 .

67 Albinski, “Taiwan and Hong Kong in Australian External Policy Perspective,” p. 39. 68 Ibid., p. 32. 69 Klintworth, Australia’s Taiwan Policy 1942–1992, p. 108. 70 Senate, “Appropriation Bill (No. 1) 1990–91: In Committee.” 71 Francoise Mengin, “The Substitution of Conventional Diplomatic Relations: The Case of Taiwan,” in Melissen, (ed.) Innovation in Diplomatic Practice, London, UK: Macmillan Press Ltd (1999), p. 245. 72 Klintworth, Australia’s Taiwan Policy 1942–1992, pp. 123–124. 73 Siew, “A Cross-Straits Common Market: Working Together to Build Prosperity in the Asia-Pacific Region.” 74 Klintworth, Australia’s Taiwan Policy 1942–1992, pp. 109–111. 75 Shearer, “International Legal Relations between Taiwan and Australia: Behind the Facade,” pp. 122–123.

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Exchanges between the two governments proliferated during this period. From 1990 the two sides began to hold “unofficial” official talks. In 1992, Australian government guidelines on contact with the Taiwan government were further relaxed, and officials from both countries began to interact largely as they would in a normal relationship.76 Ministerial level exchanges also began and then steadily expanded. In November 1990, Prime Minister Bob Hawke met with Taiwanese businessmen.77 In July 1991, Taiwan’s economics minister, Vincent Siew, was invited to Australia.78 During his visit, Siew met with the minister for primary industries, the minister for trade, and the minister for industry, technology and commerce.79 The following year, Siew met with the Australian foreign minister and minister for primary industries at the inaugural APEC meeting in Bangkok.80 However, Canberra was still reluctant to send a minister to Taiwan. Attitudes within the Australian government appear to have been divided along portfolio lines, with the minister for industry and the minister for tourism and resources pushing for a visit, and the minister of foreign affairs and the minister for defense more reticent. Minister for Social Security Neal Blewett later related a discussion on the issue during a Cabinet meeting in 9 June 1992: [Foreign Minister] Gareth [Evans] proposed a marginal relaxation in Taiwan-Australia relations but refused to tamper with criteria preventing ministerial visits to Taiwan. He originally proposed simply to keep the matter under a six-monthly review. However, given a strong letter from Alan Griffiths—not present—urging a relaxation based on his interests in tourism and resources, Gareth agreed that it should be reviewed in individual cases according to criteria determined by himself and [Prime Minister] Keating. [John] Button [the Industry Minister] was still ungenerous, believing that both China and Taiwan talk “a lot of bullshit” about the consequences that would flow from ministerial visits. He instanced a whole range of ministerial visits to Taiwan from western countries. [Minister for Immigration, Local Government and Ethnic Affairs Gerard] Hand joined in with one of his simplistic, ill-disciplined diatribes: “Let us get rid of the whole phony façade.

76 Klintworth, Australia’s Taiwan Policy 1942–1992, p. 116. 77 Andrew Christie Papadimos, Australia, Taiwan and the PRC: Evolving Relations, Doctoral Thesis, Faculty of Arts, School of Asian and International Studies, Griffith University (1994), p. 120. 78 Murray A. Rubinstein, “Political Taiwanization and Pragmatic Diplomacy: The Eras of Chiang Ching-kuo and Lee Teng-hui, 1971–1994,” in Rubinstein, (ed.) Taiwan: A New History, Armonk, New York: M.E. Sharpe (1999), p. 464. 79 Papadimos, Australia, Taiwan and the PRC: Evolving Relations, p. 120. 80 Klintworth, Australia’s Taiwan Policy 1942–1992, p. 113.



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I was never a Maoist, let’s come clean and deal openly with Taiwan.” This argument ignores utterly the international non-status of Taiwan. Gareth gave them a proper lecture and was strongly supported by [Defense Minister Kim] Beazley. Evans is particularly concerned to keep a lid on the issue, pending the visit of the Chinese foreign minister in the next fortnight.81

On 27 October 1992, the minister for tourism and resources, Alan Griffiths, made the first Australian ministerial visit to Taiwan since 1970, travelling on a private passport. Klintworth suggests that Griffiths was “relatively junior and therefore an appropriate ministerial visitor.”82 However, the information from Blewett suggests that the main reason Griffiths was chosen was due to his own interest in going to Taiwan. This Australian ministerial visit came relatively late. Opposition leader John Hewson had visited Taipei in March 1991, and the French had made the first cabinet level visit to Taiwan of any “non-recognizing” country in January 1991.83 Canberra’s increasing engagement with Taipei extended to international economic forums, with Australia pushing for Taiwan’s involvement in APEC and GATT.84 Canberra saw APEC as very important for Australia’s economic future, and Taiwan’s economic importance was such that Canberra considered Taipei’s inclusion as vital to the forum’s success.85 Canberra’s support for the accession of Taiwan to GATT was similarly motivated by economic self-interest. On 27 March 1995, Australian Trade Minister Robert McMullan told the senate: In the context of Taiwan’s application to accede to the GATT Australia is seeking significantly improved access for a wide range of products including beef, dairy, and horticulture, where there are currently a range of tariff and non-tariff barriers including import prohibitions, discretionary import licensing and discriminatory quantitative restrictions . . . Australia strongly supports Taiwan’s accession to the GATT/WTO and continues to play an active part in this process. As a member, Taiwan will be required to abide by the multilateral trade rules thus securing maximum opening of Taiwan’s market to Australian products.86

81 Neal Blewett, A Cabinet Diary: A Personal Record of the First Keating Government, Kent Town, South Australia: Wakefield Press (1999), pp. 146–147. 82 Klintworth, Australia’s Taiwan Policy 1942–1992, p. 114. 83 Mengin, “A Functional Relationship: Political Extensions to Europe-Taiwan Economic Ties,” p. 143. 84 M.D. Fletcher, “Australian-Taiwanese Relations,” in Yang, (ed.) Taiwan’s Expanding Role in the International Arena, Armonk, New York: M.E. Sharpe (1997), p. 61. 85 Klintworth, Australia’s Taiwan Policy 1942–1992, p. 100. 86 Senate, “Question on Notice: Agricultural Exports,” Senate Hansard, Australia, 27 March 1995, http://parlinfoweb.aph.gov.au/piweb/view_document.aspx?id=514102& table=HANSARDS.

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As expected, when it began in the 1990s, Taiwan’s WTO accession process reduced agricultural tariffs and made importing easier.87 According to Fletcher, Canberra saw “de facto cooperation” in APEC and GATT as “particularly positive” due to “the delicacy of bilateral relations with Taiwan and the People’s Republic.”88 Australia believed it could improve its economic cooperation with Taiwan in these forums without having to make political concessions to Taipei that would be offensive to Beijing. The economic benefits and increased international space these forums provided Taiwan appear to have made this an acceptable trade-off for Taipei at the time. By 1992, Australia-Taiwan ties had strengthened considerably. According to former TECO head Francias Lee, if “normal diplomatic relations could be regarded as 100 per cent, then by 1992 the Australia-Taiwan relationship had reached the 80 per cent mark or thereabouts.”89 Klintworth described Australia’s Taiwan policy at this point as being a “two Chinas policy, dressed up as something else.” According to Klintworth, the perception of Australia had become “that pending a Chinese resolution of the reunification issue, Taiwan and mainland China can be treated as separate entities—for all that is, but official purposes.”90 However, in reality certain components of Australia-Taiwan relations, such as ministerial visits, rested on weak foundations, and the main issues in Australia-Taiwan relations were far from resolved. Australia-Taiwan Relations Peak? The sanguine atmosphere that had come to characterize AustraliaTaiwan relations by the early 1990s derived from three main factors: the economic power of Taiwan relative to the China, relaxation of crossstrait tensions in the late 1980s–early 1990s, and the increased international isolation of the Chinese government after the massacre in 1989. Each of these factors was actually in the process of dissolution, and

87 Dent, “Taiwan’s Foreign Economic Policy: The ‘Liberalization Plus’ Approach of an Evolving Developmental State,” p. 472. 88 Fletcher, “Australian-Taiwanese Relations,” p. 62. 89 Klintworth, Australia’s Taiwan Policy 1942–1992, p. 121. 90 Klintworth, “Australia-Taiwan: The Evolving Relationship,” p. 291.



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Australia-Taiwan relations would again undergo significant transformation as they entered the contemporary period. Moreover, the demise of the Soviet Union in 1991 removed the major rationale for Sino-US strategic cooperation, and Taiwan would return as a major strategic concern for Australia.

PART two

The Taiwan issue in Australia’s relations with China and the US

CHAPTER FOUR

Australian policy feels the post-Cold War squeeze, 1989–2001 The final unraveling of the Soviet Union in the late 1980s-early 1990s removed the basis of Sino-US strategic collaboration central to the late Cold War. The massacre in the streets around Tiananmen Square in 1989 punctuated this new reality, ending the American consensus promoting good relations with China.1 The Sino-US relationship that subsequently developed was an uneasy mix of cooperation and antagonism. The US has sought to engage China to bring it into the US-led Asian security order, while simultaneously balancing to deter a forcible challenge to that order.2 This has dovetailed with Chinese policies, which converge on maintaining Communist Party rule and China’s territorial claims while building up national power relative to the US—all without drawing a strong US response.3 The respective approaches of China and the US pushes the reconciliation—peaceful or otherwise—of their apparently conflicting aims into the medium-to-long-term future, when China either will or will not have significantly reduced the power gap with the US and its allies, and it will or will not be reconciled to the US-led Asian order. This evolving dynamic now underpins the international relations of the Asia Pacific. An early appreciation of this from Australian policy makers was the 1993 Strategic

1 Nancy Bernkopf Tucker, Strait Talk: United States-Taiwan Relations and the Crisis with China, Cambridge, Massachusetts: Harvard University Press (2009), p. 176. 2 Joseph Nye provides the twin examples of the Clinton Administration’s support for China’s membership in the World Trade Organization and the Clinton-Hashimoto Declaration of April 1996 affirming that the US-Japan security treaty, “rather than being a Cold War relic, would provide the basis for a stable and prosperous East Asia.” See Joseph S. Nye, “Should China be ‘Contained’?,” Project Syndicate, 4 July 2011, http://www.projectsyndicate.org/commentary/nye96/English. 3 See for example David Shambaugh’s reference to “six-decade long single-minded mission of the Chinese Communist Party, government, military, and society to strengthen itself comprehensively and become a major world power” in David Shambaugh, “Coping with a Conflicted China,” The Washington Quarterly, 34 (1) (2011), pp. 24–25. and Michael D. Swaine and Ashley J. Tellis, “Interpreting China’s Grand Strategy: Past, Present, and Future,” RAND Corporation, http://www.rand.org/pubs/monograph_reports/MR1121.html, pp. 99–100.

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Review, which “noted increased uncertainty, in the new post-Soviet era, about the US role in Asia, and China’s potential to ‘emerge . . . as a strategic rival to the United States in Asia.’”4 Nevertheless, at least in the short term, a favorable international environment has existed for Australia. Australia has benefited from the economic growth of China and other Asian countries while continued US dominance in Asia has secured Australia from the resultant growth in military power. Moreover, while security has remained the main priority of Australia’s relations with the US, successive Australian governments have been able to make security a relatively low priority in Australia’s relations with Asian governments compared with the Cold War era. Instead, Australia has been able to accelerate and expand a trade and investment focused policy that began with Japan in the 1970s, and that now constitutes the bulk of the Australian government’s interaction with Asia. Also, unlike during the early Cold War, there are only weak domestic pressures shaping relations with China outside the arena of economy and trade. For example, concern within the Australian community about the Chinese government’s human rights abuses has not significantly hindered the intergovernmental relationship. A few years after the June 1989 massacre, the Keating Labor government sent human rights delegations to China, “the first gesture by a Western country in the post-Tiananmen era to begin quarantining human rights issues from the broader bilateral relationship.”5 Soon afterwards in 1992, then Vice-Premier Zhu Rongji visited Australia, and Prime Minister Keating went to China in June 1993. The tight linkage of the US and China in Australian policy meant that the Australian government would nevertheless put considerable energy into reconciling its interests. For example, Australia lobbied strongly for the Clinton administration to de-link the issue of Most Favored Nation (MFN) trading status from China’s human rights abuses.6 This chapter also charts the dawning of another inconvenient reality: Taiwan had been reactivated as a pivot in Sino-US relations, and the Australian government would again have to work hard to navigate the US-China-Taiwan triangle.

4 Smith, “The Long Rise of China in Australian Defence Strategy,” p. 5. 5 Wesley, “Australia-China,” p. 66. 6 Ibid., p. 67.



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Australia’s Taiwan Problem Redux Australia-Taiwan bilateral ties had improved significantly during the late 1980s-early 1990s.7 A major factor in this was the thaw in relations between China and Taiwan. In the perception of Gary Klintworth, Australia’s problem with Taiwan—meaning Australia’s security and economic interests in Taiwan conflicting with its interests in China—was all but resolved.8 However, the cross-strait détente proved to be a chimera. Taiwan reawakened as one of the most important international issues facing Australia even, as shown below, engagement with the Taiwan government became increasingly less of a priority. Under President Lee Teng-hui the ROC democratized and largely Taiwanized.9 This “New Taiwan” sought recognition and degrees of recognition not in competition with China but as a separate country. Due to the altered international strategic structure, Tiananmen Square massacre and Taiwan’s democratization and wealth relative to China, Taiwan was able to make significant progress to this end around the world, including in Australia and the US. China was implacably opposed to any changes it saw as decreasing the likelihood of unification. China’s aggressive, uncompromising attitude coupled with greater US support for Taiwan resulted in a major policy dilemma for Australia. An added challenge for Australia was that this US support for Taiwan was not steady and clear but rather swung between conflict and collaboration with China. Although US President George H. W. Bush was amenable to the Chinese leadership, he would still sell F-16 fighter planes to Taiwan in 1992. Similarly, the Clinton Administration would eventually allow Lee Teng-hui to visit the mainland US after initially refusing Lee a transit stop and then begrudgingly granting him a demeaning stopover in an Air Force base lounge in Hawaii. China withdrew its ambassador from Washington and staged missile tests and war games close to Taiwan in the lead up to Taiwan’s 1996 presidential election in response to the Taiwan government’s public moves away from the ideal of eventual unification and this stuttering US support. In August 1995, Clinton sent a classified letter to Chinese leader Jiang 7 See Chapter 3. 8 Klintworth, Australia’s Taiwan Policy 1942–1992, pp. 132–133. 9 For an explanation of Taiwanization, see for example Rubinstein, “Political Taiwanization and Pragmatic Diplomacy: The Eras of Chiang Ching-kuo and Lee Tenghui, 1971–1994.”

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Zemin that either said the US would “oppose” or “not support” Taiwan independence, two Chinas or Taiwan’s membership in the UN (the so called “three no’s”). However, China’s continued military escalation saw the US send two aircraft carrier groups to the vicinity of Taiwan.10 Australia’s response to the unfolding “crisis” embraced varied goals. On one hand, Australia wanted to see the pro-China collaboration element of the US government strengthened. This, senior policymakers hoped, would reduce contradictions in Australian policy and restore the stability in Sino-US relations seen as conducive to Australian interests. Hence, the Labor government dispatched a special envoy to Washington in 1995 to communicate its concern over the mixed messages being sent to China and Taiwan, and the lack of unity in US policy.11 On the other hand, the Asia-Pacific security dynamic had changed, and Australia’s latent strategic interest in Taiwan had relapsed. China had shown its willingness to use threats of force to advance its goals and would accelerate its military modernization towards countering American aircraft carrier groups. Washington committed to rebuilding Taiwan’s military establishment, and initiated high level talks and closer military-tomilitary ties. Japan pledged closer military co-operation with the US while alluding to Taiwan.12 The US also reached out to Australia, and the Taiwan issue and the PRC led the agenda at the first ever Australia-Japan security talks held on 25 February 1996.13 The Howard Government Confronts China The John Howard-led Coalition government took office on 11 March 1996 with a policy of emphasizing the US alliance, amplifying this securityrelated aspect of Australian policy.14 The conservatives had also made a 10 Tucker, Strait Talk: United States-Taiwan Relations and the Crisis with China, pp. 182, 201–202, 212, 217, 219–220. The “three no’s” Clinton later publicly stated in Shanghai on 30 June 1998 were “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.” 11 Stuart Harris, Will China Divide Australia and the US?, ACAS Relationship Studies Series, Sydney: University of Sydney (1998), p. 65. 12 Tucker, Strait Talk: United States-Taiwan Relations and the Crisis with China, pp. 223, 225, 228–229. 13 Gary Klintworth, “Lessons Learned,” in Austin, (ed.) Missile Diplomacy and Taiwan’s Future: Innovations in Politics and Military Power, Canberra: Strategic and Defence Studies Centre, Australian National University (1997), p. 255. 14 Harris, Will China Divide Australia and the US?, p. 64.



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strong push to expand ties with Taipei while in opposition.15 While this was partly due to the nature of parliamentary democracy, with the opposition less diplomatically constrained than the government, it also reflected political differences between the Coalition and the Australian Labor Party (ALP). Agricultural exports to Taiwan (and the requisite greater intergovernmental contact) were very important to the Coalition’s rural constituency. There were also important ideological differences between ALP and the Coalition, with the conservative side of Australian politics having made a less resounding break with the authoritarian ROC in the 1970s than the left. Although support for the “New Taiwan” was increasingly bipartisan, lingering antipathy towards the KMT was less of an initial obstacle for the Coalition. In addition to its ideological coloring, as in 1972 the new government was much less inhibited by historical baggage—in this case the relationship the Labor government had developed with Beijing. The new foreign minister, Alexander Downer, called in the Chinese ambassador to hear expressions of concern over Chinese war games and bellicose rhetoric on 12 March 1996.16 Downer later welcomed the US carrier deployment as “demonstrating [US] interest in participating in regional security issues in a very practical way.”17 Defense Minister Ian McLachlan made a further statement of support. These public comments made Australia one of only two regional countries, along with Japan, to openly support the US carrier deployment.18 In May, McLachlan cited ANZUS in discussing the prospect of sending Australian ships to “join American vessels in any future operation in the Taiwan region.”19 Also in May, Downer stated: the Government’s approach to regional security will be to ensure a continued, strong United States presence within the East Asian region. It is critical that Australia pays proper heed to the role of the United States in the maintenance of regional security.20 15 Klintworth, Australia’s Taiwan Policy 1942–1992, pp. 91–93. 16 Klintworth, “Lessons Learned,” p. 255. 17 Stephen Sherlock, “Australia’s Relations with China: What’s the Problem?,” Parliamentary Library (Australia), 21 February 1997, http://www.aph.gov.au/library/pubs/ CIB/1996-97/97cib23.htm. 18 Harris, Will China Divide Australia and the US?, p. 24. 19 Gerald Segal, “Australia Seeks to Forge a New Regional Balance of Power,” International Herald Tribune, 11 June 1996, www.iht.com/articles/1996/06/11/edsegal.t.php. 20 Alexander Downer, “Security through Cooperation: Address to the IISS/SDSC Conference, ‘The New Security Agenda in the Asia Pacific Region,’” The Department of Foreign Affairs and Trade (Australia), 2 May 1996, http://www.foreignminister.gov.au/ speeches/1996/regsec5.html.

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Four months later in New York, Downer drew attention to “widespread support for continuing United States strategic engagement in the Asia Pacific which underpins the region’s stability and security” immediately after mentioning the emergence of “new power” China.21 In addition, the review of Australia’s strategic policy initiated in 1996 “re-emphasize[d] the importance of Northeast Asia to our own security.”22 The review’s public report stated that the core task of Australia’s strategic policy must be “developing defense capabilities which can, if needed, be successfully employed in any conflict in which Australia’s interests are vitally engaged.” The report listed one of these “key strategic interests” as helping “prevent the emergence in the Asia–Pacific region of a security environment dominated by any power(s) whose strategic interests would likely be inimical to those of Australia.”23 These developments strongly suggest that Canberra had decided to support the United States by increasing Australia’s capacity to participate in a military conflict over Taiwan. China Redirects Australian Policy Australia’s moves to highlight the potential threat China posed and the importance of ANZUS were unacceptable to Beijing, and it began to apply significant pressure on Australia.24 In April 1996, China reacted angrily to Australia’s abrupt abolition of the Development Import Finance Facility, an Australian concessional finance scheme for developing countries in which China participated.25 Beijing then criticized Foreign Minister Downer’s July concerns over the future of democracy and human rights in Hong Kong,26 and China’s nuclear weapons test on the eve of

21 Alexander Downer, “The Asia Pacific: Gearing Up for the Twenty First Century: Address to the Asia Society, New York “ Parliament of Australia, 27 September 1996, http:// parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;adv=yes;orderBy=customrank;pa ge=0;query=%22gearing%20up%20for%20the%20twenty%20first%20century%22;rec=0;r esCount=Default. 22 Ian McLachlan, “Australia’s Strategic Policy,” Australian Department of Defence, 2 December 1997, http://www.defence.gov.au/minister/sr97/s971202.html. 23 Department of Defence, Australia’s Strategic Policy, Canberra: Directorate of Publishing and Visual Publications (1997), pp. 3–4, 8. 24 Undermining the US-Australia alliance became a major objective for Beijing. See Mohan Malik, “The Australia-U.S.-China Triangular Relationship,” Korean Journal of Defense Analysis, XVIII (4) (2006), p. 161. 25 Sherlock, “Australia’s Relations with China: What’s the Problem?” 26 Don Greenlees, “Downer Warns China on HK,” The Australian, 26 July 1996, p. 5.



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a testing moratorium.27 China was particularly concerned about the annual Australia-US defense talks (AUSMIN) in July 1996, at which the US-Australia alliance was upgraded. A commentary in the official People’s Daily criticized the US Secretary of Defense William Perry’s description of Japan and Australia as the northern and southern anchors of US security arrangements in Asia. The People’s Daily made clear that China saw the developments in US-Australia relations as part of a policy shift by Australia. That same month, the mayors of Beijing and Shenzhen boycotted the Asian cities’ conference in Brisbane due to the attendance of the then Taipei mayor, Chen Shui-bian. Downer had previously issued a statement saying that the government had no objection to Chen visiting. Beijing also criticized the Minister for Primary Industries John Anderson’s planned visit to Taiwan, though similar visits had been made by ministers of the previous Labor government. In August, Canberra’s authorization of negotiations for uranium sales to Taiwan drew a strong response from the Chinese government.28 McLachlan told The Australian in August, “we have had some aggression from Chinese diplomats” over these issues.29 The same article quoted a “senior diplomat” saying Beijing was attempting to see “whether we blink.” Suggesting that Canberra was resisting this effort, McLachlan told The Australian that China’s “growing strategic and diplomatic assertiveness” since the end of the Cold War could hurt foreign investment. He even went as far as to deride China’s South China Sea and Taiwan policies: “all these little claims, the (maritime) boundaries claims, the Taiwan thing, can’t encourage people to invest in China.” These remarks were published after Foreign Minister Downer had just received a warning from Premier Li Peng against meeting the Dalai Lama. Li drew Downer’s attention to China’s recent downgrade of its relations with “one of its strongest Western partners,” Germany, over its support for Tibet.30 After McLachlan’s statements, criticism from Beijing broadened into a general critique of Australia’s foreign policy in the state media. Prime Minister Howard’s decision to meet the visiting Dalai Lama in September 1996 was stridently attacked in the People’s Daily. Beijing again criticized 27 Gabrielle Chan, “Downer Condemns Chinese N-Test on Moratorium Eve,” The Australian, 30 July 1996, p. 4. 28 Sherlock, “Australia’s Relations with China: What’s the Problem?” 29 Don Greenlees, “McLachlan Criticises China,” The Australian, 24 August 1996, pp. 1, 2. 30 Richard McGregor, “China Warns Downer on Dalai Lama’s Visit,” The Australian, 24 August 1996, p. 2.

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John Anderson’s visit to Taiwan when it went ahead in September.31 Beijing apparently even mooted the possibility of economic sanctions against Australia during this period.32 However, the unusual and repeated critique of Australia in the Chinese press,33 and a temporary ban on ministerial and high level visits,34 proved sufficient to modify Canberra’s public stance. Following the efforts of senior Australian government officials and the meeting between Prime Minister Howard and Chinese President Jiang Zemin in Manila in November 1996, Beijing ended the hostile public criticism of Australian policy. Sino-Australian Relations “Recovered” In January 1997 the Chinese Deputy Foreign Minister, Chen Jian, told an Australian journalist that: Understanding had been enhanced [and there were] good prospects for the further development of Sino-Australian relations. [The difficulties in 1996 were due to the Australian government taking] some actions which ended up hurting the national feelings of the Chinese people . . . [as] long as the two countries respect each other’s sovereignty and territorial integrity, bilateral relations will continue to develop and the potential for cooperation between the two sides will be enhanced.35

Essentially, this meant that good bilateral relations in all areas are dependent on Canberra’s increased respect for the position of Beijing on Taiwan and (to a lesser extent) other sovereignty related issues like the Dalai Lama. As a result of this period, the Howard government developed a strategy for accommodating Beijing’s sensitivities while still pursuing the goal of a closer alliance with Washington. Prime Minister Howard recounted how he thus “recovered” relations at the November 1996 meeting with Chinese leader Jiang Zemin: We laid the groundwork, and the groundwork simply meant that we would focus on those things that we could build together for the future; we would understand our differences, we would respect them, we would recognize

31  Sherlock, “Australia’s Relations with China: What’s the Problem?” 32 Harris, Will China Divide Australia and the US?, p. 35. 33 Sherlock, “Australia’s Relations with China: What’s the Problem?” 34 Greg Sheridan, “The Gloves Are Off With Beijing,” The Australian, 30 May 2001, pp. 1, 2. 35 Sherlock, “Australia’s Relations with China: What’s the Problem?”



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that we would disagree on a number of strategic political issues and always would—but we would not allow those disagreements to contaminate the relationship.36

In reality, of course, the reconciliation between the two governments was much more fragile and one sided than Howard suggested. Essentially, the Australian government decided to refrain (as far as its perception of Australian interests allowed) from saying or taking action which Beijing disapproved; however, this would not be because Canberra’s position on these issues had actually changed. This new diffidence was a significant concession; China had made the Howard government blink. Accommodating China in areas of policy to which the US was largely indifferent was straightforward. Australia moved its “Human Rights dialogue” with China behind closed doors in 1997, turning this dialogue into what Labor MP Michael Danby labeled “a formalist contrivance.”37 A Taiwanese scholar would comment: “for the sake of huge economic benefits, Australia agreed to China’s excuse that ‘countries may have different understandings of human rights issues because of different cultural backgrounds’ and thus Australia sacrificed its belief that human rights should be a universal value.”38 In stark contrast to John Howard’s meeting with the Dalai Lama in 1996, Australian politicians were under orders not to meet him in 2002.39 In May 1997, China’s then Vice-Premier Zhu Rongji explicitly demanded Australia not send ministers to Taiwan, even on “private” visits. Resources and Energy Minister Warwick Parer nevertheless visited Taiwan in 1997, which continued the unofficial practice of sending one minister a year to Taiwan.40 However, in 1998 Australia did not send a minister to Taiwan 36 Peter Hartcher, “Come and Study at My School of Diplomacy, Howard Tells the World,” Sydney Morning Herald, 20 April 2005, http://www.smh.com.au/news/National/Comeand-study-at-my-school-of-diplomacy-Howard-tells-the-world/2005/04/19/1113854201865. html?oneclick=true. 37 Greg Sheridan, “Chinese Human Rights Abuse a No-Go Zone,” The Australian, 25 June 2005, http://www.theaustralian.news.com.au/common/story_page/0,5744,15720126% 255E25377,00.html. 38 Fan Lloyd Sheng-Pao (范盛保), “Aozhou yu Nantaipingyang—Taiwan Neng Zuo ji Zuoxieshenme 澳洲與南太平洋─台灣能做及應做什麼? [Australia and the South Pacific: What Could and Should Taiwan Do?],” Taiwan International Studies Quarterly 台灣國際研究季刊, 3 (3) (2007). Translation by Zaijun Yuan and the author. 39 Colin Mackerras, “The Australia-China Relationship: A Partnership of Equals?” in Thomas, (ed.) Re-orienting Australia-China Relations: 1972 to the Present, Aldershot: Ashgate Publishing Ltd (2004), p. 24; Lynne O’Donnell, “State of China Ties Pleases Howard,” The Australian, 24 May 2002, p. 2. 40 Greg Sheridan and Jock Alexander, “Taipei Ties a Complex Challenge,” The Australian, 10 October 1997, p. 15.

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for the first time since visits recommenced in 1992. Ministerial visits would dwindle from once every two years to one in every five years.41 Australia had given clear rhetorical support for the US carrier deployment in 1996, so it now had some leeway to make selected concessions to the Chinese position at the expense of the US.42 Australia refused the US’ request to co-sponsor a 1997 UN human rights resolution condemning China. Australia also adopted a positive attitude to the transfer of Hong Kong in 1997 in contrast to the US attitude and an earlier statement made by Foreign Minister Downer.43 What Wesley described as “quarantining” the US alliance from AustraliaChina bilateral relations would be much more difficult.44 In regard to Taiwan, Australia would attempt to emphasize the official policy “that there is one China, of which Taiwan is a part that is apart. Reunification should occur by peaceful means, but is expected in due course,” while still maintaining the tacit policy, “that Taiwan may well not accept reunification and that China may use force, in which case Australia would side with the United States in defending Taiwan, albeit with serious misgivings.”45 The public report resulting from the 1996 review of Australia’s strategic policy released in 1997 did not mention Taiwan once, despite being clearly informed by the 1995–1996 Taiwan Straits Crisis.46 In an accompanying press release McLachlan pointedly failed to mention Taiwan, instead citing “the Korean peninsula” as the only example of “tensions in Northeast Asia” which were modifying Australia’s strategic policy.47 These were steps in the right direction from the point of view of the Chinese government and establishment scholars. In an analysis of Australian policy published in 1999, Chinese scholars Jia Qingguo and Hou Yingli were generally sanguine:48

41 See Chapter 7. 42 Australia’s policy of satisfying both the United States and China, or what Hugh White described as “walking on two sides of the street.” In: Hugh White, The US, Taiwan and the PRC: Managing China’s Rise: Policy Options for Australia. Vol. 5 (November), Melbourne Policy Papers, Melbourne: University of Melbourne (2004), p. 7. 43 Harris, Will China Divide Australia and the US?, pp. 50, 60–61. 44 Wesley, “Australia-China,” p. 73. 45 Paul Monk, Thunder from the Silent Zone: Rethinking China, Melbourne: Scribe (2005), p. 97. 46 See Department of Defence, Australia’s Strategic Policy. 47 McLachlan, “Australia’s Strategic Policy.” 48 Jia Qingguo (贾庆国) and Hou Yingli (侯颖丽), “Zouxiang Pingdeng Huli: Lengzhan Jieshu Yilai de Zhong Aoguanxi 走向平等互利：冷战结束以来的中澳关系 [Going towards an equal and mutually beneficial relationship: the Sino-Australia relations after



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Following the lead of the US, Australia wants to change China. But Australia’s national strength is lower than that of the US and Australia’s national interests are different from the US. All these factors determine that Australia [unlike the US] is not able to take an ideology-oriented policy approach toward China. Actually, compared with other Western countries, Australia is adopting relatively pragmatic policies toward China, less influenced by political ideology. In conclusion, pragmatism will continue to be the basis of the Sino-Australia bilateral relations.

Nevertheless, there was still major issues. Jia and Hou criticized Australia’s Taiwan policy: The Taiwan issue will continue to affect the development of Sino-Australian relations. While Australia still adheres to the one-China policy, it keeps adjusting its policies to Taiwan. In addition to strengthening its non-official relations with Taiwan, Australia maintains many forms of official communications with Taiwan. Currently, as the Sino-Australian relationship has improved, Australia has to frequently declare [to China] its commitment to the one-China policy. However, because Australia maintains close economic and trade ties with Taiwan and they share a similar political ideology, the Australian government and non-governmental organizations hold an ambiguous attitude toward Taiwan. Although Australia’s stance on the Taiwan issue is seemingly based on its one-China policy, Australia is actually carrying out a two-China policy in practice.

There was also the continued problem of the US-Australia alliance. Jia and Hou argued: The security issue is a potential negative factor in Sino-Australian relations. “China threat theory” has been popular among many countries in recent years. In Australia, many people believe and advocate “China threat theory,” and propose that Australia should ally with other countries to contain and guard against China. Influenced by this view, the Australian government has strengthened the military alliance with the US.

Growing Challenges Managing Australia’s relations with China given this preoccupation with the US alliance and Taiwan would continue to become more challenging. The Clinton Administration had aimed to be more accommodating towards the PRC position after 1996, but the US domestic political

the Cold War],” International Politics Quarterly 国际政治研究, (3) (1999), pp. 57–64. Translation by Zaijun Yuan and the author.

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environment limited the extent to which this occurred. In 1997, for example, the Republican controlled congress passed a bill requiring an annual State Department report on Chinese intelligence activities in the US, a measure only previously taken for the USSR.49 The American policy community had also become increasingly suspicious that Beijing was “playing a longer-term game of challenging U.S. primacy in the Asia Pacific.”50 Hence, the inclination in US policy circles to balance increasingly tempered engagement with China. Before Taiwan’s 2000 presidential election, Clinton stated that the cross-strait controversy must be resolved “peacefully and with the assent of the people of Taiwan.” According to Alan Wachman, this was a “significant new twist in U.S. policy that underscored the importance of considering the popular will in Taiwan,” correcting a misconception that the “United States would concur with a coercive— even if peaceful—imposition of terms on Taiwan by Beijing.”51 China-Taiwan relations did not see any improvement for the remainder of Lee’s presidency, and became essentially deadlocked after the election of Chen Shui-bian in March 2000, 52 contrary to Foreign Minister Downer’s expressed hopes. Beijing declared in a February 2000 “white paper” that continued stalling of reunification by Taipei was a new casus belli.53 In response, senior Australian officials called in the Chinese ambassador to hear that China’s “new tough stand on reunification was unhelpful and not conducive to the peaceful resolution of the Taiwan issue.”54 This action may have been related to the warning the US reportedly passed to Australia and other key regional allies in early 2000 that China was possibly preparing to blockade Taiwan’s southern port of Kaohsiung.55

49 Harris, Will China Divide Australia and the US?, p. 7. 50 Dan Blumenthal, “Strengthening the U.S.-Australian Alliance: Progress and Pitfalls,” Asian Outlook (April-May) (2005), p. 5. 51 Alan W. Wachman, “America’s Taiwan Quandary: How Much Does Chen’s Election Matter?,” in Alagappa, (ed.) Taiwan’s Presidential Politics: Democratization and Cross-Strait Relations in the Twenty-first Century, Armonk, New York: M.E. Sharpe (2001), p. 246. 52 Suisheng Zhao, “Reunification Strategy: Beijing Versus Lee Teng-hui,” in Dickson and Chao, (eds.) Assessing the Lee Teng-hui Legacy in Taiwan’s Politics: Democratic Consolidation and External Relations, Armonk, New York: M.E. Sharpe (2002), pp. 234–238. 53 Bush, At Cross Purposes: U.S.-Taiwan Relations Since 1942, p. 235. 54 J. Bruce Jacobs, “Australia’s Relationship with the Republic of China on Taiwan,” in Thomas, (ed.) Re-orienting Australia-China Relations: 1972 to the Present, Aldershot: Ashgate (2004), p. 45. 55 See David Lague and Nayan Chanda, “The Spying Game Heats Up,” Far Eastern Economic Review, May 3, 2001, p. 22.



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The incoming George W. Bush Administration eschewed Clinton’s characterization of China as a “strategic partner,” labeling it a “competitor and potential regional rival,”56 and a “potential threat to stability in the Asia-Pacific region.”57 The Bush Administration was conspicuously firmer over Taiwan,58 and began moving away from the policy of “strategic ambiguity.”59 There was also an increased emphasis on a National Missile Defense (NMD) program to protect the US from ballistic missile attack, and on regional alliances with Japan and Australia. This shift in priorities increased the importance of Australia in Washington, accompanied by greater demands and pressures. Hugh White relates “a lively debate about whether Australia would or should automatically support the United States in any conflict with China over Taiwan” at the August 1999 Australian American Leadership dialogue in Sydney, a forum White describes as “unofficial but highly influential meeting of Australian and American leaders.”60 A foreign policy adviser in the Bush campaign, and soon to be Deputy Secretary of State in the Bush Administration, Richard Armitage, made clear to those at the forum that “if conflict were to break out between the US and China over Taiwan, the United States would expect Australian support, including military involvement if demanded. If such support were not forthcoming, the United States would be compelled to re-evaluate the utility of ANZUS.” Two months later, a key aide to Chinese President Jiang Zemin “intensified the pressure generated by Armitage by warning that Australia faced ‘very serious consequences’ if it sided with the US in a future Taiwan conflict.”61

56 Washington Post and AP, “US to Take a Step Back: Key Bush Aide Tells Senate He Sees Beijing as a Rival,” The West Australian, 19 January 2001, p. 18. 57 Roy Eccleston, “Rice Calls Tune on Foreign Policy,” The Australian, 19 December 2000, p. 9. 58 Robert G. Sutter, “Thirty Years of Australia-China relations: An American Perspective,” Australian Journal of International Affairs, 56 (3) (2002), p. 349. 59 Roy Pinsker, “Drawing a Line in the Taiwan Strait: ‘Strategic Ambiguity’ and its Discontents,” Australian Journal of International Affairs, 57 (2) (2003), p. 353. 60 Hugh White, “Australia in Asia: Exploring the Conditions for Security in the Asian Century,” in Shambaugh and Yahuda, (eds.) International Relations of Asia, Lanham, Maryland: Rowman & Littlefield (2008), p. 220. 61 William T. Tow and Leisa Hay, “Australia, the United States and a ‘China Growing Strong’: Managing conflict avoidance,” Australian Journal of International Affairs, 55 (1) (2001), p. 42.

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In May 2000 during a visit to Australia, the Commander of the United States Pacific Command called on Australia to maintain a high technology defense force in the context of Taiwan. Prime Minister Howard responded in a television interview, saying, “We do have a high technology Defense Force as far as Taiwan is concerned.”62 Howard then stated: I don’t think we should be talking about the possibility of conflict over Taiwan. I think what we should be doing as a very close ally of the United States, also a country having a constructive relationship with Beijing, is to say to both of them it is in everybody’s interests that we all exercise a great deal of restraint. And I’m not going to get into hypothetical situations about what we may and may not do in the event of something happening, I don’t think that’s helpful.

Howard would find this and similar verbiage refusing to contemplate the possibility of conflict over Taiwan very useful in managing the China-US linkage. To a lesser extent, Washington’s National Missile Defense (NMD) program and the intelligence-sharing core of the US-Australia alliance both also intertwined with the issue of Taiwan, creating further problems with Beijing through 2001. Washington’s push for a NMD required practical support from Australia, mainly through the use of the Pine Gap facility, and political support. Canberra responded by giving the initiative the most enthusiastic support of any country.63 The United States had stepped up EP-3 reconnaissance flights off the Chinese coast in 2000, in part to deter China from attacking Taiwan.64 Australia was part of this intelligence gathering effort, with its two EP-3 signal intelligence planes reportedly conducting operations aimed at Chinese ships in the South China Sea.65 The escalating tension came to a head in late March 2001 when a Chinese fighter rammed a US EP-3, killing the Chinese pilot. The American plane made an emergency landing in Hainan.66 A tense stand-off ensued as the American flight crew were held

62 Roy Campbell McDowall, “Howard’s Long March: The Strategic Depiction of China in Howard Government Policy, 1996–2006,” Australian National University E Press, March 2009, http://epress.anu.edu.au?p=8361, p. 23. 63 Robert Garran and Cameron Stewart, “The Dome,” The Australian, 10 February 2001, pp. 17–20. 64 Thomas E. Ricks, “China’s Anger Over Flights Was Ignored,” Guardian Weekly, 12–18 April 2001, p. 27. 65 Greg Sheridan, “Spying at the Heart of Alliance,” The Australian, 12 April 2001, p. 13. 66 Ricks, “China’s Anger Over Flights Was Ignored.”



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in custody.67 Although Canberra kept out of the dispute, in what appeared to be a related incident the Chinese navy challenged three Australian warships transiting the Taiwan Strait on April 17.68 When President Bush made an unequivocal commitment to defend Taiwan in the event of a Chinese attack on 25 April, Prime Minister Howard stated that he “understood” the US position, urged restraint and said Australia did not want tensions to escalate, and concluded, “We don’t want to see any aggression by China against Taiwan.” The Chinese embassy responded with a direct attack, prompting the Australian government to explain its position.69 A week later Beijing officially protested the passage of the Australian ships through the Taiwan Strait. Although the Chinese had previously challenged Australian ships transiting the Strait, this was the first time Beijing had escalated an incident to the level of public condemnation.70 According to Tow, this signaled to Australian policymakers that “ANZUS was regarded as an unwelcome element in the intensifying long term process of Sino-American competition.”71 Australia nevertheless continued to support Washington’s NMD program, with Foreign Minister Downer suggesting in August that failure to do so would result in the US abandoning ANZUS. Beijing responded to this continued support with a high level delegation on the issue.72 This pressure from Beijing and Washington intensified debate in Australia. Beijing’s optimal outcome—Australia adopting a neutralist policy—was being increasingly articulated.73 Two former prime ministers, Gough Whitlam and Malcolm Fraser were among those highly critical of the US and Taiwan, and strongly advocating a radical accommodation of Beijing’s position.74 This criticism drew on conceptions of where Australian interests had previously been damaged by following the US, in particular the Vietnam War and the non-recognition of the PRC before 1972. This

67 Lynne O’Donnell, “China Agrees to Send American Aircrew Home for Easter,” The Australian, 12 April 2001, p. 1. 68 Ian Henderson, “Navy Row Threatens China Ties,” The Australian, 30 May 2001, p. 1. 69 Jacobs, “Australia’s Relationship with the Republic of China on Taiwan,” pp. 45–46. 70 Henderson, “Navy Row Threatens China Ties.” 71  William T. Tow, “Australian-American Relations in the New Century: Applying Resuscitation or Pursuing Illusions?,” in Lovell, (ed.) Asia-Pacific Security: Policy Challenges, Canberra: Asia Pacific Press (2003), p. 195. 72 Peter Chen, “US May Abandon ANZUS Treaty if Australia Doesn’t Back NMD,” Central News Agency, August 11, 2001, p. 1. 73 Monk, Thunder from the Silent Zone: Rethinking China, pp. 97–98. 74 See Gough Whitlam, “Sino-Australian diplomatic relations 1972–2002,” Australian Journal of International Affairs, 56 (3) (2002), p. 335.

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neutralist position was in part informed by the belief that separating from the US position would ultimately reduce the likelihood of armed conflict. As articulated by Hugh White, a section of the Australian policy community hopes that Australia’s refusal to provide “an open-ended commitment to Taiwan’s security on this side of the Pacific . . . will inject a note of caution into US thinking—and perhaps a note of realism into the planning of pro-independence activists in Taipei.” 75 Of course, articulating neutralism over Taiwan also served the twin goal of gratifying Beijing into granting economic benefits. Deus ex Machina: 9/11 The Australian government’s interests in not just Taiwan but numerous other issues such as Tibet, Hong Kong, the South China Sea, human rights in China, US military dominance in Asia and the US-Australia alliance all diverged significantly from those of the Chinese after the Cold War. However, the Chinese government was able to leverage China’s current and projected economic importance to Australia to compel the Australian government to align more closely with China’s preferences. Australia was willing to give Beijing most of what it wanted in return for smooth relations. However, Canberra drew the line in areas material to the US alliance— and ultimately—Australian security. Where possible, Australia attempted to relieve pressure from Beijing in these areas through simply refusing to discuss or even acknowledge them. However, this stratagem had limits, and Australia continued to feel the mounting strain of managing competing demands from China and the US, and the contradictions inherent in Australia’s twin goals of seeking prosperity through trade with China, and security from China through the US. Taiwan re-emerged as major pressure point where these competing issues and pressures coalesced for Australia. A development unrelated to this dynamic—the 11 September 2001 terrorist attacks—again shifted the parameters the US-China-Taiwan triangle set for Australian policy.

75 White, The US, Taiwan and the PRC: Managing China’s Rise: Policy Options for Australia, p. 11.

CHAPTER FIVE

Australia Sidelines Taiwan, 2001–2007 The Australian government received some respite from the demands of the US-China-Taiwan triangle due to the “post 9/11 détente” between the United States and China following the September 11, 2001 terrorist attacks in the US.1 In addition, as Stuart Harris earlier noted, Australia could “more easily pay the alliance price in distant areas than within the region.”2 Australian support for the US in Iraq and Afghanistan assisted Canberra in re-orientating Australian policy towards a strong comprehensive alliance with the US, while simultaneously resisting the adoption of a common approach with Washington towards Beijing over Taiwan.3 The Australian government also had more space to maintain its silence during Sino-American standoffs.4 With the US more accommodating of such Australian “defections” over issues with China and Chinese demands vis-à-vis Taiwan, Australia found itself extraordinarily free to oblige Beijing in sidelining Taiwan. This was particularly important to the Chinese government with President Chen Shui-bian challenging China’s goal of unification during this period. As a result—for a brief period at least—the Australian government was able to move simultaneously closer to both the US and to China.5 Australia Has its Cake and Eats it Too Unlike the profound shift of the Sino-Soviet split during the Cold War, post-9/11 cooperation merely moderated strategic competition between the US and China. Beijing had earlier launched a “diplomatic

1 From: Ibid., p. 7. 2 Harris, Will China Divide Australia and the US?, p. 50. 3 Blumenthal, “Strengthening the U.S.-Australian Alliance: Progress and Pitfalls,” pp. 1, 5. 4 Wesley, “Australia-China,” p. 77. 5 White, The US, Taiwan and the PRC: Managing China’s Rise: Policy Options for Australia, p. 7.

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counter-offensive to compete with the US in the Asia-Pacific region,”6 “using its economic influence and great power potential to try to weaken U.S. leadership in Asia,” with Australia a target of that strategy.7 Beijing appears to have misinterpreted Australia’s attempts to move closer to Beijing as being a direct result of this strategy, and hence at the expense of the US. According to a former Chinese diplomat posted in Australia, Chen Yonglin, the Chinese government was using economic means to compel Australia to give ground on security issues, and turn Australia into “a country like France, that can implement a policy to say no to the United States.”8 To effect its policy “China has aggressively wooed Australia, sending its finest diplomats, building up cultural exchanges, offering a strategic partnership, and aggressively promoting the importance of China’s demand for natural resources to the Australian economy.”9 An element of this “charm offensive” was the prospect of an AustraliaChina free trade agreement (FTA). In October 2003, Chinese President Hu Jintao visited Australia and signed an agreement commencing work by both sides on studying the potential for a free trade agreement.10 During that visit, in what The Australian’s Paul Kelly grandly labeled a “symbolic turning point in our history,” Hu became the first non-American leader to address a joint sitting of the Australian federal parliament. Adding to the symbolic significance for Kelly, this occurred a day after President Bush had also addressed a joint sitting.11 In his address, Hu urged Australia to play “a constructive role” in the peaceful reunification of China and Taiwan, stressing that the threat to regional peace came from pro-independence elements on the island.12 As noted by Blumenthal, Australia’s reliance on mineral exports provided a  6 Tow and Hay, “Australia, the United States and a ‘China Growing Strong’: Managing conflict avoidance,” p. 45.  7 Blumenthal, “Strengthening the U.S.-Australian Alliance: Progress and Pitfalls,” p. 5.  8 Chen Yonglin managed to “defect” to Australia in May 2005 despite the Australian government’s reluctance. Quote from: Sheridan, “Chinese Human Rights Abuse a No-Go Zone.”  9 Joshua Kurlantzick, Charm Offensive: How China’s Soft Power is Transforming the World, Melbourne: Melbourne University Press (2007), p. 214. 10 Diplomacy Monitor, “China, Australia near FTA Talks,” 22 March 2005, http://www .diplomacymonitor.com/stu/dm.nsf/dn/dn071DEB728AE2D35C85256FCC0058C63D. 11  Paul Kelly, “Poised Between Giants,” The Australian, 23 July 2005, http://www.the australian.news.com.au/common/story_page/0,5744,16015221%255E12250,00.html. 12 Patrick Goodenough, “China’s Taiwan Law Places Australia in Awkward Position,” Cybercast News Service, 15 March 2005, http://www.cnsnews.com/ViewForeignBureaus.asp ?Page=%5CForeignBureaus%5Carchive%5C200503%5CFOR20050315a.html.



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strong incentive to conform to this expectation, and “play down Beijing’s more aggressive behavior and blame Taipei for dangers in the Taiwan Strait.”13 The particular attraction a free trade agreement held for Canberra provided an additional incentive. Australian trade with China was booming, but there was still at this time a large deficit in favor of China. Moreover, free trade agreements in general had become an important component of regional trade with the stalling of multilateral initiatives.14 An FTA with China thus held the promise of widening the range of sectors benefiting from the “China boom” and increasing Australian exports overall. One study predicted an FTA would increase Australia’s real GDP by US$18 billion and China’s by US$64 billion in 10 years.15 Securing a meaningful deal with Beijing was also important to the Australian government in terms of its domestic interests, symbolizing the achievement of a politicallyvaluable “good relationship” with China. Australian policymakers seem to have been oblivious to China’s growing trade protectionism and the lack of interest in an agreement that would significantly free up trade in areas that mattered most to Australia: agriculture and services. The Australian government generally depicted China favorably during this period.16 Moreover, Taiwan was conveniently reduced to a locus of potential “miscalculation” between the US and China, rather than a fundamental point of conflict. The 2000 Australian Defense White Paper had stated: [S]ignificant problems remain in the [Sino-US] relationship—especially concerning the issue of Taiwan. It is therefore possible that US-China relations may be a significant source of tension in the region in coming years. This could be important to Australia’s security. 13 Blumenthal, “Strengthening the U.S.-Australian Alliance: Progress and Pitfalls,” p. 5. Dan Blumenthal was senior director for China, Taiwan, and Mongolia in the US Secretary of Defense’s Office of International Security Affairs. He is currently a senior fellow at the American Enterprise Insitute, a conservative US think tank. 14 Vinod K. Aggarwal, “Bilateral Trade Agreements in the Asia-Pacific,” in Aggarwal and Urata, (eds.) Bilateral Trade Agreements in the Asia-Pacific: Origins, Evolution, and Implications, New York: Routledge (2006), pp. 3–26; Christopher Findlay, Haflah Piei and Mari Pangestu, Trading with Favourites: Free Trade Agreements in the Asia-Pacific, Pacific Economic Papers No. 335, Canberra: Australian National University (2003), pp. 2–3. 15 Yinhua Mai, Phillip Adams, Mingtai Fan and Ronglin Li, “Modelling the Potential Benefits of an Australia-China Free Trade Agreement: An Independent Report Prepared for the Australia-China Feasibility Study,” Department of Foreign Affairs & Trade (Australia), 2 March 2005, http://www.dfat.gov.au/geo/china/fta/modelling_benefits.doc., p. iii. 16 See McDowall, “Howard’s Long March: The Strategic Depiction of China in Howard Government Policy, 1996–2006.”

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In contrast, the foreign and trade policy white paper released in February 2003, Advancing the National Interest, depicted Taiwan as continuing to be “a potential source of serious tension between the United States and China. The possibility of miscalculation leading to conflict is real, although small.” Similarly, the Defense Update 2003 stated “strategic competition between the United States and China will continue over the next decade, and the possibility of miscalculation over Taiwan persists.”17 A political scandal that erupted in 2006 involving President Chen Shuibian’s wife and a secret expense account relates to this warming SinoAustralian relationship. An anonymous official in Chen’s presidential office told a reporter that the government had commissioned an Australian based Taiwanese investor to “seek to enhance the relationship between Taiwan and Australia.” According to the report, this secret “South Route Project” (nanxian gongzuo zhuan’an) had begun in 2003, when “China was making advances to Australia.”18 President Chen stated that there were six confidential diplomatic missions, though he did not say whether one of these involved Australia. Prosecutors confirmed the existence of two of these “missions.”19 Later, it was reported that a “close political ally of former Taiwan president Chen Shui-bian” linked to the “South Route Project,” Taiwanese-born businessman Kung Chin Yuan, paid for Opposition Leader Kevin Rudd to travel to London in 2005 and donated A$220,000 to his party (the ALP).20 Regardless of whether or not this “South Route Project” existed, it had no appreciable impact on the Australian government’s attempts to move closer to China. The Taiwan government could perhaps have drawn some comfort from the continued skepticism about Australia in China’s official and semiofficial policy circles. An article published in January 2004, Hu Ning, a researcher at the Institute of European Studies in the Chinese Academy of Social Sciences is representative:

17 Ibid., p. 32. 18 Hsiu-chuan Shih, “KMT’s Chiu Yi Files Suit Against Chen Shui-bian,” Taipei Times, 21 July 2006, http://www.taipeitimes.com/News/taiwan/archives/2006/07/21/2003319701. 19 Rich Chang, “Wu Indicted, Chen to Come,” Taipei Times, 4 November 2006, http:// www.taipeitimes.com/News/front/archives/2006/11/04/2003334732. 20 Richard Baker and Philip Dorling, “Taiwan Chooses the Wrong Letterhead “ The Age, 29 July 2009 http://www.theage.com.au/national/taiwan-chooses-the-wrong-letterhead20090728-e07d.html.



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So far there has been no clear evidence that Australia can think independently and can criticize its ally constructively. However, Australia’s dependent status in the Australia-US alliance is not because Australia intended to follow orders from the US, but because Australia’s foreign policy is subject to the uncertain international environment after the Cold War, especially the uncertain regional situation in China, Russia, India and Indonesia. Therefore Australia has to follow the US. Even considering these factors, many Asian countries still doubt Australia’s policy of “Engagement with Asia” because of its adherence to its alliance with the US. The alliance-based Australia-US relations pose some new challenges to Asia-Pacific regional security. The Australia-US alliance which will exist or even be strengthened in the future will make it difficult for Australia to establish true mutual trust with Asian countries, and thus make it impossible to achieve its goal of “Engagement with Asia.” If Australia really hopes to link its destiny with its northern Asian neighbors, it should be sincere and take concrete action to adopt an independent foreign policy. For example, the Taiwan issue is the most serious problem in Sino-US relations, and it becomes the biggest obstacle to Sino-Australian relations because of the existence of the Australian-US alliance.21

An Australian Foreign Minister Wavers on ANZUS in Beijing The Australian government’s unwritten policy of making rhetorical concessions and omissions for the sake of economic benefit from China culminated in three public references to Taiwan that Foreign Minister Alexander Downer made while in Beijing in August 2004 primarily to discuss the prospective free trade agreement. In the first of these on 16 August, Downer maintained Australia’s insistence on a peaceful resolution of cross-strait issues. However, it conformed to the expectations of Beijing to a greater extent than previous rhetoric by placing the stress on Taipei as the threat and downplaying the significance of Chinese military intimidation.22 In a media conference the following day (August 17) Downer expanded on this theme before making an even greater rhetorical concession to Beijing:

21 Hu Ning (胡宁), “Aomei Guanxi yu Yataidiqu Anquan 澳美关系与亚太地区安全 [Australia-US Relations and Asian-Pacific Regional Security],” Contemporary Asia-Pacific Studies 当代亚太, (1) (2004), pp. 11–15. Translation by Zaijun Yuan and the author. 22 Alexander Downer, “Doorstop Interview, St Regis Hotel Beijing,” Office of the Minister for Foreign Affairs, 16 August 2004, http://www.foreignminister.gov.au/transcripts/ 2004/040816_ds.html.

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chapter five My sense is that any military built-up [sic] on the part of China in relation to Taiwan is about providing a disincentive for Taiwan to declare independence, not a prelude to some military expedition over and above concerns about the possibility that Taiwan may proclaim independence. And it’s incumbent on a country like Australia, and active and significant countries in the region as well as those beyond—the European Union, the United States—to transmit to the Taiwanese leadership the message that any proclamation of independence would be provocative.23

That an Australian Foreign Minister was willing to characterize China’s military coercion of Taiwan as a “disincentive” demonstrated a significant transformation of Canberra’s public stance. The oblique criticism of US policy over Taiwan is further evidence of this shifting rhetoric. In addition to gratifying Beijing, Downer was also sending a message to Taipei. The Australian government and Downer personally, perceived Chen Shui-bian’s government to be destabilizing the South Pacific and recklessly stirring up problems with China for domestic political advantage.24 This cartoonish view of Taiwan helped fuel these rhetorical concessions to Beijing. However, the most significant concession was made over the US alliance in a response Downer made to a question from Sydney Morning Herald reporter Hamish McDonald: McDonald: Could you elaborate on the strategic partnership that you agreed with Mr Wen should be build [sic] up between Australia and China, and how can that go given that Australia has obligations under the ANZUS Treaty which might bring it into the Taiwan conflict on the other side? Downer: Well, the ANZUS Treaty is a treaty which of course is symbolic of the Australian alliance relationship with United States, but the ANZUS Treaty is invoked in the event of one of our two countries, Australia or the United States, being attacked. So some other military activity elsewhere in the world, be it in Iraq or anywhere else for that matter does not automatically invoke the ANZUS Treaty. It is important to remember that we only invoked the ANZUS Treaty once, that is after the events of 9/11, because there was an attack on the territory of the United States. It is very important to remember that in the context of your question.25

23 Alexander Downer, “Media Conference, Beijing,” Office of the Minister for Foreign Affairs, 17 August 2004, http://www.foreignminister.gov.au/transcripts/2004/040817_ds_ beijing.html. 24 See Chapter 8. 25 Downer, “Media Conference, Beijing.”



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This was the first time that a senior member of an Australian government had questioned the basis or the implications of the ANZUS alliance.26 To Blumenthal, this attempt to obfuscate the issue of Australia’s alliance with the US was clear evidence of pressure from Beijing.27 Downer is said to consider this ANZUS statement the worst mistake of his career as foreign minister. However, if this is the case, the realization seems to have followed the later reaction from Washington. He made no attempt to clarify his meaning in a final news conference the next day. Instead, Downer repeated his emphasis on deterring Taiwan independence. Downer had also adopted another aspect of Beijing’s rhetoric, saying a declaration of independence by Taiwan “would of course create an enormous reaction here in China and not just from the Government but I think Chinese people generally.” Downer’s third and final point was “we hope that the Taiwan status issue can be resolved peacefully and through dialogue, not through any military measures.”28 His use of “we hope” and “military measures” contrasts with Prime Minister Howard’s 25 April 2001 statement, “We don’t want to see any aggression by China against Taiwan.”29 The Taiwan government strongly objected to Downer’s statements, which were understood as an unprovoked intervention intended to “scapegoat” Taiwan for cross-strait tensions, in return for a good relationship with China. Then MOFA director-general of East Asian and Pacific Affairs, Gary Lin, who would soon become Taiwan’s representative in Australia, reportedly criticized Australia’s “lack of moral courage” and compared Downer’s statement to Neville Chamberlain’s appeasement of Hitler.30 This episode would contribute to a negative perception of the Australian government in Taipei, further damaging relations between the two governments—especially in the South Pacific. According to Chen Yonglin, Beijing believed that Downer’s ANZUS statement represented a “great coup.”31 Chen Yonglin also stated that the 26 U.S.-China Economic and Security Review Commission, China’s Military Modern­ ization and Cross-Strait Balance, URL: www.uscc.gov/hearings/2005hearings/transcripts/ Sept15/05_09_15_trans.pdf (2005), p. 225. 27 Blumenthal, “Strengthening the U.S.-Australian Alliance: Progress and Pitfalls,” p. 5. 28 Alexander Downer, “Doorstop at Tsinghua University, Beijing,” Office of the Minister for Foreign Affairs, 17 August 2004, http://www.foreignminister.gov.au/transcripts/ 2004/040817_ds_tsinghua_uni_beijing.html. 29  In Jacobs, “Australia’s Relationship with the Republic of China on Taiwan,” p. 45. 30 Melody Chen, “Aussies Not Cowards, MOFA Says,” Taipei Times, 25 September 2004, http://www.taipeitimes.com/News/taiwan/archives/2004/09/25/2003204268. 31  Sheridan, “Chinese Human Rights Abuse a No-Go Zone.”

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Chinese government believed that Downer’s statement indicated that the ANZUS treaty would not automatically cause Australia to join the US in a future military defense of Taiwan.32 Whether or not Beijing actually attributed that much significance to the statement, it sparked speculation around the world that Australia was shifting its orientation away from the US and towards China. Further demonstrating the limitations of Canberra’s capacity to decouple its relations with the US and China, Downer’s comments on ANZUS elicited a very negative reaction in Washington.33 According to Blumenthal, “Any US official you care to talk to, to this day, will tell you they found the Downer statement distressing or deeply puzzling.”34 The US government sought an immediate explanation from Australia after Downer’s statement. A further five cables and one email on the subject were reportedly sent between the two governments in the following weeks.35 US officials also publicly stated Australia’s “pretty clear” obligations under ANZUS.36 In addition to private reassurances to the Americans, Canberra disingenuously blamed the media to further diffuse the situation: [S]ome media reporting had taken elements out of context . . . Prime Minister Howard and Mr Downer had worked hard to maintain the vitality of the alliance. There should be no doubt of the strength of Australia’s commitment to the United States.37

The implication was that Australia’s commitment was so evident elsewhere that it should not have to demonstrate that commitment rhetorically over the issue of Taiwan, where it would damage Australia’s relationship with China. Nevertheless, Prime Minister Howard was forced to issue a clarification stating that the two countries “must come to each other’s aid when under attack or involved in a conflict.”38 Backtracking, Downer made a

32 ABC, “US Watching Australia-China Relations,” 22 July 2005, http://www.abc.net.au/ lateline/content/2005/s1398446.htm. 33 Leigh Sales, “Australia’s China Relationship Through US Eyes,” Australian Broadcasting Corporation, 6 June 2005, http://www.abc.net.au/pm/content/2005/s1385895.htm. 34 Sheridan, “Chinese Human Rights Abuse a No-Go Zone.” 35 Richard Baker, “US Sent ‘Please Explain’ to Downer Over China Comments,” The Age, 17 May 2006, http://www.theage.com.au/news/national/china-strains-anzuspact/2006/05/16/1147545327241.html. 36 Mohan Malik, “Stretching Diplomatic Nerves,” The Standard (Hong Kong), 18 April 2005, http://www.thestandard.com.hk/stdn/std/Focus/GD18Dh02.html. 37 Baker, “US Sent ‘Please Explain’ to Downer Over China Comments.” 38 Blumenthal, “Strengthening the U.S.-Australian Alliance: Progress and Pitfalls,” p. 5.



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statement saying Australia maintained a position of not commenting on any position it would take.39 It seems likely that Downer’s miscalculation of a US reaction was due in part to the strength of the US-Australia relationship at that point, the result of Australia’s involvement in the “War on Terror.” This strength had helped secure a US-Australia FTA40 and would help deflect US congressional pressure over the Australian Wheat Board (AWB) Iraq kickback scandal in the following months.41 It should also be remembered that the statement was an unscripted response to a question and not a considered policy statement. The Australian Government Steps Back Australian policymakers now realized that the policy of gratifying China had gone too far, and was now damaging Australian interests through fostering the image of Australia as an unreliable security partner in the US and the region. For example, US officials told a delegation of visiting Australian MPs that the “US no longer expects Australia to automatically support it in a conflict with China over the flashpoint of Taiwan.”42 Rather than pressuring the US to reconsider its support for Taiwan as White and other commentators hoped, this question mark over Australia only meant the US perceived Australia as a less reliable ally. Moreover, Australia would feel increasingly insecure if the US actually followed Australia’s prompt and distanced itself for its commitment to Taiwan—which is “emblematic of America’s commitments to the rest of Asia.”43 Clearly, Australia’s enthusiastic participation in the wars in Iraq and Afghanistan would not provide it with a free pass on the difficult task of managing China’s rise.

39 Malik, “Stretching Diplomatic Nerves.” 40 Richard E. Feinberg, “US Trade Arrangements in the Asia-Pacific,” in Aggarwal and Urata, (eds.) Bilateral Trade Agreements in the Asia-Pacific: Origins, Evolution, and Implications, New York & London: Routledge (2006), p. 111. 41 Caroline Overington, Kickback: Inside the Australian Wheat Board Scandal, Crows Nest: Allen & Unwin (2007), pp. 156–158. 42 John Kerin, “US ‘Won’t Expect Our Help in Taiwan Strife,’” The Australian, 21 September 2005, http://www.theaustralian.news.com.au/common/story_page/0,5744,1667 1449%255E2703,00.html. 43 John J. Tkacik, “TKACIK: White House bickering and Taiwan’s F-16s,” The Washington Times, 20 September 2011, http://www.washingtontimes.com/news/2011/sep/20/whitehouse-bickering-and-taiwans-f-16s/.

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The Australian government’s now firmly established track record of seeking to please China meant that the decision to not oppose the lifting of the EU arms embargo imposed on China after June 1989 received unwanted attention. Both Japan and the United States opposed the EU’s plans to lift the embargo,44 and a Pentagon report had stated the lifting of the arms ban would not only destabilize the Taiwan Straits but also put US military personnel at risk. Australian media commentator Greg Sheridan criticized Australia’s failure to oppose the lifting of the embargo. In a submission to a US congressional review commission, Adam Cobb described Australia’s action as “not something that a close and loyal ally does, I don’t think, or should do at its peril.”45 Chinese scholar Du Ping also saw it as a significant demonstration of Australian support for China at the expense of the US: Currently, public opinion in Australia is very different from the EU countries [as shown by the negative public reaction to the possibility of lifting the arms embargo]. Foreign Minister Alexander Downer has repeatedly emphasized Australia’s opposition to the American policy to contain China. Downer’s viewpoint has been widely supported by the opposition and public opinion in Australia.46

In fact, Australia credibly explained to the US that because it had lifted its own ban on arm sales to China in 1992 (without actually exporting armaments or military significant technologies to China), Australia would only have weakened the US and Japan’s case with the EU. Foreign Minister Downer told both the EU Commission and EU Presidency that if the EU embargo was lifted it should be done in a way that “has no impact on the power balance or the strategic structure of the East Asian region.”47 On 19 February 2005, the US and Japan issued a joint statement which broke with long-standing ambiguity by designating the peaceful settlement

44 John Ruwitch, “China To Boost Military Spending as It Eyes Taiwan,” Defense News, 28 February 2005, http://www.defensenews.com/story.php?F=690387&C=asiapac. 45 U.S.-China Economic and Security Review Commission, China’s Military Modernization and Cross-Strait Balance, p. 225. 46 Du Ping (杜平), “MeiAo dui Hua Zhengce Fenqi Riyi Gongkaihua 美澳对华政策 分歧日益公开化 [The differences in American and Australian China policies Are More Obvious],” Lianhe Zaobao 联合早报, 17 March 2006, p. 22. Translation by Zaijun Yuan and the author. 47 WikiLeaks, “Australia’s View on the EU’s Intention to Lift Its Arms Embargo against China,” Reference ID: 05CANBERRA310, Created: 17 February 2005, Origin: Embassy Canberra, Classification: Confidential, http://wikileaks.org/cable/2005/02/05CANBERRA310 .html.



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of cross-strait issues a “common strategic objective.”48 This statement was immediately met with a strong reaction from China.49 Then on 14 March, Chinese Premier Wen Jiabao warned the United States and Japan against any “direct or indirect interference” on the Taiwan issue and voiced concern over the US-Japan security alliance.50 Beijing’s response also included authorizing violent anti-Japanese demonstrations of up to 20,000 people in various Chinese cities.51 In addition, Beijing again turned its attention to the US’ “southern anchor”—Australia. According to Blumenthal, “Australia’s decision not to oppose the lifting of the European Union’s arms embargo on China [had] opened a door through which Beijing attempted to push.”52 Director-General of North American and Oceanian Affairs at China’s MOFA, He Yafei, demanded the Australian government review ANZUS, warning the alliance could threaten regional stability if Australia were drawn into taking sides on the Taiwan issue.53 In response, Foreign Minister Downer stated that Australia was “very satisfied with the Treaty,” with no intention of reviewing it.54 Beijing also sent a strong signal to Taiwan, the US and Japan by enacting the “Anti-Secession Law” (ASL), which authorized China to use “nonpeaceful means” with Taiwan. This drew a strong response from Taiwan,55 and was also publicly criticized by the US government.56 As the law was being passed, Australian Trade Minister Mark Vaile was in Beijing conducting bilateral talks on the possible FTA. The Australian 48 David G. Brown, “A Little Sunshine Across the Strait,” Asia Times, 21 April 2005, http://www.atimes.com/atimes/China/GD21Ad06.html; The Australian, “China Warns on Taiwan ‘Interference,’” 14 March 2005, http://www.theaustralian.news.com.au/common/ story_page/0,5744,12540211%255E1702,00.html. 49 David Pilling, “Issue of Taiwan Raises Stakes Between Tokyo and Beijing,” Financial Times, 25 February 2005, http://search.ft.com/ftArticle?queryText=Issue+of+Taiwan+raise s+stakes+between+Tokyo+and+Beijing&y=1&aje=true&x=18&id=050225001040. 50 The Australian, “China Warns on Taiwan ‘Interference.’” 51  Greg Sheridan, “Beijing’s Power Play a Warning to the Region,” The Australian, 21 April 2005, http://www.theaustralian.news.com.au/common/story_page/0,5744,15031736% 255E25377,00.html. 52 Blumenthal, “Strengthening the U.S.-Australian Alliance: Progress and Pitfalls,” p. 5. 53 AAP, “China Warns Australia on Taiwan Stance,” The Age, 8 March 2005, http:// www.theage.com.au/news/National/China-warns-Australia-on-Taiwan-stances/2005/ 03/08/1110160778362.html?oneclick=true. 54 Blumenthal, “Strengthening the U.S.-Australian Alliance: Progress and Pitfalls,” p. 5. 55 Kathrin Hille, “Taiwanese Democracy Rises Above the Bickering,” Financial Times, 28 March 2005, http://www.news.ft.com/cms/s/aac5c76e-9f25-11d9-82f0-00000e2511c8. html; Jonathan Watts, “China’s Barrier to Independence Infuriates Taiwan,” The Guardian, 7 March 2005, http://www.guardian.co.uk/china/story/0,,1431887,00.html. 56 Reuters, “U.S. Warns China on Anti-Secession Law Against Taiwan,” TVNZ, 14 March 2005, http://tvnz.co.nz/view/news_world_story_skin/479561%3Fformat=html.

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reported that Prime Minister Howard hoped to announce the commencement of talks on the FTA during his scheduled visit to Beijing in April,57 which did indeed happen.58 These talks provided a strong incentive for Canberra to make agreeable statements about the law. In addition, allowing China to conditionally threaten Taiwan was in line with the Australian government’s view of President Chen Shui-bian as a destabilizing factor who should be discouraged from further angering China. The US alliance was clearly the most challenging issue, and Foreign Minister Downer took the opportunity presented by the ASL to clarify his new public position, designed to be satisfactory to both Washington and Beijing. Downer now said that in the event of a conflict between China and Taiwan, Australia would not “pre-commit . . . to participating in [an entirely hypothetical] war.” A level of ambiguity provided by not “pre-committing” was built into ANZUS by the US for its own domestic reasons, and hence a tolerable public position as far as Washington was concerned. Apart from the ANZUS issue, Downer did not shift from the line taken in Beijing in August 2004, despite the escalation of military pressure inherent in the ASL. While Downer said he would “rather not” see China invoke its anti-secession law, Canberra also did not want Taiwan to be “highly provocative.”59 According to Blumenthal, behind this official response, “policymakers in Canberra were clearly rattled by China’s aggressive behavior.”60 Nevertheless, Downer’s statement demonstrated that Canberra sought to maintain its public position that neither ANZUS nor Taiwan were serious problems in Sino-Australian relations, and that Beijing’s belligerent stance did not warrant Australian criticism. Other government figures joined Downer in clarifying that Australia had nothing to clarify when it came to the possibility of war over Taiwan. Trade Minister Vaile replied to a question on the topic, stating, “You’re

57 John Taylor, “China, Australia Edge Closer to FTA,” Australian Broadcasting Corporation, 10 March 2005, http://www.abc.net.au/pm/content/2005/s1320742.htm. 58 John Howard, “Announcement of Free Trade Agreement Negotiations Between Australia and China,” Department of the Prime Minister and Cabinet, 18 April 2005, http:// www.pm.gov.au/news/media_releases/media_Release13332.html. 59 John Kerin, “Downer Plays Safe on China,” The Courier Mail, 15 March 2005, http:// www.thecouriermail.news.com.au/common/story_page/0,5936,12549960%255E421,00. html. 60 Blumenthal, “Strengthening the U.S.-Australian Alliance: Progress and Pitfalls,” p. 5.



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jumping ahead of the circumstances, expecting that it might.”61 Prime Minister Howard expanded on this the following day: I don’t believe there will be armed conflict and the goal of our policy— whenever we engage with this issue with the Chinese, the Americans, or the Taiwanese—is to encourage calm and restraint and the peaceful resolution of differences . . . I’m not going to get into hypothesizing about how Australia might respond in the event of something that we would encourage never occurs. Everybody knows that Australia has no closer ally than the United States. That is a given of our foreign policy. It’s a given of so many aspects of Australian life. But everybody knows also that we have developed a good relationship with China. We are different countries. China’s not a democracy. Australia is. There are a lot of things in China that we don’t agree with. Equally, however, we have very strong people-to-people links, and we will work very hard to further expand that relationship.62

Howard reiterated Australia’s refusal to contemplate conflict ahead of a visit to Beijing in April: In the context of our one-China policy, we continue to urge restraint and a peaceful resolution of issues across the Taiwan Straits . . . Clearly, a large part of the burden of such restraint is borne by the relationship between China and the US. It would be a mistake to embrace an overly pessimistic view of this relationship, pointing to unavoidable conflict. Australia does not believe that there is anything inevitable about escalating strategic competition between China and the US. In recent years, both sides have shown themselves keen to co-operate on common interests and to handle inevitable differences in an atmosphere of mutual respect.63

This motivation to reduce the contradictions in Australian policy even prompted Prime Minister Howard to suggest that Australia could act as a go-between for the US and China. It should also be noted that the above statement from Howard is more balanced between Taiwan and China than Foreign Minister Downer’s statements had been. A further example is Howard’s comment in Beijing in April that while Australia continued to support the long-standing “oneChina policy,” “We have also communicated our view, a very strong view, 61  Catherine McGrath, “Australia Still Supports ‘One China’ Policy,” Australian Broadcasting Corporation, 14 March 2005, http://www.abc.net.au/pm/content/2005/ s1323165.htm. 62 Daily Telegraph, “PM on the Fence Over Taiwan,” 15 March 2005, http://www.daily telegraph.news.com.au/story.jsp?sectionid=1274&storyid=2813830. 63 Maria Hawthorne, “Australia a Taiwan ‘Go-Between,’” The Courier Mail, 31 March 2005, http://www.thecouriermail.news.com.au/common/story_page/0,5936,12715158%255 E1702,00.html.

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that differences should be resolved in a peaceful manner.”64 Sheridan suggests that Howard’s different language is due to his being “once very proTaiwan” and “generally sounder on these issues than his Foreign Minister, Alexander Downer, who is more instinctively pro-China and seems to have taken a dislike to Taiwan.”65 As previously noted, Downer was not especially “pro-China” in 1996; at least some of Downer’s dislike for Taiwan appears to have derived from developments in the South Pacific.66 Regardless, this variation between the Prime Minister and Foreign Minister served what Hou Minyue described as Australia’s “need to speak with two voices” due to “Canberra’s dilemma in dealing with Beijing and Washington.”67 The Australian federal opposition echoed the government’s tepid criticism of the Anti-Secession Law. Opposition foreign affairs spokesperson, Kevin Rudd, commented: Like the Australian Government, Labor would have preferred the Chinese not to have made this move. Having said that, the Taiwanese pro-independence movement has not helped the situation. Labor calls on both parties to resume negotiations with the goal of resolving this matter peacefully. The alternative, which is war, is too appalling to contemplate.68

However, this stance was not universally supported in Australian politics. Labor backbencher, Michael Danby, told parliament that the ASL “threatens to destroy what was a growing atmosphere of amity and reconciliation across the Taiwan Strait.”69 Later, Danby argued that Australia “should counsel our friends in Taiwan not to make any provocative moves [.] However, we should also make clear to China that the use of force against Taiwan is not acceptable. Australia’s interest clearly lies in the preservation of the careful ambiguity of the current situation.”70

64 Sheridan, “Beijing’s Power Play a Warning to the Region.” 65 Greg Sheridan, “Give this Democracy a Hearing,” The Australian, 18 August 2005, http://www.theaustralian.news.com.au/common/story_page/0,5744,16294101%255E25377, 00.html. 66 See Chapter 8. 67 Minyue Hou, “The Taiwan Question and Sino-Australian relations: The Context of China’s Modernization,” Global Change, Peace & Security, 17 (3) (2005), p. 271. 68 Sandra O’Malley, “PM Suggests Australia Will Side with US,” News.com.au, 15 March 2005, http://www.news.com.au/story/0,10117,12556791-38196,00.html. 69 Kerin, “Downer Plays Safe on China.” 70 Michael Danby, “Australia Must Take a Clear Line With Beijing,” Taipei Times, 26 March 2005, http://www.taipeitimes.com/News/edit/archives/2005/03/26/2003247865.



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Greens Party Senator Bob Brown made the strongest criticism of the ASL saying, the government and Labor had effectively backed “China’s oppressive regime” and that “China remains a communist dictatorship, Taiwan is a democratic state. To sacrifice all democracy and every people’s right to self-determination on the altar of free trade is abhorrent.”71 This criticism of government policy from the progressive side of politics was a poignant example of how democratization and Taiwanization had transformed the image of Taiwan in Australian politics since anticommunist conservative Douglas Darby’s support for the KMT regime in the 1970s. In contrast to Brown, Defense Minister Robert Hill later sought to play down the dichotomy between China’s dictatorial regime and democratic Taiwan and Australia: “China is, of course, not a democracy of our type [but] China does have forums that include appointed and elected representatives.”72 The Australian government’s policy of glossing over the linkage of ANZUS to a conflict over Taiwan received a boost when a poll conducted by the Lowy Institute released in March suggested that Australian public opinion would not accept Australian involvement in a war over Taiwan.73 The poll’s methodology was questioned by prominent media commentators, with Greg Sheridan criticizing the question as “loaded” and Peter Hartcher arguing that the response was shaped by the Iraq War.74 Putting aside the poll’s reliability and predictive power, it was not evidence of a growing rift between Australia and the US over China, and hence a problem for Canberra. Rather, the poll likely worked to Canberra’s advantage by sending an agreeable signal about Australian intent to Beijing, without creating a liability with Washington. Canberra’s retuned rhetoric continued to be supportive of China in its relations with the US. During a visit to Beijing in June, Defense Minister Hill was questioned over US Defense Secretary Donald Rumsfeld’s recent 71 O’Malley, “PM Suggests Australia Will Side with US.” 72 Sushil Seth, “Instability Sure to Grow in China,” Taipei Times, 14 April 2005, http:// www.taipeitimes.com/News/edit/archives/2005/04/14/2003250442. 73 Sydney Morning Herald, “Australians Condemn US Foreign Policy,” 28 March 2005, http://www.smh.com.au/news/National/Australians-condemn-US-foreign-policys/ 2005/03/28/1111862313933.html?oneclick=true. 74 Peter Hartcher, “Iraq Adventure Leaves Little Taste for Possible Taiwan Call-up,” Sydney Morning Herald, 29 March 2005, http://www.smh.com.au/news/National/Iraqadventure-leaves-little-taste-for-possible-Taiwan-callup/2005/03/28/1111862325226.html? oneclick=true; Greg Sheridan, “Public Opinion is Putty in Academic Hands,” The Australian, 29 March 2005, http://www.theaustralian.news.com.au/common/story_page/0,5744,126851 25%255E25377,00.html.

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statement that China’s upgrading of its missile capabilities was a threat to the balance of power in Asia.75 Hill responded that he saw China’s expanding military expenditure as a process of modernization, not destabilization.76 On 14 July, a Chinese major general warned that China was prepared to use nuclear weapons against US cities if attacked by Washington during a confrontation over Taiwan.77 Such threats were not new, and a leaked Pentagon report had previously suggested the United States could use nuclear weapons in a war over Taiwan.78 However, the Chinese general’s statement interfered with the message of the Australian government that Sino-US conflict was not an issue for Australia or the world. In Washington at the time, Prime Minister Howard attempted to sidestep the issue of Beijing’s responsibility, “Well they were unhelpful, irresponsible remarks and I’m sure they don’t represent the views of the Chinese cabinet.”79 US Still not Satisfied Washington still saw Australia’s public position on the US-China-Taiwan triangle as too weighted in favor of China. Australia rejected an invitation from the US Deputy Secretary of State Richard Armitage to participate in a secret, multilateral forum of the US’ key allies on the potential China threat, called the Halibut Group.80 Australia was reportedly concerned 75 Reuters, “Australia Urges Peaceful Resolution of Taiwan Issue,” Boston Globe, 8 June 2005, http://www.boston.com/news/world/asia/articles/2005/06/08/australia_urges_ peaceful_resolution_of_taiwan_issue/BEIJING. 76 Paul Dibb, “Don’t Get Too Close to Beijing,” The Australian, 2 August 2005, http:// www.theaustralian.news.com.au/common/story_page/0,5744,16119044%255E7583,00.html. 77 Alexandra Harney, Demetri Sevastopulo and Edward Alden, “Top Chinese General Warns US Over Attack,” Financial Times, 14 July 2005, http://news.ft.com/cms/s/28cfe55af4a7-11d9-9dd1-00000e2511c8.html; Austin Ramzy, “Don’t Mess With Us: Would China Use Nuclear Weapons if the U.S. Interceded in a Taiwan Straits Conflict?,” Time Magazine, 18 July 2005, http://www.time.com/time/asia/magazine/article/0,13673,501050725-1083955,00 .html. 78 Rex Li, “Security Challenge of an Ascendant China: Great Power Emergence and International Stability,” in Zhao, (ed.) Chinese Foreign Policy: Pragmatism and Strategic Behavior, Armonk, New York: M.E. Sharpe (2004), p. 40. 79 The Age, “China Under Fire from US over Taiwan,” 17 July 2005, http://www.theage .com.au/news/World/China-under-fire-from-US-over-Taiwan/2005/07/17/1121538854826 .html?oneclick=true. 80 Leigh Sales, “US-Australia Relationship Challenged by China Policy,” Australian Broadcasting Corporation, 30 June 2005, http://www.abc.net.au/am/content/2005/s1403750 .htm; Sushil Seth, “Australia Dithers Between US, China,” Taipei Times, 2 August 2005, http://www.taipeitimes.com/News/editorials/archives/2005/08/02/2003266119.



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that “China would misconstrue the group as anti-Chinese.”81 After this piece of news emerged in late June 2005, a “senior Bush Administration official” told the ABC reporter Leigh Sales “the US sees evidence China is trying to use its economic relationship with Australia as leverage on political and strategic issues.” The official characterized Australia’s response to the pressure as “mixed,” and described DFAT as being occasionally “wobbly” on China in the past. According to the official, around the end of 2004 the Bush Admin­ istration believed that “Australia wasn’t getting American policy on China.” Although Washington had grown increasingly apprehensive, it was recently reassured of Australia’s like-minded views on China and that “the concerns are past us.” Another senior official in the US Department of Defense expressed similar confidence in Australia-US relations, describing Australia, as “so fully capable of understanding any potential relationship that it might have with the Chinese that this isn’t something we’d ever worry about. We simply expect that those kind of decisions are being made with a very clear-eyed view to the ultimate relationship and not short-term economic gain.”82 Australia’s relationship with China was a major topic of interest during Prime Minister Howard’s trip to the US in July 2005. In response to a question from a reporter, Howard was again forced to deny that China was a problem in US-Australian relations.83 Howard continued his insistence that ANZUS was not directed against China, “I’ve encouraged them [China] to accept that our close defense alliance with the US is not in any way directed against China.” As pointed out by Paul Kelly, this comment was directed at Washington as well as Beijing. Howard “purports to interpret what the alliance means in relation to China, thereby making it difficult and highly provocative for the US Administration to qualify this view or to undermine him.”84 Nevertheless, Australia’s public position was continuing to move towards that of the US. During his visit Howard also told Washington of

81 Peter Hartcher and Cynthia Banham, “Bush Gives Howard the Nod for Summit,” Sydney Morning Herald, 21 July 2005, http://www.smh.com.au/news/world/bush-giveshoward-the-nod-for-summit/2005/07/20/1121539033170.html. 82 All quotes from Sales, “US-Australia Relationship Challenged by China Policy.” 83 Mark Metherell, “US-China Rivalry No Problem, says Howard,” Sydney Morning Herald, 18 July 2005, http://www.smh.com.au/news/world/uschina-rivalry-no-problemsays-howard/2005/07/17/1121538868667.html?oneclick=true. 84 Kelly, “Poised Between Giants.”

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his decision to join the Halibut Group.85 Howard had previously suggested Australia play an intermediary role between the US and China. This suggestion had implied Australian neutrality between the two sides. Howard now backed away from the proposal, limiting his ambition to “identifying and advocating to each the shared strategic interests” in regional peace and prosperity.86 The Australian government further offset its “panda-hugging” reputation with a renewed emphasis on Japan. On 31 March 2005 Howard stated, “Australia has no greater friend in Asia than Japan.”87 Then in September, “no relationship of substance in Asia has been more important over the years for Australia than our relationship with Japan.” Moreover, the 2005 Defense Update employed language similar to the 1997 Strategic Review, stating “the pace and scale of China’s defense modernization may create the potential for misunderstandings, particularly with the development of new military strike capabilities that extend the strike capability and sustainability of its forces.”88 Of course, Australia could not completely ignore Taiwan in this rhetorical rebalancing. The US Defense Secretary Rumsfeld had described Taiwan as a “sovereign nation” in August 2005.89 President Bush further angered Beijing when he praised Taiwan in a speech in Japan ahead of the APEC summit that November.90 The Australian government had no desire to support Taiwan to that extent, but it did indicate a more balanced tone in reaction to the National Unification Council (NUC) issue. On 27 February 2006 President Chen Shui-bian had announced the suspension of the NUC and its guidelines on reunification after announcing an increased focus on risk management and the fostering of a separate national identity.91 At the same time Chen stated, “Taiwan has no 85 Hartcher and Banham, “Bush Gives Howard the Nod for Summit.” 86 Dibb, “Don’t Get Too Close to Beijing.” 87 John Howard, “Address to the Lowy Institute for International Policy: ‘Australia in the World,’” Department of the Prime Minister and Cabinet, 31 March 2005, http://www .pm.gov.au/media/Speech/2005/speech1290.cfm. 88 McDowall, “Howard’s Long March: The Strategic Depiction of China in Howard Government Policy, 1996–2006,” pp. 61–63. 89 Charles Snyder, “Taiwan Weapons Decision ‘Will Not Alter’ US Policies,” Taipei Times, 25 August 2005, http://www.taipeitimes.com/News/front/archives/2005/08/25/2003269041. 90 AP, “Text of President Bush’s Remarks in Kyoto, Japan, on Wednesday, as Released by the White House,” Herald News Daily, November 15, 2005, http://www.heraldnewsdaily .com/stories/news-00102267.html. 91 Kathrin Hille, “President Strait Talk Hits Stocks in Taiwan,” The Australian, 4 January 2006, http://www.theaustralian.news.com.au/common/story_page/0,5744,17722301%255E3 6375,00.html.



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intention of changing the status quo and firmly opposes any use of nonpeaceful means that will cause the status quo to change.”92 Chen later elaborated on his action: Perhaps the people of Taiwan will choose unification as the nation’s future. However, at the moment we cannot allow unification to be set as the only option for the country’s future. It goes against the spirit of democracy as the unification council and the guidelines offer no other choice but unification. Since the international community largely recognizes Taiwan’s democracy, we hope it will also respect our democratic choice.93

Washington met Chen’s move with a muted response. Despite China urging the United States to take firmer action,94 Bush did not criticize the move during Chinese President Hu Jintao’s visit to the United States.95 However, in what was widely interpreted as a delayed rebuke, the US offered Alaska as a transit stop for Chen’s upcoming tour of Central America,96 when the five previous stops had been major US cities.97 Australia’s official reaction was mild. Foreign Minister Downer’s response quoted below demonstrates a conscious attempt to bring more balance to Australian policy. The fact is we’ve always said to the Taiwanese, “Don’t change the status quo, stick to the status quo and work on ways for reconciliation into the future.” And we’ve always said to China, “Don’t even consider, don’t even consider taking military action to resolve the Taiwan question.” Now we’ve been very firm with both of them and so any change, even if it is just a cessation of the actual functions rather than the abolition of the National Unification Council and the guidelines, that causes us some concern.98

92 Alice Hung, “Taiwan Scraps Body on Unification with China,” Reuters, 27 February 2006, http://ca.today.reuters.com/news/newsArticle.aspx?type=topNews&storyID=2006-0227T101252Z_01_TP221257_RTRIDST_0_NEWS-TAIWAN-CHINA-COL.XML&archived=False. 93 Shu-ling Ko, “Chen Says China, not the NUC, Altered ‘Status Quo,’” Taipei Times, 15 March 2006, http://www.taipeitimes.com/News/taiwan/archives/2006/03/15/2003297445. 94 AFX, “China Urges US to Take Firmer Action Against Taiwan,” Forbes, 28 February 2006, http://www.forbes.com/work/feeds/afx/2006/02/28/afx2557787.html. 95 Sushil Seth, “China’s Clever Use of ‘Soft Power,’” Taipei Times, 1 May 2006, http:// www.taipeitimes.com/News/editorials/archives/2006/05/01/2003305578. 96 Rowan Callick, “Taiwan Hopeful Making Inroads,” The Australian, 9 May 2006, http:// www.theaustralian.news.com.au/story/0,20867,19068670-2703,00.html. 97 AP, “Taiwan Spurns U.S. Offer of a Stopover,” International Herald Tribune, 9 May 2006, http://www.iht.com/articles/2006/05/09/news/taiwan.php. 98 ABC, “Taiwan Warned Over North East Asian Stability,” 2 March 2006, http://www .abc.net.au/pm/content/2006/s1582592.htm.

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The Australian government found common ground over Taiwan with both China and the US as well Taiwan’s opposition KMT in the person of Ma Ying-jeou. The KMT Chairman and prospective presidential candidate Ma was very well received during his trip to Australia in May 2006, prompting Sheridan to speculate that Canberra and Washington were “conniving” to help get Ma elected president in 2008. Certainly, many in Canberra believed Ma and fellow KMT politician Su Chi were more compatible with Australian interests than the ruling DPP. Ma nevertheless criticized Canberra during his visit as being too cautious and paying too much attention to Chinese “diktats” on how it treats Taiwan.99 Inconvenient Democracy Like Washington, Taipei also attempted to counteract Beijing’s influence in Canberra. This response relied primarily on Taiwan’s healthy unofficial relationship with Australia, and its economic and democratic strengths. Taipei also sought to influence Australian policy by reference to a shared China threat. In response to a question from an Australian journalist about Foreign Minister Downer’s August 2004 statements, President Chen Shuibian referred to Australian security interests, “I must say that I feel sorry about that. If Taiwan became part of China like Hong Kong, then I believe China would be able to extend its power eastward.” In the same interview he also appealed to Australia’s democratic values, “Why has Taiwan become an orphan of the international community? I would ask all the democratic countries in the world, including the United States, Japan and Australia to put themselves in Taiwan’s shoes and see how they would feel.”100 In response to Australia’s public indifference to the ASL, Taipei announced on April 14 that it would send a delegation to visit Australia “to explain Taiwan’s stance on China’s anti-secession law targeting Taiwan.”101 Taipei sought to further influence Australia when it included an Australian

 99 Greg Sheridan, “Beijing’s Man in Taipei May Not Toe the Party Line,” The Australian, 11 May 2006, http://www.theaustralian.news.com.au/story/0,20876,19093241-25377,00.html. 100 ABC, “Taiwan President Visits Solomons,” 8 March 2005, http://www.abc.net.au/pm/ content/2005/s1318869.htm. 101  Sofia Wu, “Taiwan Delegations to Visit Southeast Asia, Australia: MOFA,” Taiwan News, 14 April 2005, http://www.etaiwannews.com/Taiwan/Politics/2005/04/15/1113530293 .htm.



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representative in its new Democratic Pacific Union,102 which took its inspiration from Joseph Nye’s notion of “soft power.”103 This was the continuation of long theme in Australia-Taiwan relations. Taiwan’s democratization in the early 1990s had played an important role in improving relations with Australia.104 Taiwan’s reputation in Australia improved still further following the successful 1996 presidential election and the democratic transfer of power in 2000, increasing bipartisan support for Taiwan in the Australian parliament. Before travelling to Taipei in May 2000, liberal party backbencher Andrew Thomson stated, “I hope it’s clear that there is a large and bipartisan body of support for the legitimate democracy that is on show there.”105 In a July 2002 interview, Taiwan’s Foreign Minister Eugene Chien argued Taiwan’s “transformation into a mature democracy” with the first transfer of political power in 2000 was Taiwan’s “largest comparative advantage” over China, providing Taiwan “with a niche within which to expand our foreign relations.”106 However, as Defense Minister Hill’s inane comment above about China not being “a democracy of our type” demonstrated, Taiwan’s democracy was losing its cachet among Australian political elites. The opposition ALP’s foreign affairs spokesman, Kevin Rudd statement on 18 July 2004 is indicative of this shift: I think there are some in Taiwan who believe that if Taiwan as a functioning democracy declared its independence, that the rest of the international community would automatically put its hand up and say, “well thanks, that’s terrific, another state has joined the international community of democratic states, and we will recognize it.” I think we’ve got a responsibility in the collective west and certainly from the point of view of Australia and the United States to make it very clear that we will not do that. Because we are bound by the terms of our treaty of recognition of the PRC in 1972, which explicitly accepted Taiwan as a province of China.107

102 Dennis Engbarth, “Chen Puts Hopes in New Regional Body,” Taiwan News, 12 August 2005, http://www.etaiwannews.com/Taiwan/Politics/2005/08/12/1123810352.htm. 103 James Holmes, “Keep DPU Separate from Taiwanese Politics,” Taipei Times, 22 August 2005, http://www.taipeitimes.com/News/editorials/archives/2005/08/22/2003268753. 104 Klintworth, Australia’s Taiwan Policy 1942–1992, p. 86. 105 Martin Chulov and Andre Perrin, “Taiwan Trip Riles Beijing,” The Australian, 17 May 2000, p. 2. 106 Monique Chu, “Chien Discusses Nauru and the Battle for Allies,” Taipei Times, 30 July 2002, p. 4. 107 Geraldine Doogue, “Kevin Rudd,” Australian Broadcasting Corporation, 18 July 2004, http://www.abc.net.au/sundayprofile/stories/s1154754.htm.

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As a former Australian diplomat posted to Beijing, Rudd undoubtedly knows that in the 1972 agreement Australia did not “explicitly accept Taiwan as a province of China” but rather “acknowledge[d] the position of the Chinese Government that Taiwan is a province of the People’s Republic of China.”108 Nevertheless, DFAT and Foreign Minister Downer shared Rudd’s view that turning a cold shoulder towards democratic Taiwan was appropriate in mid-2004. Taiwan’s emphasis on democracy would do little to change Australian policy. It was now very difficult for Taipei to win significant support in Australia for its policies. As Taiwanese scholar Sheng-pao Fan pointed out, “in the current Australian political environment . . . the concept ‘Taiwan independence’ has been degraded, defaced and stigmatized. This concept cannot be discussed rationally any longer.”109 Selling a Benign China Rather than celebrating the value of Taiwan’s hard-won democracy, the Australian government was much more interested in trumpeting a future vision of China as a benign superpower. This characterization of China’s future was a necessary condition of Australia’s public stance on the US-China-Taiwan triangle. It justified Australia making the compromises the Chinese mandated for increasing economic ties while simultaneously strengthening the alliance with the US. Prime Minister Howard duly told world leaders gathered at the September 2005 UN summit of world leaders in New York: We seek to build on shared goals and not become obsessed by those things that make us different. By widening the circle of substance, we are better able to deal openly and honestly with issues where we might disagree. But to see China’s rise in zero sum terms is overly pessimistic, intellectually misguided and potentially dangerous. It is also a negation of what the West has been urging on China now for decades. China’s progress is good for China and good for the world.110 108 See p. 38. 109 Fan Lloyd Sheng-Pao (范盛保), “Aozhou yu Nantaipingyang—Taiwan Neng Zuo ji Zuoxieshenme 澳洲與南太平洋─台灣能做及應做什麼? [Australia and the South Pacific: What Could and Should Taiwan Do?]” Translation by Zaijun Yuan and the author. 110 Michael Rowland, “Howard Seeks to Allay US Fears Over China Growth,” Australian Broadcasting Corporation, 13 September 2005, http://www.abc.net.au/am/content/2005/ s1458975.htm.



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The message was repeated by Australia’s incoming Ambassador to the US, Dennis Richardson, who “warned Washington not to let emotion drive policy on China.”111 Former head of the Australian Defense Force, Chris Barrie, expressed a similar position after his retirement in 2006: [W]e are very optimistic and hopeful that China will be a force for good in the Asia-Pacific region. I think the Taiwanese . . . [should get] used to the idea that they are going to be a small player in a very big jigsaw.112

The fact that Taiwan, Japan and the US itself were less confident about this vision of the future cannot be solely attributed to any peculiar reasonableness on the part of Australian policymakers. Rather, this was the public view of China that Beijing had consistently lured and cajoled the Australian government into adopting. In other words, of all the possible futures for China, Australian policymakers chose to publicly embrace the vision of a future benign and rich China as it brought substantive benefits in the here and now. Australia was considerably less sanguine behind closed doors. A secret Australian interagency review of the US Defense Department’s 2006 Report on China’s Military Power was published on the Wikileaks website. The review “yielded broad agreement with most of the report’s key conclusions.” According to the leaked cable, the Australian government assessed that: the immediate rationale for China’s military modernization is to deter Taiwan from taking steps towards independence, particularly by developing the capability to deter or delay any US attempt to come to Taiwan’s aid militarily. However, China’s longer-term agenda is to build its “comprehensive national power”—of which a strong military is a key element to a level that China feels commensurate with that of a great power.

The Australians agreed with the US side that “the trend of China’s military modernization is beyond the scope of what would be required for a conflict over Taiwan.” This assertion is bizarre as the demands placed on the Chinese military in a war against Taiwan’s armed forces backed by the US would be extremely high, and probably beyond the PLA’s current capability. It should be understood as an attempt to undercut China’s 111 Geoff Elliott, “Stay Cool on China, US Told,” The Australian, 30 January 2006, http:// www.theaustralian.news.com.au/common/story_page/0,5744,17978322%255E601,00.html. 112 Madeleine Coorey, “Australia May Grow Closer to China: Ex-Defense Chief,” China Post, 1 February 2006, http://www.chinapost.com.tw/international/detail.asp? GRP=D&id=76248.

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justification for its military development as being driven by the limited aim of defending China’s sovereignty, including its claim to Taiwan. The review also stated that “China already poses a credible threat to modern militaries operating in the region and will present an even more formidable challenge as its modernization continues.” While the Australian side considered China’s military development to be understandable to an extent, it is described as too fast and too opaque: There is the potential for possible misconceptions which could lead to a serious miscalculation or crisis. The nature of the PLA and the regime means that transparency will continue to be viewed as a potential vulnerability. This contributes to the likelihood of strategic misperceptions. The rapid improvements in PLA capabilities, coupled with a lack of operational experience and faith in asymmetric strategies, could lead to China overestimating its military capability. These factors, coupled with rising nationalism, heightened expectations of China’s status, China’s historical predilection for strategic deception, difficulties with Japan, and the Taiwan issue mean that miscalculations and minor events could quickly escalate.

Australia sees its military-to-military exchanges with China as playing a useful role in this context: We will continue to use our defense relationship with China to promote increased transparency in China’s military development plans and evolving doctrine . . . While remaining cautious to avoid practical co-operation that might help the PLA to fill capability gaps.113

In sum, despite the government’s China-friendly rhetoric, Australian policy of engagement with China while balancing against it continued unabated. Through 2005, the Japanese and US governments continued to upgrade their strategic dialogue,114 and in October they agreed on revamping their alliance.115 Canberra increased its security cooperation with the United States and Japan, and surreptitiously shared their perception of China as a potential threat. Nevertheless, Canberra continued to resist making such

113 WikiLeaks, “Australian Comments on DoD Report on China’s Military Power,” Reference ID: 06CANBERRA1430, Created: 15 September 2006, Origin: Embassy Canberra, Classification: SECRET//NOFORN, http://wikileaks.org/cable/2006/09/06CANBERRA1430. html. 114 Toshiyuki Ito, “Japan, U.S to Upgrade Strategic Dialogues,” Yomiuri Shimbun, 5 May 2005, http://www.yomiuri.co.jp/newse/20050505wo42.htm. 115 AFP, “US, Japan Agree on Revamping Alliance,” Taipei Times, 31 October 2005, http:// www.taipeitimes.com/News/front/archives/2005/10/31/2003278105.



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speculations public in the interest of further developing relations with China. China’s Resilient Confidence in Australia Chinese premier Wen Jiabao witnessed the signing of a nuclear safeguards agreement during his April 2006 visit to Australia, clearing the way for Australian uranium exports to China.116 The deal would presumably freeup Chinese domestically sourced uranium for use in China’s nuclear arsenal if not directly leading to Australian uranium in Chinese weapons. For many observers in Australia and China and beyond, the deal underlined growing Sino-Australian “trust” and the potential for further strategic cooperation in the future. A senior official from Taiwan’s National Security Council predictably highlighted the dangers of such cooperation, telling the Taipei Times that the government was “deeply concerned” about the pact and that “it was impossible to ensure that the uranium China plans to acquire from Australia was not used for military purposes or ended up in the hands of terrorists.”117 However, the pact also presented a diplomatic opportunity for Taipei. During Wen’s visit, Taiwan’s then GIO official in Australia, Osman Chia, told the Australian media that an arrangement for the export of uranium to Taiwan via the US had been made in 2002.118 Foreign Minister Downer confirmed that negotiations on a deal had started in 2000 and concluded successfully in 2002.119 Downer told the media that the disclosure would not anger China,120 and he was correct.121 This was in contrast to Beijing’s

116 ABC, “Chinese Premier Due to Arrive in Fiji,” 4 April 2006, http://abcasiapacific.com/ news/stories/asiapacific_stories_1607796.htm. 117 Shu-ling Ko, “Australian Uranium Worries NSC,” Taipei Times, 29 March 2006, http:// www.taipeitimes.com/News/front/archives/2006/03/29/2003299785. 118 Hamish McDonald, “Have Cash, Will Spend,” Sydney Morning Herald, 8 April 2006, http://smh.com.au/news/world/have-cash-will-spend/2006/04/07/1143916723084.html?pa ge=fullpage#contentSwap1; Craig Skehan, “Now Taiwan is Buying Our Uranium,” Sydney Morning Herald, 4 April 2006, http://www.smh.com.au/news/national/now-taiwan-isbuying-our-uranium/2006/04/03/1143916466699.html?page=2. 119 ABC, “Govt Confirms Taiwan Uranium Export Deal,” 4 April 2006, http://www.abc .net.au/news/newsitems/200604/s1607795.htm. 120 AAP, “Uranium for Taiwan OK with China,” Australian Financial Review, 4 April 2006, http://afr.com/articles/2006/04/04/1143916498012.html. 121 Xinhua News Agency, “IAEA to Supervise Taiwan’s Nuclear Activities, says FM Spokesman,” People’s Daily, 6 April 2006, http://english.people.com.cn/200604/05/ eng20060405_255932.html.

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strong reaction to Australia’s discussion with Taiwan on uranium exports in 1996.122 Beijing’s tolerant posture towards Canberra extended to the thorny issue of Australian security cooperation with Japan. In mid-2006 Wen Jiabao was publicly relaxed about the issue: I’ve closely followed the recent meeting of the foreign ministers of Australia, the US and Japan. After the meeting, Foreign Minister (Alexander) Downer told reporters in explicit terms that Australia does not support a policy of containment of China, that a policy of containment of China would be a very big mistake and that the right policy approach is successful engagement with China.123

The Chinese government’s reaction to Australia and Japan’s March 2007 joint security declaration was similarly subdued. Although this pact stopped short of being a formal bilateral treaty, it was the first Japan had sealed with any nation other than the United States. To Rowan Callick, despite denials from both sides, it was evident that the main catalyst for the security pact was “the rise of China.”124 An Australian diplomat was quoted explaining, “China is a good, constructive commercial partner, but in terms of ideas and values, it will never be anywhere near as close to us as Japan. It’s quite clear: Japan is our best friend in Asia.”125 Chinese commentators were unconcerned about the pact and “confident the two nations’ relationship with China will not be harmed.”126 Chinese representatives in Canberra informally expressed concern about the deal’s “lack of transparency,” but there was no official rebuke. This was despite Australia’s recent protest against the Chinese test of an anti-satellite missile system and new agreement to host another US military base.127 Australia also participated in the US’ 2007 efforts to stop the UN and its secretary-general

122 See p. 67. 123 Michael Stutchbury and Rowan Callick, “ ‘Our Nations Have Prosperous Future,’” The Australian, 30 March 2006, http://www.theaustralian.news.com.au/common/story_ page/0,5744,18649983%255E601,00.html. 124 Rowan Callick, “Chinese Shrug Off Concern at Pact,” The Australian, 13 March 2007, http://www.theaustralian.news.com.au/story/0,20867,21371102-601,00.html. 125 Claudio Munoz, “We’re Just Good Friends, Honest,” The Economist, 15 March 2007, http://www.economist.com/world/asia/displaystory.cfm?story_id=8856205. 126 Callick, “Chinese Shrug Off Concern at Pact.” 127 Dennis Shanahan, Patrick Walters and Peter Alford, “Our Military Ties With Japan Worry China,” The Australian, 10 March 2007, http://www.theaustralian.news.com.au/ story/0,20867,21356147-601,00.html.



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from using the phrase “Taiwan is a part of China,”128 without a significant reaction from Beijing. However, Beijing drew the line at Australia’s participation in security cooperation that added India alongside the US and Japan. Beijing formally protested this growing quadrilateral cooperation in May. In Beijing the following week, Defense Minister Brendan Nelson duly “reassured China that Australia had no intention of expanding the Australia-US-Japan military relationship to include India” and that Australia’s support for the US anti-ballistic missile system was not directed at China. He also stated that “China’s increasing defense spending was ‘perfectly understandable’ and appropriate.”129 While China expressed “concern” about the suggestion in an Australian strategic policy document “that a number of elements of China’s expansion would have to be carefully ‘managed,’” it did not develop into a major issue. China was similarly relaxed when Prime Minister Howard echoed the statement in a July speech, saying that though China’s rise was good for China and for the world, “US-China relations, China-Japan tensions and longstanding flashpoints in Taiwan and the Korean Peninsula will require continuing careful management.”130 China’s response to the Dalai Lama’s visit to Australia in May-June 2007 was further indicative of resilient Chinese confidence in Australia. Trapped by earlier criticism of Alexander Downer,131 opposition leader Kevin Rudd reluctantly met with the Tibetan leader. His planned trip to Beijing was then postponed, presumably in anticipation of a backlash.132

128 J. Michael Cole, “UN Told to Drop ‘Taiwan is part of China’: Cable,” Taipei Times, 6 September 2011, http://taipeitimes.com/News/front/archives/2011/09/06/2003512568. 129 The Age, “Great and Powerful: But is China Our Friend?,” 18 June 2007, http:// www.theage.com.au/news/editorial/great-and-powerful-8212-but-is-china-our-friend/ 2007/06/17/1182018932029.html?page=fullpage#contentSwap1; Mary-Anne Toy, “China’s Military Fears Put to Rest,” The Age, 10 July 2007, http://www.theage.com.au/news/ national/chinas-military-fears-put-to-rest/2007/07/09/1183833431722.html?page=fullpage# contentSwap1. 130 Toy, “China’s Military Fears Put to Rest.” 131  Jason Dowling, “Room Found for Dalai Date,” The Age, 27 May 2007, http://www .theage.com.au/news/national/room-found-for-dalai-date/2007/05/26/1179601737310.html. 132 AAP, “Rudd Delayed Trip Due to Dalai: Downer,” Sydney Morning Herald, 13 June 2007, http://www.smh.com.au/news/National/Rudd-delayed-trip-due-to-Dalai-Downer/ 2007/06/13/1181414346079.html; Greg Sheridan, “Rudd’s Approach to China and Stern Hu, a Lesson in Cowardice,” The Australian, 20 March 2010, http://www.theaustralian.com .au/news/opinion/rudds-approach-to-china-and-stern-hu-a-lesson-in-cowardice/storye6frg6zo-1225842986389.

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Motivated by election year politics,133 several days later Prime Minister Howard disregarded warnings from Beijing and also met the Dalai Lama.134 In response, Beijing expressed its “strong dissatisfaction” with the move.135 This response was significantly more subdued than it had been after Howard had met the Dalai Lama in 1996, again suggestive of Beijing’s new reluctance to take a harsh line due to its confidence that Australia was moving overall in the right direction. In a 30 March 2006 interview on the eve of his visit to Australia, Chinese Premier Wen Jiabao had expressed his government’s belief the Australia would maintain its current, more pro-China posture over Taiwan and the US’ Asia strategy: China-Australia relations have matured. They have entered a stage of steady, stable and sound growth . . . [w]e appreciate Australia’s longstanding adherence to the one-China policy and its opposition to Taiwan independence. We particularly appreciate Australia’s view that China’s development presents an opportunity, not a threat. China-Australia friendship and co-operation rest on a solid political foundation, and I have every confidence in the future of our bilateral relations.136

As Wen went on to underline, this confidence was in large part due to China-Australia trade, which according to Wen had reached US$38.84 billion, with an average annual growth rate of over 30 percent. This economics-inspired confidence was widespread in China’s official and semi-official policy circles. Researcher at the Centre of Australian Studies at Xuzhou Normal University Gan Zhenjun’s view of SinoAustralian relations was typical: Sino-Australian relations are more pragmatic than before. The relationship will not be as good as in 1980s. Also, it will not become as bad as in the 1950s and 1960s. Provided that the geopolitical situation in the Asia-Pacific region remains generally stable, as China’s national power grows stronger, Sino-Australian relations will keep developing steadily.

133 Sushil Seth, “China, the Dalai Lama and Tibet,” Taipei Times, 21 June 2007, http:// www.taipeitimes.com/News/editorials/archives/2007/06/21/2003366217. 134 Leigh Sales, “Howard, Dalai Lama Hold Meeting,” Australian Broadcasting Corporation, 15 June 2007, http://www.abc.net.au/lateline/content/2007/s1953114.htm. 135 Xinhua News Agency, “China Voices Stern Objection to Australian PM Meeting Dalai Lama,” 15 June 2007, http://news.xinhuanet.com/english/2007-06/15/content_6247953 .htm. 136 Stutchbury and Callick, “ ‘Our Nations Have Prosperous Future’.”



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In Gan’s view, China had successfully sidelined Taiwan: “[AustraliaTaiwan relations] will not have a significant negative impact on the SinoAustralia relationship, though we should be alert to these. It is impossible and unnecessary for the Australian government to strengthen ties with Taiwan at the expense of its relations with China.”137 In 2006, executive director of the Strategy Research Center at the China International Studies Research Fund and former senior Chinese APEC official, Wang Yusheng also believed that China had successfully changed Australian policy. Wang argued that while the US was still bent on containing China, Australia was now an “unreliable” ally in this effort: Australia has repeatedly claimed that it has no desire to “contain China.” It stressed that China’s rapid development would not be a threat, but “a good thing for Australia and the world.” As for the US and Japan, those “old allies” such as South Korea and Australia are not “reliable,” not to mention the ASEAN members and India which are China’s friendly neighbors. They perhaps need to cooperate with the US and Japan, but they can never become the strict followers of these two countries. The so-called “Asian NATO” or “frontline to contain China” are only the wishful thinking of the US and Japan, which can never become effective in reality. However, we should have an awareness of the danger. We should keep alert.138

With Australia now seen as a reliable partner in achieving the Chinese goal of breaking out of US “containment,” some Chinese scholars, like Wang Yan, would argue that Australia was “strategically important” to China:139 China will definitely extend its “strategic frontier region” to the continent of Oceania, where the strategic focus is the two leading countries, Australia and New Zealand . . . Therefore, to ensure that Australia and New Zealand

137 All quotes from: Gan Zhenjun (甘振军), “Lengzhanhou Yataidiqu Diyuanzhengzhi Geju de Yanbian jiqi dui ZhongAo Guanxi de Yingxiang 冷战后亚太地区地缘政治格局 的演变及其对中澳关系的影响 [The Geopolitical Evolution of the Asia-Pacific Region after the Cold War and its Impact on Sino-Australian Relations],” South East Asia Window 东南亚之窗, (3) (2007), pp. 24–29. Translation by Zaijun Yuan and the author. 138 Wang Yusheng (王嵎生), “Fanhua Tongmeng Zihui Wajie Zhongguo Wuxu yu MeiRi Duikang 反华同盟自会瓦解 中国无需与美日对抗 [Anti-China Alliance will Collapse Automatically, China Does Not Need to Counter the US and Japan],” Sohu.com, 28 August 2006, http://mil.news.sohu.com/20060828/n245024703.shtml. Translation by Zaijun Yuan and the author. 139 Wang Yan (王艳), “Meiguode nanmao kanzhong zhongguo, ziyuan zhanlue zhutui zhongao guanxi 美国南锚看重中国, 资源战略助推中澳关系 [America’s “Southern Anchor” Regards China as Important, the Resources Strategy Boosts the Sino-Australian Relationship],” China Newsweek 中国新闻周刊. Translation by Zaijun Yuan and the author.

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chapter five are friendly to China is crucial to China’s security, especially China’s maritime security. [China needs Australia’s participation to fulfil] the ambitious goal of constructing a harmonious Asia. Australia is a country having important resources and market for China’s further development.

Zhang Lu and Huang Ji went as far as to suggest: Australia may become an external power that facilitates the reunification of China. As a regional power, Australia has considerable influence on the international politics in its area. China can use this influence to achieve its own strategic goals. Australia and China share no territorial borders, and have no major historical or ideological disputes between the two sides. Therefore, it is likely that Australia and China can reach a consensus on such core issues as the Taiwan issue, the South China Sea dispute, the rise of China etc . . . Australia’s stance is undoubtedly the best propaganda for China’s peaceful image.

Like many Chinese commentators, Zhang and Huang saw what they perceived to be Australia’s growing alignment with Chinese goals to be driven by Australia’s economic and political interests recently-yet decisively beginning to outweigh other concerns: We must never forget Australia’s special [western] national identity and the political influence those traditionally Western countries such as the United States and Japan have on Australia. Although Australia will strengthen its relationship with China for the sake of its economic interests and political needs, it will never thoroughly break with the US. After all, Australia’s survival and security largely relies on the support of the US and Japan, especially the US. On the other hand, the US and Japan will not easily give up Australia because it is an important strategic partner in the Western Pacific region.140

Another scholar, Du Ping, was even more emphatic: “the positive change in Australia’s policy to China is really driven by its economic interests . . . and the potential to increase such cooperation in the future is enormous. Understanding this, Australia certainly does not want to follow the US and Japan to contain China.”141

140 Zhang Lu (张露) and Huang Ji (黄楫), “Daguo Zhoubian Zhanlue Zhong de Aodaliya: Dazhoubian Zhanlue Linian yu Waijiao Mouhua de Xintansuo 中国周边战 略中的澳大利亚—“大周边”战略理念与外交谋划的新探索 [Australia in China’s Peripheral Strategy],” Contemporary International Relations 现代国际关系, (2) (2007), pp. 44–45. Translation by Zaijun Yuan and the author. 141 Du Ping (杜平), “MeiAo dui Hua Zhengce Fenqi Riyi Gongkaihua 美澳对华政策 分歧日益公开化 [The differences in American and Australian China policies Are More Obvious].” Translation by Zaijun Yuan and the author.



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For Wang Honggang, Australia’s behavior over the last few years had demonstrated that China had achieved its goals in Sino-Australian relations over the issues of US containment and Taiwan: Australia’s reluctance to get itself involved in a Taiwan Strait conflict, its support for lifting the EU’s arms embargo on China, and its refusal to attend conferences dominated by the US and Japan on how to contain China [the Halibut group], all prove that Australia has its own ideas and independent position when handling its relations with China. That Australia refuses to assist the US in defending Taiwan means that Australia has downgraded the Taiwan-Australia relationship. This may lead to a wider chain reaction, and may greatly stress the Taiwan authority.

From the point of view of Chinese policymakers, this “stress” is desirable because it is believed to make the “Taiwan authorities” more inclined to move ahead with unification. Wang further argued that Australia’s China policy “will play a role of balancing America’s power in the Asia-Pacific region.”142 One of only a few veteran Chinese Australia-watchers, Professor Hou Minyue at the Australian Studies Centre, East China Normal University, struck a more cautious tone while still being optimistic and confident about the direction Sino-Australian relations were heading: “Australia softened its China policy, which stabilized the Sino-Australia relationship in the political and security aspects and thus created a good environment for the full development of the bilateral relationship.” Hou credited much of this shift to the Sino-US post 9/11 détente, which he described as the US using “its state power in the counter-terrorism war, which means that Taiwan is no longer the strategic focus of American diplomacy. Therefore, China felt less pressure in protecting its core interests and this provides a good opportunity for Beijing to improve its relations with Australia.” The other factor was: China seizing the opportunity to develop economic diplomacy . . . [which] helped China conduct its diplomatic strategy of building a multi-polar and harmonious world. China and Australia have become more interdependent economically . . . Australian leaders must know that if they want to maintain and expand this opportunity they should seriously consider China’s political interests. Australia should try not to harm the current mutual-beneficial economic cooperation by saying wrong words or taking wrong actions.

142 Wang Honggang (王鸿刚), “Aodaliya Hen Kanzhong Zhongguo 澳大利亚很看重 中国 [Australia attaches Great Importance to China],” Global Times 环球时报, 7 October 2005, p. 10. Translation by Zaijun Yuan and the author.

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Hou believed that “when making policy towards China especially the Taiwan issue, Australia has evolved from a radical and strict US follower to a cautious and relatively independent observer.” Like Wang Honggang, Hou Minyue saw this as setting a “good example for Western and Asian countries, and will restrict the effectiveness of America’s strategy to contain China.”143 Inevitably, this general perception that China had successfully brought Australian policy into line with Chinese interests raised expectations that Australia would take decisive steps to show its commitment to China. Zhang Qiusheng and Zhou Hui urged Australia to “reduce the American factors which restrict the development of the Australia-China relationship” and “stop showing two-faces to China.”144 “The Previous Balance has been Broken” In hindsight, much of this Chinese optimism about Australia was mere wishful thinking. Ironically, as these Chinese commentators were concluding that Australia’s economic reliance on China had been successfully leveraged into a pro-China Australia, the economic balance of power between the two countries had become much more ambiguous. In a book published as early as 2007, Australian foreign affairs scholar Michael Wesley noted that this balance had begun to shift in Canberra’s favor.145 In the midst of growing Sino-Australian tension in 2009, Chinese columnist He Jingjun would also articulate this in the Chinese magazine, Nanfengchuang 南风窗. He argued that “China’s dependence on Australia’s natural resources is more than Australia’s dependence on Chinese market. The previous balance has been broken, so China must be more patient and strategic when handling bilateral relations.” Hence,

143 Hou Minyue (侯敏跃), “Huohuade Zhizheng Yilai de AoMeitongmeng he Zhongaoguanxi 霍华德执政以来的澳美同盟和中澳关系 [The Development of the Australia-US alliance and China-Australia Relations since Howard Came to Power],” History Teaching and Research 历史教学问题, (4) (2007), pp. 61–65. Translation by Zaijun Yuan and the author. 144 Zhang Qiusheng (张秋生) and Zhou Hui (周慧), “Shiping Aodaliya Huohuadezhengfu de Waijiao Zhengce 试评澳大利亚霍华德政府的均衡外交政策 [Analysis of the Howard Administration’s Diplomatic Policies Toward China],” Contemporary Asia-Pacific Studies 当代亚太, (4) (2007), pp. 11–17, 31. Translation by Zaijun Yuan and the author. 145 Wesley, “Australia-China,” p. 77.



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China should “not overestimate its economic power and should not think that Australian politics is in the scope of China’s power.”146 Wen Jiabao’s characterization of China’s relations with Australia in March 2006 as having entered a stage of “steady, stable and sound growth” was wrong. China’s coercive policy had merely forced Australia to make agreeable noises. Australia had moved closer to China through obliging Chinese demands to “oppose Taiwan independence” and promote China as a benign “force for good.” Australia was also able to win Beijing’s approbation due to the particular circumstance in cross-strait relations during the Chen Shui-bian administration. While this hurt Taiwan it was not at the expense of the US. The US also moved closer to China during this period, and Australia had demonstrated its commitment to relations with the US in Iraq and Afghanistan. China could not make Australian policymakers adopt as their own the Chinese government’s view over the resolution of China’s claim to Taiwan, and the end of US-led security status quo in Asia. From 2007, these conditions would dissolve, and Australia’s approach to US-China-Taiwan triangle would change significantly.

146 He Jingjun (和静钧), “ZhongAo Guanxi Lengguancha 中澳关系冷观察 [A Calm Observation of the Sino-Australia Relationship],” Nanfengchuang 南风窗, (19) (2009), p. 88. Translation by Zaijun Yuan and the author.

CHAPTER SIX

Confronting China—with or without Taiwan, 2007–2011 From 2007, the US-China-Taiwan triangle began its most profound shift since the end of the Cold War. The world entered the worst economic crisis since the Great Depression. Significant pressure has developed within US politics to re-adjust the trade relationship with China to more benefit companies creating jobs for unemployed Americans. The economic difficulties have also put significant pressure on the US defense budget even as the Obama administration signaled a move to counter China’s growing military capabilities and assertiveness. As global demand for Chinese exports declined sharply, the Chinese government injected a huge amount of investment into the Chinese economy, the wisdom of which remains in doubt. Yet, at least for the short term, China’s economy has continued to grow rapidly, encouraging Chinese policymakers and others to perceive a shift in the balance of power with the US. This spurred China to assert its territorial and great power claims more stridently. The US and China’s neighbors responded through drawing closer together, and the US shifted more of its strategic focus to East Asia.1 Australia began this period with a new government determined to continue the process of rebalancing Australia’s public policy stance away from the previous over-eagerness to please China. Even as Australian trade with China surged, Australia embraced the US’ moves to further balance against China. Taiwan’s reaction to hardening Sino-US relations has been much more ambiguous. Following his election in 20 May 2008, President Ma Ying-jeou embarked on a series of China-friendly policies that convinced policymakers in Beijing that cross-strait relations were on track for eventual unification. As Taiwanese scholar Lin Ting-hui put it, Chinese policymakers believed they had successfully changed the Taiwan issue from an

1 Jay Carney, Ben Rhodes and Danny Russel, “Press Briefing by Press Secretary Jay Carney, Deptuy National Security Advisor for Strategic Communications Ben Rhodes and NSC Senior Director for Asia Danny Russel, Parliament House, Canberra, Australia,” White House Office of the Press Secretary, 16 November 2011, http://www.whitehouse.gov/ the-press-office/2011/11/16/press-briefing-press-secretary-jay-carney-deptuy-nationalsecurity-advis.

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international to a Chinese domestic issue.2 This meant that Australia and Taiwan largely fell off each other’s radar screens. Nevertheless, the evolving relations of the major powers have in fact further fused the strategic futures of the two countries. Australia’s Own “Frenemy-ship” with China Kevin Rudd, a fluent mandarin speaker who has studied in Taiwan and served as a diplomat in Beijing, led the ALP back into government in early December 2007. At least some Chinese policymakers expected Rudd to bring about “a more intimate relationship between the countries . . . because he knows China so well and speaks Chinese.”3 Chinese scholar Shen Shishun also had high hopes for Rudd: Rudd knows the importance and sensitivity of the Taiwan issue to China. Rudd was studying in Taiwan when he was young, so he understands that “Taiwan independence” means war and thus he insists on the “one China” policy . . . In the Asia-Pacific region, the Rudd administration refused to establish a security alliance with Japan, and it did not support the ideology-based alliance between the US, Japan, Australia and India, which aims to contain China. This Australian policy will curb the China containment policy of the US and Japan, and will enhance mutual trust and promote bilateral ties with China.4

In a confidential cable, the US embassy in Canberra also noted “Rudd’s background as a Mandarin-speaking former diplomat who served in Beijing have led some to believe that he might be overly sensitive towards China.” Nevertheless, the embassy assessed that: Rudd shares our position that China needs to be encouraged to be a responsible stakeholder in the international system, and Rudd has previously expressed support for the U.S. in any conflict over Taiwan. Judging by his public statements and private assertions, Australia’s relationship with China

2 Lin Ting-Hui, Adjunct Assistant Professor, Department of Maritime Police, Central Police University, Taiwan. Personal correspondence with the author, 10 January 2012. 3 According to Zhu Feng, deputy director of the School of International Studies at Beijing University. Rowan Callick, “China Finds Kevin Rudd ‘More Difficult’ than John Howard,” The Australian, 18 May 2009, http://www.news.com.au/china-finds-rudd-difficult/ story-0-1225713061394. 4 Shen Shishun (沈世顺), “Lu Kewen Shidai de ZhongAo Guanxi 陆克文时代的中澳 关系 [Sino-Australian Relations During the Kevin Rudd Administration],” Beijing Review 北京周报, 8 April 2008, http://www.beijingreview.com.cn/hqgc/txt/2008-04/08/content_ 109100.htm. Translation by Zaijun Yuan and the author.



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is unlikely to change with Rudd in power . . . Early signs are that the Rudd government will be tough or tougher than its predecessor on China’s military modernization, transparency, and human rights.5

Indeed, Rudd’s exposure to China and the Chinese government informed what a senior Australian media commentator labeled “a hard-eyed, realistic approach.”6 Significantly, Prime Minister Rudd’s China policy took shape in the context of Australia-China trade reaching unprecedented significance. Australia’s natural resource exports to China—and the Chinese government’s massive economic stimulus efforts—have so far continued to spare Australia from the worst of the global economic problems as they have developed since 2007. Nevertheless, as pointed out by Zhu Feng, deputy director of the School of International Studies at Beijing University in an interview with The Australian, the relationship essentially remains at “just [a] commercial level. Bilateral relations as a whole are still far from intimate; they are undeveloped.”7 These strains are evident in the realm of political economy. The two governments have not finalized an FTA, more than eight years after Hu Jintao signed an agreement commencing work by both sides on the issue. A further high profile example was the Rudd government’s ban on Chinese direct investment in two mines near the Woomera Prohibited Area weapons testing range.8 The Australian Foreign Investment Review Board then drew out consideration of China’s state-owned aluminum company Chinalco’s A$20 billion bid to increase to 18% its stake in Australian miner Rio Tinto. This reportedly contributed to Rio shareholders rejection of the bid, drawing a hostile response from Beijing. China arrested Rio Tinto’s second most senior executive in China, Australian national Stern Hu, during iron ore price negotiations. Australian Ambassador Geoff Raby privately told US diplomats that this was not retaliation for the failed Chinalco-Rio Tinto deal but “part of a

5 WikiLeaks, “Prime Minister Rudd’s Visit to the United States,” Reference ID: 08CANBERRA267, Created: 19 March 2008, Origin: Embassy Canberra, Classification: SECRET//NOFORN, http://wikileaks.org/cable/2008/03/08CANBERRA267.html. 6 Laurie Oakes, “Rudd Won’t Listen to the Bullies,” The Daily Telegraph, 22 August 2009, http://www.dailytelegraph.com.au/news/opinion/rudd-wont-listen-to-the-bullies/storye6frezz0-1225764945490. 7 Callick, “China Finds Kevin Rudd ‘More Difficult’ than John Howard.” 8 Gerard Henderson, “Rudd’s Attitude to China Gets the Balance Just About Righ,” National Times, 6 October 2009, http://www.nationaltimes.com.au/opinion/politics/ruddsattitude-to-china-gets-the-balance-just-about-right-20091005-gjav.html.

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wider effort to regain control over the Chinese steel industry.”9 However, the Australian officials would later refer to Hu’s arrest as one of several acts of intimidation.10 Australian consular officials were denied full access to Stern Hu’s trial despite an Australia-China agreement guaranteeing Australian consular access. When Prime Minister Rudd told the media that “the world will be watching how this particular court case is conducted,” a foreign ministry official in Beijing warned the Australian government not to politicize the trial.11 Hu was sentenced to 10 years in prison on charges of bribery and stealing commercial secrets, underscoring Australia’s lack of influence with the Chinese government.12 The Australian government again voiced public concern over irregularities in the Chinese government’s handling of the trial of another Australian businessman, Matthew Ng.13 Rudd was also reportedly extremely frustrated with the Chinese negotiating position at the UN climate change conference in Copenhagen.14 China’s refusal to move the global agenda on climate change ahead at Copenhagen fuelled the Labor government’s domestic political problems associated with its domestic carbon pricing initiative.15 Human Rights-related issues have been a further major area of discord. Prime Minister Rudd failed very publicly to renegotiate Australia’s latitude to criticize the Chinese government as China’s zhengyou, or “friend that  9 WikiLeaks, “Australian Ambassador Confirms GoA Surprise over Rio Tinto Detentions but Sees No Link to Chinalco” Reference ID: 09BEIJING2144, Created: 27 July 2009, Origin: Embassy Beijing, Classification: CONFIDENTIAL//NOFORN, http://wikileaks.org/ cable/2009/07/09BEIJING2144.html. 10 Philip Dorling and Richard Baker, “Beazley Pledged Troops to Help US in a War with China,” Sydney Morning Herald, 8 December 2010, http://www.smh.com.au/technology/ technology-news/beazley-pledged-troops-to-help-us-in-a-war-with-china-20101207-18obt .html. 11 Sheridan, “Rudd’s Approach to China and Stern Hu, a Lesson in Cowardice.” 12 D’Arcy Doran, “Shock as Rio Tinto’s Stern Hu Gets 10 Years’ Jail,” News.com.au, 30 March 2010, http://www.news.com.au/business/shock-as-rio-tintos-stern-hu-gets-10-yearsjail/story-e6frfm1i-1225847244830#ixzz1U1enrDCT. 13 John Garnaut, “Canberra Slams Media Blockade at China Trial “ The Age, 10 August 2011, http://www.theage.com.au/national/canberra-slams-media-blockade-at-china-trial20110809-1ikwz.html. 14 NewsCore, “Alleged ‘Rat-f**k’ Outburst Tarnishes Aussie PM Kevin Rudd’s ChinaFriendly Image,” News.com.au, 7 June 2010 http://www.news.com.au/breaking-news/ alleged-rat-fk-outburst-tarnishes-aussie-pm-kevin-rudds-china-friendly-image/storye6frfku0-1225876391999#ixzz1U1jf1oFh. 15 As Secretary of the Department of Climate Change Martin Parkinson told a US official in January 2010. See WikiLeaks, “Australia Focus on Copenhagen Accord, China,” Reference ID: 10CANBERRA41, Created: 15 January 2010, Origin: Embassy Canberra, Classification: CONFIDENTIAL//NOFORN, http://wikileaks.org/cable/2010/01/10CANBERRA41.html.



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does not hesitate to remonstrate.”16 The “thuggish behavior of thousands of flag-waving Chinese” bussed into Canberra by the Chinese government to intimidate pro-Tibet protesters during the Beijing Olympic torch relay in 2008 antagonized the Australian government.17 Beijing then made “very strong representations” to pressure Australia into barring prominent Uyghur dissident Rebiya Kadeer from Australia. China warned a “major Australian bank that sponsors the National Press Club to use its influence to block a Kadeer speech there.”18 After the Australian government allowed her to enter, China cancelled Vice Minister He Yafei’s attendance at the Pacific Islands Forum and Australia-China dialogue in Cairns.19 The Rudd government initially pushed back against China over the issue of government contact with the Dalai Lama. During his 2008 visit, the Dalai Lama met with the acting prime minister, Chris Evans, and Foreign Minister Stephen Smith. However, in 2010, Canberra reportedly told the Chinese that Rudd and the then Deputy Prime Minister Julia Gillard would not meet the Dalai Lama. Instead, the Minister for the Environment and the Arts Peter Garrett had “a more or less secret meeting with the Dalai Lama which was allowed to leak out only after it happened.” US President Obama met with the Dalai Lama his subsequent visit to Washington, causing some embarrassment for the Australian government.20 Throughout this period the opposition cynically and opportunistically accused the government of being both too friendly with China and not friendly enough. Opposition leader Malcolm Turnbull described Prime Minister Rudd as a “Manchurian candidate” and “a roving ambassador for the People’s Republic of China.”21 Turnbull also criticized the prime minister’s lobbying to give China a greater say in the IMF as an effort to “earn brownie points by flattering or favoring a great power.”22 On the other hand, opposition foreign affairs spokeswoman Julie Bishop argued the government had failed “to work constructively” with China 16 The Chinese characters for zhengyou are 诤友. Rowan Callick, “Finally, PM to Break his Long Silence,” The Australian, 23 April 2010, http://www.theaustralian.com.au/news/ opinion/finally-pm-to-break-his-long-silence/story-e6frg6zo-1225857123563. 17 Oakes, “Rudd Won’t Listen to the Bullies.” 18 Dorling and Baker, “Beazley Pledged Troops to Help US in a War with China.” 19 Gemma Daley, “China-Australia Ties Have Soured Over Rio, Uighurs, Smith Says,” Bloomberg, 18 August 2009, http://www.bloomberg.com/apps/news?pid=20601081&sid= afujfJW2tUuA. 20 Sheridan, “Rudd’s Approach to China and Stern Hu, a Lesson in Cowardice.” 21  Oakes, “Rudd Won’t Listen to the Bullies.” 22 Callick, “China Finds Kevin Rudd ‘More Difficult’ than John Howard.”

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over the Kadeer visit. Bishop also claimed Rudd’s “zhengyou” speech at Beijing University mentioning human rights “needlessly offended China.”23 Opposition Senator Russell Trood mocked Rudd as a “Prime Minister who proclaims himself as a China and foreign policy expert who has managed to leverage a ‘special relationship’ with China” yet delivered a relationship that was challenging and rife with irritants.”24 The Largely Invisible Taiwan Taiwan was for the most part ignored in the public aspects of Prime Minister Rudd’s China policy. A major reason for this was that Ma’s Chinafriendly policies had made Taiwan much less of an issue. The other factor was Australian policy. Rudd largely continued to apply the Howard government’s approach to Taiwan, neither sacrificing more of Australia’s intergovernmental relationship with Taiwan for the sake of China, nor daring to improve ties with Taiwan. For example, the Howard government had sent one cabinet minister to Taiwan between 2000 and 2007. Despite calling for visits as opposition leader,25 Prime Minister Rudd continued this ban on no visits until a cabinet minister, Minister for Resources and Energy Martin Ferguson, visited in 2011 to facilitate negotiations over gas deals potentially worth tens of billions of dollars.26 Rudd’s cautiousness on Taiwan reflects his concern about the potential of the Taiwan issue to upset Sino-US relations, and thus impact on Australia. In March 2009, Rudd apparently told US Secretary of State Hillary Clinton that “Chinese leaders were paranoid about [Taiwan] and leaders’ reactions on Taiwan were sub-rational and deeply emotional.”27 On one level, this disparaging view of Chinese policymaking presents 23 Oakes, “Rudd Won’t Listen to the Bullies.” 24 Russell Trood, “Media Release: China: DFAT officials will have some explaining to do,” Senatortrood.com, 7 June 2010, http://www.senatortrood.com/Media/MediaHub/ PressReleases/tabid/62/articleType/ArticleView/articleId/385/MEDIA-RELEASE-ChinaDFAT-officials-will-have-some-explaining-to-do.aspx. 25 Sheridan, “Give this Democracy a Hearing.” 26 AP, “Australia Denies Blocking Ministerial Trips to Taiwan,” Kyodo News, 25 March 2010, http://home.kyodo.co.jp/modules/fstStory/index.php?storyid=492291. See Chapter 7 for Ferguson trip. 27 WikiLeaks, “Secretary Clinton’s March 24, 2009 Conversation with Australian Prime Minister Kevin Rudd,” Reference ID: 09STATE30049, Created: 28 March 2009, Origin: Secretary of State, Classification: CONFIDENTIAL, http://wikileaks.org/cable/2009/03/ 09STATE30049.html.



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China’s attitude towards Taiwan as illegitimate. However, it also suggests that the US should view China’s position over Taiwan as non-negotiable (as it is “sub-rational and deeply emotional”), and to be taken seriously and handled cautiously. Hence like previous governments from Menzies onwards, the Labor government continued to seek to minimize Taiwan’s role in regional security affairs. On the other hand, also like previous Australian governments, the Rudd government continued to refuse to support China’s claim to Taiwan. In a joint statement during Vice- Premier Li Keqiang’s 29 October to 1 November 2009 visit to Australia, the Australian government stated it respected the sovereignty and territorial integrity of China in regard to Tibet and Xinjiang. However, on the Taiwan issue, the Joint Statement repeated Australia’s One-China policy as stated in the Joint Communiqué that established relations. As Lin Ting-hui points out, this is Australia rejecting China’s demand to accord Taiwan the same status as Tibet and Xinjiang.28 Sino-US Competition Laid Bare Recent years have seen a shift towards increasingly naked strategic competition between China and US, with significant implications for Australia and Taiwan. The Obama administration initially reached out to China. Obama travelled to China early in his presidency, and accommodated the Chinese in various symbolic ways, including giving Hu Jintao his first state visit to the US.29 Yet, as one commentator out it: [Chinese] leaders seem to have interpreted Obama’s attempts to engage with them, down-playing bilateral aggravations, as a sign of American weakness in the wake of Wall Street’s crash and military reverses in Iraq and Afghanistan. Arrogance has replaced sophisticated modesty. What else can explain the treatment of Obama on his first trip to China and during the disastrous

28 Lin Ting-hui (林廷輝), “Li Keqiang Chufang Nantai Sanguo zhi Zhanlue Yihan 李克強出訪南太三國之戰略意涵 [Strategic Implications of Li Keqiang’s Visit to Three Countries in the South Pacific],” Prospect & Exploration 展望與探索, 7 (12) (2009), pp. 108–117. Translation by Zaijun Yuan and the author. 29 John Pomfret, “For China and U.S., Summit Gets Passing Grade,” Washington Post, 21 January 2011 http://www.washingtonpost.com/wp-dyn/content/article/2011/01/20/ AR2011012006145.html; Fareed Zakaria, “The Dangerous Chip on China’s Shoulder” Time Magazine, 12 January 2011, http://www.time.com/time/magazine/article/0,9171,2042361,00 .html.

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This perception of American decline was officially stated in China’s 2008 National Defense White Paper, which declared that “a profound readjustment is brewing in the international system” with the world becoming increasingly multi-polar. At the same time, “China’s overall national strength has increased substantially.”31 China has made significant progress in developing military capabilities aimed at challenging the US’ military dominance in China’s near sea, in particular an upgraded submarine fleet, an anti-aircraft carrier ballistic missile and the J-20 stealth fighter. China has also made its nuclear arsenal less susceptible to a US first strike.32 Chinese policymakers perceive that the “significantly positive turn” in cross-strait relations under Ma Ying-jeou has further expanded China’s strategic license.33 Despite the US retaining a substantial military lead over China, this increasing capability has been accompanied by increased assertiveness on China’s part. The Chinese navy has reportedly almost doubled the number of long-distance submarine patrols.34 Chinese fishing boats, patrol vessels and aircraft have asserted China’s territorial claims in the South China and East China seas with growing forcefulness. China has also ratcheted up pressure on the US surveillance activities off China’s coast while increasing its maritime surveillance of its neighbors.35 Chinese scholar Zhang Yunling believed that this putative shift in power from the US to China would be welcomed in the region:

30 Chris Patten, “Hu’s Going to Washington,” The Sunday Times (Sri Lanka), 16 January 2011, http://www.sundaytimes.lk/110116/Timestwo/t2_20.html. 31 Chinese Government, “China’s National Defense in 2008,” Information Office of the State Council of the People’s Republic of China, 20 January 2009, http://www.china.org.cn/ government/whitepaper/node_7060059.htm. 32 Michael Wines and Edward Wong, “China’s Push On Military Is Beginning To Bear Fruit,” New York Times, 5 January 2011, http://www.nytimes.com/2011/01/06/world/ asia/06china.html. 33 Chinese Government, “China’s National Defense in 2008.” 34 Michael Sainsbury and Cameron Stewart, “China a ‘Peaceful Force’ in Beijing’s Response to Defence Paper,” The Australian, 6 May 2009, http://www.theaustralian.com .au/news/nation/china-a-peaceful-force/story-e6frg6nf-1225710310338. 35 Ben Blanchard and Phil Stewart, “China Protests U.S. Spy Flights Near Its Coast,” Reuters, 27 July 2011, http://www.reuters.com/article/2011/07/27/us-china-usa-spy-idUSTRE 76Q3YK20110727; WikiLeaks, “Stomp Around and Carry a Small Stick: China’s New “Global Assertiveness” Raises Hackles, but has More Form than Substance,” Reference ID: 10BEIJING383, Created: 12 February 2010, Origin: Embassy Beijing, Classification: CONFIDENTIAL, http://wikileaks.org/cable/2010/02/10BEIJING383.html.



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The US’ capability declines. Conversely, China’s status and capability gradually rise. This trend will have a huge impact on the foreign or security policies of some countries in this region. Our neighboring countries are calmly watching. However, strengthened cooperation will become the basis of their future relations with China.36

As noted previously in China’s Australia policy, this principle of “unifying political and economic expansion”37 relied on leveraging what is seen as regional countries’ dependence on the Chinese economy into political concessions towards China’s goals. Huang and Tang urged the Chinese government to: Take advantage of increasing dependence of the Asia-Pacific countries on China’s booming economy during the financial crisis, [to] further develop financial cooperation with these countries. This can deepen the economic dependence of these countries on the Chinese economy, and thus reduce conflicts between China and these countries on certain issues.38

This confidence in the power of the Chinese economy to reduce conflicts with regional countries was shared at the highest levels, and China began to confront and/or snub many of its neighbors almost simultaneously, apparently in the naïve belief that neither they nor the US would be able—or even willing—to resist. This monumental blunder undid years of “charm offensive” diplomacy that had improved China’s status and allayed regional concerns over China’s “rise.” What India’s ambassador in Beijing described to US officials as China’s “more aggressive approach to international relations” has pushed the US and regional countries such as Japan, South Korea, India, Vietnam and the Philippines closer together.39 The US has tacked 36 Zhang Yunling (张蕴岭), “Jinnianlai Ruogan Zhongyao Guojiwenti de Fenxi 近来若干 重要国际问题的分析 [Analysis of Some Important International Issues of Recent Years],” Hongqi Wengao 红旗文稿, (6) (2010), pp. 28–32. Translation by Zaijun Yuan and the author. 37 Zhong Feiteng (钟飞腾), “Zhengjingheyi yu Zhongguo Zhoubian Qaijiao de Tuozhan 政经合一与中国周边外交的拓展 [The Unity of the Political and Economic expansions and China’s Diplomacy with its Neighbouring Countries],” South Asian Studies 南亚研究, (3) (2010), pp. 1–16. Translation by Zaijun Yuan and the author. 38 Huang Zhong (黄忠) and Tang Xiaosong (唐小松), “Shilun Yataidiqu dui Zhongguo Jueqi de Renzhi yu Fanying 试论亚太地区对中国崛起的认知与反应 [Analysis of the Asia-Pacific Countries’ Responses to China’s rise],” Teaching and Research 教学与研究, (2) (2011), pp. 69–76. Translation by Zaijun Yuan and the author. 39 WikiLeaks, “Stomp Around and Carry a Small Stick: China’s New “Global Assertiveness” Raises Hackles, but has More Form than Substance.” See also John Lee, “Bringing China in—One Small Step at a Time,” Australian Strategic Policy Institute, 5 February 2009, http://www.aspi.org.au/research/spf_article.aspx?aid=39. Sunny Lee, “Post-Cheonan Dilemma: How to Deal with China (Interview with Guy Sorman),” Korea Times, 29 July 2010 http://www.koreatimes.co.kr/www/news/nation/2010/07/113_70422 .html; John Pomfret, “Concerned About China’s Rise, Southeast Asian Nations Build Up

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noticeably away from engagement and towards the balancing end of its China policy spectrum with active encouragement from many of China’s neighbors. In addition, regional countries have responded to China’s military expansion with build-ups of their own.40 Crucially, the economic crisis has weakened forces that would have balanced this growing confrontation. In China, declining exports shift political power away from those with a vested economic interest in good relations with the US and regional countries that form part of the AsiaPacific production system. On the US side, persistent, devastatingly high levels of unemployment has weakened the pro-China lobbying power of the huge US corporations that have profited from outsourcing of US manufacturing to China. Finally within Asia, China’s growing emphasis on protectionism and state-led investment offers China’s neighbors little incentive to indulge China’s demands. More Emphasis on Balancing Australia’s economic relationship with China is different from that of the US or regional countries such as Japan and South Korea. Australia’s main exports to China are minerals, and China’s domestic investment splurge provided a huge windfall for Australian miners. Despite this, Australia did not align “itself strategically towards China and away from its long-standing ally, the US.”41 Rather, Australian policy attended the US and regional hardening of attitudes towards China. Rudd’s personal approach to China reinforced this move in Australia’s China policy. In December 2007, the newly elected Rudd told the US ambassador that he was a “realist,” and “recognized the need to make China a responsible international stakeholder.” Rudd stated his “intention to engage China and ‘get inside the heads of their senior leadership on their long-term plans.’” He also said that he would “devote a considerable amount of time thinking through the government’s strategy for dealing

Militaries,” Washington Post, 9 August 2010, http://www.washingtonpost.com/wpdyn/ content/article/2010/08/08/AR2010080802631.html. 40 Pomfret, “Concerned About China’s Rise, Southeast Asian Nations Build Up Militaries.” 41 James Manicom and Andrew O’Neil, “Accommodation, Realignment, or Business as Usual? Australia’s Response to a Rising China,” The Pacific Review, 23 (1) (2010).



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with China over the next quarter century,” with a side dialogue with the United States on “what would be useful in the future.”42 In January 2008, Rudd told a visiting US congressional delegation that Australia’s “great foreign policy challenge . . . in the twenty-first century would be ‘how to wrestle with this giant.’” Rudd stated that while: this isn’t going to be easy . . . he was, on balance, an optimist—not because he believes the regime will democratize, but rather because he’s hopeful that the effort to convince the Chinese that it is in their national interest to become a responsible stakeholder in the rules-based global system will be successful.43

Rudd also told the delegation that “maintaining a strong alliance with the United States was the number one foreign policy principle for Australia for both Labor and Coalition governments.” Based on a leaked US cable, Australia likely joined the US in questioning Beijing over a 11 January 2008 ballistic missile intercept.44 Also in 2008, the Labor government signed an agreement with the US to share geospatial intelligence in a similar manner to the existing agreement on sharing signals intelligence. In addition, the Australian government decided to acquire a spy satellite from a US supplier to operate within a US network of similar satellites.45 In March 2009, Prime Minister Rudd explained to US Secretary of State Clinton that his Asia Pacific Community (APC) initiative was an important element in the effort to balance against China: [The APC was mostly] an effort to ensure Chinese dominance of the East Asia Summit (EAS) did not result in a “Chinese Monroe Doctrine” and an Asia without the United States. Expressing appreciation for U.S. reengagement in the region, Rudd said China could succeed only if the United States ceded the field.46

42 WikiLeaks, “Meeting the Prime Minister,” Reference ID: 07CANBERRA1738 Created: 10 December 2007, Origin: Embassy Canberra, Classification: CONFIDENTIAL//NOFORN, http://wikileaks.org/cable/2007/12/07CANBERRA1738.html. 43 WikiLeaks, “Odel Hoyer Meets With Prime Minister Rudd,” Reference ID: 08CANBERRA8 Created: 7 January 2008, Origin: Embassy Canberra, Classification: CONFIDENTIAL//NOFORN, http://wikileaks.org/cable/2008/01/08CANBERRA8.html. 44 WikiLeaks, “Australia Likely to Approach PRC on Missile Intercept,” Reference ID: 10CANBERRA29, Created: 12 January 2010, Origin: Embassy Canberra, Classification: SECRET//NOFORN, http://wikileaks.org/cable/2010/01/10CANBERRA29.html. 45 Philip Dorling, “Australia Signs Secret US Spy Deal,” The Age, 7 February 2011, pp. 1–2. 46 WikiLeaks, “Secretary Clinton’s March 24, 2009 Conversation with Australian Prime Minister Kevin Rudd.”

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The APC fell flat but the subsequent expansion of the East Asia Summit to include the US and Russia in the face of Chinese opposition largely achieved Australia’s goal. The Australian government also fully supported a further US step to balance against China: the Asia Pacific Democracy Partnership (APDP), a “proposed new initiative to develop a coalition of democracies to support democratic institutions in Asia and the Pacific.”47 The build-up of military force was an essential part of Australia’s new emphasis on balancing against China. Rudd told Clinton that he was “a brutal realist on China” and that China should be integrated “effectively into the international community and allowing it to demonstrate greater responsibility, all while also preparing to deploy force if everything goes wrong.” Rudd also told Clinton that the “forthcoming Australian Defense White Paper’s focus on naval capability is a response to China’s growing ability to project force.”48 This white paper, released 2 May 2009, stated that China’s military development had not been sufficiently transparent, and that if it did not become more transparent then: [T]here is likely to be a question in the minds of regional states about the long-term strategic purpose of its force development plans, particularly as the modernization appears potentially to be beyond the scope of what would be required for a conflict over Taiwan.

The last sentence is a less confrontational version of what Australia privately told the US in 2006.49 Nevertheless, given its official Defense White Paper context, this was the strongest public statement characterizing China as a strategic concern from the Australian government since China had applied significant pressure to soften Australian rhetoric after 1996. The statement was pointedly conjoined with commitments to acquire advanced submarines, missiles and fighter aircraft—capabilities all relevant to China. This directly relates to Taiwan, which remains the most likely cause of war between China and the United States. The paper stated:

47 WikiLeaks, “Asking Mongolia to Join Asia Pacific Democracy Partnership,” Reference ID: 07STATE128912, Created: 13 September 2007, Origin: Secretary of State, Classification: UNCLASSIFIED, http://wikileaks.org/cable/2007/09/07STATE128912.html. 48 WikiLeaks, “Secretary Clinton’s March 24, 2009 Conversation with Australian Prime Minister Kevin Rudd.” 49 See p. 91.



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[Taiwan] will remain a source of potential strategic miscalculation, and all parties will need to work hard to ensure that developments in relation to Taiwan over the years ahead are peaceful ones. The Government reaffirms Australia’s longstanding ‘One China’ policy.

This phrase is vague enough to satisfy or at least avoid offending each of the three sides while still explicitly stating Australia’s insistence on a peaceful outcome. In an indication of how finely calibrated Australia’s China policy has become, the government worked hard to persuade China not to punish the reference to the potential China threat in the white paper. When a reporter asked Prime Minister Rudd if Australians have reason to fear China, Rudd said only that the nation must be prepared for “a range of contingencies.”50 Meanwhile, Australian diplomats “worked behind the scenes in an attempt to quell any disquiet.”51 Ambassador Raby in Beijing told US diplomats that “its author had briefed the Chinese PLA and MFA before the paper went public.”52 It was not only Australia that expected a strong Chinese reaction. Professor of International Relations at the People’s University in Beijing, Shi Yinhong, said Rudd had “turned his face against China” and described the white paper statement as “close to the most severe ‘China threat thesis’ ever issued formally by a sovereign government.” He predicted “China definitely will not accept Australia adopting [it and] would have to publicly criticize” the white paper.53 In fact, the official Chinese response was subdued. A Chinese Foreign Ministry spokesman simply stated “China is a peaceful force that forms no threat to any other countries. [We hope] neighbor countries will view China’s military build-up objectively, without bias.”54 In addition, rather than finding reasons to criticize the white paper, many Chinese

50 Simon Jenkins and Andrew Drummond, “Australia Must be Strong in Region: Rudd,” The Age, 1 May 2009, http://news.theage.com.au/breaking-news-national/australia-mustbe-strong-in-region-rudd-20090502-aqdd.html. 51 Sainsbury and Stewart, “China a ‘Peaceful Force’ in Beijing’s Response to Defence Paper.” 52 WikiLeaks, “Australian Ambassador Confirms GoA Surprise over Rio Tinto Detentions but Sees No Link to Chinalco.” 53 John Garnaut and Jonathan Pearlman, “Rudd Accused of Fuelling New Arms Race,” Sydney Morning Herald, 4 May 2009 http://www.smh.com.au/national/rudd-accused-offuelling-new-arms-race-20090503-arg9.html. 54 Sainsbury and Stewart, “China a ‘Peaceful Force’ in Beijing’s Response to Defence Paper.”

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commentators found ways to (implausibly) explain it away as mostly driven by domestic politics.55 The Chinese government’s determination to downplay Australia’s white paper was in stark contrast to its febrile reaction to Australian statements in 1996. Clearly, Prime Minister Howard and Foreign Minister Downer had convinced Beijing its policy of leveraging trade to enhance contradictions between Australia and the US was working, and any contradictory information coming out of Australia was mere noise.56 Aptly, a “Chinese diplomatic source” told an Australian journalist that the relationship “is probably strong enough to withstand tension over defense policy. The momentum in the relationship is unstoppable.”57 However, China’s tolerance for Australian participation in US balancing activities has limits. Yielding to strong opposition from China, Australia continues to draw the line at quadrilateral cooperation with the US, Japan and India.58 Nevertheless, Australia has progressively expanded bilateral security cooperation with the US, Japan and India without experiencing serious opposing pressure from Beijing.59 Similarly, growing US-JapanAustralia trilateral cooperation continues apace, including a joint naval drill in the South China Sea.60 At the same time, Australia remains cautious

55 For example: Chunmei Guo, “Playing Up the ‘China Threat,’” Beijing Review, 24 May 2009, http://www.bjreview.com.cn/world/txt/2009-05/24/content_197174.htm. 56 True to ALP mythology, Foreign Minister Stephen Smith credited Gough Whitlam, telling US Undersecretary of State Burns that “China held a special regard for Australia and the Labor government since former PM Gough Whitlam recognized the PRC in the 1970s.” See WikiLeaks, “U/S Burns’ 12/5 Meetings With Australian DPM Gillard, FM Smith, Ag Min Burke,” Reference ID: 07CANBERRA1745, Created: 12 December 2007, Origin: Embassy Canberra, Classification: CONFIDENTIAL//NOFORN, http://wikileaks.org/cable/ 2007/12/07CANBERRA1745.html. 57 Garnaut and Pearlman, “Rudd Accused of Fuelling New Arms Race.” 58 Nick Squires, “Tighter Australia-China Ties Worry Asian Neighbors,” The Christian Science Monitor, 7 June 2008, http://www.csmonitor.com/World/Asia-Pacific/2008/0607/ p05s01-woap.html. According to a leaked US diplomatic cable, Japan was doing most of the pushing for quadrilateral talks, with the US and India not “overly enthusiastic.” See WikiLeaks, “U/S Burns’ 12/5 Meetings With Australian DPM Gillard, FM Smith, Ag Min Burke.” 59 AFP, “Japan, Australia Sign Security-Sharing Pact,” Google.com, 18 December 2008, http://www.google.com/hostednews/afp/article/ALeqM5i0lslnEShghWVmRrfRth_ UBqjTJw. 60 TWN and AFP, “US, Japan, Australia Announce Joint South China Sea Exercise,” The China Post, 9 July 2011, http://www.chinapost.com.tw/asia/regional-news/2011/07/09/309192/ US-Japan.htm.



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about antagonizing China over the issue of joint missile defense development by the three sides.61 As discussed above, the pressure Beijing has applied on Australia in recent years has chiefly related to bilateral issues, such as Chinese mining investment in Australia and the Rebiya Kadeer visa. In common with what US diplomats described as “numerous” others, the Australian government told the US about the increased difficulty it had experienced with the Chinese in 2009.62 According to a leaked confidential US diplomatic cable, senior DFAT official Graham Fletcher told the US in December 2009 that the Australian government believed “China had tried [in 2009] to intimidate it through aggressive lobbying, increased public criticism, the arrest of Hu and the ‘time-worn tactic’ of cancelling high-level visits.” Fletcher said that “Australia had stood up to Chinese pressure and forced its leaders to soften their approach in the latter part of the year. ‘We learnt we can make them blink,’ but that in his view it was ‘only round one.’ ”63 Julia Gillard replaced Rudd as prime minister on 24 June 2010. Gillard did not significantly alter the direction of Australian foreign policy, and Rudd remained in the key role of foreign minister. AUSMIN talks involving US Secretary of Defense Robert Gates and Secretary of State Clinton and their Australian counterparts in November 2010 explicitly addressed the alliance adapting to meet “evolving” challenges, including China’s efforts to limit freedom of navigation in international waters like the South China Sea.64 The following year, Gillard told the US congress in an emotionallyladen March 2011 speech that Australia has been “an ally for the sixty years past and Australia is an ally for all the years to come.”65

61 WikiLeaks, “Security And Defense Cooperation Forum (SDCF) Readout,” Reference ID: 10CANBERRA53, Created: 21 January 2010, Origin: Embassy Canberra, Classification: CONFIDENTIAL, http://wikileaks.org/cable/2010/01/10CANBERRA53.html. 62 WikiLeaks, “Stomp Around and Carry a Small Stick: China’s New “Global Asser­ tiveness” Raises Hackles, but has More Form than Substance.” 63 WikiLeaks, “Australia Raises Concerns About China’s Assertiveness, Regional Architecture Proposals and Bilateral Issues,” Reference ID: 09CANBERRA1089, Created: 11 December 2009, Origin: Embassy Canberra, Classification: CONFIDENTIAL//NOFORN, http://wikileaks.org/cable/2009/12/09CANBERRA1089.html. 64 Paul Kelly, “Deeper US Alliance in Response to Strident China,” The Australian 10 November 2010, http://www.theaustralian.com.au/news/opinion/deeper-us-alliance-inresponse-to-strident-china/story-e6frg6zo-1225950377275. 65 Julia Gillard, “Transcript of Julia Gillard’s speech to Congress,” Special Broadcasting Service (Australia), 10 March 2011 http://www.sbs.com.au/news/article/1497591/transcriptof-julia-gillard-s-speech-to-congress.

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chapter six Chinese Hopes and Fears for Australia

Reflecting policymaker thinking, the overwhelming consensus view of Chinese international relations scholars was that with the “Taiwan issue” successfully managed at both ends of the Australia-Taiwan relationship, the only serious problem with Australia was this avowedly eternal US alliance. Scholars generally saw this as a problem in the sphere of politics in contradiction to the very good relations in the sphere of economics. In 2007, Chinese scholars had been by-and-large confident that China’s problem with Australia was heading towards being resolved, that is Australia would not participate in the US effort to “contain China.” However, Chinese scholars would become increasingly disillusioned. In a book published in 2009, Li Fan argued the US and Australia had two main differences in their respective China policies: “1) Australia does not share the US’ strong desire to contain China. 2) Australia does not want to get involved in a Taiwan Strait war because of the US-Australia alliance.” The problem with this analysis of course is that the US does not want to contain China or get involved in a war in the Taiwan Strait, either. For evidence, one need only to compare the US’ containment of the USSR with the integration of the US and Chinese economies and see the US’ reluctance to arm Taiwan for war. Nevertheless, Li’s breakdown of his two differences is illuminating: The US sees China as a strategic rival but Australia thinks that China’s rise may benefit Australia and the world. The US is a world power and it seeks to promote democratic values in the world. Australia has no intention to do so. The US is very cautious about its trade deficit with China while Australia benefits greatly from Sino-Australian economic complementarities. How to deal with their relations with China have become a very important issue for both Australia and the US and this may even have some impact on the USAustralia alliance in the future.

Each of Li’s points reflects years of the Australian government’s (clearly successful) effort to pander to Chinese demands. Li sees two alternate futures for “China-US-Australia triangular relations”: 1. China’s power is restricted in the US-led unilateral global order. The US still enjoys hegemony and Australia is still a US proxy in the AsiaPacific region. Australia is strategically protected by the US, while benefiting economically from China’s prosperity. It does not need to make a choice between the two sides.



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2. China terminates US hegemony in Asia and contains America in the region with its established power and influence. Australia exits the US-Australia alliance as the alliance is no longer effective. Without the power of the US to contain China in the region, to prevent Chinese hegemony relies on China’s self-restraint. In addition, Japan, Russia, India and Australia form some unstable and loose alliances to contain China and to achieve a balance of power. Asia-Pacific security will develop toward the model of cooperative and common security to which many Asian countries aspire.66 In short, the future depends on China “terminating” US hegemony, after which Australia will no longer be a problem. However, also in 2009, another Chinese scholar, Zhou Fangyin, a senior Institute of Asia-Pacific Studies researcher at the Chinese Academy of Social Sciences, acknowledged that Australia may have some concerns about China’s rise of its own: At present, China-Australia economic cooperation has reached a very high level. It is not likely that this economic cooperation will decline or degrade. However, if the two countries hope to push their cooperation to a higher level, they have to overcome the main obstacle which is in the aspect of political security. The core strategy to develop a political security environment is to enhance mutual trust. China should assure Australia that the rise of China will not threaten Australia. In practice, China and Australia can strengthen cooperation in regional affairs. The two countries should first cooperate in non-traditional security areas, then gradually improve to higher levels, and thus establish mutual strategic trust.67

In contrast, Zhou’s colleague at the Chinese Academy of Social Sciences, Gao Cheng of the Institute of Political Science, sees Australian policy as dependent on its “domestic political situation.” As such, Australian policy­ makers have to make choices: In recent years, Australia tries to maintain strong Sino-Australian economic and trade relations, while seeking to strengthen the Australia-US alliance. 66 Li Fan (李凡), Lengzhanhou de Meiguo he Aodaliya Tongmengguanxi 冷战后的美国 和澳大利亚同盟关系 [US-Australia Alliance Relations after the Cold War], Beijing: China Social Sciences Press (2009), pp. 190–195, 197, 200. Translation by Zaijun Yuan and the author. 67 Zhou Fangyin (周方银), “ZhongAo Shangque Zhanlue Huxin 中澳尚缺战略互信 [China and Australia Lack Mutual Trust],” 25 June 2009, http://finance.ifeng.com/topic/ zlgszc/news/opinion/cjgc/20090625/841880.shtml. Translation by Zaijun Yuan and the author.

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chapter six Australia hopes to be a “lubricant” between China and US, so that it can strengthen its political and economic power in the Asian-Pacific region.

Gao calls on Australia to “take advantage of its rapid economic growth and stable domestic situation [and] send a signal to the US that it is seeking an independent status and hopes to be more politically influential in the Asian-Pacific region. Australia should not only be a US proxy in this region.”68 As increasing pessimism about Australia set in, this need for Australia to make the “right choice” took on a harder edge. In 2011, Sun Xianpu, researcher of the Institute of International Relations, Yunnan University, argued: A bright future of “win-win” relations between China and Australia is not so easy to achieve. On the contrary, bilateral relations will certainly deteriorate if mutual suspicion arises between the two countries. If the Australian government still takes a Cold War mentality and continues to promote establishing multilateral military alliances, there will be political tension between China and Australia, even though the two countries can perhaps still maintain their economic cooperation. Even worse, the political suspicion will endanger the economic and trade relationship between the two countries.

Sun does not see Australia’s alliance with the US as driven by the need for security like Zhou Fangyin, or political power and influence like Gao Cheng. Rather: China should understand that the basis of Australia’s strategic alliance with the US and other Western countries is Western values, which should be viewed from a historical standpoint. However, it is real that Australia benefits from China’s economic development. Therefore, China does not like the two sides of Australia: on one hand, Australia is firmly holding a Cold War mentality and following the US to contain China in the Western Pacific area. On the other hand, it says China is its important trade partner and it benefits from China’s economic development. Globalization requires people to get rid of the Cold War mentality. China does not hope to see that one day Australia has to choose sides between China and the US. China hopes the two countries can find the potential for cooperation, increase high-level exchanges, and deepen mutual trust.69

68 Zhang Hong (张红) and Fang Manman (房满满), “Aodaliya: zai Meiguo yu Dongya Jian Qiu Pingheng 澳大利亚: 在美国与东亚间求平衡 [Australia: seeking a balance between the US and East Asia],” People’s Daily (overseas edition) 人民日报海外版 28 April 2011, p. 6. Translation by Zaijun Yuan and the author. 69 Sun Xianpu (孫現樸), “ZhongAo Guanxi “Xiangzuozou, Xiangyouzou” de Yiyi 中澳 關係 “向左走, 向右走” 的意義 [The Implications of the Tendencies in Sino-Australian



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A 22 April 2011 anonymous opinion piece in the Chinese language edition of the nationalistic newspaper the Global Times (Huanqiu Shibao), run by the governmental mouthpiece, the People’s Daily, expressed this skepticism of Australia in an even harsher tone: China feels very unhappy if Australia not only simply follows tradition but also takes every effort to strengthen its alliance with the US. On one hand, Australia repeats to Beijing how China is important to it. One the other hand, however, it is using the old Cold War mentality and alliance to contain China. Thus, China has a bad impression of Australia: 1. Australia is co-operating with the US in its China containment policy; 2. Australia is trying to commit fraud by telling Beijing it is important. It is just exploiting China’s benevolence. China especially cannot accept that Australia challenges China on ideological issues. As with other countries in the Western Camp, Australia has no right to do so.70

This disillusionment with Australia was forming in an atmosphere of what Chinese policy elites viewed as growing US-led “encirclement,” as the US and many of China’s neighbors moved closer together in response to China’s growing assertiveness. Kuai Zheyuan, senior commentator at the Baija Strategic Think Tank admonished Chinese Vice-Foreign Minister Cui Tiankai for downplaying the threat of encirclement: In fact, the United States has formed the encirclement of China in the Asia Pacific region and it is strengthening this encirclement. The most urgent task at present is to face reality and to eliminate the encirclement. China should gradually make the encirclement an empty thing which exists in name only.71

The US’ next step would further fuel this perception of US-conspired “encirclement” and “containment,” in which Australia was complicit.

Relations],” Lianhe Zaobao 聯合早報, 3 May 2011, p. 21. Translation by Zaijun Yuan and the author. 70 Global Times (环球时报), “ZhongAo Guanxi Zhiyao Buwenbuhuo Jiuxing 中澳关 系只要不温不火就行 [Tepid Sino-Australian Relationship is Good Enough],” 22 April 2011, http://opinion.huanqiu.com/roll/2011-04/1646119.html. Translation by Zaijun Yuan and the author. 71 Kuai Zheyuan (蒯轍元), “Beijing Ruhe Yingdui Meiguo Jiezhi 北京如何應對美國 遏制 [How should Beijing Counter the US’ Containment],” Asia Weekly 亞洲周刊, 25 (8) (2011), p. 8. Translation by Zaijun Yuan and the author.

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chapter six Australia Embraces the US “Pivot”

In November 2011, the Obama administration announced a “strategic decision that the United States is going to play a larger role and a long-term role in shaping the future of the [Asian] region.”72 In the space of a week, Chinese policymakers were confronted with a bewildering series of developments, summarized by a US commentator below: The US is moving forces to Australia, Australia is selling uranium to India, Japan is stepping up military actions and coordinating more closely with the Philippines and Vietnam in the South China Sea, Myanmar is slipping out of China’s column and seeking to reintegrate itself into the region, Indonesia and the Philippines are deepening military ties with the US . . . a critical mass of the region’s countries have agreed to work out a new trade group that does not include China, while the US, to applause, has proposed that China’s territorial disputes with its neighbors be settled at a forum like the East Asia Summit—rather than in the bilateral talks with its smaller, weaker neighbors that China prefers.73

Tellingly, Australia is front and centre in these developments, while Taiwan remains largely invisible. The US’ deal with Canberra will see marines and US navy and air force assets moving in and out of Darwin in Australia’s far north.74 Given China’s anxiety over regional support for the US’ “containment” of China, neither the US nor Australia would take credit for the initiating the deal. According to commander of US Pacific Command Admiral Robert Willard, “Australia made overtures to the United States to increase our engagement with the armed forces of Australia and our utility of the training facilities, ranges and so forth that are there. That was unprecedented, and we’re very grateful for that overture.”75 The next day, a “senior Australian

72 Carney, Rhodes and Russel, “Press Briefing by Press Secretary Jay Carney, Deputy National Security Advisor for Strategic Communications Ben Rhodes and NSC Senior Director for Asia Danny Russel, Parliament House, Canberra, Australia.” 73 Walter Russell Mead, “Softly, Softly: Beijing Turns Other Cheek—For Now,” The American Interest, 19 November 2011, http://blogs.the-american-interest.com/wrm/ 2011/11/19/softly-softly-beijing-turns-other-cheek-for-now/. 74 Peter Hartcher, “Caught Between Two Giants,” Sydney Morning Herald, 19 November 2011, http://www.smh.com.au/opinion/politics/caught-between-two-giants-20111118-1nnai .html#ixzz1ex1LvXnf. 75 Sky News, “Obama on His Way to Australia,” Skynews.com.au, 16 November 2011, http://www.skynews.com.au/topstories/article.aspx?id=685698&vId=2851648&cId=Top %20Stories.



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official” told reporters “It had not come from the Australian side at all. But it hadn’t come from the American side either.”76 This announcement corrected misperceptions of Australia’s China policy across the region. As a Taiwanese scholar saw it: In the past few years, the Howard administration adopted an obviously proChina policy. In addition, the Bush administration had to spend most of its diplomatic and military power on the Afghanistan and Iraq issues. Therefore, the US-Australia alliance was not as important as it is today. Nowadays, Obama has adopted the Return to Asia policy and the US-Australia relationship is becoming more important. Australia is geographically important because it links the Pacific and Indian Oceans. The US military can use Australian military bases, including runways and harbors, to undertake military drills during peaceful times and to perform military tasks in a war. This becomes an important part of the US-Australia alliance.77

Chinese policymakers also appear to have been taken by surprise, sharing the misapprehension that Australia’s closer relations with China during the Howard government had been at the expense of the US. China’s initial response to the plan was relatively muted but expressed clear dissatisfaction.78 Liu Weimin, a spokesman of China’s Ministry of Foreign Affairs commented, “It may not be appropriate to intensify and expand military alliances at a time when the economy is still recovering. The move may not be in the interest of countries in the region.” Chinese newspapers were more menacing. The English-language version of the Global Times, aimed at overseas audiences, warned: “Any country which chooses to be a pawn in the US chess game will lose the opportunity to benefit from China’s economy. This will surely make US protection less attractive.”79 The People’s Daily “warned Australia against being ‘caught in the crossfire’ and a former Chinese army strategist, Song Xiaojun, pointed out that ‘Chinese strategic missiles can reach Australia.’ ”80 Mei Yuxin, senior researcher of the Institute of International Trade and Economic Cooperation, Ministry of the Commerce, complained: 76 Hartcher, “Caught Between Two Giants.” 77 Lin Ting-hui (林廷輝), “Jianqiang de Lianmeng Guanxi: dui Jinqi MeiAo Guanxi zhi Guancha 堅強的聯盟關係: 對近期美澳關係之觀察 [The Strong Alliance: Observations of Recent US-Australia relations],” Strategic and Security Analyases (78) (2011), pp. 3–11. Translation by Zaijun Yuan and the author. 78 Hartcher, “Caught Between Two Giants.” 79 Quotes from: Ben Packham, “China Issues Economic Warning Over US Ties in AsiaPacific,” The Australian, 18 November 2011, http://www.theaustralian.com.au/news/chinaissues-economic-warning-over-us-ties-in-asia-pacific/story-e6frg6n6-1226198703762. 80 Hartcher, “Caught Between Two Giants.”

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chapter six Normally, business activities follow the principle of “customer is God.” But China, the biggest customer of Australia has never felt like “God.” It does not even win a minimum of respect from Australia. Frictions caused by Australia come one after another, which make more and more Chinese people suspect that Sino-Australia cooperation is just wishful thinking. It is difficult to make a friend but it is easy to destroy a friendship. If the currently emerging views of Chinese society towards Australia are fixed, Chinese companies, when seeking trade partners, will give priority to other countries rather than Australia. In order to reduce Chinese people’s increasingly bad perception of Australia, the Australian government should make more effort to develop trade with China. In addition, it should reduce its excessive military activities. It especially should not impose the “China threat” as an excuse for increasing its military budget. It should not make China feel that Australia is determined to tie itself to the chariot [war machine] of the US to contend against China.81

Han Feng, deputy director of the Institute of Asia-Pacific Studies under the Chinese Academy of Social Sciences expressed his criticism of Australia in an article printed in the English-language China Daily: if American troops are stationed in Australia, they will pose a greater strategic challenge for China and East Asia. Australia must recognize the importance of its partnership with China, formed on the basis of trade and investment in the process of globalization. Though Australia faces the dilemma of choosing between the US and China, it thinks that its ties with the US are the most important.

Han warned that Australia cannot “integrate fully into East Asia” without China and that “China is indispensable to Australia’s success in coping with the financial crisis. . . . The current Australian administration should be more careful because China is already Australia’s largest trading partner.”82 Major General Luo Yuan wrote in the Chinese language Liberation Army Daily (Jiefangjun Bao) that the move was to “contain the rise of China”: Casting our eyes around we can see that the United States has been bolstering its five major military alliances in the Asia-Pacific region, and is adjusting the positioning of its five major military base clusters, while also seeking more entry rights for military bases around China. In the face of this adjustment in the U.S. strategic focus, we must possess a sense of peril 81 Mei Yuxin (梅育新), “Aodaliya Zhenzhengde Yuanlu 澳大利亚真正的远虑 [Australia’s long-term consideration],” Shanghai Securities News 上海证券报, 12 July 2011, p. 7. Translation by Zaijun Yuan and the author. 82 Han Feng (韩锋), “Australia Faces Hobson’s Choice,” China Daily, 7 December 2011, http://www.chinadaily.com.cn/opinion/2011-12/07/content_14223784.htm.



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and maintain a high degree of vigilance, but there is no need to be alarmed about the expected . . . Some countries have been swindled by America, and now are walking alongside the United States out of their own interests, but in essence they don’t fit together . . . They share the same bed but have different dreams.83

As one of these “swindled” countries, Australia can expect an intensified policy of sticks and carrots (presumably in that order) until it realizes that it too shares the dream of a powerful and unrestrained China. Chinese nationalists circulated an anonymous article on the internet that was the bluntest of all: “China should give a good and strong lesson to such a rogue state in the economic and military aspects and thus force it to shut up completely.”84 As mentioned above, Taiwan has been largely absent from these developments. The Ma administration’s policy pursing closer and warmer ties with China continued throughout these changes. Nevertheless, Taiwan continues to be a crucial factor. In November 2011, for example, Secretary of State Hilary Clinton declared that the US would stick to a “strong relationship with Taiwan . . . an important security and economic partner.”85 Clearly, Australia will be navigating the US-China-Taiwan triangle for many years to come. Stormy Waters Ahead? There is a significant amount of truth in Chinese scholar Li Fan’s assertion that “In the past, the ups and downs of Sino-Australia relations had been exactly in accordance with the fluctuations of Sino-US relations.”86 The context prevailing since the end of the Cold War (a growing Chinese economy and rising Sino-US competition) has seen Australia pursue a twin policy of engagement and balancing, roughly comparable to the US’ own 83 Chris Buckley, “China Top Military Paper Warns U.S. Aims to Contain Rise,” Reuters, 10 January 2012, http://www.reuters.com/article/2012/01/10/us-china-usa-defence-idUSTRE 8090BT20120110. 84 Anonymous, “Aodaliya, Yige Guoji Biesan de Dianfan 澳大利亚, 一个国际瘪三的 典范 [Australia, a Typical Example of a Rogue State],” Tianya.cn, 30 October 2011 (accessed), http://www.tianya.cn/publicforum/content/worldlook/1/353909.shtml. Translation by Zaijun Yuan and the author. 85 Lawrence Chung, “Clinton Pinning U.S. Hopes on Taiwan,” South China Morning Post, 15 November 2011 http://topics.scmp.com/news/china-news-watch/article/Clintonpinning-US-hopes-on-Taiwan. 86 Li Fan (李凡), Lengzhanhou de Meiguo he Aodaliya Tongmengguanxi 冷战后的美国 和澳大利亚同盟关系 [US-Australia Alliance Relations after the Cold War], p. 184.

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China policy. The key difference is that Australia has been able to engage more and balance less, perhaps largely by virtue of the fact that it is less “responsible” for balancing due to its limited military capabilities. Like the US, Australia has sought to engage China as it benefits Australia economically and because it is hoped that engagement would foster China’s acceptance of the regional status quo. China has encouraged Australian engagement through a raft of carrots and sticks, boosting this aspect of Australian policy. Australia has nevertheless continued to hedge against China’s rise—and continued to encourage the US to do likewise—because it distrusts China’s intentions. Australia’s attitude towards Taiwan reflects this twin policy, because Australia has sought to both engage with and balance against China through Taiwan. Australia’s policy approach has a limited lifespan. If China continues to grow in power but does not reconcile with the existing US-led regional order, then the US will have to change its approach to China as engagement and balancing will no longer be complementary. Instead, this powerful, demanding China will either have to be appeased or confronted. Advocates of both positions are currently engaged in debate on which approach the US should adopt. It is no coincidence that Taiwan features prominently in this debate. Numerous variables are in play. There is a very real possibility that China’s economic growth will falter. The capacity of the US to recover from its own economic problems similarly remains to be seen. There is also much debate over how successful China’s Taiwan strategy will be and which direction the Ma administration will take cross-strait relations in its second term. Regional reactions to these factors further complicate the issue. As developments over the previous decades make very clear, whatever happens, the fortunes of Australia and Taiwan will be tied together.

PART three

Australia-Taiwan relations in China’s shadow

CHAPTER SEVEN

Politics meets economics: a focus on bilateral issues Australia-Taiwan bilateral relations are routine in most respects. There are direct flights and visa free travel for citizens of both countries. The extensive economic links are typical for Australia’s relations with Northeast Asia, and proportionate to the size of Taiwan’s economy. Taiwan and Australia share democratic and liberal values. Yet from Australia’s perspective, the bilateral relationship is in a class of its own, in that a major power in Australia’s region—China—zealously deploys its considerable power resources to minimize Australian recognition of Taiwan’s sovereignty. This chapter looks at this mix of the mundane and the exigent as it has played out in the key areas of high level visits, representation, agreements and dialogue, international organizations, and trade and investment flows. High Level Visits High level official visits combine symbolic recognition of sovereignty and substantive intergovernmental dialogue. Ordinarily, these two qualities remain happily blurred. However, in the case of Australia and Taiwan, China ensures that high level visits are much more problematic. In 1992, Australia sent its first cabinet minister to Taiwan since it broke relations with the ROC, and would send a minister every year until 1998.1 Despite this momentum, Australia became increasingly restrictive over the issue of high level visits. For its part, Taiwan continued to seek to maximize high level visits in both directions. The most important driver of this shift in Australia’s attitude towards high level visits was China’s concerted campaign to redirect Howard government policy from 1996. The Chinese government lodged a strong protest against Minister for Primary Industries John Anderson’s September 1996 visit to Taiwan, despite Anderson’s explanation that he was going

1 See Chapter 3.

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in an “unofficial capacity.”2 Initially, Taiwan was able to counterbalance this Chinese pressure, seeking to “further broaden the relationship and increase the pressure on Canberra to give greater political recognition” through raising the prospect of several major investments.3 In early May, President Lee Teng-hui’s political party, the extremely wealthy KMT, publicized its consideration of plans to invest some US$3.68 billion in various development projects in northern Australia, including a Darwin to Alice Springs railway.4 Lee Teng-hui also included Australia in his government’s “look south” investment policy.5 However, like the China Steel Corporation steel mill, these investment dollars largely failed to materialize.6 In May 1997, China’s then Vice-Premier Zhu Rongji demanded Australia not send ministers to Taiwan, even on “private” visits.7 Despite further warnings from China, Resources and Energy Minister Warwick Parer visited Taiwan on 10 September 1997,8 which continued the unofficial practice of sending one minister a year to Taiwan.9 The Asian financial crisis had begun in July, and Australia was facing decreased demand for its resource exports. In this context, Taiwan was identified as a coal customer undergoing important changes and as a potentially significant buyer of Australian LNG.10 The particular economic benefit to Australia of Parer’s visit fortified the government’s reluctance to break with precedent. However, in 1998 Australia did not send a minister to Taiwan for the first time since visits recommenced in 1992. In April 1999, Minister for Industry, Science and Resources Nick Minchin visited Taiwan, coinciding with the showcase of Australian science and technology, “OzTech 99.”11 Visits would no longer be routine, but

 2 David McKenzie and Geoff Hiscock, “Anderson Trade Offer to Taiwan,” The Australian, 6 September 1996, p. 4.  3 Greg Sheridan, “Cornered in the Eternal Triangle,” The Australian, 11 October 1996, p. 15.  4 AP and Dow Jones News Service, “Taiwan’s Ruling Party Mulls Big Investments in Northern Australia,” Wall Street Journal, 6 May 1996, p. 6.  5 Sheridan and Alexander, “Taipei Ties a Complex Challenge.”  6 See p. 52.  7 Sheridan and Alexander, “Taipei Ties a Complex Challenge.”  8 Xinhua, Reuters and AFP, “Beijing Warns Canberra over Minister’s Visit,” The Straits Times, 10 September 1997, p. 19.  9 Sheridan and Alexander, “Taipei Ties a Complex Challenge.” 10 Warwick Parer, “Opening Address to the 1998 Australian Coal Conference, Gold Coast, Queensland,” Australian Department of Primary Industries & Energy, 17 May 1998, http://www.daff.gov.au/__data/assets/pdf_file/0003/23763/ministers_parer_speeches.pdf. 11 DFAT, “Annual report 1998–1999: Interests in North Asia: Sub-program 1.1,” 1999, http://www.dfat.gov.au/dept/annual_reports/98_99/html/programs/subprog11.htm.



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would occur when there was sufficient economic benefit to Australia to justify the cost of reprisals from China. The force of this Chinese pressure increased year-on-year as China’s economy grew rapidly. Moreover, the economic benefit to Australia of such visits diminished as the AustraliaTaiwan economic relationship became increasingly mature and routine. Again, Australia did not send a minister in 2000. In February 2001, Trade Minister Mark Vaile visited Taiwan. A prior statement had said only that he was travelling to Indonesia. In Taiwan, Vaile “engaged in two days of intensive meetings” with Minister for Economic Affairs Lin Hsin-yi, Vice-Premier Lai Ying-chao and other government ministers, and the heads of Formosa Plastics and China Steel. These negotiations focused on Taiwan’s access to Australian LNG, Australian participation in the Taipei to Kaohsiung high-speed train project, additional purchases of Australian fast ferries and food products, and joint projects in biotechnology and information technology.12 As Vaile was trade minister, this represented the most senior visit by an Australian government official since Labor government Trade Minister Cook’s visit to Taiwan in November 1993.13 The Chinese embassy in Canberra immediately expressed to DFAT its “strong displeasure and opposition” to Vaile’s trip. A spokeswoman for China’s Canberra embassy told the media: As a Cabinet minister, Mr. Vaile’s trip to Taiwan, in whatever capacity, cannot but be official in nature. This is what the Chinese side cannot accept. The question of Taiwan all along has been the most sensitive and important issue in Sino-Australian relations. Whether this issue can be handled properly will have a direct bearing on the smooth development of SinoAustralian relations.

A foreign ministry spokesperson in Beijing further criticized Australia over the visit, “Other countries have to acknowledge that there is only one China, and Taiwan is part of it.”14 Australia had also significantly curbed high level visits from Taiwan. According to former TECO representative in Canberra, Liu Polun, from late 1996 to 2000, Canberra refused visits by several senior Taiwan officials,

12 Tim Colebatch, “Minister’s Taiwan Trip Irks Beijing,” The Age, 16 February 2001, p. 3. 13 See DFAT, “Annual Report: 1.1 Interests in North Asia,” 1994, http://www.dfat.gov.au/ dept/annual_reports/93_94/1_1.html. 14 Colebatch, “Minister’s Taiwan Trip Irks Beijing.”

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including State Minister (minister without portfolio) Yang Shih-chien and Finance Minister Paul Chiu.15 When Taiwan’s Vice-Minister of Foreign Affairs Wu Tzu-dan was allowed to visit Australia in March 2000, China’s ambassador Zhou Wenzhong condemned the Australian government for a “gross violation” of its ties with Beijing. As Wu had come to Australia at the invitation of Liberal Party backbencher Andrew Tompson, Zhou met Tompson and other Liberal backbenchers “to brief them on the legal basis of China’s claim to Taiwan.”16 Beijing also criticized the attendance of three government and two opposition Labor MPs at President Chen Shui-bian’s May 2000 inauguration ceremony.17 Canberra’s attitude towards ministerial visits was a concern to Taiwan’s new president. Chen raised the issue with the Australian parliamentary delegation attending his inauguration ceremony. In a July 2000 interview with CNA, retiring TECO representative, Polun Liu, also strongly criticized Australia’s “misguided policy toward Taiwan” regarding ministerial visits. Clumsily referencing the importance of Australian economic interests in precipitating high level visits, Liu claimed Australia’s “inactive approach” at the senior level had seen French companies move in to supply Taiwan with liquefied natural gas (LNG). He also claimed that falling Taiwanese tourist and student numbers in Australia were the result of “Australia’s unfair treatment toward Taiwan.” Liu further expressed the hope that “Australia’s one-China policy” could be changed in the future.18 After being promoted to deputy foreign minister, Wu Tzu-dan was reportedly again in Australia in September 2000.19 The following January, Taiwan’s Foreign Minister Tien Hung-mao was permitted to travel to Australia ostensibly for a holiday. To the chagrin of the Australian government, Tien disclosed his diplomatic success to the media on his return.20

15 Peter Chen, “Australia’s Inflexible Policy Said Affecting Ties with Taiwan,” Central News Agency, 13 July 2000, p. 1. 16 David Lague, “Chinese Burn: How to Twist Canberra’s Arm on Taiwan,” Sydney Morning Herald, 22 March 2000, p. 1. 17 Chulov and Perrin, “Taiwan Trip Riles Beijing.” 18 All quotes from Chen, “Australia’s Inflexible Policy Said Affecting Ties with Taiwan.” 19  Monique Chu, “Ties with the Solomons hanging in the balance,” Taipei Times, 17 October 2000, http://www.taipeitimes.com/News/front/archives/2000/10/17/0000057551. 20 Monique Chu, “Minister Admits to Clandestine Trips to Thailand, Australia,” Taipei Times, 31 January 2001, http://www.taipeitimes.com/News/local/archives/2001/01/31/71731.



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In retaliation for the Vaile and Tien visits, Beijing walked away from annual defense talks with Australia, which had been running for three years.21 In a 6 June 2001 reply to a budget estimates committee question on notice, DFAT disclosed that the Chinese embassy in Canberra was also applying considerable diplomatic pressure on Australia. The embassy had made three separate representations on the issue of Australia-Taiwan ministerial visits in the prior six months. The first related to a prospective visit from Taiwan’s Chair of the Overseas Chinese Affairs Commission Chang Fu-mei, which did not eventuate. The embassy also made representations on the visit by Tien Hung-mao, and as previously noted, the visit by Trade Minister Mark Vaile. DFAT also reported that Premier Zhu Rongji “made general representations to Deputy Prime Minister John Anderson about visits to Australia by Taiwanese Ministers [while Anderson was] in Beijing in April 2001.” China again made representations in June about the Vaile and Tien visits at the bilateral talks in Beijing. DFAT declined to provide a list of unofficial Taiwan ministerial visits to Australia since 1996, as the “information requested is contained in a confidential document.”22 This raises the possibility of visits not on the public record. China used carrots as well as sticks to shift Australian policy. In May 2002, Beijing agreed to discuss a framework agreement on expanding the economic relationship with Australia, and to renew the annual defense talks.23 In September that year, President Chen Shui-bian called for Australia to boost the exchange of visits by high-ranking government officials with Taiwan, and expressed his hope that “bilateral substantive relations will be further strengthened based upon the existing foundations.”24 Nevertheless, there were no Australian ministerial visits in 2002, 2003 and 2004. Even given disruptions caused by elections and so on, this was a significant shift. In an August 2005 interview with The Australian’s Greg Sheridan, Chen sought to reassure Australia:

21 O’Donnell, “State of China Ties Pleases Howard.” 22 Senate, “Answers to Questions on Notice, Department of Foreign Affairs and Trade: Budget Estimates Hearing 2001–2002,” Senate Foreign Affairs, Defence and Trade Legislation Committee (Australia), 6 June 2001, http://www.aph.gov.au/senate/committee/ fadt_ctte/estimates/bud_0102/fat/ans-dfat-jun01.pdf. 23 O’Donnell, “State of China Ties Pleases Howard.” 24 CNA, “President Calls for Upgrade of Taiwan-Australia Relations,” Asia Pulse, 6 Sep­ tember 2002, http://www.asiapulse.com/.

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chapter seven Of course we respect and understand that Australia and China share a formal diplomatic relationship. Australia and China share the One-China policy. However, this should not affect the substantive aspects of our relations between our two countries.25

Sheridan, a vocal supporter of democratic Taiwan, pointed out: For several years Australia had the informal practice of sending a federal minister to Taiwan once a year. But we have not sent a minister to Taiwan since February 2001, that is, more than 4 1/2 years ago . . . The visits of our ministers to Taiwan were to support our trade and Taiwan remains our eighth largest export market. But these visits also involved a political dialogue and gave a sense of normality to Taiwan’s interaction with the world. It is inconceivable that to any equally large market we would not have sent a single minister for nearly five years. The only possible explanation is a kind of pre-emptive kowtow to China, something we are becoming all too practiced at.

Labor’s then foreign affairs spokesperson, Kevin Rudd, argued that Australia should resume the practice of sending a minister a year to Taiwan, commenting: One of the great things we’ve seen in Taiwan in the last 10 years is the emergence of a robust democracy. Compared to where it was before as a military dictatorship this has been a huge advance for the Taiwanese people. For China, in terms of its political evolution, there remains a continuing challenge of whether it will become a democracy or not. Taiwan has made that transition.26

In the context of this pressure from President Chen Shui-bian, Greg Sheridan and Kevin Rudd, in September 2005, Canberra announced it would send Gary Hardgrave, the minister for vocational and technical education and the minister assisting the prime minister, to Taiwan before Christmas. In response, a spokeswoman for the Chinese embassy in Canberra told The Australian, “Generally, it is the Australian Government’s policy to have a one-China policy. Australian government ministers should be bound by that policy. We do oppose government officials, and especially high officials, visiting Taiwan. This is not in accordance with Australian government policy.”27 25 Greg Sheridan, “Taiwan Makes Its Voice Heard,” The Australian, 15 August 2005, http://www.theaustralian.news.com.au/common/story_page/0,5744,16258960%255E2703, 00.html. 26 Sheridan, “Give this Democracy a Hearing.” 27 Greg Sheridan, “Visit to Taiwan Upsets Chinese,” The Australian, 30 September 2005, p. 5.



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Nevertheless, Hardgrave visited Taiwan in December, becoming the first minister to do so in nearly five years. According to DFAT, the visit was aimed at “promoting education exports and advancing cooperation between the two sides’ post-secondary education sectors.”28 Hardgrave had previously visited Taiwan four times before becoming a minister,29 and was one of the five Australian MPs at Chen Shui-bian’s 2000 inauguration ceremony.30 At least some of this interest in Taiwan can be attributed to the composition of his Brisbane electorate of Moreton. With 6000 Taiwanese-born residents, it has the highest proportion of Taiwanese of any electorate in Australia.31 According to an interview conducted by the author, this was a significant factor in Hardgrave’s decision to visit as minister. Moreover, he was a junior minister, moderating the force of China’s opposition to the visit. Hardgrave’s visit represented the highest percentage of symbolism over substance of any Australian ministerial visit since 1996. At the same time, Hardgrave’s junior portfolio meant that this visit was a very modest demonstration of support for Taiwan from the Australian government as a whole. It was in part a token to demonstrate to Hardgrave’s electorate that he was a friend of Taiwan, and may well have been justified to the Chinese in those terms. Foreign Minister Downer’s overstep on ANZUS in Beijing in 2004 was probably also a factor, with the visit demonstrating that Australia’s accommodation of China’s demands did have limits. Nevertheless, comparable visits from countries such as Canada had also decreased, and the Australian government felt little ideological pressure to re-expand high level contact in the face of China’s relentless demands over the issue. The Australian government continued to restrict the number and scope of Taiwan ministerial visits to Australia. Timing was critical; if China was sending a delegation to Australia at the proposed time or an important bilateral matter between Australia and China was under discussion, then Australia would refuse a visit. Visits required a strong functional rationale, and were generally restricted to the economics minister and chair of the National Science Council. Nevertheless the foreign minister and vice-foreign minister did visit on rare occasions when the Australia government considered that there were sufficiently substantive 28 DFAT, “Annual Report 2005–2006,” 2006, http://www.dfat.gov.au/dept/annual_reports/ 05_06/downloads/section_02.1.pdf, p. 37. 29 Sheridan, “Visit to Taiwan Upsets Chinese.” 30 Chulov and Perrin, “Taiwan Trip Riles Beijing.” 31  Sheridan, “Visit to Taiwan Upsets Chinese.”

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issues at stake. When it did permit a high level visit from Taiwan, the Howard government imposed what Sheridan labeled “draconian and demeaning restrictions,” often including a ban on talking to the media.32 Although Kevin Rudd had called for more ministerial visits to Taiwan while in opposition, he continued the tacit ban after his government took power in December 2007.33 After becoming president, Ma Ying-jeou argued that the warming of relations with China under his administration provided Australia with an opportunity to improve relations with Taiwan without drawing a heated response from Beijing: Countries should be taking into consideration the new situation (across the Taiwan Strait) and improving relationships with Taiwan in order to benefit both. Beijing knows that we won’t be able to win over Australia as far as diplomatic ties are concerned, but that leaves many other areas in which Australia can have relations with Taiwan.34

Nevertheless, an Australian minister would not visit Taiwan until July 2011, when Resources Minister Martin Ferguson travelled to Taipei to facilitate state-run Taiwan CPC’s prospective purchase of LNG from Australia. Taiwan’s emergence as Australia’s fifth largest export market further spurred the visit. The trip paid off at least in part, with the announcement in January 2012 that CPC had agreed to buy A$30 billion dollar of Australian LNG over 15 years.35 Ferguson described the deal as “a major step forward for the Australian LNG industry in opening up a new market.”36 Australia consistently blocked visits from Taiwan’s presidents throughout this period. Lee Teng-hui told Australian journalists he would like to make such a trip in September 1996.37 However, Lee did not visit Australia during his presidency.38 In August 2005, President Chen Shui-bian said 32 Sheridan, “Beijing’s Man in Taipei May Not Toe the Party Line.” 33 Martin Williams, “Australia Denies Blocking Ministerial Trips to Taiwan,” Kyodo News, 25 March 2010, http://home.kyodo.co.jp/modules/fstStory/index.php?storyid=492291. 34 Rowan Callick, “Taiwan in Appeal for Closer Contact,” The Australian, 29 March 2010, http://www.theaustralian.com.au/news/world/taiwan-in-appeal-for-closer-contact/ story-e6frg6so-1225846602929. 35 Matt Chambers, “$30bn Export Deal Set to Kick-Start Ichthys,” The Australian, 11 January 2012, http://www.theaustralian.com.au/business/companies/bn-export-deal-setto-kick-start-ichthys/story-fn91v9q3–1226241201343. 36 Andrea Hayward, “Taiwan signs up for LNG from Australia,” The Canberra Times, 11 January 2012, http://www.canberratimes.com.au/news/national/national/general/ taiwan-signs-up-for-lng-from-australia/2415968.aspx. 37 McKenzie and Hiscock, “Anderson Trade Offer to Taiwan.” 38 Lee Teng-hui has not visited Australia since his retirement, either.



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he would like to be able to visit Australia for short transit stops, as he has done in several countries without formal diplomatic relationships with Taiwan including Indonesia and the US.39 Downer refused saying, “We’ll just stick with the policy Australia has had since 1972. There’s been no consideration given to any change in policy by the Australian Government.”40 This position was supported by the Beazley-led opposition.41 However, two minor parties, the Australian Democrats and the Greens, argued that Australia should allow President Chen Shui-bian to visit.42 Ma Ying-jeou similarly failed to convince Prime Minister Rudd to meet with him or allow him to visit as president.43 In sum, China has been very effective in shaping Australian policy on the issue of high level official visits. Taiwan presidential visits to Australia remain taboo, and visits at the ministerial level have become significantly restricted. The roster of Australian ministerial visits has gone from one a year in the early 1990s to two in ten years. Diplomatic Representation In contrast to ministerial visits, Chinese pressure since 1996 has had less impact on mutual de facto44 diplomatic representation: the Taipei Economic and Cultural Offices (TECO) in Australia, and the Australian Commerce and Industry Office in Taipei (ACIO). According to what TECO Canberra representative Polun Liu told CNA in July 2000, the chief setback in this area after 1996 was that Australia made it harder for TECO officials to meet senior Australian officials.45 Nevertheless, Taiwan’ representative in Australia could readily meet with the ministers for energy and resources, agriculture, trade, and education in their offices. The representative was able to meet with the foreign minister in neutral locations. However, the prime minister, governor general and defense minister did not meet with Taiwan’s representative. 39 Sheridan, “Taiwan Makes Its Voice Heard.” 40 John Kerin, “Ban Stays On Visits From Taiwan,” The Australian, 16 August 2005, http:// www.theaustralian.news.com.au/common/story_page/0,5744,16275068%255E2702,00 .html. 41 Sheridan, “Give this Democracy a Hearing.” 42 Kerin, “Ban Stays On Visits From Taiwan.” 43 Rowan Callick, “We’ve Left Taiwan Out in the Cold,” The Australian, 27 October 2009, http://www.theaustralian.news.com.au/story/0,25197,26262335–25837,00.html. 44 This term is used here in its ordinary sense, not as it is used in international law. 45 Chen, “Australia’s Inflexible Policy Said Affecting Ties with Taiwan.”

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A good working relationship exists at the lower level. Taiwan officials in Canberra have very good access to Australian officials, especially concerning economic matters. One informant told the author that this access on economic matters is “not too much” different to what would exist if Australia and Taiwan had full diplomatic relations. The main difference being that it takes more time to “achieve the same thing.” TECO Canberra works closely with Australian government departments on bilateral trade issues. There is also cooperation in policing transnational crime, with a Taiwan Ministry of Justice representative posted in Canberra. This level of relations is significantly closer than Taiwan’s relations with most of the countries with which it has formal diplomatic relations, and is comparable to Taiwan’s relations with Canada or New Zealand. While TECO Canberra generally functions like an embassy, there are several restrictions. Australia restricts TECO’s displays of the ROC flag to inside the TECO office and the representative’s residence. Unlike in South Africa, TECO representatives are not provided with diplomatic car plates. The Australian government suggested Taiwan use the less symbolically significant “overseas mission” plates. However, Taiwan declined the offer. The Chinese embassy “commits substantial diplomatic resources to monitoring the contact that takes place between members of Parliament and the Taiwanese,” and these rare number plates would allow the Chinese embassy to more easily monitor the movements of TECO staff. They could also draw unwanted attention from terrorists. TECO is also different from most embassies in Canberra in regard to the resources it invests in public diplomacy. A survey of parliamentarians named TECO along with the Chinese and Israeli embassies as the most active lobbyers. In addition to this engagement of politicians at federal and state levels, TECO actively reaches out to journalists, academics and other opinion leaders. The resources and intensity Taiwan has devoted to public diplomacy have been reasonably effective in countering Chinese suppression of Taiwan’s profile in Australia. For example, there are more members of the Australia-Taiwan Parliamentary Friendship Group than the AustraliaChina Parliamentary Friendship Group. Nevertheless, the challenges are Sisyphean. According to The Australian’s Rowan Callick, when “Labor parliamentarian Michael Danby spoke to his then colleagues Laurie Brereton and Mark Latham about visiting Taiwan, Latham related to Danby the advice [former prime minister] Gough Whitlam gave him before he took



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his seat in Parliament—‘Never take the Taiwan trip.’ ” Kendall also relates that “the suggestion, which was both endorsed and rejected by different [parliamentarian] interviewees, that when parliamentarians are appointed to a position of parliamentary secretary or above, they are tapped on the shoulder by the Prime Minister and told to quit their association with the Australia–Taiwan Parliamentary Friendship Group.”46 Moreover, what success TECO has had has come at a cost of counterproductive cynicism among politicians, scholars and journalists ignorant of cross-strait relations. These critics fail to understand that in limiting itself to what Australian scholar Timothy Kendall derided as “duchessing,”47 Taiwan has shown considerably more restraint than many states would in defending its national interests. Taiwan’s de facto consulates in Brisbane, Melbourne and Sydney are also an important component of Taiwan’s representation in Australia. Here too, China has been somewhat successful in rolling back Taiwan’s access. Taiwan’s representative in Melbourne could meet with the leader of the Victorian state government, Liberal Premier Jeff Kennett (in office 1992–1999). However, subsequent Labor Premier Steve Bracks (1999–2007) would only communicate with Taiwan’s representative through third parties, like the chair of the Taiwan friendship group in the Victorian parliament. His successor, John Brumby (2007–2010) is said to have offered to meet the head of Melbourne TECO only if the representative hosted or attended a fundraising function. TECO Melbourne declined this offer. In contrast, Brumby had visited Taiwan to sign an agreement on scientific cooperation as Victorian Minister of Innovation in 2007 just prior to becoming premier.48 Alongside such setbacks, Taiwan’s representation in Australia has made some advances. The TECO office in Brisbane opened in December 2005, making Australia the country with the third most Taiwan representative offices after the US and Japan. According to a media report, this was the result of pressure on Taipei from Taiwanese living in Brisbane,

46 Timothy Kendall, Within China’s Orbit?: China Through the Eyes of the Australian Parliament, Parliamentary Library (Australia), 1 August 2008, http://www.aph.gov.au/ library/pubs/monographs/kendall/kendall_monograph.pdf, pp. 133–134. 47 Ibid., p. 134. The Macquarie Dictionary Online defines the colloquial Australian English verb “duchess” as, “to lavish entertainment on someone in order to gain favour.” 48 Current-Events Editor, “Current Events,” Journal of Synchrotron Radiation, 14 (5) (2007), pp. 449–450.

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the largest Taiwanese community in Australia.49 The Australian government responded positively to Taiwan’s request to open a Brisbane office, and there were good negotiations and communications between the two sides on the issue. Australia’s representation in Taiwan is also significant. The ACIO is one of the largest foreign representative offices in Taiwan, with over 70 local and Australian staff in 2006.50 There are very few practical differences between the ACIO and an Australian embassy in a comparable third country. The office’s policy and economic sections report directly to DFAT headquarters, and its communication system is fully integrated with DFAT. The office also provides consular and passport services. Visas have been processed in Hong Kong since 2002. In stark contrast to his or her TECO counterpart, the ACIO head is welcome at the highest levels of government, from the office of the president down. Interestingly, there has been ongoing discussion within the Australian government on whether Taipei should continue as a “political post” related to China or downgraded within DFAT’s hierarchy of embassies to a less significant “trade post.” Australia’s primary political interest in Taiwan concerns the US-China-Taiwan triangle, and this debate reflects warming cross-strait relations under President Ma Ying-jeou. The 2011 appointment of former ambassador to Saudi Arabia and China specialist, Kevin Magee, to head the ACIO demonstrates that this debate has been settled at least for the short-term, and the ACIO’s political status has been maintained and even upgraded under the Labor government. The Australian government’s trade promotion agency, Austrade, also operates in Taiwan. The Austrade offices in Taiwan are part of Austrade’s Northeast Asia region, which also includes Vietnam, Japan, Korea, Hong Kong, and China. The regional director is based in Shanghai. Austrade in Taiwan has 18 staff, including three in Kaohsiung. In addition to the standard Austrade role, Austrade’s Taiwan office also performs Invest Australia’s role of assisting Taiwanese companies to invest in Australia. According to an interview, Austrade has experienced some difficulties in operating in Taiwan. Austrade in Taiwan was unable to organise promotions in multiple markets. Another problem was the restrictions on Chinese staff travelling to Taiwan. There were also complications arising 49 Yun-ping Chang, “Fourth Representative Office Opens in Australia,” Taipei Times, 18 December 2005, http://www.taipeitimes.com/News/taiwan/archives/2005/12/18/200328 4889. 50 China Post, “Australian Office Celebrates 25 Years of Ties with Taiwan.” The ACIO was renamed the Australian Office Taipei in 2012.



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from the lack of direct flights between China and Taiwan before these were established in 2008. The benefits of de facto diplomatic representation are very high for both Australia and Taiwan. If the Australian government refused to effectively engage with the Taiwan government through either side’s representative offices it would come under significant pressure from many directions. For one, it would be unacceptable to Australia’s huge resource exporters and other Australian companies. At the international level, Japan and the US among others would lose significant trust in the Australian government if it was willing to damage Taiwan’s economic and political interests to that extent for the sake of mollifying China. As such, Australia has and will continue to hold tenaciously on to the main bulk of de facto diplomatic representation. Nevertheless, the Australian government balances this concern against China’s carrots and sticks, and is careful not to let the symbolic value of the respective representative offices exceed a level it perceives as appropriate for its interests with China. This has seen Australian governments at federal and state levels downgrade access for Taiwan’s highest representatives as they became increasingly responsive to Chinese demands. Agreements and Dialogue In 2005, Sandy Macdonald, parliamentary secretary to the trade minister, lauded what he called the “growing framework of unofficial arrangements and dialogue” that facilitates Australia-Taiwan economic relations.51 This framework includes annual bilateral high-ranking consultations covering “a wide range of issues, including market access, investment, agriculture, science and technology, and telecommunications.” There are also “annual energy and minerals trade and investment consultations” and “bilateral electronics talks.” Taiwan and Australia alternate as hosts for these dialogues.52 The list of cooperative agreements is similarly comprehensive and effective. A significant development in this area was the lifting of all capacity

51 Sandy Macdonald, “Address to the Australia—Taiwan Business Council Joint Conference, Sydney,” Department of Foreign Affairs & Trade (Australia), 8 November 2005, http://www.trademinister.gov.au/parlsec/speeches/051108_business_council.html. 52 DFAT, “Taiwan Brief,” January 2012, http://www.dfat.gov.au/geo/taiwan/taiwan_brief .html.

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and frequency restrictions on Taiwanese carrier services to Australian airports.53 This was the result of an agreement between Taiwan’s Civil Aeronautics Administration and the ACIO in Taipei.54 However, the expanding list of agreements and growing dialogue between Australia and Taiwan has pointedly not included a free trade agreement (FTA). In September 2002, President Chen indicated his desire for a FTA with Australia, and reportedly urged “all the countries in the Asia-Pacific region to sign free trade agreements in order to protect their common interests, saying that democracy, security and economy are the three pillars of the region’s stability and prosperity.”55 Australia has consistently rebuffed Taiwan’s approaches. According to a leaked US diplomatic cable, ACIO Deputy Representative Ben Gray told the US’ representative office in Taiwan, the American Institute in Taiwan (AIT) in June 2005: that Australia had so adamantly refused to discuss the issue with Taiwan interlocutors over the past two years that in the outgoing Australian Trade Representative’s courtesy calls on the Taiwan Minister of Economics, the head of the Council for Economic Planning and Development, the National Security Council and the Council of Agriculture, none of them dared to raise the possibility of an FTA. Australia’s ongoing preparatory FTA negotiations with China are in a delicate stage now and the Foreign Ministry would not want anything to upset that process. Australian Foreign Minister Downer is very focused on improving Australian relations and increasing trade with China and has little patience for Taiwan’s political gamesmanship . . .56

After assuming office, President Ma tried to assure Canberra that China would not object to an Australian FTA with Taiwan. He argued that Taiwan’s economic agreement with China had cleared the way for Taiwan to enter into FTA-like agreements with other countries.57

53 Steve Creedy, “Taiwan Flights Take Off as Red Tape Cut,” The Australian, 30 June 2006, http://www.theaustralian.news.com.au/story/0,20867,19630631-23349,00.html. 54 The Age, “More Capacity on Taiwan-Australia Route,” 30 June 2006, http:// www.theage.com.au/news/Business/More-capacity-on-TaiwanAustralia-route/2006/06/ 30/1151174376673.html. 55 CNA, “President Calls for Upgrade of Taiwan-Australia Relations.” 56 WikiLeaks, “Regional Economies Mixed Views on Taiwan FTA Prospects,” Reference ID: 05TAIPEI2599, Created: 13 June 2005, Origin: American Institute Taiwan, Taipei, Classification: CONFIDENTIAL, http://wikileaks.org/cable/2005/06/05TAIPEI2599.html. 57 Rowan Callick, “Push for Australia to Talk Trade with Taiwan,” The Australian, 30 August 2010, http://www.theaustralian.com.au/business/push-for-australia-to-talk-tradewith-taiwan/story-e6frg8zx-1225911585982.



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Australia has nevertheless continued to refuse to discuss the issue, and despite the FTA negotiations with China appearing to have stalled. According to one informant, this is because the Australian government sees Taiwan as still primarily interested in the political symbolism of an FTA, and not genuinely opening its market. If China is now truly not opposed to third countries signing FTA agreements with Taiwan then this focus on symbolism over economics would assist Australia in securing a good outcome. Protectionist tendencies would presumably be overcome in the interest of securing such a significant deal with a country as important as Australia. Moreover, while Taiwan’s market is more closed than Australia’s, it could not reasonably be considered more protectionist than China. Australia is also currently negotiating an FTA with South Korea, which has also traditionally protected its domestic market while aggressively expanding exports. Clearly, the idea of not negotiating an FTA with Taiwan has developed considerable inertia. Australian policymakers will presumably only begin to consider an FTA or FTA-like agreement when several other major economies have signed such agreements with Taiwan, and they see a threat to Australia’s share of the Taiwan market for key commodities such as beef. Presumably increasing the pressure on Australia, in October 2011 Taiwan and New Zealand announced that they would “explore the feasibility of an economic cooperation agreement.”58 International Organizations Similar to other areas, Australia has become less forceful in pushing for Taiwan’s inclusion in international organizations (IO) since the early 1990s. Australia played an important role in securing the participation of Taiwan in APEC as a “member economy” in 1991. Australian prime minister at the time, Paul Keating, later recalled that he had “pressed for Taiwan’s presence at the APEC leaders’ meeting, despite the opposition of Beijing, because I did not think we could seriously work towards an

58 New Zealand Government, “Minister Welcomes NZCIO/TECO Joint Press Release,” Scoop Independent News, 26 October 2011, http://www.scoop.co.nz/stories/PA1110/S00392/ minister-welcomes-nzcioteco-joint-press-release.htm.

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Asia-Pacific economic community without having Taiwan in it.”59 The subsequent Howard government also strongly supported Taiwan’s entry to the World Trade Organization (WTO) from 1996 once it had negotiated better access to Taiwan’s market for beef, certain fruits, cars, and several other products. This improvement in Australia’s position was reportedly worth hundreds of millions of dollars in exports.60 Taiwan then became a member of the WTO 1 January 2002, after being required to wait until China was ready to accede on 11 December 2001. The Australian government has continued to approach the issue of Taiwan’s membership in IO on the basis of perceived benefit to Australia. However, no new major international trade deals through which Australia could substantially benefit from Taiwan’s participation are on the table. Australia also now derives significantly more economic benefit from China relative to direct trade with Taiwan than in the early 1990s, and China has systematically leveraged this into greater concessions from the Australian government over Taiwan. So except in a few rare cases, Australian policymakers do not support Taiwan’s increased participation—either vertically or horizontally—in international organizations. Australia’s attitude towards Taiwan’s participation in APEC is indicative. According to Sheridan, “the Australian Government has been a strong defender of the status quo, under which Taiwan gets substantial representation, although not at the level of president, at APEC.”61 The government and opposition both rejected President Chen Shui-bian’s August 2005 request that Australia support for his attendance at an APEC summit.62 Vice-President Annette Lu criticized this reluctance, saying, “We share common values with Australia. It should be a more generous partnership, not just in trade but also in culture and values. Besides, Australia is so big a country with so great a spirit, and it is so far away from China. Why is it afraid of China?” Lu also contrasted the current stance with Keating’s

59 Paul Keating, Engagement: Australia Faces the Asia-Pacific, Sydney: Macmillan (2000), pp. 58–59. 60 McKenzie and Hiscock, “Anderson Trade Offer to Taiwan.”; Sheridan, “Cornered in the Eternal Triangle.”; Sheridan and Alexander, “Taipei Ties a Complex Challenge.”; Siew, “A Cross-Straits Common Market: Working Together to Build Prosperity in the Asia-Pacific Region.” 61 Greg Sheridan, “Taiwan’s Plea Puts Pressure on PM,” The Australian, 15 August 2005, http://www.theaustralian.news.com.au/common/story_page/0,5744,16262299%255 E601,00.html. 62 Sheridan, “Give this Democracy a Hearing.”; Sheridan, “Taiwan Makes Its Voice Heard.”



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when APEC was established.63 While Australia stood to gain substantial economic benefit from Taiwan’s participation in APEC in 1991, the attendance of Taiwan’s president at APEC would bring little if any additional benefit. Moreover, Australia fears that China would withdraw from APEC if Taiwan’s president attended, potentially crippling APEC as an effective international organization, and damaging Australia’s economic interests. In this and other cases where the Australian government perceives no significant benefit to Australia, it conditions support for Taiwan’s increased participation on a “consensus” within the IO. Such a consensus relies on Beijing—without lobbying or pressure from Australia—agreeing to allow Taiwan to participate under a given formula. Australia thus did not support the Chen Administration’s attempts to join the World Health Organization (WHO). Australia voted against the US-backed effort to help Taiwan gain entry into the WHO in 2004.64 When the rationale increased for Taiwan’s entry following outbreaks of severe acute respiratory syndrome (SARS) and avian influenza H5N1, Australia worked to elevate Taiwan’s status to the level of technical cooperation in an effort to differentiate the practical and symbolic aspects of participation.65 Despite several Australian parliaments passing resolutions supporting Taiwan’s entry to the WHO, the government declined to support Taiwan’s full participation, unlike Japan and the United States.66 With US support, the Ma administration successfully negotiated with China an annually renewable place in the WHO’s annual assembly as an observer under the title of “Chinese Taipei.” The Australian delegation did not even comment on this development in its official remarks to the assembly.67 The Ma administration also failed to receive Australian support for Taiwan’s participation in regional architecture emerging from the East Asia

63 Tony Parkinson, “Loud, Proud and Strait-talking,” The Age, 17 December 2005, http:// www.theage.com.au/news/world/loud-proud-and-straittalking/2005/12/16/1134703611163 .html?page=fullpage#contentSwap2. 64 Robert G. Sutter, Chinese Foreign Relations: Power and Policy since the Cold War, Lanham, Maryland: Rowman & Littlefield (2007), p. 235. 65 Sheridan, “Taiwan’s Plea Puts Pressure on PM.” 66 CNA incorrectly reported that Australia had argued in Taiwan’s favour at the World Health Assembly. CNA, “Allies Supported Taiwan at WHA,” Taipei Times, 26 May 2006, http://www.taipeitimes.com/News/taiwan/archives/2006/05/26/2003310121. 67 World Health Organization, “Sixty-Second World Health Assembly Geneva, 18–22 May 2009, Verbatim Records of Plenary Meetings and List of Participants,” 2010, http:// apps.who.int/gb/ebwha/pdf_files/WHA62-REC2/WHA62_REC2-en.pdf.

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Summit (EAS).68 While Australia would benefit from Taiwan’s integration into this structure, the Australian government perceives China’s participation to be critically important in shaping the future of the Asia-Pacific. Canberra does not want Taiwan to complicate this effort to “integrate” China. More importantly—at least until the recent souring of relations between China and key ASEAN states—the Australian government has relied to a significant extent on China’s goodwill for its coveted place at the East Asian regional table. Australia’s decisive role in securing Taiwan’s participation in the Convention for the Conservation of Southern Bluefin Tuna (CCSBT) makes an interesting counterpoint. Australia’s interest in managing the southern bluefin tuna fishery was made clear when it established the convention in May 1993 with Japan and New Zealand. Taiwan’s significant presence in the fishery meant its membership was crucial, and at Australia’s urging, Taiwan joined an “extended commission” created for that purpose on 30 August 2002 as the “Fishing Entity of Taiwan.”69 Taiwan had been obliged in September 2000 to sign a separate agreement and adopt the more humiliating “Fishing Entity of Chinese Taipei” in order to enter the Western and Central Pacific Fisheries Commission (WCPFC), where China is a member.70 Despite Taiwan’s delegation to the commission expressing dissatisfaction with “our current status at CCSBT,”71 Taiwan’s unrestricted participation was a significant win in terms of international space. This outcome was the direct result of Taiwan’s ability to impact on Australia’s interest in the southern bluefin fishery.

68 For example, see ACIO Representative Alice Cawte’s comments in Rachel Chan, “Taiwan Can Use Australia as ASEAN Participation Model: Diplomat,” Taiwan News, 27 October 2008, http://www.taiwannews.com.tw/etn/news_content.php?id=772930. And also Callick, “We’ve Left Taiwan Out in the Cold.” 69 CCSBT, “About the Commission,” Convention for the Conservation of Southern Bluefin Tuna, 15 November 2007 (accessed), http://www.ccsbt.org/docs/about.html. 70 Sandra Tarte, ‘Small Islands; Big Fish’: the International Politics of Tuna Management in the Western and Central Pacific, Marine Studies Technical Report, Suva: University of the South Pacific (2001), p. 4; Sandra Tarte, “A Duty to Cooperate: Building a Regional Regime for the Conservation and Management of Highly Migratory Fish Stocks in the Central and Western Pacific,” Ocean Yearbook, 16(2002), pp. 285–286; Western and Central Pacific Fisheries Commission, “Convention Texts: Arrangement for the Participation of Fishing Entities,” Western and Central Pacific Fisheries Commission, 5 September 2000, http:// www.wcpfc.int/. 71 CCSBT (Commission for the Conservation of Southern Bluefin Tuna), “Report of the Ninth Annual Meeting of the Commission, Attachment 1: Statement by the Fishing Entity of Taiwan to the Admission,” 18 October 2002, http://www.ccsbt.org/docs/pdf/meeting_ reports/ccsbt_9/report_of_ccsbt9.pdf, p. 1.



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Trade and Investment Flows There continue to be areas where China’s Taiwan policy intrudes on trade and investment flows, such as some Australian companies steering clear of the Australia-Taiwan Business Council (ATBC) out of concern that Beijing might shut them out of the Chinese market. However, overall, AustraliaTaiwan economic relations are much what they would be if China did not dispute Taiwan’s independence. The scale of Australia-Taiwan trade has made it an important pillar of the relationship, underpinning the intergovernmental interactions described above, and providing an important counterweight to Chinese efforts to curb Australian governmental contact with Taiwan. Taiwan has declined in relative importance as an Australian trading partner since the 1990s, while the relative importance of China to Australia has grown remarkably. This has made trade and investment a less effective counterweight to Chinese pressure in areas of intergovernmental relations either high in symbolism or low in substance—or both. At the same time, the importance of Australia-Taiwan economic ties have continued to grow in absolute terms, helping to cement the intergovernmental contact that facilitates this trade and investment. According to DFAT’s 2010–2011 statistics, Taiwan is Australia’s 10th largest trading partner, accounting for 2.8 percent of Australia’s total merchandise trade. Australia has a large trade surplus with Taiwan, with Australian exports to Taiwan for 2010–2011 worth A$9.1 billion (making Taiwan Australia’s fifth largest export market), and Australian imports from Taiwan worth A$3.6 billion. This makes a total of A$12.7 billion in two-way trade. This compares with A$22.5 billion in Australian exports to South Korea, and A$7 billion in imports. Statistics for Australia’s trade with China for the same period are a massive A$65 billion in exports and A$41 billion in imports. The five year trend of growth of Australia’s exports to China as of 2010 was 27.3% per annum, compared to 7.1% growth per annum in exports to Taiwan.72 While growing Australia-China trade has undermined the Taiwan government’s influence in Australia, it is important to note that this is not at the expense of Australia and Taiwan’s mutual economic interests. Taiwanese have now invested over A$93 billion into some 50,000 businesses

72 DFAT, “Australia’s Trade with East Asia,” August 2011, http://www.dfat.gov.au/ publications/stats-pubs/Australia-trade-with-East-Asia-2010.pdf.

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in China—many of which are exporters. This means that much of Australia’s trade with China is linked with Taiwan’s economy.73 For example, China’s sudden emergence as Australia’s largest supplier of computers was largely due to Taiwanese IT manufacturers shifting production to China.74 Hence, it is virtually impossible to separate Australia’s economic interests in China from its interests in Taiwan. Direct Australia-Taiwan trade has also become more complex and diverse since the 1990s, with over 2,300 Australian businesses now exporting merchandise to Taiwan.75 However, Australia’s resource commodities and Taiwan’s manufactured goods continues to constitute the bulk of trade. Again according to DFAT, Australia’s major exports to Taiwan during the 2010–2011 period were coal, iron ore and concentrates, aluminum, and copper. Taiwan’s main exports to Australia were telecommunications equipment, refined petroleum, motorcycles and bicycles, and computers.76 Trade in services totaled A$821 million in 2009–10, with A$551 million in Australian exports to Taiwan and A$270 million in Taiwan exports to Australia. Australian exports in this sector are concentrated in tourism and education. In 2010 over 87,000 Taiwanese visited Australia and there were over 8,400 Taiwanese enrolments in Australian educational institutions. In 2009–10, over 10,000 Taiwanese participated in the working holiday program established in 2004.77 Transport and travel comprise the bulk of Taiwan’s service exports to Australia. Since Taiwan’s accession to the WTO Taiwan has developed into a solid market for Australian farm products. Of a total A$2.976 billion worth of Australia beef exported to East Asia in 2010, A$143 million went to Taiwan, or roughly five per cent. For the next most significant product, wheat, the figures were A$2.6 billion to East Asia, with A$92 million or 3.5 per cent to Taiwan.78 According to DFAT, Australia was Taiwan’s 4th largest agriculture supplier in 2010 (after the US, Brazil and Japan) with 6.2 per cent of the total agriculture imports valued at US$815 million (A$888 million).79 Australia has also become the third largest wine supplier to Taiwan, after 73 Tim Harcourt, “Taiwan: Asian Tiger, Hidden Treasure,” Timharcourt.com, 10 October 2006, http://timharcourt.com/other/asian-tiger-hidden-treasure-looking-at-taiwan. 74 To-hai Liou, “Australia’s Economic Relations with China and Taiwan in the 2000s,” Taiwanese Journal of Australian Studies, 5 (2004), p. 105. 75 Harcourt, “Taiwan: Asian Tiger, Hidden Treasure.” 76 DFAT, “Taiwan Fact Sheet,” December 2011, http://www.dfat.gov.au/geo/fs/taiw.pdf. 77 DFAT, “Taiwan Brief.” 78 DFAT, “Australia’s Trade with East Asia.” 79 DFAT, “Taiwan Brief.”



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the United States and France.80 Taiwan is obligated to import 8 percent of its rice under WTO rules, and Australia was able to win a A$15 million contract for rice, its first in the market. Taiwan now allows Australia to export 10,000 metric tonnes of rice per year. Taiwan also lifted restrictions on live animal imports in 2007, allowing Australia to export premium dairy cows to Taiwan.81 One category that has registered a decline is imports of Australian greasy wool, due to Taiwanese textile manufacturers shifting their operations to China.82 Both Taiwan and Australia have politically influential farm sectors, and agriculture is the most problematic area in the trade relationship. There have been two major interrelated trade issues in recent years: Taiwanese pickled eggs and Australian stone fruit. Taiwan applied to the Australian Quarantine Inspection Service (AQIS) in 2000 for permission to export pickled and salted duck eggs (pidan in Chinese). The author was told in an interview that Taiwan regularly submitted the requested evidence, only to have new demands issued. This was despite AQIS allowing the importation of the same product from China. The informant claimed this was due to Australia’s “instinct to give favorable consideration to China.” In what unnamed Australian governmental sources alleged was “an attempt to bully Australia into accepting Taiwanese pickled and salted egg exports,”83 Taiwan’s Council of Agriculture (COA) banned imports of apples, citrus fruits and cherries from all regions of Australia except for the Riverland district from 1 January 2006.84 According to Sue Neales, “senior [Australian] government officials . . . privately admit[ed] the ban is not really about fruit fly at all, but is instead linked to Taiwan’s own trade priorities. Taiwan wants approval to sell its own mangoes, lychees and salted and preserved eggs into Australia and appears to be using the cherry import ban as leverage.”85 The COA denied that the two issues were linked. The COA told the media that the new quarantine regulations had 80 China Post, “Australia and Taiwan are ‘Good Neighbors,’” 12 March 2007, http://www. chinapost.com.tw/editorial/detail.asp?ID=104395&GRP=i. 81 Karon Snowdon, “Live Cattle Exports to Taiwan Resume,” Radio Australia, 21 February 2007, http://www.radioaustralia.net.au/connectasia/stories/s1853102.htm. 82 Australian Wool Innovation Limited, “Taiwan: Wool Import-Export Results, Jan-Sept 2005,” Asiahatter.com, 12 January 2006, www.asiahatter.com/news/22.html. 83 Jenny Chou, “Australia Accuses Taiwan of Tit-For-Tat Ban,” Taipei Times, 3 January 2006, http://www.taipeitimes.com/News/taiwan/archives/2006/01/03/2003287189. 84 Taipei Times, “Officials Slap Suspension On Almost All Aussie Fruit,” 26 December 2005, http://www.taipeitimes.com/News/front/archives/2005/12/26/2003286049. 85 Sue Neales, “Local Cherry Exports to Taiwan Hit Wall,” The Mercury, 30 December 2005, http://www.themercury.news.com.au/common/story_page/0,5936,17689249%255E3 462,00.html.

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been announced in March 2005, and Australia had only responded with an inadequate draft proposal after a bilateral meeting in July.86 Taiwan also banned fruit from South Korea and Japan at the same time.87 The fruit ban echoed the Board of Foreign Trade’s 1987 ban on all fruit imports, except those from the US, in order to protect local fruit growers. Australia, along with other countries, had also protested against that ban.88 Australia’s largest stone fruit exporter to Taiwan said the import bans would cost Australian producers A$50 million.89 The situation for growers worsened when the resulting over-supply led to price falls in other markets.90 Lobbying from Tasmania’s minister for primary industries in Taiwan, armed with Tasmania’s fruit fly-free status,91 saw the ban on Tasmanian fruit lifted.92 Later, kiwifruit, citrus and table grape exports to Taiwan resumed after both governments agreed on export protocols.93 Issues for growers were again compounded when Indonesia followed Taiwan’s example in April, implementing new quarantine protocols which shut some Australian fruit out of the market.94 The situation facing growers was serious enough to force the relevant peak body, Summerfruit Australia, to draft an action plan to keep producers in business.95 In June 2006, Biosecurity Australia commenced a policy review of imports of preserved duck eggs from Taiwan.96 Agriculture Minister Peter McGauran also announced that the government had given A$500,000 to a research project to satisfy Taiwan’s concerns about Queensland fruit 86 Chou, “Australia Accuses Taiwan of Tit-For-Tat Ban.” 87 Taipei Times, “Officials Slap Suspension On Almost All Aussie Fruit.” 88 Government Information Office, “International Flavor For Fruit Publication,” Free China Journal, 13 July 1988, http://taiwanjournal.nat.gov.tw/ct.asp?xItem=3691&CtNode=118. 89 ABC, “Taiwan Import Bans Hit Stonefruit Industry,” 23 January 2006, http://www.abc .net.au/rural/content/2006/s1553166.htm. 90 Nonie Stava, “Stone Fruit is Still Locked Out,” Country News, 1 February 2006, http:// www.countrynews.com.au/story.asp?TakeNo=200601306238624. 91 Michelle Paine, “Taiwan Talks Fruitful: Kons,” The Mercury, 14 December 2005, http:// www.themercury.news.com.au/common/story_page/0,5936,17562055%255E3462,00.html. 92 ABC, “Govt Applauded Over Fruit Ban Action,” 21 January 2006, http://www.abc.net .au/news/newsitems/200601/s1552288.htm; ABC, “Tas Apple Exports Resume to Taiwan,” 23 February 2006, http://www.abc.net.au/rural/news/content/2006/s1576767.htm. 93 ABC, “Push on for Stonefruit Exports Protocol,” 31 March 2006, http://www.abc.net .au/news/newsitems/200603/s1605485.htm. 94 Nonie Stava, “No Joy for Stonefruit,” Country News, 15 May 2006, http://www.country news.com.au/story.asp?TakeNo=2006051567372. 95 ABC, “Fruit Growers Attend Crisis Summit,” 3 May 2006, http://www.abc.net.au/ rural/news/content/2006/s1629635.htm. 96 Biosecurity Australia, “2007/22 Preserved Duck Eggs From Taiwan: Finalised Policy Review,” Department of Agriculture, Fisheries & Forestry (Australia), 5 October 2007, http://www.daff.gov.au/ba/reviews/final-animal/preserved_duck_eggs_from_taiwan.



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fly and at “the same time our quarantine officials are speedily considering Taiwan’s request for imports to Australia such as eggs, mangos and lychees.”97 Later that month Biosecurity Australia approved the importation of Taiwanese mangoes “under strict regulations.”98 By 5 October 2007, Biosecurity Australia had concluded that salt and heat-treated duck eggs from Taiwan could be imported into Australia, as “processing addresses disease agents of quarantine concern.” However certain additional risk management measures were required for alkalized eggs and negotiations are still underway.99 Taiwan lifted its restrictions on Australian stone fruit from the Riverland region, though new procedures to control fruit fly in fruit from Queensland are still being tested. In 2011, Taiwanese growers were allowed to begin exports of live orchids to Australia. A final bilateral economic issue is investment. The prospect of significant Taiwanese investment was an important factor in bilateral relations during the early 1990s. However, twenty years on, Taiwan has not become a major source of foreign investment for Australia. In 2005, Sandy Macdonald, parliamentary secretary for the minister for trade was still urging “Taiwanese investors [to] take full advantage of the opportunities available here in Australia,” noting that it “is remarkable that Taiwanese investment lags far behind Hong Kong and even Singapore.”100 According to DFAT, Taiwanese investment in Australia for 2010–2011 totaled a modest A$4.6 billion. However, this statistic does not include Taiwanese investment migration. This form of investment is fairly significant, with the 7th and 8th most wealthy individuals in Queensland—the favored destination for Taiwanese immigrants—reportedly Taiwanese immigrant investors.101 Australian investment in Taiwan is at a comparably low level. The largest such investment came in December 2005, when Australia’s Macquarie Media Group bought control of Taiwan Broadband Communications in a A$1.19 billion deal. This reportedly gave the fund 12 percent of Taiwan’s

 97 Nonie Stava, “Taiwan Still a Big Issue,” Country News, 7 August 2006, http://www .countrynews.com.au/story.asp?TakeNo=20060807704278.  98 ABC, “Mango Growers Comfortable With Imports Decision,” 28 August 2006, http:// www.abc.net.au/rural/news/content/2006/s1725845.htm.  99 Biosecurity Australia, “2007/22 Preserved Duck Eggs From Taiwan: Finalised Policy Review.” 100 Macdonald, “Address to the Australia—Taiwan Business Council Joint Conference, Sydney.” 101 Tony Moore, “The Queensland 2006 Rich List,” Brisbane Times, 20 July 2007, http:// www.brisbanetimes.com.au/articles/2007/07/20/1184560003802.html?page=2.

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cable-television market, the third largest in Asia.102 The other significant Australian presence in Taiwan is the ANZ bank, which now has more than 1 million customers, and has identified Taiwan as “a key market in [its] Greater China strategy.”103 Some informants speculated in interviews with the author that political issues have hampered Australian investment in Taiwan and Taiwanese investment in Australia. However, for the most part, the low levels of investment reflect investor sentiment in both countries. The Australian and Taiwan governments have sought to change this perception, signing an “Investment Promotion Agreement” in 2011. However, this will probably do little to change the situation. State-to-State by Any Other Name According to Liou, the increased relative importance of China to Australia has “put Taiwan in an unfavorable position in the triangular relationship.”104 This dynamic explains much of Australia’s moves to satisfy China at the expense of Taiwan. However, China’s rapid economic growth has not just affected Australia, but the entire world. As such, it is China that now benefits from a bandwagon strategy, and aspects of Australia’s Taiwan policy have become increasingly exposed and susceptible to Chinese pressure. The standout example is the significant curtailing of Australian ministerial visits to Taiwan. Nevertheless, the Australia-Taiwan economic relationship remains robust, and continues to underpin Australia-Taiwan intergovernmental ties that approximate what they would be if China did not oppose Taiwan’s statehood. As one Chinese scholar put it: The development of the Australia-Taiwan relations is affected by changes in the international situation and is driven by the national interests of both sides. Australia has stated that it develops economic and cultural relations with Taiwan based on the premise of the “one China” principle but in reality Australia develops a state-to-state relationship. Economic cooperation is the basis of Australia-Taiwan relations and the economic structures of the

102 Bloomberg, “Macquarie Media Buys Carlyle’s Taiwan Broadband Stake,” 19 December 2005, http://www.bloomberg.com/apps/news?pid=10000081&sid=azdFhsoay90o&refer=au stralia. 103 DPA, “Taiwan Allows ANZ to Acquire Royal Bank of Scotland’s Business,” Intellasia 12 March 2010, http://www.intellasia.net/news/articles/taiwan/111289093.shtml. 104 Liou, “Australia’s Economic Relations with China and Taiwan in the 2000s,” p. 123.



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two countries complement each other. Without paying any price, Australia profits from the substantial development of its relations with Taiwan. These relations, however, ultimately harm the interests of mainland China by depriving China of some strength in modifying and guiding China-Australia relations. Also, Australia-Taiwan “un-official” relations cover up the Taiwan authority’s real attempt [to expand international connections].105

As discussed in the previous chapter, the Chinese government’s approval of the Ma Ying-jeou government has significantly lessened this anxiety about Australia-Taiwan relations. However, China is increasingly concerned about US-Australia relations, and this attitude will presumably change rapidly if Chinese policymakers perceive a shift in Taiwan away from eventual unification.

105 Gan Zhenjun (甘振军), “Lengzhanhou Yataidiqu Diyuanzhengzhi Geju de Yanbian jiqi dui ZhongAo Guanxi de Yingxiang 冷战后亚太地区地缘政治格局的演变及其对 中澳关系的影响 [The Geopolitical Evolution of the Asia-Pacific Region after the Cold War and its Impact on Sino-Australian Relations].” Translation by Zaijun Yuan and the author.

CHAPTER EIGHT

South Pacific friction Australia and Taiwan have pursued different and often incompatible goals in the South Pacific. Australia has sought to leverage development aid to push the small and impoverished South Pacific states towards reform. In contrast, Taiwan has provided significant funds to these polities in return for diplomatic recognition, providing them with a cushion against Australian pressure. Both countries have strong national interests in the South Pacific, and until Taiwan’s recent tacit diplomatic truce with China, there were few options for reducing this conflict of interests. Australia’s broader efforts to win favor from China made this friction even more acute, though this also appears to be changing. Australia and Taiwan on a Collision Course The US naval intervention in the Taiwan Strait following the start of the Korean War in 1950 denied the Chinese Communists a complete victory over Chiang Kai-shek and the Chinese Nationalist government. As discussed in Chapter 2, with the support of the US, this Republic of China (ROC) government on Taiwan would then continue to contend with Beijing for international recognition as the sole government of China. Taipei’s position in this competition deteriorated to the point that it lost sufficient support for its claim to the China seat in the United Nations (UN) and walked out in 1971. Australia then withdrew diplomatic recognition form the ROC the following year. However, new opportunities for diplomatic competition between Beijing and Taipei for the right to represent “China” emerged as the Pacific Islands transitioned to independence from the late 1960s to early 1980s.1 The permanent seat and the right of veto allocated to “China” in the United Nations Security Council was a decisive factor in this incipient competition. When Taipei occupied the China seat it assisted Nauruan

1 Thomas V. Biddick, “Diplomatic Rivalry in the South Pacific: The PRC and Taiwan,” Asian Survey, 29 (8) (1989), pp. 803, 811.

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leader Hammer DeRoburt’s negotiations within the UN on the termination of the trusteeship agreement ahead of Nauru’s independence in 1968. Nauru then apparently established relations with Taipei in 1980 out of appreciation. However, as most Pacific Islands countries became independent after the People’s Republic of China (PRC) took over the China seat, Beijing gained most from this UN leverage. For example, Australian government documents suggest Beijing’s influence in the UN assisted it in establishing exclusive diplomatic relations with Papua New Guinea (PNG).2 China was reportedly also able to use its support for Vanuatu’s independence to influence that country’s decision to recognize Beijing.3 The PRC and ROC further swayed the South Pacific governments with aid and other inducements. In a top secret 1975 foreign ministry cablegram, an ROC official suggested there was a fair possibility of establishing relations with PNG following its independence, provided there were inducements and “vanguard plan” agricultural technical teams were sent to cultivate sentiments.4 Although Taipei was unsuccessful with PNG, Taiwan’s economic success relative to China through the 1970s and 1980s assisted in this purchasing of diplomatic recognition, to some extent counteracting China’s greater international weight.5 For example, the ROC was able to secure the diplomatic recognition of Solomon Islands on the basis of inducements.6 By 1988, the ROC had the recognition of four Pacific Island states (or “allies”)—Tonga, Solomon Islands, Nauru and Tuvalu—and the PRC the recognition of five—PNG, Samoa, Fiji, Kiribati and Vanuatu. The Pacific Islands countries were active co-creators of this PRC–ROC rivalry. The political conflict between Beijing and Taipei enabled the Pacific Islands states to leverage their new sovereignty into aid and other benefits, and at least some South Pacific countries courted both sides. For instance, PNG officials attempted to cultivate relations with both China and Taiwan ahead of independence.7

2 NAA, A1838:1500/2/62/4 PART 1, Port Moresby 1/7/1974. 3 Nicholas Zamiska and Jason Dean, “Treasure Islands: China and Taiwan Spar over Friends in Small Places,” Wall Street Journal, 9 May 2006, http://www.news.vu/en/news/ InternationalMediaCoverage/060509-China-and-Taiwan-Spar-Over-Vanuatu.shtml. 4 This early ROC-PNG interaction is also discussed on p. 46. MOFA archive, 012: 0001 File 230-14, Shen 1/1/1975 0014012. 5 Randall E. Newnham, “Embassies for Sale: The Purchase of Diplomatic Recognition by West Germany, Taiwan and South Korea,” International Politics, 37 (2000), p. 273. 6 Biddick, “Diplomatic Rivalry in the South Pacific: The PRC and Taiwan,” p. 807. 7 NAA, A1838:1500/2/62/4 PART 1, Port Moresby 1/7/1974.



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The basis of China–Taiwan competition in the South Pacific changed with Taiwan’s democratization. The authoritarian regimes of Chiang Kai-shek and his son, Chiang Ching-kuo, were essentially colonial governments, with mainland Chinese suppressing the political voice of the majority Taiwanese.8 During Lee Teng-hui’s presidency, Taipei increasingly began to act as a government of Taiwan and not China, dropping its version of the Hallstein doctrine, the condition that Taiwan would only recognize a country if it cut relations with China.9 This “New Taiwan” continued to seek diplomatic recognition from the Pacific Islands, but as a state separate from that controlled by the government in Beijing. It would also become interested in acquiring increments of recognition, such as permission for presidential flight stopovers. However, as Beijing continues to insist that other countries adhere to a “one China policy” and not recognize Taiwan’s statehood, China–Taiwan diplomatic competition has maintained much of its pre-1988 form despite this fundamental change. Initially, Australia was not particularly alarmed by the arrival of ChinaTaiwan diplomatic competition its South Pacific backyard. Australia had increased its involvement in the South Pacific since the mid-1970s in part to counter the Soviet Union.10 According to an interview conducted by the author, when Prime Minister Mamaloni of Solomon Islands turned to Russia for assistance during this period, Australia “poured in millions” of additional aid dollars. In the late 1970s Australia pushed hard to keep the United States involved in the South Pacific, but was told that Australia had the “main responsibility” for the Pacific Islands.11 As external powers further lost interest in the region after the Cold War, the expectations of the South Pacific countries on Australia increased.12 As such, Australia supported what Albinski described as “the PRC-Taiwan ‘creative tension’ basis of benefits accruing to the region.”13  8  J. Bruce Jacobs, “Taiwan’s Colonial History and Postcolonial Nationalism,” in Chow, (ed.) The “One China” Dilemma, New York: Palgrave Macmillan (2008).  9  Chiao Chiao Hsieh, “Pragmatic Diplomacy: Foreign Policy and External Relations,” in Ferdinand, (ed.) Take-off for Taiwan?, London: Pinter (1996), p. 80. 10 Gregory E. Fry, “Regionalism and International Politics of the South Pacific,” Pacific Affairs, 54 (3) (1981), p. 460. 11  Geraldine Coutts, “Australia Secret Cabinet Papers Revealed,” Australian Broadcasting Corporation, 2 January 2009, http://www.radioaustralia.net.au/programguide/stories/ 200901/s2457984.htm. 12 Ken Ross, Regional Security in the South Pacific: The Quarter-Century 1970–95, Canberra: Australian National University (1993), p. 172. 13 Albinski, “Taiwan and Hong Kong in Australian External Policy Perspective,” p. 37.

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Australia’s main concern was how China and Taiwan would affect “the framework of South Pacific regionalism based on consensus.”14 According to Albinski, “Australian Prime Minister Bob Hawke was not well disposed towards Taiwan’s presence at the South Pacific Forum’s Dialogue Partners’ meetings.”15 Hawke reportedly persuaded the South Pacific Forum to postpone Taiwan’s application for observer status in 1990.16 However, Australia-Taiwan relations were rapidly improving during this period, and the views of Australia towards Taiwan’s participation in the South Pacific Forum subsequently mellowed. In 1992, the forum agreed to accept Taiwan as a dialogue partner. In the face of Chinese protests, Taiwan attended the forum in 1993 held in Nauru, a country recognizing Taiwan. China was even more concerned about the prospect of Taiwan’s attendance at the South Pacific Forum meeting in Brisbane in 1994. Beijing wanted Taiwan’s attendance to be restricted to South Pacific Forum meetings held in countries recognizing Taipei. Australian Prime Minister Paul Keating resisted this, instead finding a compromise where a South Pacific Forum dialogue with Taiwan was hosted at a separate venue on the nearby Queensland Gold Coast.17 Australia’s attitude towards the involvement of Taiwan and China in the South Pacific would begin to harden as this involvement escalated—and as Australia became increasingly focused on reforming the Pacific Islands. In 1994, Australia’s Minister for Pacific Island Affairs Gordon Bilney raised the issue of the “pacific paradox”: Over the past decade, most Pacific island countries have achieved only slow growth in per-capita incomes despite favorable natural and human resources, high levels of foreign aid and generally sound management . . . Problems can be tackled properly only if leaders and peoples of the island states commit themselves to the effort. Aid donors can help, but only if their programs support, and do not undermine, those of the island countries.18

Bilney argued that foreign aid must be accompanied by an increased focus on private sector involvement and business development in the region.

14 Biddick, “Diplomatic Rivalry in the South Pacific: The PRC and Taiwan,” p. 801. 15 The South Pacific Forum was renamed the Pacific Islands Forum (PIF) in October 2000. 16 Klintworth, Australia’s Taiwan Policy 1942–1992, p. 67. 17 Albinski, “Taiwan and Hong Kong in Australian External Policy Perspective,” p. 37. 18 Gordon Bilney, “The Pacific Island States, Rich in Resources, Need to Do Better,” International Herald Tribune, 1 August 1994, www.iht.com/articles/1994/08/01/edsouth .php.



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As long as China remained opposed to Taiwan’s independence, Australia’s new emphasis on conditioning aid on improvements in governance was incompatible with Taiwan’s efforts to buy diplomatic recognition. Both countries also had significant national interests at stake. This intensity and growing disparity in the interests of Taiwan and Australia sparked a public clash between the two countries over Papua New Guinea. In 1995, it was revealed that PNG Deputy Prime Minister Chris Haiveta had “sought to establish economic ties with Taiwan in exchange for a long-term loan.”19 According to Albinski, “Australia had no quarrel with such a loan per se. It was apprehensive that the loan could compromise funding from the World Bank and the International Monetary Fund, assistance from which was contingent on rigorous PNG economic reform and for which Canberra had itself pledged support.” Annoyed by the interference of Australia, PNG Prime Minister Julius Chan said he was tired of being treated like a child, “We are thinking people, not fools. We are just like any other borrowers. We are not prisoners of the World Bank.”20 However, following “the PRC’s vigorous protest, Prime Minister Chan affirmed PNG’s ‘one China’ policy,”21 and the issue was dropped. Howard and Lee Teng-hui Governments Clash over Papua New Guinea The incoming Howard-led Coalition government picked up the previous government’s emphasis on reforming the South Pacific through reengineering Australia’s aid program. New Minister for Foreign Affairs Alexander Downer stated in a July 1996 speech: Australia has stressed the link between the aid program and PNG’s reform process—both the structural adjustment program and provincial government reform—and how those reforms could be sustained and strengthened in the future. These reforms are an ongoing process and Australia’s aid program has a significant role in this area . . . The connection between aid and good policy is relevant not only for PNG but for all [Pacific] Forum Island Countries. There is now a consensus internationally that aid can only achieve its full potential when it is provided in the context of good national

19 Ronald Hideo Hayashida, “Papua New Guinea in 1995: Restructuring and Retrench­ ment,” Asian Survey, 36 (2) (1996), p. 156. 20 Albinski, “Taiwan and Hong Kong in Australian External Policy Perspective,” p. 38. 21  Hayashida, “Papua New Guinea in 1995: Restructuring and Retrenchment,” p. 156.

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As Taiwan’s agreement with PNG in 1995 had demonstrated, support for South Pacific countries from China and Taiwan was not determined by a “commitment to responsible policies and self reliance,” but by what South Pacific governments wanted and what Taiwan and China were prepared to spend in their diplomatic competition. Moreover, even though, as pointed out by Downer in his speech, “Aid flows from outside the region are diminishing,” aid from China and Taiwan continued to increase in line with their growing economies. This increasing involvement of Taiwan in the South Pacific was likely a key factor in the Australian government’s decision to abandon its practice of refusing to communicate with Taiwan officials in South Pacific countries as part of Australia’s “one China” policy in the late 1990s. Relations between PNG and the Australian government soon deteriorated, with Canberra strongly criticizing the PNG government’s hiring of international mercenaries and use of Australian supplied military equipment to fight Bougainville rebels.23 PNG Prime Minister Chan responded to Australian criticism, condemning “the remnants of Australian colonialists” and calling for “diversifying relations with friendly countries.”24 The inability of Australia to influence PNG, despite the US$250 million in annual aid (one-fifth of Australia’s total aid budget), prompted a government review of Australia’s PNG policy. Predictably, this review concluded that Australia could not afford to abandon PNG. In August 1997, an independent report commissioned by the PNG government also recommended it review ties with Australia. However, with a new prime minister, Bill Skate, in office, by early April 1998 both sides announced that the relationship was back on track.25

22 Alexander Downer, “Australia’s Renewed Commitment to the South Pacific: Address by the Hon. Alexander Downer, MP, Minister for Foreign Affairs, to the Centre for South Pacific Studies, University of New South Wales,” Department of Foreign Affairs & Trade (Australia), 18 July 1996, http://www.dfat.gov.au/media/speeches/foreign/1996/pacifics .html. 23 Katherine S. Kerr, “Papua New Guinea in 1997 and 1998: Troubles in Paradise,” Asian Survey, 39 (1) (1999), p. 62. 24 Ronald Hideo Hayashida, “Papua New Guinea in 1996: Problems in the Homestretch,” Asian Survey, 37 (2) (1997), p. 203. 25 Kerr, “Papua New Guinea in 1997 and 1998: Troubles in Paradise,” p. 62.



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In mid-December 1998, Skate travelled to China and obtained a pledge for a further US$4 million in Chinese aid over the next year.26 That month Skate also successfully engineered a recess of parliament until mid-July 1999, precluding a vote of no confidence. Skate then spent the “succeeding months crafting deals and searching for sources of fast cash to maintain his parliamentary numbers.” When a commercial loan and plans for a large bond issue failed to materialize, “a now desperate Skate” offered Taiwan “diplomatic recognition in exchange for a deal reportedly worth US$2.3 billion.”27 According to one report, PNG Deputy Prime Minister Iairo Lasaro told the media that Taiwan had promised PNG A$3.8 billion in soft loans. However, the same report quoted “diplomatic sources” as stating that “such a large amount was highly unlikely unless it was spread over many years.”28 Another report valued the deal at US$2.35 billion, of which US$1.5 billion was grant assistance to be paid over five years.29 These billion dollar figures are ludicrously out of proportion to other deals made by Taiwan, and it is possible that Skate’s government grossly inflated the figure to boost parliamentary support for the deal. Skate’s agreement with Taiwan “drew a sharp protest from Beijing and opprobrium from Canberra.”30 According to The Australian’s Paul Kelly, Australia used its intelligence sources to confirm the deal to China. This confirmation “came after China approached Australia to confirm its own intelligence sources in Taiwan.” The Australian government then helped to ensure the PNG-Taiwan deal became a major news story.31 Australia also requested PNG drop the deal with Taiwan, arguing that the move added “unwelcome tension” to the region, and would have “negative economic implications” for PNG. Foreign Minister Alexander Downer also stated Australia’s concern that the soft loan from Taiwan would postpone necessary economic reforms, and involve the South Pacific Forum in the China-Taiwan issue.32

26 Ibid., p. 63. 27 Katherine S. Kerr, “Papua New Guinea in 1999: Stepping Back from the Brink,” Asian Survey, 40 (1) (2000), p. 62. 28 David Lague and Peter Cole-Adams, “Ties With Taipei Infuriate Beijing,” Sydney Morning Herald, 7 July 1999, p. 11. 29 Geoffrey Barker, “PNG’s Skate Quits in Bid to Rescue Government,” Australian Financial Review, 8 July 1999, p. 1. 30 Kerr, “Papua New Guinea in 1999: Stepping Back from the Brink,” p. 62. 31  Paul Kelly, “Canberra’s Spies Put Skids Under PM,” The Australian, 8 July 1999, p. 1. 32 Lague and Cole-Adams, “Ties With Taipei Infuriate Beijing.”

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Again demonstrating the Taiwan government’s assessment of Australia as country that should be influenced through economic interest, Taiwan’s United Evening News reported that in response to Australia’s interference in the deal, the “Foreign Ministry is drafting trade sanction measures, under which Taiwan may switch its iron ore sourcing from Australia to PNG.” A Foreign Ministry spokesperson delivered a more muted threat, saying that while, “he was not clear about a report that Australia had pressured PNG, and further checks were needed before commenting . . . PNG is very rich in natural resources” and “stepping up purchases from allies is one of the directions that could be considered.”33 This was a transparent bluff, and Taiwan took no action to disrupt its trade relations with Australia. The Australian government was seeking to improve its relationship with China during this period, often at the expense of Taiwan. Paul Kelly concluded from Australia’s intelligence cooperation with China that the “priority Australia accords the Beijing relationship should never be underestimated.”34 This Australian urge to cooperate with China even at the expense of Taiwan would continue to grow as Sino-Australian intergovernmental ties became increasingly friendly over the next decade. However, the Australian government also had other, more pressing, interests in torpedoing PNG’s deal with Taiwan. Australia was concerned that it would damage PNG’s export markets in China and “put off . . . reengagement with the IMF and the World Bank.”35 The Australian government believed both of which would significantly set back Australia’s economic reform agenda for PNG and increase Australia’s aid burden. It was no coincidence that the PNG government was in a reform dispute with Australia when it turned to Taiwan for financial assistance. This dynamic would become something of a leitmotif in Australia-Taiwan relations in the South Pacific, with similarities to the dispute between Australia and Taiwan over Vanuatu in 2004 (see below). After Prime Minister Skate resigned, he was replaced by Morauta, who “immediately made clear that putting PNG’s economic house in order was the new government’s highest priority.”36 He moved quickly to restart discussions with the World Bank and the IMF, and scrapped Skate’s deal with Taiwan. China eventually 33 Dennis Engbarth, “Taiwan Warns Australia: Report,” The Australian, 9 July 1999, p. 8. 34 Kelly, “Canberra’s Spies Put Skids Under PM.” 35 Mary-Louise O’Callaghan, “China Targets Downer on PNG,” The Australian, 7 July 1999, p. 1. 36 Kerr, “Papua New Guinea in 1999: Stepping Back from the Brink,” p. 63.



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rewarded him with a US$5 million cash grant and US$5 million in technical assistance. Australia was also satisfied with the new government’s stance and provided US$80 million in bridge financing.37 Australia’s Intervention in Solomon Islands Australia intervened militarily in East Timor on 20 September 1999. In an interview with The Bulletin, Prime Minister Howard explained how this intervention represented a new policy approach for Australia. Howard believed Australia had “a particular responsibility to do things above and beyond in this part of the world,” and that Australia was prepared to take on a role as the US’ “deputy” in the region. Howard reportedly said “that new role would mean increasing defense spending and make upgrading the military a priority that could stand in the way of other, less urgent needs.”38 The article labeled this new stance the “Howard Doctrine.” Facing a backlash from Asian leaders, Howard later clarified that Australia would seek to “act in concert with friendly nations within our region to achieve mutually shared objectives.”39 Despite this rhetoric, Australia was extremely reluctant to intervene militarily in the low-intensity civil warfare that had been developing since 1998 in Solomon Islands. The requests of successive Solomon Island prime ministers for Australian intervention had been consistently denied,40 apparently because Australia was unwilling to shoulder the burden alone. In 2002, Australia lobbied together with the Solomons for United Nations peacekeepers, though these efforts stalled on China’s backroom insistence that Solomon Islands first switch diplomatic recognition from Taiwan to the PRC. In January 2003, Foreign Minister Alexander Downer declared, “sending in Australian troops to occupy Solomon Islands would be folly in the extreme.” He argued that an Australian intervention would be resented by the region, difficult to justify to Australian taxpayers, open ended, would not succeed, and at best only delay the inevitable, “which

37 Ibid., p. 64. 38 All quotes from Scoop, “Australia to Become America’s Peacekeeping Deputy,” Scoop. co.nz, 23 September 1999, http://www.scoop.co.nz/stories/HL9909/S00191.htm. 39 ABC, “Australia as Regional Police Doctrine Puts Howard in Damage Control,” 27 September 1999, http://www.abc.net.au/7.30/stories/s55116.htm. 40 Jon Fraenkel, The Manipulation of Custom: From Uprising to Intervention in the Solomon Islands, Canberra: Pandanus Books (2004), p. 153.

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is that Solomon Islanders themselves have to come to grips with the challenges they face.”41 However, according to Fraenkel by early June 2003, and within the space of a few weeks, an “extraordinary shift had taken place in Australia’s Pacific policy.” The factors in this shift had little to do with the South Pacific. Fraenkel credits part of the shift to post-9/11 security concerns, the 12 October 2002 Bali Bombing, the strengthening of the US-Australia alliance during the Iraq War, and the casting by the Australian Strategic Policy Institute and others of the Solomons as a “failed state” and “Petri dish” threatening Australia. According to Fraenkel, the decisive event was Prime Minister Howard’s May 2003 meeting with US President George W. Bush, which apparently refocused his security priorities on Australia’s “backyard.”42 In an alternative analysis, Clive Moore posits Foreign Minister Downer as the key protagonist.43 With any misgivings pushed aside, and after receiving a legal basis in a treaty between participating countries and Solomon Islands and an act in the Solomon Islands parliament,44 in July 2003 an Australian-led force of 2,225 soldiers from six regional nations entered the country unopposed.45 Anxious to avoid charges of neo-colonialism, this Regional Assistance Mission to Solomon Islands (RAMSI) was ostensibly a Pacific Island Forum (PIF) member country initiative, sanctioned under the Forum’s 2000 “Biketawa declaration,” which authorized intervention upon invitation by the government concerned.46 However, it was (and still is) principally financed, staffed and controlled by Australia. The RAMSI intervention represented a significant increase in Australia’s already large investment of resources and prestige in the South Pacific. Australia became motivated to ensure the success of the mission in Solomon Islands and also prevent another costly intervention in the South Pacific in the future. This intensified the existent focus of Australia 41  Ibid., p. 160. 42 Ibid., pp. 161–163. 43 Clive Moore, Happy Isles in Crisis: the Historical Causes for a Failed State in Solomon Islands, 1998–2004, Canberra: Asia Pacific Press (2004), p. 201. 44 James Batley and Paul Ash, “RAMSI and How it Works,” Solomon Star, 9 June 2006, http://www.solomonstarnews.com/?q=node/8799. 45 Reuters, “FACTBOX-Solomon Islands, a Troubled Tropical Paradise,” Reuters, 18 September 2006, http://www.alertnet.org/thenews/newsdesk/SP205085.htm. 46 Jon Fraenkel, “Pacific Democracy: Dilemmas of Intervention,” Open Democracy, 28 November 2006, http://www.opendemocracy.net/globalization-institutions_government/ pacific_democracy_4135.jsp.



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on reforming South Pacific politics. Australia sought to bring about this change in South Pacific governance through further conditioning aid on reform. RAMSI also made Australia more fixated on China-Taiwan competition and Taiwan in particular. Taiwan had been a significant factor in the deteriorating situation in Solomon Islands. As the crisis developed and international donors began withholding aid due to serious governmental irregularities, the Solomon Islands’ leadership had turned to Taiwan to meet the spiraling compensation demands of the conflicting parties. The Chen Shui-bian government, elected in March 2000, aimed to improve Taiwan’s tarnished donor image, but was unable to resist being pulled deeper into the crisis. In June 2001, Taiwan’s state-run EXIM Bank agreed to a US$25 million loan after the Solomon Islands government threatened to switch diplomatic recognition to China. The package was used to finance hundreds of payouts routed through Allan Kemakeza’s Ministry of National Unity, Reconciliation and Peace. Kemakeza himself was at the top of the list, and was later sacked for embezzlement over the issue. Parliament nonetheless elected Kemakeza prime minister following the 5 December 2001 elections. The final tranche of the EXIM loan arrived in September 2002, and as the money ran out the crisis reached its nadir, with Cabinet and Finance Ministry offices invaded by armed men, including police, demanding money.47 A report released in August 2003 by the Australian Senate Foreign Affairs, Defense and Trade Committee reflected Australia’s growing concern about the involvement of China and Taiwan in the region following the RAMSI intervention. It acknowledged “the emergence of donors such as China and Taiwan in the region . . . [and considered] that Australia should be concerned about these developments, both in terms of the use of development assistance as a ‘blunt foreign policy tool,’ as well as for Australia’s position and influence in the region.”48

47 Fraenkel, The Manipulation of Custom: From Uprising to Intervention in the Solomon Islands, pp. 124–159. 48 Senate, A Pacific Engaged: Australia’s Relations with Papua New Guinea and the Island States of the Southwest Pacific, Canberra: Senate Foreign Affairs, Defence and Trade Committee (2003), p. 132.

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Australia immediately had cause to express its increased concern with China-Taiwan competition following the July 2003 election in Kiribati, in which China and Taiwan were accused of funding rival candidates.49 According to an interview conducted by the author, the Australian high commissioner urged the winner, Anote Tong, not to recognize Taiwan. Kiribati and Taiwan nevertheless established diplomatic relations in November 2003. The Chinese embassy desperately sought to overturn this result, going as far as engineering a protest of several hundred Kiribati citizens outside the parliament building. Finally, China conceded defeat and broke of diplomatic relations. In addition to being one more country that did not recognize Taiwan, Kiribati had been particularly important to China after it set up a satellite tracking station on the Kiribati island of Tarawa in 1997. The Chinese reportedly used this facility to spy on the US military base on Kwajalein in the neighboring Marshall Islands, the “linchpin” in the US national missile defense system tests. Following Anote Tong’s recognition of Taiwan, US diplomatic representation for Kiribati was moved from the Marshall Islands to the larger office in Suva, reportedly constituting “an upgrading of relations between Kiribati and the US.”50 If this shift in the location of the US’ Kiribati representation was a reward for Kiribati’s switch in recognition to Taiwan, and if Australia’s high commissioner did urge President Tong not to recognize Taiwan, then Australia and the US were backroom players working at cross-purposes. However, the evidence is far from compelling, and the United States has not been particularly helpful to Taiwan in the South Pacific in other instances. For example, in February 2001 the US vetoed a visit from Taiwanese warships to the Marshall Islands under the Compact of Free Association as the visit conflicted with its own “one China” policy.51 Taiwan’s attempt to establish diplomatic relations with Vanuatu in late 2004, a country where Australia is the major aid donor, led to a much more significant dispute between Australia and Taiwan. Australia was

49 See Joel Atkinson, “China-Taiwan Diplomatic Competition and the Pacific Islands,” The Pacific Review, 23 (4) (2010), pp. 415–416. 50 David Fickling, “Diplomacy for Sale,” The Guardian, 1 December 2003, http://www .guardian.co.uk/taiwan/Story/0,,1097301,00.html. 51  John Henderson, “China, Taiwan and the Changing Strategic Significance of Oceania,” Revue Juridique Polynesienne, 1(2001), p. 152.



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attempting to implement an ambitious program of reform in Vanuatu at the time, and was in open conflict with Vanuatu Prime Minister Serge Vohor. China enjoyed well established and broad based support within Vanuatu’s politics, and likely assessed that there was no need to significantly raise its funding. This created the opportunity for Taiwan to make an ephemeral deal with a prime minister who did not have the support of his cabinet, let alone parliament. The efforts of Australia and China saw him ousted in a parliamentary vote of no confidence and his agreement with Taiwan was scrapped.52 Taiwan’s “Shift in Diplomacy” After re-election in 2004, Chen Shui-bian “pledged to boost [Taiwan’s] international profile before embarking for the Pacific nations of Palau and the Solomon Islands.”53 This was the first time a Taiwan president had visited either country. In Solomon Islands, Chen again denied that Taiwan practiced “checkbook diplomacy,”54 and declared the start of a new era in the development of ties between the two countries, with “a relationship based on the principles of equality, reciprocity, mutual respect, freedom and peace.”55 A Taiwan News editorial hailed this “shift in diplomacy” as moving away from the money diplomacy “of the Kuomintang era” to a new diplomacy based on a “commitment to human rights and democratic values.” According to the editorial, Taiwan now “put emphasis on helping our allies improve their people’s living standards and quality, bolster basic infrastructure, reform governance and introduce or deepen democratic institutionalization.”56 Taiwan under Chen Shui-bian did place increased emphasis on oversight, and improvements were made where recipient governments and

52 See Joel Atkinson, “Vanuatu in Australia-China-Taiwan Relations,” Australian Journal of International Affairs, 61 (3) (2007). 53 AFP, “Taiwan President Leaves for South Pacific Tour After Row with China,” Channel News Asia, 27 January 2005, http://www.channelnewsasia.com/stories/afp_asiapacific/ view/129411/1/.html. 54 Craig Skehan, “Questions of Corruption in the Search for Pacific Allies,” Sydney Morning Herald, 7 February 2005, http://www.smh.com.au/news/World/Questions-ofcorruption-in-the-search-for-Pacific-allies/2005/02/06/1107625061638.html. 55 Central News Agency, “President Links Peace to Democracy,” 1 January 2005, http:// www.cna.com.tw/eng/. 56 Taiwan News, “Pacific Trip Marks a Shift in Diplomacy,” 7 February 2005, etaiwannews.com/Editorial/2005/02/07/1107744128.htm.

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Taiwan could agree. However, the dynamics of competitive diplomacy hampered Taiwan’s attempts to reform its aid program, as ultimately if Taiwan did not give South Pacific polities what they wanted then they would turn to China. President Chen would later admit that his administration had in fact reluctantly continued his predecessors’ “practices of foreign affairs” due to “China’s relentless suppression.”57 One response to Taiwan’s predicament of being caught between Australian censure and Chinese suppression would have been to “sweeten” an increased focus on transparency and development in Taiwan’s aid programs with an increase in the overall amount of aid given to each ally. However, there was opposition within Taiwan to providing aid to countries in the South Pacific (and other developing countries)—not due to a perception of its harmful effects—but because these governments were seen as greedy and exploitative of Taiwan. This same rationale sustained the opposition pan-blue legislature’s criticism of President Chen’s aid plans in September 2005,58 and made a funding increase impossible. Needless to say, this kind of domestic pressure is not an inhibiting factor for China’s authoritarian leadership. As a result, Taiwan’s aid programs made only modest progress towards adopting Western overseas development aid (ODA) norms. The real significance of Taiwan’s “shift in diplomacy” was that President Chen would visit each South Pacific “ally” personally, something Chinese leader Hu Jintao found impossible to do for both practical and symbolic reasons. This marked an interesting shift in dynamic from when Deng Xiaoping instructed his foreign ministry in 1990 to out-compete Taiwan in the third world—not by engaging in dollar diplomacy that China could not afford—but by treating them as equals and showing respect.59 As China now had the deeper pockets, it became increasingly important for the Chen Administration to take advantage of its greater capacity than Beijing to treat small developing countries as equals.

57 Shu-ling Ko, “Chen Apologizes for PNG Diplomatic Fund Scandal,” Taipei Times, 7 May 2008, https://www.taipeitimes.com/News/front/archives/2008/05/07/2003411285. 58 Shu-ling Ko, “Pan-Blues See Red Over Foreign-Aid Plan, Demand Report,” Taipei Times, 25 September 2005, http://www.taipeitimes.com/News/taiwan/archives/ 2005/09/25/2003273113. 59 Gu, Conflicts of Divided Nations: the Cases of China and Korea, p. 127.



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Nauru Switches Back to Taiwan Nauru had broken relations with Taiwan and recognized China in 2002. Following several years of political churning, Nauru and Taiwan reestablished relations on 14 May 2005. Australia is Nauru largest aid donor, and since 2001 had maintained an “offshore processing centre” on Nauru to hold asylum seekers that had tried to reach Australia by boat.60 The involvement of Nauru in this “Pacific Solution” had seen a significant upgrading in Australia’s diplomatic presence and aid commitment to Nauru. According to an interview conducted by the author, Taiwan explained to Australia “that it was not trying to grab Nauru back” and that it was Nauru that had approached Taiwan. Nevertheless, Prime Minister Ludwig Scotty would later complain to US officials that Australia had “pushed for Nauru to align with the PRC,” which his government resisted.61 On May 17 Australian Foreign Minister Downer commented: “unseemly competition within the South Pacific between China and Taiwan over recognition . . . obviously doesn’t contribute to the stability of the region, so we’d rather not see that,” and cited the example of Nauru.62 After holding talks in Canberra, the “top United States diplomat for the South Pacific,” Assistant Secretary of State for East Asia Christopher Hill, presumably at Australia’s prompting, “called for greater encouragement of good governance in the region.”63 However, overall, Australia’s response was low-key, suggesting that the interests of Australia and Taiwan aligned in Prime Minister Scotty. Scotty had a greater commitment to “good governance” than former Prime Minister Harris, and according to DFAT with “the help of the

60 Michael Gordon, “Blighted Isle,” The Age, 19 April 2005, http://www.theage.com .au/news/World/Blighted-isle/2005/04/18/1113676704562.html?oneclick=true; Cath Hart, “Nauru Centre Closure to Hit Economy,” The Australian, 9 January 2008, http://www .theaustralian.news.com.au/story/0,25197,23025955-2703,00.html. 61  WikiLeaks, “Taiwan and China Relations in the Pacific—Update re Tuvalu, Kiribati, and Nauru,” Reference ID: 07SUVA402, Created: 9 August 2007, Origin: Embassy Suva, Classification: CONFIDENTIAL, http://wikileaks.org/cable/2007/08/07SUVA402.html. US officials also noted that “in a past visit to Tuvalu” they had “heard a similar account of Australian lobbying for the PRC.” 62 Alexander Downer, “Doorstop Interview at Sydney Airport,” Department of Foreign Affairs & Trade, 17 May 2005, http://www.foreignminister.gov.au/transcripts/2005/050517_ ds.html. 63 ABC, “US Official Says Good Governance Needed in the Pacific,” 18 May 2005, http:// www.abc.net.au/ra/news/stories/s1371707.htm.

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Australian Finance Team in Nauru . . . implemented key financial and governance reforms and did much to restore Nauru’s international financial reputation.”64 A South Pacific Partnership? In general, there was negligible Australia-Taiwan cooperation in the South Pacific. There were “in-country” discussions between Australia and Taiwan about their respective aid programs in order to avoid overlap. At least in Solomon Islands, this took place at regular donor meetings. Some Taiwan aid funds had also been channeled through trust accounts set up by Australia. According to an interview conducted by the author, ACIO head Frances Adamson began the practice of assisting South Pacific countries in making aid requests to Taiwan. However, Australia had repeatedly ignored Taiwan’s overtures for cooperation beyond these levels, anticipating a negative response from China. In an August 2005 interview with a senior Australian journalist, President Chen Shui-bian expressed his hope that the activeness of Australia and Taiwan in the South Pacific could facilitate the expansion of AustraliaTaiwan relations in two ways: Taiwan now has six diplomatic allies in the South Pacific, and it is my earnest hope in the future to have the opportunity to stop over in Brisbane or Sydney or other Australian cities [en route to the South Pacific] . . . the Australian Government has lent these island nations much support. Therefore I believe Australia and Taiwan can forge a partnership in lending these nations greater support in many projects . . . Taiwan and Australia are both maritime nations, both island nations. Taiwan is a small island and Australia is much bigger and a great power in this region.65

The Australian government has never allowed Taiwan’s president to visit Australia, and President Chen’s “South Pacific” rationale would have no impact on this policy. An aid partnership was also problematic not only because Australia feared China’s response, but also because the nature of their respective relationships with the Pacific Islands were poles apart.

64 DFAT, “Republic of Nauru Country Brief,” December 2007, http://www.dfat.gov.au/ geo/nauru/nauru_brief.html. 65 Sheridan, “Taiwan Makes Its Voice Heard.”



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Prime Minister Howard took Australia’s theme of strictly controlling aid packages to the UN summit of world leaders in September.66 The following month, the PIF adopted the “Pacific Plan,” “geared towards enhancing” economic growth, good governance, sustainable development and “security for the Pacific through regionalism.”67 Despite the unanimous endorsement of the plan, there was some resistance from the Pacific Islands. One specific issue of contention between Australia and some Pacific Island states at the forum was Australia’s refusal to accept unskilled, seasonal workers from the region,68 a stance which “perplexed” PNG prime minister and forum host, Michael Somare.69 Seeing an opportunity, Taiwan began working on a plan to accept workers from its diplomatic “allies” in the South Pacific as a further incentive to prevent the countries from recognizing China.70 As Taiwan was already taking 320,000 foreign workers from Southeast Asian countries, this issue did not present much of a hurdle for Taiwan in principle. However, there were significant practical difficulties and idea was never put into practice. Later that year, in an interview with the New Zealand Herald, Taiwan’s ambassador to Tuvalu, Tai Feng, expressed “a little criticism” of the New Zealand and Australian governments: [New Zealand] must respect any individual sovereign state to conduct their foreign affairs and diplomacy . . . Sometimes your country criticizes Taiwan for establishing diplomatic links with some countries in the region . . . We feel it is a little unfair, we feel uneasy, uncomfortable . . . New Zealand and Australia think the Pacific is their big garden but the world is a global village . . . There is no harm to New Zealand for us to keep diplomatic links.71 66 Steve Lewis and David Nason, “PM to Lecture World on Aid Waste,” The Australian, 12 September 2005, http://www.theaustralian.news.com.au/common/story_page/0,5744,16 570760%255E2702,00.html. 67 Pacific Islands Forum Secretariat, “Thirty-Sixth Pacific Islands Forum Communique,” Scoop Independent News, 27 October 2005, http://www.scoop.co.nz/stories/WO0510/ S00396.htm. 68 Cynthia Banham, “Seasonal Worker Entry Not On—PM,” Sydney Morning Herald, 27 October 2005, http://www.smh.com.au/news/world/seasonal-worker-entry-not-on— pm/2005/10/26/1130302840472.html. 69 AAP, “Pacific Set to Adopt 10-year Plan,” The Age, 20 October 2005, http://www .theage.com.au/news/National/Pacific-set-to-adopt-10year-plan/2005/10/20/1129775894040 .html. 70 Yun-ping Chang, “Pacific Allies to Shun Summit with China’s Premier,” Taipei Times, 24 March 2006, http://www.taipeitimes.com/News/taiwan/archives/2006/03/24/2003298917; DPA, “Government Plans to Import Workers From Pacific Allies,” Taipei Times, 10 August 2006, http://www.taipeitimes.com/News/taiwan/archives/2006/08/10/2003322578. 71  Angela Gregory, “Islands of Influence,” New Zealand Herald, 10 December 2005, http://www.nzherald.co.nz/section/print.cfm?c_id=2&objectid=10359277.

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Tai Feng also reportedly said, “New Zealand enjoyed trade with Taiwan and should respect its right to establish diplomatic links with other countries.” New Zealand’s Minister of Pacific Island Affairs Phil Goff responded: What we have said to the Taiwanese and the Chinese is that we think their ongoing rivalry and checkbook diplomacy in the Pacific, wanting diplomatic recognition from these countries, is unhelpful for their developmental needs and the Pacific as a whole . . . We don’t regard ourselves as in competition with other countries . . . we have no concern with China coming in and providing assistance, or for that matter Taiwan, but they should work within international standards for plainly transparent purposes.72

This view that aid in return for diplomatic recognition is harmful and the bias in favor of China over Taiwan implied by Goff ’s phrasing was consistent with that of the Australian government. The March 2006 Australian Senate Report In March 2006, a report from the Australian Senate Foreign Affairs, Defense and Trade References Committee into “China’s Emergence: Implications for Australia” was released. The report examined, inter alia, “Australia’s political relationship with China with particular reference to . . . China’s emerging influence across . . . the South Pacific . . . [and] Australian responses to China’s emergence as a regional power with particular reference to . . . China’s expanded activities across the South West Pacific.”73 The committee noted “Among some Pacific Island nations, competition between China and Taiwan for diplomatic recognition has, on occasion, appeared to take on the characteristics of a bidding war, conducted mainly through bilateral ‘aid’ payments.” As such, “The committee remains concerned at the effects that this rivalry is having on the countries in the Southwest Pacific.”74 The committee referenced a “suggestion” by DFAT “that both China and Taiwan use economic assistance as a lever

72 Pacific Magazine, “Goff Warns Pacific Nations On Chequebook Diplomacy,” 10 December 2005, http://www.pacificislands.cc/pina/pinadefault2.php?urlpinaid=18826. 73 Senate, China’s Emergence: Implications for Australia, Canberra: Senate Foreign Affairs, Defence and Trade References Committee (2006), p. v. 74 Ibid., p. xvii. Kendall notes “while some parliamentarians are critical of the way the two Chinas conduct their diplomacy in the Pacific, in the local version of cheque-book diplomacy, many parliamentarians enjoy the benefits of generously funded China trips.” From Kendall, Within China’s Orbit?: China Through the Eyes of the Australian Parliament, p. 135.



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in their competition for diplomatic recognition.”75 The report also quoted the views of Susan Windybank, Helen Hughes, Stuart Harris and James Cotton that China-Taiwan competition increases instability and promotes corruption in the South Pacific.76 DFAT expressed its concern about what China-Taiwan rivalry was doing to Australia’s reform efforts: Australia opposes such checkbook diplomacy, because it works against regional countries’ efforts to improve living standards, governance and political stability . . . Firstly, we are concerned about incidents of checkbook diplomacy in the South-West Pacific where, as you know, we have made a very considerable effort to try to address governance issues. We see checkbook diplomacy as directly undermining the efforts that we have made over many years—particularly the efforts that we have intensified in recent times.77

DFAT stated that its response to this issue was to engage in dialogue with China and Taiwan,78 omitting the instances where the Australian government had actively intervened. The committee recommended that Australia counter what it called “problems associated with this diplomatic competition, both for the Pacific Island nations involved and for Australia, which is seeking to improve governance in the region through conditional aid.”79 It suggested the prime minister attend as many PIF meetings as possible, and encouraging South Pacific countries, China, and Taiwan to follow OECD guidelines on development assistance.80 Taiwan’s MOFA responded to the report by stating, “Unlike China, whose diplomatic policy is to either obstruct other countries from establishing diplomatic relations with us or snatch our diplomatic allies, we make efforts to help the sustainable development of our diplomatic allies and create a win-win situation.”81 However, the association of Taiwan with South Pacific instability was underlined in the very month the Senate report was released. The Tuvaluan foreign minister’s false declaration in parliament that a Taiwan grant for private sector loans had been disbursed prompted Tuvalu’s first 75 Senate, China’s Emergence: Implications for Australia, p. 167. 76 Ibid., p. 173–174. 77 Ibid., p. 174. 78 Ibid., p. 178. 79 Ibid., p. 163. 80 Ibid., p. xvii–xviii. 81  Shu-ling Ko, “MOFA Defends South Pacific Ties,” Taipei Times, 5 April 2006, http:// www.taipeitimes.com/News/taiwan/archives/2006/04/05/2003301035.

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mass protest.82 Then following Tuvalu’s general election in late August 2006, Taiwan’s ambassador to Tuvalu, Tai Feng, was expelled for meddling in the process of forming the new government through offering bribes.83 Whatever Australia’s objections, the issue of China-Taiwan rivalry in the South Pacific clearly showed no signs of abating. In a submission to the Australian senate committee, DFAT stated that China has the most diplomats in the South Pacific of any country.84 Considering that China only has representation in 8 of the 14 South Pacific countries, and 6 embassies, this amounts to a significant pool of manpower prioritizing “competition from Taiwan for diplomatic recognition.”85 DFAT also stated, “China has greatly increased its aid to the Pacific in recent years, with one study suggesting that Chinese aid could total up to [A]$300 million annually.”86 Fergus Hanson valued total Chinese aid to the South Pacific in 2008 at around US$100 million.87 It is unclear how this compares with Taiwan’s aid to the region as there are no reliable figures for Taiwan’s aid expenditure. In 2006, MOFA stated that its “total foreign affairs budget is around NT$28 billion (US$853.65 million) a year—and less than half of that is used for international cooperation projects.”88 However, the funds directed through MOFA are just one portion of Taiwan’s total aid budget.89 In September 2005, President Chen Shui-bian pledged to offer NT$7.5 billion (US$250 million) per year in additional foreign aid to Taiwan’s “diplomatic allies” worldwide.90 Whatever the portion of these and any additional funds were being given to South Pacific countries, China clearly enjoyed the upper hand. Not only did China have more South Pacific 82 Samisoni Pareti, “PM Maatia Seeks Another Term: 32 Candidates Fight for 15 Parliamentary Seats,” Islands Business, August 2006, http://www.islandsbusiness.com/ islands_business/index_dynamic/containerNameToReplace=MiddleMiddle/focusModuleID=15881/overideSkinName=issueArticle-full.tpl. 83 Jewel Huang, “Taiwan Replaces Ambassador to Tuvalu,” Taipei Times, 8 October 2006, http://www.taipeitimes.com/News/front/archives/2006/10/08/2003330831; WikiLeaks, “Taiwan and China Relations in the Pacific—Update re Tuvalu, Kiribati, and Nauru.” 84 Senate, China’s Emergence: Implications for Australia, p. 163. 85 Ibid., p. 167. 86 Ibid., pp. 164–165. 87 Fergus Hanson, “China: Stumbling through the Pacific?,” in Brady, (ed.) Looking North, Looking South: China, Taiwan and South Pacific, Singapore: World Scientific (2010), p. 84. 88 Taipei Times, “Too Soon to Talk About Costs: MOFA,” 6 September 2006, http:// www.taipeitimes.com/News/taiwan/archives/2006/09/06/2003326396. 89 See Gerald Chan, “Taiwan as an Emerging Foreign Aid Donor: Developments, Problems, and Prospects,” Pacific Affairs, 70 (1) (1997), pp. 45–46. 90 Ko, “Pan-Blues See Red Over Foreign-Aid Plan, Demand Report.”



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“allies,” it was recognized by the two largest and most important countries, PNG and Fiji. Wen Jiabao Visits the South Pacific The situation became even more difficult for Taiwan when Chinese Premier Wen Jiabao travelled to the South Pacific for the first “ChinaPacific Island Countries Economic Development and Cooperation Forum Ministerial Conference” in April 2006.91 At the conference, China made several significant aid pledges to the countries recognizing it in the South Pacific.92 Wen described this package as “a ‘strategic decision’ by one developing nation on behalf of others ‘without any political strings attached.’ ”93 This statement was seemingly designed to separate China from (increasingly resented) Western donors, such as Australia. In addition to the main agreement, each participating country struck bilateral deals with China, worth over US$24 million in the case of Fiji.94 China also made important commercial deals, the biggest of which was the financing of a new mine in PNG.95 These initiatives were aimed at further expanding China’s increasingly substantial economic involvement in the region.96

91 Heda Bayron, “China Grants Economic Aid Package to Pacific Island Allies,” Voice of America, 5 April 2006, http://www.voanews.com/english/2006-04-05-voa7.cfm; Chang, “Pacific Allies to Shun Summit with China’s Premier.” 92 AFP, “China Tempts Pacific Nations With Aid Package,” Taiwan News, 6 April 2006, http://etaiwannews.com/showPage.php?setupFile=showcontent.xml&menu_item_id=MI1123666634&did=d_1144286407_8448_9C824E68C821BCED7053F4D2CA9B1C11C62105F1_2& area=taiwan&area_code=00000; AP, “China Pledges Millions to Pacific,” CNN, 4 April 2006, http://edition.cnn.com/2006/WORLD/asiapcf/04/04/china.pacific.ap/NADI; Samisoni Pareti, “Santa Wen’s $Billion Aid to the Pacific Pro-Taiwan States Urged to ‘Engage’ with China,” Islands Business, May 2006, http://www.islandsbusiness.com/islands_business/index_dynamic/containerNameToReplace=MiddleMiddle/focusModuleID=5733/ overideSkinName=issueArticle-full.tpl. 93 Zamiska and Dean, “Treasure Islands: China and Taiwan Spar over Friends in Small Places.” 94 Pareti, “Santa Wen’s $Billion Aid to the Pacific Pro-Taiwan States Urged to ‘Engage’ with China.” 95 AP, “China Pledges Millions to Pacific.” 96 AFP, “Chinese Premier Wen to Visit the Pacific Islands,” Taipei Times, 3 April 2006, http://www.taipeitimes.com/News/taiwan/archives/2006/04/03/2003300678.

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The most significant disagreement between Australia and Taiwan over the South Pacific to date occurred shortly after Wen’s visit. In the leadup to the elections April 2006 elections, a Solomon Islands politician accused Taiwan of funding candidates. Following a post-election riot targeting Honiara’s Chinese commercial district that made headlines around the world, the same politician claimed the riot was sparked by popular anger towards Taiwan. Neither of these accusations was supported with evidence, nor have they since been substantiated. Nevertheless, the Australian government and media publicly criticized Taiwan’s involvement in Solomon Islands, causing considerable damage to Taiwan’s international reputation. Australia’s unfair targeting of Taiwan was due to pre-existing Australia-Taiwan tension, and because Australian policymakers found Taiwan more palatable focus than acknowledging the significant problems with Australian policy in Solomon Islands. Australia’s rhetoric drew a negative reaction from Taiwan, which believed Canberra was seeking a scapegoat to deflect from its inability to anticipate or control the riot. The incident also contributed to the Taiwan government’s perception of Australia as increasingly pro-China.97 Australia would ask its US ally to “weigh in with Taiwan, and to a lesser extent China, on the need to avoid using assistance in ways that undercut good governance and sustainable development.” Australian officials told the US that “Downer’s focus was on Taiwan, rather than China for which the [Australian government] had less evidence of outright funding of politicians.”98 The Australian government’s willful ignorance on Chinese practices reflected Australia’s interest in closer ties with Beijing and related urge to marginalize Taiwan. AIT Director Young duly met with Taiwan Foreign Minister James Huang stressing “that Taiwan follow its democratic values in its relations with Fiji and Solomon Islands and stay in close contact with Australia.”99

97 See Joel Atkinson, “Big Trouble in Little Chinatown: Australia, Taiwan and the April 2006 Post-Election Riot in Solomon Islands,” Pacific Affairs, 82 (1) (2009). 98 WikiLeaks, “PM Assistant Secretary Hillen’s Consultations in Australia,” Reference ID: 06CANBERRA1804, Created: 9 November 2006, Origin: Embassy Canberra, Classification: SECRET//NOFORN, http://wikileaks.org/cable/2006/11/06CANBERRA1804.html. 99 WikiLeaks, “Taiwan Foreign Minister on Fiji and Solomon Islands,” Reference ID: 07TAIPEI174, Created: 24 January 2007, Origin: American Institute Taiwan, Taipei, Classification: CONFIDENTIAL, http://wikileaks.org/cable/2007/01/07TAIPEI174.html.



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Chinese scholars Zhang and Huang correctly noted, “many South Pacific countries closely follow Australia’s foreign policies . . . Australia is of great significance for China’s policies. To develop and maintain a friendly bilateral relationship with Australia may help to contain the power of Taiwan independence.”100 Australia’s response to the riot gave China—even as it was pledging a significant funding package for the South Pacific—an opportunity to cynically criticize Taiwan’s “dollar diplomacy.” China’s Ministry of Foreign Affairs spokesperson said at the time, Taiwan “has wantonly pushed forward the so-called dollar diplomacy internationally for a long time, which has fostered corruption in some of the countries, causing chaos and turbulence and harming the interests of the local people.” Equally as implausibly, Taiwan MOFA’s spokesperson responded, “Checkbook diplomacy is not our strategy.”101 Ma Ying-jeou Visits Australia Australia’s international profile, influence in the South Pacific and leverage with the US meant that its pressure was having an impact in Taipei. Yet as long as Taiwan’s government and voters continued to see official diplomatic relationships with the small countries in the South Pacific and elsewhere as vital to the national interest, Taiwan could not stop providing aid to its South Pacific allies if that meant they would break diplomatic relations and recognize China. However, China’s interest in cooperating with the KMT to defeat the DPP government raised the prospect of a deal with China that would take the option of breaking ties with Taiwan away from the Pacific Islands. In this context of warming China-KMT ties, prospective KMT presidential candidate, Ma Ying-jeou, visited Australia in May 2006, promising to solve Australia’s problem of China-Taiwan rivalry in the South Pacific by developing a “modus vivendi with the mainland on the international space.” Ma explained, “We don’t expect recognition: all they [China] have to do is not to challenge, not to deny the existence of us. Then the room, 100 Zhang Lu (张露) and Huang Ji (黄楫), “Zhongguo Zhoubian Zhanlue Zhong de Aodaliya: Dazhoubian Zhanlue Linian yu Waijiao Mouhua de Xintansuo 中国周边战 略中的澳大利亚—“大周边” 战略理念与外交谋划的新探索 [Australia in China’s Peripheral Strategy],” pp. 40–45. Translation by Zaijun Yuan and the author. 101 Zamiska and Dean, “Treasure Islands: China and Taiwan Spar over Friends in Small Places.”

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the space will be created.”102 Ma further elaborated in an Australian television interview: The problem, primarily, is attributable to very fierce competition on the diplomatic front between Taiwan and the Chinese mainland. They are competing for recognition, competing for diplomatic relations. Sometimes such a competition is unnecessary and unwise. So we should negotiate with the Chinese mainland on the issue of adequate space for Taiwan in the international community . . . some of these points were already being agreed upon last year when our former chairman, Lien Chan, went to meet in China and met with the President Hu Jintao of the PRC. In other words, they agreed that we should explore the possibility of more international space to Taiwan.103

The message received a willing audience in Australia, indicating the salience Taiwan had attained for Australia’s relations with the South Pacific. Another indication of this importance came when Pacific Magazine’s “POWER 10 ranking of the [South Pacific] region’s most powerful people” for 2006, ranked Australian Prime Minister John Howard first and President Chen Shui-bian third (after New Zealand PM Helen Clark).104 Moreover, in June, the Australian prime minister’s chief intelligence adviser, Office of National Assessments Director-General Peter Varghese, included ChinaTaiwan South Pacific competition in his “assessment of the threats and issues affecting Australia’s security over the next 10 to 15 years.” Varghese said, “The South Pacific is where we can most expect trouble of the kind which generates pressure for Australia to respond directly . . . The region’s very small states with fast growing populations will struggle to stay viable. China-Taiwan rivalry over ties with island states can further weaken governments.”105

102 Hamish McDonald, “Taiwan Wants a Space of its Own, Says Would-Be President,” Sydney Morning Herald, 10 May 2006, http://www.smh.com.au/news/world/taiwan-wantsa-space-of-its-own-says-wouldbe president/2006/05/09/1146940550741.html. 103 ABC, “Interview with Taiwan’s Opposition Leader, Dr Ma Ying-jeou,” 12 May 2006, http://abcasiapacific.com/focus. 104 Samantha Magick and Floyd K. Takeuchi, “Power 10: Who Has The Real Power?,” Pacific Magazine, May 2006, http://www.pacificislands.cc/pm52006/pmdefault.php?url articleid=0013. 105 AAP, “Australia Must ‘Focus’ on Pacific Region,” Ninemsn, 28 June 2006, http://news .ninemsn.com.au/article.aspx?id=109335.



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Taiwan’s South Pacific Summit Taiwan President Chen Shui-bian had neither the inclination nor the option of a “modus vivendi” with China that required sufficient concessions towards China’s “one China principle.” With “diplomatic warfare” with China official foreign policy, the Chen Administration was caught between a rock and several hard places. Raising the aid budget was out of the question, Australian pressure was intensifying and “allies” continued to be uninterested in ties with a Taiwan that delivered aid in a form acceptable to Australia. Taiwan’s policymakers tried to relieve the policy squeeze through bringing together President Chen and the leaders of Taiwan’s six Pacific Island “allies” in a summit. The Taiwan government believed that this would put pressure on each individual leader to both restrain requests for more aid and to reform how aid from Taiwan was handled. It also mirrored Chinese Premier Wen Jiabao’s April “ministerial conference” in Fiji that had generated considerable regional and international interest. On 14 August, Chen Shui-bian revealed that the summit would be in Palau in September.106 The Presidential Office said the summit had been under preparation since early 2006,107 and therefore was not an attempt by President Chen to avoid a large-scale protest campaign against him in Taiwan, as some newspapers had reported.108 The Chen government faced increased domestic political pressure when Nauruan President Ludwig Scotty and Solomon Islands Prime Minister Manasseh Sogavare visited Taiwan ahead of the summit in Palau. Taiwan’s vice minister of foreign affairs denied that the leaders were practising “diplomatic extortion,” and that the visits were “just flight transits.”109 Scotty also denied that he had travelled to Taiwan for additional funds.110

106 Shu-ling Ko, “Chen Shui-bian Confirms Date for Palau Visit,” Taipei Times, 24 August 2006, http://www.taipeitimes.com/News/taiwan/archives/2006/08/24/2003324576. 107 Dennis Engbarth, “President to Attend Palau Forum,” Taiwan News, 26 August 2006, http//www.taiwannews.com.tw/etn/news_content.php?id=163658&lang=eng_news&cate_ img=logo_taiwan&cate_rss=TAIWAN_eng. 108 Taipei Times, “Chen Trip Still in the Works,” 22 August 2006, http://www.taipeitimes .com/News/taiwan/archives/2006/08/22/2003324291. 109 Jewel Huang, “MOFA Pooh-Poohs ‘Extortion’ Talk,” Taipei Times, 4 September 2006, http://www.taipeitimes.com/News/taiwan/archives/2006/09/04/2003326089. 110 Radio New Zealand International, “Nauru President Denies Asking Taiwan for $US4 million Loan Exemption,” 5 September 2006, http://www.radionz.co.nz/news/bulletins/rnzi/ 200609051853/auru_president_denies_asking_taiwan_for_$us4_million_loan_exemption.

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At the summit, the leaders affirmed the goals adopted in the PIF’s “Pacific Plan,” and in addition, agreed to “strengthen cooperation and partnership.”111 President Chen declared that the purpose of the summit was “not to engage in a check-writing contest . . . [but] to build viable and lasting mechanisms of cooperation and foster partnerships.”112 Chen also reportedly said “We are different from them [China] because we don’t write blank checks. Instead, we offer practical and useful programs designed to solve their [our allies’] problems.”113 Chen described the summit as an “‘evolution’ in Taiwan’s diplomacy from bilateral links to multilateral comprehensive partnerships.”114 In reality, Taiwan’s relations with South Pacific countries continued to be based on direct budgetary cash grants and bilateral aid programs. The countries signed “eight priority cooperation projects” at the summit, though MOFA said it was “too early to discuss the exact amounts of money involved.”115 Chen visited Nauru after the summit, thus completing his goal of visiting all of the countries recognizing Taiwan in the South Pacific.116 A Major Aid Scandal The Chen government received a further blow over its foreign policy when it was revealed in mid-2008 that in August 2006, MOFA had engaged two businessmen to establish relations with PNG,117 and wired US$30 million

111 Dennis Engbarth, “Taiwan, Allies Issue ‘Palau Declaration,’” Taiwan News, 5 August 2006, http://www.taiwannews.com.tw/etn/news_content.php?id=189068&lang=eng_news& cate_img=logo_taiwan&cate_rss=TAIWAN_eng. 112 Dennis Engbarth, “Summit Not ‘Check-Writing Contest,’ Says Chen,” Taiwan News, 5 September 2006, http://www.taiwannews.com.tw/etn/news_content.php?id=189066& lang=eng_news&cate_img=logo_taiwan&cate_rss=TAIWAN_eng. 113 Shu-ling Ko, “We Didn’t Talk Cash, Chen Says of Allies,” Taipei Times, 6 September 2006, http://www.taipeitimes.com/News/front/archives/2006/09/06/2003326357. 114 Dennis Engbarth, “‘We Were Right to Come to Palau,’ Chen states,” Taiwan News, 6 September 2006, http://www.taiwannews.com.tw/etn/news_content.php?id=190546. 115 Taipei Times, “Too Soon to Talk About Costs: MOFA.” 116 Dennis Engbarth, “Chen Fulfills Dream With ‘Historic’ Visit to Nauru,” Taiwan News, 7 September 2006, http://www.taiwannews.com.tw/etn/news_content.php?id=192204& lang=eng_news&cate_img=logo_taiwan&cate_rss=TAIWAN_eng. 117 Jenny W. Hsu, hsiu-chuan Shih, Yan-chih Mo and Jimmy Chuang, “Huang Apologizes for PNG Fund Scandal,” Taipei Times, 3 May 2008, http://www.taipeitimes.com/News/front/ archives/2008/05/03/2003410908; Joseph Yeh, “Prosecutors Find Key Data in Embezzlement Scandal,” Taiwan News, 5 May 2008, http://www.taiwannews.com.tw/etn/news_content .php?id=650884&lang=eng_news&cate_img=logo_taiwan&cate_rss=TAIWAN_eng.



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into their Singapore bank account on 14 September 2006.118 This money was from MOFA’s annual budget, and to be used as “technical aid” for Papua New Guinea to forge official diplomatic ties.119 PNG’s Planning Minister Paul Tiensten said he met first with one of the two middlemen and then with Taiwan officials in 2006. According to Tiensten, Taiwan was “trying to get us into a diplomatic recognition arrangement but we said no.”120 At the end of 2006, MOFA called off the negotiations and requested the middlemen return the money. However, the two men, one a Taiwanese businessman with a US passport and the other a Singaporean, had pocketed the cash and disappeared.121 Minister of Foreign Affairs James Huang repeatedly stated the scandal was not a result of “checkbook diplomacy.”122 President Chen Shui-bian was more candid, arguing that “Nobody but those actually involved in foreign affairs could understand how hard it was to obtain the support of allies and the international community because of China’s relentless suppression.”123 Clearly, Taiwan was still a long way from adopting an aid policy consistent with the preferences of the Australian government’s approach to the South Pacific. Australia’s Continuing Problems in the South Pacific Taiwan’s attempts to foster multilateralism in its part of the South Pacific coincided with Australian attempts to maintain a united, Australian-led, regional stance towards its deteriorating relationships with key regional countries. Australia attended the PIF meeting in October 2006 at a time when PNG Prime Minister Somare and Solomon Islands Prime Minister Sogavare, and their cabinet ministers, were banned from visiting Australia.124 Then on 5 December in the face of public opposition from Australia, Commodore Frank Bainimarama took over the government of Fiji in a

118 Hsu, Shih, Mo and Chuang, “Huang Apologizes for PNG Fund Scandal.” 119 Rich Chang, “Fraud Suspect’s Property Seized,” Taipei Times, 11 June 2008, http:// www.taipeitimes.com/News/taiwan/archives/2008/06/11/2003414421. 120 Ilya Gridneff, “PNG Wanted Trade with Taiwan: Minister,” Ninemsn, 12 May 2008, http://news.ninemsn.com.au/article.aspx?id=561467. 121  Kathrin Hille, “Taiwan Mislays $30m in Foreign Aid,” Financial Times, 2 May 2008, http://www.ft.com/cms/s/0/86937c20-1825-11dd-8c92-0000779fd2ac.html?nclick_check=1. 122 Hsu, Shih, Mo and Chuang, “Huang Apologizes for PNG Fund Scandal.” 123 All quotes from Ko, “Chen Apologizes for PNG Diplomatic Fund Scandal.” 124 Greg Sheridan, “One Big Unhappy Family,” The Australian, 18 October 2006, http:// www.theaustralian.news.com.au/story/0,20876,20599367-28737,00.html.

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military coup. When asked by an Australian reporter if he feared sanctions from Australia, interim Prime Minister Jona Senilagakali replied: You can go ahead . . . You did that in 1987, and I, with Ratu Mara,125 went to South East Asia, and we went to Taiwan, to Japan, we went to Indonesia, Singapore and Kuala Lumpur. If you do that you can go ahead. We will . . . have no choice but to go to Indonesia, we’ll go to Taiwan, we’ll go to China to enlist their support. And I’m sure they’ll be prepared to do that. My advice is that just leave us alone. Do not introduce economic sanctions on Fiji. I mean, our total life, economic life of Fiji is not dependent fully on Australia. Let me make that very clear to the Australians.126

Bainimarama reiterated that Fiji would turn to Asian countries to counteract Australia, saying that though he had not held formal talks with Chinese officials, he “took it for granted that China would always be there” to support Fiji. He added, “We have always had close ties with Beijing . . . I’ve already made an official visit there at the invitation of the People’s Liberation Army and we’ve had two senior officers at China’s defense college since 2000 . . . we’ll see how Australia goes in terms of military assistance. If they [Australia] don’t help, we’ll certainly have to look to other places.” He also listed Malaysia, South Korea and Japan as potential sources of support, saying they had not followed Australia, New Zealand, the US and France in cancelling military ties after his coup. However, he left Taiwan off the list and stated, “The Chinese Government came across and said, ‘we heard you mention Taiwan,’ so we just wanted to confirm to them that we still recognize the One China policy.”127 It is possible that this expectation of continued support from China, and to a lesser extent other Asian countries—perhaps even Taiwan, emboldened Bainimarama to ignore Australian threats and carry out the coup. Fiji’s military government and China have continued to bolster ties in the face of Australian sanctions. The Fijian government sent a letter of support to Beijing in March 2008 over the protests in Tibet. China had provided a F$170 million (A$120 million) loan the day before. In contrast,

125 Ramu Sir Ratu Mara was a towering figure in Fijian politics and is considered the founding father of modern Fiji. He was prime minister in 1987. 126 Michael Vincent, “Fiji’s New PM Says Coup Justified,” Australian Broadcasting Corporation, 7 December 2006, http://www.abc.net.au/am/content/2006/s1806122.htm. 127 All quotes from Graham Davis, “I’ll Get Help From China: Coup Chief,” The Austral­ ian, 30 December 2006, http://www.theaustralian.news.com.au/story/0,20867,209894655001561,00.html.



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Taiwan halted its direct payments to the office of Fiji’s prime minister’s after the coup.128 Australia also experienced significant problems in its relationship with the Sogavare government in Solomon Islands. Even as Taiwan’s funding became more important to the Sogavare government as its dispute with Australia intensified, Taiwan moved to reform aspects of its aid program. Taiwan’s ambassador Antonio Chen told the Australian Broadcasting Corporation, “something we are going to encourage is that it [the aid program] is now transparent 100 percent.” Prime Minister Sogavare said Taiwanese funds would no longer be channeled through the prime minister’s office. Sogavare also told Parliament he intended to reform the administration of Taiwanese aid, with “greater transparency” in disbursing the money. Significant improvements were made to the controversial—and Taiwan funded—Rural Constituencies Development Fund (RCDF), which provides development money for parliamentarians to spend in their electorates. Perhaps most significantly, when Sogavare turned to Taiwan to help re-arm the Solomon Islands police in the face of stiff opposition from Australia and RAMSI, Australia persuaded Taiwan to withdraw its support for the scheme.129 Australia’s support for China in China-Taiwan diplomatic competition in the South Pacific meant that the Solomon Islands’ and other regional countries’ divergence with Australia was potentially good for Taiwan. As Taiwanese scholar Lin Ting-hui saw it: Although China’s supporters [in the South Pacific] include regional powers Australia and New Zealand, the island countries in the region are becoming more independent of Australia and New Zealand so it is an important diplomatic task for Taiwan to unite its diplomatic allies and win increased support in the South Pacific forum.130

However, the relationship between Australia and Taiwan in the South Pacific was about to experience a sea change. 128 WikiLeaks, “Ambassador Lunches with Taiwan’s Trade Mission Representative,” Reference ID: 09SUVA245, Created: 10 June 2009, Origin: Embassy Suva, Classification: UNCLASSIFIED, http://wikileaks.org/cable/2009/06/09SUVA245.html. 129 See Atkinson, “Big Trouble in Little Chinatown: Australia, Taiwan and the April 2006 Post-Election Riot in Solomon Islands,” p. 63. 130 Lin Ting-hui (林廷輝), “Jianxi Disanshiqijie Taipingyangdaoguoluntan Gongbao ji Qidui Woguowaijiao zhi Yingxiang 簡析第 37 屆「太平洋島國論壇」公報及其對 我國外交之影響 [An Analysis of the 37th Pacific Islands Forum Communiqué and Its Impact on Taiwan Foreign Policy],” Prospect & Exploration 展望與探索, 5 (6) (2007), pp. 115–122. Translation by Zaijun Yuan and the author.

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President Ma Ying-jeou was indeed able to establish a tacit “diplomatic truce” with China. After his election in 2008, Beijing honored “its agreement not to pursue efforts to get Kiribati, Tuvalu, Nauru and Solomon Islands to switch allegiances.”131 President Ma told The Australian’s Rowan Callick that Australia’s concern about Taiwan’s role in the South Pacific was “a very important element in changing [Taiwan’s] foreign policy” to bring about this tacit truce. Ma told the journalist that “According to my contact with Australian friends, by and large your people seem to be satisfied with what we have been doing, particularly over our dealings with South Pacific countries.”132 In his September 2008 address to the legislature, Taiwan’s foreign minister reported “Taiwan’s flexible diplomacy has won support from New Zealand and Australia, which have expressed interest in cooperating with Taiwan in its humanitarian projects in the South Pacific region.”133 Tangible proof was provided when Ma was able to visit RAMSI headquarters during his trip to Solomon Islands.134 AusAID also agreed to establish an annual dialogue with an important governmental aid agency in Taiwan, the ICDF. Vice Foreign Minister Chang Hsiao-yueh was further welcomed in Australia to discuss the Pacific Islands.135 Taipei promised that it would not reduce aid funding as a result of the truce.136 Nevertheless, some of Taiwan’s aid recipients have voiced concerns that Taiwan’s aid has ‘diminished markedly.’137 The author was told in an interview that Taiwan’s aid programs are in the process of reform, and funding will return to pre-truce levels once new oversight and allocation mechanisms are in place. Taiwan indeed appears to have become much stricter. The RCDF cherished by many Solomon Islands parliamentarians was renamed in 2011 and is now dispersed through a consolidated account. Taiwan Ambassador Roy Wu reportedly refused to tolerate Solomon’s Prime Minister Danny 131  WikiLeaks, “Ambassador Lunches with Taiwan’s Trade Mission Representative.” 132 Callick, “We’ve Left Taiwan Out in the Cold.” 133 MOFA, “Foreign Policy Report, 7th Congress of the Legislative Yuan, 2nd Session,” 25 September 2008 http://www.mofa.gov.tw/webapp/ct.asp?xItem=33802&ctNode=1877& mp=6. 134 Callick, “Taiwan in Appeal for Closer Contact.” 135 WikiLeaks, “Taiwan Foreign Minister on Fiji and Solomon Islands.” 136 Taiwan News, “President Hopes Taiwan Can Spend More on Allies,” 16 September 2008, p. 2. 137 ABC, “Taiwan’s Pacific Allies Worried over Funding Decline,” 10 August 2009, http:// www.radioaustralianews.net.au/stories/200908/2651593.htm.



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Phillip’s misuse of SI$10 million of development funding, leading to Phillip’s unseating.138 The atmosphere between Australia and Taiwan in the South Pacific was also improved with the election of the Rudd Labor government in November 2007. Rudd indicated a new, less combative, approach to relations with South Pacific countries.139 This brought Australia at least somewhat closer to Taiwan’s “loosely-conditioned” aid approach even as Taiwan moved towards Australia’s “strongly-conditioned” aid end of the spectrum. Nevertheless, Australia continued to confront the military government in Fiji. This effort was made much harder by China’s indifference to Australian concerns. While Taiwan has been the most important rationale for China’s engagement with South Pacific governments, it also has other interests in cultivating good relations in the region. Moreover, the Chinese government is itself a dictatorship resisting democratization, and has no interest in helping Australia meddle in Fiji’s “internal affairs” to restore democracy. Officials at China’s MOFA told US diplomats that “western-led efforts to push for political reform in Fiji were part of Fiji’s underlying problem. China, as a developing country and regional leader, had unique insights into Fiji’s political needs.” One “suggested that western powers were compromising Fiji’s sovereignty by pushing for political reforms, and stressed the importance of understanding Fijian culture and its emphasis on consensus-building.”140 China has backed this rhetoric with significant support. China increased training for Fijian military officers after the 2006 coup. China ignored opposition from Australia and New Zealand, and sent China’s Vice-President and likely next leader, Xi Jinping to Fiji in 8–9 February 2009. The Chinese downplayed the visit as a “stopover” on the way to Latin America. He nevertheless signed several development assistance deals and met with President Iloilo and Prime Minister Bainimarama. Australian officials 138 Solomon Star, “PM Will Score Nothing: Lilo Hits Back,” 11 November 2011, http:// www.solomonstarnews.com/news/national/12762-pm-will-score-nothing-lilo-hits-back; Solomon Star, “Taiwan Should Stop Giving ‘Loose Cash,’” 21 November 2011, http://www .solomontimes.com/news.aspx?nwID=6656. 139 Greg Sheridan, “Melanesia On Our Radar,” The Australian, 15 March 2008, http:// www.theaustralian.news.com.au/story/0,25197,23376152-16953,00.html. 140 WikiLeaks, “PRC/South Pacific: International Isolation of Regime in Fiji an Opportunity for China,” Reference ID: 09BEIJING1679, Created: 19 June 2009, Origin: Embassy Beijing, Classification: CONFIDENTIAL, http://wikileaks.org/cable/2009/06/09BEIJING1679.html.

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initially thought the “value of the development deals was more symbolic than economic.”141 However, a New Zealand official later described them as “‘massive’ and potentially very destructive given the poor capacity of small South Pacific nations to repay large loans.”142 According to the US embassy in Canberra, “Rudd is especially concerned with Chinese influence in the Pacific and sees Australian leverage ebbing thanks to massive Chinese aid flows.”143 As foreign minister, Rudd subsequently announced plans to almost double Australia’s aid budget by 2016, with an increased focus on the South Pacific.144 An Australia-Taiwan Truce? Two strongly held interests drove Australia and Taiwan’s disagreement over the South Pacific. Taiwan’s need to purchase diplomatic recognition was incompatible with Australia’s efforts to reform the Pacific Island governments. Australia’s conflict of interests with China were actually more fundamental, but China’s power to help and hurt Australian interests saw Australia direct its animosity largely towards Taiwan. This hostility permeated into other spheres of the Australia-Taiwan relationship discussed in previous chapters. It is possible that a future breakdown in Taiwan’s tacit “diplomatic truce” with China will reignite Australia and Taiwan’s South Pacific dispute. However, future Taiwan presidents—either KMT or DPP—will be unwilling to dismantle the more open and accountable aid mechanism that is being established. Rather, future presidents—and the voting public— will likely tolerate a reduction in the number of diplomatic allies rather than allowing Taiwan’s international reputation to again be tarnished by its aid programs.

141 WikiLeaks, “Australia and New Zealand Demarche PRC on Fiji Visit,” Reference ID: 09BEIJING383, Created: 13 February 2009, Origin: Embassy Beijing, Classification: CONFIDENTIAL, http://wikileaks.org/cable/2009/02/09BEIJING383.html. 142 WikiLeaks, “PRC/South Pacific: International Isolation of Regime in Fiji an Opportunity for China.” 143 WikiLeaks, “Rudd’s Foreign Policy—An Overview” Reference ID: 08CANBERRA59 Created: 22 January 2008, Origin: Embassy Canberra, Classification: CONFIDENTIAL// NOFORN, http://wikileaks.org/cable/2008/01/08CANBERRA59.html. 144 Stephen Dziedzic, “Rudd Announces Foreign Aid Overhaul,” Australian Broadcasting Corporation, 6 July 2011, http://www.abc.net.au/news/2011-07-06/rudd-announces-foreignaid-overhaul/2784526.



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Australia’s approach is also undergoing change that mitigates the risk of a return to the previous acrimony. China’s refusal to be co-opted to Australia’s agenda in Fiji appears to have finally awakened Australian policymakers to a reality that should have been obvious: Australia and China have very different interests in the South Pacific. Australia is moving to counter China’s growing influence with more aid to the region. Taiwan’s involvement in the South Pacific also offsets China’s influence. This will presumably mellow Australia’s reaction if Taiwan returns to “checkbook diplomacy.”

CONCLUSION

Australia-Taiwan relations in perspective The paths of Australia and Taiwan had crossed during the age of European colonization, World War II and the immediate post-War period. This interaction foreshadowed Taiwan’s arrival as a major foreign policy issue during the Cold War—a significance that endures to this day. From North Korea’s invasion of South Korea in 1950 until the early 1970s, the Australian government sought a government in Taipei that would assert a de jure independent status for Taiwan—whether controlled by the Taiwanese majority or Chinese Nationalists that had dropped their claim to “Chinese” territory they did not control. Initial strong Australian support for a “Taiwanese” Taiwan gave way to increasing support for a “Chinese Nationalist” Taiwan. While support for self-determination for the people of Taiwan played an important role within this policy, it was not the main driver. Australia’s push to cement Taiwan’s independence from China was largely a way to both balance against and engage with China. The policy hedged against the threat from China through securing Australia’s alliance with US and the US’ “forward engagement” in Asia. It also wanted to deny China the geostrategic and geopolitical advantages of controlling Taiwan, and retain these for the US and its allies. At the same time, the policy was an effort to engage China through seeking a seat for China at the UN, removing the threat of US-backed ROC invasion, and maximizing the legitimacy of the CCP’s rule through recognizing it as the undisputed government of China (or the great bulk of China if recognition was on the basis of “Two Chinas” rather than “One China, One Taiwan”). These incentives were seen as a way to encourage China’s evolution into what in recent decades has been described as a “responsible stakeholder” in the international system. Reform within China and changes in Cold War architecture following the Sino-Soviet saw China become much more accepting of the US-led East Asian order, and Australia much more interested and able to engage China. China insisted that Taiwan be at the forefront of these policy changes. At China’s request, Australia shunned the ROC regime and largely ignored Taiwan. Australia’s antagonistic relationship with the ROC regime

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during the first half of the Cold War meant that this was not as radical a shift as it might appear. Moreover, key elements of a balancing policy remained. Australia continued to pursue a strong US alliance. Australia also went against China in not contradicting US support for Taiwan’s continued independent status. Crucially, Australia did not concede the PRC’s assertions that Taiwan is its province or that it had the right to use force to absorb Taiwan whatever its status. Australia-Taiwan trade was allowed to grow, and would eventually prosper as Taiwan’s “economic miracle” took off. Cross-strait tensions relaxed in the late 1980s-early 1990s and the Chinese government became more isolated after the June 4 massacre in 1989. The ROC government under Lee Teng-hui Taiwanised and democratized. These changes saw Australia-Taiwan intergovernmental relations improve significantly, to the point that they approximated what they would presumably have been without Chinese interference. The fall of the Soviet Union in 1991 punctuated the post-Cold War dissipation of the rationale for Sino-US strategic cooperation. Sino-US relations accordingly became more evenly balanced between confrontation and cooperation. The Chinese leadership increasingly saw engagement with the US as a possible threat to Communist Party rule, even as it was seen as a tool to greater “comprehensive national power.” Similarly, US military dominance in East Asia was seen as a serious threat, even as it provided China with the regional stability required to develop its economy—and by extension—its own military strength. The US moved towards increased balancing against China’s growing power even as engagement was increased in a renewed effort to evolve China towards the kind of peaceful, democratic and non-revanchist state that the US and its allies in the region could trust. As a result, Sino-US relations again became the sine qua non of Australian foreign policy, and Taiwan returned as a major strategic concern for Australia. In 1996, Australia pursued a policy that opposed China over human rights abuses and its militant approach to its territorial claims, particularly Taiwan. However, the Chinese government was able to leverage its existent and projected economic importance to Australia to compel the Australian government to align more closely with China’s preferences. Among Australia’s differences with China, Taiwan and the US alliance were the most challenging. Australia could not fundamentally compromise on these issues without jeopardizing its vital interests, so it pursued a policy of delinking these from its relations with China through rhetorical



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obfuscation and “tweaking” its policy in ways that sent signals that Chinese policymakers and observers found highly encouraging. This policy would not have been as successful in ingratiating Australia to the Chinese leadership as it was without the shift in Sino-US relations following the September 11, 2001 terrorist attacks and subsequent US invasions of Afghanistan and Iraq. This allowed Australia to simultaneously improve relations with China and the US. As it had more or less done since 1949, China conditioned an improvement in Sino-Australian relations on Australia reducing support for the Taiwan government. Australia obliged. Australia’s disagreement with Taiwan in the South Pacific—itself related to Australia’s effort to develop a cooperative relationship with China—gave extra vehemence to this hostility towards Taiwan. Taiwan was unable to do much to change Australia’s attitude. However, the US finally checked this slide towards China at the expense of Taiwan when the Australian foreign minister signaled that Australia would not assist the US in defending Taiwan 2004. While Australian rhetoric pulled back from this extreme and became more favorable towards the US position, it nevertheless continued to gratify the Chinese government and dismiss Taiwan’s interests. After 2007, Australian policy would begin to tilt significantly towards a greater emphasis on balancing against rather than obliging China. In some respects, this was a natural outcome of ever-growing Chinese expectations hitting a ceiling of what concessions Australia was actually willing to offer in terms of the US alliance and China’s “right” to re-write the rules in East Asia as its power grows. However, most importantly, it was the result of growing Sino-US confrontation as the “War on Terror” winds up, the reduced basis for Sino-US economic cooperation, and greater Chinese assertiveness that accompanied Chinese policymakers’ perception of relative US decline. Taiwan’s role in this emerging scene is complex and ambiguous yet nevertheless crucial. This wider shift has not precipitated a major improvement in AustraliaTaiwan relations. For example, the Howard government significantly curtailed Australian ministerial visits to Taiwan at China’s behest. The current Labor government has yet to demonstrate that it has rectified this situation. Nevertheless, the Australia-Taiwan economic relationship remains excellent, and continues to underpin robust Australia-Taiwan intergovernmental ties. The South Pacific has been a key domain in the relationship since the 1990s, though Australia-Taiwan interaction in the region dates to the early 1970s. Two strongly held interests drove Australia and Taiwan’s

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disagreement over the South Pacific. Taiwan’s need to purchase diplomatic recognition was incompatible with Australia’s efforts to reform the Pacific Island governments. Australia’s conflict of interests with China was actually more fundamental, but China’s power to help and hurt Australian interests saw Australia direct its animosity largely towards Taiwan. The Ma Ying-jeou Administration’s tacit “diplomatic truce” with China and Australia’s growing concern about China’s role in South Pacific has seen the atmosphere improve dramatically in recent years. Australia-Taiwan Relations Defined When viewed across space and time in this way, it should be very clear that the current Australia-Taiwan relationship is one between two states. Terms used to describe Taiwan such as “de facto independence” or “political autonomy” often skew the nature of Taiwan’s role in international affairs. Taiwan is an actor that possesses sovereignty—the absence of any higher authority both in domestic and external affairs. That China denies this blatant reality, and bullies and coaxes governments like Australia to play along, should not confuse serious scholars, journalists and policymakers. The broad outline presented above also reveals the Australia-Taiwan relationship to be a bundle of contradictions. Due to China, Australian policymakers both ignore and obsess over Taiwan. Moreover, the relationship is at once good and bad, friendly and unfriendly. It is not hard to find examples of how strong and well grounded the relationship is. On a per capita basis, the strength and volume of business and trade links are among the best for either country. In terms of ideology, both support the US-led East Asian order, human rights and democracy. Finally, though the issue is hotly debated, Australia appears to have an implicit defense commitment to Taiwan. On the other hand, the relationship is so palpably bad as to be hostile— even if one looks beyond the obvious issue of official non-recognition. Former Prime Minister Gough Whitlam is said to warn ALP acolytes against “making the Taiwan trip.” Foreign Minister Downer stated in Beijing that China’s use of a threat of force against Taiwan was a mere “disincentive.”1 Australia dismissed as “political gamesmanship” the Ma 1 See p. 82.



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government’s hope for an Australia-Taiwan FTA, and “adamantly refused” to discuss the issue. Taiwan has also been unfriendly. Taiwan governments have consistently used economic incentives and threats to push Australia towards greater inter-governmental interaction. A Taiwan official compared Foreign Minister Downer to Neville Chamberlin. Vice-President Annette Lu ridiculed Australia’s being “afraid” of China. In sum, Australia-Taiwan relations have at times been hard edged and mutually exasperating. In large measure, it is these un-resolved dialectical impulses that make Australia-Taiwan relations so interesting. Future Prospects These contradictions in Australia-Taiwan relations will only be finally resolved if China either absorbs Taiwan or drops its opposition to Taiwan’s independence. Neither outcome appears to be likely in the short-tomedium term. Nevertheless, there is still plenty of scope for the unexpected. At least until recently, China’s growing power has encouraged Australia to engage with China through sidelining Taiwan. China’s booming economy has provided significant economic opportunities for Australia. At the same time, the Australian government has been satisfied with believing that meeting Chinese demands over Taiwan where possible would ultimately facilitate China’s evolution into a contented supporter of the peaceful, US-led, trade-focused East Asian status quo. In such a future, Australia’s relations with Taiwan and the US-China-Taiwan triangle would no longer be such serious issues. However, if China’s power continues to grow without reconciling to the existing order, then Australia’s view of Taiwan will change. Australia will have to make a choice between utterly appeasing China over Taiwan in the hope that China will not then go on to threaten Australia. Or, Australia will have to confront China before the advantages of having Taiwan on side are lost. Of course, if the US decides to give China carte blanche in Taiwan then Australia will follow suit, all the while rethinking its security reliance on the US. It is also possible that China’s carrots and sticks unification policy will see Taiwan further orientate itself towards China; forestalling any US and Australian decision to abandon Taiwan or use it as a “force multiplier” in escalating confrontation with China.

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Alternatively, China’s economic growth could stall or slow significantly, changing Taiwan’s place in regional strategic calculations. Whatever happens, the outlook for Australia-Taiwan relations seems set to be both eventful and consequential.

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INDEX Acheson, Dean 15 Adamson, Frances 178 Advancing the National Interest (2003) (Australia) 80 Afghanistan 77, 85, 109, 117, 131 agreements and dialogue 149–151 agriculture 10, 29, 49, 55, 65, 79, 85, 145, 149, 151–152, 156–159 Albanian Resolution 33, 34–36 alliance Australia-United States (ANZUS) 17, 22–24, 26, 65–66, 68, 73–77, 81–84, 86–87, 88, 91–93, 102–103, 109, 112, 121, 124–125, 130–133, 143, 149, 171–172, 177, 184 Japan-United States 64, 73, 86–87, 92, 100–103, 124 aluminum 113, 156 Anderson, Harold 36 Anderson, John 67–68, 137, 141 Anti-Secession Law (ASL) 87–88, 90, 96 ANZ bank 160 Armitage, Richard 73, 92 Asia Pacific Democracy Partnership (APDP) 122 Asian Development Bank (ADB) 46 Asia Pacific Community 121–122 Asia-Pacific Economic Cooperation (APEC) 54–56, 94, 151–153 AusAID 192 AUSMIN 67, 125 Austrade 50, 148 Australia advocacy of neutrality over Taiwan 75–76 as US-China go-between 89, 94 defense sales to Taiwan 53 Department of Foreign Affairs 44 Department of Foreign Affairs and Trade (DFAT) 50, 53, 93, 98, 141, 143, 148, 181, 182 de-recognition of the ROC 36–38 domestic politics 31, 36–37, 49, 51, 62, 65, 79, 114–115, 124, 127, 143 economic importance to China 106, 108–109, 113 economic importance to Taiwan 47–48, 155–159

military 65–66, 74–75, 122, 130 multilateral security cooperation 103, 112, 124 one-China policy 71, 89, 104, 112, 117, 140, 142 opposition to use of force against Taiwan 31, 72, 81, 83, 89, 123 parliament 90, 140, 147, 153, 173 Australia–Taiwan Parliamentary Friendship Group 146–147 security interests in Taiwan 11, 14, 17–18, 21, 23, 64, 96 stance on Taiwan sovereignty 13, 18, 26, 37–38, 98, 117 support for US in war over Taiwan 70, 82–85 Australia-Free China Society 45 Australian Commerce and Industry Office (ACIO) See Australian representative office Australian Democrats 145 Australian Education Office in Taipei 53 Australian Embassy in Taipei 26–28, 41 Australian Greens 91, 145 Australian Labor Party (ALP) 37, 65, 69, 80, 90–91, 97, 112, 114, 121, 140, 142, 146–147, 193 Australian Office Taipei See Australian representative office Australian Quarantine Inspection Service (AQIS) 157 Australian representative office 48, 50, 53, 145, 148, 150, 178 Australian Security Intelligence Organisation (ASIO) 45 Australia’s National Security: A Defense Update 2003 80 Australia’s National Security: Defense Update 2005 94 Australia’s Strategic Policy (1997) 62, 94, 70 Australia-Taiwan Business Council 155 avian influenza 153 aviation 49–50, 52, 53, 137, 150 Bainimarama, Frank 189–190, 193 Bali bombing 172 Bank of Taiwan 10

228

index

Barrie, Chris 99 Barwick, Garfield 25–26 Beazley, Kim 55, 145 beef 49, 55, 151–152, 156 bicycles 156 Bilney, Gordon 166 biotechnology 139 Bishop, Julie 115 Blewett, Neal 54, 55 Bowen, Nigel 35, 36 Bracks, Steve 147 Brereton, Laurie 146 Brisbane 67, 143, 147–148, 178 Britain 10, 11, 17, 22–24, 28 British Commonwealth 13–14, 22, 26 Brown, Allen 24 Brown, Bob 91 Brumby, John 147 Burgess, John 45 Bush, George H. W. 63 Bush, George W. Administration 75 China policy 73, 91–92 criticism of Chen Shui-bian 95 perceptions of Australia 84–86, 92–93, 113, 172 support for Taiwan 94 Button, John 54 Cairo Declaration 11, 13, 18–19, 26 Canada 49, 143, 146 Canberra 115, 139, 145–146, 148 car plates 146 cars 152 Casey, Richard 20, 22–23, 25, 32 Chan, Julius 167–168 Chang Fu-mei 141 Chen Chi-mai 27 Chen Jian 68 Chen Shui-bian expense account scandal 80 inauguration ceremony 140, 143 Pacific Magazine power ranking 186 request to attend APEC 152 visit to Australia as Taipei mayor 67 Chen Shui-bian Administration call for improved ties with Australia 96–97, 141–145, 150, 178 perceptions of Australia 83, 131 policies towards Australia 140 relations with China 72, 77, 94–95, 109, 182–183 South Pacific policies 173, 175, 181–182 South Pacific summit 187–188 Chen Yonglin 78, 83

Chen, Antonio 191 Chia, Osman 101 Chiang Ching-kuo 28, 47, 165 Chiang Kai-shek government as colonial regime 165 Australian support 21, 25 commercial enticements 27, 32 hostility towards Australia 28–29 policy in South Pacific 46–47, 164 speculation on removing 15, 18–19 take-over of Taiwan 12 US support 15, 19–20, 28 Chien, Eugene 97 Chifley government 12–14 China defense dialogue with Australia 100, 141 economic importance for Australia 76, 78–79, 81, 93, 99, 104, 108–109, 113, 120, 127–129, 131–133, 150, 155 embassy in Australia 43, 65, 72, 102, 139, 140, 141, 142 investment in Australia 113, 125 military 118, 123 China Steel Corporation (CSC) (Taiwan) 52, 138–139 Chinalco 113 Chinese civil war 14, 17–18, 21–22 Chiu, Paul 140 Clinton Administration 62–63 China policy 72 military cooperation with Taiwan 64 support for Taiwan 72 coal 138, 156 Coalition (conservative) parties 36, 55, 64–65, 97, 121, 140, 143 computers 156 Congress (US) 72, 85, 125 consular services 148 Cook, Peter 139 Cooper, Frank 28–30 copper 156 Council of Agriculture (COA) 157 Court, Charles 45 CPC Corporation 144 crime 146 Critchley, Thomas 25 cross-strait détente 63 customs 49 dairy 55, 157 Dalai Lama 67–69, 103–104, 115 Danby, Michael 69, 90, 146



index

Darby, Douglas 45, 91 Defense White Paper 2009 (Australia) 79, 122–123 democracy 9, 18, 21, 50–51, 63, 65–66, 89, 91, 95–98, 122, 126, 137, 142, 150, 165, 175, 184, 193 Democratic Labor Party 31 Democratic Pacific Union 97 Democratic Progressive Party (DPP) 2, 67, 72, 80, 96, 140, 185, 187, 194 Deng Xiaoping 176 DeRoburt, Hammer 164 diplomatic representation 145–146 diplomatic truce 192 donor meetings 178 Downer, Alexander 65–67, 70, 72, 75, 81, 86–90, 96, 98, 101–103, 145, 167, 168–169, 171, 172 2004 statements in Beijing 81–85, 88, 143 negative view of Taiwan 150, 177, 184 Dunn, Hugh 30, 41 Dutch 9 East Asia Summit (EAS) 121–122, 130, 154 East Timor 171 education 49, 53, 140, 142–143, 145–156 Eggleston, Frederic 11 Eisenhower Administration relations with Australia 20–24 relations with Mao Zedong government 22 support for Chiang Kai-shek government 20–24 energy 54, 69, 78, 106, 108, 113, 116, 138–140, 144–145, 156 Europe 9, 11, 15, 21, 51–52, 55, 67, 82, 86–87, 107, 140 arms embargo 86–87, 107 Evans, Chris 115 Evans, Gareth 49, 54–55 Evatt, Herbett 11, 13 EXIM Bank 173 Far East Trading Company See Taiwan Representative office fast ferries 139 February 28, 1947 uprising (228) 12–13 Ferguson, Martin 116, 144 Fiji 46, 164, 174, 183–184, 187, 190–193, 195 2006 coup 189–190 fisheries 47, 154 flag restrictions on display of 146

229

Fletcher, Graham 125 food 139 Formosa 9 Formosa Plastics 139 Fraser government South Pacific policies 165 Taiwan policies 47–48 Fraser, Malcolm 75 free trade agreements 78–79, 81, 85, 87–88, 113, 150–151 Freeth, Gordon 29–30 fruit 49, 152, 157–159 Fujian 9 Garnaut, Ross 50 Garrett, Peter 115 gas 116, 138–140, 144 Gates, Robert 125 GATT See World Trade Organization (WTO) Gillard government See Rudd-Gillard government Gillard, Julia 115, 125 Support for US alliance 125 Global Financial Crisis (GFC) 111, 113, 120 Goff, Phil 180 Gray, Ben 150 Griffiths, Alan 54–55 guest workers 179 Haiveta, Chris 167 Halibut Group 92, 94, 107 Hand, Gerard 54 Hardgrave, Gary 142–143 Harris, Stuart 49, 181 Hasluck, Paul 28–29 Hawke, Bob 48, 54, 166 Hawke-Keating government  48 concern over US China policy 64 involvement in South Pacific 166 relations with China  50, 55, 62, 65 relations with Taiwan 139 support for Taiwan in APEC 151 Taiwan policy  49, 50, 54–55 view on Taiwan independence 56 He Yafei 87, 115 Hewson, John 55 Hill, Christopher 177 Hill, Robert 91–92, 97 Holt, Harold 27–28 Holt-McEwen-Gorton-McMahon government attempt to establish diplomatic relations with China 31–37

230

index

attitude towards Chiang-Kai-shek government 27–28 China policy 27–31 relations with US 30–36 support for Chiang-Kai-shek government 28 view on Taiwan independence 29–31, 36–37 Hong Kong 14, 23, 43, 53, 66, 70, 96, 148, 159 horticulture 55 Howard Doctrine 171 Howard government China policy 64, 68–69, 124 concern over Chinese 2000 White Paper 72 concern over Chinese bellicosity in 1996 65 concern over Chinese military 66, 94, 99–100, 102 concern over US China policy 99 criticism of Taiwan in South Pacific 169–170, 173–174, 177, 180– 181, 184–185 dislike for Chen Shui-bian 82, 88, 90, 150 downplay of Sino-US competition 69, 74, 79–80, 89, 92–93, 98–99 friendship with Japan 94, 102 refusal to speculate on war over Taiwan 88–89 South Pacific policies 167, 171–173, 189–191 stance on cross-strait issues 95–96, 103 support for Taiwan in WTO 152 support for US defense of Taiwan 65, 75 support for US role in Asia 64–66, 109, 113 Taiwan policies 143, 150, 152 view on Taiwan independence 82 Howard, John 67, 74–75, 83–84, 88–89, 90, 92, 94, 98, 103–104, 171, 179, 186 July 2005 trip to US 93 May 2003 meeting with Bush 172 meeting with Dalai Lama 69, 104 meeting with Jiang Zemin 68 Hu Jintao 2006 visit to US 95 2011 visit to US 117 meeting with Lien Chan 186 October 2003 visit to Australia 78

Hu Jintao government approval of Australian policy 104–108, 124 concern over Australia-US alliance 81, 87, 93, 103, 126–133 criticism of Australia’s Taiwan policy 142 perception Australia is separating from US 84, 86, 102, 105–109, 112, 124, 126–133 perception of Australian importance 105–106 perceptions of Australia 81 perceptions of Australia’s Taiwan policy 105–109, 112, 126 perceptions of Kevin Rudd 112, 123 perceptions of Ma Ying-jeou 111, 118, 148 policy towards Australia 78–79 post-GFC assertiveness 111, 117–119 renewed pessimism about Australia 128–133 South Pacific policies 105, 176, 180–183, 193 Taiwan policy 182–183 Hu, Stern 113–114, 125 Huang, James 184, 189 human rights 9, 16, 50, 62, 66, 69, 70, 113–114, 116, 175 Iloilo, Josefa 193 India 81, 103, 105, 112, 119, 124, 127, 130 Indonesia 11, 81, 130, 139, 145, 158, 190 information technology 139, 156 intelligence sharing 29, 74, 121 International Cooperation and Development Fund (ICDF) 192 International Monetary Fund (IMF) 115, 167, 170 international organizations 46–47, 151–152 Invest Australia 148 investment Australia in Taiwan 149–159, 160 Taiwan in Australia 49–52, 138, 149, 159–160 Iraq 77, 82, 85, 91, 109, 117, 131, 172 iron ore 113, 156, 170 Japan 18, 48, 53, 62, 65, 67, 86–87, 94, 96, 99, 100, 105–107, 119, 120, 127, 130, 153–154, 156, 158, 190 colonial rule of Taiwan 10–14 relations with Australia 148–149



index

representative office in Taiwan 147 security cooperation with Australia  64, 102–103, 112, 124 Jiang Zemin 64, 68, 73 Jiang Zemin government concern about Australia-US alliance 66–67, 71, 73, 75 criticism of Australia 66–68, 75 criticism of Australia’s Taiwan policy 139, 141–142 perceptions of Australia 71 Joint Communiqué 117 Kaohsiung high-speed train project 139 Keating government See Hawke-Keating government Keating, Paul 54, 62, 152 Kemakeza, Allan 173 Kennedy-Johnson Administration relations with Australia 26 support for Chiang Kai-shek government 26 Kennett, Jeff 147 Kiribati 164, 174, 192 Kissinger, Henry 32 Korea 15, 21, 48, 70, 105, 119–120, 148, 151, 155, 158, 190 Korean War 9, 15, 17, 21 Chinese intervention 19 Koxinga 9 Kuomintang (KMT) 138, 185 Lai Ying-chao 139 Latham, Mark 146 Lee Teng-hui 63, 72 desire to visit Australia 144 visit to US 63 Lee Teng-hui Administration criticism of Australia over PNG 170 policies towards Australia 49–51, 54–55, 138 policy in South Pacific 165 Lee, Francias 56 Li Peng 67 Li, K.T. 43 Lin Hsin-yi 139 Lin, Gary 83 Liu Polun 139 Lowy Institute poll 91 Ma Ying-jeou desire to visit Australia as president 145

231

May 2006 visit to Australia 96, 185–186 push for ministerial visits 144 Ma Ying-jeou Administration China policy 111, 116, 133, 148, 153, 185 policies towards Australia 150 South Pacific policies 192 Macdonald, Sandy 149 Macquarie Media Group 159 Magee, Kevin 148 Malaysia 190 Mamaloni, Solomon 165 manufacturing 156 Mao Zedong government 15, 37 Australian recognition 14–15, 19–20, 25–26, 28, 30–31, 36–38 establishment 14 market for Australia 30 military threat to Taiwan 15 relations with US 22, 30, 32–33 US recognition 15 Marshall Islands 174 Mattingly, Bill 48 McBride, Phillip 24 McIntyre, Laurence 30, 33 McLachlan, Ian 65, 67, 70 McMahon, William 31–32, 36 McMullan, Robert 55 Melbourne 44, 53, 147 Memoranda of Understanding (MOUs) 52 Menzies government attitude towards Chiang Kai-shek government 15–26 China policy 15, 18–19, 23–24 concern over US China policy 18, 20, 23 fear of war over Taiwan 18, 20–22 military guarantee proposal 23 relations with US 15, 18–22, 24, 26 support for Chiang Kai-shek government 24–25 support for US position in Asia 23–24 view on Taiwan independence 17–26 views on Chinese strategic intent 18, 21 Menzies, Robert 15, 19, 20, 23, 26, 27 Minchin, Nick 138 minerals 48–49, 54, 69, 78, 106, 108, 113, 116, 120, 138, 144–145, 149, 156, 170 ministerial visits 42–43, 52, 54–55, 56, 67–70, 116, 137–145 missile defense 73–75, 103, 125, 174 Moreton 143 motorcycles 156 Myanmar 130

232

index

National Unification Council (NUC) 94–95 Nauru 164, 166–177, 178, 188, 192 Nelson, Brendan 103 New Zealand 13, 105, 146, 151, 154, 179, 186, 190–193 view on China’s and Taiwan’s role in South Pacific 180 Ng, Matthew 114 Nixon Administration rapprochement with Mao Zedong government 30–33, 36 relations with Australia 30–36 Nixon, Richard 32–33, 36–37 nuclear weapons 22, 66, 92, 101 Obama Administration 121 China policy 111, 117, 119–120, 130 pivot to Asia 62, 130–131 relations with Australia 116, 122, 125 relations with Taiwan 133 Obama, Barack 111, 117, 130–131 meeting with Dalai Lama 115 Offshore islands 22–24 Olympic torch relay 115 Operation Vanguard 46, 164 orchids 159 Outer Mongolia 28 Overseas Development Aid (ODA) 176 Pacific Basin Economic Council (PBEC) 43 Pacific Islands Forum (PIF) 115, 166, 172, 181, 188–189 Pacific Plan 179 Taiwan’s attendance 166 Palau 175, 187 Papua New Guinea 11, 46, 164, 167–170, 179, 183, 188–189 1995 deal with Taiwan 167 1999 deal with Taiwan 169 2008 Taiwan aid scandal 189 Parer, Warwick 69, 138 passports 42–44, 53, 55, 148 Pentagon See United States, Department of Defense Perry, William 67 petroleum 156 Philippines 45, 119, 130 Phillip, Danny 193 pickled eggs 157 pidan See Pickled eggs Plimsoll, James 30, 35 Polun Liu 140, 145 public diplomacy 146

Qing Empire 9, 10 quarantine 49, 157–159 Queensland 159 Quemoy-Matsu crisis See Offshore islands Raby, Geoff 113, 123 Ratu Mara 190 Rebiya Kadeer 115, 125 Regional Assistance Mission to Solomon Islands (RAMSI) 172–173, 191–192 rice 157 Richardson, Dennis 99 Rio Tinto 113 Robinson, Robert 31 Roosevelt, Franklin 11 Rudd, Kevin 112–116, 120–123, 142, 145, 193–194 meeting with Dalai Lama as opposition leader 103 transition to foreign minister 125 trip paid by a Taiwanese 80 views on Taiwan in opposition 90, 97, 142 Rudd-Gillard government China policy 112–113, 115–117, 120–123, 125 perceptions of China 116–117, 121–122 South Pacific policies 192–194 stance on cross-strait issues 123 support for US alliance 121–122 Taiwan policy 112, 116–117, 148 zhengyou initiative 114, 116 Rumsfeld, Donald 91, 94 Rusk, Dean 15, 19 Russia 81, 122, 127 Samoa 46, 164 SARS 153 science and technology 149 Scotty, Ludwig 177, 187 Second World War See World War II September 11, 2001 terrorist attacks  76–77, 82, 107, 172 service sector 45, 79, 156 Shann, Mick 35–36 Shaw, Patrick 12 Siew, Vincent 54 Sinclair, Ian 43 Singapore 35, 159, 190 Skate, Bill 168, 170 Smith, Stephen 115 soft power 97 Sogavare, Manasseh 187, 189, 191 Solomon Islands 164–165, 171–175, 178, 184, 187, 189, 191–192



index

Somare, Michael 179 South Africa 146 South China Sea 67, 74, 106, 124–125, 130 South Pacific Forum See Pacific Islands Forum (PIF) South Route Project (nanxian gongzuo zhuan’an) 80 Soviet Union 17–18, 21, 41, 57, 62, 72, 126, 165 Spender, Percy 18–21 steel 52, 114, 138–139 Su Chi 96 substantive diplomacy 47 sugar 10 Sydney 53, 147, 178 Tai Feng 179, 180, 182 Taipei Economic and Cultural Office (TECO) See Taiwan representative office Taiwan aid programs 176, 182 domestic politics 176 economic importance for Australia 48–52, 55, 65, 140, 144, 155–159 independence movement 11–12, 14, 90 mainland Chinese minority 22, 30 Ministry of Foreign Affairs 44, 83, 188–189 National Security Council 101 Taiwanese majority 9, 13–14, 18–19, 22–24, 26, 29–30, 142 Taiwan Broadband Communications 159 Taiwan Market Service 53 Taiwan representative office 44–45, 53, 56, 139, 140, 145–148 Taiwan Strait 15, 22, 75 1995–1996 crisis 63–64, 70 Taiwanization 63, 91 Tang, H.J. 45 Tange, Arthur 24–26 tariffs 48, 55–56 taxation 49 telecommunications 149, 156 textiles 157 Thomson, Andrew 97, 140 Tiananmen Square Massacre 50, 61–63 Tibet 67, 115, 117, 190 Tien Hung-mao 140–141 Tiensten, Paul 189 Tong, Anote 174 Tonga 46, 164 tourism 48–49, 54–55, 140, 156

233

Trade Australia-China 79, 155 Australia-Taiwan 41–42, 48, 50, 137, 149–150, 152, 155–159 early inter-colonial 10 China-US 111, 120 travel restrictions 42–44 Trood, Russell 116 Truman Administration expectation that Communists would take Taiwan 15 naval intervention in Taiwan Strait 15 relations with Australia 15, 19–20 relations with Mao Zedong government 15 support for Chiang Kai-shek government 12–13 Truman, Harry 15 Turnbull, Malcolm 115 Tuvalu 164, 179, 181–182, 192 United Kingdom See Britain United Nations 15, 19, 26, 102, 164, 171 2005 summit 98, 179 Chinese representation 15, 19, 26, 30–36, 163 climate conference in Copenhagen 114 General Assembly 25, 32–36 Security Council 15, 33–35, 46, 150, 163 Taiwan’s membership bid 64 trusteeship for Taiwan 13, 15, 18, 22, 26 United States competitor for Australia in Taiwan market 49 Congress 15 consul in Tamsui 10 defense budget 111 Department of Defense 86, 92–93, 99 expectation of Australian support in war over Taiwan 73 involvement in South Pacific 165, 172, 174, 177, 184–185, 190, 193 representative office in Taiwan 53, 147, 150, 184 State Department 34, 72 support for Taiwan in WHO 153 uranium 67, 101, 102, 130 US-China-Taiwan triangle 62, 77, 92, 98, 109, 111, 133, 148 Vaile, Mark 87–88, 139, 141 Vanuatu 164, 170, 174–175 Victoria 147 Vietnam 75, 119, 130, 148 Vietnam War 75

234

index

visas 43, 45, 48, 50, 53, 137 Vohor, Serge 175 Waller, Keith 35 War on Terror 85 Wen Jiabao 87, 102, 104, 183 April 2006 visit to Australia 101 April 2006 visit to South Pacific 183, 187 views on Sino-Australian relations 104, 109 Western Australia 45 wheat 10, 29, 49, 85, 156 Whitlam government China policy 37–38, 42–45 involvement in South Pacific 46 Taiwan policy 37–38, 42–47 Whitlam, Gough 32, 37, 42, 47, 75, 146 trip to China as opposition leader 32

Willard, Robert 130 wine 156 wool 157 working holiday program 156 World Bank 167, 170 World Health Organization (WHO) 153 World Trade Organization (WTO) 50, 55–56, 152, 156–157 World War II 11, 17 Wu Tzu-dan 140 Wu, Roy 192 Xinjiang 115, 117 Yang Shih-chien 140 Yu Kuo-hua 48 Zhou Enlai 32 Zhu Rongji 62, 69, 138, 141