Sources Of Conflict And Cooperation In The Taiwan Strait 9789812707314, 9789812567000

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Sources of

Conflict and Cooperation in the

Taiwan Strait

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Sources of

Conflict and Cooperation in the

Taiwan Strait Editors

Zheng Yongnian University of Nottingham, UK

Raymond Ray-kuo Wu Cross-Strait Interflow Prospect Foundation, Taiwan

World Scientific NEW JERSEY

•

LONDON

•

SINGAPORE

•

BEIJING

•

SHANGHAI

•

HONG KONG

•

TA I P E I

•

CHENNAI

Published by World Scientific Publishing Co. Pte. Ltd. 5 Toh Tuck Link, Singapore 596224 USA office: 27 Warren Street, Suite 401-402, Hackensack, NJ 07601 UK office: 57 Shelton Street, Covent Garden, London WC2H 9HE

Library of Congress Cataloging-in-Publication Data Sources of conflict and cooperation in the Taiwan Strait / editors Yongnian Zheng and Raymond Ray-Kuo Wu. p. cm. Includes bibliographical references and index. ISBN 981-256-700-3 1. Presidents--Taiwan--Election--2004---Congresses. 2. International relations---Congresses. 3. Taiwan--Foreign relations--1945---Congresses. 4. Taiwan--Politics and government--2000 ---Congresses. I. Zheng, Yongnian. II. Wu, Raymond R. JZ1733.A57C67 2006 372.5124'9--dc22 2006042160

British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library.

Copyright © 2006 by World Scientific Publishing Co. Pte. Ltd. All rights reserved. This book, or parts thereof, may not be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording or any information storage and retrieval system now known or to be invented, without written permission from the Publisher.

For photocopying of material in this volume, please pay a copying fee through the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA. In this case permission to photocopy is not required from the publisher.

Printed in Singapore.

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Contents

Preface 1.

vii

Taiwan’s 2004 Presidential Election: The Day After

1

Chih-Cheng Lo 2.

Prospects for the Pan-Blue in Post-2004 Presidential Election Taiwan

23

Raymond R. Wu 3.

Sources in China’s Formulation of Its Taiwan Policy

35

Zheng Yongnian and Lye Liang Fook 4.

The Economics of the “Three Links”

59

Lee-Rong Wang and Chung-Hua Shen 5.

The Three Paradigms for the Taiwan Question

75

Baogang He 6.

The Strategic Lessons and the Evolution of Approach: China’s Management of the Taiwan Issue and Its American Element

95

Shi Yinhong 7.

The Cross-Taiwan Strait Relations: Hard to Start and Move Chu Shulong

v

109

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Contents

The United States Factor in Cross-Strait Crises

127

Qingshan Tan 9.

United States Taiwan Policy: How the 2004 (Taiwan) Presidential Election Put it to the Test

149

John F. Copper 10.

Trends in PRC–Taiwan Relations and United States Policy Responses

169

Susan L. Shirk 11.

Taiwan in Japan’s Relations with China: After the Cold War

177

Lam Peng Er 12. A Southeast Asian Perspective on Cross-Strait Relations Eric Teo Chu Cheow

195

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Preface

As an academic research institute committed to the studies of contemporary political, economic, and social issues in China and the rest of East Asia, the East Asian Institute of the National University of Singapore conducts seminars and conferences periodically to enhance the understanding of one of the world’s most vibrant and fast-changing regions. This volume is based on an international conference held by the East Asian Institute on June 21, 2004. The conference was to examine and analyze Taiwan’s 2004 presidential contest, its impact and implications. With three sessions devoted specifically to domestic politics, cross-Strait ties, and international responses, they identified factors and trends which would be critical to the maintenance of peace and prosperity not only in the Taiwan Strait, but in the Asia-Pacific region as well. Scholars from the United States, China, Australia, Singapore, and Taiwan explored the issues from different perspectives. It was the first attempt to systematically analyze issues and challenges confronting Taiwan after the March 2004 election. While not providing all the answers, it does hope to consolidate perspectives and suggest directions for continued research on a potentially volatile area where many view as the world’s next “hot spot”. The scholarly community confronts a dilemma in the study of the crossStrait relationship. It is an unfolding story. Initially, we asked each author to update their story. But after a few attempts, we have to give up since there is no ending. Once updated, there are new changes. Drastic changes have taken place since the 2004 election: China passed the Anti-Secession Law in March 2005; Taiwan’s opposition party leaders Lien Chan and James Soong visited China; and the ruling party Democratic Progress Party lost local elections. Taiwan’s nascent democracy makes anything unpredictable. Despite all these new changes, main themes identified in this volume continue to be the same. Main sources of cooperation and conflict and

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Preface

main actors involved remain unchanged. Therefore, we believe that this conference is still relevant to the study of cross-Strait relations. The editors are grateful to the East Asian Institute, especially its Director Wang Gungwu and Research Director John Wong, for their intellectual guidance for the project. Thanks also go to Prof. K K Phua of World Scientific Publishing. Without his enthusiasm and firm support, it would not have been possible for this volume to appear in print form. Zheng Yongnian Raymond Wu

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1 Taiwan’s 2004 Presidential Election: The Day After Chih-Cheng Lo

Introduction The 2004 presidential election will prove to be a watershed in Taiwan’s history not only because it is the third direct presidential election, but also because of its post-election events. The presidential election is over, but political clouds continue to hover over the country. The incumbent President Chen Shui-Bian and Vice President Annette Lu defeated the Nationalist Party (KMT) Chairman Lien Chan and the People First Party (PFP) Chairman James Soong by a margin of only 0.228%, a victory that has stirred a huge controversy. For the losing camp, the pan-blue alliance, the election is not yet over and the Lien–Soong alliance is still fighting it out in the cut-throat battlefield of the campaign trail. The KMT–PFP alliance has not conceded defeat and has filed a string of lawsuits to have the election and the Chen–Lu victory declared invalid. The pan-blue camp has also demanded the establishment of an independent committee to investigate the assassination attempt on President Chen Shui-Bian and Vice President Annette Lu, and also an investigation of the effects, if any, ensuing from the activation of the so-called “national security mechanism” on the eve of the election. The nation is therefore in the midst of one of the most painful phases of democratization ever with the opposition parties vociferously contesting the election results. To be sure, the outcome of this election has become a critical test of Taiwan’s democracy and its consolidation. For the rest of the world, the result is important too, because it is something that could affect Taiwan’s already difficult relationship with China. During the course of the election, the issues of defensive referendum and a new constitution have already caused an escalation of tensions across 1

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the Taiwan Strait as well as stirred up trouble in the relationship between Taipei and Washington. Although this agitation has begun to subside in the wake of the presidential election, Beijing and Washington continue to closely watch every move taken by the re-elected Chen administration. Regardless of the results of the election lawsuits, and irrespective of what the investigation into the shooting incident uncovers, post-election politics in Taiwan will have important implications for future mainland and foreign policies. Evidently, as long as the Taiwan Strait remains a potential flashpoint that could possibly drag China and the US into military conflict, governments and security analysts in the region and around the world have little choice but to pay close attention to developments in Taiwan’s domestic politics.

Interpreting the Election Results Prior to the election result, many pan-blue supporters believed that the Lien–Soong ticket would win by a margin of at least 3% to unseat Chen and Lu. Hence, within the pan-blue camp, there is considerable dissatisfaction and frustration over the razor-thin margin by which the pan-blue ticket lost. While making repeated accusations that the election was unfair and should be nullified, pan-blue supporters had also been venting their frustration on the streets in Taipei ever since the Lien–Soong ticket lost the election on March 20. The KMT–PFP alliance had persistently questioned the legitimacy of Chen’s victory and mobilized supporters to deny the legitimacy of Chen’s re-election. The pan-blue camp’s lawsuit against the commission and against President Chen and the effort to have the election results annulled dragged on for months. Notwithstanding the judges’ final decision, Taiwan’s political map has apparently been redrawn as a consequence of the 2004 presidential election. As Table 1 shows, the assertion that Lien was enjoying a sure lead in the run-up to the election is a problematic statement. The closeness of the race is evidenced by the final result of the election. Chen retained the presidency by the slimmest of margins — fewer than 30,000 votes, less than 0.3% of the votes cast. Table 2 shows the official results of the presidential election. In the 2004 presidential election, the total number of valid ballots was 12,914,422, while invalid ballots numbered 337,297, making a total number of 13,251,719 ballots cast. Since a total of 13,252,490 ballots were distributed, 771 were not cast. The number of eligible voters was estimated at 16,507,179,

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Taiwan’s 2004 Presidential Election: The Day After Table 1. Date

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Pre-election opinion surveys.

Agency

Chen/Lu (%) Lien/Soong (%) Undecided (%)

March 1 China Times March 4 Shih Hsin University March 4 Focus Survey Research (“Shanshui”) March 7 United Daily News March 7 SET TV March 8 TVBS

39.80 37.60 40.40

38.10 42.60 39.50

22.10 19.80 20.10

38.00 38.30 36.00

41.00 36.70 40.00

21.00 25.00 24.00

Source: Various news reports and news releases.

Table 2. Candidate Party Ballots and Percentage National summary Votes cast Voter turnout Valid votes Invalid votes

Results of the presidential election, 2004.

Chen–Lu Democratic Progressive Party

Lien–Soong Kuomintang and People First Party

Ballots cast

Ballots (percentage)

Ballots cast

Ballots (percentage)

6,471,970

50.11

6,442,452

49.89

13,251,719 80.28% 12,914,422 337,297

Source: Central Election Commission (http://www.president2004.nat.gov.tw/).

which therefore made the turnout rate to 80.28%. The total number of ballots cast for the Chen–Lu ticket came to 6,471,970 while that for Lien–Soong was 6,442,452 ballots. Thus in the final outcome, Chen Shui-Bian’s victory over his rival, Lien Chan, was extremely narrow — only 29,518 votes out of more than 13.25 million, or just 0.228%. It is also worth noting that the 337,297 invalid ballots accounted for 2.5% of the total ballots cast. By all measures, when compared to the last presidential election, Chen’s victory is quite impressive. Table 3 shows the results of the 2000 presidential election. Since the 2000 election, Chen has managed to increase his share of the vote by just over 10%, from 39.30 to 50.11%. In comparison, even with the Lien–Soong team up this time around, the Lien–Soong vote turned out to be much lower than their total in the 2000 presidential election. The

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C.-C. Lo Table 3.

Results of the 2000 presidential election.

Candidate

Party

Votes

Votes (%)

Chen Shui-Bian

Democratic Progressive Party (DPP)

4,977,737

39.30

James Soong

Independent Candidate

4,664,932

36.84

–

Kuomintang (Nationalist Party)

–

–

Hsu Hsin-Liang

Independent Candidate

79,429

0.63

Lee Ao

New Party

16,782

0.13

Votes cast Voter turnout Valid votes Invalid votes

12,786,671 82.69% 12,664,393 122,278

Source: Central Election Commission.

results have demystified the idea that “one plus one equals two” (1+1 = 2) (namely, that Lien and Soong were bound to win because their combined votes in 2000 were about 60%). From the very beginning, after the announcement of the pan-blue coalition on February 14, 2003 (Valentine’s Day), all the opinion surveys suggested that the plan-blue alliance was sure to win. In retrospect, Lien and Soong were seemingly over-optimistic about the election and their possible ballots. When the election campaign drew to a close, the two camps were equally strong and neither side was certain of a win. Although Chen’s victory was only by a small margin, it nevertheless represented a great victory for the green camp. Lien Chan and James Soong lost not only the presidential election once again, but also a significant portion of the political territories that the pan-blue had once occupied. For the first time in Taiwan’s electoral history, there was a 50:50 divide in the votes. It is an interesting and important fault line in Taiwan’s political landscape. In the past, the Democratic Progressive Party (DPP), the pangreen alliance had never managed to cross the 40% threshold. Accordingly, many analysts had previously believed that the political balance of power between the two camps could be around 60:40, with the blue camp taking a 20% lead. However, the results of the 2004 presidential election seemed to indicate an important change across the political spectrum. Obviously, there had been a crucial 10% increase for the DPP over the last four years. More importantly, the DPP’s progress in its power base is not a regionspecific but a nation-wide phenomenon. Table 4 demonstrates the expansion of pan-green’s growth over the past four years, as evidenced by the increase in vote share that the Chen–Lu

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Table 4. The 2000 and 2004 presidential elections (by district). District

Chen–Lu 2000

Taipei City Kaohsiung City Taipei Yilan Taoyuan Hsinchu Miaoli Taichung Changhua Nantou Yunlin Chiayi Tainan Kaohsiung Pingtung Taitung Hualien Penghu Keelung City Hsinchu City Taichung City Chiayi City Tainan City Kinmen Lienchiang Total

Lien–Soong

2004

2000 Votes Change (%) (%)

Votes (%)

Votes

597,465 398,381

37.64 45.79

690,379 43.47 500,304 55.65

741,596 123,157 299,120 61,533 86,707 305,219 298,571 106,440 193,715 157,512 347,210 342,553 238,572 28,102 40,044 16,487 69,555 69,760 193,796 70,124 191,261 759 58

36.73 1,000,265 46.94 10.21 1,264,528 62.63 1,130,615 53.06 −9.57 47.03 147,848 57.71 10.68 137,631 52.56 108,361 42.29 −10.27 31.72 448,770 44.68 12.96 622,251 65.98 555,688 55.32 −10.66 24.75 92,576 35.94 11.19 179,673 72.27 165,027 64.06 −8.21 26.81 123,427 39.25 12.44 232,331 71.85 191,059 60.75 −11.10 36.51 440,479 51.79 15.28 525,331 62.84 410,082 48.21 −14.63 40.05 383,296 52.26 12.21 442,995 59.42 350,128 47.74 −11.68 34.49 146,415 48.75 14.26 200,888 65.09 153,913 51.25 −13.84 46.99 243,129 60.32 13.33 216,365 52.48 159,906 39.68 −12.80 49.49 199,466 62.79 13.30 159,299 50.04 118,189 37.21 −12.83 53.78 421,927 64.79 11.01 295,660 45.80 229,284 35.21 −10.59 47.14 425,265 58.40 11.26 380,637 52.38 302,937 41.60 −10.78 46.28 299,321 58.11 11.83 274,305 53.21 215,796 41.89 −11.32 23.20 40,203 34.48 11.28 92,572 76.44 76,382 65.52 −10.92 21.42 53,501 29.80 8.38 146,005 78.09 126,041 70.20 −7.89 36.79 22,162 49.47 12.68 28,141 62.80 22,639 50.53 −12.27 30.84 90,276 40.56 9.72 154,577 68.53 132,289 59.44 −9.09 33.79 96,818 44.88 11.09 134,646 65.23 118,924 55.12 −10.11 36.86 267,095 47.34 10.48 328,877 62.56 297,098 52.66 −9.90 47.01 85,702 56.06 9.05 78,443 52.58 67,176 43.94 −8.64 46.06 251,397 57.77 11.71 221,978 53.46 183,786 42.23 −11.23 3.11 1,701 6.05 2.94 23,534 96.31 26,433 93.95 −2.36 1.80 248 5.76 3.96 3,149 97.74 4,060 94.24 −3.50

4,977,697

39.30 6,471,970 50.11 10.81 7,590,485 59.94 6,442,452 49.89 −10.05

5.83 9.86

Votes

2004

Votes

Votes (%)

979,102 61.69 467,567 53.75

Votes

Votes Change (%) (%)

897,870 56.53 398,769 44.35

−5.16 −9.40

Source: Central Election Commission.

ticket has gained. The vote share of the Chen–Lu ticket in the 25 counties and cities showed improvement when compared to what they had garnered four years ago. More impressively, Chen’s vote share has racked up increases of over 10% in 17 out of the 25 counties and cities. In Taichung County, which used to be the pan-blue’s stronghold, Chen’s vote share increased from 36.5 to 51.79%, indicating a 15.28% jump. Even in offshore islands such as Kinmen and Lienchiang also, support for Chen has grown visibly over the past four years. The election results demonstrate a very clear divide between the North and the South. The northern region — Taipei City, Taipei County, Keelung

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City, Taoyuan County, Hsinchu City, and Hsinchu County — have continued to be the stronghold for the pan-blue camp. For instance, in Taipei City, the Lien–Soong ticket won 56.53% against Chen and Lu’s 43.47%. Therefore, at least in the capital, this would represent a landslide victory for the pan-blue. Nevertheless, and perhaps more importantly, when compared to the 2000 presidential election, one can clearly see significant changes even in Taipei. Chen only received 597,468 votes (37.64%) in the 2000 election; the Chen–Lu ticket grew by almost 100,000 votes in 2004, or a 6% increase in vote share. Apparently, Chen performed much better in Taipei City, and also in Taipei County, than in 2000. To achieve this, the pan-green camp has worked hard over the past four years in the Hakka regions — Taoyuan County, Hsinchu City and County and Miaoli County — by setting up a Hakka TV station, promoting the Hakka language in public schools, reviving Hakka culture and boosting tourism, etc. All these efforts seem to have paid off. As a result, although the pan-blue camp still won over half of the total ballots in these regions, the DPP has made important progress in the share of votes. For instance, in the 2000 election, the DPP ticket won no more than 37% in any of these regions. In 2004 however, the Chen–Lu ticket won nearly 45% in Taoyuan County and Hsinchu County. Moreover, the Chen–Lu ticket had also advanced considerably in percentage points in central Taiwan. For instance, Nantou County, home of the Taiwan Provincial Government and a stronghold of former governor Soong, has also become greener this time. In the 2000 presidential election, Soong, running as an independent, won 46.94% of the total vote against Chen’s 34.49%. In 2004, however, the pan-green camp won 48.75% of the votes in the county compared to the pan-blue camp’s 51.25%. More importantly, the surprising results in Taichung and Yunlin Counties, both of which yielded a DPP victory, have upset the KMT’s longtime dominance in this region. Having said this, the stronghold for the DPP continues to be very much in the South. The ironclad fact is that, without the South, the DPP could not have won. As many had predicted, the north of Taiwan has lived up to its reputation of sticking with the blues and resulted in the pan-blue winning half a million more ballots than pan-green. But an analysis of the election result shows that in the South, the pan-green took the lead in every county and city, and this lead was good enough for Chen to win over the losses in the North. In Chiayi County and City, Tainan City and County and Kaohsiung City, the Chen–Lu ticket won more than 55% of the

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Taiwan’s 2004 Presidential Election: The Day After

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vote. Without a doubt, Chen’s great victory in southern Taiwan cancelled out the KMT’s lead in northern Taiwan. Moreover, as evidenced by the results of the presidential election, the KMT have lost further support in the South. In short, the pan-blue camp’s territory has diminished. While the panblue camp continues to have its stronghold in northern Taiwan, the pangreen camp has not only consolidated its support in southern Taiwan, but has also made advances in central Taiwan. In addition, the Hakka area, which used to be a weak point for the DPP, has shifted. The pan-green succeeded in winning increased support in this traditionally blue region. In a word, the 2004 election is a milestone in party politics in Taiwan.

Sources of Taiwan’s Electoral Politics Due to the interplay of domestic and international factors, the 2004 presidential election is extremely complex, and it is more difficult to predict the election results than ever before. Of course, the pan-blue’s legal and political challenges regarding the result are set to continue for some time yet, but the fact remains that for the first time in a national election, the DPP has won a majority of the votes. At this juncture, analysts are interested in knowing not only why the blue-alliance failed but, more importantly, why they failed so badly. In 2000, their combined vote exceeded 59% and it took only four years for their vote to drop to 49%, representing a loss of more than one million votes. This being the case, it becomes much more interesting to explain this significant shift in the two-camps’ balance of power than to understand the narrow margin of the final result. The first question that springs to mind is: where did the DPP’s 10% increase come from? Bullets vs ballots Especially among the pan-blue leaders, some have said that the election was influenced by the dubious assassination attempt on Chen and Lu on the eve of election. It has been claimed that this dramatic event, which came in the final stages of the campaign, complicated the two camps’ campaign tactics and affected voters’ ballot decisions, thereby influencing the result of the election. To be more specific, the pan-blue has argued that the shooting incident provoked a surge in sympathy votes for Chen and helped him win the contest. In addition, following the assassination attempt, a national security mechanism was immediately activated and the KMT–PFP alliance

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claimed that thousands of service members were therefore forced to stay in their bases and deprived of their right to vote. And it was this group of voters that was said to be the pan-blue’s stronghold. However, the government has since denied allegations by the pan-blue camp that over 200,000 service members were affected by the activation of the security mechanism. The Ministry of National Defense has explained that only one-ninth of the service members were kept in camp to execute combat missions on the day of the elections while one-sixth of the armed forces had to be on duty for the presidential election in 1996. How many people were actually swayed into voting for Chen because of what happened is something no one will ever know. But KMT supporters are convinced that enough voters had changed their minds to alter the result. The pan-blue camp even accused Chen of staging the shooting to swing the vote and therefore demanded the establishment of an independent investigation task force. In any case, the assertion that the assassination attempt against the president has mobilized substantial sympathy vote in favor of the DPP did not seem to be a convincing argument. It is difficult to see how the assassination attempt may have swayed more than a few undecided voters. Certainly, it is inconceivable that this event could explain the 10% increase gained by the DPP. As a matter of fact, even though analysts have said that the shooting would probably have increased the overall election turnout, the actual turnout was still lower than the 2000 election. In the end, the 2004 election saw Chen’s support increase by 1.5 million votes, allowing him to win by a very small margin of majority. Chen’s narrow victory is based on this foundation of 1.5 million votes and it is this dramatic and massive jump that is the real determining factor of the election. Even if the shooting incident did impact upon the election, it is not certain whether it favored the DPP. In any case, some analysts believe that the pan-blues have nothing to blame but their own sloppy handling of the incident. In other words, it is not the shooting per se that affected the election, but the way the pan-blue camp handled the shooting incident that cost their victory. Initially the opposition KMT–PFP condemned the shooting as an attack “on democracy” and offered a $300,000 reward for the capture of the attacker. James Soong also went so far as to state that the people of Taiwan had shown great composure and levelheadedness when faced with the shooting of the president and the vice president. The KMT–PFP alliance also decided to cancel its massive campaign rallies on the election eve, which was an act that won praise from the people and from the

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Taiwan’s 2004 Presidential Election: The Day After

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international society. However, later on that same night, the pan-blue began to question the shooting incident. Without producing any hard evidence to back her claims, independent Legislator Sisy Chen held a press conference in the pan-blue’s campaign headquarters and frivolously insinuated that the shooting of Chen and Lu was a trick to win sympathy. Thereafter, public opinion polls showed that there was widespread discontentment with this move and may have prompted some undecided voters to vote for Chen in the final crucial twist of the campaign. Even with this twist, it is inconceivable that tens of thousands of votes were affected as a result of the shooting incident. In fact, as shown in the preceding analysis, over the last month of the election, the two camps’ opinion polls have shown an equivalent gap of not more than three percentage points. Even if the shooting had not occurred, the support for Chen would have continued to grow prior to the Election day. More importantly, by narrowing the focus on one factor, namely, the shooting incident, the bigger picture of the DPP’s 10% increase over the past four years will be overlooked. Apparently, the answer must be found somewhere else.

Agenda-setting and referendum The main issues in the campaign included relations with the People’s Republic of China (PRC), political and educational reform, and the economy. Throughout almost the entire campaign, the KMT–PFP alliance tried to score points by attacking Chen over “an unimpressive performance in the nation’s economy,” as well as over ineffectual educational reform and failure to improve employment rate, criticizing Chen as an incompetent leader in office. Challenging the DPP’s campaign slogan of “deepening reform,” the Lien–Soong ticket made “a second transfer of power” its major platform. In response to the opposition’s campaign slogan, the pan-green put up the argument that “a second transfer of power” would mean “the return of black-gold” (i.e. money and mafia politics). Then in the final analysis, the pan-blue alliance failed to convince voters that they could root out the “black-gold” elements in their parties and had difficulty presenting its own positive image of reform. Interestingly, most polls indicated that Chen is widely considered the cleaner candidate and that the general public is doubtful about Lien’s and Soong’s honesty and the sources of their wealth. In the initial stages, the KMT’s strategy of emphasizing the DPP’s poor record of governance appeared to be successful in putting the incumbent in a very difficult and defensive position, as shown by the opinion polls.

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Apparently, until October 2003, the Lien–Soong strategy was to avoid doing or saying anything controversial to keep its lead. This strategy was widely seen as counterproductive and problematic by the end of October when the pan-green started to set the agenda along the line of the referendum and the new constitution. The KMT began to lose its edge to the DPP, both in terms of agenda setting and campaign theme. As a matter of fact, in the latter period of the election, almost all the campaign issues were created and manipulated by the pan-green camp, including that of the referendum and the writing of a new constitution. To counter Chen’s platform for a new constitution, the opposition campaigned for a major constitutional change by 2004. In addition, the opposition stopped stalling over the proposed referendum bill. That appeared to help the KMT–PFP alliance to recover some of the poll losses that had occurred at the beginning of October 2003. Still, the tables had already been turned and the KMT began to fall into a defensive position. The election and the referendum are two independent issues, but it is difficult to separate these two completely. In fact, the DPP successfully pushed the presidential election to a higher level by throwing in the referendum issue. It was believed that Chen Shui–Bian would benefit and mobilize the presidential vote by initiating the referendum, and this is what happened. But more importantly, the KMT’s treatment of the referendum issue has probably done much more damage to the pan-blue’s chance of winning the election than the actual referendum itself. The KMT would have performed better if it supported the referendum issue and have it taken off the electoral agenda. That would have stopped the DPP from capitalizing on the issue. To validate the vote, the Referendum Law requires at least 50% of votes cast. In the end, on the first referendum question (i.e. strengthening national defense), there were 7,452,340 people with valid votes representing 45.17% of eligible voters and 359,711 invalid ballots. Among the valid ballots, 6,511,216 (92%) voted for it, while 581,413 voted against. Similarly, on the second referendum question (i.e. negotiation with the Chinese mainland), 7,444,148 ballots were cast representing 45.12% of eligible voters and 578,574 invalid ballots. Of the valid ballots, 6,319,663 (92%) voted “yes,” and 545,911 voted “no.” In brief, of the 80% who voted in the Presidential election, over 58% participated in the referendum. An overwhelming majority answered “yes” to both questions, showing a very high degree of consensus. Accordingly, the referendum failed, but in many ways, there is strong evidence of voter interest in and voters’ agreement for the issues. So,

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given the pan-blue camp’s boycott of the referendum, the results appear to indicate that most, if not all, green-camp voters and some blue-camp supporters have endorsed the government’s proposals. In fact, the number of referendum ballots far exceeded the number of votes Chen received in the presidential election. The Lien–Soong pair refused to take a position on the referendum issues and stood solidly against the holding of the referendum. Moreover, Lien kept changing his mind about the referendum. The opposition’s attitude towards the referendum obviously deviated from the mainstream public opinion in Taiwan. In other words, they must have alienated themselves from some potential pan-blue voters who supported the referendum. On hindsight, if Lien were to endorse the referendum, it would have neutralized the green camp’s campaign advantage and forced Chen to respond to issues which he is weak in, such as the economy. Not having done that, the pan-blue alliance’s strong boycott of the referendum not only accounted for the failure of the referendum, but also ruined their chances of winning the election.

Taiwan identity President Chen’s victory with slightly more than 50% of the vote — although a very narrow margin — indicated a strengthening and growing trend towards a Taiwan identity. As a consequence of Taiwan’s democratization and thanks to Beijing’s heavy handedness, an increasing number of Taiwanese have started to see themselves as Taiwanese. The shift towards a Taiwan identity is evident in polls carried out in the period 1992–2003 by National Chengchi University’s Election Study Center. Figure 1, in particular, demonstrates this trend of growing Taiwan identity. When the poll was first taken in 1992, 26.7% of the respondents identified themselves as Chinese, 17.3% said they were Taiwanese, and 45.4% said they saw themselves as both Taiwanese and Chinese. In the most recent poll published in December 2004, the percentage of people who consider themselves Taiwanese had jumped (when compared to the first poll taken 11 years earlier) from 17 to 43.2%, while those identifying themselves as Chinese has fallen from 26 to 7.7%. The number who said they were both Chinese and Taiwanese had dropped slightly to 42.9%. Obviously, the political environment has changed in recent years toward localization or more precisely towards “Taiwanization,” meaning that more emphasis is placed on Taiwanese history, culture and languages, all of which had been suppressed during the five-decade KMT rule. Thus it

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12 60.0 % 50.0

40.0

30.0

20.0

10.0

0.0 92.06 92.12 93.06 93.12 94.06 94.12 95.06 95.12 96.06 96.12 97.06 97.12 98.06 98.12 99.06 99.12 00.06 00.12 01.06 01.12 02.06 02.12 03.06 03.12

Year/Month Taiwanese

Both

Chinese

No response

Source: Election Study Center, National Chengchi University.

Fig. 1.

Identity trends in Taiwan (1992–2003).

comes as little surprise that apart from attempting to render the Lien–Soong ticket as one that would betray Taiwan to China, the DPP also emphasized constitutional reform, a new constitution, and a peace referendum. In contrast, the Lien–Soong ticket endeavored to portray Chen as someone who let politics and ideologies get in the way of improving the Taiwanese economy. The issue of establishing the three links with the Chinese mainland, which is viewed as critical to Taiwan’s economy, and the hurdles that the incumbent faces in achieving that end were paraded by the KMT–PFP alliance as evidence of Chen’s inability to improve Taiwan’s economy. However, in the aftermath of the SARS outbreak in mid-2003, the pan-blue alliance changed its overall message to emphasize on cautious integration with the Chinese mainland. Meanwhile, the DPP had succeeded in focusing on the wishes of the people by addressing the issue of a “Taiwanese awareness”; in some respects it was this initiative that helped Chen offset four years of poor governance and an unfavorable grassroots support base. Right from the beginning of the presidential campaign, the pan-blue candidates continued to be criticized by the green camp for their lack of loyalty to Taiwan. Even the voters have their doubts over the pan-blue camp’s loyalty to the island, mainly because of its upholding of the reunification agenda. Moreover, many opinion surveys have indicated more people believe that President Chen is better able to guard and protect Taiwan’s interests than Lien Chan.

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“Perception” matters. And as aforesaid, almost all the opinion polls have shown that more and more people on the island identify themselves as Taiwanese while fewer and fewer people see themselves as Chinese. In other words, arguing for “reunification with China” at this point in time would appear politically suicidal for any politicians hoping to be elected by the people. As a result, the KMT, which had earlier upheld eventual reunification with the mainland as its goal, was forced to backtrack on its own words that it no longer believed reunification with China is the only option for Taiwan and that eventual independence could also be considered. Legislative Speaker Wang Jin-Pying noted that “Taiwan’s independence ought to be an acceptable alternative.” Meanwhile, Lien and Soong ceased talking about the so-called “one China” or even the “1992 consensus.” However, in February 2004, former Justice Minister Liao Cheng-Hao, attempted to establish four pan-blue support organizations in mainland China, with the purpose of mobilizing Taiwanese businessmen on the mainland to support Lien–Soong. News of this caused uproar in Taiwan. Lien Chan quickly distanced himself from this episode, and Liao wrote an essay stating that his activities were not authorized. In any case, the damage had been done. Then came the showdown on the issue of the Taiwan identity. The pan-green alliance, under the leadership of Chen and former president Lee Teng-Hui, initiated the 228 Hand-in-Hand Rally. Not only did the rally demonstrate the mobilization skills of the pan-green team, it also demonstrated that the theme of the rally, “Say ‘yes’ to Taiwan, say ‘no’ to China!” was highly appealing to many of the non-traditional pan-green supporters. At this historic rally of February 28, 2004, over 2 million people formed a human chain across the island to protest China’s threats towards Taiwan. It was then that the pan-blue uncovered an ironclad fact: while there are still a few people who regard the Chinese mainland as their motherland, there are more and more people in Taiwan that see the island as their one and only homeland. Opinion polls taken after the 228 Rally indicated that the pan-green was catching up or had even taken the lead. Regardless of any possible impacts on the presidential election, the March 13 island-wide campaign rally where pan-blue candidates Lien– Soong knelt and kissed the ground reflected how, in due course, democratization on the island would effectively become “Taiwanization.” This explains why right after the rally in the afternoon, Lien Chan made the following public announcement: “The Republic of China is a sovereign state, which we cannot, and will not allow to be swallowed, merged or

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united with the People’s Republic of China.” James Soong echoed Lien with, “Taiwan should not bow to the pressure of the Chinese mainland.” There was also similar talk in Lien’s campaign pledges to the effect that “under his term, there would be no reunification between the two sides of the Strait.” Apparently, like it or not, the “we-group vs they-group”, “Taiwan vs China” has gradually become mainstream opinion in Taiwan. And it is this mainstream trend that spells out the pan-blue’s calculation: the candidates simply have to demonstrate that they love the land and are answering the calls of the people. In fact, there is another angle to this turn of events. Many analysts tend to see the dynamics of Taiwan politics from a “top-down” perspective. That is, politicians mobilize voters to support their vision and their agendas. However, the 228 Rally and Lien–Soong’s theatrical gestures, instead suggest that a “bottom-up” view to politics in this island is needed. Simply put, it is not so much about how politicians manipulate the people, but rather, how people might and should, dictate to the politicians. Taiwan’s democracy has pressured the politicians into responding without ambiguity and into putting forth their vision about the country, particularly with respect to its current status and its future. This is something concrete that has come about after decades of separation from the mainland. Taiwan has gradually developed its own politically unique identity. Ethnic problems, which used to be an issue in the past, are no longer a concern in the 2004 election. Rather it is more to do with the Taiwan national identity. Taiwan’s democratization has made the country’s status an unavoidable issue in the minds of the Taiwanese people. Unfortunately, for the Lien–Soong ticket, it is a case of “too late and too little.” It had been an uphill battle for them to demonstrate their political credentials and make the voters believe that they are sincere in fully supporting and nourishing the Taiwan’s identity, not for their votes. In short, the DPP victory signifies that Taiwan has taken an important step in realizing Taiwan’s individual identity and conscience, whereas the pan-blue’s failure showed the ticket’s failed response to the mainstream voice of the people of Taiwan.

Spoiled ballots The high number of invalid ballots in this year’s presidential poll, which came to 337,297, or 2.5% of the total ballots cast, was questioned by the pan-blue camp in their move to annul the election. Of course, in such a close race, with a mere margin of 29,000 votes, the unprecedented

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number of spoiled ballots was bound to have an effect on the election result. The question was: what had accounted for the large number of invalid ballots, an almost triple-fold increase when compared to the 122,278 invalid votes (or one percent) that were cast in the 2000 presidential election? The KMT–PFP alliance had gone so far as to accuse the Chen administration of rigging the election by spoiling the ballots that favored the Lien–Soong ticket. However, the accusation does not seem to be supported by any concrete evidence. Table 5 illustrates the distribution of invalid ballots by geographical area. Among the country’s 25 cities

Table 5. Locality Yunlin Kinmen Chaiyi Changhua Ilan Miaoli Taoyuan Kaohsiung Tainan Nantou Taitung Lienchang Penghu Hsinchu Pingtung Hualien Taichung Taipei Hsinchu City Keelung City Taipei City Chiayi City Tainan City Taichung City Kaohsiung City Nationwide

Geographic distribution of invalid ballots.

Governing party

Total votes

Invalid votes

Percent of invalid votes (%)

KMT KMT DPP DPP DPP Independent KMT DPP DPP DPP PFP PFP KMT KMT DPP KMT KMT DPP KMT KMT KMT DPP DPP KMT DPP

419,783 29,203 329,209 759,712 265,094 325,354 1,035,296 750,105 670,524 309,112 119,783 4,425 46,014 264,340 528,500 184,065 871,831 2,183,828 220,885 227,561 1,619,038 155,783 443,430 574,759 914,085 13,251,719

16,748 1,069 11,554 26,288 8,885 10,868 30,838 21,903 19,313 8,784 3,198 117 1,213 6,737 13,383 4,523 21,270 52,948 5,143 4,996 30,789 2,905 8,247 10,566 15,012 337,297

3.99 3.66 3.51 3.46 3.35 3.34 2.98 2.92 2.88 2.84 2.67 2.64 2.64 2.55 2.53 2.46 2.44 2.42 2.33 2.20 1.90 1.86 1.86 1.84 1.64 2.55

Source: Central Election Commission.

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and counties, the offshore island of Kinmen registered the second highest ratio of invalid ballots in the election, with 3.66%, or 1,069, invalid ballots. The highest ratio was recorded in Yunlin County, with 3.99%. Both counties were in fact governed by pan-blue magistrates. In fact, the invalid votes were distributed evenly throughout all cities and counties, regardless of party affiliation of their county magistrates or city mayors. Analysts have sought to provide alternative explanations for what really happened. First, there is speculation that the high number of spoiled ballots may have a lot to do with the campaign of the Alliance of One Million Invalid Ballots. The alliance was led by Cheng Tsun-Chi, former Labor Bureau Chief for the Taipei City Government. To show their discontent with the two camps, the alliance of various social groups encouraged voters to spoil their ballots as protest. It is certain that this campaign had at least achieved some success, as witnessed by individuals who openly declared after the election that they had indeed hailed to this campaign and spoiled their ballots. In fact, after the election, leaders of the alliance proudly claimed that they had made a difference in this election. Second, the large number of invalid ballots could also be attributed to the stringent way invalid ballots are identified. The Legislative Yuan, dominated by the pan-blue caucuses, amended the Presidential and Vice Presidential Election and Recall Act in October 2003, adopting a stricter guideline for valid ballots. For instance, according to the new rules, a vote is valid if the stamp is made only in a box above the photo of the candidate. In the past, a ballot was valid if the stamp was made over the candidate’s name or if it was stamped across his or her ballot number. As a consequence of these more stringent standards for deciding valid ballots, it was natural to see a corresponding increase in the number of invalid votes. In brief, these alternative explanations for the large number of spoiled ballots seem more convincing than the unsubstantiated charges that had been made by the pan-blue alliance. In sum, as a rule, an election result cannot be attributed to any single factor. In this election, voters voted for all kinds of reasons. However, to explain the significant change in Taiwan’s political landscape, namely, the increase in the pan-green’s power-hold, one needs to pay attention to the evolving forces that drive Taiwan’s politics. In other words, the surge in the Taiwan identity is an important key to understanding not only this election, but also Taiwan’s politics in general. This bears important implications not only for Taiwan’s internal politics, but also its external relations.

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Implications of New Taiwanese Politics President Chen Shui-Bian’s victory in the election gives him another four years in power to realize his mission to change Taiwan and to improve relations with China. However, there are numerous issues he has to face and overcome in the years ahead. These issues are important aspects of Taiwan’s new political environment. Democratic consolidation and reform issues How will Chen’s re-election influence Taiwan’s democratization and ongoing reforms? Unfortunately, Chen’s victory of less than 30,000 votes does not constitute an effective majority. In other words, although Chen has left the minority position of the past four years behind him to become a president supported by a majority of voters, it is still difficult to translate a 0.2% victory into a clear mandate. In addition, the blue camp’s continuing challenge to Chen’s legitimacy will tend to weaken Chen’s ability to fulfill some of his more contentious campaign promises or embark on a radical reform agenda. More importantly, the mutual distrust between the two camps and the disrespect for the very rules of the democratic game, as shown by the post-election events, has seemingly weakened the consolidation of Taiwan’s young democracy. In addition, in the wake of a bitter election, the different political parties seem to have taken an extreme partisan position with regard to most, if not all, policy issues, especially the reform issues. This is largely out of the hope that it will allow them to take stock of their own political position. So, there could be a crisis of governance and mandate, unless the pan-green could claim another victory in the December legislative election. However, the polling results in many areas show a growing selfawareness among voters, which is clearly a harbinger of a more mature democracy. With a maturing electorate, politicians ought to be more responsive and accountable so that they can meet the expectations of the voters. Although the two referendum issues were a legal failure this time, politically, it is not the end but the beginning of history of referenda in Taiwan. The next step in this evolution is likely to be popular initiatives on various issues put to the ballot by the citizens themselves. In other words, with this first experience at referenda, Taiwan has taken a step forward in deepening its democratic system. Ironically, even with the pan-blue’s preoccupation with challenging the presidential election result, all the major parties

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had already begun their preparation for the December legislative election. Apparently, different political parties, blue or green, still see the elections, the very foundation of a democracy, as the most legitimate and important way to build up their own political capital. In this regard, political parties still believe in the democratic system in Taiwan. It is also evident that Taiwan is now entering a very difficult, but critical phase of its democratic consolidation.

Party politics in Taiwan The political map in Taiwan has been redrawn. One particularly salient and legitimate question in this regard is: will there be a party realignment in the aftermath of the presidential election? Or more specifically, is Taiwan moving toward a “two-party system?” There are many people hoping that in the future Taiwan will have a mature ruling party and a mature opposition. But will the KMT and the PFP merge or will the KMT break up? The issue of the KMT–PFP merger had already created some controversies both inside the KMT and the PFP. Some saw the merger as inevitable in order for the KMT to survive or even thrive, but others tended to see this same thing as a form of political suicide for the KMT. Obviously, within the KMT, there is serious factional as well as generational competition in the wake of the presidential election. There is even some danger that a bitter leadership struggle and intra-party split could occur in the KMT. Moreover, if an opinion poll of KMT members were to be conducted today, it would probably indicate that the majority opinion favors either Ma or Wang running in 2008, perhaps with strong support given to both sides. Thus Lien and his running mate, PFP Chairman James Soong, are faced with the difficult task of holding the KMT–PFP alliance together, and in doing so, a number of hurdles lie ahead. For instance, will the Taiwan-conscious faction within the KMT revolt? Will the promised generation change of the KMT leadership take place soon? If a split in the KMT occurs, the PFP is not likely to continue its cooperation with the KMT. It would have to walk its own path as a new leader of the pan-blue camp. If this is the scenario, it is foreseeable that the PFP might become much stronger than it is now. This having been said, the PFP must make some fundamental changes to be able to cash in on a possible KMT breakup. If for instance, the PFP is not able to shed the stereotypes of “a party just for Soong” and “a party for mainlanders”, it will face marginalization instead. For all these reasons, it is difficult to predict

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whether the pan-blue will achieve its goals or suffer another electoral defeat in December. These are all important questions related to the future of the pan-blue camp. For the green camp, as its territory expands, it appears to be easier for the DPP and the Taiwan Solidarity Union (TSU) to share the fruits of a growing pie. Accordingly, in the immediate term, the DPP and the TSU are likely to take a more co-operative and accommodating attitude in dealing with each other. Many analysts have predicted that the TSU influence will grow and there will be a gain of more legislative seats this year. To expand and consolidate its electoral gains, the TSU will surely take a very clear pro-independence stance in Taiwan’s unification–independence ideological spectrum. In contrast, the DPP is likely to move towards occupying the political middle ground, with the hope that the DPP can also increase its legislative seats. In the longer term, however, there could be competition between the TSU and the DPP, simply because each has to expand its political space at the expense of the other. In any case, if the pan-green camp wins a majority of seats in the legislative election, Taiwan’s politics will enter into a new phase, with the green camp controlling both the government and the legislature. In Taiwan’s political history, this will be “a real transfer of power” from the blue to the green. But then, will a DPP government be in place for many years to come? How will this transfer affect Taiwan’s party politics? These are important questions that warrant careful analyses. Regardless of whether there will be a party realignment taking place, it appears that within and between the green and the blue camps, there will be cooperation as well as competition. Taiwan’s politics is thus set to enter into a very dynamic and possibly fluid period.

Identity vs ethnicity As discussed earlier, the rising Taiwan identity issue has become one of the driving forces for Taiwan’s political change. However, throughout the campaign and post-election period, the issue of identity has unfortunately been intermingled with the issue of ethnicity. Either implicitly or explicitly, the voters had been encouraged to vote according to their ethnic background. This campaign strategy to dichotomize the two camps along the line of “Taiwanese vs Chinese,” “pro-referendum vs anti-referendum” and “pro-democracy vs anti-democracy” has resulted in a serious split in Taiwan’s society. More importantly, since much of the post-election

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activities, as mobilized by the pan-blue leaders, aim to challenge the result of the election and the legitimacy of President Chen, it has evidently created a wider gulf between the supporters of the two camps. In fact, in many areas, there appears to be a significant ethnic divide on mainstream issues. Nonetheless, I would again argue that the election itself had more to do with identity than ethnicity. Of course, it is palpable that the great majority of mainlanders seem to have a strong sense of insecurity and a strong suspicion over Chen’s legitimacy. This is understandable because this is the first time ever that the mainlanders, as the core supporters of the panblue camp, have felt any sense of marginalization in Taiwan’s political map. Although a power in exile for the past four years, the pan blue camp has continued to occupy 60% of the votes (Lien plus Soong in the 2000 election), and their control of the Legislative Yuan made the pan-blue continue to see themselves as a majority camp. However, the 2004 election has proven their lead to be a myth, and this has thereby compelled the pan-blue leaders and supporters to realize that they are not only an opposition, but also a minority. Accordingly, as an ethnic minority and now a political minority, it is quite conceivable that the mainlanders would have a very strong feeling of insecurity. In other words, for some people, the identity issue equals the issue of ethnicity. Obviously, over the next four years, the priority for President Chen is to ease ethnic and social cleavages that have resulted due to the fierce competition of the election campaign. The president will need to be both creative and proactive in looking for ways to reconcile different ethnic groups. In fact, President Chen’s inauguration address had publicly noted the seriousness of these issues and acknowledged the necessity of solving these problems. He emphasized that he must both observe his constitutional obligations and at the same time remind everyone of the thing that unites the country — love for Taiwan. He apparently hopes to transcend the ethnic issue and transform it into an identity issue. In any case, the government as well as the opposition parties will need to work together to resolve the political and ethnic tensions in Taiwan or will at least need to compromise so as not to exacerbate the situation. The president has personally taken concrete steps to heal the division of different ethnic communities. In particular, the question of how to alleviate the concerns of the minority mainlanders should be high on the president’s political agenda. Without restoring ethnic harmony in society, Taiwan will not have a stable foundation for its burgeoning democracy.

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Cross-strait relations What are the implications of the election to the future development of crossStrait relations? As previously discussed, the results of the election have indicated a surging Taiwan identity across the island. But many analysts tend to see the dynamics of Taiwan politics from a “top-down” perspective. That is, politicians mobilize voters to support their vision and their agendas. Looking at the 228 Rally and Lien–Soong’s theatrical gesture of kneeling and kissing the ground, it instead suggests that a “bottom-up” view of politics of this island should be adopted. Simply put, it is not so much about how politicians manipulate the people, but rather, how people might and should, dictate to the politicians. Taiwan’s democracy has pressured the politicians into responding without ambiguity, to put forth their vision about this country, particularly with respect to its current status and its future. No leader in the future can afford to take a very soft position vis-àvis Taiwan. Nor can any leaders accept cross-Strait relations under any “one China” framework. More importantly, after decades of separation between the two sides of the Taiwan Strait, and due in large part to the democratization of Taiwan and the hostility of Beijing, Taiwan has developed its own socially and politically unique identity. This explains why “one China” has become a political taboo for the island’s politicians and clarifies why the “one country, two systems” model simply has no market in Taiwan. If the above characterization of recent developments in Taiwan is correct, the message that is being sent across the Taiwan Strait is surely very profound. Leaders in Beijing have repeatedly said that they want to listen to the hearts and minds of the people in Taiwan. But the sad fact for China is: it is slowly but surely losing the hearts and minds of the Taiwanese people. China’s continued military intimidation and diplomatic isolation cannot succeed in winning Taiwan. More evidently, these hawkish positions and heavy-handed policies will only dishearten the people here and drive Taiwan away. While the two referendum questions failed due to the boycott of the pan-blue, the overwhelming support for these two proposals, namely, the strengthening of national defense and the opening up of cross-Strait talks has also sent clear messages to the leaders in Beijing. That is, Taiwan wants peace and is prepared to talk not under military intimidation. Since democratization has resulted in Taiwanization, it naturally follows that any sound Taiwan policy by Beijing has to accommodate this fact. On this note, it is worthwhile giving some forethought to the question: will Beijing be brave enough to drop the “one country, two systems” model

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and be creative enough to propose a new formula that is more attractive to the people in Taiwan?

Concluding Remarks After more than a decade of democratization and reforms, Taiwan is now entering a critical stage of consolidating its democracy and facing its biggest test ever towards its democracy. In fact, the 2004 presidential election will surely have long-lasting impact on and ongoing implications for Taiwan’s economic, ethnic, social, and political developments. In addition to these domestic ramifications, the election result will also have significant external effects, both in terms of the implications for cross-Strait relations and for foreign affairs. Among these new developments, the rise of a Taiwan identity has become an important foundation of Taiwan’s internal and external politics. Despite some post-election controversies, it appears that most people still believe in Taiwan’s democracy, as evidenced by the initiation of campaign preparations for the legislative elections in December. The pan-blue camp’s lawsuit against the commission and against President Chen to have the election results annulled had dragged on for months. Nevertheless, the pan-blue’s decision to seek resolution through the legal process demonstrated a minimal and necessary trust of the rules of the democratic game. Still, Taiwan’s democracy is in the midst of a period of instability and possibly a crisis. In order for democracy to survive and to thrive on the island, the question of whether or not the government and the opposition can show their respect for democratic ideas and values and reconcile their differences will be essential to Taiwan’s future destiny.

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2 Prospects for the Pan-Blue in Post-2004 Presidential Election Taiwan Raymond R. Wu

Introduction The original thinking was simple and straight-forward. By combining Lien Chan’s and James Soong’s vote totals in the 2000 presidential election, the pan-blue — the Kuomintang (KMT) and the People First Party (PFP) alliance — was anticipating a certain victory and a return to the presidency which it lost four years earlier because Lien and Soong were split. Riding on the strength of a double-digit lead during the initial months, the pan-blue, however, became complacent towards the end of the campaign. The possibility of losing was never factored into the thinking within the pan-blue. Therefore, the pan-blue was ill-prepared to deal with the aftermath when their worst nightmare became reality in the early evening of March 20, 2004. From strategy to objective, disunity and confusion characterized the pan-blue’s post-election mortem. Compounding the situation further, internal friction within the pan-blue — which had always been there, but was long suppressed for the sake of winning the presidential election “in unity” — surfaced after the election. In addition, calls for a “generational change” in leadership intensified, with most looking to Taipei Mayor Ma Ying-jeou and Legislative Yuan (LY) Speaker Wang Jin-ping to assume greater responsibilities, at least within the KMT. However, when Lien made public the planned merger of the KMT, PFP, and others in the opposition, the rank-and-file greeted the news with not a ringing endorsement, but skepticism over its underlying intent. The

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merger, if realized, could temporarily delay the pressure to reform the KMT, but is unable to ignore the need for change altogether. How — and when — to implement the necessary reforms, from personnel to policy orientation, remain a formidable challenge in the pan-blue’s continued search for a new political identity. This paper will first examine Taiwan’s 2004 presidential election in retrospect. It seeks to identify the major factors responsible for President Chen Shui-bian’s re-election victory and the pan-blue’s inability to hold onto its once seemingly insurmountable lead in the polls. It will next spell out the issues and problems that have emerged within the pan-blue following the March 20 vote. In particular, the analysis will identify the challenges — both internal and external — in the pan-blue’s continued search for a new political identity.

Pan-Green vs Pan-Blue: The 2004 Presidential Election in Retrospect Categorized according to the color of their respective political parties’ emblem, the 2004 presidential campaign was a fierce contest, from start to finish, between the pan-green (the ruling Democratic Progressive Party and the Taiwan Solidarity Union) and the pan-blue (the KMT and the PFP).1 Widely regarded as an uphill battle, Taiwan’s incumbent President Chen Shui-bian and Vice President Annette Lu surprised many by winning the 2004 presidential race with 6,471,970 votes, or 50.11%. The opposition candidates — the Kuomintang’s (KMT) Lien Chan and the People First Party’s (PFP) James Soong — received 6,442,452 votes, or 49.89%. The total voter turnout was 80.28%, not particularly high considering the closeness of the race, and the margin of victory — 0.228% — is the smallest ever in any national contest in Taiwan’s still-maturing democracy.1 From the outset, the 2004 presidential campaign was perceived by many as “Campaign 2000: Part II,” since the candidates were the same as those four years earlier. Personal animosity amongst the candidates was as intense as differences in ideological preference. Subsequent negative campaigning and smear tactics were the norm, not the exception, throughout Taiwan’s 2004 presidential campaign. 1 For a complete coverage of results of the 2004 presidential campaign in Taiwan,

please see China Times, March 21, 2004.

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Table 1. Comparison of vote totals in 2000 and 2004 Presidential Campaigns. Year

2000 2004 Difference

Candidates Lien–Soong

Chen–Lu

7,590,485 6,442,452 −1,148,033

4,977,697 6,471,970 +1,494,273

On the other hand, the presidential vote also coincided with the firstever national referendum, invoked under the “defensive referendum” provision regarding the Chinese missile threat. From the timing, the appropriateness, to the final wording, the referendum became another point of contention between the candidates. Worse yet, the controversy later degenerated into a debate over “pro-Taiwan” vs “pro-China.” Even if the allegation that the pan-green used referendum to mobilize its fundamentalist supporters was just, the tactic apparently worked, as nearly 7.5 million voters — nearly one million more than Chen’s total — took part in the historic undertaking. Amidst all the controversies in the campaign, big and small, from start to finish, the one that had the most impact on the outcome was undoubtedly the pre-election shooting of Chen and Lu in Tainan on March 19. In retrospect, the March 19 shooting incident is the single most influential event in Taiwan’s 2004 presidential election. Beyond policy differences, the “ethnic card” was, unfortunately, exploited to mobilize respective fundamentalist supporters of both sides. As a consequence, it heightened the sense of differentiation in Taiwan’s politics-induced ethnic tensions and agitated anxiety among the major ethnic groups. How to achieve and maintain ethnic harmony thus becomes a formidable challenge for the new president and his administration. The significance of the 2004 presidential campaign in Taiwan goes beyond the negative campaigning, the first-ever referendum vote, or the controversy over pre-election shooting. The result confirmed that the assertion and preservation of “Taiwan-First” interests — and the pursuit of a distinctive “Taiwanese identity” — have become the mainstream view across ethnic, regional, and ideological divide. A candidate’s — as well as that of a political party’s — ability to effectively articulate his position in that regard is, and will be, critical in any future campaign.

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Externally, the heightened awareness and increased identification with a distinctive “Taiwanese identity” collectively conveyed a strong message. No future leader of Taiwan would risk alienating such mainstream views in managing cross-Strait ties and US–China–Taiwan trilateral relations. How to achieve — and maintain — a balance between the appreciation for such indigenous sentiments and the prevention of unilateral moves to upset the status quo will be a delicate task for all concerned with future developments in and around the Taiwan Strait.

Facts vs Fiction: A Tale of Two Political Parties — The Pan-Green Judging from the final vote tally, there are several significant developments, particularly in terms of Taiwan’s electoral politics, worthy of further observation. First, it is the first time that the ruling DPP has won a re-election at the national level. Second, Chen received more than 50% of the popular vote, a near 11% increase from his vote total in 2000. This may mark the beginning of a gradual, but steady shift in Taiwan’s domestic political landscape, with the proportion of respective supporters moving in pan-green’s favor. At the same time, while Chen received almost one and a half million more votes than in 2000, the pan-blue’s total shrank over 1.1 million from Lien’s and Soong’s combined total in 2000. Moreover, although the opposition — KMT and PFP — has come together to form a united ticket, Chen is nevertheless able to prevail in the end. While many factors were responsible, Chen’s success in mobilizing the fundamentalists with the first-ever national referendum, and his articulation of “Taiwan-First” interests would appear paramount. Another factor not to be overlooked is Chen’s personal qualities, especially his perseverance and convictions. Despite disappointing poll numbers, Chen was “hungrier” than the challenger; he simply appeared more eager, more intent on winning than the opponent. In the end, these qualities had some considerable influence over those undecided voters and contributed to the final outcome. Taiwan’s first national referendum As a means of exercising direct democracy, referendum has always been a favored cause for the DPP while it was the opposition. When the controversy over referendum re-surfaced in the second half of 2003, the pan-blue underwent fierce internal debate over referendum legislation, particularly

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when the legislation came up for a vote in late November 2003. Though the pan-blue, out of consideration for the presidential campaign, switched and supported the referendum legislation in the end, it never anticipated that Chen would almost immediately invoke Article 17,2 which gives the president power to stage a referendum vote if “the country’s sovereignty was under threat.” It caught the pan-blue off guard and gave Chen and the DPP the strategic edge in rallying not only the pan-green’s fundamentalist supporters, but those middle-of-the-road voters who have long yearned for a greater stake in deciding Taiwan’s future. While the opposition accused Chen of manipulating referendum for electoral purposes, over seven million Taiwanese voters — though short of the mandated quorum to make the vote binding — seemed to have responded favorably to Chen’s call for heightened assertiveness.3 Moreover, after this initial vote, referendum now becomes a readily available means to exercising direct democracy in Taiwan. With expected amendments in the legislation’s scope and requirement in the months ahead, referendum will continue to be an issue of fierce domestic debate and controversy for years to come.

The pan-blue When KMT’s Lien Chan and PFP’s James Soong agreed to form a single ticket for the 2004 presidential race in February 2003, such a “dream team” led DPP’s Chen and Lu, at one time, by as much as close to 20% in the poll.4 However, without a clearly-defined vision and a proven resolve to fight corruption and implement reforms, the once-huge lead dwindled to “too close to call” immediately before the March 20 vote. 2 In the Referendum Law passed by Taiwan’s Legislative Yuan (LY), Article 17

specifically provided that “when the nation is threatened by an external force that could cause a change in the nation’s sovereignty, the president may, through a resolution of the Executive Yuan Council, refer a matter crucial to national security to the citizens for a referendum.” Please refer to www.gio.gov.tw/taiwan-website/ 4-oa/20040301/2004030101.html. 3 On the first question — strengthening Taiwan’s national defense — the total number of people who voted was 7,452,340, and on the second question — reciprocal negotiation stature with China — the number was only 7,444,148. Both were short of the quorum of 8,248,873 to make the referendum legally binding. 4 Please refer to successive opinion polls conducted by media organizations like the United Daily News and TVBS cable television in the spring of 2003.

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While people may point fingers at a number of factors, the pan-blue’s inability to sustain initial momentum with new vision, its over-emphasis on economic and quality-of-life concerns on the electorate, and its ambiguous stance on the island’s “national identity” should bear the brunt of the responsibility in defeat. From the beginning, the pan-blue felt Chen’s poor performance in office was enough to remove him from office. Given Taiwan’s economic sluggishness in recent years, the pan-blue felt the electorate would be overwhelmingly pre-occupied with quality-of-life issues, i.e. unemployment, education, and crime. Privately, pan-blue’s campaign staff drew a close parallel of the 2004 campaign to that of former U.S. President Bill Clinton’s first bid for the White House in 1992; they even utilized the same campaign theme — “It’s the economy, stupid!” — in drawing up strategy for their candidates. In retrospect, while economy and quality-of-life concerns are important to Taiwan’s electorate, they are not enough in a one-on-one, islandwide election. Furthermore, Taiwan’s economy has been showing signs of revival since late 2003, with imports and exports both scoring record highs and the stock market rallying from mid-4000 in November 2003 to mid-6000 before the March election.5 These developments had somewhat undermined the pan-blue’s charge of incompetence against Chen and the DPP. In fact, in a “fast-food” culture like that of Taiwan’s, people are quick to forget past woes if the current windfalls meet, or surpass, their expectations. By positioning the campaign theme on the economy and the quality-of-life concerns, the pan-blue was hoping to leap-frog over the highly-emotional issues regarding Taiwan’s relations with China and, more importantly, Taiwan’s “national identity.” In a dramatic change of policy positions, both Lien and Soong publicly stated that they would “indefinitely suspend” further discussions on “one-China” and “1992 Consensus.” Instead, they proposed that both Taipei and Beijing shelve political controversies and proceed to build mutual trust through economic and cultural exchanges. While these pronouncements sounded plausible, they invariably gave people the impression that the pan-blue was “dodging” questions relating 5 See statistics compiled by the Directorate-General of Budget, Accounting and

Statistics, Executive Yuan, ROC, “Key Economic and Social Indicators,” at www.dgbas.gov.tw/dgbas03/english/key/kesi.xls.

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to the highly sensitive and potentially divisive issue of independence vs unification, and future relations across the Taiwan Strait. Worse yet, the pan-blue fumbled away an important opportunity to convince the electorate that it is equally, if not more than Chen and the DPP, “pro-reform, pro-Taiwan.” Consequently, doubts remain if the pan-blue would be as vigorously protective of Taiwan’s indigenous interests as the pan-green. Judging from the voting pattern in Central and Southern Taiwan, the pan-blue was not able to convince the electorate, and embarrassingly for the pan-blue, the margin of victory for Chen in the seven southern-most cities and counties was larger than in 2000. In all, the pan-blue’s over-confidence, misplaced campaign theme, and the inability to effectively articulate indigenous interests contributed to its downfall at the March 20 vote. While the pre-election shooting incident was weighty and controversial at the end, it could not, and should not, be the “excuse” for the pan-blue to exonerate itself of the real reasons behind the evaporated big lead that once guaranteed a certain victory.

After the Vote: Pan-Blue’s Post-Election Disarray However, judging from pan-blue’s post-election responses, both the KMT and the PFP have not begun a critical self-examination that could provide the momentum for change and reform. As expected, suspicion and bitterness overwhelmed the pan-blue from top to bottom. The sense of disbelief overwhelmed most, which subsequently led to angry outbursts and challenges over the vote outcome. On election night, pan-blue supporters first marched down the streets of Taipei from the Lien–Soong campaign headquarters, later gathered in front of the president’s office, and staged camp-outs and mass demonstrations that ultimately led to clashes and bloodshed with the riot police on both April 3 and 10. It was later learned that there was fierce internal debate immediately prior to Lien’s decision to challenge the vote and its outcome on election night. Even the march down the president’s office and the subsequent decision to stage a mass demonstration, there were more like an afterthought made at the spur-of-the-moment. Concern over cohesion and unity within the pan-blue became paramount when successive mass demonstrations on April 3 and April 10 turned violent with demonstrators attacking police precinct and clashing

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with the riot police.6 Worried that the violence would turn away centrist voters, many within the KMT voiced strong objection over such tactics. In particular, the KMT’s “indigenous faction” — mostly LY members of Taiwanese descent — opposed the “populist” approach and preferred efforts in seeking relief to be reverted within the system. In a recent survey by the United Daily News, pan-blue’s successive demonstrations have hurt its image and stature with the electorate. In fact, the approval rate of the KMT dropped from 49% last September to 39% today, and the disapproval rate increased from 32 to 44%. The same applied to the PFP, with the approval rate dipping to 35 from 40% while experiencing an upward swing in disapproval numbers from 34 to 45%. The numbers for the DPP, on the other hand, stayed relatively unchanged compared with September 2003.7 With the LY election coming up in early December 2004, both the KMT and the PFP must scramble to assemble and nominate the best and most “elect-able” candidates. With the momentum apparently behind the pangreen, the challenge ahead is formidable. Should the pan-green secure enough seats in the LY and become the majority party, the prospects for the pan-blue launching a credible campaign in 2008 and beyond will be greatly diminished. With the LY election approaching, both the KMT and PFP have agreed to temporarily halt efforts at mass mobilization and resort to seeking relief within the system, both administrative and judicial. The call for infusion of new blood and new vision, however, continues to gather strength and support in the media, as well as within pan-blue’s rank-and-file. Though generally considered a “nice man,” people never really warm up to Lien Chan in this age of the electronic media, where images and style mattered nearly as much as substance. Introverted and often stiff in front of the camera, Lien never fully gave the people of Taiwan a credible vision, nor convincingly convey to the electorate that the KMT was equally, if not more, “pro-reform, pro-Taiwan” as the DPP. The result was painful but expected.

6 When the pro-pan-blue demonstrators refused to leave, tensions escalated after

the event ended in the evening of April 10, 2004. The scene turned violent when demonstrators threw stones at police and tried unsuccessfully to storm police lines. For a detailed report, see China Times, April 11, 2004. 7 For a report on the survey, please see United Daily News, April 8, 2004.

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Merging the Pan-Blue: United “We” Stand? Despite persistent calls for merging the three opposition parties — the KMT, the PFP, and the New Party (NP) — both before and after the election, prospects were dim until Lien made the surprise announcement at the weekly KMT Central Standing Committee meeting on May 19, 2004. Although a substantial portion of the pan-blue rank-and-file would like to have the opposition merged into a single entity, Lien’s announcement was greeted more with skepticism than enthusiasm. The problem lies with Lien’s inability to outline the reasons and the necessity for a merger now. Statistically, the support for merging the pan-blue appears solid. According to a recent China Times survey, 50% of the respondents preferred a new leadership for the KMT while 36% would like to see the KMT and the PFP merged into a single political party.8 The apparent lag between the poll numbers and the reality can only be explained in terms of “providing a credible vision” following the merger. The NP is, and has been, the one most actively seeking consolidation of the opposition parties. Generally identified along the far-right end of the political spectrum, the NP has not been able to transform itself from an elitist party, driven by “anti-Lee Teng-hui sentiments,” to a mass party based on visions and ideas. Therefore, it is not surprising that the NP has been marginalized in recent years after bitter internal division and poor showing at the polls for public offices. On the other hand, the KMT and the PFP have other ideas in mind concerning the proposed merger. The KMT is worried that the proposed merger would blur the distinction among the three parties and confuse its supporters over which would best represent the pan-blue. At the same time, the KMT is concerned that if it merges with political parties that are generally identified with a “pro-China” inclination, a lot of the nonpartisan, “pro-Taiwan” voters may distance themselves from the KMT. It could squeeze the KMT from both sides — the pan-green at one end and the PFP and the NP at the other — along the voter spectrum. Such prospects have alarmed the most loyal of the KMT rank-and-file. Putting the merger talks aside, the immediate task for the pan-blue centers on nominating candidates for the December LY election. By staying separate and independent from each other, the pan-blue runs the risk of 8 For a full report on the survey, please see China Times, April 15, 2004,

or at: http://news.chinatimes.com/Chinatimes/Moment/newfocus-index/0,3687, 930415003+0.

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nominating too many candidates and ending up fighting amongst themselves for votes. Unless, of course, the pan-blue could significantly enlarge its electoral appeal, it would likely suffer a similar fate as in the last LY election of 2001, when a lot of pre-election favorites lost, high on the list of “runner-ups.”9

Looking Ahead: Prospects of 2008 Presidential Election It is unlikely that either Lien or Soong will run again on the presidential ticket, irrespective of which slot, for the pan-blue in 2008 and beyond. While the DPP already has a number of prospective candidates lined up and ready to succeed Chen — including, but not limited to, Vice President Annette Lu, Premier Yu Shyi-kun, Taipei County Magistrate Su Tseng-chang, and Kaohsiung Mayor Frank Hsieh, the pan-blue needs to identify the probable contenders soon. The most likely presidential hopefuls for the pan-Blue, at this point in time, remain to be Taipei Mayor Ma and LY Speaker Wang. Ma’s current term expires in December 2006, and he has roughly 15 months thereon to launch a national campaign if he wins the pan-blue nomination for 2008. Wang, if successfully re-elected to the LY speaker in February 2005, could well be a king-maker, if not a candidate himself. Being a native Taiwanese elected from Kaohsiung County for more than 25 years, Wang has some definite advantages that Ma, and the pan-blue as a whole, cannot ignore. There is a lot of politicking leading up to the nomination for the presidency in 2008. The pan-blue, however, confronts immediate and formidable challenges that could decide its fortunes and political relevance for the future. Most importantly, the pan-blue must carefully re-calibrate its ideological appeal and prepare to contend with the pan-green over the centrist, non-partisan voters who would foremost demand commitment to “TaiwanFirst” interests from the political party worthy of their support. Without infusion of fresh blood and new ideas that would excite the electorate’s imagination, the electorate is bound to further identify the panblue as a collection of political “has-beens,” with an ideological underpinning incompatible with Taiwan’s realities and people’s core values. Indeed, 9 For instance, unable to persuade others to withdraw to avoid over-nomination,

the PFP nominated three candidates in the Northern District of Kaohsiung City in the 2001 LY election. Unable to expand the party’s support base, the three nominees ended up losing the vote, placing atop the list of “runner-up.”

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without clearly conveying to the electorate its commitment to the preservation of “Taiwan-First” interests, the pan-blue could face further decline in popular support, possibly as quickly as the end-of-year LY election. Although the pan-blue needs to effectively articulate and convince the electorate of its commitment to the “Taiwan-First” sentiments, it is highly unlikely for the KMT and the PFP to be more “native” or “indigenous” than what the DPP and the Taiwan Solidarity Union have already preached. Consequently, it is nearly impossible for the pan-blue to “out-duel” the pan-green in projecting the “pro-Taiwan, pro-reform” stance. In short, it is hard to be “more original” than the original, including political ideology for political parties. It thus becomes imperative for the pan-blue to re-group and strengthen its position as a credible opposition and a viable alternative to the pangreen. In addition to attracting younger members and more professionals, the pan-blue must distinguish itself from the pan-green with visions that emphasize economic growth, ethnic harmony, and social cohesion in Taiwan. On the other hand, while upholding indigenous interests, the panblue should devise ways to seek and maintain peace and stability in the Taiwan Strait. How to balance the competing interests — political, economic, and others — intertwined in cross-Strait relations remains at the heart of pan-blue’s attempt in reviving the electorate’s trust and solidifying their support. The defeat of Lien and Soong in the 2004 presidential campaign is undoubtedly devastating to the pan-blue, particularly to those loyal rankand-file supporters who disagree with the ruling DPP and disapprove of Chen’s performance in office. However, the outcome of the 2004 Presidential Election could be the needed impetus for change and reform, with infusion of new visions and ideas that would hopefully re-capture the electorate’s imagination before the next election. Without some timely and pointed measures to meet grassroots demand for change and reform, the road ahead will be rough and bumpy for the pan-blue. Given recent developments, however, there is no indication that changes or reforms are either forthcoming or inevitable. If the “status quo” remains, the pan-blue better be prepared for another difficult campaign for the LY this December.

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3 Sources in China’s Formulation of Its Taiwan Policy

Zheng Yongnian and Lye Liang Fook

Introduction Chen Shui-bian’s insistence on pushing ahead with a referendum vote for a new Taiwanese constitution in 2006 following his surprise election victory in March 2004 and the apparent ambiguities in his inaugural speech in May 2004 have once again thrown the spotlight on the ever bumpy crossStrait relationship. While the mainland and Taiwan are becoming more interdependent in economic terms, they are drifting further apart in terms of their political relationship. Take the call for a new constitution for instance. From Taiwan’s perspective, a new constitution is a necessity because the current constitution, enacted in 1947, is outdated and urgently in need of an overhaul to meet present needs. But in the eyes of Beijing, a new constitution serves as a means for Chen to formalize Taiwan’s independence without declaring one. China is strongly opposed to this. In an unprecedented move, the Taiwan Work Office of the Central Committee and the Taiwan Affairs Office of the State Council took the unprecedented initiative of issuing a joint statement on May 17, 2004, highlighting the broad scope and depth for cooperation between the two sides if Taiwan recognizes the “One China” policy. The same statement also warned of dire consequences if Taiwan were to go further down the independence road.1 Several months after that, in December 2004, the Standing Committee of the National People’s Congress discussed 1 Zhongtaiban, guotaiban jiu dangqian liangan guanxi fabiao shengming (Central

Committee Taiwan Affairs Office and State Council Taiwan Affairs Office issues announcement on the current state of cross-Strait relations), Renminwang, May 17, 2004. 35

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and passed a draft of the Anti-Secession Law aimed at containing Taiwan’s independence movement.2 More discussion on the May 17 statement and the anti-secession law will follow, but it is clear from these examples that cross-Strait relations involve a dynamic process subject to constant change depending on a host of factors intrinsic to China and Taiwan as well as the bigger external environment. At times, the changes are expected and do not raise much of a ripple in crossStrait relations. On other occasions, however, the changes are unpredictable and they spark off an escalating chain of developments which threaten to spiral out of control. But fortunately, the two sides have so far refrained from the use of force to settle their differences although Beijing has stated in unequivocal terms that war is a certainty if Taiwan declares independence. To make sense of the volatility of cross-Strait relations, this paper intends to go beyond the vagaries of the political environment and examine the major factors that help to guide the mainland’s policy towards Taiwan. We believe that these factors are relatively constant and do not change unless the prevailing circumstances on which they are premised have changed. Identifying the domestic sources of mainland’s Taiwan policy will provide readers with the means to understand the reasons behind the actions Beijing has taken so far in response to Chen’s move to secure greater independence for Taiwan. Equally important, it will also help readers predict the likely actions that Beijing will take in the future to prevent the outright independence of Taiwan from the mainland. Once the domestic sources of mainland’s Taiwan policy are known, they might help policy makers on both sides to better devise policies or strategies to ease cross-Strait relations and come up with an outcome acceptable to both sides. In this paper, we have identified four related key factors that can help explain the recent changes as well as any expected changes in the mainland’s policy towards Taiwan. They are: (a) the central importance attached to the mainland’s domestic agendas; (b) the focus on conducting its foreign policy from the perspective of a great power; (c) the priority being placed on developing economic ties on both sides of the Taiwan Strait; and, (d) the prevention of Taiwan’s independence.3 We will show how these factors 2 “Anti-secession law called timely”, China Daily, December 26, 2004. 3 For an earlier version of this article, see Zheng Yongnian and Lye Liang Fook,

Zhonggong xinyidai lingdaoceng he Taiwan wenti: jige jiben zhengce panduan (Chinese Communist Party new generation leadership and the Taiwan question: a few basic policy predictions), Studies on Chinese Communism, Vol. 37, No. 11 (November 2003), pp. 34–42.

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have affected the mainland’s formulation of its Taiwan policy, and how the Chinese leadership has continuously adjusted its Taiwan policy in accordance to changes related to these factors.

Leadership and Agenda-Setting Among the four factors, the centrality of domestic agendas is the most important in determining the mainland’s policy towards Taiwan. Without a doubt, domestic politics have consistently been regarded by the top Chinese leadership as deserving the most attention on the political agenda. The top leadership of any country, especially when it first assumes political power, will outline for the purpose of domestic consumption as well as for its international audience what it hopes to achieve during its term in office. For a big and emerging power like China, it is even more important for the leaders to identify their political agenda early in their term given the numerous tasks that call for urgent and undivided attention. Having a clearly defined political agenda can help the leadership mobilize the necessary resources to achieve what it wants to do during its term in office. If, at the end of the day, the leadership can successfully deliver on its promises, this will further enhance its legitimacy in the eyes of the population. More importantly, having a well defined political agenda will provide a clear direction for the entire country to move towards. This will foster predictability and stability, and the benefits that will arise from such an approach will not only be limited to the duration of the present leadership, but extend to the succeeding leadership as well. The current set of difficulties and challenges related to cross-Strait relations can, to a large extent, be traced to the agenda set by the third generation of leaders. In particular, how to handle the Taiwan issue and the future development of cross-Strait relation is closely related to the choices made on these issues by the top leaders in China. When Jiang Zemin was at the helm of the Party, the Chinese leadership elevated the Taiwan issue to the top issue on the agenda. It is now widely recognised that Jiang came into his own as General Secretary sometime in the mid-1990s. At that time, the ideological battle over whether China’s development should be capitalistic or socialistic in its orientation was eventually resolved during the 14th Party Congress in 1992. Since the overall direction of China’s economic development was already settled, what remains to be done was to implement such a policy. Hence, Jiang needed to turn his attention elsewhere and outline a few key

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tasks that he would like to achieve for the remaining days of his term. There were two clear choices for Jiang Zemin then: either to opt for domestic political reforms or to pick an external issue such as the Taiwan question. Of the two, Jiang chose the Taiwan issue rather than political reforms. The question is: Why did Jiang choose Taiwan? It would be politically risky for Jiang to opt for a sensitive area such as political reforms because party elders such as Deng Xiaoping were still around. Even though Deng and other Party elders had relinquished all formal positions, they continued to wield considerable influence and Jiang still had to tread cautiously. Also, at that time, the political atmosphere was generally in favor of stability and against any grandiose plans or ideas in the wake of the 1989 Tiananmen crackdown and the 1991 shocking collapse of the Soviet Union. In particular, Deng attributed the collapse of communism in the Soviet Union and Eastern European countries to the failure by the leaders to push ahead with radical economic reforms rather than the failure to carry out political reforms. Jiang, himself a handpicked successor by Party elders, was aware of the prevalent conservative political atmosphere. Among the third generation leaders headed by Jiang, there was also no strong inclination to opt for political reforms. This does not mean that they did not understand the important role political reforms could play in resolving some of the daunting challenges confronting China such as corruption. But more importantly, it would not have gone unnoticed to them that all the Chinese leaders who have advocated political reforms did not have a good political ending. Jiang’s predecessors such as Hu Yaobang and Zhao Ziyang who had attempted to experiment with some form of political reforms soon fell out with their mentor Deng Xiaoping. Thus, unless there was a serious political crisis, there was no strong reason for Jiang and third generation leaders to opt for political reforms. It was logical and timely for Jiang and third generation leaders to turn their attention to the Taiwan issue because of the historical legacy left behind by Deng. Soon after Deng assumed power, he mentioned the importance of reunifying the country. The concept of “one country, two systems” was devised primarily to address the issue of reunification with Taiwan. However, following the death of Chiang Ching-guo, the momentum towards reunification was delayed indefinitely because of the uncertain political situation.4 As a result, the “one country, two systems” came

4 Chiang Ching-guo passed away in 1988.

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to be first applied to Hong Kong and Macau in 1997 and 1999 respectively. It was only a matter of time before the top leadership turned its attention to the Taiwan issue. If Jiang did not raise this issue, he would come under strong political pressure since he was expected to complete the legacy left behind by Deng. Moreover, the relatively speedy reunification with Hong Kong and Macau appeared to have given Jiang the impression that the model of “one country, two systems” could similarly be applied to Taiwan. The decision of the Jiang leadership to elevate the Taiwan issue to the agenda of the top leadership was also closely related to the rise of a new wave of nationalism in China at that time. This wave of nationalism had its beginnings partly in a new found sense of national pride as a result of the rapid rise in China’s international stature after Deng’s nanxun (southern tour) and partly as a reaction to the perceived unequal treatment of China by the West. This was best manifested in the voting for 2000 Olympics in which China lost to Sydney by a mere two votes.5 Riding on the wave of this new nationalism, it was logical for Jiang to elevate the Taiwan issue to the fore of Chinese politics as it would serve to enhance his legitimacy. In fact, he appeared to have very little to lose and much to gain by this approach. Such was the political context behind Jiang’s eight points on the Taiwan question propounded in January 1995.6 But on hindsight, it was not such a good idea to elevate the Taiwan issue to the forefront of Chinese politics. Once this was done, the top leadership would have to mobilize a great deal of resources including civilian and military resources to take care of this agenda item. China paid great attention to every development that took place across the Strait especially those which it regarded as moving in the direction of independence and reacted in a manner which it deemed appropriate. In response, Taiwan would accuse China of unnecessary intervention in its affairs and of resorting to bullying tactics to cower the Taiwanese into submission. China’s missile testing over the Taiwan Strait in 1996 and Zhu Rongji’s strong words in 2000 were regarded as such by the Taiwanese. A vicious circle was created and this only served to widen the political gulf on both sides. When Hu Jintao took over the helm of the Party in 2002, he decided to adopt a slightly different tact. Even though a new generation of leaders 5 Yongnian Zheng, Discovering Chinese Nationalism in China: Modernization, Identity

and International Relations (Cambridge: Cambridge University Press, 1999). 6 Jiang badian (Jiang’s eight points), Zhongxinwang, January 19, 2004 (http://news.

sina.com.cn/c/2004-01-19/15312673242.shtml).

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had assumed key positions in the Party, power succession had yet to be completed then as Jiang’s men still held the majority of positions in the Standing Committee of the Political Bureau. More significantly, Jiang himself remained as Chairman of the Central Military Commission. Strictly speaking, Hu did not then have a completely free hand to set the political agenda of the fourth generation leadership.7 However, Hu did have greater room to maneuver in setting his political agenda compared to Jiang when he first took over as General Secretary. This is because the transition from Deng to Jiang is quite different from the transition from Jiang to Hu. The transition from Deng to Jiang was a change from the “owner of the country” to the “manager of a country”. Deng, like Mao, was owner of the country because of his revolutionary struggle for the victory of the CCP to rule the country. As a result, Deng regarded the country as his personal possession to be protected at all costs. If any of his anointed successors do not pay heed to what he says, as the owner, he has the right to withdraw their rights to manage the country. Besides Hu Yaobang and Zhao Ziyang, Jiang himself came close to being removed in 1992 when he was deemed to have opposed an open market economy. But the transition from Jiang to Hu could be described as the passing of the leadership baton from one set of managers to the other. Because he could not lay claim as an owner of the country, Jiang would have less reason and less clout to intervene as actively as Deng had in the affairs of the country. The only legitimacy he had to exert some kind of influence over Hu as the “junior” manager was in his capacity as a “senior” manager in offering advice and inputs to the top leadership. The present stage of “managerial” leaders is a positive development as it adds an element of stability and predictability to the way politics is conducted in China. As managers, they are likely to be more professional and less ideological in dealing with the problems of the state. Without any revolutionary credentials to fall back on, they rely more on institutions and established norms to get things done. It is precisely this change in the 7 In his acceptance speech after his appointment as General Secretary in November

2002, Hu pledged that on important matters, he would seek instruction from and listen to the views of his predecessor. See “Hu pledges to confer with Jiang on issues”, International Herald Tribune, November 21, 2002 and “Hu speaks softly for quiet reform”, Asian Wall Street Journal, November 18, 2002.

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nature of the leadership that has allowed Hu greater room to set his political agenda compared to Jiang when he first took over. There are two essential reasons why Hu chose to focus on domestic issues over the Taiwan issue after he took over from Jiang. First, it was obvious that according a higher status to the Taiwan issue had not produced much headway in terms of resolving the reunification issue and to a large extent, it has been counter-productive. If Hu were to stay the course, there was no guarantee that he could achieve an outcome different from what Jiang had achieved. Moreover, staying the course could possibly show up differences between the two over the Taiwan issue and this would be detrimental to Hu in terms of consolidating his power. The best alternative was for Hu to downplay the Taiwan issue while at the same time accord due recognition to Jiang’s legacy on Taiwan. Hu’s four points propounded in March 2003 was the outcome of the political compromise between these two objectives.8 Second, and more importantly, there was greater reason for Hu to turn his attention to domestic politics due to the changed domestic circumstances. The emphasis on domestic politics however did not necessarily mean that the leadership was prepared to engage in democratic reforms. Indeed, some China observers held the view that the SARS episode in the first half of 2003 provided an unprecedented opportunity for Hu to embark on political reforms in China. Instead, Hu completely avoided this topic in his keynote address during the 82nd Anniversary of the founding of the Party on July 1, 2003 and called on the Party and the whole nation to launch a new wave of study on Jiang’s “Three Represents” theory.9 8 Hu Jintao zai canjia Taiwan daibiaotuan shenyishi qiangdiao: jianding buyidi

jianchi “heping tongyi, yiguo liangzhi” jiben fangzhen wei zaori jiejue Taiwan wenti, wancheng zuguo tongyi daye er fengdou (Participating at the review session attended by the Taiwan delegation, Hu Jintao emphasizes: resolutely persist with “peaceful reunification, one country, two systems” as the basic principles for the early resolution of the Taiwan issue, to strive towards the huge task of reunifying the fatherland), Xinhuanet, March 12, 2003 (see http://news.xinhuanet.com/newscenter/2003-03/12/content_772458.htm). 9 “Hu Jintao zai yantaohui zuo zhongyao tanhua: zhenxin xue sangedaibiao lidang weigong zhizheng weimin shi biaozhi” (Hu’s important speech at the symposium: whole-heartedly study the “Three Represents”, follow the guidelines of establishing the Party for the interests of the public and governing in the people’s interests), Xinhuanet, July 1, 2003. See also “Hu Jintao urges greater effort in implementing the ‘Three Represents’ ”, Xinhua News Agency, July 1, 2003.

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What Hu and premier Wen Jiabao had in mind was to establish a leadership style that was more mass oriented.10 This shift in the leadership’s focus was a timely balance to Jiang’s focus on admitting the privileged classes, i.e. the capitalists and private entrepreneurs, into the Party. In February 2003, when Hu spoke at the Central Party School, he proposed the new “Three People’s Principles” of the Party, i.e. power to be used by people, concern to be showered on the people and benefits to be enjoyed by the people.11 To augment the New Three People’s Principles, Hu further proposed at a Political Bureau Meeting in March 2003 that the national media carry more articles that reflect the daily lives of the people so that the media can be “closer to reality, closer to the masses and closer to life”. Li Changchun, a member of the Political Bureau Standing Committee in-charge-of ideology and propaganda, had on a number of occasions called on party organs and officials working in the media industry to stay in close touch with the people and pay more attention to issues that affect their lives.12 The changed orientation of the top leadership is of great political significance as it reflects the leadership’s commitment to stay in touch with the people in the interest of long-term stability in general and to maintain the Party monopoly on power in particular. In a sense, the leadership is renewing its “social contract” with the people. As China does not have a democratic system of government, it is even more important for

10 To be sure, this shift in orientation started even before Hu and Wen became the

President and Prime Minister respectively in March 2003. Hu’s key message when he visited Xipaibo, the revolutionary base of the CCP in November 2002, was that the Party should not forget the needs and aspirations of the ordinary people. As for Wen, he had stressed the importance of accelerating agriculture and rural reform to raise the living standards of farmers and reduce their financial burden at a Central Conference on Work in Rural Areas in January 2003. See “Stable rural policy stressed by central conference”, Xinhua News Agency, January 8, 2003. 11 Hu’s New Three People’s Principles serves a number of purposes. First, it distinguishes Hu’s leadership style from that of his predecessor without any adverse political risks to himself. Second, the New Three People’s Principles provides the ideological underpinnings to support the people orientation which the Hu–Wen leadership wants to be identified with. Third, by appealing to the masses, Hu can build up a basis of legitimacy among the people. This will be important in helping Hu consolidate power. 12 “CPC leader calls on publicity officials to improve work”, Xinhua News Agency, April 15, 2003. See also “Senior CPC leader calls for studies of 16th CPC National Congress guidelines”, Xinhua News Agency, February 12, 2003.

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the leadership to keep in close touch with the people and understand their aspirations. Failure to do so could spell the demise of the Party and throw the country into chaos. In recent years, there seems to be greater incidences of workers and peasants unrest particularly in the poorer provinces. Hence, the shift in orientation of the top leadership is to address genuine grievances by the workers and peasants that comprise the majority of the population. In placing greater focus on the needs of the ordinary people, the top leadership is not only trying to improve the quality of life for the entire population but also, more importantly, adjusting its basis of legitimacy. While economic growth is still important, it is not the only major preoccupation of the government. The key to stability in China lies in balancing economic growth with other social objectives such as reducing the urban– rural divide and lending a helping hand to ordinary Chinese who may run into intractable difficulties from time to time. Indeed, if Hu and Wen are to achieve the goal of transforming the whole of China into a “comfortable society” (xiaokang shehui), they must make sure that the benefits of economic growth are spread more evenly.13 Nevertheless, the preoccupation with the domestic agenda does not mean that the Hu leadership can overlook the Taiwan issue. As a matter of fact, an important part of the basis of legitimacy of the top leadership lies in its ability to manage the Taiwan issue and preventing it from getting out of hand. The Hu–Wen leadership would want the status quo on the Taiwan issue to remain, since it is acceptable to the majority of the Chinese. But the leadership cannot afford Taiwan’s independence since it will seriously undermine its legitimacy. Once Chen began to push the independence envelope further after his re-election with his shortened reference to the Republic of China as Taiwan and attempt to register Taiwan as a member state of the UN, the Hu leadership had to take a slightly firmer stand. In a demonstration of the resolve of the top leadership, a communiqué issued by the 4th plenum of the 16th Party Congress in September 2004 stated that “solving the Taiwan issue and realizing complete reunification of the country is a sacred task for the Party”.14 In a nutshell, although national 13 Xiaokang shehui was used as the title of Jiang Zemin’s political report to the

16th Party Congress in November 2002. Please refer to http://www.china.org.cn/ chinese/zhuanti/251522.htm for further details on this topic. 14 Chinese mainland condemns Chen Shui-bian’s push for “Taiwan Independence”, Xinhua News Agency, September 21, 2004. See also Hu’s hard line on Taiwan, Business Times (Singapore), September 24, 2004.

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unification is no longer regarded as a key item on the political agenda, the new leadership will be ready to do anything to prevent Taiwan from declaring formal independence. In this context, the May 17 statement and the anti-secession law become understandable.

Great Power Diplomacy Although the Hu leadership chose to stress more on domestic politics, this did not mean that it was not concerned with developments in Taiwan. The reality is that Beijing has little influence over what occurs within Taiwan. To a large extent, the Taiwan issue is driven by the dynamics of Taiwan’s own domestic politics. Beijing’s priority is to restrain Taiwan from edging further down the road of independence. To do so, Beijing has resorted to great power diplomacy with the ultimate aim of creating an international “bird cage” to restrain Taiwan from going for outright independence. The stress on great power diplomacy is a relatively new strategy. In the past, Beijing regarded Taiwan as a purely internal matter and did not take lightly to attempts by third parties, whether friendly or hostile, to intervene to try to resolve the issue. For instance, even though the Wang Daohan and Koo Chen-fu meeting took place in Singapore in April 1993, Singapore was not allowed to play a role beyond that of a venue for the meeting.15 Former Senior Minister Lee Kuan Yew has disclosed that while he had in the past played the role as a channel of messages between the two sides, he was never a mediator.16 And the Chinese have affirmed as late as 2002 that Senior Minister Lee has never acted as an intermediary between the two sides.17 China’s non-intervention message was directed less at Singapore but more at the United States who had in the past interfered in what Beijing 15A conference to mark the 10th Anniversary of the Wang–Koo talks was to have

been held in Singapore in April 2003 was eventually postponed. See “China–Taiwan conference in Singapore postponed”, Straits Times, April 2, 2003. 16 “I wasn’t a mediator, I just passed messages”, Straits Times, September 22, 2003 (excerpts of Senior Minister Lee’s interview with Taiwan’s China Television Company on September 19, 2003). 17 Zhongguo waijiaobu ping liguangyao fangtai (China’s Foreign Ministry comments on Lee Kuan Yew’s visit to Taiwan), Ming Pao, September 17, 2002.

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considers a domestic affair.18 In May 1995, Beijing severely criticised the United States for granting Lee Teng-hui a visa to visit the US. The US has also insisted on pushing for the sale of advanced weaponry to Taiwan much to China’s chagrin. In April 2001, the Bush administration upped the ante by announcing that it would sell advanced weapons and equipment worth billions of US dollars to Taiwan, including four Kidd-class destroyers, eight diesel-powered submarines, and 12 P-3C Orion submarine-hunting aircrafts.19 In reality, Beijing did not have any real levers of influence over Taiwan to prevent it from going down the independence road. This was in stark contrast to the speedy reunification of Hong Kong and Macau with the mainland. China merely conducted direct negotiations with the governments of the United Kingdom and Portugal without active participation from either the people of Hong Kong or Macau. While there were dissenting voices from these people, they were easily side-stepped. But Taiwan is a different political entity altogether, with its own set of government and vocal population. When Taiwan began moving down the independence road beginning with the days of Lee Teng-hui, there was very little Beijing could do on its own to prevent such an occurrence except to resort to a show of force. This was the origin of the series of military exercises from July 1995 to March 1996 across the Taiwan Strait.20 During the second half of Jiang’s leadership, there was an apparent shift in thinking that it would be better to regard the Taiwan issue not as a domestic matter of China, but as the most important issue in China’s relations with the United States. The top leadership began to realize that 18 Even though the United States is the only country that can exert a significant

influence on Taiwan, China nevertheless reacted strongly when former Singapore Deputy Prime Minister Lee Hsien Loong (now the Prime Minister) visited Taiwan in July 2004. Beijing’s primary concern was that the visit, the first by a seniorlevel foreign dignitary to Taiwan since Chen’s inauguration, was an unnecessary endorsement of Chen’s Presidency and would embolden Taiwan to go further down the independence road. There was a worry that other regional countries would follow Singapore’s example. Beijing told Singapore that the visit harmed “China’s core interests, the political base between the two countries and the feeling of 1.3 billion Chinese”. Thereafter, Beijing halted ministerial-level visits to Singapore. It is unclear at this stage when such visits would resume. For a write-up on the above episode, please see “China’s reaction to DPM Lee Hsien Loong’s visit to Taiwan”, EAI Background Brief, No. 206, August 25, 2004. 19 “China strongly protests US arms sales to Taiwan”, People’s Daily, April 25, 2001. 20 “How the die was cast against Taiwan”, Straits Times, July 9, 2000.

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only the United States could exert real influence over Taiwan. With this shift, the Chinese leadership began to turn its attention to the United States and to work with it to prevent Taiwan from breaking away. Following the two summit meetings between Jiang and Clinton in 1997 and 1998, there was better understanding between the United States and China on the Taiwan issue.21 Clinton publicly stated the United States adherence to the one-China policy and China refrained from overreacting to developments across the Taiwan Strait. While strong words were exchanged, the level of tension never came near the military maneuvers of 1995–1996.22 However, when Bush first became President, there were signs that he wanted to use Taiwan as a political weapon to restrain China. Besides approving a major arms sales package for Taiwan, Bush was also reported to have said in a public interview that the United States would do whatever it takes to help Taiwan defend itself.23 This was read by China as a sign that the United States was abandoning its role of strategic ambiguity vis-à-vis Taiwan. However, following the terrorist attack of September 11, 2001, the dynamics of United States–China relations turned much better. Both countries are now cooperating on a host of issues especially on counter-terrorism and the burgeoning trade-deficit between them. Hu Jintao has continued and further relied on great power diplomacy in order to stabilize the situation across the Taiwan Strait. In his first overseas trip since becoming President in March 2003, Hu toured Europe and

21 The first summit meeting between the two leaders occurred during Jiang Zemin’s

visit to the United States in October 1997. In the following year in July 1998, Clinton paid a return visit to China. At the conclusion of his nine-day trip to China, Clinton called it “a remarkably successful attempt to continue to build our partnership for the future”. See “Beyond Tiananmen: Clinton in China” at http://edition.cnn.com/specials/1998/06/china/. 22 When former President Lee Teng-hui was granted a tourist visa to visit Cornell University, his alma-mater, China voiced strong opposition through diplomatic channels. See “China protests as Lee wins Japan, US visas”, CNN, April 21, 2001 (see http://edition.cnn.com/2001/world/asiapcf/east/04/20/lee.visa.01/ index.html). 23 United States–China relations were going through a rough patch at that time as China continued to detain a US surveillance plane that performed an emergency landing on Hainan Island after a collision with a Chinese fighter jet on April 1, 2001. See “Bush pledges whatever it takes to defend Taiwan”, CNN, April 24, 2001 (see http://edition.cnn.com/2001/ALLPOLITICS/04/24/bush.taiwan.abc/).

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accepted the invitation of Jacques Chirac to attend the meeting of the Group of Eight industrialized countries in Evian in June.24 China seems to be moving beyond its traditional role as a spokesman for the developing countries, to assuming an additional responsibility as an important counterpart of the industrialized world. Lately, China is taking a leading role in the six-party talks on the Korean Peninsula and has enunciated the policy of a “peaceful rise”. It would therefore appear that China is making subtle changes to Deng’s traditional policy of taoguan yanghui (???) that advocated an unobtrusive and low-key approach. To some extent, China’s more active role on the international stage is a reflection of its growing international stature. Whatever China does or not do will have implications for the rest of the world. If China does not explicitly state what its thinking is, other countries, particularly neighboring ones, will be concerned and suspicious of its real intentions. Conversely, if China is clear about its intentions, it will allow room for other countries to adjust their positions accordingly. This greater transparency in terms of China’s foreign policy is welcomed by most countries as it is a factor for stability. At a related, but more important level, the Taiwan issue has compelled China to push ahead with great power diplomacy especially in terms of its relations with the United States. China has said on a number of occasions that the most sensitive aspect of its relations with the United States is on the Taiwan issue.25 Given this recognition that the United States is a pivotal player when it comes to the Taiwan issue, China has made a concerted effort to work closely with the United States to expand the common pool of interest between them. As mentioned earlier, particularly in the later half of the 1990s, and more obviously at present, China has been very careful to take into account the interest of the United States at almost every important juncture. When Hu Jintao met President Bush at the APEC summit in Chile in November 2004, Hu stressed that the US and China should work together to jointly deal with the Taiwan issue. This was the first time that

24 Will China join the Group of Eight? Taiwan’s National Policy Foundation, Septem-

ber 3, 2003 (see http://www.npf.org.tw/publications/ns/092/ns-c-092-269.htm). 25 For instance, just prior to the summit meeting between Clinton and Jiang

Zemin in Beijing in June 1998, Chinese Foreign Minister Tang Jiaxuan was quoted by CNN to have said that Taiwan will figure as the “most sensitive problem in China–US relations”. See “What China wants”, CNN, June 25, 1998 (http://edition.cnn.com/world/asiapcf/9806/25/what.china.wants/index.html).

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the Chinese top leadership publicly expressed a willingness to cooperate with the United States over the Taiwan issue.26 Unlike the Cold War years whereby the Soviet Union and United States were in opposite camps and at loggerheads with each other, China has been very cautious not to follow in the footsteps of its former communist neighbor and set itself up against the United States. Instead, China has recognized the superpower status of the United States, and within this framework, is willing to work with the United States to expand areas of common interests and to allay concerns that a rising China is a “threat” to the region. For example, China’s active mediating role over the Korean Peninsula is meant to portray itself as a responsible and constructive player. There have been occasions whereby the United States has acted as the big brother and resort to some form of bullying tactics. For instance, the China “threat theory” was strongly peddled by a number of United States congressmen and military commanders over the past few years. In July 2002, two separate reports released by the Pentagon and the US–China Security Review Commission raised alarms about China as a potential military and economic rival.27 In January 2002, Dennis Blair, commanderin-chief of the Pacific Command of the United States Armed Forces, was reported to have said that the military forces of most Asia–Pacific countries are defensive, but those of some countries including China are aggressive.28 China’s reaction has been firm, but polite with remarks from relevant departments and leaders dispelling such a threat.29 26 Hu Jintao zhuxi huijian bushi zongtong (President Hu Jintao meets with Pres-

ident George Bush), November 21, 2004, website of the Ministry of Foreign Affairs of the People’s Republic of China (http://www.fmprc.gov.cn/chn/ziliao/ wzzt/hjtlatinamerica/t171122.htm). 27 “US ‘fabricating’ China threat”, CNN, July 23, 2002 (see http://edition.cnn.com/ 2002/world/asiapcf/east/07/22/china.us/?related). As far back as May 2000, four members of the House Armed Services Committee, citing national security reasons, came out against granting China Permanent Normal Trade Relations status as they believe this would “aid and abet Communist China’s dangerous military buildup”. See “Congressmen warn of China threat”, NewsMax.com, May 9, 2000 (see http://www.newsmax.com/articles/?a=2000/5/9/221845). See also “US Congressman jabbers about ‘China threat’ in Russia”, People’s Daily, January 16, 2002. 28 “Advocacy of ‘China threat’ fruitless: FM Spokesman”, People’s Daily, January 17, 2002 (see http://english.peopledaily.com.cn/20020117_88810.html). 29 “Authors of US ‘China Threat’ report may visit China”, People’s Daily, July 26, 2002; and, “China won’t go for bullying or threatening other countries”, People’s Daily, February 21, 2002.

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China’s foreign policy posture towards the United States has deliberately avoided a direct confrontation with the world’s sole superpower and to cooperate on areas of mutual interests. China’s constructive role and willingness to settle as No. 2 has made the United States see the need to act with a greater sense of responsibility over the Taiwan issue. On its part, the United States, preoccupied with counter-terrorism and military campaigns in Iraq and Afghanistan, would like China to continue to act responsibly. Unlike the initial period of the Bush administration, the White House is more prepared to restrain Taiwan from going further down the independence road. During Wen’s visit to the United States in December 2003, Bush for the first time, abandoned ambiguity and stated that the United States was opposed to any moves in Taiwan that would alter the island’s status quo.30 So far, the United States sees that it is in its best interests to exercise restraint on the independence forces in Taiwan. However, China is under no illusion that the United States is doing this out of a sense of altruism. Despite its professed support of the status quo, the United States looks set to transfer the weapons first approved in April 2001 once Taiwan’s Parliament approves the necessary budget for such weapons. This is despite strong opposition from China. In April 2004, during United States Vice President Dick Cheney’s visit to China, Chinese leaders including Hu Jintao, Wen Jiabao and Jiang Zemin (in his capacity as Chairman of the Central Military Commission) urged the United States to stop arms sales to Taiwan and to avoid sending incorrect signals to Taiwan’s independence forces.31 Jiang himself told visiting United States National Security Adviser Condoleezza Rice in July 2004 that China was opposed to United States arms sales to Taiwan and that it would not sit idly by if other countries interfered to support Taiwan independence.32

30 “Blunt US words for Taiwan: warning reaffirms one-China policy but drops ambi-

guity”, International Herald Tribune, December 11, 2003. 31 “China urges US to stop arms sales to Taiwan”, website of the Embassy of

the People’s Republic of China in the US, April 15, 2004 (see http://www.chinaembassy.org/eng/xw/t84817.htm). 32 Jiang Zemin huijian meiguo zongtong guojia anquan shiwu zhuli laisi (Jiang Zemin meets US President National Security Affairs Assistant Condoleezza Rice), Renminwang, July 8, 2004. (http://www1.people.com.cn/GB/shizheng/1024/ 2626525.html).

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Economic (Inter)dependency as a Strategy The third aspect of China’s leadership formulation of its Taiwan policy is to stress the primacy of developing trade and investment relations on both sides of the Strait. From Beijing’s perspective, the development of economic ties should continue and even be stepped up even though there is no headway on the political front between the two sides. This seeming distinction between politics and economics has a number of advantages. First, as mentioned before, Beijing has very little levers to influence the conduct of politics within Taiwan. It is only through the broadening and deepening of trade and investment ties between the two sides can Beijing hope to exert some degree of influence over Taiwan. Second, the nature of trade and investment relations, compared to politics, is such that its benefits usually result in win–win situations for both sides of the Strait. Just to cite a simple example: an investment by a Taiwanese company in China will help the company, on the one hand, to lower its cost of operation while on the other, help to generate employment for the locals. Third, precisely because of the win–win benefits of trade and investment relations, it would be very difficult if not politically costly for whoever is in power in Taiwan today to ignore this aspect of cross-Strait relations. The longer Taiwan holds out on the establishment of “three links”, the greater is the political and economic costs to the people of Taiwan. To be sure, the growing interdependence between China and Taiwan is increasing day-by-day. Bilateral trade between the two sides has been on an upward trend from the low of just over US$ 10 billion in 1992 to over US$ 35 billion in 2002. There has also been much growth in terms of Taiwan’s investments in China. In 2000, Taiwan’s investment there amounted to US$ 2.3 billion, but this figure shot up to US$ 4 billion two years later.33 A significant trend is that businesses in Taiwan are shifting their operations to the mainland to achieve more optimum and efficient performance. Cross-Strait economic relations have become more diverse and intertwined, and this have served to some extent to exercise some restraint on both sides not to rock the boat too much. At the moment, the bulk of Taiwanese investment in China is concentrated in Guangdong, Jiangsu and Shanghai which are the most economically advanced areas in China. The economic performance of these areas is closely tied to Taiwanese investments there. To some extent, these areas wield some influence over Beijing’s policy towards Taiwan although the influence may not be direct. 33Asian Development Bank, Key Indicators 2003: Education for Global Participation,

2003.

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It is possible that over time, the interdependence of the economic relationship will exert a greater restraining influence on Taiwan than on China. This is what China wants to see happening as Taiwan would have more to lose if cross-Strait relations come to a head. At the moment, Taiwan enjoys a burgeoning trade surplus with China and China has so far not indicated any displeasure against such a skewed development. It cannot be denied that this “benevolent” attitude is part of China’s long-term strategy to increase its political leverage over Taiwan. Take Hong Kong for instance. The model of “one country, two systems” has worked remarkably well in bringing Hong Kong under the fold of China. The original intention was to keep the “one country, two systems” intact for at least 50 years. However, in reality, it is obvious that the trend has generally been away from “two systems” and towards “One China”. In the economic realm for instance, Hong Kong used to be a major gateway for trade and investment flows into China. Today, Hong Kong no longer enjoys such a preeminent position and has lost much of its economic lustre and distinctiveness. This veering towards the “One China” outcome is due primarily to China’s growing economic clout, thereby forcing Hong Kong and neighbouring countries to adjust their economic niches accordingly.34 Even though Taiwan is bigger and economically more independent than Hong Kong, it is unlikely to escape the fate of Hong Kong if cross-Strait trade and investment ties were to broaden and deepen further. It is precisely because of this that Chen Shui-bian is reluctant to give the go-ahead to establish the “three big links” with China, opting instead for the “three small links” in January 2001.35 Although Chen expanded the geographical coverage of the “three small links” in January 2004, it still fell short of full fledged links.36

34 In the realm of politics, even if the democratic elements were to rise to political

prominence, they would also not be able to stop the general trend towards “One China”. 35 The “three small links”, which officially started in January 2001, allow the citizens of Jinmen, Mazu and Penghu to travel to Fuzhou and Xiamen in Fujian province. But this move has been criticized by the mainland as merely legalizing an already existing practice. See “ ‘Xiaosantong’ sheliao dalu zou xiaolu” (Three small links: shun the big road to walk the small road), Renminwang, June 1, 2001 (http://www.people.com.cn/gb/shizheng/18/20/20010106/372103.html). 36 “Taikuoda ‘xiaosantong’ shiyong fanwei jinqi shiyong suoyou taishang” (Taiwan expands the effective coverage of “three small links”, from today it applies to all Taiwanese businessmen), Xinhuanet, March 1, 2004.

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Between January 2001 and July 2002, former Vice Premier Qian Qichen put forward a series of flexible suggestions in an effort to rekindle crossStrait talks on the “three links”.37 However, Chen’s “one country on each side” of the Taiwan Strait enunciated in August 2002 put a dampener on cross-Strait ties as it repudiated Beijing’s “One China” policy. Most recently, in response to a call by Taiwan’s Mainland Affairs Council to revert to Qian Qichen’s suggestions on the “three links”, Li Weiyi, the spokesman of the Taiwan Affairs Office of China’s State Council, stated in June 2004 that China is ready to start talks on the “three links” as long as Taipei agrees not to internationalize these links. China is prepared to regard the “three links” as an economic issue and to put aside the issue of “One China”.38 It remains to be seen whether the two sides can begin talks on the “three links” given the atmosphere of mutual mistrust. On the other hand, holding back talks would only increase the economic costs to Taiwan. The collapse of the former Soviet Union and Eastern European countries, as well as the dramatic economic transformation taking place in China today bears testimony to the strength of economic forces as opposed to other political factors. In the Taiwan case, it is obvious that despite the ever expanding and deepening economic ties across the Strait, there remains a yawning gap between the two when it comes to the conduct of politics. But it is equally obvious that the more intertwined the economies, the greater will be the restraint on Taiwan to maintain the status quo. Beijing’s focus on developing trade and investment ties between the two sides is also an indication of the preference placed by the top leadership on using traditional united front tactics to prevent Taiwan from slipping further down the road of independence. Under Hu’s four points, more 37 There are four main points in Qian Qichen’s suggestions. First, putting the peo-

ple first and benefiting the people is the starting point of solving the “three direct links”. Second, the “three direct links” is an issue between the two sides across the Strait, not between two states, and the air and sea routes between the two sides are not international ones. Third, the “three direct links” is an economic issue and talks on opening the links can leave aside the political connotations of “One China” during the technical negotiations. Fourth, the way to realize the “three direct links” should be simplified and flexible, and should be reached by negotiations between non-governmental organizations of the two sides. See Qian’s precondition for “three links” talks, Xinhuanet, June 30, 2004 (http://news.xinhuanet.com/english/200406/30/content_1559293.htm). 38 Guotaiban: Ruotai tongyi Qian Qichen santong lichang liangan ke shangtan (Taiwan Affairs Office: If Taiwan agrees with Qian Qichen’s position on “three links”, the two sides can engage in discussions), Zhongxinwang, June 30, 2004 (http://news.sohu.com/2004/06/30/34/news220783446.shtml).

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emphasis seemed to be placed on developing economic and trade ties, and cultural exchange.

Prevent Taiwan’s Independence All the above-discussed factors are aimed at achieving Beijing’s ultimate objective, i.e. prevent Taiwan’s independence. The mainland’s policy towards Taiwan has shifted from fostering reunification to preventing Taiwan from declaring independence. When Deng Xiaoping assumed power, reunification with Taiwan became a key objective of the top leadership and this gave rise to the concept of “one country, two systems”. Under Jiang Zemin, this remained a top priority as evidenced by Jiang’s eight points. It can be argued that the top leadership has tried all available strategies in favor of reunification, but did not secure any breakthrough. As a result, the strategy has now shifted to the prevention of Taiwan’s independence. There is now a realization on the part of the top leadership that reunification with Taiwan is a distant goal and they are prepared for the status quo to remain for some time. Although the publicly stated goal is reunification, it cannot be achieved overnight. This realization was already obvious during the second half of Jiang Zemin’s term. Having said that, however, it has to be clarified that no leader in China can afford to stay in office if he allows or is seen to allow Taiwan to break away. If the mainland had not threatened the use of force, Taiwan might have already broken away. Yet the threat of the use of force is a double-edged weapon. Taiwan has regarded this as China resorting to bullying tactics to cower it into submission. In fact, Chen has used China’s slew of 496 missiles targeted at the island to bring Taiwan further down the independence road. One of the referendum questions posed in March 2004 was whether Taiwan should acquire more advanced anti-missile weapons if the mainland refuses to withdraw missiles targeting the island. Although the referendum vote was less than the required 50% for it to be valid, it showed how Chen had cleverly manipulated the issue. The more Beijing opposed the referendum, the greater the level of support Chen could draw upon.39 39 Beijing’s rants boost Taiwan referendum and Chen, Asia Times Online, January 23, 2004 (see http://www.atimes.com/atimes/China/FA23Ad03.html); NPC: Taiwan referendum an “immoral” tactic, Xinhua News Agency, March 4, 2004; Taiwan Referendum Condemned, Xinhua News Agency, February 26, 2004; Taiwan referendum criticised, China Daily, December 2, 2003.

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In recent months, China seemed amenable to a more flexible approach in dealing with Taiwan although it is prepared to stand firm when necessary. The May 17, 2004 statement by the Taiwan Work Office of the Central Committee and the Taiwan Affairs Office of the State Council showed how much China is prepared to offer should Taiwan accept “One China”.40 In that statement, Beijing reiterated the “One China” principle and stated that under this framework, cross-Strait relations can expect stable development in seven aspects including resuming talks based on equality of status and establishing a system of mutual trust on military affairs; using appropriate methods to maintain close contact so as to speedily resolve any issues that arise; and, establishing a comprehensive, direct and mutually beneficial “three links”.41 Despite its largely positive tone, Beijing did threaten the use of force if Taiwan breaks away. This led some observers to conclude that Beijing had simply issued an ultimatum to Chen to toe the line or else face the consequences of war, but this view as explained above does not adequately explain Beijing’s position.42 Beijing has denied that the May 17 statement is an ultimatum, but rather a reiteration of its consistent stance and policies toward Taiwan.43 Chen’s May 20 inaugural address seemed to have responded to some extent to the carrots offered in the mainland’s May 17 statement. On the principle of “One China”, Chen indirectly mentioned this by stating that Taiwan can understand why the mainland, because of historical emotions and ethnic feelings, cannot relinquish the “One China” principle. On the issue of constitution changes, Chen appears to have backed down from his earlier clarion call for a referendum to vote for a new constitution. He has instead used a more neutral reference of constitutional re-engineering and also suggested that issues related to national sovereignty, territory 40 “Zhongtaiban, guotaiban shouquan jiu liangan guanxi wenti fabiao shengming”

(Taiwan Work Office of the Central Committee and the Taiwan Affairs Office of the State Council were authorised to issue a statement on cross-Strait relations), Xinhua News Agency, May 17, 2004. It is obvious that the statement had the endorsement of the members of the Political Bureau. 41 “ ‘5.17’ shengming, Chen Shui-bian bixu zuochu xuanze” (The May 17 statement: Chen Shui-bian must make a choice), Renminwang, May 19, 2004 (http://tw.people.com.cn/GB/26741/28631/2508494.html). 42 “Recognize One China or pay price, Beijing tells Chen; make the right choice or face destruction, Taiwanese leader is told”, South China Morning Post, May 17, 2004. 43 “May 17 statement on cross-Strait ties not ultimatum”, Renminwang, May 19, 2004 (http://english.peopledaily.com.cn/200405/19/eng20040519_143720.html).

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and the subject of unification or independence be left out of the current constitutional re-engineering exercise. Chen also said that Taiwan and the mainland could establish relations in any form as long as it is with the consent of 23 million people of Taiwan.44 However, Chen’s seemingly conciliatory tone was hardly acceptable to Beijing. Beijing is not convinced that Chen would mean what he says judging from how he is perceived to have reneged on his promises in his last four years at the helm. Moreover, on those issues which Chen appears to have conceded some ground in his inauguration speech, he has at the same time used ambiguous language that would allow him an excuse not to abide by what he has said in the future. On constitutional reforms for instance, Zhang Mingqing, spokesman of the Taiwan Affairs Office, has said that Chen has in the same vein said that it is “his personal suggestion” that issues such as national sovereignty, territory and the subject of unification or independence be left out of the constitutional re-engineering exercise because there is “currently no majority consensus on these issues”. This left open the possibility that things could change if a majority consensus should emerge in the future. In Zhang’s view, such ambiguities have sown the seeds for Taiwanese independence.45 To some extent, the mainland has shown a certain degree of maturity in its handling of cross-Strait relations. It has so far refrained from escalating the level of tensions across the Strait as had happened in 1996 and 2000. It continues to wield a combination of a carrot and stick approach in dealing with Taiwan. Lately, there are signs that a more hard line stance may be in the offing. Beijing has stated that it does not welcome “green” Taiwanese businessmen who earn money from their investments on the mainland only to bring such money back to Taiwan to support the independence movement. Also, there is growing momentum to enact a “national reunification” law to provide the legal authority for reunification in the future. If Taiwan moves further towards independence, China will certainly re-assess its Taiwan’s strategy and decide further on an appropriate course of action. The recent expansion of the Central Military Commission at the 4th plenum of the 16th Party Congress to include the Commanders of the 44 “Chen avoids showdown with Beijing: charter will avoid Taiwan’s sovereignty,

he says and referendum vote may die”, South China Morning Post, May 21, 2004. ‘520 yashuo’ Chen Shui-bian mo fangqi ‘taidu’ lichang” (Taiwan Affairs Office: May 20 inauguration speech, Chen Shui-bian has not relinquished Taiwan independence position), Renminwang, May 24, 2004 (http://tw.people.com.cn/GB/14863/14908/2517866.html).

45 “Guotaiban:

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Air Force (Qiao Qingchen), Navy (Zhang Dingfa) and Second Artillery Force (Jing Zhiyuan) sends an unequivocal message to Taiwan that China will not hesitate to bring all its forces to bear to prevent Taiwan from going for independence. In December 2004, Beijing announced that an AntiSecession Law will be passed by the annual section of the National People’s Congress in March 2005. Like the May 17 statement, the main purpose of the Anti-Secession Law is to prevent Taiwan’s formal independence. It is the first time that Beijing has resorted to legal means to restrain Taiwan. For Beijing, such a law is especially fitting since Chen himself has also pursued his course for Taiwan’s independence via constitutional reforms. One must also add here that the Law poses a serious constraint on the Beijing leadership to deal with the Taiwan issue. Previously, the mainland’s Taiwan policy was constantly subject to changes. When a new leader comes to power, China’s Taiwan policy would experience changes. Policy initiatives followed leadership changes. Such a trend indeed gave the outside world, especially Taiwan, a wrong illusion that the Chinese leadership could eventually give up Taiwan, and that peaceful independence was not an impossible endeavor. Certainly, by passing the Anti-Secession Law, the leadership in Beijing wants to make it clear that no individual leader in China could allow Taiwan’s independence. Since the law is an expression of people’s wills, all leaders in Beijing have to follow it.

Towards an Open Conflict? Underpinning the four main sources of the mainland’s Taiwan policy is the realization by Beijing that reunification is not a realistic goal in the shortand even in the medium-term. The primacy of domestic agendas, the resort to great power diplomacy, the priority of economic (inter)dependency and the prevention of Taiwan’s independence, have all served to reduce the saliency of the Taiwan issue and prevent it from being on the top policy agenda of the Chinese leadership. Given that prospects for reunification are not bright, the mainland has indicated on a number of occasions that it would want to maintain the status quo. By status quo, Beijing wants both sides to refrain from undertaking any actions that would raise tensions across the Strait. This is essentially the same position enunciated by the United States during Wen Jiabao’s visit to the United States in December 2003. However, the question on everybody’s mind is what kind of crossStrait relations will unfold under Chen’s second term and thereafter. Due

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to domestic political dynamics within Taiwan, Beijing’s goal of maintaining statue quo is increasingly becoming difficult. During Chen’s first term, Beijing had capitalized on the apparent weakness of the DPP, i.e. DPP’s slim election victory and the existence of various factions within the party, and rally opposition elements such as the Nationalist Party and New Party to exert political pressure on the DPP to be more willing to deal with crossStrait relations on Beijing’s terms. In line with the united front strategy, the aim then was to unite the majority and isolate the minority. But this did not come to pass. What happened was that the New Party, which advocated unification, soon fell by the wayside and the Nationalist Party and the People First Party found themselves reacting to the agenda set by the DPP.46 The mainland’s stress on adopting a united front strategy against Taiwan proved counter-productive. This is because of the DPP’s success in harnessing social forces in Taiwan in favor of indigenization and nationalistic sentiments against the perceived bullying tactics of the mainland.47 The more Beijing opposed the holding of any referendum or any of DPP’s policies, the more the DPP felt challenged to persist with them. More significantly, the DPP cleverly lumped any elements opposed to its political agenda as in cahoots with the Chinese Communist Party. This proved politically costly for the pan-blue camp whose clear lead of 20 percentage points over the pan-green camp just a year ago disappeared completely in the Presidential Election in March 2004.48 Chen increased his share of the votes at the March 2004 election to 50.1% compared to 39% four years ago.49 46 During the race for the March 2004 Presidential Election, the opposition National-

ist Party and the People First Party tried unsuccessfully to turn the focus of the electorate to Taiwan’s dismal economic performance over the past four years. Instead, the incumbent DPP virtually dominated the agenda with its appeal to nationalistic fervor and indigenization. Also, the Nationalist Party and the People’s First Party were opposed to any referendum law, but later changed their position to support a referendum law with restrictions. 47 During the height of the SARS crisis, when Taiwan made a bid for observer status at the World Health Assembly, Beijing strongly opposed the bid. During a press inquiry into why Beijing was opposed to Taiwan’s WHA presence, one Chinese delegate was reported to have said, “who cares about Taiwan?”. See “China not showing goodwill: Chen”, Taipei Times, July 5, 2003. 48 “The real battle was won before the voting started”, South China Morning Post, March 21, 2004. 49 “Taiwan — the result is final: a divided Taiwan, China bites its tongue”, Far Eastern Economic Review, April 1, 2004.

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Beijing’s united front strategy against Taiwan is in need of adjustment or even overhaul following Chen’s second election victory. In Taiwan, the KMT and PFP are in disarray; the DPP looks set to dominate Taiwan’s domestic political scene for years to come. At this stage, Chen has given no indication that he wants to give up the idea of holding a referendum in 2006 to devise a new constitution and it would be politically costly for him to do so. Much would hinge on what is eventually included in the new constitution. Cross-Strait relations may not go inexorably down the path of conflict. Both sides are aware of the negative consequences should war break out. It is not entirely impossible that somewhere down the line, both sides may think of a politically acceptable way to return to the negotiating table to begin talks.

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4 The Economics of the “Three Links” Lee-Rong Wang and Chung-Hua Shen

Introduction One of the important issues between Taiwan and China is the so-called “three links”, which are direct trade, transport and postal ties. These three links were first proposed by Beijing for better mutual understanding so as to pave the way for possible future unification. Except for the postal link, which has been conducted “directly” between the two places, cross-Strait trade and transport have continued to be “indirect”. Indirect here means the “third place principle”, which means that transportation or trade has to be routed to a third region, such as Hong Kong. Official talks on resuming transport links stalled with the election of President Chen Shui-Bian, who is nominally pro-Taiwan independence. Chen insisted on the current indirect links on transport and trade for the reason of national security. Nevertheless, under continuous pressure because of the “China factor,” any cross-Strait talks on direct links will definitely be Taiwan’s most complicated and imposing negotiations since Taiwan’s accession to the World Trade Organization. Implementation of the three links involves various ministries as well as numerous professional assessments covering at least three main issues: political sovereignty, economic issues and national security. In this paper, the focus is on economic issues. The postal link, which has already been conducted for years, is not discussed in this paper. Thus, while the term of three links is used here, only direct transport and trade are discussed. Four sections are included in this paper. Section One analyzes economic integration between the two sides of the Taiwan Strait, covering exchanges of private citizens, financial interaction, trade and Taiwan’s indirect investment in China. The importance and current situation of direct 59

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transportation links is discussed in Section Two. Section Three investigates the impact of the three links. The final section concludes with debates on the three links.

The Status and Importance of The Three Links Why do the three links become an issue? Taiwan and China are linked economically, politically and culturally, making the three links an important issue. Again, the focus here is on economics. First, Taiwan is geographically close to China and its peoples are closely related by ethnicity, culture, language and history. While widening regional inequality and emerging regionalism have reduced economic integration within China, its economic links with other Asian-Pacific countries, especially Taiwan, grew dramatically. The outbreak of Severe Acute Respiratory Syndrome (SARS) last year not only highlighted the importance of crossStrait cooperation in preventing epidemics, it also revealed the frequency of exchanges and movement of private citizens across the strait as well as China’s tremendous impact on the stability of Taiwan’s economy and society. Another example which justifies economic integration across the Strait is the contagion effect of the financial markets on both sides. The main index of Taiwan Stock Exchange tumbled 5.4 percent in early May when the Chinese government announced measures to prevent China’s economy from overheating. This simply reflects that China’s tightening policy will affect Taiwan’s economy as well in the future. Direct trade links: status and importance China surpassed the United States and Japan to become Taiwan’s biggest trading partner last year (Tables 1 and 2). Taiwan-China trade increased at a steady pace in the 1990s. Trade between the two sides experienced double-digit growth annually in the first half of the 1990s (Table 3). In the mid-1990s, however, growth slowed and even reversed (becoming negative) because of unstable cross-Strait relations. Thereafter, at the end of the decade, with no immediate military threat, steady growth in the US market and gradual recovery of the Asia-Pacific economy, trade between the two sides exhibited explosive growth. China became the fourth largest trading partner for Taiwan and Taiwan became China’s fifth largest trading partner in 1997 and 1998.

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Table 1. Top-ten export countries of Taiwan 2003: Q1 Amount∗ Total China USA Japan Singapore South Korea Netherlands Germany Philippines Malaysia Thailand

32495.4 7801.5 6010.8 2882.8 1071.8 1132.6 802.7 1043.5 553.3 669.6 613.6

Share (%) 100 24.0 18.5 8.9 3.3 3.5 2.5 3.2 1.7 2.1 1.9

2004: Q1 Amount∗ 39748.4 9993.6 6181.2 3162.4 1555.6 1200.2 1200.1 1189.0 887.6 864.7 760.2

Change

Share (%) Amount∗ 100 25.1 15.6 8.0 3.9 3.0 3.0 3.0 2.2 2.2 1.9

Growth rate (%)

7253.0

22.3

2192.1 170.4 279.6 483.8 67.6 397.3 145.6 334.3 195.1 146.6

28.1 2.8 9.7 45.1 6.0 49.5 13.9 60.4 29.1 23.9

Sources: The estimate from the Ministry of Economic Affairs, ROC (for China), Taiwan customs (for other countries). ∗ in million US$.

Table 2. Top-ten import countries of Taiwan. 2003: Q1 Amount∗ Total Japan USA China South Korea Germany Malaysia Saudi Arabia Singapore Indonesia Australia

28814.4 7368.3 3793.2 2264.7 2071.1 1168.9 1096.9 1135.3 920.3 683.0 684.3

Source: Taiwan customs. ∗ in million US$.

Share (%) 100 25.6 13.2 7.9 7.2 4.1 3.8 3.9 3.2 2.4 2.1

2004: Q1 Amount∗ 37800.6 10132.6 5060.1 3461.6 2646.8 1345.2 1314.9 1084.5 1073.1 874.2 786.7

Change

Share (%) Amount∗ 100 26.8 13.4 9.2 7.0 3.6 3.5 2.9 2.8 2.3 2.0

Growth rate (%)

8986

31.2

2764 1267 1197 576 176 218 −51 153 191 102

37.5 33.4 52.9 27.81 15.1 19.9 −4.5 16.6 28.0 15.0

Total trade

Import

Trade surplus/ deficit

Amount∗ Share Growth Amount∗ Share Growth Amount∗ Share Growth Amount∗ Growth (%) rate (%) (%) rate (%) (%) rate (%) rate (%) 8,054.2 10,815.8 13,743.3 16,511.7 20,989.6 22,208.1 24,433.3 22,490.6 25,747.6 32,367.3 29,963.4 37,412.5 46,319.7 3,948.3 4,545.7 4,931.1 10,066.2

5.8 7.1 8.5 9.3 9.8 10.2 10.3 10.4 11.1 11.2 13.0 15.4 17.1 17.6 17.2 17.1 16.4

63.1 34.2 — 20.1 27.1 5.8 10.0 −8.0 14.5 25.7 −7.4 24.9 23.8 22.7 61.1 22.5 33.2

6,928.3 9,696.8 12,727.8 14,653.0 17,898.2 19,148.3 20,518.0 18,380.1 21,221.3 26,144.0 24,061.3 29,465.0 35,357.7 2,900.6 3,488.5 3,574.3 7,801.5

9.1 11.9 14.9 15.7 16.0 16.5 16.8 16.6 17.5 17.6 19.6 22.6 24.5 24.5 26.4 24.2 24.0

66.1 40.0 31.3 15.1 22.1 7.0 7.2 −10.4 15.5 23.2 −8.0 22.5 20.0 19.3 54.5 14.9 29.9

1,126.0 1,119.0 1,015.5 1,858.7 3,091.3 3,059.8 3,915.3 4,110.5 4,526.3 6,223.3 5,902.0 7,947.7 10,962.0 1,047.7 1,057.2 1,356.8 2,264.7

1.8 1.6 1.3 2.2 3.0 3.0 3.4 3.9 4.1 4.4 5.5 7.1 8.6 9.9 8.0 9.6 7.9

47.1 −0.6 — 83.0 66.3 −1.0 28.0 5.0 10.1 37.5 −5.2 34.7 37.9 33.1 87.2 48.6 45.9

5,802.4 8,577.8 11,712.3 12,794.3 14,806.8 16,088.5 16,602.7 14,269.6 16,695.0 19,920.8 18,159.3 21,517.3 24,395.8 1,852.9 2,431.3 2,217.5 5,536.8

70.4 47.8 — 9.2 15.7 8.7 3.2 −14.1 17.0 19.3 −8.8 18.5 13.4 12.7 43.6 0.9 24.3

13,455.3

17.3

33.7

9,993.6

25.1

28.1

3,461.7

9.2

52.9

6,531.9

18.0

Sources: The estimate from the Ministry of Economic Affairs, ROC (for exports), Taiwan customs (for imports). ∗ in million US$.

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Table 3. Taiwan’s trade with China.

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Taiwan’s trade with China accounted for 23.8% of Taiwan’s total foreign trade during 2003, with exports to China accounting for 24.5% of Taiwan’s total exports. Meanwhile, imports from China accounted for 8.6% of Taiwan’s total imports. In addition, China has attracted 57.76% of Taiwan’s total foreign investment, thus becoming its foremost destination. The economies of both sides are moving toward becoming an integrated entity (Lin and Chen, 2003).a To attract Taiwanese investment, the People’s Republic of China’s State Council promulgated 22 articles on Regulations on Encouraging the Investment of Taiwanese in July 1988. Subsequently, Taiwanese investment in China increased. In October 1989, the ROC government promulgated regulations on sanctioning indirect trade, investment and technical cooperation with China. Increase in contracted investment with Taiwanese enterprises skyrocketed in 1990 both in terms of volume and number of items. Facing the surge of indirect investment in China, the ROC government tried to guide the investment boom rather than reverse it. In September 1990, the Ministry of Economic Affairs required spontaneous registration and report of previous investment in China by April 8, 1991. Most laborintensive industries that are no longer competitive in Taiwan are now allowed to invest in China. However, the Taiwanese government carefully controls China-bound investment in sensitive industries like semiconductors, fearing that an exodus of chipmakers might increase unemployment at home, while helping its political rival build up its own electronics prowess. It was not until the middle of 2004 that Taiwan Semiconductor Manufacturing Co. was granted permission to remit US$371 million to China, the final step in the company’s plans to build a plant near Shanghai. Besides low wages and land costs, other internal factors that are not commonly perceived as important have influenced SMEs to choose China. Yen and Lee (1990) provide a motivation study for Taiwanese shoemakers running both Taiwan and China factories. Among 11 items, “similar culture and language” and “under request of foreign clients” are the second and fourth most important factors. Taiwan’s SME reputation for flexible and high quality OEM technology has meant that long-term clients do not want to lose such good OEM partners, and have thus encouraged transplantation of production sites to a Taiwan changed its policy and strategy for cross-Strait trade in February 2002,

encouraging exporters to be honest when China was the destination of their exports.

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low-cost areas to maintain and even expand markets. SME investment in China is, therefore, under pressure from a deteriorating investment environment (shortage of labor, NT dollar appreciation, and high labor and land costs) and request from clients. In other words, such investment means survival for SMEs (Chiu and Chung, 2002). Multinationals, usually with more technological and capital intensive businesses, have availed themselves of Taiwan’s geographic location and shared culture to set up operational headquarters or R & D centers. Taiwan serves as a springboard for the Chinese market.

Direct Transportation Links: Status and Importance Direct transportation is the catalyst for full-scale implementation of the three links. The absence of direct air links presents a great obstacle to growing cross-Strait trade. Therefore, more and more entrepreneurs advocate direct air links to maintain global competitiveness. On the other hand, the mutually complementary relationship points out an urgent need for direct airfreight. Most foreign and local businesses want direct transportation links because they would greatly improve cost efficiency. Apart from reducing costs, opening direct links would provide a great opportunity for logistics operators in Taiwan and China to jointly establish world-class express companies to compete with large players such as DHL and UPS. Many managers of foreign enterprises in Taiwan, such as the director of the American Chamber of Commerce in Taipei, believed that Taiwan has the advantages — geographic location, transportation volume and comparative costs — to turn itself into an international logistics hub such as Singapore, Hong Kong and Japan. According to the cochairman of the Logistics Committee of the European Chamber of Commerce in Taipei, Taiwan lost its chance to become a logistics center in Asia during the past few years due to a stagnation of cross-Strait traffic. “The government encourages European businesspeople to invest in the nation, but fails to improve or map out plans on opening direct links, which tops our agenda when making investment decisions,” the cochairman noted. In 1996, after more than four decades, both sides finally agreed to direct maritime links, even though they were limited to only a few seaports on each side. Furthermore, all air cargo still must transit third airports prior to entering either side. On January 1, 2001, Taiwan opened the “small three

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links”, basically a mini direct-links plan between the islands of Kinmen and Matsu, near the Chinese coast, and the Chinese cities of Xiamen and Fuzhou. Ignored at first by China, the plan slowly found grudging acceptance when Taiwanese businessmen, rather than just the islanders for whom the route was originally opened for, were allowed to use it to get to their businesses in Fujian province. In September 2003, a Taiwanese coast guard officer kidnapped by Chinese fishermen was returned to Taiwan via the “small three links”, marking the first time that China used the route for an official purpose. During Chinese New Year in 2003, semi-direct chartered flights were set up between China and Taiwan to bring Taiwanese businessmen home for the annual holiday. The flights were mainly from Shanghai to Taipei with a stop in Hong Kong. Unlike standard China–Taiwan flights, no change of plane was necessary; the Hong Kong stop was merely a formality to maintain the fiction of the ban on direct links. Only recently, Taiwan gave the go-ahead for semi-direct cargo flights, allowing one cargo plane a day to travel to Shanghai with a stopover in Hong Kong without having to transship cargo. In addition, after Taiwan’s presidential election, as a gesture of good will, Taiwan authorities opened two additional ports, Taichung and Keelung, for foreign-flagged ships to sail to and from China for transshipment. China’s reaction was mixed, in that it deplored the fact that these were simply a unilateral action on the part of Taiwan rather than the result of bilateral consultations. Because of this, the nation’s dream to become a major logistics hub in the Asia-Pacific region will be difficult to realize if direct links with China, the world’s most active market, remain banned.

Impact of the Three Links The authors’ assessments of direct trade in this section are based on the Computable General Equilibrium (CGE) model. The CGE model is a simulation approach given different scenarios.b On direct transportation, the Assessments of the Impact of Direct Cross-Strait Transportation conducted by the ROC Mainland Affairs Council in August, 2003 is the main reference source. b See Wang and Chen (2002).

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Impact of direct trade Wang and Chen (2002) investigate the impact of direct aviation across the Taiwan Strait on imports and exports and find that direct aviation would increase the following Taiwan exports to China: beverages, tobacco and wine, textiles, plastics and steel products. Meanwhile, the following Taiwan imports from China would increase: clothing, leather, car and car components, other transportation vehicles, and electrical and electronic products. Taiwan’s agricultural products that would be influenced unfavorably are those which mostly have a limited shelf life or are highly perishable, such as fresh fruit and vegetables, meat and fish. Manufactured goods that incurred high shipping costs and produced under favorable conditions in China, such as home appliances machinery, building materials, automobiles and spare parts, would be negatively impacted. It is expected that Taiwan’s textile, plastics and oil product industries will benefit from reduced transportation costs caused by direct transportation links. Other simulations adopting the CGE model, such as Chen (1998), Shon (1999), Weng et al. (2001), and Kao et al. (2002), find that direct transportation links increase the total value of Taiwanese manufactured products, diminishing negative effect of opening service investment from abroad and finally, raising social welfare of Taiwan as a whole. Similarly, for industries such as food processing, wood, vehicles and other transportation, direct links have a negative impact, expediting investment in China. Impacts of direct transportation Impact on shipping costs It is estimated that the opening of direct sea and air transportation links would result in a reduction of shipping costs amounting to around NT$820 million and NT$13.2 billion per year, respectively. For individual enterprises, direct sea and air transportation would reduce shipping costs by an estimated 15–30%. A potential economic benefit of direct transportation is that, through cost and time savings, it could raise efficiency of goods distribution, generate increases in cargo volume at seaports and airports, and spur expansion of various value-added activities in adjacent areas. Impact on Taiwan’s transportation status (a) Direct sea transportation could help secure Taiwan’s transportation status as international shipping companies will be more willing to operate

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in Taiwan’s ports, thus reducing the threat posed by Shanghai’s new deep-water port on Big and Little Yangshan Islands when it is completed in 2005 and sustaining Taiwan’s merchant fleets. (b) Direct air transportation will be favorable to Taiwan’s development as an Asia-Pacific regional air-cargo and air-passenger transit hub. It will also help Taiwan businesses grasp commercial opportunities for goods sourcing and travel, further consolidating Taiwan’s international status in air transport. Overall impact on macroeconomy The beneficial and negative impacts on macroeconomy are as follows. (a) Economic benefits of direct transportation include the following: i. Reducing goods shipment and personnel travel costs, and raising efficiency of business operations. ii. Building a positive image of improving cross-Strait relations and stimulating domestic financial markets. iii. Potentially boosting efficiency of resource utilization, promoting cross-Strait division of labor in industry and expanding bilateral trade in the medium to long term. (b) Negative impact of the three links could include an influx of imports from China and backflow of goods manufactured by Taiwan businesses in China, which could deal a blow to domestic industries, reduce Taiwan’s trade surplus and cause deflation. (c) Direct transportation would be beneficial to strengthening Taiwan’s strategic economic position in the region, reducing relative costs of mobilizing cross-Strait economic resources and preventing Taiwan’s marginalization from the trend toward regional integration. At the same time, Taiwan would have to overcome negative impact of an influx of Chinese products and an exodus of capital and talent to ensure that direct transportation is beneficial overall. Overall impact on industry This can be discussed from short- and long-term perspectives: (a) In the short term, impact of direct transportation would be felt mainly by industries that are relatively sensitive to transportation time and cost. Those adversely affected would include producers of fresh fruit,

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vegetables, meat, fish and other agricultural products that have a limited shelf life or are highly perishable, and manufacturers of industrial products with high shipping costs that are produced under favorable conditions in China, such as home appliances, machinery, building materials, automobiles and automobile parts. Those favorably affected would be mainly raw material and component industries, such as petrochemicals, textiles, and information and electronics. (b) In the long term, the three links would have the following structural impact on Taiwan’s industrial development: i. Agricultural and industrial sectors would see a fall in the share of GNP, while the service sector’s share would increase correspondingly. ii. Agriculture and fishery would be hardest hit. It would be necessary to improve technology and upgrade products in order to maintain some space for its survival and development. iii. Structure of the manufacturing industry would undergo great change. In principle, relatively uncompetitive traditional industries and those geared toward domestic sales would contract, while high value-added and high-tech industries would expand share of manufacturing output. iv. Service industries that could bring the Chinese market within the scope of their operations and those possessing potential to develop as regional operation centers would have relatively greater room for development. Overall impact on employment (a) After implementation of direct transportation, transformation of Taiwan’s economy could exacerbate structural unemployment. (b) There would be an inevitable increase in the number of Taiwanese managers and families going to work and live in China in the wake of company investments there. Assessment of the overall impact on Taiwan’s economy (a) In the next five to 10 years, Taiwan’s economic development will be affected by several key factors, including changes in the domestic economy, shifts in the international economy, economic factors in China and development of cross-Strait business relations. It cannot be denied that

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continued strengthening of the China factor and deepening of crossStrait economic and trade interdependency will increase calls for the three links. Taiwan, however, must also heed the gulf between the two sides’ political and economic environments, and the very different nature of their respective systems. Furthermore, Taiwan must keep in mind the plethora of variable factors at work within the Chinese economy as well as the possible impact from diseases such as SARS. To respond to the magnetic pull of China’s economy and its gradual emergence as the world’s factory, Taiwan has no choice but to include it as one of the main overseas bases for the manufacture and global marketing of its products. At the same time, Taiwan must preserve the autonomy of its economic development, take advantage of its favorable industrial-development base, join force with multinational enterprises and speed reshaping and upgrading of its industry. Furthermore, Taiwan must establish a cross-Strait division of labor that is better attuned to risk considerations and strengthen its base of production at home. Only by taking such steps will Taiwan be able to secure comparative advantages needed for long-term economic development. Basic conditions that must be in place for implementation of the three links include the following: continuing internationalization of Taiwan’s economy, enhancement of the attractive power of Taiwan’s economy, assurance and strengthening of Taiwan’s core competitiveness, and balanced interflow of cross-Strait resources. Implementation of the three links must include appropriate risk control to guarantee overall economic security. Therefore, economic safety nets must be strengthened, and economic early-warning and response capabilities enhanced, while economic and trade order must be established and factors of uncertainty reduced. To sum up, the three links offer advantages and disadvantages for Taiwan’s long-term economic development. The key is whether Taiwan can amplify positive effects and diminish negative ones. This depends on whether it can raise its level of internationalization, comprehensively improve its investment environment and living quality, enhance its attractiveness in the economy, strengthen its domestic production base and promote balance in inflow and outflow of resources. Only then will it be able to attract capital and high-quality human resources from overseas, including China, and secure a leading role for the Taiwan economy.

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Therefore, implementation of the three links depends on objective conditions and full supporting measures put into place. Timing depends on fullness of preparations in Taiwan and whether negotiations will be able to create the right conditions. It should be noted that direct transportation would have varying effects on economies of different countries in Asia. On the whole, it would be favorable to China, but in the short-term it would be unfavorable to Hong Kong. It would have a limited impact on Japan’s economy, would generate competitive pressure for South Korea and would have a greater long-term than short-term impact on the Association of Southeast Asian Nations. Furthermore, the three links will facilitate establishment of a mechanism for normal, cross-Strait economic and personnel exchanges. Through bilateral cooperation, it is possible to more effectively curb existing smuggling and illegal immigration and further protect vital interests and personal safety. Finally, it is true that realization of the three links plays an important role in foreign-enterprise decisions to invest in Taiwan. Attracting more foreign enterprises is very likely to invite more international concern about Taiwan’s national security. This is a very important policy consideration for Taiwan given the uncertain relationship with China.

Debates on the Three Links In this section, some controversial issues regarding the three links will be discussed. Will the three links marginalize the Taiwanese economy? Dissenters claim that increased Taiwan business investment in China could exacerbate the lopsidedness of cross-Strait capital flows, lure industrial technology and high-tech talent to China and squeeze domestic investment. Proponents argue that continuous delay in opening the three links not only deprives Taiwan of the enormous benefits brought by cross-Strait economic cooperation, it also isolates Taiwan in regional economic cooperation. As a result, according to proponents of the three links, the delay risks marginalizing Taiwan’s economy. At present, China has become the major destination of overseas investment by Taiwanese businesspeople. Cross-Strait division of labor is deepening. This situation is both the result of full play given by the two

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sides to respective comparative advantages and the product of globalization and regional economic cooperation. China is an important emerging market and production base in the Asia-Pacific region. China’s economy will play an increasingly important role in the Asia-Pacific economy. Evercloser cross-Strait trade and economic ties will become increasingly important in enhancing Taiwan’s position and role in the Asia-Pacific economy. In view of this, East Asian countries have strengthened cooperation with China in recent years in order to reinforce their position and role in future East Asian economic cooperation. For example, the “Closer Economic Partnership Arrangement” was signed between China and Hong Kong, and later between China and Macau this year. In addition, China and ASEAN are speeding establishment of a free-trade area by 2010.

Will the three links lead to hollowing out of Taiwan industries? This important economic-security issue is a concern for Taiwanese authorities. However, for those in favor of the three links, smooth industrial upgrading of Taiwan’s economy in the 1990s was a result of rapid development of cross-Strait trade relations. Since the mid- and late-1980s, Taiwan’s economy has entered a transition period from industrialization to postindustrialization, where the proportion of industry to GDP has continued to drop and ratio of services has risen. Newly-emerging information technology has replaced traditional industries to become the leading sector. Proponents say that this structural change is an important indication of economic development rather than a sign of hollowing out. Taiwan’s economy is in transition. The domestic IT industry is engaged mainly in processing. This is weakening the island’s comparative advantage and accelerating the shift of production to China. Taiwan’s industry must urgently rid itself of existing development modes to develop innovation, research and services as well as sophisticated scientific and technological industries. Net influence of direct transportation links on Taiwan’s economy depends on coordination measures to reduce potential negative impacts, such as raising resource-allocation efficiency, speeding innovation and R & D activities and enhancing industry cooperation between both sides of the strait. At the same time, after Taiwan’s entry into a post-industrialization society, faster development of tertiary industry also requires ending the situation where domestic demand dominates and international competitiveness is weak to add fresh vigor through expanding overseas markets.

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Now, upgrading Taiwan’s industry and stronger competitiveness in services requires the vast Chinese market. Therefore, realization of direct links will not lead to a loss for Taiwan. On the contrary, it will probably be an important driving force for Taiwan’s economic restructuring. Will the three links exacerbate unemployment in Taiwan? Many people worry that increased Taiwanese business investment in China could induce part of the domestic work force, especially mediumgrade to high-grade manpower, to work in China, thus exacerbating unemployment. Since 2001, Taiwan’s unemployment rate has remained relatively high at around 5%. This is caused by, on the one hand, recession and, on the other, structural unemployment resulting from industrial restructuring. The three direct links will rejuvenate tourism and real estate, creating many more new job opportunities within a short period of time. Meanwhile, after realization of direct links, quite a number of enterprises will, thanks to unimpeded cross-Strait economic and trade exchange, expand Chinese markets in the form of commodities export rather than direct investment, thereby increasing investment in Taiwan and reducing unemployment pressure caused by shift in production bases. The security issue One argument against direct links is that Chinese warplanes are based only 10 minutes’ flying time from Taiwan. The island’s military has long worried of a sneak attack via commercial flight paths. The Taipei government released a report in last August on how direct links will operate. The project took a year to research and focused a lot on the security issue. Taiwan cannot open direct links unconditionally When foreign shipping companies are excluded, cross-Strait shipping is limited to “domestic” branch lines of the international shipping. It not only causes a loss of sovereignty, but also makes direct shipping links simply an extension of the Kaohsiung–Fujian and Xiamen port-to-port links. This will not help Taiwan transform into a global logistic center as hoped by many proponents of direct transport. Overall, the three direct links should not be seen as a panacea for Taiwan’s economic problems. President Chen Shui-Bian has mentioned

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this repeatedly. Above all, even though benefits induced by the three links could have been overestimated by proponents, negative effects still need to be managed well.

References Chen Chun-yen, 1998. “Analyzing and forecasting freight transportation market in cross-Strait direct shipping.” (in Chinese), Master’s Thesis, The Graduate School of Department of Transportation and Communications Management, National Cheng Kung University. Chiu Chiu Lee-in, and Chin Chung, 2002. “An assessment of Taiwan’s indirect investment toward mainland China.” Asian Econ. J. 7(1): Kao, Charng-shih, Hui Tzu, and Shu-fei Yang, 2002. “The impacts of deregulating the investments toward mainland China on Taiwan’s economy.” 2002 Conference on Mainland China Economic Development (in Chinese), The Ministry of Economic Affairs, ROC. Lin C. C, and Chen Y. C., 2003. “The integration of Taiwanese and Chinese air networks for direct air cargo services.” Transp. Res. Part A: Pol. Practice, 37: 629–647. Related Agencies of the Executive Yuan, ROC, 2003. “Assessment of the impact of direct cross-Strait transportation.” August 15. Shon Zheng-Yi, 1999. “Modeling hub location strategies for direct flights across the Taiwan strait.” Master’s Thesis, The Graduate School of Department of Transportation and Communication Management, National Cheng Kung University. Wang Sze-yueh, and Chiu Lee-in Chen, 2002. “The impacts of the three links across the strait on Taiwan’s industries.” (in Chinese), 2002 Conference on Mainland China Economic Development (in Chinese), The Ministry of Economic Affairs, ROC, October. Weng Yung-ho, Kuang-chung Hsu, and Shih-hsun Hsu, 2001. “The CGE analysis of the impacts of the non-application clause and direct transportation under the framework of WTO and overall liberalization.” (in Chinese), J. Soc. Sci. Philos. 13(2): 163–193. Yen Zong-tai, and Hwei-ming Lee, 1990. “An industrial impact study of Taiwan’s investment toward the mainland.” (in Chinese), Chung-Hua Institution for Economic Research.

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5 The Three Paradigms for the Taiwan Question Baogang He

The Taiwan question is a term that now appears with growing frequency in international affairs and area studies. It is a crucial issue concerning Taiwanese self-determination and national identity/status. However, there are different views and considerable confusion about just what the sources are, and what ways are available to deal with it. Three paradigms for or three approaches to the Taiwan question can be grouped under the headings of realism, democracy and postsovereignty. Analytically, these three are distinctive, but in reality each approach interacts and overlaps each other. More importantly, different actors in Washington, Beijing and Taipei have different interpretation of the paradigms. The paradigms have shaped political debates, intellectual research and pursuit. They can be considered “boxes”: each approach will be persuasive only to those who look at the issue from the same perspective. Politicians and scholars may go inside one box, but return to their favorite one as they are comfortable with one box, but uneasy with the others. It should be noted that realism prevails in China where the paradigms of democracy and post-sovereignty are absent. The United States favors a democratic solution and supports a democratic Taiwan, but has to come to grips with the fact that China has become a greater regional power. In Taiwan, all three paradigms have been explored. This paper provides a brief account of the general features of each paradigm, characterizes what is distinctive about its approach, and outlines the advantages and disadvantages of each approach. It questions some presuppositions of three intellectual frameworks through which scholars

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study Taiwan and political actors propose various solutions to the Taiwan question.1

Realist Paradigm The analytic centrality of a realist paradigm is power. Power is viewed as the sum of political, military, economic and moral forces of one political entity, and the capacity of one to interfere, constrain and influence the behavior of others. The power-centric approach is concerned with the question of expansion and the limits of influence and conflicts over power influence. According to realism, it is power that matters, power that decides Taiwan’s fate, and power that settles the Taiwan question. A power-centric approach holds that the Taiwan question is about power relations.2 Precisely, it believes that the United States–Sino power relations hold a key to solving the Taiwan issue. In the eyes of Beijing, Taiwan is the most important and sensitive issue for Sino–United States relations. It is the United States’ support for Taiwan that prevents China from reunifying with Taiwan. China launched a missile test against former Taiwan President Lee’s visit to United States and his theory of two states in 1995/6. As a response, American President Bill Clinton sent an aircraft carrier to Taiwan Strait in March 1996.

1 To find a solution to the Taiwan question, Ya-chung Chang, a Taiwanese scholar,

has discussed the interim (or peace) agreement across Taiwan Strait in 1999. See Ya-chung Change, “The ‘Cross-Taiwan Strait Basic Agreement’ and the Future of Taiwan and Mainland China”, Issues and Studies, Vol. 38, No. 8, September 1999, pp. 1–29. Lynn T. White III has addressed the issue in detail; see Lynn T. White III, “War or Peace over Taiwan”, China Information, Vol. XIV, No. 1, 2000, pp. 1–31. However, the peace agreement proposal misses the key issue of sovereignty. See Baogang He, “The question of sovereignty in the Taiwan Strait: Re-examining Peking’s policy of opposition to Taiwan’s bid for UN membership”, China Perspectives, No. 34, March 2001, pp. 7–18. A critique of Lynn White’s article, also see Lowell Dittmer, “On the prospect of an interim solution to the China–Taiwan crisis”, China Information, Vol. XIV, No. 1, 2000, pp. 58–68. International Crisis Group has examined various solutions to the Taiwan question. See “Taiwan Strait I: What’s Left of ‘One China’?”, ICG Asia Report No. 53, June 6, 2003; “Taiwan Strait II: The Risk of War”, ICG Asia Report No. 54, June 6, 2003; “Taiwan Strait III: The Chance of Peace”, ICG Asia Report No. 55, June 6, 2003. 2 Domestic power relations in the United States, China and Taiwan matter, and they are the sources of changing foreign policies. They deserve a separate paper. Due to the focus and scope of this paper, the author will not pursue the issue further here.

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A Chinese realist would hold the view that the source of the Taiwan question is American support for Taiwan; and that the United States will cease its support of Taiwan if China becomes more powerful in the next two decades. It is also held that China, as an increasingly great power, can build a “bird cage” to contain Taiwan’s independence and set its agenda for dialogue with Taiwan, that the idea of political equality is irrelevant to settling the Taiwan question. In the eyes of a Chinese realist, China’s growing power is the best way to ensure its territorial integrity and prevent Taiwan from gaining its independence. A Taiwanese realist would embrace the idea that the one China two systems policy cannot apply to Taiwan largely because Taiwan has greater power than Hong Kong and the policy does not work in Hong Kong as Beijing refuses to grant more autonomous powers to the Hong Kong people. At the same time, Taiwan is not strong enough to stand alone so it has to rely on the United States for its security. An American realist thinks that it is in America’s interests to be on good terms with both Taiwan and mainland China instead of being caught in a conflict. In the worst-case scenario of actual conflict, the United States will be forced to choose between China and Taiwan. And that would be a choice the United States would hate to make. Therefore, the United States, has a major strategic interest in Taiwan — that of preventing a potential war. To achieve the above strategic goal, the United States adopts the strategic ambiguity policy. While it supports one China policy,3 it protects Taiwan’s security and democracy. An American hardliner holds that only military balance can ensure peace across Taiwan Strait. The Pentagon therefore sells military weapons to Taiwan to maintain East Asian peace. An American realist will play the Taiwan card to contain China’s power. At the same time, Washington does not want Taiwan to disturb the status quo. Due to the United States’ superpower position, a peculiar triangle relation exists among Washington, Beijing and Taipei. Both Beijing and Taipei see United States as a necessary political friend, and ask the United States for help and interference in different ways. Unusually, some Chinese technocrats will treat United States as a friend even if United States treats China as an enemy. It is hard for the United States to be a true friend of either side with China and Taiwan being suspicious of each other. 3 Both Clinton and Bush endorsed the Three Nos policy: no support for Taiwan’s

independence, no support for a two-China policy, and no support for Taiwan’s membership in international organization on the basis of statehood.

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The key to Washington–Beijing–Taipei trilateral ties is the United States– Sino relation, the essence of which is between two empires. Bush’s neo-cons attempt to establish and maintain a liberal or republic empire.4 In providing global security, the United States Empire can intervene in the sovereignty of other countries, but not the other way round. Stephen Peter Rosen, a former NSC and Defense Department staff officer, now a fully endowed professor and head of the Olin Institute for Strategic Studies in Harvard University, elaborates the United States’ empire thesis well. The United States is a global power, the only one in the world without rival. Its military spending exceeds that of six or seven powers combined. It is militarily dominant around the world and intervenes in the internal affairs of other countries. The United States is an empire in the sense that it has overwhelming superiority in military power, and uses that power to influence the internal behavior of other states. It is however an indirect empire since it does not seek to control territory or govern the overseas citizens of the empire. According to Rosen, the American goal is not combating a rival, but maintaining its imperial position and imperial order. The American imperial strategy should focus on preventing the emergence of powerful, hostile challengers to the empire. In this regard, “China is not yet powerful enough to be a challenger to the American empire, and the goal of the United States is to prevent that challenge from emerging”.5 In contrast, China’s policy on Taiwan aims to revive Qing’s imperial territories. As a historical mission, the reunification of China with Taiwan is a restoration of the Chinese Empire. The China empire is restorative and residual. It does not aim to expand its territories nor does it want

4 For a discussion on neo-cons, see John F. Copper, “The Neocons and United

States–Asia Policy, Background Brief papers, Nos. 168–169, September 2003, East Asian Institute, the National University of Singapore. For a discussion on American empire, see Andrew J. Bacevich, American Empire: The Realities and Consequences of United States Diplomacy, Cambridge: Harvard University Press, 2002; Immanuel Wallerstein, The Decline of American Power, New York: New Press, 2003; Niall Ferguson, Empire: How Britain Made the Modern World, London: Allen Lane, 2003. It should be noted that the United States has a long tradition of hostility to empire, let alone to the acceptance of the term of empire to describe American power. In this regard, Niall Ferguson accuses Washington of denying empire: “It is an empire in denial, and United States denial of this poses a real danger to the world.” Cited in Fiachra Gibbons, “United States is an Empire in Denial”, The Observer, June 1, 2003. 5 Stephen Peter Rosen, “The future of war and the American Military,” http://www.harvardmagazine.com/on-line/050218.html, accessed on May 6, 2004.

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to overstretch its power, a lesson it learnt from the collapse of the Soviet Union. Recently, Chen Shui-bian has adopted the China empire thesis. In his interview with Japanese journalist Yoichi Funabashi in May 2004, Chen said: “So long as the Beijing leadership continues to run a Chinese empire that is a far cry from democracy, none of us will see unification during our lifetime. The people of Taiwan will never agree to become one with the Chinese empire”.6 The two empires are very much concerned with maintaining their power and are struggling for influence and their national interests. China is concerned with becoming a regional power. China’s reunification project constitutes a threat to the US Empire and a potential challenge to its domination in East Asia and beyond. At the same time, the United States is worried about a rising China and is determined to prevent China from becoming a serious challenge. In this regard, Wang Gungwu proposed an interesting thesis of “two nightmares”.7 According to Wang, it is a nightmare to the hawkish American neo-cons to keep United States as the eternal superpower and to avoid the decline of the US Empire. Beijing is also having a nightmare to search for the permanent domination of the Chinese Communist Party (CCP). Despite the fact that no party can maintain a one-party domination forever or avoid its decline, Beijing is still hoping to achieve the impossible task of maintaining the longevity of the CCP. To adopt a realist view of the thesis of two empires, one has to take into consideration the inevitable conflict between China and the United States. Conflicts are structured by global politics, rooted in a colonial and anticolonial history, and are driven by a struggle for global or regional power. Today’s peace is temporary; tomorrow’s conflict is inevitable. In the eyes of the realists, maintaining the status quo of Taiwan is in the best interest of the United States and China. The perfect outcome for the United States is the independence of Taiwan, but China would not agree to it. The best result for China is the reunification of China and Taiwan, but the United States is likely to resist it powerfully. As a compromise, the status quo is the second best option. All political forces, except for the forces in Taiwan where the power balance is changing in favor of the DPP, are working towards such a direction. 6 http://www.asahi.com/english/opinion/TKY200405110126.html, accessed on May 12,

2004. Thanks to Dr. Lam Peng-er for this information. 7 Professor Wang’s remark in an informal meeting at the EAI on May 4, 2004.

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Weakness of power approach One weakness of the power approach held by some Asian scholars is that it does not pay sufficient attention to democracy. Although Chinese and American policy-makers care about power, they operate under different political systems. The cost of maintaining the US Empire would be enormous and American personal security would be a serious problem. The Americans must consider the consequence of global responsibility of the US Empire seriously. The attitude of the Americans and their preference are crucial. If the Americans do not care and even resist the idea of the US Empire, they will send their message to elites through periodical elections. The American democratic system will influence and change the United States policy on a republic empire. In short, the power of the United States is constrained by democratic institutions. By contrast, China’s restorative empire is not controlled and constrained by its people. The power-centric approach overlooks mutual independence underpinned by globalization. The idea of the inevitable clash between China and the United States ignores the necessity of cooperation between them in the areas of global and/or regional security and economic independence. In 1999, Paul Wolfowitz and Richard Armitage urged the then President Bill Clinton to revise the ambiguous policy and called for greater moral clarity on Taiwan’s status.8 Wolfowitz also argued, “The primary US goal should focus on ‘convincing potential competitors’ that they need not aspire to a greater role or pursue a more aggressive posture to protect their legitimate interests’.9 Before September 1, 2001, George Bush gave up Clinton’s strategic partnership with China and expressed clearly that the United States would defend Taiwan if it were attacked by China.10 Nevertheless, Bush reconsidered China’s policy, adopted “constructive partnership”, and openly supported one-China policy in his visit to Beijing in Feb 2003. After September 11, United States needed China’s support to fight against terrorism and to solve the North Korean nuclear weapon issue. Economic conflicts 8 Jandas Devan, “The Lure of the Status quo over Taiwan”, The Straits Times, May

1, 2004, p. 33. 9 Robert W. Meery, “Rome on the Dotomac”, The International Economy, Summer

2003, pp. 12–15, pp. 94–99; p. 96. 10A pattern seems to exist in American electoral politics. During campaigns, strong

anti-China sentiments were used to win some voters in presidential elections. As soon as the President comes to the White House, pragmatism prevails and a compromise with China is often made.

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exist in the areas of copyright, the deflation of the Chinese Yuan, and many other trade-related issues. Nevertheless, cooperation overrides conflicts. The structural element of power approach overlooks agency, perception, cognition, and value change. If both Washington and Beijing develop a sophisticated and not simplistic zero-sum view of China’s rising power, the inevitable power conflict can be reduced and the direction of power conflicts altered. Today, China recognizes the United States’ power as a guarantee for regional peace. China cannot afford to compete with United States’ military power. Following the teaching of Deng Xiaoping who developed a strategy of hiding China’s capacities and bidding China’s time, Beijing never challenges the United States openly. The Chinese leadership adopts conciliatory and not conflictive policy toward United States. The Taiwan question has been considered in relation to China’s modernization project. What is crucial is the alliance between top and provincial leaders and their strong commitment to economic development. As long as the CCP is capable of controlling and containing the influence of military forces, the chance of a war against Taiwan in the near future would be slim.

Democracy Paradigm11 A democracy approach contains empirical and normative components which are related to each other. Central to any democratic analysis is the empirical question of how democracy, democratization and the nondemocratic regime impact on the definition and emergence of the Taiwan question, and on the conditions under which various solutions to the Taiwan question are proposed and tried. The normative centrality of democracy approach is the notion of people. The democracy paradigm stresses the democracy principle, the will and consent of the people, and the democratic mechanism such as referendum. The democracy paradigm holds that the authoritarian system of China is the primary source of the so-called Taiwan question, that China’s policy toward Taiwan failed to take Taiwan’s democratization into account,12 and that China–Taiwan relation 11 Some of the following discussion from Baogang He, “China’s national identity: a source of conflict between democracy and state nationalism,” In: Leong Liew and Shaoguang Wang, eds., Nationalism, Democracy and National Integration in China, London: Routledge-Curzon, 2004, pp. 170–195. 12 While Beijing is legitimate to assert that Chen uses democracy to push for independence, it overlooks how democratization operates in Taiwan, and it fears democratization in China.

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is fundamentally the question of democracy. The democratization of China is a precondition for reunification. A democratic Taiwan will not, and cannot, reunify with an authoritarian China. The Taiwanese people have the right to make their decision on national identity. The impact of Chinese democratization on Chinese restorative empire Since 1974, around 100 states have democratized. Among them, 47 democratizing states have confronted the national identity question. A majority of these 47 democratizing states face challenges from secession or independence; only around seven states face reunification problems. The impact of democratization on secession and unification is asymmetric.13 Democratization, other things being equal, plays a big role in facilitating independence or secession. In the context of a global trend towards independence or secession and a marginalization of reunification, democratization plays only a minor role in reunification, such as in the case of Germany, or, indeed has little to do with reunification as in other cases. Democratization is associated with far more political “divorces” than “marriages”. Statistically, among the 47 new member states in the UN since 1974, the independence of 26 has been closely associated with the democratization of their “parent states”. By comparison, among seven of the states which have successfully achieved reunification since 1974, only the unification of the two Germanys and the two Yemens was related to democratization. The reunification of Vietnam, Germany, Yemen, and China–Hong Kong has nothing to do with democratizations. China’s reunification with Hong Kong was the result of diplomatic negotiation, while the reunification of Vietnam was achieved through wars that followed the surrender, on April 30, 1975, of the southern government. In the case of Taiwan, democratization has resulted in a virtual abandonment of the project of reunification with China and in the de facto independence of Taiwan. Of note also is the fact that while the democratization of Moldova supported its independence from the former Soviet Union, it did not enable its reunification with Romania. The democratization of China is likely to undermine the Chinese restorative empire project. The empire thesis holds that an empire has to 13 Baogang He, “Democratization and the national identity question in East Asia”,

New Challenges for Development and Modernization: Hong Kong and the Asia-Pacific Region in the New Millennium, edited by Yeung Yue-man, Hong Kong: Chinese University of Hong Kong Press, 2002, pp. 245–273.

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break up if democracy is established. It contains the logic of the world’s last traditional empire breaking down into several nations. China is the last traditional empire, as all other empires, such as Ottoman and Russian, have collapsed. The process evolving from “empire” to nation-states challenges China’s territorial integrity. China’s “family” union was achieved under the Qing Empire and has been maintained by the CCP. The question is, will it break up as a modern state if it is democratized. Comparatively speaking, the Ottoman Empire had been undermined by the Western forces in the 19th century and the democratization process. The democratization of the USSR and the emergence of Russian ethnic nationalism played a decisive role in generating centrifugal forces which tore the Soviet Union apart.14 Beijing not only rejects the empire thesis, but also considers a democratic solution to the Taiwan issue unfeasible and undesirable. Qian Qichen, Vice-Prime Minister, for example, said it is illegitimate, fruitless and pointless to declare Taiwan’s independence through a referendum.15 Beijing denounced the Tainan referendum in 1998 as the work of a few extreme separatists in favor of Taiwan independence. If a referendum had been held in Taiwan, it would have gone against unification, for Taiwanese nationalism and a democratic spirit have already developed. For Chinese nationalists, the “One China” policy will never be compromised by democracy or anything else. They see the unification of Mainland China and Taiwan as a primary task in building a strong nation-state. The rationale is that “Taiwan was an inalienable part of China, thus any self-determination process that might result in a permanent separation was totally unacceptable”.16 In the eyes of Beijing, the One-China policy presupposes the membership of the political community of China and the precedence of Chinese national identity over the democratic enterprise. For Chinese nationalists, when there 14 Wang Weimin and Yi Xiaohong, “Minzu yishi: lijie qiansulian minzu wenti de

guanjian” (National consciousness: understanding the crux of the national problem of the former Soviet Union), Shanxi shida xuebao, Sheke ban (Linfen), No. 4, 1996, pp. 17–21. 15 The People’s Daily (overseas edition), January 29, 1999, p. 1. Zhang Fengshan, a research fellow at the Institute of Taiwan Studies in the Chinese Academics of Social Sciences, makes a systematic critique of referendum being used to solve the Taiwan question. See his article, “On Taiwan’s Independents’ Referendum”, Taiwan Studies, No. 2, 1999, pp. 14–21. 16 C. L. Chiou, “Dilemmas in China’s Reunification Policy toward Taiwan”, Asian Survey, Vol. 26, 1986, p. 480.

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is a dispute over what constitutes “the people”, Chinese nationalism provides the answer. It is a guiding principle for unification that overrides the ideological competition between socialism and the three principles of the people.17 A Chinese realist would doubt the democratic approach. When the security issue is a top priority, it is unlikely that the United States will support Taiwan’s democracy strongly. Even if China embarks on a democratization process, as long as China remains a regional power in East Asia, the conflict between China and the United States will remain. A Chinese realist will hold the view that it is impossible for China to rely on Taiwanese votes for reunification; or for the United States to give up its support for Taiwan or for China to achieve reunification through democracy. A realist strongly believes that democratic unification is far fetched. The most important factor is economic. The economic integration across Taiwan Strait does not favor Taiwan’s independence if Taiwan’s economic development relies on China completely. The impact of Taiwan’s democratization on the definition of and Resolution to the Taiwan Question Under Chiang Kai Sek’s regime, there was the “province identity problem.” People in Taiwan were classified under two groups: “benshengren,” the people from the province of Taiwan; and “waishengren”, the people from other provinces of China. The “province identity problem” refers to the sensitive relations between Taiwanese and Mainlanders. It involved the issue concerning the fair distribution of public office positions among the two groups. The question of Taiwan’s independence did not arise during Chiang’s regime because both sides of the Taiwan Strait shared an imaginative community, and reunification was taken for granted. Despite holding different ideological positions, both Mao Zedong and Chiang held the same view about the future of the Chinese nation-state: that it should include Mainland China and Taiwan. Since the beginning of democratization in 1978, the strength of unification forces has gradually eroded, while that of the pro-independence forces has increasingly grown in Taiwan. The DPP challenged the virtually unquestionable assumption of reunification held by officials and people in 17 See Zhao Quansheng, “A Proposed Model of Unification and Plural Politics”,

China Forum, Vol. 26, No. 5, 1988, pp. 54–55.

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Taiwan, Mainland China and overseas. Huang Hsin-chieh (Huang Xinjie), the former chairperson of the DPP asserted that the presumption of reunification is due to Chinese psychology.18 The DPP debunked the assumption that Taiwan is simply one province of China, and refused to use the concepts of “benshengren” and “waishengren.” The so-called “province identity problem” has disappeared, at least for Taiwanese nationalists, to evolve into Taiwan’s national identity problem — that is, Taiwan as one unique nation, is entitled to be its own independent state. “Recurring political participation under a democratic regime helped develop a sense of collective consciousness among the people, transforming the term ‘Taiwan’ from a geographic unit to a political community and the term ‘Taiwanese’ from an ethnic term for native Taiwanese to a civic term for citizens of Taiwan”.19 Under democratic conditions, political parties have used the national identity issue to shore up political power. To preempt the DPP’s exploitation of sub-ethnic cleavages and the identity issue, President Lee Teng-hui introduced the Taiwanization of the KMT. This has changed the image of the party from an externally imposed Mainlander institution to a Taiwanesecontrolled party. The Taiwanese component of the party has risen steadily from 15% in 1976, to 35% in 1988, and to 54% in 1993. At the same time, the Central Standing Committee’s Taiwanese membership rose from 19% in 1976, to over 60% in 1993.20 In the July 1997 fourth round of Constitutional revision, the KMT and DPP worked together to freeze the Taiwan provincial government that was seen as a symbol of Taiwan’s subordination to China. Taiwanese democratization has impacted on the methods of addressing the national identity question and the future of Taiwan. It was said that secret negotiations across the Taiwan Strait were undertaken under Chiang Ching-kuo’s instruction. After Chiang’s death in January 1988, Beijing hoped that Lee Teng-hui would continue the process and sent a fiveman group for a secret visit to negotiate for reunification. Such a thing did not happen because of dramatic political changes in Taiwan.21 18 The author’s interview with Mr. Huang on July 23, 1991 in Taipei. 19 Yuan-han Chu and Jih-wen Lin, “Political development in 20th-century Taiwan:

state-building, regime transformation and the construction of national identity,” China Quarterly, No. 165, 2001, p. 123. 20 Tien Hung-mao. “Taiwan’s transformation,” In: Larry Diamond, Marc F. Plattner, Yun-han Chu, and Hung-mao Tien, eds., Consolidating the Third Wave Democracies: Regional Challenges, Baltimore: Johns Hopkins University Press, 1997, p. 145. 21 Sheng Lijun, “China eyes Taiwan: why is a breakthrough so difficult?” The Journal of Strategic Studies, Vol. 21, No. 1, March 1998, p. 69.

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The party–party dialogue model was rejected by the DPP as an illegitimate method. The DPP reserved the right to exercise independence if the KMT and CCP entered into negotiation without the DPP.22 The diplomatic negotiation model used for the reversion of Hong Kong’s sovereignty cannot be applied to Taiwan. The legislative and political changes in Taiwan in 1991, the DPP’s influential seats in the National Assembly and its successful demand for transparency in the Mainland policy, have made impossible any secret deal with Beijing. On October 7, 1992 at the 38th meeting of the Fifth Convention of the DPP, a resolution was passed to “oppose any form of cross-Strait party to party negotiations. Any cross-Strait negotiations can only be carried out in a government to government-like way, or through an intermediary organization that has been authorized and is controlled by the government and parliament”.23 Democratization has facilitated conditions under which referenda can be adopted and accepted as a means of settling the national identity question. The concept of popular sovereignty and referendum emerges when countries become democratized. When democratization began in Eastern Europe in the 1990s, more than 27 referenda were held, constituting 66% of the world’s total national identity-related referenda held during that decade.24 Taiwanese democratization has promoted the concept of popular sovereignty and facilitated the discussion and acceptance of referendum as a political and moral principle to settle the national status question. It has empowered Taiwanese nationalists who have demanded for a new constitution and a new political community with its new title of “a Republic of Taiwan.” Taiwanese nationalists perceive the concept of popular sovereignty as the foundation for a new independent state. In 1994, the DPP convened a “people’s constitution conference” calling for a new national flag. In the 1996 election, there was a consensus that Taiwan’s President must be Taiwanese. The DPP claims that the people constitute the final source of state sovereignty; all major policies including the national status of a country must gain people’s consent. The promotion of referendum is 22 Chao Chien-min, “DPP’s factional politics and Taiwan independence,” EAI Back-

ground Brief, No. 93, June 30, 2001, p. 5. 23 The Department of China Affair of the DPP, ed., A Documentary Collection of the

DPP’s Policy on the Two Sides of Taiwan Strait, Taipei: The Department of China Affair of the DPP, 2001, p. 157. 24 Baogang He, “Referenda as a solution to the national identity/boundary question: an empirical critique of the theoretical literature,” Alternatives: Global, Local, Political, Vol. 27, No. 1, 2002, pp. 67–97.

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therefore seen as an important step in the process of democratization and in the realization of the idea of “power to the people”. Comparatively speaking, the United States is a mature democracy with a high level of stability as well as certain level of predictability. China is an authoritarian regime within which certain predictability can be assumed as long as the leadership is stable and united. Taiwan is an immature democracy as evidenced by the series of events in the 2004 Presidential Election. The ongoing democratization process is full of uncertainty and unpredictability; this uncertain process constitutes a crucial unstable element in the triangle relations between Washington, Beijing and Taipei. Before the democratization of Taiwan Washington, Beijing and Taipei were committed to one China policy. Even today, Beijing, Washington, the KMT and the PFP are committed to the one China policy with different interpretations and emphases. Since the DPP came to power in 2000 President Chen Shui-bian has adopted a creeping independence strategy and rejected the one China policy.25 The result of the 2004 Presidential Election was a victory for Chen Shuibian, the DPP, and Taiwanese nationalism. The votes Chen has gained increased from 39.3% of total votes in the 2000 election to 50% in this election. Chen captured Taizhong City and County, widening the gap between the pan-green vote and the pan-blue vote in southern Taiwan, and narrowing the gap in Taipei. The political map of Taiwan has changed substantially. The result of the vote will strengthen Chen’s determination to change the status quo and challenge China’s bottom line on the grounds that China will refrain from taking drastic action in 2008, the year of the Olympic Games. Chen may even want to use possible Chinese aggression as an excuse to declare formal independence. The DPP seems to see China as a “paper tiger” since China has not taken any concrete action despite Chen’s challenges to China’s position in past years.

Democracy and Sino–United States relations Chinese democracy and human rights are a source of cooperation and conflict between Washington and Beijing. While village elections in recent years

25 Nevertheless the changing policy of the DPP should not be excluded if China

adopts a compromising and conciliatory attitude toward it. Chen Shui-bian once talked about one future China.

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are a source of cooperation, the elections of 1989 was a cause of conflict. The June 4, 1989 events shattered hopes for friendly ties within months of Bush’s assumption of office. Literally overnight, Suettinger writes, the relationship between Washington and Beijing went from “amity and strategic cooperation to hostility, distrust, and misunderstanding”. In the 12 succeeding years, bilateral relations never evolved “beyond Tiananmen”.26 According to the democratic approach, China’s democratic reform is the best means to improve Sino–United States relations. It will narrow the political system gap across the Strait and between the United States and China. It is believed that the democratization of China will constrain China’s political behavior; hopefully China will renounce its intention of using force against Taiwan. Rosen argues, “If Chinese political reforms are successful, and the Chinese government ceases to be a dictatorship, it is likely that there will be a large-scale movement of power away from Beijing toward the provinces or regions that have their own ethnic or religious identities. The government of China will concentrate on improving the lives of its own people, and participating in the world order led by the United States”.27 Washington upholds the principle of consent: the solution to Taiwan’s national status must have the consent of the Taiwan people. It stresses on the peaceful settlement of the Taiwan question as a precondition. The Bush government acknowledges referendums as a tool of democracy that Taiwan has the right to use. It would honor its duty of protecting a democratic Taiwan if attacked by China. Following American democratic traditions, the Bush government should have supported Chen Shui-bian’s referendum proposal. But a realist assessment of the current situation shows that the Bush administration is very prudent not to support the referendum proposal, and in Michael D. Swaine’s words, “President Bush’s recent policy shift is a step in the right direction”.28 The United States’ democratic approach is realist in two senses. First, it recognizes the reality that China is opposed to the referendum. Second, United States’ democratic approach is for the sake of American national interest. The security issue presides over human rights concern in the war against terrorism. 26 Robert M. Suettinger, Beyond Tiananmen: The Politics of US–China Relations 1989–

2000, Brookings Institute, 2003. 27 Rosen, “The future of war and the American military.” 28 Michael D. Swaine, “Trouble in Taiwan”, Foreign Affairs, March/April issue,

2004.

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Post Modern Sovereign Paradigm29 Central to this approach is the question of what constitutes sovereignty and of how sovereignty can be derived and pooled together. The post modern sovereign paradigm also provides an explanation to the failure of finding solutions to the Taiwan question. Due to rigid sovereignty consideration, Beijing rejects many proposals including two states, confederation, federalism, the commonwealth of Chinese states, two Chinas in transition and interim agreement. In the postmodern sovereign framework, the Taiwan issue is seen as the question concerning sovereignty. If Mainland China regards its right of sovereignty as absolute and maintains it over dissident Taiwan, and if a pro-independence group in Taiwan asserts an uncompromising right of self-determination on the part of any community that calls itself a nation, no peaceful solution is possible except a war. In such a case, the politics of exclusion and the A–B–C paradox, pointed out by Morgenthau, take place: nation B invokes the principles of nationalism against nation A and denies them to nation C, in each case for the sake of its own survival.30 It seems that the idea of absolutist national sovereignty must be abandoned in order to find a peaceful resolution to the Taiwan question. The solution to the Taiwan issue can be found in the practice of postmodern sovereignty in the EU, not the United States whose federal model cannot offer a solution to the Taiwan question. EU member countries have conceded some of their national sovereignty for the sake of political and economic union so as to compete more effectively with Japan and the United States. According to British diplomat Robert Cooper, pre-modern states, such as Somalia, Afghanistan and Liberia, are characterized by chaos and anarchy, whereas modern states are concerned with state sovereignty issues and their corollary — the non-interference by one country in another’s internal affairs.31 Within this framework, China, Russia, Indonesia and Malaysia fit best the description of a “modern” state concerned with defending its 29 The following discussion has made reference to some of my early publications.

See “Power, responsibility and sovereignty: China’s policy towards Taiwan’s Bid for a UN Seat”, Power and Responsibility in Chinese Foreign Policy, eds., by Yongjin Zhang and Greg Austin, Asia Pacific Press, ANU, 2001, 196–218. 30 Hans J. Morgenthau, “The paradoxes of nationalism”, Yale Review, XLVI, June 1957, p. 481. 31 Robert Cooper, The Post-Modern State and the World Order, Demos, London, 1996, p. 19.

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territorial sovereignty. The Shanghai Five Agreement reflects this shared belief that state boundaries are sacred and human rights should not be a pretext for outside intervention. Ultimately, East Asian regionalism can be said to value their sovereignty and East Asian states feel threatened by post-modern intrusion. Post-modern states, such as those within the EU, in the words of Cooper, have “largely shed their hang-ups about sovereignty”.32 Instead, they are open to mutual inspection and interaction, which serves to build trust and confidence between states, and so restrict opportunities for conflict. Such states place a different emphasis on the value of sovereignty. As Cooper points out: The post-modern system does not rely on balance; nor does it emphasize sovereignty or the separation of domestic and foreign affairs. The European Union, for example, is a highly developed system for mutual interference in each other’s domestic affairs, right down to beer and sausages.33 It can be argued that national sovereignty has been eroded in post-modern states, such as those in the EU, with the formation of a unified market and currency, the establishment of the European parliament and court, the emergence of European citizenship, and the absence of visa requirements for European citizens within the EU. It is important to note that EU member states were willing to transfer some of their sovereign powers to supranational organizations required to deal with a wide range of regional and global issues and that the veto power that EU member states enjoy provides them with a powerful weapon against the abuse of superior powers by supranational organizations.34 The postmodern sovereignty game is based on intense cooperation between sovereign states. EU members can no longer be characterized as “Westphalian” in terms of their substantial statehood. Instead, “Postmodern states are characterized by transnationally integrated, globalized economies, by multi-level governance, and by identities that are no longer 32 Robert Cooper, “Not quite a new world order, more a three-way split”, The

Economist, December 20, 1997, p. 42. 33 Cooper, The Post-Modern State and the World Order, p. 23. 34 For Chinese writing on this matter, see Dai Bingran, “The Issues Concerning

Sovereignty in the Process of European Integration”, Fudan University Journal (Social Sciences Edition), No. 1, 1998, pp. 39–41.

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exclusively tied to check nation-states”.35 The EU would thus seem to have returned to a “mediaeval order” which emphasizes vertical rather than horizontal relations and is characterized by a mix of modern and post-modern elements, overlapping authorities and the recognition of corporate bodies and differentiated rights. Germany, in particular, has shrewdly exploited its limited sovereignty. As Daniel Vernet argues, rather than glorifying national sovereignty, “…the goal of German foreign policy should not be to win back its sovereignty, but to benefit from the last forty years in which Germany was forced to turn limited sovereignty to its advantage, and apply this experience to the new game and new rules of play decreed by globalization”.36 While EU member states pool sovereignty, increase individual freedom, and impose democracy as a precondition for its membership, Asian countries are still working on ways to rebuild nations and reconfirm the primacy of state sovereignty through elite-led economic regionalism. Thus these countries tend to downplay democracy as a prerequisite for regional organization. China uses regionalism to contain Taiwan. China’s FTA proposal excluded Taiwan (By contrast, Taiwan is a member of APEC). Taiwan issue became a facilitating factor for China to go for regional cooperation. China attempts to constrain Taiwan through regional organizations. On August 14, 2002, China warned Singapore of “trouble” if it were to establish a Free Trade Agreement with Taiwan. On November 12, 2002, Taiwan economic minister Lin Yi-fu proposed establishing a Free Trade Agreement with ASEAN on his visit to Malaysia. In response, his Malaysian counterpart Rafidah Aziz suggested that Taiwan take up the issue with the ASEAN secretariat. Chinese regionalism in essence is the extension of nationalism to achieve the great reunification. Nevertheless, according to Noboru Hatakeyama, chairman of Japan Economic Foundation, the GDP of Taiwan is much bigger than that of any ASEAN country. Therefore, economically speaking, Taiwan is an indispensable member of East Asia Free Trade Agreement.37 35 Robert Jackson, ed., Sovereignty at the Millennium, Oxford: Blackwell publishers,

1999, p. 180. 36 Daniel Vernet, “Shrewd Exploitation of Limited Sovereignty”, Internationale Poli-

tik, Vol. 1, No. 1, 2000, p. 57. 37 Noboru Hatakeyama, “EAFTA, not a Dream but a Reality,” the paper presented

at International Symposium on FTA: JSEPA and Beyond, organized by Singapore Institute of International Affairs, March 7, 2003, Singapore.

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It seems that the United States lags behind the EU in developing new ideas and practices with regard to the sovereignty issue. Nationalist thinking still predominates in United States foreign policy. When two sides of the Taiwan Strait are both influenced by American nationalism, there seems very little hope for either side to get out of the messy trap of exclusive sovereignty. Take the example of the “Three No” policy — no support for Taiwan’s independence, no support for a two-China policy, and no support for Taiwan’s membership in international organization on the basis of statehood. Such a policy does not address the fundamental question, but is a product of the engagement policy with China. It has a number of flaws. It accepts the idea of exclusive sovereignty: one sovereignty, one seat. In other words, it accepts the terms of reference imposed by China: that Beijing does not allow dual seats in political organizations, and only mainland China represents national sovereignty. There seems to be no necessary connection between supporting the One China policy and opposing Taiwan’s membership in the UN. The Three Nos are not necessarily inter-related. In addressing Taiwan’s international status, the One China policy does not necessarily and logically exclude Taiwan’s participation in the UN. When we see the possibility of dual seats for one nation, the rigidly-applied logic of one sovereignty, one seat breaks down. In real political life, the United States does not, and indeed cannot, have a logically coherent Taiwan policy. While the United States stood against the ROC’s bid for the UN membership in 1999, it supported Taiwan’s membership in the international health organization.38 While the United States says it does not support Taiwan’s independence, it provides basic security for Taiwan: selling sophisticated weapons to Taiwan39 and passing Taiwan’s security law. These seemingly contradictory policies are necessary for the United States to maintain a balance of power across the Taiwan Strait. The United States, unlike the EU, does not have complex arrangements with regard to sovereignty. It is still committed to the idea of one sovereignty one seat. By contrast, the EU certainly offers rich intellectual resources regarding the multiple possibilities of sovereignty arrangements. The EU demonstrates the possibility of escaping the ashes of war and its appalling human destruction, and of creating collaborative institutions 38 Beijing expresses its opposition to this. See People’s Daily (Overseas edition),

December 13, 1999, p. 1. 39 France was also a supplier of sophisticated arms to Taiwan until January 1994.

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across nation-states. The most illustrative case is the successful resolution of the territorial boundary in Alsace and Lorraine, a region over which France and Germany have shed much blood, and which now houses the European Parliament and the European Court of Human Rights.40 There are several major obstacles to China’s acceptance of the post modern sovereign arrangement. First, Beijing feels strongly that its sovereignty has not been respected by major powers in the world. In this context, it is too early and even too luxurious for China to endorse the notion of post modern sovereignty. Second, major European countries were sick of fighting, thus were eager to pool their sovereignty to form a great union. By contrast, many people in China are eager to fight against Taiwan; some of them even discuss the use of nuclear weapon. A major issue for China is the cost of learning. If China can adopt flexible policies toward Taiwan, the cost will be lower; refusal to adapt to the postmodern notion of sovereignty is likely to cost China dearly. It would be tragic for both sides of the Taiwan Strait to learn the necessity of a postmodern notion of sovereignty and find cooperation only through war and great pain.

Conclusion This paper has examined three paradigms for the study of the Taiwan question and outlined the characteristic strengths and weaknesses of each paradigm. The power approach comes to term with the real world, no matter how ugly and cruel it is. It is too realist in the sense that it makes compromises and even accepts ugly and cruel reality to the point that it lacks political imagination. It is dominant and prevailing among politicians and scholars. Think-tanks in Washington, Beijing and Taipei endorse different versions of the realist paradigm. However, it does not offer a ground-breaking solution to the Taiwan question: the power is the incomplete solution and the partial source of problems. It is also unstable because the status quo is changing. It overlooks democracy that constrains powers. The democracy paradigm offers innovative mechanisms such as referendum and moves away from reality. Democratic actors fight against a 40 Gunter Schubert argues that the European Union is in a better position to offer a

solution to the Taiwan question than the United States See Gunter Schubert, “How to intervene as a third party? — The European Union and cross-Strait Relations”, Paper presented at the 19th Sino-European Conference, Taipei, October 22–23, 2002.

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dreadful and brutal world with a political imagination of how the ugly world would be replaced by a more equal, free, humanitarian and peaceful world. Nevertheless, the democracy approach must not ignore power question. The leadership in Beijing does not accept democracy when it weakens its power. Political leaders and parties in Taiwan use democracy to compute political power. And the United States adopts a pragmatic attitude toward the democratic approach and even makes a compromise to democratic value in dealing with China with regards to the Taiwan question. Democracy is not only the incomplete solution, but also the partial source of problems; in particular, democratization might worsen the situation and lead to further conflicts. Even a combination of power and democracy is not enough because national identity-power is a zero-sum game. As long as reunification or independence is conceived, a dead road is inescapable. Post-sovereign paradigm advocated by a few intellectuals is an attempt to transcend nationalist thinking, challenge the traditional concept of sovereignty, and outline an alternative concept of sovereignty. It offers a pioneering solution, but moves further away from the reality of politics. It is too unrealistic and alien to be accepted by the current leadership in Beijing, but may, hopefully, appeal to the next generation. If political forces across the Taiwan Strait try to find a novel idea, the post-sovereign paradigm would be a qualified candidate. What is the way forward? The time has come for greater interchange among the three paradigms. At a minimum, a better understanding of the other paradigm would lead to a more sophisticated appreciation of its underlying assumptions. Each paradigm seems to be providing a partial account of the forces at work or capturing different dimensions of the Taiwan question. Considerable promise may lie in a creative, but not crude, synthesis. The solution lies in a creative combination of the three paradigms, in particular, how power-holders use democracy and postsovereign paradigm to construct or constrain China’s increasing power. A decent and satisfactory resolution to the Taiwan question requires changes in power balance, China’s move toward democracy, and a partial experiment of some ideas and practices of post-modern sovereignty.

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6 The Strategic Lessons and the

Evolution of Approach: China’s Management of the Taiwan Issue and Its American Element Shi Yinhong

The result of the Presidential Election in Taiwan on March 20, 2004 reminds one of Carl von Clausewitz, the extremely insightful and most dialectically philosopher of war the modern world has ever had. Clausewitz repeatedly emphasized that there is in the very nature of things such as a kind of forceful element in the world that may subvert or even completely overthrow so-called strategic planning, or rational overall calculation. This is what he called “friction”, or variously expressed as chance, unpredictable, accidents, or uncertainties. However, even if Chen Shui-bian’s disputed win by a thin majority after a mysterious attempt at assassination has provided an almost classical illustration of Clausewitzian “friction”, there is still some “inevitability” embedded in it as reflected in the more than one million increased votes he obtained in his previous March 20, 2000 election. One of the most important influences the result of the 2004 Presidential Election in Taiwan had produced is that a great chance was thereby lost, probably permanently or at least in the predictable future: the chance of maintaining for a very long time the basic status quo between the Mainland and Taiwan, and achieving possibly a kind of modus vivendi “settlement” which might not lead to reunification itself, but could definitely push the dangerous specter of de jure independence of Taiwan into a quite distant background.

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The Problem of Cross-Strait Political Dialogue It could be predicted that after Chen Shui-bian’s accession to his second presidential term on May 20, 2004, the Chinese Mainland will not be able to avoid the problem raised more than once by the United States government. In the White House language used in its published statement to congratulate Chen on his declared election victory, “It falls to Taiwan and Beijing to build the essential foundations for peace and stability by pursuing dialogue through all available means”.1 This will require China to abandon its position of refusing to undertake any political dialogue and even political negotiation with the Taiwanese government unless the latter accepts the “One China” principle. James A. Kelly, Assistant Secretary of State for East Asian and Pacific Affairs, made a similar statement when he testified at a hearing marking the 25th anniversary of the Taiwan Relations Act at the House International Relations Committee.2 Some well-known American scholars in their related proposals also said in the same tone, especially in a popular Washington Post article written by Professors David M. Lampton and Kenneth Lieberthal.3 As for Chen Shui-bian, he made several extremely explicit and strong statements in the early post-election 1 Dong Shen Xinwen Bao (Ettoday) (Taiwan), March 27, 2004. Besides, it is said that

when he visited Beijing in mid-April, United States Vice President Dick Cheney told top Chinese leaders that if they did not want to see Taiwan as an independent state, they should “resume negotiation with Taiwan as soon as possible”. Chen Yan’s report, Yazhou Xinwen Wang (Asian News Network — www.cna.tv) (Singapore), April 15, 2004. It is widely noted that a few days later Matthew Daley, deputy assistant secretary of state, said in response to questions after a speech at a security conference in Singapore: “We’re prepared to see a change in the status quo. We want it to happen peacefully with the consent of the parties … the American policy is not simply one of insisting on the status quo”. About this very thought-provoking statement, “analysts said Washington was probably voicing its impatience at the reluctance of both sides to make the concessions necessary to restart talks that made progress toward detente in the 1990s”. Alan Wheatley, “U.S. Ready to See Change in China–Taiwan Status Quo”, Reuters, April 22, 2004. 2 He said, as Taiwan’s Central News Agency reports, “for the sake of bilateral interest, Taipei and Beijing should resume dialogue without preconditions”. “U.S. Hopes for Early Resumption of Cross-Strait Dialogue: Official”, Central News Agency, April 23, 2004. 3 “Heading Off the Next War”, Washington Post, April 12, 2004. For Taiwan’s very favorable semi-official response to the proposals in this article, see the statement by Wu Jian-xie, the appointed new Director of the Mainland Affairs Commission of Taiwan Government on May 17, Lianhe Bao (United Daily) , May 18, 2004. Cf. Ralph Cosa, “China Can Narrow the Divide”, Japan Times, May 27, 2004.

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weeks to express his aspiration or even determination to realize the de jure independence of Taiwan.4 These include his much publicized political slogan, the “One Peace replacing One China,” and his newly chosen watchphrase, the “Framework for Cross-Strait Peaceful and Stable Interaction” to be designed by a “Commission on Peace and Development between the Two Sides of the Strait” chaired by himself.5 This kind of compatibility or even fundamental coordination on the part of the United States and Chen Shui-bian (for the latter it undoubtedly resulted from deliberate tactical calculation) on political dialogue without “One China” principle was obvious when Chen delivered his inaugural speech as the new president on May 20; the United States government described it as constructive and to some United States officials as something which “will open the way to a new cross-Strait dialogue between Taiwan and China”.6 On the Chinese Mainland’s side, one vital point is confirmed (and it seems that at the present, it is indeed convinced by the main-stream opinion among policy- and opinion-makers7 ): the Mainland would have 4 Philip P. Pan and David E. Hoffman, “Taiwan’s President Maintains Hard Line”,

Washington Post, March 30, 2004; Transcript of BBC’s interview with Chen Shuibian, April 1, 2004, Fenghuang Wei Si Wang (Phenix TV Network) (Hong Kong), April 1, 2004. 5 “Chen Shui-bian: One Peace replacing One China,” Lianhe Zhaobao Wang (United Morning News Network) (Singapore), April 6, 2004; “Commission on Peace between the Two Sides of the Strait: To be Headed by Chen Personally”, Fanshu Teng Wang (Yam Network) (Taiwan), April 26, 2004. 6 David Gollust, “U.S. Welcomes Constructive Message from Taiwan’s President”, VOA, May 20, 2004. For a general picture of warming United States–Taiwan relations since May 20, see Roger Mitton, “Washington Warms Up to Chen Again”, Straits Times, June 4, 2004. Cf. Cossa, “China Can Narrow the Divide”. 7 The most important evidence in this respect is, of course, the Authorized Statement of Taiwan Affairs Offices (TAOs) of the CCP Central Committee and China’s State Council issued on May 17, 2004. People’s Daily, May 17, 2004. See an analysis by a Taiwanese professor: “Ruan Min: CCP’s New Policy Connects All Cross-Strait Affairs with ‘One China’ Principle”, Central News Agency (Taiwan), May 17, 2004. For the direct origins of this, most significant policy declaration, see Wang Chuozhong’s report and analysis in Zhongguo Shibao (China Times) (Taiwan), May 17, 2004. Also quite valuable in a much more general way is Bonnie S. Glasser, “United States Hands-On Management of Cross-Strait Tension”, Pacific Forum CSIS, May 2004. For China’s very negative response to Chen Shui-bian’s inaugural speech on May 20, especially see “Foreign Affairs Ministry: Chen’s Essence Has Not Changed, and United States Should Not Send False Signal”, Xinhua Network, May 21, 2004; “The First Comments on Chen Shui-bian’s May 20th Speech by TAO of the State Council”, Zhongguo Xinwen Wang (China News Network), May 24, 2004.

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necessarily failed if it had begun such kind of political dialogue or even negotiation under the double effects of American persuasion and/or pressure on the one hand, and its own confusion on the other. The Mainland is not able to have the only thing it really needs, i.e. the acceptance of the “One China” principle which is vitally important for preventing Taiwan’s independence. Moreover, such kind of political dialogue will also have the effects of (1) greatly strengthening the political preponderance of Chen Shui-bian and DPP in Taiwan and Chen’s ability to unite domestic political division, all in favor of his ideal of Taiwanese independence; (2) successfully mending fences with the United States after his unilateral move to change the status quo; (3) discrediting the traditional “One China” position or its equivalents held by the Nationalist Party or the pan-blue alliance within the Island, and therefore seriously damaging their overall political potentiality; (4) seriously eroding, or perhaps even gradually eliminating, the most essential consensus in preventing Taiwanese independence within the Mainland itself.

The Primary Strategic Lesson Strictly speaking, up to now or at least until most recently China’s No. 1 strategic fault or weakness in preventing Taiwanese independence lies in its very serious inability of establishing the real credibility of deterrence against it. If this prevails, China will necessarily fail in the end.8 China has taken many measures including military, diplomatic and political instruments (especially the former two) to prevent Taiwan’s independence; but they are largely half measures. Like a game of chess, the strategy of moving in several major fronts has avoided the fault of going to extreme in one front at the cost of the others. But “half measures” by their very nature are far from enough to prevent Taiwan’s independence; China is therefore unable to even realize its minimum essential objective. Generally, as from 2000–2001, it has adopted a kind of “asymmetrical strategy” in dealing with Chen Shui-bian. According to Professor John Lewis Gaddis, a distinguished

8 I once pointed it out quite forcefully in an article “The Mainland vs. Taiwan: the

long term advantages vs. the short-term advantages”, Shijie Jingji yu Zhengzhi (World Economy and Politics), No. 7, 2002. This is also a basic point of view of Professor Yan Xuetong at Qinghua University on the Taiwan issue. For example, see “Gradually Escalated Military Action against Creeping Independence” (Yan Xuetong and others’ interview with correspondent), China Times (Taiwan), April 1, 2004.

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American strategic historian and the best expounder or even creator of this strategic concept, “asymmetrical strategy understands well the reality of limitations in resources, emphasizes the need to develop and select one’s own ways of response, for avoiding winning battles while losing the war as a whole; it puts a premium on exerting one’s own strong points against the enemy’s weak points, emphasizes calculating environment, timing, and methods of taking one’s own actions. Therefore, it keeps initiative, but by the cost of conceding to the enemy those grounds which are quite difficult to defend”. Professor Gaddis went on to point out that “asymmetrical strategy needs first of all very firm nerves: peripheral interests must be rationally and even ruthlessly distinguished from vital ones, tolerable threats from intolerable dangers, and workable counter measures from unworkable responses; however, not only these distinctions are often far from easy to be made, but also there is so little in human nature to resist ‘the psychological insecurity”’. How relevant is his argument when they are generally applied to China’s situation on the very intricate and almost perennial Taiwan problem!9 Who could bear the psychology of conceding grounds again and again, if he or she would not make the simple choice of acknowledging the corner or surrender to the enemy. However, once cornered and with no capacity to concede any more, you would immediately find that you are far from ready for the necessary “fight” in terms of will, physical strength, and institutional arrangements because of the over reliance on the previous asymmetrical strategy, which has indeed been indispensable and advantageous until not long ago. Consequently, you would find yourself in a worst situation of either giving in or desperately gambling almost all you have on a decisive adventure. This is a situation of “being checkmated” in the Taiwan issue, which might very well happen if the aforesaid strategic approach in 2000/2001 remains for several more years.10 On the contrary,

9 For the complexities and great difficulties, cf. Shi Yinhong, “Difficulties and

choices: a reflection on the Taiwan issue”, Zhanlue yu Guanli (Strategy and Management), No. 5, 1999; Shi Yinhong, “The Mainland vs. Taiwan: the long term advantages vs. the short-term advantages”; Zheng Yong-nian, “Beijing has not been prepared for Chen Shui-bian’s re-election”, Lianhe Zaobao, March 30, 2004; Zhang Nianci, “Cross-Strait relations: reflections on the present and the future,” Zhongguo Pinglun (China Review) (Hong Kong), No. 3, 2004. 10 Cf. Shi Yinhong, “International politics, foreign policy, and the Taiwan problem: China’s external difficulties and the challenges that confront the new generation of leaders,”: Zanlue yu Guanli (Strategy and Management), No. 3, 2003.

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had the creditability of deterrence against Taiwanese independence been established, a protracted maintenance of the basic status quo would be secured. In other words, if the de jure independence aspiration of Taiwan could be kept at bay for a longer time, the reunification of the Mainland and Taiwan in some legal form would in most possibility be realized in a not too long distant future, and peacefully too. In a whole future historical era during which China could accomplish its “peaceful ascension”, the chief near or even mid-term hindrance or national danger will lie in Taiwanese independence. The “Taiwan issue” now confronting China and even the world emerged in 1995 with nothing more than that of independence forces within the Island striving for Taiwanese de jure independence through a chain of limited, step-by-step and situationally determined actions — an “indirect approach” of fulfilling “the unlimited purpose in limited actions”.11 Since then, the efforts and struggle to prevent Taiwanese independence have almost constantly been complicated, hard, and protracted, primarily due to three major elements: (1) the seriously or even dramatically developed sentiment and aspiration for independence among the Taiwanese people,12 due to complex interactions of numerous historical, cultural, social, and political factors, among which the most important seems to be the deliberate “de-Chinaization” policy pursued for about a decade by the Taiwanese government; (2) the aforementioned strategy for independence pursued by the Taiwanese independence forces headed successively by Lee Teng-hui and Chen Shui-bian, which may not be unique, but is still highly characteristic and very hard to deal with; (3) the close and complicated connections between Taiwan

11 This kind of strategy is in its essence similar to what Germany once pursued with extraordinary (and almost inevitable) great success from 1933 to 1938. For an analysis of the Lee Teng-hui/Chen Shui-bian strategy, see Shi Yinhong, “The unlimited purpose in limited actions”, Shijie Zhisi (World Affairs Biweekly), No. 6, 2004. On the strategic concept of “indirect approach”, see B.H. Liddell Hart, Strategy, 2nd revised edition (New York, 1967). 12 It is not too difficult to understand that this factor is the most decisive one within the Island for its fundamental political course, as well as the most profound one for making it a difficult task of preventing Taiwanese independence and achieving reunification for China. For this development, see among others, Philip P. Pan, “New national identity emerges in Taiwan: cultural shift away from Mainland China”, Washington Post, January 2, 2004; George Wehrfritz, “Rocking the boat”, Newsweek, January 5, 2004; “Taiwan sees rising awareness of the independence cause”, Editorial, China Post, January 1, 2004.

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issue and a United States policy which is recently described by an author as having “displayed a subtlety worthy of a Talleyrand”.13 But up to now, having experienced so many difficulties, frustrations, and policy zigzags, and facing most recently Chen Shui-bian’s new extraordinary victories and all their dire implications, the following three most fundamental strategic necessities should have been perceived by China as clear-cut in the coming stage of development, thereby its [e1] strategic thinking and choice be relatively simplified to a corresponding degree14 : (1) On the Taiwan issue, preventing independence has the overwhelmingly first priority, surpassing any other thing including reunification; for this, the most critical requirement is to establish the creditability of deterrence, i.e. the use of force determinately for (and only for) stopping or crushing independence forces in Taiwan when absolutely necessary, by such words and deeds that are sufficient to demonstrate to the government, political parties, and general public in Taiwan, as well as to the United States Administration its unquestionable resolve in this respect; (2) Among the various kinds of instruments for the grand strategy including political, economic, military, diplomatic, and cultural ones, those of military and diplomacy have become much more important; the balance between these two is obviously the sole key to the vital task of “strategic balancing”; (3) The forces for Taiwanese independence have achieved their greatest unprecedented breakthrough by incorporating referendum into constitutional laws in Taiwan and practicing it for the first time on issues fundamental to Taiwan’s status, as well as by Chen’s reelection based on a “bashing China” campaign. The situation demands China to undertake corresponding unprecedented efforts to prevent Taiwanese independence, on the assumption of balancing military and diplomatic means.

13 Janadas Devan, “The lure of the status quo over Taiwan”, Straits Times, May 1,

2004. “The United States’ foreign policy is not noted for subtlety. About the only matter where one might accuse it of this altogether French quality is Taiwan. There, for 30 years and across seven presidencies, United States officials have displayed a subtlety worthy of a Talleyrand. Where Taiwan is concerned, it is they, not the Chinese, who have displayed an admirable inscrutability; it is they, not the Chinese, who have managed the impossible feat of having their cake and eating it as well. To President George W. Bush’s credit, he has taken care not to allow his customary itch for simplicity and clarity to spoil this fine inheritance”. 14 I repeat here what I argued in the article “The unlimited purpose in limited actions”, which was written in mid-February 2004 and published as shown in note 12 a month later.

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The Evolution of Strategic Approach Since the Presidential Election in Taiwan on March 20, up to the issue of the 5/17 Authorized Statement by Taiwan Affairs Office (TAW), the Chinese government, together with related institutions and professional opinion, has obviously undergone surprise, bewilderment, confusion, rethinking, and controversy to adopt an essential strategic approach for at least the next two coming years. This approach abandons the “asymmetrical strategy” of the past three years, and changes in a substantial degree the practice of preventing Taiwanese independence primarily through America against Chen Shui-bian. The approach has begun to return in a dialectical way to the symmetrical strategy of a “tit-for-tat” nature and primarily relying upon military deterrence, together with “preemptive” political pressure/deterrence aimed at obtaining an initiative on the Taiwan issue which the Mainland largely never had in the past decade.15 Why was the previous “hardliner” approach abandoned in 2000– 2001?16 First, policy makers and many people in China believed that the approach was ineffective and even counterproductive based on the result of the 2000 Presidential Election in Taiwan, which bring Chen Shui-bian and DPP to power.17 The approach’s bases — the preparation in will, strength, 15 Just as many observers point out, in this last aspect it was also the Authorized

Statement of TAOs on May 17, issued three days before Chen’s inaugural speech, which gave the performance for the first time. 16 It is well known that the most prominent demonstrations of the “hardliner” or former symmetrical approach are China’s demonstrative “missile test” projected on the sea near the east coast of Taiwan and the White Paper (“The one China principle and the Taiwan issue”) issued by TAO of the State Council on February 21, 2000 accompanied by several large-scale military exercises. For a survey and analysis of that document, see Harvey Sicherman, “China’s three ifs”, Foreign Policy Research Institute, March 3, 2000. For questioning and criticism of the approach at that time from Mainland scholar, see Shi Yinhong, “On several grand strategic problems about Taiwan which must be envisaged”, Zanlue yu Guanli (Strategy and Management), No.2, 2000; Shi Yinhong, “Difficulties and choice: a reflection on the Taiwan Issue”, ibid., No. 5, 1999. 17 During the months before Taiwan’s 2004 Presidential Election, this was a most influential opinion both in and outside the Mainland, obviously having had enormous effects upon Beijing’s related behavior. Two examples of this standard opinion are Xu Shiquan’s interview with correspondent on March 7, 2004, Central News Agency (Taiwan), March 7, 2004; and Laurence Eyton, “Beijing’s rants boost Taiwan’s referendum and Chen”, Asia Times, January 23, 2004.

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and institutional arrangements for use of force when it becomes absolutely necessary — remained far from adequate, lacking creditability to Taiwan as well as the United States. Second, the Chinese government had big hope for three things, i.e. winning the hearts of the Taiwanese public, returning to power in the 2004 Presidential Election by the Nationalist Party which did not approve independence, and the expected “automatic” political effects of increasing cross-Strait economic exchanges for preventing independence and promoting reunification. Finally, to a great degree, the diplomatic instrument on the Taiwan issue is not yet available, for China’s relations with the United States were still far from stable, with great tension or even crisis occurring at times from 1995 to 2001. There were no adequate consultations, de facto coordination, and relative maturity of “rules of game” on the Taiwan issue between China and the United States.18 The moderate approach or “asymmetrical strategy”, practiced in about three years until the 5/17 Authorized Statement of TAOs, had its success in a vitally important front. During this period, the Chinese government, for the first time, consciously distinguished between the two objectives of preventing independence and promoting reunification, giving the former an overwhelming prominent priority19 and developing a strategy for it which is quite different from that for the latter. The performances of the moderate or asymmetrical approach based on this differentiation, combined with the negative effects of Chen Shui-bian’s escalating movement toward independence upon American interests, decisively contribute to President Bush and his administration’s successive statements opposing Taiwanese independence and referendum (including “defensive referendum”). In

18 Compared with what happened in the past few months as the following quo-

tation describes, one can feel the major change that has taken place: “Ironically, Mr. Chen’s opportunist pro-independence politics have fostered an unusual symmetry in Beijing’s and Washington’s policies towards Taiwan. Beijing understands Washington will not tolerate any unilateral change in the island’s status; and Washington understands Beijing will not tolerate any such change either… This symmetry can only be changed by two powers — China or the United States. But it is not in the interest of either to do so in the near future”. Devan, “The lure of the status quo over Taiwan”. 19 One may believe that this process was roughly completed at the CCP’s 16th Party Congress held in November 2002, when the policy-makers declared publicly that “From now on, we should give a greater priority to striking against the forces for Taiwanese independence”.

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other words, the dramatically accelerated trends toward independence in Taiwan and the improvement in China’s strategy and tactics led the United States Administration to perceive more clearly that the Taiwanese government (and only this government) is striving for an “unprovoked change of status quo” at the risk of damaging important or even vital interests of the United States.20 Another great advantage of the moderate or asymmetrical approach: the Mainland could delay indefinitely the clearest declaration of being ready to show its strength when it was far from prepared in strength and will for doing so, lest its creditability is subject to a real test. However, the re-election of Chen Shui-bian, who has a well-known strong aspiration and (as so many people firmly believed recently21 ) a concrete schedule for de jure independence for Taiwan in his second term, has pushed the Mainland to delay no further the development and declaration of the will for a showdown, notwithstanding the fact that the moderate approach has proven, by the result of the presidential election in Taiwan, as ineffective or even counterproductive.22 Equally important are the three facts pointed out by Bonnie S. Glaser: “…using economic levers to attract Taiwan toward political integration with the Mainland have lost credibility as cross-Strait trade has flourished while failing to bridge the political divide… Now that more than half of Taiwan’s electorate has cast votes for Chen, who ran on an anti-China platform, there is growing doubt about pinning hopes on the Taiwanese people and Taiwan’s business community to preserve a political link with the Chinese motherland … the pan-blue 20 Numerous United States statements based on that perception, now quite famil-

iar to everyone, began with a talk two years ago from an almost unlikely person, Deputy Defense Secretary Paul Wolfowitz. “We’re opposed to Taiwan Independence”, he told reporters at a press conference toward the end of May 2002. For details, see Charles Snyder, “Wolfowitz Clarifies Taiwan Stance”, Taipei Times, May 31, 2002. 21 The most well-known expression of this belief is in a speech delivered in Sydney in early January by Wang Zaixi, Deputy Director of TAO of the State Council. See “Wang Zaixi: stopping Taiwanese independence is the urgent task of all sons and daughters of the Chinese nation,” Zhongguo Xinwen Wang (China News Network), January 3, 2004. 22 I implied a “yes” prediction in my article “The serious danger and strategic necessity on the Taiwan issue”, which was written in early January and published in mid-February in Zhanlue yu Guanli (Strategy and Management), No. 1, 2004. But even now, as I know, almost no one in the Mainland ever try to face this significant question, in sharp contrast to what happened after Taiwan’s 2000 Presidential Election.

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opposition, once thought to be invincible, will splinter and lose its majority in the legislative elections slated for December”.23 Indeed, in recent months, China’s diplomacy toward the United States on the Taiwan issue appears to be quite successful and effective. It has become one of the main “strategic assets” of the Mainland in dealing with Taiwan, which it never had before and is now near absolutely indispensable. However, the recent American influence in preventing Taiwanese independence was still limited and sometimes even rather vague.24 Since the disputed Presidential Election in Taiwan (and especially since Chen’s inaugural speech on May 20, which was applauded by United States government as containing “constructive messages”), “Washington warms up to Chen again”.25 United States Administration’s early congratulatory 23 Glaser, “US hands-on management of cross-Strait tension”. What she did not

point out here was a very important development: the rapidly increasing trends within the pan-blue opposition to follow the “de-Chinaization” in the context of electoral politics. This became quite clear even before March 20. See “Taiwan opposition flip-flops”, The Daily Yomiuri, December 22, 2003; “Taiwan sees rising awareness of the independence cause”, Editorial, China Post, January 1, 2004; George Wehrfritz, “Rockin the Boat”, Newsweek, January 5, 2004. After March 20, a prominent event in this respect is that the “Nativist” faction on the top level has demanded a rename of “the Nationalist Party of China” as “the Nationalist Party of Taiwan”. See “The Nativist Faction Urges Again to Change the Party Name”, Lianhe Zaobao Wang (United Morning News Network), April 8, 2004. 24 Before March 20, what was the most noted was three actions by Secretary of State Colin Powell: He said in a hearing of House of Representatives committee that Taiwan as a democracy could have a referendum though United States did not find the necessity of having one; he shook hands and chatted with Chen Shui-bian during a luncheon to celebrate the 100th anniversary of Panamanian independence, “becoming the highest-ranking United States official known to have spoken with a Taiwanese president since 1979”; he cautioned China over its missile build-up across the Taiwan Strait in addressing a conference on United States–China relations at Texas A&M University. Besides, Douglas J. Feith, the under secretary of defense for policy told Chinese leaders in early February that they should withdraw missiles aimed at Taiwan, stressing that the burden of reducing tensions across the Taiwan Strait falls heavily on Beijing. “Powell: Taiwan can have referendum but U.S. finds no need”, Central News Agency (Taiwan), February 12, 2004; “Powell chats with Taiwan’s Chen”, Associate Press, November 4, 2003; Chris Cockel, “Powell cautions Mainland China on missile build-up across Taiwan Strait,” China Post, November 7, 2003; Joseph Khan, “U.S. asks China to trim threat to Taiwan”, The New York Times, February 12, 2004. 25 Roger Mitton, “Washington warms up to Chen again”, Straits Times, June 4, 2004. For Washington’s applause of Chen’s inaugural speech, see David Gollust, “U.S. welcomes ‘Constructive’ messages from Taiwan’s President”, VOA, May 20, 2004.

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messages to the controversial re-election of Chen as Taiwan’s President,26 its most recent criticism of China’s tough attitude toward Chen, especially that expressed by TAOs’ 5/17 Authorized Statement,27 its aforesaid insistence on a cross-Strait political dialogue or even political negotiation without any precondition, together with its repeated reaffirmation of the responsibility to Taiwan’s security under Taiwan Relations Act and of its arms sale to Taiwan28 : all these seem to indicate that “the period of coolness by the United States towards the administration of President Chen Shui-bian in Taiwan has ended…Washington has rewarded Mr. Chen by tilting back towards Taiwan and away from the Mainland”.29 In all of the 26 White House Press Secretary “Statement on Taiwan election”, (Original English

text and the Chinese translation) Dong Shen Xinwen Bao (Ettoday) (Taiwan), March 27, 2004. This statement is obviously in its text in favor of Chen against pan-blue, and also clearly tilts toward Taiwan in the cross-Strait dispute. 27 “U.S. Department of State: China’s Statement on Taiwan ‘Not Helpful’ ”, Yazhou Xinwen Wang (Asia News Network)(Singapore), May 18, 2004. See also “U.S. Warns China again for Its Threats against Stability by Military Deployments”, ibid., June 1, 2004. 28 Especially see, White House Press Secretary “Statement on Taiwan Election”; Roger Mitton, “Cheney Made Solid Progress”, Straits Times, April 17, 2004. 29 Mitton, “Washington warms up to Chen again”. “This has been evident in the way the Pentagon has released a report warning about the massive military buildup on the Mainland directly facing Taiwan. It is also shown by the way the United States has allowed Mr. Chen’s No. 2, Vice-President Annette Lu, to make transit stops in Las Vegas and San Francisco for her visit to El Salvador. More pertinently, it is demonstrated by the way a high-ranking United States military officer, MajorGeneral John Allen, will visit Taipei next month to discuss the military situation. The United States has also openly applauded the recent decision by Taiwan to approve the purchase of United States military items, including anti-missile systems, airplanes and diesel-electric submarines”. Ibid. Perhaps what is the most ominous in the mid- and long-term was Assistant Secretary of State James Kelly’s testimony before the House International Relations Committee on April 21 that both Beijing and Taipei had to accept the American definition of “ ‘status quo” over the Taiwan Strait. Mr. Kelly gave the definition when pressed by Democratic Congresswoman Grace Napolitano from California to spell out “our one-China policy”. In his candid reply, he said: “I am not sure I very easily could define it, but I can tell you what it is not. It is not the one-China principle that Beijing suggests”. This makes a famous not-pro-Beijing Hong Kong columnist concludes that “Taiwanese President Chen Shui-bian’s election victory appears to have rekindled a latent U.S. desire to turn Taiwan into an independent country. Ching Cheong, “Two different Takes on One China Policy,” Straits Times, June 11, 2004. Cf. Charles Snyder, “ ‘One China’ Review under Way”, Taipei Times, June 17, 2004.

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above situations, it is easy for Beijing to conclude finally that China cannot primarily rely upon the United States to prevent Taiwanese independence movement through the latter’s pressure on Chen Shui-bian, as Beijing had done during the months before May 17. Moreover, a review of its diplomacy toward the United States on the Taiwan issue in these months and their overall effects, a somewhat delayed conclusion was reached: for the United States to exert pressure on Chen’s independence movement with enough seriousness and efficiency, it would be necessary to let the United States know that China would most likely use force against Taiwan under provocation.30 Under these circumstances, there is no solution to the present crossStrait stalemate at least in a protracted time-span. Given the “zero-sum game” structure between the Mainland and Chen Shui-bian, any fundamental mutual compromise will be very difficult or even impossible to break the stalemate. It will be more the case if we take into account Beijing’s changed judgments on Taiwan’s popular will, prospects of pan-blue opposition, and the political effects of the cross-Strait economic exchanges, together with its quite reasonable distrust (an almost absolute distrust) of Chen Shui-bian himself.

Fundamental Problems of the New Approach There is never a perfect strategy in the world, especially for such a thorny problem as the Taiwan issue — China faces several basic dilemmas and therefore, the hardest task of multiple “strategic balancing”.31 It should be emphasized that the newly emerging tough approach as described aforesaid has it own factual or potential problems or weak-spots. Firstly, its essential effectiveness depends first of all upon real resolve and solid working measures in preparation for a showdown; but in both of these aspects there are still, to speak politely, things left to be desired, lest it become merely a “modus vivendi” or expediency. Secondly, and equally important, though preventing independence and promoting reunification have been distinguished in recent years, the distinction is still not sharp enough to avoid future confusion again. This is because the Mainland will 30 This is the largely unheeded argument in Shi Yinhong, “The serious danger and

strategic necessity on the Taiwan issue”. 31 “Shi Yinhong: Showdown over Taiwan issue probable if Chen Shui-bian re-

elected,”China Times (Taiwan), October 8, 2003.

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be reminded that “without reunification there will always be some danger of Taiwan going for independence”; therefore, a possibility exists — premature reunification by use of force might become strategic objective, upsetting both grand strategy and diplomacy. Thirdly, adopting a tough and military stand might lead the United States resume a perception held three years ago — it is the Mainland rather than Taiwan that would probably “change the status quo unilaterally” since Chen Shui-bian is bound to show his “moderateness” and “rationality” in the first two years of his second term. Finally, if Chen uses empty “soft words” to pacify the United States while embarrassing the Mainland by refusing to accept the “One China” principle in the coming one or two years, the Mainland may confront substantial international difficulties for insisting its tough approach. On the other hand, if China is to abandon its tough approach, Chen would surely make major progress toward de jure independence of Taiwan. Taiwanese independence forces have achieved unprecedented breakthrough; the situation thus demands China to undertake unprecedented efforts in preventing the independence of Taiwan. Given the present stage of development, China have to be ready to “fight” in terms of national will and power to avoid “being checkmated” in the Taiwan issue, and thereby to win the time needed for solving it peacefully or in a way compatible with the common will of peoples on both sides of the Strait.

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7 The Cross-Taiwan Strait Relations: Hard to Start and Move Chu Shulong

Since the opening up of relations in the mid-80s, the cross-Strait relations have experienced three different stages: from hostile confrontation in the 80s to relaxation and semi-official contacts in the 90s, and to political impasse and suspension of political negotiations in the 90s. The persistent principal theme going through all these stages is the “one China” principle. From the beginning, Mainland has been upholding the principle of “one China” and “one country, two systems” although the contents of both these notions have evolved to be more flexible and more embracing. Taiwan, on the other hand, has deviated from the “one China” principle under Jiang Jingguo to the “one China” principle in rhetoric and “two states” in reality under Lee Teng-hui, and to the current rejection of the “one China” principle even in rhetoric by Chen Shui-bian, who has been implementing “one state on each side,” “desinification,” and “independence of Taiwan in stages” in reality. The current disagreement over the meaning of the “one China” principle has clearly indicated that the center of contention has shifted from the issue of “the right to represent” and manner of reunification, to the issue of reunification or secession. So far, scholars have proposed many models upon which reunification can be achieved; none, however, has been accepted by both sides. Therefore, it is perhaps reasonable to put the hope on the long-term development of cross-Strait social, economic, and cultural exchanges, through which a consensus on bilateral relations and future cross-Strait relations might emerge.

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Cross-Taiwan Strait Relations Since 2000 In March 2000, Chen became the President of Taiwan. Faced with the difficulties of consolidating his power, and also serious pressure from Mainland, and the United States, Chen did not openly challenge the “one China” principle at first. On May 20, 2000, he put forward the “four nots and one no” (or five Nos) in his inaugural speech: “As long as the communists don’t intend to attack Taiwan, I promise that during my term I will not declare independence, will not change the name of ROC, will not put the “two states” theory into the Constitution, will not push for referendum on the issue of reunification or independence. There’s also no plan to abolish the Guideline for National Unification or National Unification Council.” He further stated on June 27 that his government was willing to accept the “92 Consensus,” which is that of “one China, but separate interpretations.” In his new year address on December 31, 2000, he said that people on both sides of the Strait had common sufferings in the past, and that even according to ROC’s Constitution, “one China” was not an issue. However, Chen and his party’s fundamental belief showed that his “goodwill” is a ploy to buy time. Even his goodwill is shrouded with many separatist schemes. For example, his pledge of “five nos” were based on a pre-condition that China did not intend to attack Taiwan, whose logic amounts to putting the cart in front of the horse. In addition, he also called upon the Mainland to “respect ROC’s living space in the international community and ROC’s dignity.” Anew term, “integration”, was also introduced during this period instead of the more commonly used “unification.” His plan was to construct “a new framework for the political integration of the two sides.” The Mainland government must respect Taiwan as an independent state which has its own living space in the international community and its own separate dignity. As Chen consolidated his power, his separatist positions became more pronounced. On August 3, 2002, Chen spoke to members of an old separatist organization in Tokyo, Japan, claiming that Taiwan is an independent sovereign state, and clarifying the “fact” that Taiwan and Mainland are one state on each side (of the strait). The issue of status quo and Taiwan’s future must be determined by referendum, and that everyone must realize the importance and urgency of passing legislations through referendum. On October 6, 2003, Chen said to the Washington Post that Taiwan is a sovereign state, and he, as the leader of that state, had the responsibility of pushing for a new Constitution that fit the need of the Taiwanese people.

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The Taiwanese authority thus has transited from “five nos” to “one state on each side,” to referendum, and then to amending the Constitution; it has gone through various stages from the “quiet two countries,” to “two countries” in both rhetoric and actions, and finally to “gradual independence.” The “quiet two states” has long been recognized by various people in Taiwan. As early as May 2000, the former director of MAC Su Qi commented on the Mainland policy of Chen’s party — Democratic Progress Party — that it was just a “two state” theory quietly put into practice. The chairman of DPP said to reporters on August 19, 2000, that DPP believes that the maintaining of the status quo was itself independence, and that DPP had changed its position of “would become independent.” Now the new position was that it believes that Taiwan was already independent, and was striving to protect its independence and its space in the international community. Following this theory, the Taiwanese authority adopted a series of actions toward “gradual independence.” 1. Marginalizing NUC, and rejecting the “92 Consensus.” As soon as he assumed office, Chen immediately formed the Multi-Partisan Task Force on Cross-Strait Affairs to marginalize the NUC. However, because the opposition parties did not want to be part of this task force, it then in effect became a tool for the Taiwanese authority to implement its separatist policy. On June 20, 2000, Chen said in a news conference that there had never been a consensus on the issue of “one China,” and that if there ever was one, there was no consensus. He affirmed again in September that unification was not the only option for Taiwan. 2. Desinification in domestic politics to remove all marks of “China,” or “reunification,” and replace them with Taiwan, or Formosa. In 2001, Taiwan’s Defense Ministry ordered to dismantle all signs in the military that advocate reunification and oppose independence. Chen himself made conscious effort to use the term “ROC” as few times as possible in public. In December, the News Bureau stopped using its old logo that showed China’s territory and ROC flags. It also put the word “Taiwan” on its annual publication “ROC Annuals,” and switched the map of China to the last page, and the map of Taiwan to the first. Internationally, Taiwan also made a series of efforts to change names in all official buildings and documents from ROC or Taipei to Taiwan. Its Foreign Ministry put a “Taiwan” seal on all the new ROC passports, which were officially issued to applicants on September 1, 2003.

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3. Desinification in education. Chinese culture is the link between Taiwan and Mainland, and thus is a great obstacle to the separatists. In order to sever this link, the Taiwanese authority has implemented a series of policies. Its Vice President has claimed on many occasions that she is not a Chinese. In March 2001, its Ministry of Education adopted several localization measures, and reduced by huge amount the coverage of China’s history, geography and humanities in its educational materials. In 2003, it further put modern Chinese history into the category of world history. In its plan for textbooks in 2005, the word ROC has been replaced by two separate words, Taiwan and China. 4. Wooing international support. Taiwan took consecutive efforts from 2000 to 2003 to return to the U.N. After four failures, Chen declared that the effort will never stop. After the failed attempt to join WHO in 2003, Chen proposed to put the issue on referendum in 2004 and did so on March 20. Chen also promoted the “China threat” theory in order to win favor from Japan and United States. 5. Full scale military preparation against reunification effort by Mainland. In 2000, Taiwan published its new military doctrine based on “effective deterrence” and its effort to wage war outside Taiwan. It also wanted to join United States. sponsored TMD[e1] . Its military budget in 2002 is as high as 230 billion NTD[e2] . 6. Clear direction, goal and steps towards Taiwan independence. Since mid-2003, Chen and other DPP leaders have been clearly stating their goal for Taiwan independence. They set the time-table for Taiwan independence: referendum in 2004, new constitution in 2006, and establish “a great and full country” in 2008 when Chen finishes his term. Chen restated the goal after he won the election in March 2004. He changed his rhetoric in his speech on May 20 under the American pressure. However, it is hard to believe that he has changed his mind-set and his final goal of Taiwan independence.

Mainland’s Policy toward Taiwan after 2000 Into the 21st Century, Mainland has accomplished major achievements in many areas. Economically, her GDP has hit the 10 trillion RMB mark; politically, the power transition in 2002 and 2003 was done smoothly; internationally, the bilateral relations between the United States and China are at its best in history.

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Within this strategic context, the Mainland is able to maintain a consistent policy toward Taiwan. However, the changing situation within Taiwan, especially the rise and the development of the separatist movement, has posed a serious challenge to Mainland’s policy. As a result, while the broader policy has remained consistent, there have been some major adjustments in the Mainland’s Taiwan policy. These adjustments are reflected in Jiang Zemin’s report to the 16th Party Congress.

The new interpretation on the “one China” principle While this principle has been the cornerstone and bottom line of the Mainland’s policy toward Taiwan, some new contents and new interpretations have been added. In July 2000, Qian Qichen said to a Taiwanese news delegation that the Mainland and Taiwan both belong to one China, and they did not have to be mutually exclusive. As long as both sides upheld the notion of one China, there is no necessity to go around in circles on the issue of whether this one China was PRC or ROC. In August, Qian further pointed out to another delegation from Taiwan that the Mainland believed that there was only one China in the world, to which both sides of the Strait belonged. This one China’s territorial integrity and sovereignty could not be divided. This interpretation is written in the Government Work Report to China’s People’s Congress. It replaces the old interpretation that states: “There’s only one China in the world, Taiwan is a province of China, and PRC is the only legitimate government.” It is significant because it shows that the Mainland now recognizes that both sides are equal in the negotiations toward reunification, and there is no such issue as belittling Taiwan. This becomes the Mainland’s standard interpretation of the “one China” principle. On January 22, 2001, Qian made another elaboration on the “one China” principle: “This is the common starting point for both sides of the Strait, and it has a high degree of compatibility. The notion of one China as we hold it includes both Mainland and Taiwan, and through mutual contacts and exchanges, the two sides will move toward reunification. Of course, there are indeed problems that need to be solved, but as long as we both recognize this one China principle, anything can be discussed.” General Secretary Hu Jintao said in his speech to the People’s Congress that upholding the “one China” principle is the basis for developing cross-Strait relations and for peaceful reunification. This principle involved the fundamental issue concerning the most important interest of the Chinese nation. Mainland’s position on this issue, he said, had been

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firm and consistent — there’s only one China in the world, and both the Mainland and Taiwan belonged to that one China. China’s sovereignty and territorial integrity could not be divided. This one China was shared by people on both sides of the Strait; it was their common home. And any schemes designed to create Taiwan’s independence, “two Chinas” or “one China, one Taiwan” would be firmly opposed by the Chinese people. Under this principle, China firmly rejected any efforts by Taiwan to join international organizations which only admit sovereign nations, such as U.N. and WHO, and also opposed any countries which have diplomatic relations with China to develop any official relations with Taiwan. After Chen put forward his notion of “one state on each side,” and referendum, the Mainland criticized Chen. New appeals to Taiwan to start negotiations Jiang Zemin proposed a “one China and three cans” in his speech to the 16th Party Congress, and that is, under the “one China” principle, both sides can: 1. discuss how to officially end hostilities; 2. discuss under what name Taiwan should pursue economic and cultural activities in international communities, and 3. even discuss the political status of the Taiwanese authority. In addition, the Mainland removed one article from the list of the unacceptable items, which is the “one state, two governments.” New interpretations to the “one country, two systems” Since its initiation by Deng Xiaoping, and since the return of Hong Kong and Macao, the Mainland has always considered the “one country, two systems” the most viable way to solve the reunification issue with Taiwan. However, its particular content has become much more flexible. On July 13, 2001, Qian pointed out that the “one country, two systems” has more to the current seven articles, and the reunification with Taiwan is not restricted to the same manner through which Hong Kong was returned. Instead, Taiwan can continue to use its currency, keep its military, its way of life, all private properties, and its authority on personnel; continue its current governmental structure, its tax system, and exist as a separate customs territory; the Mainland will not levy one cent of tax, or redistribute one cent of its wealth. Jiang Zemin also pointed out that after reunification,

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Taiwan can advance into China’s inland and truly gain a vast space for its development, and the Taiwanese people, together with people on the Mainland, can exercise various rights and privileges to participate in state affairs. This shows that the “one country, two systems” has been extended to bestow right to the Taiwanese people to participate in state affairs of the whole unified China. The Mainland has thus unilaterally expanded the space within which negotiations can take place. The role of the Taiwanese people As the separatist movement gains momentum, the Mainland has put more hope on the Taiwanese people to curb the separatist tendency. This includes the following: 1. Separating the Taiwanese people from the Taiwanese separatists, and reiterate the point that the military option is directed at the separatists and not the Taiwanese people. 2. Developing relations with the opposition parties and people in the business circles, such as the People First Party (PFP) and the New Party. These forces have become an important counter-balancing factor against the separatist movement. Since 2000, many important members of the opposition parties have visited Mainland. 3. Promoting reunification through economic ties. As the two sides cannot achieve any breakthrough politically, and as the separatist movement strengthens, the cross-Strait economic, trade and personnel exchanges become the most important link between the two sides, and served as an indispensable force to retard the progress of the separatists. The Mainland has improved the overall environment for Taiwanese investors and pushed further the “The Three Direct Links.” The crossStrait trade has developed very rapidly. In 2002, Taiwan’s trade surplus with the Mainland reached $44.6 billion. The Mainland, therefore, has become the biggest exporting market and largest trade surplus source for Taiwan. By the end of 2002, roughly 1 million Taiwanese live in the Mainland, and actual investment was over $33.1 billion. 4. Flexible application of the military option. In February 2000, the “One China Principle and the Taiwan Issue” White Paper was published. It reiterates the desire of the Mainland government to unify with Taiwan through peaceful means. However, it also gives a more detailed elaboration on the possible use of force, which states that the Chinese government will have to use all means available, including that of military,

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to maintain sovereignty and territorial integrity if the following occurs: first, Taiwan secedes under whatever names from China; foreign invasion and occupation of Taiwan; and the infinite delay by the Taiwanese authority over the issue of reunification. It once again states that the military option is not directed against the Taiwanese people, but against the separatists. Entering the new millennium, the Taiwanese authority not only refused to clearly state the “one China” principle, but also put forward the “one state on each side” concept. It has also accelerated steps toward independence both inside Taiwan and in the international community, causing tension between the two sides. Under the “one China” principle, the Mainland has made many adjustments and as a result, its policy toward Taiwan has become more flexible, more pragmatic, and more composed. Its new interpretations on the content of “one China,” and “one country, two systems” have become more embracing. While fighting against the separatist tendencies of Taiwan, it has paid more attention to its method to avoid being used by the separatists. There have been closer contacts between the Mainland and the Blue Camp in Taiwan, and more attention is given to the people in Taiwan as they become an important factor in the reunification effort. The fact that economic relations have grown rapidly under the shadow of unprecedented political tension shows the strength and appeal of Mainland’s economy; the economic ties have become the main factor in pushing cross-Strait relations toward positive mutual reinforcement. It has become more and more difficult for the Taiwanese authority to control the situation. The joining of World Trade Organization (WTO) by both sides has further promoted division of labor and cooperation between the two sides, which provided a stable institutional framework. The most negative and most unstable factor in cross-Strait relations is the strengthening of the separatist movement in the democratization process of Taiwan. The outcome of the 2004 election in Taiwan will have a strong influence on the direction of cross-Strait relations in the future.

Main Factors Affecting Cross-Strait Relations The diametrically opposed political goals The diametrically opposed political goals are the main reason for the impasse in cross-Strait political relationship. “Peaceful reunification, and one country, two systems” is the strategic choice that the Mainland has

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made in its relations with Taiwan. Here, the “one country” is the principle, “reunification” the goal, and “two systems” the design, and “peaceful” is the desired means, with force as the last resort. Although the Mainland has experienced two power transitions from Deng Xiaoping to Jiang Zemin, and from Jiang to Hu Jintao, this strategy has never changed. On the other side, from Jiang Jingguo to Lee Teng-hui, and then to Chen Shuibian, there is a transition from “one country, but good system” to “two countries,” and then to “one state on each side.” Taiwan’s basic policy has experienced major changes from unification of the two sides to separation between the two sides. In this, “two countries” and “separation” are the goal, “peaceful” is the ideal way, and “gradual” and “flexible” its method. Therefore, neither side wants war because that means a certain destruction of Taiwan and a great setback for Mainland, and yet the goals are diverging. The Mainland pursues reunification, and Taiwan separation. The fundamental conflict between the two goals determines that peace is nearly impossible. And this is why political tensions have been persistent since the 90s.

Internal politics and economic development “Cold peace” between the two sides is the common desire by both. Internal politics and economic development are the determining factors in crossStrait relations. Although they have opposing goals, both sides have tried to avoid war and maintain “cold peace,” which accounts for the absence of military conflict in the past twenty years. It is the fundamental and strategic goal for the Mainland to develop its economy, and quadruple its GDP by the year 2020, and to rapidly increase its comprehensive national power and competitiveness. To realize this goal, the Mainland needs a peaceful and stable international environment, including a peaceful surrounding area. Should war break out, the Mainland’s economy will have to be put on the war track. If United States is involved in this conflict, which is quite possible, Mainland’s economically most advanced areas will be devastated, and it will be difficult to revitalize the country. Therefore, it is imperative that the Mainland avoid a war or delay it. The other side of the Strait faces a similar situation. After the split of KMT, Taiwan has accomplished the transition to a multiparty system and localization of its politics. This political system determines that leaders have to act according to the desire of the people, which is the desire for peace. A war would mean the destruction of Taiwan, a reality the Taiwanese

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leaders have to face. In addition, Taiwan has to upgrade and restructure its economy, solve its employment problem, and improve people’s living standard. Satisfying people’s economic need has more pragmatic and more direct policy implications than security issues. In this respect, since the Mainland is the fastest growing region economically, and has the closest ties with which Taiwan enjoys, it has an irreplaceable role in Taiwan’s economic development. This is also why the Taiwanese separatists do not openly push for independence, but always adopt a gradual, elastic, and obscure method. The internal factors in Taiwan The separatist movement and localization awareness of the Taiwanese have several causes, and some of them are compound causes. Among them are: the long period of imperial rule by the Japanese, the support of international forces (Japan, United States), the demonization of the Mainland by the KMT, the long period of severance from the Mainland in history, the autocratic rule of the Jiang family which gave the Taiwanese the impression that the Mainland government was imposing its rule from the “outside,” and lastly, the propaganda and desinification by Lee, Chen and other leaders. The uneven development between the two sides and changes in Taiwan’s politics also contributed to the separatist cause. On the other hand, the idea of “one China” long promoted by KMT, the gradual declining of Lee’s influence in politics, the realignment of the Blue Camp, the loosening up of ideological control, the narrowing gap between the two sides, and the rapid growth of power and international stature of the Mainland have also served to curb the growth of the separatist movement. There seems to be a zero-sum relationship between the separatist and antiseparatist forces, and the latter seems to be growing. The next election in Taiwan may be crucial to the development of cross-Strait relations. If the Blue Camp wins, the separatist movement is likely to suffer a great defeat, and cross-Strait relations could enter a period of positive development, and “The Three Direct Links” could soon be realized under the “one China” principle. If the opposite happens, then, the political authority will still be in the hands of the separatists. Although they hardly have any room to maneuver in the international arena, the desinification campaign at home may still cause great damages, and even sharp deterioration in cross-Strait relations.

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Internal elements in Mainland Reunification is the Mainland’s strategic goal. Whether this can be realized depends on the level of the Mainland’s comprehensive national power, which can be understood as having a hard component — deterrence, and a soft component — appeal. Deterrence of course means that the growth of the Mainland’s economic, technological, and military power reaches such a point that no country in the world would want to risk interfering in China’s reunification effort, or to a point that the separatists would not want to risk declaring independence or delay reunification without limit. In 2002, the Mainland’s GDP hit the 10 trillion RMB mark, and the growth rate was 8%. In the next ten years, the gap between the Mainland and Taiwan economies and strategic power is likely to become even wider while the gap between the Mainland and United States is likely to become smaller. Although the latter will still enjoy a great advantage over the Mainland, it is nevertheless a global power which has to allocate its resources to other strategic places instead of concentrating its efforts on dealing with China’s reunification. To the Mainland, reunification is its center of effort and attention. Its will and ability to mobilize the whole country to defend itself is far greater than that of the United States which is disadvantaged by the distance from home. In general, the Mainland’s deterrence will play an important role in ten years. Appeal is exhibited in the Mainland’s attraction to Taiwan, including the influence of the Mainland on its people and the direction of Taiwan’s economy. The Mainland as the main embodiment of common culture shared by both sides will produce an immense power of attraction and coherence that will add to its power of deterrence. Its effect is evident by the 300,000 Taiwanese businessmen living in Shanghais who are pressing the authority to realize the “The Three Direct Links.” This appeal and attraction will also extend themselves beyond Taiwan to reach the overseas Chinese community. With the continuing growth of its economy, all other areas of life, including cultural achievement, moral education and common behavior, have showed signs of great improvement. More and more people of Chinese origin become strongly attached to the Mainland and identify themselves with it as clearly demonstrated in Hong Kong and Singapore’s warm and enthusiastic response to the Mainland’s recent manned space flight. Right now, political appeal is a negative assess for Mainland. The “one country, two systems” was formulated under the unique conditions of

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the Cold War where serious and genuine competition between socialism and capitalism still prevailed. The notion then was to solve the issue of sovereignty while keeping the two systems apart and intact. If a country has two political systems, it is difficult to assert that it has achieved genuine political unity. Therefore, the notion was only a compromise and a transitional measure aimed at bringing Hong Kong and Macao back under two mutually exclusive systems. This is a policy that embodies the political wisdom of Deng Xiaoping; it has indeed greatly contributed to the national unification effort in the return of Hong Kong and Macao. However, world politics has undergone fundamental transformations after the 90s, and similar changes have occurred in China in its economy and politics. It now has a market oriented economy, and has joined the WTO. Politically, the influence of ideology has been significantly weakened. Only one of the original “four fundamental principles” has survived, namely upholding the leadership of the party. Under the current circumstances, the “one country, two systems” no longer means one country with two systems of socialism and capitalism, but one country with two political systems, one of a one-party rule and the other of a multiparty democracy. Therefore, morally, the Mainland has been in the inferior position. The “one party” rule has been used as an excuse for the Taiwanese separatists to fan negative emotions toward the Mainland, and a justification for various international forces to support the separatists. It is therefore not attractive to the Taiwanese people. The July 2003 demonstrations in Hong Kong against the 23rd Article in its security laws were used by the Taiwanese authority to demonize the Mainland, and with great effect. From a practical point of view, since no Taiwanese politicians can go to the Mainland to “wreck the Mainland’s socialism,” reunification with the Mainland means that all Taiwanese politicians will be demoted to the status of local officials or local political activists. Of course, no politicians of the right mind will accept this arrangement. The lack of multiparty competition in the Mainland makes it almost impossible for the leaders of ROC (regardless who recognizes this ROC) to pursue reunification under the current political framework. It is therefore quite clear that no rational human being will come to the negotiation table as long as he has other options available to him. Of course, this does not mean that things will always stay the same in this regard. As the Mainland’s economy develops, social interest will become more fragmented, and ideological control weakened. The communist party will have to find other ways to legitimize its rule. Jiang Zemin’s “three represents” is a good example of a search for new legitimacy by

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the party. This transformation will ultimately lead to the legalization of multiparty systems in the Mainland. When that happens, the current negative assess will become positive. The reunification of two sides will no longer need “one country, two systems,” but will be under “one country, one system.”

The United States factor The United States is the biggest external factor in cross-Strait relations; it has always played a very important role. As a global superpower, the United States certainly will not support any country with a different ideology as its own and with a great potential to become a great regional power, or even a global power. China’s national unification falls under this category, and will not have the support of the United States. Though the Taiwan issue has been used to curb and guard against the Mainland, it is by no means the most important one for the United States. It is quite possible that the United States will try to avoid or limit the negative impact of cross-Strait relations on its more important interests. The normalization of Sino–American relations in the 70s is a clear example. Since the separation of Taiwan and the Mainland, the United States has favored Taiwan, and has been playing a balancing role, an important reason why the Taiwan issue remains unsolved today. It should also be noted, however, that the fundamental cause for any development in cross-Strait relations, especially in the development of any serious crisis, has its roots in the Mainland and Taiwan. It is the result of respective internal changes and internal conflicts. In other words, the root cause is not external. During the Jiang family period, the focus of crossStrait confrontation was on different systems or the issue of legitimacy. During the Lee and Chen periods, the focus is on reunification or separation. The Taiwanese separatist movement is mainly the consequence of its internal political development, and similarly, the Mainland’s policy toward Taiwan is also a product of its internal development. Whenever there is a serious crisis in the strait, there is often a split — sometimes even a confrontation — between the Taiwanese authority and the interest of United States. In the 1950s, the United States proposed to split China along the Strait and form two separate political entities, and it was rejected by Jiang Jieshi (Chiang Kai-shek); in 1999, when Lee put forth his notion of “two countries,” the Clinton administration considered him a “trouble maker,” and in 2002, when Chen proposed the notion of “one state on each side,”

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it fell right in the middle of America’s global campaign against terrorists, and Mainland China’s strategic cooperation was badly needed by United States. In fact, America’s top officials had declared that Sino–American relations were then at its best in history, and the Bush administration had repeatedly “sanitized” the “two Chinas” theory by Chen. Therefore, the overall trend is that as the Mainland’s comprehensive power continues to grow, as it is further integrated into the international community, and as the two sides identify more and more with each other, the United States factor will become less and less important in cross-Strait relations.

Prospects and Models of the Relationship Cross-Strait relations affect the future of China, the survival of its people, and its further development. It has therefore been closely studied by scholars in the past 20 years. Various speculations have been proposed both on the prospects of cross-Strait relations and on different models under which reunification can be achieved. One country, two systems This model was first proposed by the Mainland in the 1980s. It was designed for the return of Hong Kong and Macao and as a fundamental guiding principle in the Mainland’s policy toward Taiwan. It is indeed the desired goal of reunification sought by the Mainland. This principle and model have been upheld, and are unlikely to be changed in the future. The Mainland maintains that this is based on both the ideal of national unification, and the consideration of reality facing both sides. It is therefore rational and sound. However, it has been repeatedly rejected by Taiwan, for the latter believes that if accepted, this principle will turn Taiwan into a province or a special administrative zone of PRC, just like Hong Kong. It is belittling Taiwan, and therefore cannot be accepted. The overall approval of this plan by the Taiwanese people has never exceeded 16%. Therefore, it is quite unlikely that Taiwan will accept this model in the near future. One country, two governments This model was proposed by the Taiwanese authority in the late 80s and early 90s. It means that both sides of the Strait belong to one country,

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but has two governments. On this “one country,” however, Taiwan holds that it must be ROC, not PRC, and both governments are central governments without any hierarchies between them. This model deviated too far from the “one country, two systems” model and was not accepted by the Mainland. In 2001, after the Mainland revised its “one China” policy, this model seemed feasible and acceptable to both sides. However, by that time, neither KMT led by Lee, nor DPP led by Chen, were satisfied with this model any more. They had already replaced them with “one state on each side,” or “two countries.” Two states, one state on each side, and Republic of Taiwan Lee proposed “two states” in 1999, and Chen “one state on each side” in 2002. They consider cross-Strait relations as “state to state” relations, or at least “special state to state” relations. This is completely unacceptable to the Mainland because they violate the “one China” principle, and they are in reality “one China, one Taiwan,” or “two Chinas,” or “the independence of Taiwan.” This opposed the goal of national unification. Both the Chinese government and most of its people will not accept the separation of Taiwan and the “two countries” model in any shape or form. Lee and his Taiwan Solidarity Union (TSU) first proposed the notion of “Republic of Taiwan.” Chen and his vice president Lu Xiulian also claimed from time to time that they would change the name of ROC to Republic of Taiwan, followed by the amending of the constitution. Lee even maintained that 2008 will be the best year for independence, because the Mainland will be hosting the Olympic Games and World Exhibition, and will not want to risk using military force. This is an extremely dangerous political gamble. Lee, Chen and other separatists should realize although the two events are important to the Mainland, it is much less significant next to the issue of national unity. The Mainland will not sacrifice its national interest for the sake of either the Game or the Exhibition. Confederation Confederation is a model proposed by the KMT, PFP, and some Taiwanese scholars. However, in modern times, all confederations are certain alliances among sovereign states, not a political arrangement within a country. It is therefore rejected by the Mainland. Of course, if one takes the model of the Confederation in the early history of America, it is indeed an internal arrangement, and might be considered by the Mainland. However, at the

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operational level, it becomes much more difficult to implement this model. Although the American Confederation was a unified country and had a Congress, it was so only in name; the real powers were in the hands of the 13 states. No substantive power will be given to the central government, making it difficult for the country to exercise its rights and achieve its goals. China federation China Federation as a unified country is an acceptable model to the Mainland. However, some Taiwanese scholars understand “China Federation” as a composition of two sovereign states, and based on these two states, another “Greater China” will be constructed. This model of a Greater China containing two smaller sovereign states is indeed a rather creative solution. But in reality, many issues that involve this Greater China and the two smaller states, as well as the issue of national sovereignty may prove to be the Achilles’ heel in this model. Commonwealth of Chinese states This model was proposed by some Taiwanese, replicating the post-Soviet model of governing relations among those independent countries of former Soviet states and the commonwealth of Independent States (CIS). This model has not and will not be acceptable to Mainland China because it is not an integration of one Chinese country, but a group of independent states. Two Chinas in transition Some Taiwanese scholars maintain that since there is no consensus on “one China,” and there exist in reality a PRC and a ROC, one may consider the possibility of recognizing two Chinas, and leave the reunification to the future. The proponents of this model drew their inspiration from the two Germanys and two Koreas. The separation did not prevent the unification of Germany nor is it likely to affect Korea in the future. Both sides of the Strait can recognize the existence of two Chinas, including such existence in the international arena, and wait for the right time in the future for reunification. However, the Mainland believes that there are several problems with this model. First, when Lee came to power in 1988, even the Taiwanese

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side had been very reluctant to accept this model as what they want is two permanent Chinas. Second, the Mainland is equally reluctant as it has been upholding the “one China” principle, and is unwilling to consider any plans involving two Chinas. Third, although there used to be two Germanys and now two Koreas, the biggest difference is that the Germans and the Koreans on both sides are firmly committed to the unification of their countries in the future. Such consensus and commitment do not exist on the Taiwanese side. Therefore, there is no guarantee that after the “transition,” the two Chinas will become one.

Interim agreement Realizing that there are serious disagreements over the issue of reunification, some people in Taiwan and in other countries have proposed a model called “intermediate agreement,” which aims not at eventual reunification, but at the “intermediate period” before reunification can be achieved. There are two kinds of agreements. First, the two sides will sign an agreement to keep the status quo for a number of years, twenty or thirty for example, and then resume talks on models of reunification. The second is to sign an agreement and after the intermediate period, the two sides will complete the reunification process. So far, neither officials on both sides have expressed any serious interest nor approval for this model. Lee rejected this model outright. It is unlikely for either side to be interested without any clearly stated end goal. However, the current disagreement is most likely to prevent any consensus on the end goal in the first place. The models proposed were not acceptable because of opposing principles and goals between the two sides. While the Mainland’s basic principle, position and goal is one China, national unification, and rejection of Taiwan’s independence, those of Lee and Chen are just the opposite. If the current situation persists without any adjustment on either side, the prospect can only be confrontation, conflict, and/or even war under certain conditions. Yet, confrontation, conflict and war are against the fundamental interest of the Chinese people on both sides of the strait. When no agreement or consensus can be reached, officials on both sides should respect the desire and interest of the people, open up cross-Strait Economic, social, and cultural exchanges and contacts, so that each side can further learn and understand the other during these exchanges. This in turn will hopefully lead to

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consensus on cross-Strait relations, and to the exploration of more viable models for reunification that are acceptable to both sides. Right now and looking at the next four years at least, it seems that the goal and position of both sides across the Taiwan Strait are so differing and even conflicting that it is almost impossible for them to embark on anything jointly. What is left seems to be a “cold war” at best, and a hot war at worst.

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8 The United States Factor in Cross-Strait Crises Qingshan Tan

If an election year in Taiwan has become an established pattern for producing cross-Strait tensions since 1996, the variables for causing the mounting tension in 2004 and the continuing crisis are significantly different from the previous ones.1 For one thing, the dynamics of actions and interactions have shifted from the Mainland government to the Taiwan authority. The internationalization of the Taiwan issue has put greater burden on the United States in maintaining the status quo in the Taiwan Strait. United States policy toward China and Taiwan is an important source of dynamic cross-Strait relations and interaction, contributing to their mood swings. Any slightest change in United States policy raises greater sensitivity in both Taipei and Beijing’s attitudes toward each other, and causes actions and reactions from both parties. Both sides feel vulnerable to a change in United States policy. The sensitivity and vulnerability to United States policy often create dynamic forces of actions and interactions in the Strait, which in turn makes it more difficult for the United States to manage and control the situation in the Taiwan Strait. This article seeks to examine and analyze the United States factor as a causal effect on the dynamics of cross-Strait relations. In particular, this article argues that United States’ arms sales policy and expansion of official relations with Taiwan have produced two serious consequences. Despite

1 This chapter is a revision of the earlier paper presented at the International Con-

ference on Taiwan’s New Challenges: Politics, Policies and Cross-Strait Relations, East Asian Institute, National University of Singapore, Singapore, June 21, 2004. The author was a visiting research fellow at East Asian Institute from 2003 to 2004. 127

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a long-established bi-partisan Taiwan policy, a series of actions the United States took in the 1990s and early 2000s that meant to put a safety valve on the Taiwan Strait have resulted in mounting pressure on cross-Strait relations instead. Arms sales and diplomatic accommodation boosted Taiwan leaders’ confidence in exploring populist appeal for independence, and in so doing, Taiwan is now in the driver seat in a war game. The United States ability to maintain and control the status quo in the Taiwan Strait is under serious challenge from Taiwan. The other consequence is China’s countermeasure to United States’ arms sales resulting in one of the biggest arms race in the Taiwan Strait, and in the process, the United States inadvertently pushed China to accelerate its military modernization, causing the premature and earlier rise of Chinese military power, and hardening China’s resolve on unification. The consequences could result in miscalculation and wrong rationalization leading to the outbreak of war in the Taiwan Strait, if the United States does not give up its strategic ambiguity on the Taiwan issue, reassert itself into the peace process, and play an active role in bringing the two parties together.

Breakthrough in Arms Sales and Its Impact United States policy toward Taiwan has been the most important factor in influencing cross-Strait relations. For many years, the United States was worried about China’s initiative to unify with Taiwan. It thus focused on possible military actions by the Beijing government, thus giving Taiwan more leniency and tolerance. The United States was instrumental in inducing Beijing to abandon her liberation rhetoric, and adopt peaceful unification policy in the 1980s. The earlier politics of arms sales to Taiwan was to link arms sales to the peaceful resolution of the Taiwan issue. This policy intent was most clearly expressed in the arms sale communiqué reached in 1982 between President Ronald Reagan and Premier Zhao Ziyang. The communiqué pledged a gradual reduction of arms sales to Taiwan in both quantity and quality in a not too distant future, with the prospect of increasing peace in the Taiwan Strait.2 The arms sale communiqué was reached in the wake of a series of China’s peace initiatives taken by the reform minded government under Deng Xiaoping. Although Beijing initially insisted on linking the peaceful 2 Qingshan Tan, The Making of United States–China Policy: From Normalization to Post-

Cold War Era, Boulder: Lynne Reinner Publishers, 1992, Chapter 2.

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resolution of the Taiwan issue to a reduction in United States arms sales to Taiwan, it gradually gave up the linkage in the face of continuous United States. arms sales. In 1979, the National People’s Congress Standing Committee issued a call “To Taiwan Compatriots,” and in 1981 Ye Jianying proposed to hold party-to-party talks and start commercial, postal, and travel links.3 The peaceful overture marked a departure from the liberation policy that emphasized on military solution and was heeded by the United States in the context of strategic cooperation between China and the United States, both sharing strategic interest in containing the Soviet expansion at the time. However, since the collapse of the former Soviet Union, the strategic interest faded away, so did the United States’ arms sale commitment to China. The arms sale communiqué had some binding effect until the 1980s. The breakthrough came when President George Bush decided to sell 150 F-16 fighter planes to Taiwan in 1992.4 This sale effectively negated the 1982 arms sale communiqué, since it far exceeded the quality of previous arms sold to Taiwan. It was also important to note that the arms sale decision was made against the backdrop of a historical cross-Strait talks held in Singapore by the representatives from Taiwan and the Mainland governments. This breakthrough was surprisingly met with subdued protest from Beijing; no dramatic measures were taken given the significance of the breakthrough.5 This precedent swung the arms sale door wide open for future sales. When Clinton came to power, he ordered another batch of arms sale to Taiwan that included Hawkeye E-2T early-warning aircraft, MK-46 torpedoes, M60A3 tanks, Knox-class destroyers, Harpoon anti-ship missiles, a derivative of the Patriot missile air-defense system, known as the “Patriot PAC-2 plus.”6 In 2000, the Clinton administration decided to sell more advanced medium-range air-to-air missiles, the RGM-84L Harpoon missiles, and

3 Beijing Review 24, No. 40 (October 5, 1981), p. 11. 4 This was coupled with a French sale of 60 Mirage 2000 fighters to Taiwan. 5 There were two reasons why Beijing did not take drastic action. One was that

Bush convinced Beijing that this was for domestic politics and to help his lackluster campaign, thus representing no change of Taiwan policy. Second, Bush convinced Beijing that this was a one time deal, and no further package was in the pipeline. 6 Dennis Van Vranken Hickey, “The Taiwan Strait Crisis of 1996,” In: Suisheng Zhao, ed., Across the Taiwan Strait: Mainland China, Taiwan, and the 1995–1996 Crisis, New York, Routledge, 1999, p. 283. Sheng Lijun, China’s Dilemma: the Taiwan Issue, Singapore: Institute of Southeast Asian Studies, 2001, p. 24.

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radar systems to Taiwan, while deferring a decision on Taiwan’s request for Aegis missile cruisers, submarines, and upgraded P-3 patrol aircraft.7 Again, in 2001, the Bush administration decided to sell another extensive arms package that included eight diesel submarines and advanced destroyers, but without Arleigh Burke-class destroyers, PAC-3, and Apache helicopters as Taiwan had requested.8 What Beijing concerns most is not the arms sales — though it clearly prefers to stop arms sales — but rather what it sees as “the wrong message” the United States government is sending to Taiwan; Taiwan’s intention is to build a military alliance with the United States through integrating and sharing military intelligence, data, communication and software.9 In recent years, Washington has been urging Taipei to undertake systematic military reforms and spend more on defense.10 Beijing is concerned that continuous arms sales will encourage Taiwan authorities to go separate ways. With more advanced weapon purchases, which require technical assistance, data sharing, and software integration, Beijing is also afraid that it would lead to the establishment of military interoperability between the United States and Taiwan militaries. For example, the 2001 United States. Navy provision of wireless communication codes to facilitate communication can easily enable Taiwan’s fighter planes and warships to communicate with their United States counterparts in time of war. Accordingly, such codes will serve as a military linage in the absence of diplomatic ties.11 United States arms sales to Taiwan have been met with growing countermeasures from China, especially since 1992 when the breakthrough was made. China under Deng Xiaoping focused on economic reform and development; low priority was given to military modernization. China reduced the size of the military personnel from 4 to 2.5 million in the 1990s. At the same time, Chinese military spending fell behind the inflation rate in the late 1980s. Even if China’s GNP growths were high, the military spending as a percentage of GNP continued to drop during this period; the actual spending maintained at the level of around $50–56 billion measured based on power purchasing parity estimates (Table 1). If allowing inflation and 7 New York Times, April 18, 2000, p. A1. 8 New York Times, April 24, 2001, p. A8. 9Author’s interview in Beijing, 2002–2003. 10 Stephen Blank, “Taiwan referendum=big military challenges,” http://www.

atimes.com/atimes/China/FC24Ad01.html 11 “Taiwan gets US military communication codes,” Straits Times (Singapore), April 11, 2001, cited in Sheng, 2001, p. 104.

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Table 1. Chinese military expenditure, 1983–1993 (in constant 1993 million dollars). Year

Annual spending

% of GNP

% of Government spending

1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993

53,050 52,140 52,160 50,960 51,400 52,040 51,320 54,110 52,000 54,870 56,170

6.8 5.8 5.1 4.6 4.2 3.8 3.6 3.7 3.3 3.0 2.7

30.4 26.1 23.8 19.3 19.5 20.0 19.1 18.8 17.3 16.9 16.2

Sources: United States Arms Control and Disarmament Agency, World Military Expenditures and Arms Transfers, 1993–1994 (US Government Printing Office: Washington, DC, Feb. 1995) p. 58, cited in Bates Gill and Taeho Kim, China’s Arms Acquisitions from Abroad: A Quest For ‘Superb and Secret Weapons’, SIPRI Research Report No. 11, 1995, p. 99. Figures reached using purchasing power parity estimates.

currency devaluation, growth in military spending remained quite flat or even declined.12 China’s earnest military armament started since mid-1990s, in response to continuous United States arms sales to Taiwan and due to China’s perception of Taiwan’s accelerating pace for independence. With the exception of 2003, military expenditure has increased at double-digit growth rate since 1996 (Table 2). United States estimates of Chinese military spending doubled that of Chinese figures, even at low estimates. For example, United States Department of Defense estimated China’s 2002 military expenditure at 49 and 70 billion dollars respectively (Table 2). China has also adopted an active defense doctrine in recent years. Its active defense strategy largely aims at defending the integrity of territory, which has often been interpreted as using offensive military capabilities to fight a war against Taiwan. This strategy implies that China has to develop air and naval power capable of deterring the United States from defending 12 Bates Gill and Taeho Kim, China’s Arms Acquisitions from Abroad: A Quest for ‘Superb

and Secret Weapons,’ SIPRI Research Report No. 11, Oxford University Press, 1995, pp. 98–99.

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Q. Tan Table 2.

Military budgetary expenditure, 1996–2003.

Year

Military budgetary expenditure Chinese figure (in billion yuan)

Growth rate %

1996 1997 1998 1999 2000 2001 2002 2003 2004*

720 813 935 1076 1208 1442 1708 1872 2089

13.1 12.8 15.0 15.2 12.2 19.4 18.4 9.6 11.6

Total defense-related expenditure; United States estimates (in billion dollars) 28 32 34 37 39 42 49

41 45 48 52 56 60 70

Source: China Statistical Yearbook, 2003, Beijing: China Statistics Press, 2003, p. 285. United States estimates are from United States Department of Defense, Annual Report on the Military Power of the People’s Republic of China, FY04 report to Congress on PRC military power, Washington D.C., June 2004, p. 27. These figures are roughly derived from the chart. The two sets of figures represent two estimates, with figures in bold being high estimate. *2004 figure is calculated from the budgetary estimate.

Taiwan or fighting a limited offshore war with the United States China has increasingly expanded navy and air power aimed at depriving the United States of naval operation around the Taiwan Strait.13 China in recent years, especially since mid-1990s, gave greater emphasis on establishing and modernizing near and mid-range air force fighting capabilities. To do this, China relied on purchasing and utilizing Russian military hardware. In 1991, China reportedly bought 24 Su-27 aircraft in reaction to Taiwan’s purchase of 200 French Mirage fighter planes. After Li Tenghui’s visit to the United States in early 1995, China announced a purchase of another 22 Su-27 fighter planes from Russia.14 In 1996, China reached an agreement with Russia to co-produce up to 200 Su-27 fighters, using Russian made parts (without the right to re-export the jets to third 13 See also United States Department of Defense, Annual Report on the Military Power

of the People’s Republic of China, FY04 report to Congress on PRC military power, Washington D.C., June 2004. 14Agence France-Presse, “Moscow delivers 22 Su-27 fighters to China,” the Korea Times, April 27, 1996, p. 1.

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countries).15 This arms technology transfer would enable China to improve the much stalled production of J-10 fighters and make a leap to produce J-11, the Chinese equivalent to Su-27. By 2004, China had assembled 95 aircraft. Adding the previous imports, the air force now has a total number of 133 Su-27 fighters.16 In 1999, Russia announced that it would sell 72 Su-30MKK fighters to China; Su-30 is an upgrade to Su27 capable of multipurpose fighting.17 This aircraft is capable of distance bombing, ground attack, and air-fighting and is said to have the capability of deterring United States aircraft carriers from entering the Taiwan Strait when war is initiated. In July 2002, it was reported that China reached an agreement to purchase 30 Su-30MK2 naval fighters. This aircraft, a modified version of the Su-30MKK, is a naval striker equipped with X-31A anti-ship missiles. On March 31, 2004, China accepted six Su-30 aircraft and would receive 18 additional aircraft by the end of 2004.18 Though the air force buildup clearly has Taiwan as the target, it also has the United States in mind. According to a Pentagon report, Chinese air force strategy “has been mainly at defeating regional air forces, defending against aircraft operating at long range from China’s coast, denying United States naval operations, and striking regional targets such as airbases and air defense sites.” The report predicts that with domestic production and upgrades through foreign purchase, the Chinese air force will have made substantial progress in modernizing the air force by 2010 and will be equipped with weapons that will enable China to achieve the objectives of winning an offshore war contained in China’s military doctrine.19 Upgrading offshore naval capability has also been part of China’s active defense strategy. China purchased advanced destroyers and stateof-art anti-ship missiles from Russia and upgraded its submarine fleet and improved the accuracy of its missiles to counter United States aircraft carriers. In 1999 and 2000, China took delivery of two 7940-ton Sovremennyy 15 Richard D. Fisher, Jr, “foreign arms acquisition and PLA modernization,” In:

James R. Lilley and David Shambough, eds., China’s Military Faces the Future, M.E. Sharpe, 1999, pp. 96–126. 16 Globalsecurity.org/military/world/china/j-11.html 17 “Beijing to buy 72 Russian jet fighter-bombers,” FBIS-CHI-1999-0621: June 21, 1999 (Hong Kong Standard, June 21, 1999, p. 1.) 18 Jane’s Defense Weekly “China accepts Su-30KM@ fighters,” March 31, 2004, p. 19. 19 United States Department of Defense, Annual Report on the Military Power of the People’s Republic of China.

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class missile destroyers from Russia, with two more on order. These ships are equipped with an advanced SA-N-7 air-defense missile system: the KA28 Helix helicopter, and the supersonic SS-N-22 Sunbum anti-ship cruise missiles. China also purchased four Russian KILO Class attack submarines (SSNs). The KILO, which may be armed with wake-homing torpedoes, is a major improvement of the noisy ROMEO Class submarines. In addition, the Chinese acquisition of western technology has improved production of more advanced surface combat ships, including one 6000-ton Luhai Class missile destroyer, two 4,200-ton Luhu Class missile destroyers, and ten 2,250-ton Jiangwei Class frigates. These ships are integrated with relatively advanced systems based on western technology, including short-range air defense missiles, combat data systems, improved anti-submarine warfare suites with embarked helicopters, and diesel or gas turbine propulsion.20 With the breakthrough of arms sales to Taiwan in 1992, Chinese leaders realized that China cannot prevent and limit United States arms sales to Taiwan through agreements; they have to bite the bullet. But at the same time, their resolve to find a military way to deter Taiwan and the United States has also been hardened. Chinese leaders know that they cannot engage in a direct military confrontation with the United States over Taiwan in the near future, so they choose to develop a military strategy to prevent the United States from effective military interference or to fight a limited war with the United States 7th fleet in case the United States chooses to come to Taiwan’s rescue.21 The emphasis has been given to the development of “assassin’s mace” (shashoujian) that includes integrated offensive systems related to information warfare, ballistic and anti-ship cruise missile, advance fighter aircraft, submarines and counter-satellite systems to “blunt United States intervention or deny access to the theater of operations.”22 What will be involved in achieving this military strategy has never been clearly defined, but the term has frequently appeared in Chinese military journals since 1999. The term is often used in the context of how to contain and prevent United States military intervention in a Strait war. The Chinese government defended its aggressive military buildup against Taiwan and

20 Chinese Defense Today, http://www.sinodefence.com/navy/surface/default.sap. 21 Yu Zeyuan, “PLA generals stress that air force should develop offensive weapons

fast,” Lianhe zaobao, May 3, 2004, p. 7. 22 United States Department of Defense, Annual Report on the Military Power of the People’s Republic of China, p. 14.

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blamed the United States for sending the wrong signal to Taiwan by selling arms to Taiwan.23 China asserted that China needs to develop “credible military options” to deter Taiwan from seeking independence.

Pendulum Swing in Favor of Upgrading Relations with Taiwan If the Bush Administration made a breakthrough in arms sales to Taiwan in 1992, the Clinton administration and the subsequent Bush administration broke the diplomatic taboo in expanding relations with Taiwan, thus establishing precedents to further official relations with Taiwan. The diplomatic breakthrough not only irked Chinese officials and caused drastic reactions to Taiwan’s diplomatic initiative, but also enabled Taiwan leaders to explore United States goodwill to advance a series of brinksmanship policies that have caused strong reactions from the Mainland and destabilized situation in the Taiwan Strait. The Clinton administration’s policy to allow Lee Teng-hui to visit his alma mater in 1995 signaled a reversal of United States policy in the past of not allowing top Taiwan officials to visit the United States. This reversal of policy came just days after senior officials assured China that the visit would not happen.24 To be sure, the decision to permit Lee’s visit was made under the pressure of Congress and did not necessarily represent Clinton’s intention to change United States’ Taiwan policy.25 From March to May, Congress passed several resolutions calling on the administration to give permission to Lee to visit the United States. Members of Congress even threatened to review the Taiwan Relations Act and revise the Immigration Law if the administration did not listen. Fearing the backlash from the Senate and the House, both under the Republican control, and worrying about possible political fallout, Clinton decided to try to find a way to accommodate Taiwan’s request. In May, Secretary Christopher gathered his China hands in his office to weigh the pros and cons of approving Lee’s 23 In rebuttal to the Pentagon report, Beijing defended its buildup of credible military

options. See Chua Chin Hon, “Beijing blames US for military build-up against Taiwan,” Strait Times (Singapore), June 1, 2004, p. A2. 24 June Teufel Dreyer, “A history of cross-Strait interchange,” in James R. Lilley and Chuck Downs eds., Crisis in the Taiwan Strait, Ft. McNair, Washington D.C.: National Defense University Press, 1997, pp. 13–44. 25 Zhu Chenghu, zhongmei guanxi de fazhanbianhua ji qushi (Changes and trends in the development of Sino–United States relations), Nanjing: Jiangsu renmin chubanshe, 1998, pp. 185–186.

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visit. At the end of the day, the State Department decided to risk China’s reaction by approving Lee’s visit.26 China’s reaction was indeed swift and strong. On the same day, the administration confirmed the visit, Chinese vice premier Qian Qichen held an urgent meeting with Ambassador Jim Sasser, sternly warning him of the serious consequences of Lee’s visit. Beijing immediately suspended and cancelled a number of important dialogues with Washington, including the immediate termination of visit by the head of the Chinese Air Force, cancellation of the planned visit of Chinese Defense Minister Chi Haotian and proposed bilateral exchange programs, postponing expert talks on “missile technology control regime, and suspension of visits by United States arms control officials. China also suspended many important crossStrait dialogues with Taiwan. China followed diplomatic actions with a series of military exercises across Taiwan, including ballistic missile tests. Even though the missile test was dubbed by Lee as empty shells with no real threat, Beijing did launch the missile into Taiwan waters for the first time, the significance of which has often been underappreciated by Taiwan politicians. The United States response to China’s military exercise and missile launching was to send two aircraft carriers into the Taiwan area. Though China eventually toned down the war rhetoric and halted military exercises, ending the crisis in the Taiwan Strait without incident, the military maneuver by both China and the United States raised the specter of military confrontation by the two nuclear powers for the first time in the Taiwan Strait. The deterioration of United States–China relations and the subsequent Strait crisis was a direct result of what China perceived as “changing U.S. policy” toward Taiwan. Qian remarked to Sasser that United States policy “forced us to take strong reaction” and “the United States should take the responsibility.”27 Some United States observers viewed Clinton’s policy as flawed. The seasoned Sinologist Doak Barnett stressed the importance of United States–PRC relations on long-term United States interests and blamed the shortsightedness of the administration’s response to Taiwan’s desires.28 James Lilley, former United States ambassador to China, also 26 Ibid. 27 Ibid, p. 189. 28 See “At Issue: Should the U.S. Support Taiwan’s Membership in International

Organizations,” CQ Researcher 6, No. 20 (May 24, 1996): 473.

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criticized the Clinton’s “misguided” China policies and the inept handling of Lee’s visa to visit the United States that contributed to the Taiwan crisis.29 Several factors were responsible for the Chinese dramatic response to Lee’s visit. First, the United States decision came right after Jiang Zemin’s Taiwan speech on January 30, 1995 in which Jiang proposed eight measures to jump start cross-Strait dialogue and promote exchanges including “three direct linkages” (postal, commerce, and travel). Beijing was upset that the United States only paid lip service to the peaceful resolution of the Taiwan issue, and is not truly interested in endorsing such peace initiatives. On the contrary, the United States upgraded its relations with Taiwan by allowing Lee’s visit. This only confirmed China’s suspicions that the United States wanted to contain China by supporting Taiwan.30 China believed that this new containment policy was a function of the United States being a hegemon in the post Cold-War era and the need to hold down the “threat” of a rising China. Second, China was irritated by Lee’s “flexible diplomacy” for some time. Taiwan tried very hard to seek re-entry into the United Nations by pursuing diplomatic recognition using money and aid, and conducting “vacation diplomacy.” China considered the United States’ decision to accommodate Lee as a diplomatic breakthrough and was worried that more countries may follow suit. Third, China was very much concerned about the U.S. intention to upgrade relations with Taiwan; the visa approval was just the beginning. Therefore, China wanted to demonstrate to the United States the serious consequences of this policy reversal and tried to prevent the United States from sliding further away from the established United States Taiwan policy. To an extent, the Chinese concerns were not unfounded, even if United States–China relations were restored to a “partner level” and remained so toward the end of the Clinton Administration after Clinton reassured China of “three nos.”31 Soon after George W. Bush came to office in 2001, 29 Hickey, “The Taiwan Strait Crisis of 1996,” pp. 284–285. 30 Robert G. Sutter, Chinese Policy Priorities and their Implications for the United States,

Lanham: Rowman and Littlefield Publishers, 2000, p. 48. 31 The three nos are: the United States would not pursue a “two–China policy or

“one-China, one Taiwan” policy; the United States does not support the independence of Taiwan; the United States does not endorse Taiwan’s membership in international organizations represented by sovereign states. For a brief origin of the three no’s, see Harry Harding, “American China policy under the Bush Administration: change and continuity,” In: Arthur Lewis Rosenbaum, ed., U.S.–China Relations and the Bush Administration: a New Paradigm or Continuing Modalities, The Keck Center for International and Strategic Studies, Monograph Series, No. 15. p. 62.

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the administration abandoned Clinton’s policy of “comprehensive engagement” and partnership with China. Instead, the administration sympathetically subscribed to the view that China was a strategic competitor to the United States. To back up this view, Bush’s campaign attacked Clinton’s “misguided” Taiwan policy. The administration announced a package of more advanced arms sales to Taiwan that included up to eight diesel submarines and four Kidd-class destroyers.32 Bush himself took the opportunity of a TV interview to state that the United States would do “whatever it takes to help Taiwan” if Taiwan was attacked; the White House, however, later clarified that the Taiwan policy was unchanged.33 Chinese leaders were obviously puzzled by Bush’s statement and did not quite make out if this was a slip of tongue by the President or if this was a real change of Taiwan policy. But in many Chinese view, the statement was consistent with the pattern of United States policy tilting toward Taiwan since the end of the Cold War and represented an unambiguous change in the “strategic ambiguity” with regard to the United States commitment to the defense of Taiwan.34 China was deeply concerned with Bush’s “extremely mistaken” statement, which in China’s view, departed from a 22-year-old United States policy of never explicitly saying whether the United States would intervene to defend Taiwan. And, more importantly, Chinese officials worried that this statement would “further the arrogance of pro-Taiwan independence forces to split China,” thus disrupting peace and stability across the Taiwan Strait.35 Further evidence that reinforced China’s concern over United States Taiwan policy came when the Bush administration set yet another precedent by allowing Taiwan’s Minister of Defense, Tang Yao-ming to visit United States for a United States Taiwan Business Council in Florida meeting on March 11, 2002. The United States government had not permitted Taiwan top military officials to visit the United States, other than in transit, 32 Steven Mufson and Dana Milbank, “Taiwan to Get Variety of Arms; But U.S.

Withholds Aegis Radar That China Strongly Opposed,” Washington Post, April 24, 2001. p. A.01. 33 Steven Mufson, “President pledges defense of Taiwan,” Washington Post, April 26, 2001, p. 1. 34 Wang Jisi, “China’s reaction to G.W. Bush: tactical moves, or a strategic reorientation?” In: Arthur Lewis Rosenbaum, ed., U.S.–China Relations and the Bush Administration: a New Paradigm or Continuing Modalities, pp. 127–154. 35 Philip Pan, “China ‘concerned’ by Bush remarks; Beijing says U.S. drifting ‘down a dangerous road,”’ Washington Post, April 27, 2001, p. 19.

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since 1979. Moreover, Bush sent two high-level officials, Deputy Defense Secretary Paul Wolfowitz and Assistant Secretary of State James Kelly to participate in this “private” conference where Wolfowitz not only met with Tang, but also made a tilted gesture to Taiwan officials.36 While reiterating that the United States does not support Taiwan independence, he specifically repeated Bush’s controversial remarks that the United States would defend Taiwan at all costs.37

Strategic Ambiguity and Changing Reality Many cross-Strait observers used the phrase “strategic ambiguity” to describe what the United States response would be regarding a Mainland military action against Taiwan. United States Assistant Secretary of Defense Joseph Nye originally was trying to clarify the United States intent by creating the phrase to remind Beijing of the United States commitment to Taiwan. But the term was later interpreted as the United States equivocal policy as to what the United States would act in the event of a military confrontation in the Taiwan Strait.38 The term is seen as a different expression of the Taiwan Relations Act (TRA) passed in 1979, which says any non-peaceful means to solve the Taiwan issue would be a “grave concern of the western hemisphere.” On the one hand, the TRA supports a peaceful resolution to the Taiwan issue; the United States will provide Taiwan with arms to raise the defense capability of Taiwan. On the other hand, the TRA does not specifically guarantee that a military aid to Taiwan is automatic if a military confrontation breaks out in the Taiwan Strait. Although United States officials and scholars often cite the TRA as a binding legal document that obligates the United States to seek a peaceful resolution to the Taiwan question, the TRA itself is ambiguous at best with regard to whether the United States will take military action to defend Taiwan in case of war.39 The ambiguity of the TRA is also manifested in its lack of distinction between a war initiated by the Mainland and a war provoked by Taiwan. 36 “Taiwan’s Defense Minister in Landmark Visit to U.S,” Washington Post, March

11, 2002, p. 22. 37 See Harding, footnote 19. 38 Harding, “American China policy under the Bush Administration: change and

continuity,” pp. 62–63. 39 Tan, The Making of U.S.–China Policy: From Normalization to Post-Cold War Era,

Chapter 2.

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At the time of making the TRA, law-makers were preoccupied with the implication of establishing diplomatic relations with China and with possible threat from the Mainland. The intent of the TRA therefore was to prevent non-peaceful means taken by Beijing to force Taiwan to unify with the Mainland. What lawmakers did not foresee is the dynamic change in political development in the Mainland and Taiwan that have reversed the cause of concern. The Chinese government, since embarking on economic reform in the late 1970s, has set economic development as the state’s top priority, and made foreign policy the goal of the national development. In the 1980s, and most part of the 1990s, the government adopted a reconciliatory and pragmatic approach to the issue of Taiwan. Thereafter, Beijing literally abandoned its long-held policy of active unification and adopted a passive Taiwan policy of maintaining the status quo, as long as Taiwan does not seek independence. This policy change was quite noteworthy given China’s long standing on the issue; active unification has been the established goal for China since Deng Xiaoping’s proposal of “one country, two systems in the 1980s and it was the central theme of Ye’s speech and Jiang’s “eight points,” which was to woo Taiwan to the table of negotiation for unification. Beijing has even adjusted the long-term opposition to the internationalization of the Taiwan issue, taking the defensive measure of seeking international support to exert pressure on Taiwan not to change the status quo. In particular, China has openly called on the United States to put a stop to Taiwan’s independent move, a discernible change from her previous position that Taiwan is an internal affair of China, and China opposed any foreign interference with the Taiwan issue. On Taiwan, a major development was DPP’s coming to power and subsequent policies that made the Mainland government increasingly suspicious of the DPP government’s intent on independence. Chen Shui-bian abandoned the principle of “one China with different interpretations” that was reached in the Koo-Wang talk in 1993, insisting on no pre-conditions for cross-Strait dialogue. Beijing viewed this as abandoning one China principle. Moreover, Chen adopted a series of de-sinicization policies, seeking to remove symbols, titles, and signs that are seen as linking Taiwan to the one China concept. This included removing ROC title from the passport and holding no national flag at DPP campaign rallies.40 Chen’s de-sinicization 40 Jason Blatt, “Symbolic gestures lead to criticism,” South China Morning Post,

December 31, 2001, p. 6.

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policy has been viewed by Beijing as a calculated and intentional move toward independence. Beijing’s view was largely confirmed when Chen’s government made a decision to put up a referendum on the question of Taiwan status in the general election, despite the initial United States warning not to do it. This bold and open challenge to Beijing’s bottom line and to changing the status quo of the Taiwan Strait alerted both Beijing and the United States. In the beginning, the United States thought Chen was doing the usual campaign rhetoric and did not pay serious attention, but Chen showed open defiance on Untied States warning against such a referendum by politically fan faring the public sentiment on the issue. In an unusual demonstration of United States anger, President Bush, with Chinese Premier Wen Jiabao standing beside him, publicly stated that the United States opposed “any unilateral decision by either China or Taiwan to change the status quo.” Bush added: “And the comments and actions made by the leader of Taiwan indicate that he may be willing to make decisions unilaterally to change the status quo, which we oppose.”41 It took a series of diplomatic maneuvers and President Bush’s warning that the Taiwan government eventually backed down to change the wording of the referendum. Nevertheless, the referendum law was passed and referendum mechanism initiated in the election, which opens up referendum possibility on Taiwan’s status in future electoral politics. The new developments on both sides of the Strait have created a new dynamics of actions and reactions in reversal. Whereas Beijing is retreating from active unification to defend its bottom line, the DPP government is on the offensive in initiating sensitive policies with the intention to change the status quo. The new dynamics have a potential of challenging the United States strategic ambiguity and of disrupting peace and stability in the Taiwan Strait.

United States Policy Impact and Dilemma United States arms sales policy and upgrading official contacts with Taiwan in the Clinton and Bush administrations have direct impact on policies adopted by both Beijing and Taipei that have resulted in the Taiwan crisis before and since the Taiwan election in March 2004. This is not to say that 41 John Pomfret, “China Lauds Bush for Comments On Taiwan,” The Washington

Post; December 12, 2003, p. A.44.

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these United States policies are the only causal factors leading to the Strait crisis. There are other factors; and it was the interaction of these factors with the United States policies that gave rise to changing circumstances affecting decision-making in Taiwan and China. However, United States arms sales and upgrading relations with Taiwan are important factors in contributing to and prolonging the crisis. The arms sale and diplomatic breakthroughs since the senior Bush administration have greatly heartened and encouraged Taiwan leaders to pursue a series of policy initiatives that Beijing regarded as moving towards Taiwan independence. Under Lee and Chen’s leadership, Taiwan had gone through a political transition of indigenization and de-sinicization. From Lee’s two state statements to Chen Shui-bian’s proposal of referendum over the United States objection during the election campaign,42 Taiwan leaders have tried very hard to push the envelop, believing whatever Taiwan does will have the United States support. Chen’s move on referendum precipitated a crisis overnight in the Taiwan Strait. Chinese officials sternly warned Chen not to insist on a referendum and openly stated that referendum on independence would force China to exercise military options to stop what China called the split of the Motherland. The referendum move deeply troubled China and the United States. For the first time, China and the United States saw the danger eye to eye and dealt with the Taiwan issue on the same pace. All these years, the United States had leverage over the Taiwan issue. But this time, Taiwan leaders chose to ignore the United States caution and used public opinion to back their defiance over the United States warning. This new use of populist politics makes it more difficult for the United States to oppose any public opinion-based initiatives to take Taiwan onto the independence path. Moreover, Taiwan is now in the driver’s seat, taking advantage of pro-Taiwan sentiment in the Bush administration and Congress to initiate new policies and diplomatic moves that would either test Beijing’s will or force Beijing to respond, dragging the United States along in the process. The implication of the referendum incident is far reaching to the future peace and stability of the Taiwan Strait: the war initiative is slipping into the hands of Taiwan leaders. Whether they will push for referendum on an immediate change in Taiwan status or a gradual move toward de jure 42 Philip P. Pan, “Taiwan’s President Unfazed by U.S. Warning,” Washington Post;

December 11, 2003; p. A.47.

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independence through constitutional making will inevitably change the status quo of the Taiwan Strait and challenge the “bottom line” set by the Beijing government. In the context of United States Taiwan policy in the Clinton and Bush administrations, China’s focus on Taiwan has shifted from active unification to the prevention of Taiwan seeking independence. Upon making such a shift, China relies on a two-legged strategy: asking the United States to deter Taiwan in the hunt for independence and develop “credible military capability” to engage in military action in case China is “forced” to take military action. In light of Chen’s aggressive campaign rhetoric and initiatives, China began to call on the United States to exert pressure on Chen.43 China communicated its concern and request over hotlines and in person (during Premier Wen’s visit to the United States). In addition to seeking United States help, China also took the case internationally, expressing its concerns over Taiwan’s referendum and the resolve to stop Taiwan independence by issuing diplomatic memorandum.44 Several developments have made this change of policy possible. First, Chinese leaders have regarded economic development as the highest national priority. They have realized that in order to develop Chinese economy, a necessary peaceful international environment is vital. They see peace and development as the two main themes of today’s international relations as well as the main objectives for Chinese foreign policy. Thus, they believe that the Taiwan issue should be viewed in the context of achieving peace and development and that unification with Taiwan can be postponed as long as Taiwan does not engage in provocative acts. Second, while United States–Taiwan relations have been upgraded, United States–China relations have also been expanded affably. The bilateral relationship has never been so comprehensive and interdependent. Both the Clinton and Bush administrations supported expansion of economic relations, especially by removing the annual obstacle of reviewing China’s most favored nation status. China restored military contacts with the United States after the missile crisis and formed strategic alliances 43 In an interview with the Wall Street Journal, the Vice Minister Zhou Wenzhong

indicated the necessity for the United States to make a public statement opposing Taiwan’s referendum. See http://tw.people.com.cn/GB/1480/14858/2329507.html. 44 In the Chinese state media, many articles reporting on French, Russian, and Japanese opposing referendum were given prominent space to show that international opinion was behind China. See, http://tw.people.com.cn/GB/26741/28813/28815/ index.html.

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against terrorism after September 11th. Chinese leaders recognize the United States superpower position and seek to cooperate with the United States on major international affairs, trying to act as a responsible partner in maintaining the international system, which has been demonstrated by China’s active role in brokering the Korean nuclear issue. As in the words of United States Secretary of State Powell, United States–China relations have never been better, and Chinese leaders hope that such a close relationship can help contain Chen’s aspiration for Taiwan independence. Third, United States and Chinese top leaders have developed better personal ties and mutual trusts over the past decade, making it possible for Chinese leaders to appeal directly to the United States president on the Taiwan issue. Jiang Zemin’s visits to the United States, including visit to President Bush’s ranch in Texas resulted in close personal relations so much so that leaders of both countries could pick up the phone to speak directly on emerging issues. Vice President Hu Jintao and Premier Wen Jiabao’s visits to the United States also renewed such personal ties with top United States officials. Personal ties and trust were noticeably absent in the 1970s and 1980s, only shared strategic interests sustained the bilateral relationship at that time. For a while, China envied Taiwan leaders’ personal ties with United States leaders.45 While China was working on the United States support to contain Taiwan’s independence movement, China also took notice of “contradictory messages” the United States sent to Taiwan authorities. China attributed these mixed signals to be the cause of Chen’s reckless behavior regarding referendum.46 For example, Chinese officials and scholars pointed out two events preceding the referendum crisis: one is Chen’s unprecedented access and freedom during his stopover in New York where he was given an opportunity to trumpet his plan for a new constitution and referendum; the other is the high profile handshake between Chen and Powell in Panama. Both events broke the norms governing United States–Taiwan relations for the past decades. To avoid over reliance on the United States to contain Taiwan, China has also been strengthening its military readiness. Chinese officials believe only through maintaining credible military capability can Taiwan be deterred from seeking radical breakup with the mainland. The concept of credible 45Author’s interview, Beijing, summer 2003. 46 Xing Zhigang, “US should be straight on one-China policy,” China Daily,

November 20, 2003, p. 1.

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military power has taken on new meaning in recent years. In addition to building up a military force that can overpower Taiwan in a military conflict, China has taken into consideration the development of a force to deter possible United States military intervention in the event of war. To achieve credible deterring capability, China has built up an offensive inventory in navy and air force over the past five years.47

Conclusion: Can Status Quo be Maintained? The 2004 crisis is not over with the Taiwan election; on the contrary, the crisis is deepening with China’s increasing belligerence over Chen’s refusal to come to the negotiation table under the one China principle with regards to referendum and constitutional remaking. Furthermore, an ironic consensus among the hardliners, albeit a minority on both sides of the Taiwan Strait, that the United States in all honesty supports Taiwan’s independence may pressure top leaders to believe in the inevitability of war. China showed a deepening suspicion of Chen’s stance on independence after his reelection, but did not totally write him off. Instead of passively reacting to Chen’s resourceful initiatives as in the past, China’s preemptive statement on May 17 took the offensive to set two strict options for Chen to take. While sweetening the pot by offering more concrete concessions under the condition on one China principle, including the establishment of a peaceful framework and military dialogue mechanism, China limited Chen’s maneuvering space, pre-warning the grave consequence of rejecting the one China principle and seeking creeping independence.48 China is hardening its position after Chen refused to accept China’s precondition on negotiation. Beijing is showing some sign of giving up on Chen and starting to focus on unilateral options regarding the Taiwan issue.49 The much talked unification law, economic sanction against pro-independence businessmen, threat of the middle line attach, and military exercises in Dongshan Island are all pointing towards this direction.50 47 Sun Zhuanwei, “China may attack Taiwan in 2006,” Lianhe zaobao (Singapore)

June 10, 2004, p. 7. 48 For the statement of the Taiwan Affairs Office of the State Council, see People’s

Daily, May 17, 2004, p. 1. 49 Officials stated clearly that Chen’s 520 speech did not give up his position on

Taiwan independence. See People’s Daily, May 24, 2004, p. 1. 50 Ching Cheong, “All eyes on imaginary line in Taiwan Strait,” Strait Times

(Singapore), June 5, 2004.

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Recent Taiwan developments are also not encouraging to the alleviation of the crisis. Chen rejected China’s May 17 proposal, refusing to bow to China’s precondition on negotiation. The $18 billion arms purchase represents one of the largest arms sales in recent years that include weapons of offensive nature. Chen has already started to work on constitutional changes and promised to use referendum again if necessary. Many ideas and versions of proposed changes are circulating to achieve maximum de jure independence.51 Annette Lu even suggested the name change to “Taiwan Republic of China” or simply Taiwan during her recent transit in the United States.52 What is more worrisome is the existence of a consensus on the inevitability of war among some influential hardliners on Taiwan and in China. Such a consensus derived from United States strategic ambiguity and mixed messages leads to the belief that the United States supports Taiwan independence and will fight for Taiwan. They have come to the conclusion based on different logics that a war may not necessarily be a bad thing, although with different outcomes. For Chinese military hardliners, unification with Taiwan is incompatible with United States interest in Taiwan, and they believe that the United States intention is to forestall unification. United States military arms sales to and connections with Taiwan make it impossible for Taiwan authorities to yield to unification.53 Unification can only be achieved through military action, thus a limited war with the United States is unavoidable.54 For fundamentalists within the DPP and other independence advocates, Taiwan should declare independence. If war breaks out because of that, the United States will come to its rescue. A war defending Taiwan will result in a weakened China and a phoenix of an independent Taiwan arising from the ashes.55

51 Chang Yun-ping, “Lee launches constitutional plan,” Taipei Times, July 2, 2004,

p. 1. 52 Lin Chieh-yu, “Lu gets rough ride over plan to alter name of country,” Taipei

Times, Jun 09, 2004, p. 1. 53 John Pomfret and Philip Pan, “U.S. hits obstacles in helping Taiwan guard against

China,” Washington Post, October 30, 2003, p. 1; Ji Xiaoqi, “Taiwan authority purchase NTW$600 billion arms, U.S. and Taiwan are uptight on military exercises on Dongshan Island,” the Global Times, June 4, 2004, p. 1. 54 Qingshan Tan, “Further on U.S. dilemma on the Taiwan question,” Lianhe zaobao, May 20, 2004, p. 8. 55Author’s interview, Taipei, March 19–22, 2004.

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United States’ stance toward the Taiwan Strait has been to maintain the status quo. This article has shown that maintaining the status quo is increasingly difficult, because the United States is part of the problem. Dynamic forces on both sides of the Taiwan Strait take cue from an ambiguous United States policy toward Taiwan and act accordingly. There is the real danger of United States’ loss of control over the situation, strengthening the DPP56 given Chen Shui-bian’s ingenuous manipulation of public opinion. China’s reaction to United States arms sales to and expansion of official relations with Taiwan is the acceleration of military buildup and the resolve to face the inevitability of war. In the process, China is prematurely rising to become a military power. In Beijing’s view, the current crisis has not ended with the reelection of Chen Shui-bian and the failure of the referendum. It is just the beginning of a prolonged crisis that will eventually be ended with two possible ways: either Taiwan leaders give up resistance to Beijing’s call for a cross-Strait dialogue or continue down the independence path leading to a military showdown.57 This policy seems to suggest that whichever way cross-relations end up will not be the status quo. Therefore, the primacy of the United States policy is to give up the strategic ambiguity on the Taiwan issue,58 reassert itself in the peace process, and play an active role in bringing the two parties together rather than let the situation slip out of control.

56 Qingshan Tan, “Taiwan’s green expansion,” Strait Times, March 29, 2004, p. 11. 57 Statement of The Taiwan Affairs Office of the State Council, People’s Daily, May 17,

2004, p. 1. 58 Some may point out that United States Secretary of State Collin Powell’s recent

comment that Taiwan is not a sovereign state could represent the change of the ambiguous Taiwan policy. See, Edward Cody, “Powell’s comments in China rile Taiwan,” Washington Post, October 28, 2004, p. A18–A19.

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9 United States Taiwan Policy: How the 2004 (Taiwan) Presidential Election Put it to the Test John F. Copper

Introduction To adequately comprehend the process of formulating United States foreign policy, of which China/Taiwan policy is an essential part, it is necessary to take cognizance of a multitude of “inputs” into the process — the United States being a pluralist and democratic country.1 While generalizations regarding the making of United States foreign policy are basically true of making Taiwan policy, the importance of the various organizations affecting policy making differs noticeably. It will thus be instructive (as will be seen below) to note the different weight of policy “influencers” of United States foreign policy overall and specifically Taiwan policy before assessing the United States reaction to the controversial March 20 Presidential Elections in Taiwan. The entities that affect the making of United States foreign policy, without reference to a specific country or issue, include: the Department of State, the Department of Defense, Congress, the media, the intelligence community, the Democratic and Republican parties, public opinion, and the socalled foreign policy elite. The hierarchy of importance of these agencies and organizations will vary depending upon whether the United States is at war or not, whether the said nation is strategically important to the

1 See Eleanor Lansing Dulles, American Foreign Policy in the Making (New York:

Harper and Row, 1968), Chapter 1. 149

ch09

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United States, if the American public generally pays attention to that nation, and some other variables.2 In the case of Taiwan, the Congress is a much bigger influencer because it has written legislation, namely the Taiwan Relations Act (TRA) that sets the parameters of American policy vis-à-vis Taiwan, and because Congress covets its role in overseeing what it considers its special responsibilities (as stated in the TRA) toward Taiwan.3 In fact, Taiwan stands alone as the only political entity for which Congress has written legislation to set nation-specific guidelines for American foreign policy. In addition, public opinion plays a larger role in the making of the Taiwan policy because Taiwan has been and remains an important variable in United States–China relations, because Taiwan is a democracy, and for a number of other reasons. Last but not least, Taiwan’s diplomats in the United States have been very talented and have effectively influenced American opinion about Taiwan in a positive way.4 All of these things prompt Congress to continually pay attention to Taiwan and to give it favorable treatment. The Department of State plays a very weighty role in the making of United States Taiwan policy. But its attitudes toward Taiwan are generally hostile since it considers China very important and sees Taiwan as at minimum a distraction (usually much worse) in maintaining good relations with China. State’s influence over Taiwan policy is thence strong — even though the United States does not maintain formal diplomatic relations with Taiwan, and diplomatic business is conducted and technically the “private” American Institute in Taiwan formulates policy.5 In contrast, the Department of Defense is favorably disposed towards Taiwan, as is the intelligence community due to the fact that they regard

2 For a discussion on this, see Henry Kissinger, American Foreign Policy (New York:

W.W. Norton, 1977), Chapter 1. 3 See John F. Copper, China Diplomacy: The Washington–Taipei–Beijing Triangle (Boul-

der, CO: Westview Press, 1992), Chapter 2. Section 14 of the TRA states that the Foreign Affairs Committee of the House and the Foreign Relations Committee of the Senate shall monitor implementation of the Act. 4 For background details on United States public opinion as it relates to making China and Taiwan policy, see Leonard A. Kusnitz, Public Opinion and Foreign Policy: America’s China Policy, 1949–1979 (Westport, CT: Greenwood Press, 1984). 5 For details on the matter of differences between the Department of State and other policy-making organs, especially the Congress, see James A. Gregor, The China Connection: United States Policy and the People’s Republic of China (Stanford: Hoover Institution Press, 1986). See pp. 96–97 for comments regarding the Taiwan Relations Act.

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China as a “challenge” to the United States, if not a threat, and Taiwan is seen (though there is considerable debate about this) as having strategic value to the United States Certainly if Taiwan were taken by China by force, America’s military position in East Asia, if not beyond, would be seriously undermined.6 Furthermore, Taiwan is valuable to the United States for its intelligence gathering and cooperation. The Republican Party is somewhat more supportive of Taiwan than the Democratic Party due to the history of United States relations with China and Taiwan; but because Congress passed the Taiwan Relations Act when Democrats controlled both houses, this is not a very meaningful difference.7 The author believes that knowing this background is essential to grasping United States Taiwan policy before, during, and after the 2004 Presidential Elections. The election in some serious ways “tested” United States Taiwan policy and may have altered it permanently as will be noted below. The United States reaction was complex even though in principle American policy makers seek as a matter of course to avoid positions or actions that will influence an election in another country and, thus, as a rule, take a neutral stance regarding partisan politics or who should win or lose. This was true of this election; still, the events that constituted a prelude to the election, the results, and the election’s aftermath made United States policy makers reconsider the tenets of United States Taiwan policy.

The Basics of United States Taiwan Policy Before pursuing these propositions, it is necessary to review the fundamentals of United States Taiwan policy. The most basic tenet of United

6 This argument has a long history. For an early account of this argument, see Martin

L. Lasater, The Taiwan Issue in Sino–American Strategic Relations (Boulder: Westview Press, 1984), p. 249. For the more recent argument, see Ross H. Munro, “China: the challenge of a rising power,” In: Robert Kagan and William Kristol (eds.), Present Dangers: Crisis and Opportunity in American Foreign and Defense Policy (San Francisco: Encounter Books, 2000), pp. 48–49 and Cris Rahman, “Defending Taiwan and why it matters,” Naval War College Review, autumn 2001, pp. 69–93. Also see Alan Wachman, “Credibility and the United States defense of Taiwan: Nullifying the notion of a Taiwan threat,” Issues and Studies, March 2002. 7 This relates to the Republican Party’s greater interest in Asia historically and to its anti-communist posture regarding the “loss” of China in 1949, while democrats blamed Chiang Kai-shek.

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States Taiwan policy is that the “Taiwan issue,” or the future of Taiwan, must be resolved peacefully. This proposition traces its origins to the 1950s and after when the United States became concerned that the NationalistCommunist struggle would draw the United States into war. So, the United States sought to “leash” Chiang Kai-shek on the one hand and protect Taiwan by defending it and intimidating China (in the case of crises over Quemoy and Matsu) on the other.8 When Washington first engaged in talks with China, it enunciated this “peaceful resolution only” stance regarding the problem of Taiwan.9 Chinese leaders did not agree with this policy since it contradicted their fundamental position that the “Taiwan issue” is a domestic matter. Nevertheless, United States and Chinese leaders were able to construct a modis vivendi and negotiate on other important issues while putting the “Taiwan issue” aside. For the United States, the peaceful resolution only policy meant protecting Taiwan from an attack by China. In January 1950, the United States had seemed to abandon Taiwan when Secretary of State Dean Acheson stated that Taiwan was not within the United States “defense perimeter.” But opponents said his statement caused the Korean War and when the war began, President Truman dispatched the 7th Fleet to the Taiwan Strait in order to block an invasion. Mao’s forces were poised to cross the Taiwan Strait and bring the island under the jurisdiction of the People’s Republic of China.10 Ever since then, the United States has been Taiwan’s protector. This role was formalized in a mutual defense pact signed by the two countries in 1954. Though that treaty was terminated in 1980, in the meantime the TRA, which many felt constitute as strong or even a stronger commitment of American protection, substituted for it.11 In the TRA, the United States Congress proclaims that any attempt to change Taiwan’s future by force … is of grave concern, it pledges the United States will provide Taiwan with arms to defend itself, and promises to keep forces in the area to ensure

8 Copper, China Diplomacy, p. 30. 9 Ibid., p. 29. 10 See Nancy Bernkopf Tucker, Taiwan, Hong Kong and the United States, 1945–1992

(New York: Twayne Publishers, 1994), Chapter 3. 11 Senator Javits, who was important in framing the law, said this. See Jacob K. Javits, “The Taiwan Relations Act,” Foreign Affairs, fall 1981, pp. 54–62.

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Taiwan’s social or economic system remains intact. These are still considered very meaningful commitments.12 Washington keenly demonstrated its protector role in 1996 when President Clinton sent two American aircraft groups to the Taiwan Strait after China conducted threatening missile tests near Taiwan’s shores to express displeasure with President Lee Teng-hui at the time of Taiwan’s first direct Presidential Election. An United States China “face off” and the strong possibility of war resulted.13 Most indicators show that America’s guardian role has gained even more salience since 1996 and that the United States will guarantee Taiwan’s security and its sovereignty in almost any and all circumstances. Evidence of this can be found in the moves in Congress to pass a bill known as the Taiwan Security Enhancement Act during the Clinton Administration, President George W. Bush’s statements indicating he regards Taiwan as strategically important, the Bush administration’s increased arms sales to Taipei, and comments in Congress and elsewhere in Washington applauding the TRA at the time of it 25th anniversary in 2004. However, the policy of defending Taiwan conflicts with another basic tenet of United States policy: one-China. America’s one-China policy, like the peaceful solution only policy, originates from efforts to keep peace in the area. It ensured Chiang Kai-shek that the United States would not abandon him or support local “revolutionary” forces. The one-China policy later made it possible to seek a rapprochement with China, because Chinese leaders feared the United States had predatory intentions toward Taiwan or that the United States might precipitously leave the island, making it vulnerable to Japan’s ambitions.14 The United States one-China policy provided the needed milieu for United States China relations to improve markedly and, more recently, for China to succor Washington in the war on terrorism, nuclear non-proliferation efforts, arms sales (especially to rogue

12 For a recent analysis that brings this up to date, see my testimony before the

Congressional United States–China Economic and Security Review Commission on the issue of the TRA and Referendums in Taiwan (“Hearing on Military Modernization and cross-Strait Balance,” February 6, 2004, United States Government Printing Office). 13 See John Garver, Face Off: China, the United States and Taiwan’s Democratization (Seattle: University of Washington Press, 1997), Chapter 1. 14 See James Mann, About Face (New York: Alfred A. Knopf, 1999), p. 46.

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states), dealing with the North Korea problem, and much more. This is considered very important to the United States 15 Since America’s protector role and its one-China policy do not comport, Washington was put in a quandary regarding how to deal with the “Taiwan issue,” especially as Taiwan democratized. As Taiwan became democratic, the island witnessed growing local nationalism and more frequent calls for independence. Trying to bridge the gap between America’s commitment to defend Taiwan and its one-China policy, hence, presented a serious challenge to American foreign policy decision-makers. In response, the United States adopted a position of viewing Taiwan as possessing sovereignty, but as still having an undetermined or uncertain future. It was part of China; but “China” was not defined. Washington knew it must come to grips with the fact China is an expanding power and important to the United States; yet America favored democratic countries (which Taiwan is and China is not) and has a special relationship with Taiwan. This situation still obtains; in fact, it is more a dilemma for the United States than ever. This means that the United States must employ “special handling” of the situation and try to maintain harmony between Taiwan and China. However, democratic politics in Taiwan and China’s growing desire to bring Taiwan “back into the fold,” stimulated by ever more potent nationalism and its increasing military capabilities, make that difficult.

Bush Administration’s Taiwan Policy Even before the Bush Administration entered office, its officials and supporters criticized President Clinton’s “excessively” pro-China policy, focusing on his use of the term “strategic partnership” to describe United States–China relations and his “three nos” pronouncement (the United States would not support an independent Taiwan, nor a one-China/oneTaiwan policy, or Taiwan’s membership in international organizations that assumed statehood for membership) during his visit there in 1998. They also condemned Clinton’s efforts to compel Taiwan to reach “interim agreements” and to negotiate with Beijing and ultimately accept unification 15 See Thomas J. Christensen and Michael A. Glosny, “Sources of stability in United

States–China security relations,” In: Richard J. Ellings and Aaron L. Friedberg with Michael Wills, Fragility and Crisis: Strategic Asia, 2003–2004 (Seattle: National Bureau of Asian Research, 2004), pp. 59–60 and 62–71.

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and Chinese rule.16 Bush administration felt that Clinton had “leaned” too much toward China and this was not auspicious for relations with other Unites States’ friends and allies in Asia, especially Taiwan.17 In office, the Bush administration (compared to the Clinton presidency) gave much more attention to its traditional friends and allies in Asia and this included Taiwan.18 According to the so-called “Armitage–Wolfowitz vision,” the United States needed to revamp its Asia policy and that effort meant bolstering political and military ties with Taiwan.19 After the EP-3 incident, which resulted from America’s need to learn more about China’s military buildup in Southeast China that threatened Taiwan, President Bush announced (with considerable fanfare in a nationally televised interview) that the United States would do “whatever it took” to defend Taiwan. This, some analysts said, was not only a very poignant statement of positive support for Taiwan, but also constituted a departure from America’s policy in the sense that it marked an end (perhaps even a repudiation) of the long-standing policy of strategic ambiguity.”20 Forthwith, the Bush administration announced a very generous arms package for Taiwan, the largest since Bush’s father allowed Taiwan to buy 150 F-16 fighter planes in 1992. The deal included offensive weapons (incidentally not promised in the TRA) for the first time.21 The sale was followed, significantly, by the transfer of more sophisticated missiles, the establishing of upgraded military communications links, and even a hotline.22 It was further reported that the George W. Bush administration 16 See Ross H. Munro, “China: The challenge of a rising power,” In: Robert Kagan

and William Kristol (eds.), Present Dangers: Crisis and Opportunity in American Foreign and Defense Policy (San Francisco: Encounter Books, 2000), pp. 49–50. 17 Bush’s national security advisor wrote about this during the campaign, saying that China was, as a result of Clinton’s ill-advised policies, intimidating Taiwan. See Condoleezza Rice, “Promoting the National Interest,” Foreign Affairs, January/February 2000, p. 56. 18 This was recommended before Bush entered office. See Aaron L. Friedberg, “Asian allies: true strategic partners,” In: Kagan and Kristol (eds.), Present Dangers, p. 218. 19 See David Shambaugh, “Sino–American relations since September 11: can the new stability last?” Current History, September 2002, pp. 243–249. 20 Ibid. 21 The United States included submarines in the arms package for Taiwan to purchase. Submarines are not normally considered defensive weapons. 22 See David Lague, “United States holds tighter to Taiwan’s hand,” Far Eastern Economic Review, August 30, 2001, pp. 12–13.

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wanted to provide Taiwan with some deterrence (meaning offensive weapons) against China.23 The Bush administration also departed from traditional United States Taiwan policy guidelines in allowing high officials to visit the United States, not just transit. With the exception of President Lee Teng-hui’s 1995 visit to the United States, which was the product of Congressional pressure on the Clinton administration, after the United States established formal diplomatic relations with Beijing in 1979, high-ranking leaders from Taiwan only stopped in the United States to transit and change aircraft. In March 2002, however, Taiwan’s Minister of Defense made a trip to Florida to attend a conference and there met and talked to Deputy Secretary of Defense Paul Wolfowitz and Assistant Secretary of State James Kelley. He was the first of Taiwan’s defense ministers to set foot in the United States 24 Not long after that, former vice president and chairman of the KMT, Lien Chan, visited the United States. Lien was invited to a conference and to a reception at the White House, signifying to the media an increasingly friendly stance toward Taiwan on the part of the Bush administration.25 In August, however, in what some called a “policy turn” the Bush administration expressed concern (and apparently some harsh words were exchanged) after President Chen made a provocative statement referring to “one country on each side” of the Taiwan Strait. Chen’s words challenged Washington’s one-China policy. It was reported that in reaction Bush subsequently told former China President Jiang Zemin that the United States “opposes” Taiwan’s independence (as opposed to the usual position of “not supporting” it). The reasons cited for Bush’s departure from what had been a patently pro-Taiwan stance were the United States preoccupation with problems elsewhere and its desire to avoid problems in the Taiwan Strait.26 Notwithstanding this “flap” in United States–Taiwan relations, Washington–Taipei ties remained strong and United States policy toward 23 See “Taiwan urged to beef up deterrent forces,” Central News Agency, November

17, 2003 (online at taiwansecurity.org). Theresa Shaheen, director of the American Institute in Taiwan said at the time that Taiwan “had yet to build an adequate deterrent force.” 24 “Summit clarifies United States–Taiwan dynamic,” China Post, March 13, 2002 (online at lexis-nexis.com). 25 “Former Taiwan official to visit White House,” Deutsche Presse-Agentur, June 10, 2002 (online at lexis-nexis.com). 26 See Christensen and Glosny, “Sources of stability in United States–China security relations,” p. 61.

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Taiwan remained very cordial. Visits continued. Relations at various levels were good, though the United States military expressed frustration that Taiwan was not buying the arms allocated. Congress continued to applaud Taiwan for its democratization and more. In October 2003, President Chen Shui-bian visited the United States, and when in New York, he gave a public address and received a human rights award. Notably, in his speech to the International League for Human Rights, he discussed his proposal for a new constitution — an issue that was very provocative (to Beijing) inasmuch as Taiwan’s present Constitution states that its national title is the Republic of China and that Taiwan is a part of China. A new one is likely not to contain these phrases, and this change could signify independence. Chen went on to Panama where he met and chatted in public view with Secretary of State Colin Powell.27 President Chen’s public relations staff made much of the visit, as did the pro-Chen media in Taiwan. His sojourn thus conveyed the impression he was a successful statesman and gave him a meaningful boost in public opinion polls at home.28

Pre-Election United States Taiwan Relations Leading up to the 2004 Presidential Election, Washington began to see Taiwan more and more as taking advantage of Bush’s pro-Taiwan policy and as a troublemaker. Some even counseled that the Chen administration wanted to sabotage United States–China relations and even promote conflict in the Taiwan Strait for the purpose of winning the upcoming election. This view stemmed in large part from the matter of Taiwan holding referendums. The referendum issue was first broached when China blocked Taipei’s admission to the World Health Organization, which most in Taiwan as well as in the United States thought to be legitimate in view of the problem SARS had caused in Taiwan. But, it soon became evident that the Chen administration had other things in mind.29 As the referendum issue evolved into what looked like an effort to proclaim independence, the Department of

27 “Powell meets Taiwanese President,” Associated Press, November 3, 2003 (online

at lexis-nexis.com). 28 Cris Cockrel, “Chen’s New York transit gets high marks,” China Post, November

5, 2003, p. 1. 29 See Shelley Rigger, “Taiwan in 2003: plenty of clouds, few silver linings,” Asian

Survey, January/February 2004, pp. 184–185.

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State became very disturbed. The State and other agencies were especially troubled by Taiwan Vice President Annette Lu’s statement to the press in June that the “U.S. government has no right to oppose our decision to hold referendums.” Subsequently, President Chen said assertively: “Taiwan is not a province of any country.” Meanwhile, Pentagon officials expressed frustration with Taiwan not purchasing the arms it had been allocated and thus, not assuming its responsibilities for defense in the area, while putting an increased burden on the United States.30 Late in the year, rumors floated about in the think tanks and media in Washington to the effect that the United States might adopt an official policy of “opposing” Taiwan’s independence to replace the present stance of “not supporting” it. There was also mention of the Bush administration ending its criticism of former president Clinton’s three-nos policy and perhaps even adopting the three-nos as policy.31 At this juncture, it was reported that James Moriarty, chief Asia advisor to Condoleezza Rice, went to Taiwan to persuade President Chen to moderate his position on holding referendums at the same time as the March Presidential Election and also that Moriarty carried a letter from President Bush that expressed displeasure with Chen’s public statements and actions.32 It was later said that he had made several unproductive trips to Taiwan before this and that on this one, Chen rebuffed him.33 All of this came at a time when China’s Premier Wen Jiabao was soon to visit Washington at the invitation of the White House. Wen had on several occasions publicly asked for United States cooperation in “quieting” President Chen on the independence issue and offered help to the United States in dealing with a number of issues in return. Of special note, the statement was heard frequently in official circles in Washington: “The U.S. does not want Taiwan to move toward independence.”34 The State, Defense and other agencies involved in formulating China/Taiwan policy were said to 30 Ibid., p. 186. 31 Charles Snyder, “US’ Taiwan policy in doubt: academic,” Taipei Times,

December 4, 2003 (online at taipeitimes.com). President Bush did use the term “oppose” during a meeting with then President Jiang Zemin at his ranch in Crawford, but the term did not see much usage after that. 32 Ibid. 33 Susan V. Lawrence, “Bush to Chen: don’t risk it,” Far Eastern Economic Review, May 20, 2004, p. 29. 34 Charles Snyder, “United States ready to press Chen to maintain stability,” Taipei Times, December 5, 2003, p. 1 (online at taipeitimes. com).

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be seriously entertaining the idea of a shift in policy. It appeared, however, apparently because of fundamentally opposing views about United States Taiwan policy among the Department of State, Department of Defense and Congressional leaders, there was more disagreement than agreement about this. In any event, it was decided not to make a change of substance. President Chen’s “concession” in changing the term “defensive” to preventive” to describe the referendums, may have had some impact.35 Nevertheless, on December 9, while meeting with Premier Wen, President Bush stated: “We oppose any unilateral decision … to change the status quo, and the comments and actions made by the leader of Taiwan indicate that he may be willing to … which we oppose.”36 This statement was clearly intended to send Chen a stern message that the United States, while supporting democracy in Taiwan, did not want Taiwan to provoke a conflict with China as Chen seemed to be doing and that the United States had to consider problems elsewhere and act in its own national interest.37 It may as well have been an effort by the White House to stave off differences within the administration or with Congress with a firm warning. Did Taiwan get the message? The pro-Chen administration media in Taiwan subsequently made “observations” that suggest they did not take Bush’s statement seriously, noting the following: Before his December 9 statement, Bush had said United States policy was based on the three communiqués and the Taiwan Relations Act; the Bush administration had not adopted Clinton’s three nos; Bush only responded to Premier Wen’s statements by shaking his head (to signify that he heard them); that the United States responded in a negative manner to President Lee Teng-hui in 1999 when he spoke of “two states” but had come to accept Chen’s “one country on each side” of the Taiwan Strait, which is essentially the same thing.38 The Chen administration’s posture seemed to mirror the view that it could exploit differences over Taiwan policy inside the Bush administration (cognizant of strong support for Taiwan in Congress and among the 35 Melody Chen, “Issues relating to referendum debated with US,” Taipei Times,

December 6, 2003, p. 3 (online at taipeitimes. com). 36 Joseph Kahn, “Taiwan’s strategic miscalculation,” New York Times, December 10,

2003, p. 1. 37 See Peter Brookes, “Why Bush acted on Taiwan,” Far Eastern Economic Review,

December 25, 2003, p. 23. 38 Chin Heng-wei, “US won’t dare to tell Taiwan ‘no,”’ Taipei Times, December 16,

2003 (online at taipeitimes.com).

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American people) and meanwhile provoke anger toward China in Taiwan for the purpose of winning the upcoming election and that it had friends in Congress that would dampen or even contradict Bush’s statements.39 Some even said that, in view of the fact that he is facing a tough election himself in a few months, Bush does not want to take on Taiwan, given its popularity among United States voters.40 Reinforcing this view, in January, Taiwan supporters in Congress prepared a resolution to support Taiwan in response to Bush’s “pro-Beijing” December 9 statement, and it had the support of many of Bush’s Republican stalwarts in Congress.41 Nevertheless, President Chen relented and changed the wording of the most controversial of the referendums to the effect that voters would be asked if Taiwan should buy more weapons if China does not remove its missiles across the Taiwan Strait aimed at Taiwan (from originally calling for China to remove the weapons). It may be that increased pressure, such as the United States canceling visits by delegations from Taiwan and meetings with Taiwan’s representative in Washington, together with statements by some United States officials that United States–Taiwan relations were at a low point, had an effect.42 Chen’s advisors may have calculated that support in Congress was not enough. In any event, the Bush administration was said to be relieved by Chen’s move and relations warmed.43

A Shift in United States Stance after the Election The 2004 Presidential Election was clouded by serious questions about the legitimacy of President Chen Shui-bian’s victory. Before the voting, a myriad of indicators foretold of Chen’s defeat: opinion surveys, stocks of companies connected to the Democratic Progressive Party and the Nationalist 39 Su Chi, former head of the Mainland Affairs Council, said that Chen sought

to stir up anti-American feelings to gain votes. For the idea that Congress favored Taiwan, see Melody Chen, “Taiwan trudges on despite lack of US ties,” Taipei Times, December 16, 2003, p. 3 (online at taipeitimes.com). 40 The author heard this from several scholars in Taiwan. 41 Charles Snyder, “US Congress set to affirm Taiwan ties,” Taipei Times, January 9, 2003, p. 1 (online at taipeitimes.com). 42 Bill Nichols, “Taiwan tones down referendum,” USA Today, January 20, 2004, p. 11A (online at lexis.nexis.com). 43 Charles Snyder, “US warming to Chen’s referendum,” Taipei Times, January 23, 2004, p. 1 (online at taipeitimes. com).

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Party, and odds-makers in the United Kingdom and in Taiwan where there was considerable betting on the election.44 Nineteen hours before the voting President Chen and Vice President Lu were shot while campaigning in South Taiwan. Chen ordered his driver to take them to the hospital; but they did not go to the nearest one, rather to one owned by a friend of the President. A nurse there said that security forces had been there the previous day “checking.” The president, though neither he nor the VP was injured seriously, waited until that night to make a statement — keeping the population in suspense. Meanwhile, DPP workers spread the rumor that the President and Vice President had been shot by agents of the KMT and/or China. Vice President Lu later said publicly that she and the president had “taken a bullet for you” (meaning the people of Taiwan).45 In addition, Chen ordered a number of police and military personnel to remain at their posts. Thus they did not have an opportunity to vote (and they would have voted in larger numbers for the other side). The police did not find the spent cartridges at the scene of the shooting; a child did. The event was on tape, yet the police did not arrest any suspects. All of these actions seemed contrived to generate a sympathy vote and to win the election which otherwise would not have been winnable.46 Following the vote tallying and the announcement Chen had won, the opposition leaders charged he had “stolen” the election. They soon organized massive protests to express that feeling. The country was in chaos. This lasted for some time. The United States was obviously not pleased with the turn of events. The Bush administration sent its congratulations to Taiwan on its democratic Presidential Election; it did not congratulate President Chen and Vice President Lu. The reaction coming from State was to express concern over possible violence. AIT Director Douglas Paal met with both Chen and Lien Chan to voice apprehension over the paralysis and the general state of affairs in Taiwan, but neither side issued a statement on the meeting. Speculation followed that the meetings, especially with Chen, were not cordial. Moreover, 44 See John F. Copper, Taiwan’s 2004 Presidential and Vice Presidential Election: Democ-

racy’s Consolidation or Devolution? (Baltimore: University of Maryland School of Law, 2004) (Forthcoming). Opinion surveys consistently showed Lien and Soong ahead. Stocks of companies linked to the KMT rose; stocks of companies close to the DPP fell. Betting strongly favored pan-blue. 45 See ibid for details. 46 Ibid.

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there were reports that the United States might change its Taiwan policy in view of the situation, though it was uncertain what this might constitute.47 The Chen administration took the position that relations were good with the United States and would get better because of the election. Deputy Foreign Minister Michael Kau announced that he expected relations with the United States to improve and planned a trip to the United States to explain the election. Taiwan’s representative in Washington said: “Relations will continue to grow.”48 Some observers said that the Chen administration was trying too hard, and it was obvious things were not well. A few days later, President Chen and Vice President Lu asked (some said demanded) the Bush administration to recognize their victory and send an official message of congratulations. United States Deputy Secretary of State Richard Armitage said that the election was a “great example of the democratic process.” But, he did not mention a winner or issue an expression of congratulations.49 At this juncture, the Committee on International Relations of the United States House of Representatives passed a bill supporting Taiwan’s bid to join the World Health Assembly (the top decision making body of the World Health Organization). Representative Steve Chabot, co-chairman of the United States–Taiwan Caucus (a pro-Taiwan group in the House), sponsored the measure.50 The Chen administration expressed gratitude for the gesture, but was otherwise quiet about the matter — apparently not wanting to anger the Department of State. This seemed to be confirmed when amidst talk in Washington, especially in Congress, that something should be done to revise or upgrade the Taiwan Relations Act on its 25th anniversary, Taipei hardly responded. Foreign Minister Eugene Chien said simply that it is up to the United States.51 Meanwhile, the deputy director of the Ministry of Foreign Affairs North American Bureau spoke of a possible

47 Charles Snyder, “US urges calm in face of turmoil,” Taipei Times, March 22, 2004,

p. 4. Taiwan’s representative in Washington, Chen Chien-jen, even responded to these reports. 48 Ibid. 49 “Taiwan election winners urge US to recognize result,” AFX New Limited, March 25, 2004 (online at legis-nexis.com). 50 “US House Committee passes bill supporting Taiwan’s WHA bid,” Central News Agency, April 1, 2004 (online at lexis-nexis.com). 51 “Revisions in taiwan relations act a United States issue: Foreign Minister,” Central News Agency, April 5, 2004 (online at lexis.nexis.com).

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backlash from State or the White House and said that Taipei prefers “not to fix it if it is not broken”.52 Shortly after this, the director of the American Institute in Taiwan office in Washington, Theresa Shaheen, resigned. More precisely, she was fired. What happened? After the election results were certified, the State Department authorized Shaheen to telephone President Chen with a congratulatory message. Subsequently, however, when Taipei’s representative in Washington asked her to sign a written (and nicer sounding version of the message), she complied. This went to Taipei and was leaked to the press, conflicting with a more nuanced statement released later in the day by the Department of State. State was very upset.53 Other reasons were also suggested for Shaheen’s “firing.” She had taken an excessively pro-Taiwan stance on a number of issues in contention between Washington and Taipei, especially the referendums. Many said Shaheen was “used” by the Chen administration to convince people in Taiwan (especially voters) that the Bush administration was strongly proTaiwan and would protect Taiwan no matter what. Also she had been at odds with Douglas Paal, who was better liked in the corridors at State, over various issues including whether it was United States policy to “not support” Taiwan’s independence or “oppose” it. Finally, China did not like her.54 Following her departure, Foreign Minister Chien resigned and accepted blame for what many called a “fiasco.” A Nationalist Party legislator who had just returned from the United States at this time said State Department personnel had expressed “pessimism” about relations with Taiwan and were angry at Taiwan over the issue of President Chen pushing ahead with a proposal to write a new constitution in 2006 (which would surely contradict America’s one-China policy).55 Some also said that the United States had sent a signal to Taipei by not naming Shaheen’s replacement immediately.56 52 Ibid. 53 Susan V. Lawrence, “The Guardian Angel finally had enough,” Far Eastern Eco-

nomic Review, April 22, 2004, pp. 27–28. 54 Ibid. Also see “Top U.S. Taiwan official resigns,” CNN, April 7, 2004 (online at

lexis-nexis.com). 55 “AIT Head Shaheen’s resignation won’t alter U.S.–Taiwan Ties,” China Post, April

9, 2004 (online at lexis-nexis.com). Taiwan’s current Constitution reads that Taiwan is a part of China; a new one would not be expected to say that. 56 There was nothing official said about this though, and the post had remained vacant for some time in the past.

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In late April, in what appeared to be a strong warning sign to the Chen administration, Assistant Secretary of State James Kelley (testifying before a congressional committee) said, about the issue of Taiwan proclaiming independence, that it would “avail Taiwan of nothing it does not already enjoy in terms of freedom, autonomy, prosperity and security.” He continued saying that it could “carry the potential for a military response (by China) … that could destroy much of what Taiwan has built.” Meanwhile, State Department officials were almost daily warning their counterparts in Taipei about pressing the constitution issue and promoting independence. They also expressed grave concern about what Chen would say in his inauguration speech May 20.57 Though a number of members of Congress expressed strong support for Taipei, the Chen administration seemed to understand that it was necessary to bend to State Department pressure and that the White House was listening to State. Thus, in his inaugural address, President Chen was conciliatory. He used the term Republic of China more than Taiwan, mentioned “reengineering” the constitution rather than scrapping it and writing a new one, and even spoke of Taiwan’s future possibly being linked to China.58 Observers read this as signifying Chen was heeding warnings from the Bush administration not to announce any plans for the next four years that would move Taiwan closer to independence.59 Joseph Wu, new director of the Mainland Affairs Council (which handles relations with China) said, “The president and his aides … had received the message loud and clear.”60 Although many wondered whether Chen might, as he had many times, change his tune later.

57 Susan V. Lawrence, “Bush to Chen: Don’t risk it,” Far Eastern Economic Review,

May 20, 2004, pp. 28–31. 58 For the text of the speech, see “President Chen’s inaugural speech: ‘paving the

way for a sustainable taiwan,”’ Taipei Times, May 20, 2004 (online at taipeitimes. com). 59 Edward Cody,” Taiwan President pledges to hold off formal independence,” Washington Post, May 20, 2004 (online at taiwansecurity.org/WP/2004/WP100504.htm). Also see Ellen Bork, “Chen’s Balancing Act,” Weekly Standard, May 31, 2004, pp. 17–18. The latter notes that Chen’s statement about “no unilateral change to the status quo” in the Taiwan Strait was lifted from Bush’s December statement. 60 Cited in Cody, Ibid.

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Conclusions Before the Bush administration took office, many Republicans had expressed the view that President Clinton had wrongly tilted toward China and had treated Taiwan shabbily. In particular, they criticized Clinton’s statement that China is a “strategic partner” and his “three nos” statement about Taiwan. Bush policy advisers also perceived that Clinton wanted to shift Taiwan policy away from a United States protector role and saw China as more a challenge (perhaps even an enemy) than a partner. The EP-3 incident in April 2001 confirmed to many in the Bush administration that they were right about China’s aggressive intentions. Washington thus offered a large package of arms to Taiwan and extended favorable treatment toward Taiwan, including allowing top Taiwan officials to visit the United States under more liberal guidelines, establishing more military contacts, and much more. All of this caused the Chen administration in Taiwan to believe that they could use United States Taiwan policy to their advantage (and even play one government agency against another) and that the United States would come to Taiwan’s rescue in the event of a conflict with China — probably under any and all circumstances. In the context of opinion polls that indicated that Chen would lose the March 2004 election, the President and others in his administration studiously sought to provoke Beijing and use anti-China sentiment to stir up local nationalism to the President’s advantage in the campaign. Chen indeed solidified his base of support among Taiwanese that hail from Fukien Province that are a majority of the population and quite successfully portrayed the opposition as being traitors because they espoused a friendlier mien toward China. Central to his strategy, Chen sought to include referendums with the March voting. He also proposed writing a new constitution. Sentiment in the United States at the grass roots and in Congress was favorable toward both (though it was quite the opposite in the Department of State). After all, these were elements of the democratization process. In addition, President Bush was heading into an election himself. It was thus evident that the United States electorate had a good impression of Taiwan and good relations with Taiwan would help Bush more than hurt him at the polls.

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It was also understood in the United States that as China boomed economically and as its military budget commensurately grew, China would be more and more perceived as a threat in the United States , and America’s national interest in a separate Taiwan would become more and more apparent. Therefore, the United States should defend Taiwan against the threat or the use of military force. Thus, from still another perspective, the Chen administration was given a license to goad China and benefit politically from it. But, this could only go so far. Chen exceeded the limit when he proposed the referendums. The Bush administration quickly expressed its disapproval, and, when Chen pressed the referendum issue further President Bush rebuffed him in both private and in public (in December when China’s Premier Wen visited Washington). President Chen got the message, but he simply retreated momentarily only to provoke again a bit later. Due to the questionable events that surrounded his election “victory” and the election results being contested, Washington maintained its neutral position on who should be President and Vice President. With Chen declaring victory and again provoking China by advocating Taiwan’s formal separation from China, the Bush administration sent even stronger signals. Chen again back-stepped and was conciliatory in his inauguration address. The core problem remained unresolved though: that the Chen administration can provoke China when it is convenient to do so and probably will do this whenever it thinks it needs to. It can do it at a whim. One has to think that this will eventually bring the United States and China into conflict. At the heart of the matter, Chen’s independence policy contradicts America’s one-China policy, which has been adhered to by various (in fact, all) recent presidents and has helped keep peace in the Taiwan Strait. In the meantime, China has become a bigger, more important power — with which the United States does not want to create an intractable problem that might make relations unworkable. Plus, Washington needs China’s cooperation and help in resolving a number of global problems — including terrorism, nuclear proliferation and North Korea. Hence it seems clear that the United States will defend and protect Taiwan. Yet, Washington must keep Taiwan on a short leash and make it clear to Taipei that the United States will not tolerate President Chen or other leaders advocating independence and riling China. In fact, the United States policy of ambiguity, which lost credibility and support from

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Congressional and important interest groups following the EP-3 incident, needs to be replaced (and perhaps was) by a policy of “protect but do not allow provocation.” It remains to be determined whether this policy will stick or will be made a formal United States Taiwan policy. It seems likely it will in view of the fact there are few realistic alternatives.

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10 Trends in PRC–Taiwan

Relations and United States Policy Responses Susan L. Shirk

The cross-Strait situation has kept me up at night worrying for years. It is a very dangerous, unsettled situation. I worry about the possibility of a direct military confrontation erupting, perhaps inadvertently, between the PRC and Taiwan, and the United States being drawn in. The air-forces of the PRC and Taiwan often fly near each other in the Taiwan Strait. In 1996, Beijing held massive military exercises and launched M-9 missiles to zones just 30–40 km outside Taiwan ports; Washington sent two aircraft carriers to the vicinity of Taiwan; and fortunately, Beijing backed off instead of escalating. We cannot be confident that Beijing will show the same restraint next time. A military face-off between China and the United States, if it occurred, would be the first ever direct military confrontation between two nuclear powers. I am losing more and more sleep over the situation since this year’s Presidential Election campaign in Taiwan. The trends in PRC–Taiwan relations are making reconciliation more difficult and conflict more likely. I would like to discuss some of these trends and tell you why I think they require a new, clearer and more pro-active approach from Washington.

Taiwan Democratization as the Driving Force The situation has grown increasingly tense since 1994, driven primarily by Taiwan’s democratization. Like other new democracies, Taiwan has

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experienced a growth in nationalism. Its politicians compete for votes by mobilizing a sense of Taiwan national identity. They present themselves as strong leaders by promising to stand up to external pressure, in this case from Beijing. Former President Lee Teng-hui and the recently re-elected President Chen Shui-bian assert that there is no need to declare Taiwan legally independent, because it already is an independent, sovereign country. They talk much more about “the Taiwan family” than about the “Republic of China.” In the most recent Presidential Election, Chen Shui-bian held a referendum at least in part to establish a precedent for a future referendum that would declare Taiwan to be legally independent. His victory in the 2000 election as the candidate of the Democratic Progressive Party (DPP) which advocates independence could be explained as the result of a three-way race. His victory in the 2004 election, when he faced only the pan-blue ticket, and when cross-Strait issues were the main issues in the campaign, demonstrates the growth of popular support for his pro-independence positions. The 2004 election was a very unusual and controversial one because of the assassination attempt on President Chen and the legal and political challenge to the results by the pan-blue team; it has left the Taiwan political scene highly polarized. Nevertheless, the reality underlying the results is that the KMT has lost much of its previous popular support and that the DPP, as the pro-independence party, is now more popular. And of course, the other reality is that Chen Shui-bian will be President until 2008. During the campaign, Chen Shui-bian proposed creating a new constitution through a referendum by 2006 — a step viewed by Beijing as essentially a declaration of independence. Under pressure from Washington, Chen came up with a revised plan in his inaugural speech. He describes a two-stage process: first revising the Taiwan constitution through existing procedures involving the Legislative Yuan and the National Assembly and thereby creating the legal basis for the second stage, a future referendum on sovereignty and other issues. Even in this revised form, however, the view after the election, at least in Beijing and in Washington, is that President Chen is committed to creating the legal foundation for an independent Taiwan and that the majority of Taiwan citizens support him in this effort.

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PRC Domestic Politics The PRC is far from being a democracy, but it has domestic politics too. Its domestic politics are now driven more by nationalistic public opinion than in the past. Taiwan is the number one hot button issue of Chinese nationalism. China’s foreign policies in the reform era have very effectively enhanced its international influence because of their pragmatism and flexibility. But in a few issue areas — namely policies toward Taiwan, Japan, and the United States — emotional nationalism among the public runs high. The market-oriented mass media and the internet appeal to and mobilize such popular sentiments. And China’s decision-makers both mobilize these sentiments and feel pressured not to appear weak in the face of external pressure. Since March, Huanqiu shibao (Global Times), the most widely read newspaper on international events has run 26 cover stories on the Taiwan election, more than 40 stories in all on Taiwan. Policy-makers say they regularly read this paper to get information on public opinion. There is a widely held assumption in China and abroad that its communist regime would not survive a Taiwan declaration of independence; that if it did not respond with military force the CCP would fall. To tell you the truth, I question the validity of this assumption. My talks with local officials, business people, and even students lead me to believe that there probably is a silent majority in China that wants to avoid a military conflict in the Strait even if it means accepting the loss of Taiwan. A Mainland public opinion poll that was released in January when Chen Shui-bian was talking about the referendum found that 58% believed that military action was unnecessary and that both sides should work toward economic integration. (I do not want to make too much of this finding; it was a large but unscientific sample.) But no matter what public opinion actually is on this matter, the widespread belief that the CCP leaders would not survive politically if they did not fight to prevent Taiwan independence creates its own reality. For one thing, it makes the Mainland’s threat to use force if Taiwan declares independence highly credible. It also creates a political climate of political correctness that makes it difficult for individuals to suggest creative policy approaches that might be criticized as soft. Recently, international relations scholar Qin Yaqing, in speaking with a journalist, acknowledged the problem of political correctness in Mainland discussions of Taiwan: “If I said in front of my students, ‘Let Taiwan be independent,’ I would be killed.”

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PRC Options As I see it, Beijing has three policy options to prevent Taiwan from becoming formally independent and ultimately achieving reunification: • Using positive appeals to win the “hearts and minds” of the Taiwan people. • Getting the United States to constrain Taiwan. • Using coercion to constrain Taiwan. Let me say something about each of these approaches: Hearts and minds Since 1979, Beijing has used carrots as well as sticks to prevent Taiwan independence and achieve reunification. The core element of the positive strategy is economic integration. The PRC has done everything it could to facilitate investments from Taiwan companies and expand trade with Taiwan. The thickening of economic ties has built a Taiwan constituency for good relations with the Mainland and raised the cost to Taiwan of any disruption to these ties. Especially during the past five years, the PRC leaders have also made some important concessions in their policies toward Taiwan, such as redefining the core concept of “one China.” One China no longer means the People’s Republic of China, with Taiwan being a province of the PRC; now it means a broader entity to which both the PRC and Taiwan belong. The leaders toned down their bellicose rhetoric and actions toward Taiwan to avoid a public backlash, although at the same time, the military was given a green light to develop the capabilities to use force if need be to resolve the situation. The re-election of Chen Shui-bian appears to have convinced decisionmakers in China that this positive approach has failed. Even the more liberal academics have concluded that they cannot win hearts and minds fast enough to keep pace with the growth of popular Taiwan nationalism. Moreover, no matter what Chen Shui-bian now says or does, policy makers on the Mainland have made up their minds that he is untrustworthy and deceptive. There is no more willingness to “ting qi yang, guan qi xing” (listen to what he says, and watch what he does). The post-election policy statement by the PRC Taiwan Affairs Office, while not overtly bellicose, offered little in the way of new positive initiatives. The only indication that there is still life in the flexible approach was

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the absence of the “one country, two systems” slogan which is a red-flag to Taiwan. One clear sign that Beijing has given up on trying to win hearts and minds in Taiwan is that it decided to lower the boom on the prospect of democratic elections in Hong Kong now even though it need not be done now. In the past, Beijing has emphasized its commitment to maintain Hong Kong’s political autonomy, using it as a model of freedom under unification that will appeal to the people of Taiwan. I am not sure how much of a popular backlash in Taiwan it has provoked — folks are distracted by the continuing drama related to the election — but in any case, it now appears that Beijing is no longer constrained in its actions toward Hong Kong by its public relations efforts in Taiwan. Another danger sign is that Beijing is no longer protecting Taiwan investors from the fall-out in cross-Strait tensions. The People’s Daily recently criticized (Hsu Wen-lung) one Taiwan investor of giving campaign contributions to Chen. The spokesman of the Taiwan Affairs Office said that China “does not welcome people who make money on the Mainland and return to Taiwan to support independence.”

Constraining Taipei through Washington If the PRC leaders are convinced that positive appeals would not work, they will try harder than ever to get the United States to constrain Taiwan’s moves toward independence. Of course the Chinese leaders have been trying to solve the Taiwan problem through Washington ever since they invited Henry Kissinger to Beijing in 1971. Over the decades, however, they have learned to have realistic expectations of what American Presidents can do because of their own domestic political pressures. President Bush’s statement in December, “We oppose any unilateral decision by either China or Taiwan to change the status quo. And the comments and actions made by the leader of Taiwan indicate that he may be willing to make decisions unilaterally to change the status quo,” was a significant clarification of the United States position. Assistant Secretary of State Jim Kelly in his April testimony to the House International Relations Committee, reiterated this new formulation (“the US does not support any unilateral moves that would change the status quo as we define it” ) and explained that it was based on the sober recognition that Taiwan’s actions and the Mainland’s reactions could jeopardize American security interests.

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Yet the word from Beijing is that its leaders do not believe that the United States position will have much traction with Chen Shui-bian. They saw how Chen was undeterred by strong messages delivered directly by National Security Council officials traveling to Taiwan during the campaign. And while they surely recognize that it was American pressure that got Chen to modify the plans for constitutional revision announced in his inaugural speech, they also see the United States trying to twist arms in Taiwan to get them to actually buy all the advanced weapons the United States has approved. Coercing Taiwan Even when it hoped that positive inducements would work, the PRC has always maintained the threat to use force to deter Taiwan independence. Beginning in the mid-1990’s, it started to give the military the resources it needs to confront Taiwan, and the United States, if need be. The 400–500 missiles it has deployed in Fujian across the Strait from Taiwan manifest this military threat. Yet it is quite clear that China does not want a fight over Taiwan to disrupt its peaceful path to wealth and power. In fact the problem Beijing faces is that since it has become so dependent on foreign trade and investment, and so focused on gaining international respect by hosting the 2008 Olympics, its threat to use force is becoming less credible. Many people in Taiwan view the Mainland as a paper tiger who will never risk attacking them. No doubt many voices in Beijing are now calling for the PLA to demonstrate its resolve by grabbing a small island or making another military gesture. In 2006, it will be tempted to make a show of force. Any show of force runs the risk of escalation. And regardless of the current balance of capabilities between the two sides, Taiwan’s economy is highly vulnerable; it could easily be shut down by so-called missile tests outside its two ports and a few strikes at targets on land. If Beijing has lost confidence in the utility of the “hearts and minds” strategy and Washington’s ability to constrain Taiwan, then it is more likely to make a military move.

The United States Role Let me conclude my remarks by some personal thoughts about the United States role in the increasingly dangerous situation across the Strait.

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The starting point for American policy toward the PRC-Taiwan relationship must be its own security interests. It must prevent a cross-Strait military conflict and avoid having to send its forces to defend Taiwan against China. How do we do that? It is clear that its approach up to now is not working. Declaratory policy The United States relies heavily on a declaratory formula that aims to reassure and deter both sides simultaneously, often called “strategic ambiguity.” It reassures the PRC with a one China policy and its opposition to Taiwan independence. And it deters the PRC by “insisting on peaceful resolution,” and by providing weapons and an ambiguous commitment to defend Taiwan. It reassures Taiwan with weapons, military ties and its shared democratic values. And it deters Taiwan with its “non support of Taiwan independence” and the ambiguous defense commitment. There are a number of different declaratory approaches that foreign scholars who want to be helpful have proposed. Up until recently, I have been a defender of “strategic ambiguity” as the most effective, and the most politically practicable way for the United States to prevent military conflict. But recent trends — especially during the Taiwan election — have convinced me that “strategic ambiguity” is just not working and we need a formulation with greater clarity. The one I find most interesting has been proposed by Chas Freeman. He suggests that the United States government state the following: “The United States will not recognize an independent Taiwan that has not been recognized by Beijing; nor will we recognize any form of reunification that has not been endorsed by the people of Taiwan.” I like this formulation not just because it is clear, simple, and balanced, but also because it gives us more leverage over the situation by introducing a diplomatic veto gate (United States recognition) instead of a military one. I will be interested to hear whether other people think that such a statement by the United States would be credible, i.e. could it deliver on it. Mediation Up until now, Washington also has avoided getting in the middle of the relationship. It urges the two sides to talk to each other, but it does not offer its help in making it happen.

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When you think about it, it is rather ludicrous that the United States could find itself in the middle militarily, but cannot get in the middle diplomatically. Of course, there are serious risks, both at home and abroad, to the United States getting involved. But if it continues to sit on the sidelines, the risks of a military confrontation are even greater.

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11 Taiwan in Japan’s Relations with China: After the Cold War Lam Peng Er

Introduction At the height of the Cold War bipolarity, Japan followed the lead of the United States superpower and ally to seek rapprochement with Mainland China against a common enemy, the Soviet superpower. Japan broke off diplomatic relations with Taiwan (Republic of China) and recognized the Mainland as the legitimate government of China in 1972. Tokyo’s declaratory policy towards Beijing is: “The Government of Japan recognizes the Government of the People’s Republic of China as the sole legal Government of China. The Government of the People’s Republic of China reiterates that Taiwan is an inalienable part of the territory of the People’s Republic of China. The Government of Japan fully understands and respects this stand of the Government of the People’s Republic of China”.1 While Japan officially acknowledges a one-China Policy, it, in reality, maintains close informal political and economic ties with Taiwan. Japan adheres to the United States–Japan Alliance as the cornerstone of its foreign policy. It also perceives that a status quo on the Taiwan issue is to its best advantage. Any attempts to change the status quo such as Taiwan declaring de jure independence or China brandishing military force against Taiwan is considered to be against Japan’s national interest. Tokyo also balances between Beijing and Taipei by seeking good relations with China (increasingly its most important trading partner) and also maintaining 1 Ministry of Foreign Affairs of Japan, “Joint Communiqué of the Government of

Japan and the Government of the People’s Republic of China” in Beijing, September 29, 1972. 177

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close informal ties with Taiwan (its former colony and another key trading partner). Obliged to provide logistical support to its United States ally, Tokyo’s strategic nightmare is being dragged into a cross-Strait conflict where both combatants are, geographically, its closest neighbors and best markets. While many Japanese politicians, media and public opinion have become increasingly sympathetic to Taiwan’s democratization, quest for international space and desire for a Taiwan identity, there are practical limits to what Japan can do for Taiwan. When the push comes to the shove, Japan will act according to its perceived national interest despite Japan’s affinity for Taiwan.2 And that interest is not to support de jure independence for Taiwan and rupture Japan’s important ties with China. Arguably, with the exception of the United States–Japan Alliance, there is no more important bilateral relationship in the world for Japan than Sino–Japanese relations.

Sacrificing Taiwan: A Precedent Demonstrating the harsh logic of pursuing one’s national interest in international relations is Japan’s diplomatic rupture with Taiwan. When Prime Minister Tanaka Kakuei decided to normalize Tokyo’s relations with Beijing, the Taiwan Lobby within the ruling Liberal Democratic Party (LDP), was shocked and furious. The Lobby argued that Japan should not abandon Taiwan especially when Chiang Kai-shek has been so magnanimous not to seek reparations after Japan’s defeat. Kosaka Zentaro, head of a special LDP committee on China policy at that time, asked Tanaka how he could desert Taiwan and Chiang Kai-shek when the Japanese people value the norms of giri ninjo (obligation and human feeling). Tanaka’s reply was: “Giri Ninjo is important in relations among people, but the government has to consider what is in the best interests of the nation. We need to have relations with China. I’m going to recognize China”.3 Japan’s relations with China and Taiwan continue to be guided by its national interest in the post-Cold War era. Indeed, both sides of the Taiwan Strait should be mindful of this. Even though China has become 2 See Lam Peng Er and Ja Ian Jong, “Japan–Taiwan relations: between affinity and

reality”, Asian Affairs: An American Review, Vol. 30, No. 4, winter 2004. 3 Quote from Gerald L. Curtis, The Logic of Japanese Politics (New York: Columbia

University Press, 1999) p. 13.

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increasingly important to Japan especially in economics, Tokyo is obliged to assist the United States military if Washington chooses to intervene in a cross-Strait conflict. Although Japan has an affinity for Taiwan, it will not support Taiwan if the latter seeks to change the status quo by pushing for referenda, constitutional change and de jure independence. Tokyo’s national interest also dictates that it must maintain good relations with Beijing to seek the latter’s assistance to secure the release of Japanese abducted by Pyongyang and to keep the Six Party Talks going to address the issue of suspected North Korean nuclear proliferation. Many Japanese today perceive North Korea to be the main threat to Japan. The Japanese government is not prepared to jeopardize good relations with China over Taiwan when it needs the goodwill of China to settle the North Korean problem.

Significance of Taiwan in Japan’s Relations with China Japan is cognizant of China emerging as a great economic power. Since the late 1970s, Tokyo has sought Beijing’s integration into the global community and its adherence to global norms in international relations. Japan has supported China’s Open Door Policy, was the first to restore ODA (Official Develop Assistance) to China after the Tiananmen Tragedy (when China was isolated internationally) and also arranged for Emperor Akihito to visit China in 1992. The Emperor’s visit was a strong signal that Tokyo valued its relations with Beijing even when it was then ostracized by the West and also a symbolic green light to Japanese business investment in China. Since then, Japan has also supported China’s entry in various multilateral organizations such as APEC (Asia Pacific Economic Cooperation), ARF (ASEAN Regional Forum) and WTO (World Trade Organization). Indeed, Prime Minister Koizumi Junichiro has reiterated the need for the world to “encourage and support China’s efforts in developing its economy and reforming its system of governance so that it becomes a constructive member of the international community”.4 But war in the Taiwan Strait will shatter this desirable scenario envisaged by Japan; the result would be a hostile China in an unstable East Asia. Thus, it is in Japan’s self-interest to maintain good relations with a rising China, benefit from its burgeoning market and encourage both sides of the Strait to exercise restraint. Both Japan and China are becoming 4 “Koizumi says Japan must facilitate China–Taiwan ties”, Taipei Times, September

12, 2002.

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economically interdependent and have a mutual stake in keeping relations on an even keel. By 2002, the total trade between Japan and China has exceeded US $100 billion. Nevertheless, Sino–Japanese relations are still bedeviled by the problems of history: textbooks on Imperial Japan’s invasion of China, whether an adequate apology over the invasion has been extended to China, and Prime Minister Koizumi’s annual visit to Yasukuni Shrine, the symbol of Japanese militarism. Other irritations include the territorial dispute over Senkaku (Diayutao) and trade disputes such as mushrooms, leeks and tatami rushes. However, it is almost inconceivable that Japan and China would go to war over historical issues, Senkaku (Diayutao) and mushrooms. Such bilateral issues have been expediently sidestepped during the Cold War and can be sidestepped again in the post-Cold War era. But the only conceivable issue which Japan and China can be drawn into a war is over Taiwan. If the United States chooses to militarily intervene in a crossStrait conflict, Japan will provide logistical support to United States military forces, part of which will be deployed from United States military bases in Japan. A failure on the part of Japan to keep its obligations to the United States in a Taiwan Strait conflict will lead to the abrogation of the Alliance. An outbreak of war will also end any nascent East Asian Community which would have centered round China, Japan and the ASEAN states. Moreover, Japan’s recent economic recovery after a lingering economic stagnation since 1991 has been, in part, due to its rising exports to China. War would be an economic catastrophe not only to China and Taiwan, but Japan as well. China is also concerned with a strengthened United States–Japan alliance and with Japan’s participation in joint missile defense research because it fears that these new commitments can be applied to Taiwan. Under the 1997 New Defense Guidelines, Japan is committed to providing logistical support to United States forces in “areas surrounding Japan”. This strategic ambiguity can be interpreted as applicable to the Taiwan case too. China fears that the New Defense Guidelines and the deployment of a missile defense shield will encourage Taiwan to edge towards de jure independence especially if the Taiwanese miscalculate China as merely a “paper tiger” that could be deterred by the United States–Japan Alliance. If not for the Taiwan factor, China would have been less nervous about a strengthened United States–Japan Alliance and missile defense system. After all, the United States and Japan could have plausibly claimed that these new commitments are meant for the divided Korean peninsula. Simply put, the

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Taiwan factor is potentially the most problematic issue in Sino–Japanese relations.

Central Argument The international system has changed from Cold War bipolarity to PostCold War unipolarity. Despite the change in the international system, the two key factors that have profoundly shaped Japan’s relations with the Mainland and Taiwan have remained unchanged: first, the United States– Japan Alliance as the cornerstone of Japan’s foreign policy and impact on its relations with China and Taiwan and second, Japan’s concept of its own national interest. This is interpreted as: developing good Japan–China relations (as both countries enjoy rising economic interdependence) while maintaining close informal ties with Taiwan. The status quo of Taiwan neither moving towards de jure independence nor reunified with the Mainland is the best strategic outcome for Japan. Despite Japan’s affinity for Taiwan, it will put its own interest first and not support de jure Taiwan independence which might lead to war and disaster for all. Japan’s own interest requires it to perform a balancing act between China and Taiwan. Prime Minister Koizumi affirmed that Japan has to “pay consideration” to both sides, but admitted that this is a “tricky job”.5 Koizumi also noted that Japan has an “important role” in creating an environment for Taiwan and China to settle their differences in a peaceful manner. Even though the two features of alliance and self interest continue to frame Japan’s relations with Taiwan and China, there are also new considerations in Japan’s relations with both sides of the Strait. This includes: less friendly Japanese sentiments towards authoritarian China after the Tiananmen Incident and greater appreciation for Taiwan’s democratization. Although Japan does not support Taiwan’s de jure independence, it has also not yielded to China’s demands to further tighten the screw on Taiwan: that Japan adopt the “Three Nos” to Taiwan,6 not extend a visa to ex-President Lee Teng-hui in 2001 and not support Taiwan’s bid to

5 “Koizumi says Japan must facilitate China–Taiwan ties”, Taipei Times, September

12, 2002. 6 The Three Nos policy is no to Taiwan independence; no to two Chinas, or one China

and one Taiwan; and no to Taiwan’s participation in international organizations whose members are states.

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obtain observer status at the World Health Organization (WHO). However, Beijing has also expressed its appreciation to Tokyo for cautioning Taipei not to push for referenda, constitutional change and other actions which will destabilize cross-Strait relations. This paper will first examine why Japan maintains close informal ties with Taiwan despite official diplomatic relations with China. It will then analyze how Taiwan seeks to win Japanese sympathy to forestall Chinese pressure. Following that is an examination of the extent to which Tokyo has rebuffed Beijing’s demand to curb Taipei politically. It will then assess Japan’s attempts to restrain Taiwan in its balancing act to maintain good relations with China. Finally, it will anticipate the Taiwan factor in Japan’s relations with China in the next decade.

Japan’s Multi-faceted Relations with Taiwan Japanese state and society maintain an informal yet close relationship with Taiwan, often to the chagrin of China. Understandably, Beijing is suspicious of the close informal political and economic ties between Japan and Taiwan.7 There is more than a grain of truth if we were to label it a “special relationship” of a sort.8 This unique relationship is underpinned by common history, shared values, economics and geopolitical interests.9 Japan colonized Taiwan between 1895 and 1945 after China, the loser of the Sino–Japanese war, ceded Taiwan to Japan. Japanese rule in Taiwan was relatively benign compared to its control of other colonies especially Korea. In half a century, the Japanese colonial government educated two

7 “Commentary: Pro-Taiwan pose mars Sino–Japanese Ties”, China Daily, July 26,

2003. 8 International relations purists would object to the term “special relationship”

which is usually applied to countries with diplomatic relations and military alliances. But I would argue that, except for their relations with the United States, there are no other warmer bilateral relationships which Japan and Taiwan have than the one with each other. But in Realpolitik, cold-hearted national interests would trump over warm sentiments. This logic applies to even the most solid special relationship in the world: the Anglo–US special relationship. The United States opposed Britain in the 1956 and abstained in the Falklands War; Britain did not support the United States in the Vietnam War and its invasion of Grenada. 9 For an elaboration of the factors underpinning close informal Japan–Taiwan ties, see Lam Peng Er and Ja Ian Jong, “Japan–Taiwan relations: between affinity and reality”.

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generations of Taiwanese, many of whom became fluent in Japanese and comfortable with the Japanese culture. To many older Taiwanese who were culturally socialized during the Japanese colonization, they prefer life under the Japanese over their subsequent “colonization” by the repressive KMT regime from Mainland China. Many Japanese, especially right-wing politicians and opinion shapers, have a soft spot for Taiwan because it is the friendliest political entity in Asia to Japan. Unlike China, the two Koreas and certain Southeast Asian countries, mainstream Taiwanese state and society rarely criticize Japan for its past militarism, atrocities and lack of a sincere apology for its imperialism. After all, many Taiwanese fought for the Imperial military. Ironically, Japan and Taiwan have become closer in terms of shared values and culture over the past two decades. Both subscribe to the ideologies of capitalism and democracy. (China is of course not a democracy). Youth culture in Taiwan also thinks that it is “cool” and “chic” to emulate J-pop music and fashion. Taiwanese youths are informed by MTV culture and style from the West and Japan, but do not take their cue from Mainland China. One Taiwanese analyst remarked that the more belligerent China becomes towards Taiwan, the more young Taiwanese will be switched off culturally from the Mainland.10 Besides shared values, Tokyo considers Taipei to be a very important trading partner. The Ministry of Foreign Affairs of Japan’s 2003 Blue Paper stated that: “For Japan, Taiwan is an important region with close economic relations and Taiwan ranks fourth as a trading partner for Japan in terms of total value, next to the United States, China and the ROK”.11 Geopolitically, Tokyo does not want Beijing to dominate both sides of the Taiwan Strait because the Chinese then would be able to interdict Japan’s vital sea lanes of communications. According to Okazaki Hisahiko (a former Japanese ambassador and now political commentator), the “first concern of Japan in such an eventuality would be over sea lanes of communications in East Asia. It is a natural reaction for Japan, which is unable to self-supply food and other vital raw material … What is vital to Japan’s interests, however, is not limited to the question of oil routes to the Middle East, because in an extreme case, Japanese ships could reach the Gulf by 10 Comment by Wilson Tien Hsin, then Director of International Affairs Central

Committee, DPP. Interview, August 6, 2000. 11 See Ministry of Foreign Affairs of Japan, “Taiwan” in Asia and the Pacific, 2003 Blue Paper.

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going around the south of Australia. What is more important is the political impact of China’s annexation of Taiwan on Southeast Asian countries, which have been Japan’s economic stronghold … Finlandization of Southeast Asian nations by China will undermine Japan’s vital interests”.12 The Japanese are also concerned about tension in the Taiwan Strait and its vicinity because their island country is geographically very close to Taiwan. Funabashi Yoichi, a prominent opinion shaper, remarked on the close geographical proximity between Japan and Taiwan: “At Irizaki point on Yonagunijima Island, Okinawa Prefecture, there is a monument bearing the words ‘Japan’s westernmost point … To the west, on the other side of the cloud-obscure horizon, lay Taiwan … When China fired missiles eight years ago, it was a nightmare for Yonagunijima. In March 1996, before Taiwan’s Presidential Election, China fired missiles as a warning. One of them flew over Taiwan and fell into the ocean 609 km off Yonagunijuma. Islanders could not go out fishing”.13

Taiwan: Forestalling China and Wooing Japan When examining the Taiwan factor in Sino–Japanese relations, we must be mindful that Taiwan is, in reality, an independent and active player in international relations. Taipei has indeed persistently and skillfully sought to woo Japanese sympathy to forestall pressure from Beijing. Taiwanese approaches include: deploying former President Lee Teng-hui to garner support in Japan, activating a Taiwan Lobby,14 inviting high profile visits from top Japanese politicians to Taiwan and proposing various schemes of bilateral and regional cooperation to show its trust and good feelings towards Japan. Lee as Taiwan’s Emissary Lee Teng-hui is probably one of the most effective propagandists for Taiwan in Japan. He ingratiates himself with many Japanese with his impeccable 12 Okazaki Hisahiko, “The strategic value of Taiwan”, The US–Japan-Taiwan Trilat-

eral Strategic Dialogue, Tokyo Round, March 2, 2003. 13 Funabashi Yoichi, “As a maritime nation, the seas await Japan”, Asahi Shimbun,

Asahi.com, February 3, 2004. Another analyst remarked that Taiwan is only a little more than 100 km away from Irisaki. See “Taiwan’s Chen seeks society free from fear”, Asahi Shimbun, Asahi.com, March 23, 2004. 14 Todd Crowell and Murakami Mustsuko, “Taiwan’s Lobby in Japan”, In: Asiaweek, December 11, 1998. See also Honzawa Jiro, Taiwan Robii [Taiwan Lobby] (Tokyo: Data House, 1998).

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Japanese, genuine admiration and affection for Japanese culture, gumption to stand up to the Mainland, advocacy of democracy and flirtation with Taiwan independence. Lee could attract support from many Japanese politicians and opinion shapers from both ends of the political spectrum: he could appeal to the cultural pride and anti-Chinese sentiments of the right and the liberal sentiments for democracy from the left. In 2001, the Taiwan Lobby won a diplomatic coup against China when it secured a visa for Lee Teng-hui (who was no longer president then) to visit Japan for “medical treatment”. Beijing warned Tokyo that if Lee were to visit Japan “in whatever name and whatever capacity”, Sino–Japanese relations would be “fundamentally” undermined. Nevertheless, the then Prime Minister Mori Yoshiro overrode the initial reluctance of Foreign Minister Kono Yohei to issue a visa to Lee. Beijing retaliated by canceling a number of official visits to Japan including one by Li Peng, chairman of the National People’s Congress.

Mori’s visit to Taiwan In September 2003, China’s Minister of Foreign Affairs Li Zhaoxing told his counterpart Kawaguchi Yoriko: “Taiwan has recently been showing actions that provoke the relationships between China and its friendly partners. I hope that Japan–China relations will not be broken by such actions. I hope that key political figures of Taiwan will not use Japan as a stage to perform activities that divides China”.15 Despite acute Chinese sensitivities to Taiwan soliciting Japanese ties, Mori Yoshiro visited Taiwan in December 2003, the second trip by a former Japanese Prime Minister since diplomatic relations were established between Beijing and Tokyo. Mori held discussions with President Chen Shui-bian and also advised caution in his pursuit of referendum and constitutional revisions. Mori remains influential and is still the leader of a LDP faction to which Koizumi belonged to before he became Mori’s successor. Beijing expressed “deep regret and strong discomfort caused by the fact the visit was undertaken in the face of our grave protests and warnings”.16 15 Ministry of Foreign Affairs of Japan, “Japan–China Foreign Ministers’ Meet-

ing on the Occasion of the General Assembly of the United Nations (Summary)”, September 24, 2003. 16 “China hits Mori’s visit to Taiwan”, Asahi Shimbun, Asahi.com, December 27, 2003.

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Taiwan lobby in Japan An analyst wrote: “Japan’s pro-Taiwan lobby spans the political spectrum — from the governing Liberal Democratic Party’s (LDP) venerable Japan–Republic of China (Taiwan) Diet members’ Consultative Council to the opposition Democratic Party of Japan’s (DPJ) Japan–Taiwan Parliamentary Friendship Consultation Association. Prominent public figures … have backed Taiwan’s entry into the WHO, a Japan–Taiwan Free Trade Agreement and outright Taiwanese independence. All this has angered China”.17 In 2004, a group of 70 Diet members called for the government to explicitly support Taiwan’s bid to join the World Health Assembly as an observer.18 The most prominent Japanese politician in the Taiwan Lobby is probably Ishihara Shintaro, Governor of Tokyo and one of the most popular politicians in Japan today. We should note that Japan is a liberal democracy and the Japanese national government has no monopoly over international relations. As the head of the local government of Tokyo, Ishihara, who is anti-China and pro-Taiwan independence, visited Taipei in May 2004 for Chen’s Presidential Inauguration, at the invitation of the Presidential Office. This was his third visit to Taiwan since Ishihara became Governor in April 1999. At their meeting, Ishihara and Chen agreed to promote bilateral youth exchanges to deepen Japanese–Taiwan friendships.19 Besides the sympathy of Japanese politicians, the Taiwan Lobby and its causes also enjoy favorable coverage from Japanese mass media. Recently, mass circulation magazines like the rightwing Sapio and even the centrist Chuo Koron ran cover stories on Taiwan independence.20 In the April 2004 issue of the prestigious and influential Chuo Koron, ten articles dealt with the issue of Taiwan independence.21 The left leaning Asahi Shimbun is also sympathetic to Taiwan’s democracy and remarked in its editorial: “The Chinese government should also try instead to win over the hearts and 17 Jamie Miyazaki, “Japan: Don’t rock the cross-Strait boat”, Asia Times, Febru-

ary 20, 2004. http://www.atimes.com/ato,es/Japan/FB20Dh01.html (Accessed: February 20, 2004). 18 Taipei Times, May 13, 2004 and Kyodo News, May 12, 2004. 19 “Ishihara, Chen agree on bilateral ties”, Japan Times, May 22, 2004. 20 See cover story “Taiwan dokuritsu ga higashi ajiaa kyoeiken no kagi da” (Taiwan Independence is the Key to East Asian Co Prosperity Sphere), Sapio, November 26, 2003. 21 See “Taiwan dokuritsu ze ka hi ka: sotosen wa nihon no mondai da” (Is Taiwan Independence right or wrong? The Presidential Election is Japan’s problem), Chuo Koron, No. 119, No. 4, April 2004.

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minds of the people of Taiwan who elected Chen as their president. In a democratic Taiwan, it is hard to have a dialogue with China if the public is opposed to it — even if Chen wants to do so. China’s exertion of pressure on Taiwan during elections and its attempts at preventing Taiwan from joining international organizations, like the WHO, will only make the Taiwanese resentful of Beijing and alienate them further from the Mainland”.22 The rightwing Sankei Shimbun often runs articles which are favorable to Taiwan and negative towards China. For example, Okazaki Hisahiko argued that China is placing economic and military pressure on Taiwan.23 Besides ex-diplomats like Okazaki, there are also hawks among Japan’s military circles. Retired Rear Admiral Kawamura Sumihiko proposed: “Japan should expand military cooperation with Taiwan and should come to Taiwan’s aid, in concert with the United States, if China attacked Taiwan”. His recommendations included: “Eliminating the restrictions on Japan’s Self Defense Force ‘as soon as possible’, allowing it to come to Taiwan’s aid if needed, and ‘strengthening the deterrent power of the United States– Japan alliance’. That would include strengthening Japan’s political, economic, defense and cultural activities in the region”.24 Given the favorable outlook towards Taiwan across Japan’s political spectrum and the specter of a “China Threat” (given China’s economic rise coinciding with Japan’s relative economic decline), Japanese mass sentiments are also sympathetic to Taiwan. According to a survey of Japanese public opinion, 64% would support recognizing Taiwan as an independent country.25 Koh Se-kai as Taiwan’s de facto Ambassador to Japan An act which is likely to further anger and arouse the suspicions of China is Chen’s appointment of Koh Se-kai as head of Taiwan Economic and 22 Editorial, “China’s stand on Taiwan”, Asahi Shimbun, Asahi.com, May 22, 2004. 23 “Taiwan no dokuritsu shiko ni kensei tsuyomeru chugoku” [China which is

strengthening its restraints on Taiwanese aspirations for independence], Sankei Shimbun, June 9, 2004. 24 “Japan military should be prepared to aid Taiwan”, Taipei Times, August 24, 2003. 25 In 1997, the Wall Street Journal and the Nihon Keizai Shimbun held a survey among 1204 American and 1200 Japanese adults. The poll found that nearly two out of three people surveyed — 60% of the Americans and 64% of the Japanese — would support recognizing Taiwan as an independent country. Quoted in David M. Lampton, Same Bed Different Dreams: Managing US–China Relations 1989–2000 (Berkeley: University of California Press, 2001) p. 107.

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Cultural Representative Office (Taiwan’s de facto embassy in Japan) in May 2004. Koh, a well-known pro-independence activist who was blacklisted by the KMT, lived in Japan for 33 years, and had developed strong academic, cultural and political ties there. He was a Professor at Providence University in Taichung and President of Formosa and has been advocating the establishment of a new constitution. He drafted a “Constitution for the Taiwan Republic” as early as 1975 in Japan, but only in 1988 was his constitutional draft published in Taiwan. Koh has studied at Waseda University and then obtained his doctorate at the University of Tokyo. One analyst noted: “Koh’s extensive ties to Japanese officials should help him to promote Taiwan’s agenda. The appointment of a pro-independence figure to such a prominent post is a signal of the Chen administration’s desire to expand the security links between Japan and Taiwan”.26 To Beijing, Chen’s appointment of someone who has dedicated his life to Taiwan independence as Taipei’s representative to Tokyo will probably be viewed as evidence that Chen engages in double-talk and cannot be trusted. In his inauguration in May 2004, Chen’s Presidential address sought to project a moderate image of not pushing for de jure independence to placate Beijing (and even more so, Washington). But his appointment of Koh to Tokyo is likely to be another factor which convinces Beijing that Chen lacks credibility because his rhetoric and actions do not necessarily have a good fit. According to Koh, “the most difficult part for Taiwan in constructing a new constitution will be international pressure from countries such as the United States and Japan. My job is to promote the constitutional project to Japan and to explain the goal and Taiwan’s need for a new constitution”. Another role as envoy, according to Koh, is “to bolster Japan’s role in defending Taiwan’s security on the basis of the United States–Japan Defense Guidelines in 1999 under which the United States and Japan are responsible for the security of ‘areas surrounding Japan’. It is not only the United States’ responsibility to defend Taiwan’s security. Japan also shares that responsibility. The United States is mandated to come to Taiwan’s defense under the Taiwan Relations Act, while Japan is related to this with its obligation for regional security under the United States–Japan defense 26 Mac William Bishop, “The Taipei Triad: Taiwan, US, Japan” in Asia Times, May

28, 2004. http://www.atimes.com/atimes/China/FE28Ad05.html (Accessed: March 28, 2004).

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Guidelines. Therefore, it is very important for Taiwan to ensure that Japan is obligated to defend Taiwan”.27 Koh also argued that: “Taiwan should quit pursuing small, volatile diplomatic allies, but strive to befriend the United States and Japan in its attempt to lift its global stature and toughen up against China’s constant military threat. That Chen administration should court friendship with Tokyo and Washington, the island’s most important allies, which can better preserve stability in the Taiwan Strait”.

Taiwan National Security Council’s proposals to Japan Chen Shui-bian has proposed a Free Trade Agreement (FTA) and “cooperation in the areas of politics, the military and security” with Tokyo.28 In March 2004, Taiwan’s National Security Council sought to forge a security dialogue with Japan including maritime search and rescue operations training between the Japanese SDF (Self Defense Force) and the Taiwanese military.29 Other proposals include: mutual notification of military maneuvers, military educational exchange and dialogue on anti-terrorism measures. Taiwan’s ostensible aim is to deepen confidence building between Japan and Taiwan, but the real goal is to seek concrete military exchanges. Since the second half of 2002, the Taiwan Lobby had informally floated these trial balloons to the Japanese Ministry of Foreign Affairs (MOFA) and Defense Agency. The Japanese side replied that since Tokyo does not have official diplomatic relations with Taipei, it cannot respond to such 27 “Representative to Japan has years of experience”, Taipei Times, May 20, 2004.

Koh remarked: “If people think the ROC is not a proper name for Taiwan, there is always the possibility of change through democratic procedures. But before the name is changed, I have to minimize my (independence) activities. Privately, I’m determined to advocate Taiwan’s independence, but as an ROC official, I’ll respect the limitations”. Koh also noted: “The 33 years I spent in Japan because of the blacklist — which barred me from returning to Taiwan — have enabled me to cultivate the resources I have right now. The late Japanese Prime Minister Obuchi Keizo was a good friend of mine when we studied in Waseda University. He used to consult with me about the situation in Taiwan. I also had interaction with former Prime Minister Mori Yoshiro in Waseda University, and now we still keep in touch with each other”. See also “Pro-independence activist to head mission in Japan”, Taipei Times, May 19, 2004. 28 “Chen: More Ties to Tokyo”, Asahi Shimbun, Asahi.com, September 28, 2002. 29 Asahi Shimbun, Asahi.com, March 22, 2004.

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requests. Moreover, “if dialogue takes place, it will provoke China and invite unnecessary tension”.30

Japan’s Considerations for Taiwan Despite China’s displeasure, Japan has, on certain issues, not yielded to Chinese pressure. When President Clinton visited Shanghai in 1998, he said the United States would abide by the so-called Three Nos policy: no to Taiwan independence; no to one China, one Taiwan; and no to Taiwan’s participation in international organizations whose members are states. However, Tokyo refused to bend to Beijing’s pressure to adopt the Three Nos when Jiang Zemin visited Japan in 1998.31 Subsequently, as mentioned earlier, Japan extended a visa to Lee Teng-hui in 2001. Japan also supports Taiwan’s observer status in WHO. The Japanese government noted in April 2004: “This issue has been put to discussion quite some time now. Especially in the light of SARS and the related development, we also support the Taiwanese participation as an observer to the Assembly”.32 During the SARS epidemic in Taiwan, as a gesture of affinity, Japan provided humanitarian assistance to Taiwan: medical equipment and materials equivalent to a total of 56 million yen, consisting of 50,000 medical protective suits, 500 anti-dust masks and 2,500 bags of replacement filters for the masks to cope with SARS.33 Beijing reacted by expressing its regrets to Tokyo’s position on Taipei at the 57th World Health Assembly.34

Tokyo: Balancing between Beijing and Taipei Although Japanese elite and public opinion are favorably disposed to Taiwan, the Japanese government is very concerned about Chen altering the cross-Strait status quo by pushing for a referendum and constitutional 30 Ibid. 31 For the reasons why Japan said no to China, see Lam Peng Er and Ja Ian Chong,

“Japan–Taiwan relations: between affinity and reality”, pp. 260–261. 32 Ministry of Foreign Affairs of Japan, Press Conference by Press Secretary

Takashima Hatsuhisa, April 23, 2004. 33 Ministry of Foreign Affairs of Japan, “Provision of medical equipment and mate-

rials to Taiwan to cope with Severe Acute Respiratory Syndrome (SARS)”, June 6, 2003. 34 “China regrets Japan’s attitude on Taiwan-related proposal at WHA”, People’s Daily Online, May 18, 2004.

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changes — unilateral actions deemed to bring Taiwan closer to de jure independence. Tokyo normally does not comment publicly on Taiwan’s domestic politics, but in a rare move, it urged Chen to exercise caution in his actions. The Japanese government called its word of caution to the Taiwanese government “a piece of advice given out of goodwill”.35 Tokyo’s spokesman said: “The Government of Japan wishes the Taiwan issue to be resolved peacefully, and no action should be taken which might heighten the tension between China and Taiwan. That is our basic position, which is why we were not in favor of seeing the Taiwan national referendum being conducted”.36 China then thanked Japan for its statement on the referendum issue.37 Moreover, after Taiwan’s 2004 Presidential Election, Japan, unlike the United States, did not congratulate Chen on his re-election. The Japanese government explained: “Since we do not have any governmental relations with Taiwan, there would be no possibility of the Japanese Government sending any official word in regard to the results of the Taiwanese elections”.38 Koizumi also urged the two rival parties (DPP and KMT) to settle its Presidential Election row to avoid political instability in Taiwan. He said: “This is a domestic matter for Taiwan. But I think it’s better for both the ruling and opposition parties to try to stabilize the political situation quickly”.39 Earlier, there were at least two other decisions concerning Taipei by Tokyo which would have placated Beijing somewhat. In 2002, Japan refused to grant a visa to Lee Teng-hui who ostensibly wanted to give a talk at Keio University because on this occasion, Lee lacked the fig leaf of going to Japan for “medical and humanitarian” reasons. Japan has also declined to forge an FTA with Taiwan. When questioned whether Japan is including Taiwan in its conception of regionalism in East Asia, the Japanese government said: “Taiwan is not in the East Asian comprehensive Economic Partnership that 35 Editorial, “Taiwan goes to the polls”, Asahi Shimbun, Asahi.com, February 14, 2004. 36 Ministry of Foreign Affairs of Japan, Press Conference by Press Secretary

Takashima Hatsuhisa, March 26, 2004. See also “Japan ‘concerned’ over Chen’s move”, Asahi Shimbun, Asahi.com, December 31, 2003. 37 “Japan’s position on Taiwan welcomed”, China Daily and Xinhua News Agency, December 31, 2003. http://www.china.org.cn/english/2003/dec/83654.htm (Accessed: May 31, 2004). 38 Ministry of Foreign Affairs of Japan, Press Conference by Press Secretary Takashima Hatsuhisa, March 30, 2004. 39 Kyodo News, March 23, 2004.

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was proposed by Prime Minister Koizumi when he visited ASEAN … We have proposed a Comprehensive Economic Partnership among 13 nations: ASEAN plus Japan, China, and the Republic of Korea”.40 While Japan has an affinity for Taiwan, it is also circumscribed by the need to maintain good relations with China. Besides expanding economic ties and the need for stability in the Taiwan Strait, Japan also desires China’s assistance in dealing with North Korea over the latter’s abduction of Japanese citizens and also in hosting the Six Party Talks to address Pyongyang’s alleged nuclear proliferation. Indeed, the Japanese today perceive North Korea rather than China to be its greatest security threat. In February 2005, Japan and the United States agreed to a set of “common strategic objectives” in the resolution of global issues at the meeting of top security officials from both nations. It specifically stated that the two nations will promote the peaceful resolution of issues across the Taiwan Strait. To the chagrin of China, Taiwan is now explicitly mentioned as falling within the framework of the alliance. Although the set of “common strategic objectives” were forged against the backdrop of a rising China and its insistence of codifying an anti-secession law against Taiwan, the United States and Japan appear to be more immediately concerned about North Korea which has declared itself to be a nuclear state and threatened to pull out of the Six Party Talks. However, Tokyo is also careful not to antagonize Beijing. The Japanese media noted: “Reflecting their dilemma, Japanese representatives insisted just before the meeting that the joint statement somewhat mitigate the tone of a hard-line theory against China that is simmering in both nations, and eventually inserted into the document a pledge to develop their cooperative relationships with China”.41

Conclusion Despite Japan’s affinity to Taiwan, its support and sympathy to Taiwan are limited and qualified. Tokyo is against Taipei pushing for de jure independence because war in the Taiwan Strait will hurt Japan’s national interest. The harsh reality of geopolitics is that Tokyo will not place Japan–Taiwan relations above Japan–China relations or even on the same plane. After all, Beijing is an emerging great power and Japan’s key trading partner. Japan 40 Ministry of Foreign Affairs of Japan, Press Conference by Press Secretary Hattori

Norio, April 16, 2002. 41 The Nikkei Weekly, February 28, 2005.

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is cognizant of China’s desire for “peaceful ascendancy” but a cross-Strait conflict will destroy this approach. An embittered and war-shattered China will be bad for Japan: damaging an important export market which has helped to lift Japan out of its decade long recession and ushering in decades of political instability in East Asia. The challenge for Tokyo remains: how to balance its relations with Beijing and Taipei and avoid a cross-Strait conflict. Perhaps the best approach for Japan is to avoid strategic ambiguity towards China and Taiwan. To Taiwan, it should convey a crystal-clear message that Japan is against any drive for de jure independence. It will not assist Taipei if a cross-Strait conflict is triggered by Taiwanese attempts to change the political status quo and make a bid for de jure independence. It should firmly assert to China that the use of force against Taiwan is unacceptable by the international community. And it will assist its United States ally to check China, militarily if necessary (under the terms of the 1997 New Defense Guidelines and the 2005 Common Strategic Objectives), if China were to seek a military solution to the Taiwan issue. Tokyo should urge both Beijing and Taipei to flexibly restart talks and seek the common ground of peace, stability and prosperity instead of the killing ground of a cross-Strait conflict. Besides a potential vicious cycle of “action–reaction” between Beijing and Taipei, Tokyo has two other uncertainties: the likely response of its United States ally when the flashpoint in the Taiwan Strait erupts and value change in the Taiwanese society. While Japan prefers the status quo (neither Taiwan independence nor reunification with Mainland), Taiwanese society, political culture and political identity are transforming to the extent that pro-independent forces might gain the upper hand. Indeed, the status quo might not be tenable in the long run. Chen’s second term win with a significantly higher margin cannot be primarily attributed to “dirty tricks” and “fraud”, but reflected a tectonic shift in Taiwanese sentiments for a separate identity. Benefiting from the value change of voters viewing their identity as Taiwanese rather than Chinese or even a hybrid of Taiwanese Chinese, the pro-independent DPP might do even better in future legislative elections. It is not inconceivable that the Taiwan President after Chen might flirt even more with independence. Japan will have an important and delicate role to play: working with the United States to restrain both Taiwan and China from a collision course leading to war and catastrophe in East Asia.

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12 A Southeast Asian Perspective on Cross-Strait Relations Eric Teo Chu Cheow

Introduction A Southeast Asian perspective of cross-Strait relations is today premised on the following three basic fundamentals: • Southeast Asian or ASEAN countries all accept unequivocally the “oneChina” policy, as spelt out by Beijing. • Southeast Asian countries or ASEAN have made it clear that they do not want cross-Strait relations to “get out of control”. It is likely to bring instability to the whole region, deter foreign investments and disrupt trade flows, thereby plunging ASEAN into a crisis, especially at a time when its investment credibility has declined and stability less assured within the present geo-strategic and geo-economic context. • Thirdly, cross-Strait relations are fundamentally determined by the significant advance of ASEAN–China relations in all aspects, especially in the past five years, and the accompanying decline in ASEAN–Taiwan relations, despite Taiwan’s official “Go South” policy. It is the significant advance of ASEAN–China relations, which would be specifically dealt with in this paper, as well as the important impact it has on cross-Strait relations and development. This aspect of “advancing ASEAN– China ties and cooperation” in the context of China’s “peaceful rising”, is a phenomenon that Taipei could no longer afford to ignore in its own strategic calculations, especially in designing and developing cross-Strait relations in the next few years.

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Advancing ASEAN–China Relations Much has been focused on the spectacular rise of China today; Southeast Asia is no exception, especially in its media, amongst its elite and power brokers and in its official line, either focusing on its economic and financial emergence or its social and political transformation. Its impact on Southeast Asia (and the world) is reckoned to be more than tremendous; Napoléon Bonaparte had in fact once said, “When China awakens, the world will tremble”. China’s relations with Southeast Asia or ASEAN within the past five years therefore provide one of the best indicators of China’s profound impact on the region, with important repercussions on cross-Strait relations and development. On the other hand, Taiwan had been encouraging its businessmen to pursue a “Go South” policy (towards ASEAN countries) in economics, trade and investments since the presidencies of Lee Teng-hui and Chen Shui-bian, but with starkly limited success. The intention and strategy of this “Go South” policy was clear, as it was meant to lessen Taiwan’s economic dependence with and links to the Mainland, for fear of untoward strategic implications, especially if held to ransom or “taken hostage” by Beijing, in the event of tensions or conflicts across the Taiwan Strait. Taiwan’s attempt was also to wean ASEAN away from China, in the context then of “mutual competition”, but Taipei’s “Go South” policy appears to be in tatters today, given the “advancing ASEAN–China ties and cooperation” within the last five or more years. The failure of such a policy is indeed obvious today. Not only have Taiwanese businessmen increased their investments to and economic links with the Mainland, but it is equally obvious that Taiwanese investments in ASEAN countries have been stalled or reduced (in relative terms, as compared to the Mainland), thanks partly to the relative “decline” of ASEAN countries’ competitiveness as compared to that of China, as well as Taiwanese businessmen’s refusal to follow the official Taipei government line, out of sheer economic and business pragmatism. Moreover, ASEAN’s geopolitical risks have increased since the Asian Crisis of 1997–98, just as potential terrorist threats (after the Bali bombings of October 12, 2002) have also undoubtedly “cooled” Taiwanese investment enthusiasm in this region, as compared to the Mainland. Meanwhile, another important shift has been taking place in Southeast Asia, which could even spell enormous trouble for Taiwan’s “Go South” policy, just as Beijing inaugurates its own “unofficial” “Go South” policy,

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with predictably greater success to date thus far. ASEAN–China relations have clearly consolidated in the past five years, to the detriment of Taiwan, Japan and the United States. The successful strengthening of ASEAN– China relations, despite their historical animosities of the 1970s and the economic “hang-ups” more recently, will now constitute a real challenge to Taiwan’s foreign policy, as cross-Strait relations remain uncertain and tense, following the inauguration of President Chen Shui-bian for a second term in office; Taipei clearly needs friends across the region and globe to stand by its side in case of a break-out in animosities across the Taiwan Strait. Southeast Asia’s perspectives of cross-Strait relations could be determined and analyzed through the following five factors, which have all helped cement China’s relations with ASEAN countries in a profound way: • the revival of the historical “tributary system” mentality of Southeast Asia towards China, for trade and goodwill versus respect, reverence and stability; • a shift in threat perception of China, thanks to China’s ideological shift and active diplomacy; • China’s novel political posturing and assurances; • economic and political opportunism in the ASEAN–China FTA; and • the rise of China’s “soft power” and the role of ethnic Chinese in Southeast Asia. Southeast Asia’s relations with China: a revival of the Chinese “Imperial Tributary System” mentality in Asia? The geo-politics of Asia is progressively shaped by two fundamental trends emanating from China. Firstly, there appears to be a “revival” of an ancient Chinese tributary system mentality in Asia, as a basis for Beijing’s “new” security environment. Secondly, there is a rise of Chinese “soft power” across Asia as well as a rise in influence of ethnic Chinese communities across Southeast Asia. In fact, the increase in China’s influence and power in Southeast Asia, and even South Korea and Japan, is remarkable. China’s key role in the “six-party” talks of the Korean Peninsula has moved Beijing to centerstage in Asian and international diplomacy, a fact now accepted by Tokyo and Washington; China’s “soft power” has subsequently increased in Seoul. China’s proposal and launch of official negotiations with ASEAN

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on an ASEAN–China FTA (or “10-plus-1”) stole the march on Japan completely and surprisingly, constitutes an astute “new strategic dimension” in ASEAN–China relations. On the other hand, the ASEAN–Japan Summit of December 2003 in Tokyo could be interpreted as a direct Japanese response to this “emergence” of China as a major actor (and rival) on the Asian stage and to its increasing “soft power” in Southeast Asia itself. Intra-Asian relations are no longer the same now, with the “peaceful rising” of China. In fact, Eisuke Sakakibara of Keio University and former Japanese ViceMinister for Finance (otherwise known as “Mr. Yen”), had highlighted at a Lecture in Kuala Lumpur in November 2003 this “re-emergence” of China, “as China had already been the de facto pre-eminent power in Asia till the 1850s”. In this regard, China could be re-creating its former “imperial” security system and environment in Asia, though in a more benign and discreet way. Informally, some of the elite in Tokyo is beginning to recognize the fact that Japan may have to “ultimately contend with history, geography and technology in order to build East Asia into a regional entity”; contending with history and geography would mean for Tokyo to accept and recognize the key role an “emerging China” would play within the future Asian context. A 2003 publication by Beida’s (Beijing University) Institute of International Relations on “China’s Security Environment” put forward a novel perspective of China’s “new” security environment, which could have profound implications for Beijing’s relations with its Asian neighbors and its emerging regional role. From a historical perspective, Beijing’s “new” security environment, or at least its thinking/mentality, could have been modeled after the imperial tributary system, which started under the Ming Dynasty and perfected under the Qing. In fact, China’s Ming/Qing tributary system was based on three cardinal points, as follows: • firstly, China considered itself the “central heart” (zhongxin in Mandarin) of the region; this tributary system assured China of its overall security environment. • secondly, China needed a stable external environment, immediately surrounding the Middle Kingdom to ensure its own internal stability and prosperity. • thirdly, the Chinese emperor, at the “heart”, would in principle give more favors to tributary states or kingdoms than receive from them; for his “generosity”, the emperor gets the tributary states’ respect and goodwill.

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In fact, from the royal Qing archives (according to Beida’s publication), the well-established system laid out meticulously the tributes from regional countries to the Chinese court. Korea had to pay tribute once a year, the Ryuku Kingdom (present-day Okinawan islands) once in two years, Annam (Vietnam) once in three years, Siam (Thailand) once in four years, Sulu (in Southern Philippines) once in five years, and Burma (Myanmar) and Laos, once every seven to ten years. The BeiDa publication even calculated the number of times these kingdoms had effectively paid tribute to Beijing, from 1662 till early 1900s; it also listed some of the tributes paid, like elephant tusks (ivory) from Siam or precious stones from Burma, some of which could still be seen in the Forbidden City Museum. The thinking behind this tributary system seems to be already bearing out on certain geo-political trends, four of which are apparent on the current Asian horizon. Firstly, the “stabilization” of China’s immediate external environment is proceeding at an impressive pace, ranging from its entente with Vladimir Putin’s Russia, rapprochement with India, naval exercises with both India and Pakistan separately in the South China Sea to an active diplomatic role on the Korean Peninsula (“six-party” talks), a common declaration with ASEAN on the South China Sea territorial dispute and ongoing negotiations for an ASEAN–China Free Trade Agreement (FTA) by 2010. Secondly, this mammoth ASEAN–China FTA project could be perceived as a “continuation” of China’s tributary system across Southeast Asia, or at least in its thinking and mentality. Beijing is giving more than it receives, via either an “early harvest” in agriculture, or the Most Favored Nation (MFN) clause accorded to Vietnam, Laos and Cambodia even before they join the WTO. A “privileged” fruits and vegetable FTA “early harvest” with Thailand since 1 October 2003 is another such example. Thirdly, China has “conceded” trade surpluses to all its smaller Southeast Asian and Korean neighbors, in line with the tributary principle of “give more, take less”; it is these trade surpluses that are currently funneling regional economic growth, thus confirming China as the “heart” of the present Asian economic system. Fourthly, China seeks to become a “brotherly example” to Vietnam, just as it had been culturally in the past. Today, Vietnamese leaders’ doi moi reforms are inspired by China’s kaifang reforms; it is even rumored that the former are also studying China’s “Three Represents” theory for their own ultimate political reforms. Similarly, other ASEAN countries are looking at China’s emphasis on “stability, development and reforms” as the basis

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of their own socio-economic development as well; these Southeast Asian countries range from the Philippines to Malaysia. There are no doubts that the new Chinese leadership under the present Hu Jintao–Wen Jiabao team is sparking a new regionalism à la chinoise, not dissimilar to the traditional Ming/Qing system, but with one fundamental difference. The new Beijing leaders are definitely more humble and down-to-earth than the great Ming/Qing emperors; China’s “new” security environment and regionalism could thus be more effectively hinged on the current Chinese belief of “more confidence, more cooperation”, but with China at the region’s “central heart” once again. Ethnic Chinese communities in Southeast Asia have also risen in influence and stature, commensurating with China’s emergence and the rise of its “soft power” across Asia, in turn helping to further enhance Beijing’s security environment and ASEAN–China relations.

A distinct warming of ASEAN–China relations from an overall historical perspective: a “Shifted” “China Threat” perception within ASEAN China used to pose two sorts of threats to Southeast Asia. From a historical perspective, there was the “communist threat” from Beijing in the 1960s and 1970s, as experienced by Indonesia, Thailand, Malaysia, Singapore, Philippines and Burma (Myanmar now). On the other hand, Beijing represented a “war threat”, as was the case with Vietnam in 1979, when Chinese troops crossed the Sino–Vietnamese border to “teach Vietnam a lesson” over its “invasion and occupation of neighboring Cambodia”. Today, all ASEAN countries embrace unequivocally and acknowledge publicly the “one-China” policy and cooperate actively with Beijing, to the detriment of Taiwan, which has not made much headway in wooing the ASEAN countries. Adding to this historical dimension, Southeast Asian countries have also lately witnessed another major perception change of China, from what was termed a “China threat” (in economic, trade, investment, social/job terms) just three years ago, to one of a “benign China with opportunities (for ASEAN)”. Three factors have since come into play. Firstly, Beijing’s pragmatic policy of “political stabilization” has been assuring to ASEAN countries, instead of China’s former “ideological destabilization” policy. Secondly, China is now in fact perceived as an opportunity to ASEAN, thanks first to Beijing’s “political” decision to “hold up” (or not competitively devalue) the RMB during the 1997–98 Asian Crisis, and then to the

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latest “bonus” of surplus trade, as is “accorded” to ASEAN countries by Beijing today. Lastly, this “shifted” or reduced threat perception from China is also due to Beijing’s new, active and emerging “sophisticated diplomacy”, from the days of Deng Xiaoping to the Jiang Zemin–Zhu Rongji, and then to the present Hu Jintao–Wen Jiabao team. Four areas of Beijing’s present foreign policy “sophistication” would include a less pompous, but more pragmatic foreign policy; its growing economic diplomacy; its thrust towards “international integration”; and finally, a struggle for multi-polarity in the world. All these four areas assure the ASEAN countries of a more “benign China” in its outlook and national strategy, and have thus helped reduce the previous “China threat”. Fundamentally, this change in Southeast Asia also mirrors a monumental change in the international perception of China in the last five years, as it emerges as a formidable global economic and political power, and becomes increasingly perceived not only as a “benign power”, but also as a responsible actor on the world stage.

China’s Novel Political Posturing and Assurances Key to this perception shift in ASEAN has been China’s strategic policy of “down-playing ideology, and moving towards pragmatism”, which ASEAN countries have detected in both China’s domestic policies and external relations. In fact, ASEAN countries appreciate the “normalization” of Beijing’s relations with the region. It is as though, coupled with a greater “sophistication” in its foreign policy and posture, Beijing has deliberately changed its overall strategic engagement with Southeast Asia. China has not only abandoned its “communist insurgency or war threats” of the past, but also adopted an active policy of “strategic friendship” with ASEAN countries. Ideology has been abandoned both domestically and externally, as the vehicle of relations with its neighbors; this has greatly assuaged the fears and concerns of Southeast Asian countries. This new posture and assurance from a more pragmatic and “normalized” China is the first and foremost important political move by Beijing to have shifted the geo-political relationship between China and ASEAN. It is interesting that Beijing’s recent “3 principles, 7 conditions” for Hong Kong SAR and moves against the “non-patriots” in Hong Kong (which has been largely interpreted by Hong Kong liberals as “moves against democracy there”), did not really affect ASEAN’s elite much in their perception

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of Beijing. Southeast Asian public opinion also did not rise to “side” the Hong Kong liberals in any substantial way, but instead, it continued to see the whole episode as an “internal issue” of China. This appears to be a significant point in ASEAN–China relations, which could also have dire implications for cross-Strait relations in the future. ASEAN governments and the elite have been probably most impressed by Beijing leaders’ pragmatism in governance, as China seeks to create stability and equilibrium for its own economic and political development. China’s slogan of “Stability, Development, Reforms” has gone down well with ASEAN leaders, as well as Beijing’s stress on the symbiotic relationship between China’s own “internal” and “external” stability. The unprecedentedly smooth transfer of power from the Jiang–Zhu to the Hu–Wen team, despite what Western liberals charge China for having “no democracy”, was another plus-point, not lost on but, in reality, constituted a profound assurance for, the ASEAN elite. The common feeling in Southeast Asia is that they could now do business with a more pragmatic generation of Chinese leaders and the “new” rising China. In fact, the “resurrection” of a mentality akin to China’s Ming/Qing imperial tributary system in Southeast Asia is particularly significant. In political and security terms, China is helping to maintain “stability” in Southeast Asia, such as Beijing’s “diplomatic intervention” during the Thai–Cambodian flare-up in July 2003 (to calm the two conflicting sides via an appeal by the Chinese Ministry of Foreign Affairs to both the Thai and Cambodian Ambassadors resident in Beijing) and recent indications that Beijing may even like to host peace talks between the Philippine Government and Filipino communists within the New Democratic Front. It is possible that Beijing may have discreetly drawn its inspiration from the imperial tributary system in managing its relations with ASEAN, as this mentality pervades the new diplomatic thinking of China today in its “new” relations with Southeast Asia. However, China is also very sensitive to ASEAN’s fears of being subordinated to the big Asian giant; there is a recent talk in Beijing that Chinese leaders may not want to push the “peaceful rising of China” too far, as it may evoke some serious misgivings from Southeast Asian countries; instead, Beijing may use “peaceful development of China”, which is undoubtedly a “softer” and less threatening posture by Beijing towards its Southeast Asian neighbors. Further examples of this active and “sensitive” diplomacy by Beijing in order to stabilize its southern flank, and thus woo ASEAN actively, would

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include the Joint ASEAN–China Declaration on the South China Sea in 2001, a more flexible and active position and posture within the ASEAN Regional Forum (ARF), the signing of ASEAN’s Treaty of Amity and Cooperation (TAC) in Bali in November 2003, especially as one of ASEAN’s first big-power neighbors to do so. China also significantly extended its “hand of friendship” to Myanmar, when many other nations tried to ostracize the military regime there; Beijing’s influence and clout in Yangon has thus increased. China’s “activism” in the Greater Mekong SubRegion (GMS) to “compete” outright with Japan (which has been active there for years), also bears political significance; in fact, this may fit well into a pattern of increasing rivalry between Beijing and Tokyo in Asian affairs.

Economically, from a “China Threat” to “A Golden Opportunity” for ASEAN The ASEAN–China Free Trade Agreement (FTA) or “10 + 1” was initially launched more as a political initiative and gesture by ex-PM Zhu Rongji to ASEAN than purely economic; it is today evolving beyond a pure FTA, and towards a Common Economic Partnership (CEP). Agriculture and services will be progressively liberalized, in addition to “allowing” more ASEAN exports into China. Beijing is even considering giving some technical assistance to help “raise” ASEAN’s competitiveness in the longer term. (The 2003 McKinsey report highlighted ASEAN’s deteriorating competitiveness in industrial manufacturing production, relative to China.) On its end, besides “according” unprecedented surpluses to the ASEAN economies, Beijing is also increasing Chinese investments outwards into ASEAN; Chinese investments stand at about US$ 2 billion today. China has in fact invested in oil and gas in Indonesia through CNOOC and has voiced interest in manufacturing investments in Vietnam and Thailand; there are also initial moves of potential Chinese investments in power plants in Indonesia. But it is envisaged that competition would increase for natural resources worldwide, thanks to China’s thirst for oil, gas, steel and other minerals and agricultural products, with possible negative repercussion on world prices, especially for ASEAN economies which do not produce such commodities. Thirdly, China’s human resources are also moving outwards towards Southeast Asia in a progressive, but not insignificant way. Chinese tourists,

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students, expatriates and lower-level workers are now going out to ASEAN countries, bringing new opportunities of revenue to both China and ASEAN economies, although there could also be certain social issues, which would ultimately ensue between Beijing and ASEAN. Mainland Chinese presence in Southeast Asia could thus increase and have a major financial and social impact on ASEAN in the coming years. Lastly, there has been a rise in Chinese economic and social assistance to regional countries. Regional cooperation in the GMS, as well as in the region’s fight against SARS, bird or “avian” flu will increase, just as Beijing increases its social programs of “re-distribution” to the poorer and lessdeveloped ASEAN countries. In this regard, Beijing’s “Go West” policy would be followed closely by Southeast Asian governments, especially on Southeast Asia’s mainland.

The Rise of China’s “Soft Power” and its Cultural and Social Influence in ASEAN Commensurating with China’s rise as an economic and political power has been the concurrent rise in China’s “soft power” in Southeast Asia in the past few years. Chinese culture, cuisine, calligraphy, cinema, curios, art, acupuncture, herbal medicine and fashion fads have penetrated well into the regional culture. Fascination for popular Chinese culture amongst ASEAN youth in film, pop music and the television has been noticeable, even though such popular culture may in fact emanate from Hong Kong (films, actors, actresses and “canto-pop”) or Taiwan (like the “Meteor Garden” television series or boy-bands, such as F4 or 5566), and not necessarily, China. Joint “Chinese” film production, such as “Hero” or “Crouching Tiger, Hidden Dragon” (which “pool” together acting talents from China, Taiwan and Hong Kong), have hit international box-offices and gave Chinese culture a big boost. Mainland Chinese cinema idols, like Zhang Yimou and Gong Li, are beginning to command an artistic following, although they still lack a popular following; on the other hand, the famous “12 Girls Band” is currently becoming a true Chinese pop product, and may be followed ultimately by other rising Chinese pop groups or bands too. Meanwhile, Mainland Chinese consumer brands (like Hai-er, TCL or Huawei) are also becoming increasingly popular in ASEAN societies, especially in lower-end electronic and telecommunication products in Indonesia and Philippines today.

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But more importantly in Southeast Asia today is the rise in the role and influence of ethnic Chinese over the past few years. Formerly, resolute anti-communist and anti-Beijing, this group has swung towards the “more benign China”, as these ethnic Chinese communities ride on the coat-tails of this emerging China to make money and prosper, thereby gaining even more clout and influence at home. In Thailand, there is undoubtedly a rise in Thai–Chinese power and influence, not only in commerce and business (as it had always and traditionally been the case), but also in politics (with PM Thaksin Shinawatra and his ruling Thai Rath Thai Party), in the bureaucracy and in the intelligentsia. Indonesia has “rehabilitated” its Indonesian-Chinese community, as the Lunar New Year or “Imlek” has since 2003 been designated an official Indonesian public holiday; public “Metro TV” even has some of its news bulletins (“xin wen”) read in Mandarin. In the Philippines, Filipino– Chinese movies had captured top prizes at the annual Metro-Manila Film Festival for the past two years. There are also more “chinovelas” (Chinese serials) on local television stations in the afternoon, and Taiwanese boy band F4 is currently Philippines’ biggest craze, as its songs fill Manila’s mega-malls. Vietnam is undoubtedly following the “China model” economically and even politically, as returning viet kieu (or overseas Vietnamese) are leading Vietnamese economic recovery, like overseas Chinese did 15 years ago. In Malaysia, Chinese tycoons are playing an increasingly prominent role in leading the current economic boom, and may even “inspire” reforms to Malaysia’s bumiputra policy. In Southeast Asia, the “pai hwa” (or anti-Chinese) sentiment has undoubtedly subsided to a large extent, and many ethnic Southeast Asian Chinese now want to “re-discover” their (Chinese) culture and identity, in line with the emerging China to the north; Mandarin classes have thus boomed in ASEAN countries. One of the most significant changes in Southeast Asia has been the attitude of ethnic Chinese, who have become less biased, less anti-communist and less anti-Beijing. But this “over-play” of their “China connection” could also be a double-edged sword, if they do not “share” or better distribute their acquired wealth locally (within their countries), especially if they are largely perceived to have prospered, thanks to their “China connection”. Therein lies a potential danger for both the ethnic Chinese (as they seek a better integration with their Southeast Asian “homeland”) and Beijing, which must be aware of such a potential “ethnic Chinese” danger in ASEAN.

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Conclusion China’s influence, clout and “soft power” have grown tremendously in Southeast Asia and ASEAN in the past five years or so. This could be a prelude to the dawning “China century” for the region, especially as China takes on the United States in international geo-politics and geoeconomics. But the ultimate “battle-ground” would still be in East Asia itself, as the Americans (and Japanese) may have to concede ultimately to growing Chinese “soft power” regionally. This development has serious implications for cross-Strait relations, as ASEAN–China relations consolidate and as ASEAN–Taiwan relations consequently decline in relative terms. Southeast Asia’s perception of crossStrait relations and its official acceptance and recognition of the “one China” policy, as expounded by Beijing (and as reiterated at the ASEAN Foreign Ministers’ Retreat in Halong Bay, Vietnam in April), would mean that its perspective of cross-Strait relations has inexorably shifted towards one of “neutrality” at best, with calls to Taipei “not to rock the boat” for stabilitysake in the region as a whole. Taiwan’s “Go South” policy has declined in the past few years, as ASEAN remains more anchored now towards China and could even ultimately adopt a less-than-neutral stance in cross-Strait relations, if and should hostilities erupt across the Taiwan Strait.