Publication: China Brief Volume: 1 Issue: 3

By Jean-Pierre Cabestan

Since Chen Shui-bian’s election as president of Taiwan (Republic of China) in March 2000, Beijing has constantly refused to resume its unofficial dialogue with Taipei. Channels of indirect communication, however, have multiplied. China’s impending entry into the WTO and its need to improve relations with the Bush administration, as well as Taiwan’s economic difficulties and coming legislative election, may favor the reemergence of technical and political talks between the two Chinas.


Since Chen’s inauguration in May 2000, the Chinese authorities in Beijing have deliberately ignored Taiwan’s call for dialogue, in spite of the relative moderation shown by the new (formerly pro-independence) president. Making Taiwan’s formal return to the 1992 consensus about the “one China” concept (or, as Taipei considers it: “one China, two interpretations”) a precondition to resuming talks with Taipei, Beijing has given priority to courting Taiwan’s opposition parties, which still control the parliament–be it the minuscule New Party (NP), James Song’s People’s First Party (PFP) or Lien Chan’s Kuomintang (KMT). This united front strategy has contributed to both isolating and increasing pressure on Chen’s government.

In order to retake the initiative, Chen has tried several times to go back to the 1992 consensus. But because of the protest of many Democratic Progressive Party (DPP) supporters and leaders as well as of ex-president Lee Teng-hui’s friends, he has had to back down every time. Yet, in December 2000, he endorsed the “one China” proposal made by a cross-party group chaired by scientist and Nobel Price Lee Yuan-tse and put forward the idea of a gradual economic and eventual “political integration” with China. And, on January 2001, he authorized the opening of direct sea links (the so-called “mini links”) between Taiwan’s outside islands of Kinmen and Matsu and mainland China.

But this has not persuaded Beijing to soften its stance. On the contrary, Taiwan’s booming investments (between US$48 and US$70 billion) and trade (US$26 billion in 2000) with China and growing economic difficulties (+1.1 percent growth in the first quarter of 2000, the lowest result in twenty-six years) have first encouraged Jiang Zemin to intensify pressure on not only the opposition parties but also Taiwan’s increasingly depressed business community.

In mid-July, the Chinese Communist Party (CCP) established a regular dialogue mechanism with Taiwan’s NP on the occasion of the visit to Beijing by an NP delegation. That delegation clearly endorsed Beijing’s definition of “one China” and Chinese Foreign Minister Qian Qichen made public a seven-point plan fleshing out–without actually proposing anything new–the CCP’s “one country, two system” policy. A few days later, several Taiwanese business leaders urged their government to relax restrictions on trade with the mainland–Lee Teng-hui’s so-called “no haste, be patient” policy–in order to lift the island’s economy out of its slump. And, echoing Wang Yung-ching, chairman of Taiwan’s largest company, Formosa Plastics, and other entrepreneurs’ fresh concerns, a group of fourteen presidential advisers, including Stan Shih, Acer’s boss and one of Chen’s supporters, asked Chen Shui-bian to abide by a separate “one China” principle guided by Taiwan’s constitution. This new environment has contributed to partially changing the Taiwanese’s view of their longterm future. In particular, much publicity has been made about the fact that Beijing’s “one country, two system” formula is now accepted by a more substantial minority in Taiwan, though political manipulations of opinion polls cannot be excluded–13.3 percent in July 2001 against 16.1 percent in March and 9 percent a year ago according to the government, but 33 percent according to opposition newspaper United Daily News.

Will these new pressures modify Chen’s mainland China policy? Only to some extent. In late July, Chen set up a national economic advisory council aimed at solving the island’s daunting problems, even if its conclusions include the opening of direct sea and air links with China. Though a relaxation of Lee’s “go slow” policy and ban on direct links with the mainland had been part of the electoral platform of every presidential candidate, Chen has remained very reluctant to carry out these promises in view of Beijing’s hard attitude and Taiwan’s economic “hollowing-out.” But today, due to the fall of the stock market (4,000 points only against 10,000 in March 2000), growing unemployment (4.4 percent) and the coming legislative election, Chen seems to have less room to maneuver.


Two external and reassuring factors may also contribute to persuading Chen’s government to accept some limited changes in its mainland policy. The first, the more supportive and clearer attitude of the new U.S. administration. The second, China’s somewhat less worried and thus aggressive approach to cross-Strait relations.

Since February 2001, in a few well-publicized statements and decisions, President George W. Bush has both strengthened and clarified Washington’s support to Taiwan’s security and de facto survival. Though the words “whatever it takes” do not apply to a Taiwan deliberately declaring formal independence, they do mean that any unprovoked attack of the island would trigger a U.S. military reaction. The substantial arm package (including eight diesel submarines but excluding the Aegis warships) to Taiwan that Washington approved in April–the largest since 1992–was another signal Bush Jr. intended for Beijing, indicating that he would keep a close eye at the preservation of the balance of military power in the Taiwan Strait. Finally, the EP3 surveillance plane incident has underlined Washington’s will to both maintain a strong security role in the Asia-Pacific region whatever Beijing’s objections, and establish a healthy and stable working relationship with the PRC. In spite of the unbridgeable disagreements between both governments in several well-known areas (human rights, Taiwan, proliferation, to name a few), Secretary of State Colin Powell’s July and George W. Bush’s October visit to Beijing will favor this stabilization. Taiwan and Chen can only benefit from the success of this new approach.

Fully aware of the risks of a longterm deterioration of Sino-American relations, the PRC has ironically showed an unexpected moderation on a number of important issues regarding Taiwan. Its criticism of Washington’s arms sales and of Chen’s and Lee Teng-hui’s private visits to the United States has been calm. Additionally, and despite nationalistic rhetoric, it solved the EP3 incident rather quickly.

Its successful bid to hold the Olympics in 2008 cannot fully explain this change of approach. On the one hand, Beijing is quite conscious of stronger pressure on it from a new U.S. administration, which at least partly considers it a “strategic competitor.” On the other, it is reassured by Taiwan’s growing economic and political fragility, and by Taiwan’s fear of being used as a pawn in a Sino-American rivalry. Changing attitudes on the island have led a larger number of Beijing decisionmakers to think (again) that time may be on their side. They may therefore be prepared to show more flexibility towards Chen’s government.


To be sure, there are a number of obstacles in the way of direct talks between Beijing and Taipei. The former may prefer to wait until the latter takes real action: soften its invesments rules in and open direct sea and/or air links with the mainland. It can also choose to base its decision on the results of the December 1 legislative election and threaten not to re-open direct channels of communications with Taipei if the DPP-Lee Teng-hui coalition initiated in June wins a majority in the parliament, an outcome that cannot be excluded.

But, conversely, Beijing’s cultivated contacts with the Taiwanese opposition have not born much fruit. First, owing to the microscopic size of the New Party, the agreement reached with it is meaningless. Second, though both the PFP and the KMT have accepted to return to the “1992 consensus,” they are very attached to the existence of the ROC. Lien Chan’s July 2001 proposal to establish a confederation between China and Taiwan has not been welcomed by Beijing, which probably sees in it a softer version of Lee’s “special state-to-state relations.” And the numerous visits to China by opposition politicians have also been used by Chen’s government to convey messages and as “confidence-building measures” aimed at relaxing the atmospherics of what is both a too-tense and a too-dormant unofficial relationship.

This is to say that it may be in both China’s and Taiwan’s interest to resume some sort of dialogue. The more likely scenario would be to see technical talks about direct sea or air links starting first, and only later to re-open more political discussions. In that respect, China’s and Taiwan’s coming entry into the WTO may offer Jiang Zemin a good opportunity (and excuse) to initiate fresh bilateral talks on the wide range of trade and economic issues that both governments would willy-nilly have to tackle sooner or later.

Jean-Pierre Cabestan is the director of the French Center for Research on Contemporary China (Hong Kong).