In the wake of President Chen Shui-bian's (
Future historians will probably agree that Taiwan's greatest problem in the last two decades has been its absolute inability to come up with a rational policy to deal with China. The reason why no such policy was ever forthcoming has a lot to do with the ambivalence of the Chinese Nationalist Party (KMT), which governed for the vast majority of this period, toward Taiwan.
Much of this ambivalence was the result of the divide in the KMT between an old guard which loathed Taiwan independence as "anti-Chinese" and an affront to their dreams of a powerful China seeking its place in the world, and the Taiwan-firsters like former president and KMT chairman Lee Teng-hui (
But there has also been miscalculation. Originally, investment in China was allowed simply because it was happening anyway and nobody had the nerve to start prosecuting businessmen for investing there. Once China had tasted the fruits of this investment, so the thinking went, it would be willing to make concessions for such things as direct links. Such thinking, however, was wrong.
What happened is that Taiwan's economy has become a virtual hostage to China. Lee tried to stop this rot in 1996 with his "no haste, be patient" policy. But as the economy weakened after the 2000 election, a panicky Chen actually abandoned Lee's policy, putting the concerns of a heavily China-invested business elite over national security and the electorate's economic well-being. Chen has continued to make concessions to China and has just as continuously been rebuffed in everything he has done, while Taiwan's position has weakened with each passing month.
How can this rot be stopped? Only the Taiwan Solidarity Union (TSU) seems to be asking this question. This week it released a legislative election campaign manifesto which contained some good ideas. Plugging the drain of capital outflow to China is of course vital, as is beefing up the military. A wholesale shift in the values of the education system toward the promotion of Taiwanese consciousness is also needed.
But what really impresses is that while everyone complains about Taiwan being bullied, the TSU has given thought to what to do about it. The suggestion that all Chinese visiting Taiwan should have to take an oath recognizing that Taiwan is not part of China is exactly the kind of niggling irritant that is needed to show that two can play China's game.
It is not that Taiwan wants to promote conflict. It is quite willing to work with Beijing if Beijing is reasonable. But when Beijing shows no signs of changing its attitude, it is perhaps time to replace the kid gloves and the outstretched hand with a mailed fist.
The conflict in the Middle East has been disrupting financial markets, raising concerns about rising inflationary pressures and global economic growth. One market that some investors are particularly worried about has not been heavily covered in the news: the private credit market. Even before the joint US-Israeli attacks on Iran on Feb. 28, global capital markets had faced growing structural pressure — the deteriorating funding conditions in the private credit market. The private credit market is where companies borrow funds directly from nonbank financial institutions such as asset management companies, insurance companies and private lending platforms. Its popularity has risen since
The Donald Trump administration’s approach to China broadly, and to cross-Strait relations in particular, remains a conundrum. The 2025 US National Security Strategy prioritized the defense of Taiwan in a way that surprised some observers of the Trump administration: “Deterring a conflict over Taiwan, ideally by preserving military overmatch, is a priority.” Two months later, Taiwan went entirely unmentioned in the US National Defense Strategy, as did military overmatch vis-a-vis China, giving renewed cause for concern. How to interpret these varying statements remains an open question. In both documents, the Indo-Pacific is listed as a second priority behind homeland defense and
In an op-ed published in Foreign Affairs on Tuesday, Chinese Nationalist Party (KMT) Chairwoman Cheng Li-wun (鄭麗文) said that Taiwan should not have to choose between aligning with Beijing or Washington, and advocated for cooperation with Beijing under the so-called “1992 consensus” as a form of “strategic ambiguity.” However, Cheng has either misunderstood the geopolitical reality and chosen appeasement, or is trying to fool an international audience with her doublespeak; nonetheless, it risks sending the wrong message to Taiwan’s democratic allies and partners. Cheng stressed that “Taiwan does not have to choose,” as while Beijing and Washington compete, Taiwan is strongest when
US Secretary of the Treasury Scott Bessent and Chinese Vice Premier He Lifeng (何立峰) are expected to meet this month in Paris to prepare for a meeting between US President Donald Trump and Chinese President Xi Jinping (習近平). According to media reports, the two sides would discuss issues such as the potential purchase of Boeing aircraft by China, increasing imports of US soybeans and the latest impacts of Trump’s reciprocal tariffs. However, recent US military action against Iran has added uncertainty to the Trump-Xi summit. Chinese Minister of Foreign Affairs Wang Yi (王毅) called the joint US-Israeli airstrikes and the