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Is `economic one china' inevitable?

On Feb. 21, 1972, US president Richard Nixon traveled to China. A week later, the Shanghai Communique was announced in the city after whose name the agreement was named. In this document, the US stated: "All Chinese on either side of the Taiwan Strait maintain there is but one China and that Taiwan is a part of China. The United States government does not challenge that position."

Nixon thus found a legitimate excuse to abandon Taiwan for China, and he was right: Beijing stated that Taiwan is a part of China while Taipei said the mainland is within the territory of the Republic of China. The idea of "One China" was used by both Taipei and Beijing at that time.

Unfortunately this formulation caused a misunderstanding among our allies and deprived Taiwan of its rightful place on the international stage.

Thirty-four years later, Beijing and Taiwan have a new common phrase: "economic one China." Beijing's policy of using economics to hasten unification is obviously an economic "one China" policy, but the more subtle point is that Taiwan is singing the same tune, with calls for economic integration and a common market. With "economic one China," Beijing and Taipei are once again pursuing a common goal.

The opposition, and the Chinese Nationalist Party (KMT) in particular, has pushed for this longest and hardest. A few days ago, 44 pan-blue legislators suggested amending to Article 34 of the Act Governing Relations between Peoples of the Taiwan Area and the Mainland Area (兩岸人民關係條例). The amendment clearly states that the government may not prohibit any products or business items that have already entered mass production in China. The KMT has further suggested a referendum on direct cross-strait flights. The goal is to complement Beijing's "economic one China" and fulfill the ultimate "one China" goal.

But if the KMT's efforts do not receive the government's cooperation and permission, it will be impossible for it to build the necessary momentum to bind Taiwan to China through this means.

On the surface, the government opposes the pan-blue camp's amendment proposal and does not support realizing direct flights through legislation.

However, it does not oppose the pan-blue camp's goals of direct flights, allowing Taiwanese banks to invest in China and raising the legal limit on investment in China. At an economic development conference last year, the government brought up each of those three issues. It was abundantly clear that the government is hoping to become more involved in China's economic rise and to accomplishing economic integration with it.

At the end of the conference, a few Democratic Progressive Party (DPP) legislators -- mostly from the former New Tide faction -- signed a petition calling for relaxed restrictions on China-bound investments and strongly defending economic policy aiming at integration with China.

Taiwan is a democracy with a free market economy, and business leaders have a greater chance to participate in and influence policymaking. This is especially true for China-based Taiwanese businesspeople and foreign investors in Taiwan who have teamed up with pro-China academics and media.

The increase in China-bound investments has already led to the creation of irresistible pressure groups with tight control over Taiwan's economic debate and public opinion. The call to make Taiwan a stepping stone to the world has disappeared in a puff of smoke. During the seven years the DPP has been in power, top policy makers have either talked about the imperative need for direct flights and how further deregulation is unavoidable, or praised the contributions of China-based Taiwanese businesspeople to China and affirmed their support for the go west policy.

A few days ago in Taichung, President Chen Shui-bian (陳水扁) said Taichung would not miss out on cross-strait direct flights. This seemed to mean that direct flights are already are in the works. With this official approach, it would be difficult for business not to go to China. Chinese production grows annually and more than a million Taiwanese are long-term residents in China. Cross-strait economic integration is closer than any of the bilateral relationships between France, Spain, Germany and Poland -- so much so that "economic one China" can no longer be used in the future tense.

This has influenced the wording regarding direct flights in the latest annual white paper from the American Chamber of Commerce in Taipei, which states that since direct flights are necessary, why not "just do it," as the commercial goes? That's a pretty natural and logical response.

Diplomacy is the extension of domestic policy. In 1972, Taiwan's "one China" policy tempted Nixon and resulted in the joint Sino-US Shanghai Communique. In the last few years, "economic one China" has been on the lips of both the government and the opposition and it is becoming obvious that this once again is leading to another misunderstanding on the part of the US.

Autumn begins with one falling leaf; the American Institute in Taiwan's misinterpretation of Taiwan's economic future is only a first sign.

Huang Tien-lin is a former national policy adviser to the president.

Translated by Jason Cox and Perry Svensson
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