The topic of China and the WTO has been a favorite among the think-tank community in Wash-ington of late. There is broad disagreement on the issue among the experts, with some predicting disaster and some a China that will have an enormous impact on the international economic system. The growth in the flow of capital and know-how from Tai-wan to China often becomes a side issue in these seminars, and, inevitably, leads to discussion the impact that this movement has on cross-strait relations.
Almost all experts consider this growing interaction a positive development. A small number remind us that though there has been impressive movement on the economic side, there has been little movement on the political side. In both cases, any discussion of the topic seems to stop there. If one looks at political developments in Taiwan, however, I believe there is a movement of sorts taking place in cross-strait relations, and if that trend continues, it could make US-Taiwan relations even more complicated than they already are.
Taiwan is not alone in scrambling to cope with the changes in the economic architecture of East Asia brought on by China's active involvement in the international economic community. From South Korea and Japan to the countries of Southeast Asia, there are the common problems of past foreign direct investment being diverted to China, a growing trade deficit with Beijing and the movement to China of those countries' industries.
Despite the uncertainties about China's ability to manage this enormous change and about its intentions if it is able to do so, all the countries of East Asia are having to do what Taiwan is trying to do -- find a niche in the world market and decide how best to stay ahead in it.
All of the economies in the region, including the US, will be affected by these changes. But there the similarities end. No country except Taiwan has to cope with the fact that the country that is generating this change in the region is its huge adversary and one that is challenging its sovereignty.
Since the change of government in Taiwan two years ago, there has been a dramatic growth in the cross-strait economic relationship, but a stalemate in political relations. As is to be expected in a democracy, the media in Taiwan, the political opposition and even members of the business community have tended to describe the relationship as being in a high level of tension -- even though this is not true.
Conventional wisdom points to the coming leadership succession in China and the difficult economic transition caused by entry into the WTO as preoccupying Beijing's attention, and providing the main reason for it to want a low level of tension.
It is more likely, in fact, that the stronger reason is the rapidly expanding economic relationship with Taiwan. China has made quite clear that it welcomes this growing economic relationship because it needs the capital, technology and human talent that Taiwan has to offer, and believes that this trend will increase its influence over Taiwan. A high level of tension would slow it down (although differences on security issues and maintaining Taiwan's diplomatic isolation in the international community will continue).
Clearly Beijing has been changing its strategy with regard to Taiwan. It tried military intimidation in 1996 and failed. In the 2000 election it tried verbal intimidation, and that too failed. Perhaps the strong reaction by the losing parties that followed that election and the advice received from Taiwan sympathizers prompted a wait-and-see posture on China's part, prior to the Legislative Yuan elections last year. But that similarly failed to have the desired effect.
With time comes experience, and there is still some time before the next election. Taiwan's political parties, however, are already maneuvering to gain advantage in the 2004 election.
Perhaps once the parties have decided their election strategies, they may shift the heavy focus on "localization" versus "unification" to include some domestic issues, of which there are many. This could give the appearance at least of a broadening of their platforms for gains at the ballot box.
The lack of consensus in Taiwan on the subject of national identity has made this the most contentious issue here since democratization more than a decade ago. Despite leadership efforts in all the political parties to restrain confrontation on this highly emotional issue, it lies just beneath the surface of most subjects being debated. The difficulty of forging a consensus has been a major obstacle for Taiwan's leadership in developing a negotiating position on cross-strait relations.
Having failed in its overt efforts to intimidate Taiwan's voters, and, in light of the increasingly open debate on national identity in Taiwan, it may be that Beijing will involve itself covertly on a much broader scale in important elections in Taiwan. This will be all the more likely the longer the major focus of elections remains the national identity issue, as elections could then be seen as tantamount to referendums. There are constitutional constraints on holding a formal referendum on this subject, however, and the practical constraints presented by Beijing's opposition and the US' stand against unilateral change in Taiwan's status by either side are well known.
Still, US commitments on security matters and its pledge that no changes in Taiwan's political status are acceptable without the "assent" of the people on Taiwan remain valid.
But the dynamics of cross-strait relations will shift in that the "action" will move entirely to Taiwan, where very vigorous, open debate organized by political parties will continue on a highly emotional subject in which both Beijing and Washington have a deep interest. Given the practical constraints mentioned above, it is highly unlikely that the leaders of Taiwan would unilaterally move to implement any change, whatever the outcome of elections. But this will leave both Beijing and Washington, each for different reasons, with an even more complicated problem than they currently have.
Nat Bellocchi is the former chairman of the American Institute in Taiwan and is now a special adviser to the Liberty Times Group. The views expressed in this article are his own.
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