The past two years have seen an almost unbelievable change in the cross-strait relationship. One wonders if the voters of Taiwan, who will determine its future, are sufficiently aware of the implications of these changes. In the US as well, what they mean for Taiwan-American relations is still far from clear.
On the China side, there has been some change in tone, but none in fundamentals. The "one China" principle has been downplayed, but not removed. It is brought up occasionally when correspondents ask about it or when legislators from Taiwan visit and raise the issue. For the time being, China seems to be pursuing ways to get around obstacles -- which often they themselves establish -- to encourage the exodus of economic talent and capital from Taiwan.
Different expressions of policies on this subject are still conveyed to the international community, however. The recent warning that China would be unhappy if other countries establish free trade agreements with Taiwan is one example. The steel dispute between China, South Korea and Taiwan is being addressed in Tokyo and Seoul under WTO rules, but not with Taipei (though Taiwan's steel producers have reportedly been talking to Beijing on their own).
In Taiwan, the change in the cross-strait relationship is far more pervasive and profound. The rationale for this rapidly expanding economic relationship -- that as a free-market economy Taiwan has no choice but to liberalize the rules, that as a WTO member it is committed to do so and that its participation in a globalized economy must include trading with China -- is defensible. What is less clear is the modest reaction in Taiwan to China's efforts to isolate Taipei, even in economic matters.
While this relatively modest public reaction is perplexing, so is the small amount of space in Tai-wan's media given to the problems China faces -- such as labor unrest, difficulties with the Falun Gong, the rapidly growing HIV problem and the weak system of justice -- when compared to the interest shown abroad. The general public does not seem to be exposed to the implications of these matters for Taiwan.
Since the Hong Kong handover in 1997, problems in the former colony have not received much attention. Changes to the Hong Kong government's structure have generated international scrutiny as this kind of change clearly was not intended in the handover agreement. That alone should give pause to those in Taiwan who might have a benign view of what "one country, two systems" means.
But Hong Kong has another lesson as well. For years it has acted as a go-between for the world and China. That role is diminishing as Shanghai and other Chinese ports expand. Shanghai is also overtaking Hong Kong's capabilities as a financial and service center. At the same time, the territory's economy has deteriorated. Experts there believe a very difficult and uncertain restructuring of the economy is needed.
Here, too, there seems to be much more public attention given in the US to Hong Kong's predicament than in Taiwan. Yet the two lessons -- the political movement away from more democracy under "one country, two systems" and the negative impact of China's economic dominance of Hong Kong's economy -- should be of critical importance for the voters of Taiwan.
But the process of a well-organized change to gradually adjust Taiwan's economy to the new reality through a program like the recently announced six-year plan seems destined to be more like a frantic catch-up process. Its success may come to depend on a slower growth rate in China if it is to get ahead of the advances being made there.
In the meantime, a widening gate to China's economy and the expansion of Beijing's involvement in Taiwan's political arena puts ever stronger pressure on the government to move in the opposite direction.
Already, Taiwan has lifted some important restraints on cross-strait trade. With this has come problems that are likely to test its will to protect its freedom and sovereignty. High-ranking government and private-sector officials are able to join Chinese institutions or companies. Defections have taken place that have seen the passing of sensitive intelligence to Beijing. The transfer of technology in the private sector occurs but companies transferring the technology may not be licensed to do so. The media's inability to discipline itself when dealing with national security issues is also worrisome.
There is also the growing number of legislators who travel frequently to China, seeking news-worthy encounters with Chinese officials or to develop a constituency among the Taiwanese working in China.
The extent to which government listens to the complaints of its citizens in China and makes efforts to accommodate them invites the expectation that the government will help them. Other free-market countries, except in cases of discrimination, view business success or failure abroad as a business problem, not a government responsibility.
There also seems to be greater emphasis in public discussions in Taiwan on how much to relax rules that have inhibited cross-strait commerce rather than talk on how to shape the rules that would better balance both security and economic interests. There have also been trial balloons put out on such issues as having cross-strait commerce be considered special rather than either internal or international in nature -- a decision that would have implications for foreign commerce and security interests. Another is relaxing the rules regarding Tai-wan business residents in China, adding to what seems greater government responsibility for them.
Uncertainty over where Tai-wan is going and over how well-informed voters are, inevitably, will have an impact abroad as well as domestically. Is Taiwan going the way of Hong Kong? When one observes Taiwan's increasing economic dependence on China, despite Beijing's domestic problems and its behavior toward Taiwan through its international containment policy, such a question is inevitable.
Is the confidence in the people's will to hold on to demo-cracy slipping? Their very robust participation in politics says otherwise. Can Taiwan maintain its position as a world-class economy on its own? It has that potential. But from abroad, the more the economies of Hong Kong and Taiwan are integrated into a Greater China economy, the more likely other concerns will grow in some areas of the US-Taiwan relationship. Political stability, technology transfer, security, among other matters, would naturally need attention.
The voters of Taiwan, as these important changes are taking place, will have a lot to ponder.
Nat Bellocchi is 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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