Facing the Challenges of Cross-Strait Relations in 2012

The Republic of China’s Mainland Policy: Piloting Cross-Strait Relations to Create a Peaceful Environment for Benign Interaction between the Two Sides of the Taiwan Strait

Shin-yuan Lai, minister of the Mainland Affairs Council of the Republic of China (ROC), discussed the accomplishments of Taiwan’s policy toward Mainland China and how a balanced policy can promote peaceful relations across the strait.

A Successful Balanced Policy

Lai began by arguing that the ROC, under President Ma Ying-jeou, has adopted a successful policy toward Mainland China. This has been accomplished through interacting “benignly on an equal and dignified footing” and “putting aside [the] sovereignty dispute,” while at the same time not compromising democracy for the sake of progress in cross-strait relations. She argued that the interaction and dialogue between the two sides over the past three years has promoted peace, strengthened Taiwan’s democracy, and provided an example of positive cooperation to the rest of the world.

Status Quo has Enabled Stable Development

The ROC’s policy toward the mainland has helped to secure a stable external environment that has been conducive to Taiwan’s economic development, Lai said. Specifically, she suggested that the Ma administration’s determination to uphold the status quo of “no unification, no independence, and no use of force” has provided the foundation for stability. She acknowledged that differences remain among the parties in Taiwan and that the will of the people must be upheld, but noted that “close to 90 percent of Taiwan’s people support maintaining the status quo in all forms.”

Institutionalizing Cross-Strait Negotiations

Lai lauded the Ma administration’s efforts to “institutionalize” cross-strait negotiations. The regularized interaction of Mainland China and Taiwan officials has helped to establish orderly relations between the two sides and, over time, will contribute to building greater mutual trust. In particular, Lai suggested that the signing of various agreements such as the Economic Cooperation Framework Agreement (ECFA) “has exerted a push-pull effect, pushing the advancement of cross-strait interaction, and at the same time pulling unregulated aspects of cross-strait dealings onto a sound track.”

The “Peace Dividend,” Cultural Exchange, and International Space

The “peace dividend” has been the greatest outcome of the ROC’s mainland policy under Ma, argued Lai. Intercultural exchange and trade have blossomed, as evidenced by increased tourist flows and trade under the early harvest provisions of ECFA, and Taiwan has become more economically competitive. Moreover, Taiwan’s expanding international economic cooperation, its participation in international organizations such as the World Health Assembly, and the growing number of countries granting visa-free status to Taiwan’s citizens demonstrate the ROC’s policy successes on a global level.

Taiwan as a Catalyst for Mainland China’s Growth and Reform

Lai noted the challenges that Mainland China faces as it strives to reform its political system, deal with its growing gap between the rich and the poor, and develop its civil society. She argued that Taiwan has helped facilitate Mainland China’s global trade and economic growth, and that Taiwan’s democratic soft power is a force for good in cross-strait relations.

Taiwan’s Strategic Significance and National Security Needs

Taiwan is of great strategic importance to the Asia-Pacific region, Lai said, and regional allies—particularly the United States—need to join with Taiwan to defend its interests. Since the mainland has not renounced the use of force toward Taiwan, the country must acquire “essential defensive weapons” to bolster its case in negotiations with the mainland. She suggested that such actions would reinforce Ma’s three national security principles: institutionalizing cross-strait rapprochement, enhancing Taiwan’s contributions to international participation, and aligning defense with diplomacy.

Arthur Ding of National Chengchi University, Wu Shiouh-Guang from National Taipei University, and Smith College’s Steven Goldstein discussed the future of cross-strait relations and the challenges faced by all sides in making progress and maintaining stability. The Stimson Center’s Alan Romberg moderated, and Cynthia Watson of the National War College provided commentary.

No More Easy Tasks

Ding noted that most of the easy economic issues between Taiwan and Mainland China have already been resolved. What remains, he said, are difficult economic and political matters. Domestic political pressure will ensure that even if Taiwanese President Ma Ying-jeou is re-elected, he will have little room to maneuver and will be unable to make any major concessions to China, despite China’s high aspirations.

Supporting President Ma

Wu said that there was reason to be optimistic about the potential for stability and progress in cross-strait relations, and that both the United States and China could take steps to ensure stability and help Taiwan continue its rapprochement with the mainland.

• Continued Accommodation: Wu argued that continued accommodation might not weaken Taiwan’s position, but rather buy it time. He added that a change in Taiwan’s government could create a tremendous backlash from China.


• U.S.-China Support: China and the United States should support Ma’s current policy, Wu said. The United States should do so by accelerating arms sales and helping Taiwan develop an indigenous high-tech military industry. This will strengthen Ma’s position, make his re-election more likely, and thus help stabilize the relationship.

Unstable Status Quo

Goldstein explained that there is significant uncertainty over the current status of cross-strait relations, which makes it difficult to move forward. He highlighted two fundamental and contradictory observations that illustrate this, as well as his own conclusion about the situation:

• Shifting Fundamentals: The first observation argues that the foundations for past stability are shifting. Some observers view this as an opportunity to reduce the importance of the Taiwan issue in China. Others see it as potentially dangerous, because they view Taiwan as a beacon of democratic values that is crucial to U.S. interests or an indicator of American commitment in Asia.


• Enhanced Fundamentals: The second observation is that the foundations for past stability have not shifted but rather have been enhanced. Some observers argue there has been an institutionalization of the 1992 Consensus and an institutionalization of stability.


• Stable Fundamentals, but a False Consensus: Goldstein, however, argued that there is a third option: fundamentals are not shifting, but that cross-strait talks are based on a shared belief in a consensus on issues that, in fact, does not exist. This false consensus has facilitated contact, but has no real substance. The result is a status quo where some people feel that the policies currently being pursued endanger their long-term objectives. The challenge, Goldstein said, will be to get past this fundamental condition that has a greater chance of deteriorating than it does of improving.

Short-Term Thinking

Watson argued that China, the United States, and Taiwan all seem to be focusing on short-term priorities rather than long-term issues. Potential leadership changes in 2012 could potentially bring weakened administrations to power in all three countries, which would only increase the tentativeness of each side.

Yen Chen-Shen of National Chengchi University, Edward I-Hsin Chen of Tamkang University, Bonnie Glaser of the Center for Strategic and International Studies, and Wang Jianwei of the University of Macau discussed the trilateral dynamics of the relationships among China, Taiwan, and the United States. Carnegie’s Douglas Paal moderated and Michael Swaine provided commentary.

Taiwan’s Rising Fear of Abandonment

• U.S. Strategy and Taiwan: There is increasing support in the United States for ‘abandoning Taiwan’, according to Chen. He cited Charles Glaser’s article on this topic in Foreign Affairs, while acknowledging Paal’s rebuttal to it. Most people in Taiwan do not feel that Taiwan is a part of America’s strategic architecture, but it will not help cross-strait relations if the United States abandons Taiwan, Chen asserted.


• Relative Levels of Support: Swaine argued that in the United States, abandonment of Taiwan is “unthinkable;” rather, the question is about relative levels of support. Paal noted that if Taiwan feels like it keeps being abandoned, this may be a sign that it should reexamine its policies. Glaser added that the status-quo policy serves U.S. interests, so there is unlikely to be a change in future Republican or Democratic administrations.


• Fears of Peaceful Resolution: Swaine also noted that both Chen and Wang assumed that the United States fears peaceful reunification between Mainland China and Taiwan or opposes a peaceful resolution of the Taiwan issue because it feels such outcomes would threaten the U.S. strategic position in the region. However, Swaine argued that such a view is a “fundamentally faulty assumption.”

Current U.S. Policy and Arms Sales to Taiwan

• Effects of U.S. Policy: Current U.S. policy, Chen claimed, is hurting the Republic of China’s interests even more than the rise of the abandonment school, largely because of U.S. reluctance to negotiate F-16 C/D sales to Taiwan. He also suggested that placing Taiwan in the same paragraph as the “core interests” commitment in the U.S.-China 2nd Joint Statement was a major blow to Taiwan, though the phrase “core interests” was removed in the 3rd Joint Statement.


• Arms Sales to Taiwan Likely: Glaser stated that there is likely to be another U.S. arms sale to Taiwan soon, but China is prepared to contain the damage to U.S.-China relations, as long as the sale does not cross certain red lines. Moreover, such sales are unlikely to harm Mainland China-Taiwan relations.


• Reevaluate Cross-Strait Policies: Swaine acknowledged that while perhaps the United States needs to reevaluate its arms sales policy, the People’s Republic of China needs to reevaluate its cross-strait policies, since its continued military buildup may eventually provoke U.S. arms sales that cross red lines.

The Implications of Taiwan’s Domestic Politics

• Political Talks Unlikely: Even if he is reelected, Taiwanese President Ma Ying-jeou is unlikely to pursue political negotiations with China, Chen argued. He said Taiwan’s people are not psychologically prepared for such negotiations, no consensus exists on the issue domestically, and U.S. and international support is insufficient, he added.


• What if the DPP wins?: Even if Democratic Progressive Party candidate Tsai Ying-wen were elected in Taiwan, Glaser explained it is unlikely that a DPP administration would take actions similar to Chen Shui-bian, the previous DPP president, since it could cause the United States and Mainland China to come together in a way that would not benefit Taiwan’s interests.


• Taiwan’s Election and Mainland Policy: Within the People’s Republic of China, some scholars argue that Chinese President Hu Jintao has been too soft on Taiwan and that Ma is actually seeking a “peaceful separation,” while others argue that the mainland should be more flexible, explained Glaser. She warned that a DPP victory, especially if unexpected, could strengthen the PRC hardliners, affect PRC personnel decisions, and even lead to a PRC deadline or a reaffirmation of the 2000 Taiwan white paper, which outlined situations under which the PRC would use force against Taiwan. However, the most likely response would be for the mainland to appeal to Taiwan’s people in an effort to separate them from the DPP government by 2016.

Positive Trends and Potential Complications in Trilateral Relations

Wang observed that the trilateral Beijing-Taipei-Washington relationship shows positive trends.

1. It is much less of a zero-sum relationship than previously, as one side is able to maintain positive relations with both of the others;


2. The U.S. factor in cross-strait relations matters less than in the past;


3. Beijing has tried to insulate cross-strait relations from U.S. arms sales.

Despite these positive trends, Wang identified four areas of potential complications: 

1. If Ma is reelected but does not pursue political negotiations with Beijing, it could strengthen PRC hardliners, especially after Hu leaves office in October 2012.


2. Ma may lose reelection to the DPP’s Tsai, who does not support the 1992 Consensus.


3. U.S. arms sales to Taiwan are a time bomb, though the PRC will try to prevent the issue from damaging U.S.-China relations as long as the sales do not cross certain red lines.


4. Changes in the Asia-Pacific strategic environment.

Taiwan’s Need for Status-Quo Consistency

In discussing the “numerology” of cross-strait relations, Yen pointed out that Taiwan, Mainland China, and the United States have all used numbers to describe their policies toward cross-strait issues. He mentioned examples such as Ma’s three nos, then-President Bill Clinton’s three nos, Hu’s four absolute nos, and the “One China” policy itself.

However, Yen argued that Mainland China has historically been more consistent in its use of numbers, and that Taiwan needs to be more consistent in its numbers and not try to change the status quo, rather than presenting a new set of numbered principles with every new administration.

Tsai Chung-Min of National Chengchi University, Chen Chih-Jou of Academia Sinica, Quansheng Zhao of American University, and Hua Shiping of the University of Louisville analyzed the internal dynamics of Mainland China and how they might impact cross-strait relations. Michael McDevitt of the Center for Naval Analyses moderated, and the National War College’s Bernard Cole provided commentary.

China’s Growing Economic Challenges

China is facing an array of economic challenges, especially inflation, which has been exacerbated by droughts in northern China and frost in eastern China. Tsai explained that China has enlarged the state’s presence in the market to confront these challenges. However, such a hybrid state-owned/private model poses a threat to China’s continued economic vibrancy.

Popular Protests in China

The number of popular protests in China has grown in recent years. Chen explained that most of these protests are not organized movements based in civil society, but rather more spontaneous objections to specific grievances. Based on an analysis of a database of protests covering 2001 to 2010, compiled from open-source reports, Chen reported that rural protests tended to be more violent (55 percent) than urban protests (30 percent), and local government responses to protests vary widely.

Internal PRC Politics and Cross-Strait Relations

Zhao observed that arms sales are of greater symbolic significance than actual military significance. He noted that Beijing is making an effort to appear more flexible, while remaining cautious, on issues related to Taiwan’s international representation. Cole noted that domestic political issues weigh more heavily than cross-strait issues in the minds of the PRC leadership. He also observed that there is no military balance across the strait without major U.S. involvement. The real issue is political, economic, and social balance.

China’s Political Culture

According to Hua, China has demonstrated that it can be quite accommodating in territorial disputes with border countries but not on “internal issues” like Taiwan, Hong Kong, and Macao. He also noted that the development of the rule of law in China has been heavily influenced by the United States, a source of concern to PRC leftists. At least seventeen of the 20 major pieces of PRC legislation borrow directly from U.S. legislation.

The Role of Nationalism in the PRC

Nationalism has become a substitute for Marxism as a unifying force, Hua contended. However, he suggested that such nationalism comes from Chinese minds rather than hearts, and thus is less deeply rooted. He also stated that since it is now focused on Japan, Taiwan, and Tibet, nationalism in China is not concentrated as heavily on Taiwan.

Chan Man-Jung of the Taiwan Institute of Economic Research, Huang Kwei-Bo of National Chengchi University, Michael Yahuda of George Washington University, and Jin Canrong of Renmin University discussed Asian regional economic integration and the Asia-Pacific context of Beijing-Taipei relations. Eugene Martin of the United States Institute of Peace moderated, and the Brookings Institution’s Jonathan Pollack provided commentary.

Cross-Strait ECFA a Step Forward

The cross-strait Economic Cooperation Framework Agreement (ECFA), while imperfect, is a positive step for Taiwan’s economy and regional economic integration, argued Chan. In particular, the ECFA has rejuvenated economic negotiations among China, Japan, and Korea, which had stalled in recent years. Huang suggested that the “ECFA can be a touchstone for the success of Asia-Pacific economic cooperation and integration.”

APEC vs. ASEAN

Asian regional economic integration has primarily followed two models: the Association of Southeast Asian Nations (ASEAN) and the Asia Pacific Economic Cooperation forum (APEC), explained Chan. Taiwan has been an active participant in APEC initiatives, Chan noted. Huang contended that ASEAN, in contrast, is not an ideal vehicle for regional economic integration, since membership in ASEAN initiatives is restricted to states, and ASEAN members do not recognize Taiwan as a sovereign state.

Asia-Pacific Region as Taiwan’s Natural Space

Taiwan’s natural international space is the Asia-Pacific region, posited Yahuda. However, Taiwan has tended to focus its efforts to gain official recognition on international organizations. Yahuda also noted that Taiwan is not of major strategic significance to the United States, but it is more important to Japan and South Korea. Thus, he suggested Taiwan should do more to foster its relationships with those countries.

China’s Asia-Pacific Hierarchy

China prioritizes different subregions within the Asia-Pacific according to a four-level hierarchy, according to Jin. These include, in order of importance: Northeast Asia, Southeast Asia, Central Asia, and South Asia. Northeast Asia is the most significant largely because of Taiwan, but also the Korean Peninsula and Japan. Jin argued that China wishes to press forward first with economic cooperation and then with security cooperation.