Northeast Asia Projects
NCAFP Roundtable, Co-sponsored with the Institute
of Taiwan Studies, Chinese Academy of Social Sciences, Beijing,
on U.S.-China Relations and the Taiwan Issue
New York, N. Y.
January 13-15, 2002
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Summary: The Cross-Strait Issue
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PRC Perspectives on Cross-Strait
Issues
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U.S. Perspectives on Cross-Strait
Relations
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PRC Perceptions of U.S.-China Relations
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U. S. Perceptions of U.S.-China
Relations
A. Summary: The Cross-Strait Issue
1. There was general agreement on one point: Economic relations
between China and Taiwan have increased dramatically in the recent
past. Investment in China from Taiwan now totals some $US 60 billion
and some analysts regard the accurate figure as much larger. Approximately
one-half of Taiwan's business establishments are now engaged in
production in China. Cross-strait trade was nearly $US 15 billion
for the first six months of 2001 and represents a major factor in
the Taiwan economy, since some 50 percent of Taiwan's GDP comes
from exports. Taiwan has become the fifth largest trading partner
for the mainland and the mainland has become the second largest
export market for Taiwan.
It is, moreover, likely that cross-strait economic relations will
continue to grow after both Beijing and Taipei adjust to their membership
in the World Trade Organization. Business enterprises on both sides
of the strait will find ways to expand economic relations, in anticipation
of an upturn in the global economy in 2002.
Also, fundamental reasons are dictating the increase in cross-strait
economic relations. Taiwan is in economic trouble. Taiwan's troubles
are part of a broader picture in East Asia which sees a number of
countries in difficulty because they face increased competition
from the PRC with its low labor costs, increased productivity and
quality, and export orientation. This forces the smaller countries
to try to improve their competitive performance.
In this situation, Taiwan is doing what is logical. The Taiwan business
community has put pressure on the Chen Shui-bian government to legalize
what is already its extensive investment on the mainland, to move
production facilities, and to utilize China's abundant labor force.
As a result, a process of economic integration between China and
Taiwan has accelerated despite the fears of many in the Taiwan government
that this economic integration will give the PRC political leverage
over Taiwan.
2. It is not clear, however, that economic integration will lead
to political integration. Chen Shui-bian may win a second term as
president in 2004 and there is no trust between the PRC and Chen.
Moreover, although polls in Taiwan show that a minority favors reunification
at some point, a 70-80 percent majority favor maintaining the status
quo, i.e., de facto independence, and no political leader in Taiwan
could defy this public sentiment. So even if James Soong or someone
from the KMT is elected president in 2004, he will have to be extremely
cautious on this issue.
3. Under present conditions, there is no strong risk of high tension
or conflict between China and Taiwan in the near term. China faces
severe economic problems at home. Many banks are in trouble, many
State-owned enterprises are faltering, there is an East-West gap,
and there are many unsatisfied farmers and many unemployed workers.
China must tackle these problems. Also China has been successful
in building better relations with all of its neighbors and the United
States and any conflict with Taiwan would threaten these relations.
Finally the degree of economic interaction between China and Taiwan
has already grown to such proportions that any hostile actions that
China takes against Taiwan are likely to have an adverse impact
on its own economy.
The risks in cross-strait relations are, therefore, more in the
middle to long-range. For the near future, it is very likely that
the present situation will continue--a political impasse combined
with growing economic relations.
Over the longer term, the question is whether economic integration
will gradually lead to a reduction in political tensions and a resumption
of the cross-strait political dialog. Many analysts on the mainland
seem to be betting that time is on Beijing's side and that growing
economic interaction will eventually force Taiwan into a political
accommodation with the PRC.
B. PRC Perspectives on Cross-Strait Issues
A prominent PRC analyst characterized Chinese "principles"
for dealing with Chen Shui-bian in unusually moderate terms:
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Not to provoke or stir up disputes. The "one
China" principle allows room for
differences.
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Be pragmatic. For example, China favors going
ahead with the "three links."
There has been an average of $US 30 billion in trade over the
last three years. Vice
Premier Qian Qichen has said that links could be established
by talks between
companies on each side of the strait. Ships need not fly any
flag.
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Aim for a policy that is win-win for both sides.
Promoting trade is a good example
of this.
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The goal is stability and development. The aim
of the PRC's "one China" policy is
to keep the status quo.
The PRC analyst concluded by reiterating that China wants to
deal with Taiwan in a very realistic and pragmatic way. Another
PRC analyst opined that the status quo was unstable. He feared
that Chen was engaging in covert moves toward independence.
Although generally moderate in his characterization of PRC policy
on cross-strait issues, the first PRC analyst had three caveats:
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In the United States, the "one China"
principle is "hollowing out" and the anti-"one
China" voices are getting stronger. It would be "dangerous"
if the U.S. "one China" policy simply becomes lip
service.
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There is a view in the United States that because
Taiwan is a democracy, it can do
whatever it wants and there is no need for the United States
to interfere. But
democracies cannot promote "separatism." It is good
for the United States to listen
to the Taiwanese people, but it should also listen to the PRC.
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There are three major issues for China in this
century and "peaceful reunification"
is on the top of the list.
According to another PRC analyst, the PRC is making a concerted
effort to stabilize cross-strait relations and to find a way acceptable
to both sides that is consistent with the one China principle. He
cited a speech by Vice Premier Qian Qichen, made on Sept. 10, 2001,
in which Qian said that the PRC was ready to be patient as long
as Taiwan did not rush to independence and accepted the one China
principle. He also cited a speech of October 29, 2001, in which
President Jiang Zemin said that a unified China in the future would
have a new title. These statements, the analyst went on, showed
that China was ready to be flexible in interpreting one China.
The same analyst said that the December 2001 legislative elections
in Taiwan did not fundamentally change PRC-Taiwan relations, but
there is no reason to worry. The present pattern will continue for
some time. China will continue its effort to solve the Taiwan problem
through peaceful reunification on the basis of its "one China,
two systems"
formula. But China will be flexible in interpreting those principles.
China will also try to resume the SEF-ARATS dialogue "under
the right conditions." China, he said, wants to concentrate
on its economic modernization and does not want war; therefore,
it is emphasizing peaceful reunification. Also there is not much
room for Taiwan to become independent, because the overwhelming
majority of the international community favors the one China principle.
Also the closer economic relations between the two sides of the
strait will eventually translate into closer political relations.
China was moving toward greater democracy, diversity, and tolerance.
The political impact of WTO entry would be as great as Deng's decision
on reform and opening. He conceded that his government had done
a poor job of reaching out to the people of Taiwan. Most of the
young people on Taiwan favor integration with the mainland, because
they see good opportunities for pursuing their careers on the mainland.
The analyst concluded by holding out three possible scenarios for
cross-strait relations. First, the two sides could come to the negotiating
table and begin the long process of reunification. The process could
last a long time, but there must be an end in sight. Second, the
political stalemate could continue indefinitely which would mean
dangers and uncertainties. Third, there will be a conflict.
According to another PRC analyst, the December elections have further
complicated the already tense and difficult cross-strait relations.
As a result of the elections, the DPP is facing conflicting pressures.
On the one hand, the DPP's improved position in the legislature
has led the hard liners inside the DPP to believe that there is
no need to moderate the party's "independence" platform.
In addition, Lee Teng-hui will be an added stumbling block to the
DPP moderates who attempt to follow the "middle road."
On the other hand, the DPP authorities are facing increasing pressures
from the public in general and the business circles in particular
to lessen restriction on trade relations with the mainland.
In the face of these conflicting pressures, Chen Shui-bian is likely
to harden his policies politically by refusing to accept the one
China principle and the 1992 consensus. But he is likely to pay
lip service to improving cross-strait relations in order to "mislead
public and international opinion."
The mainland policy with regard to cross-strait relations will basically
remain the same: peaceful reunification, the one country-two systems
formula, and the 8-point proposal by Jiang Zemin. And so long as
the DPP refuses to accept the 1992 consensus, the mainland will
not deal with the DPP at official levels. If, however, the DPP comes
back to the 1992 Consensus, the mainland will immediately deal with
it, resume cross-strait dialogue immediately, and be willing to
discuss everything with the DPP, including military matters.
Another PRC analyst expressed the view that Taiwan lacks the political
will to engage in dialogue. It would be a waste of time to talk
just for the sake of talking, exchanging the same old arguments.
Several PRC analysts warned against increased arms sales to Taiwan,
which make the Taiwan authorities less willing to negotiate. They
expressed particular concern over the proposed sale of submarines.
C. U.S. Perspectives on Cross-Strait Relations
According to one U.S. analyst, the United States has accepted Taiwan
as a de facto separate political entity seeking to uphold the principles
of democracy and a market economy. The image of Taiwan is good in
America, albeit, not of deep concern for most Americans. Nevertheless,
policies perceived to be those of abandonment would provoke an instant
sharply negative response at many levels. The repeated assertion
that any declaration of independence by Taiwan would not be recognized
or supported, and that any use of force by China would be regarded
with the utmost gravity is likely to remain U.S. policy. Further,
the thesis that any resolution must have the support of the Taiwan
people is strongly in accord with American principles, and not likely
to be altered. Thus, neither a major softening nor a substantial
hardening of the present U.S. position on the Taiwan issue appears
feasible or desirable at this time.
The analyst also said that the United States cannot avoid involvement
in the Taiwan issue given history and the contemporary scene. But
its involvement should be such as to encourage by every means possible
a peaceful resolution of the dispute, and have the concurrence of
other Asia-Pacific nations, as well as, hopefully, both China and
Taiwan.
Finally, the U.S. analyst discussed the proposition that economic
integration would lead to political integration. He said that this
now appeared to be the PRC perception and that this was healthy,
if it meant that the PRC would have some degree of patience. But
the analyst questioned the validity of the proposition. He did not
believe that politics would inevitably follow economics. And he,
along with several other U.S. analysts, wondered if there was any
willingness in the PRC to think about formulas that set the sovereignty
issue aside for the time being so as to allow a reopening of the
cross-strait dialogue.
Another U.S. analyst made the point that although China needs to
reassess its Taiwan policy, and to reach out to the people of Taiwan,
it is doubtful that this will happen this year. The coming year
is a political year for the PRC because of the upcoming 16th Party
Congress and the impending leadership changes. In such a year, the
normally risk-averse Chinese leadership will be even more risk-averse
than usual. Thus, the political stalemate is likely to continue.
D. PRC Perceptions of U.S.-China Relations
One influential PRC analyst said that the plane incident last year
had threatened to derail U.S.-China relations, but that since the
visits of Secretary of State Colin L. Powell to China and the Chinese
Foreign Minister to Washington, things were better. Also the PRC
was impressed that President George W. Bush came to the APEC meeting
in Shanghai last October, despite the terrorist attacks on the United
States, and that Bush said at that time that he considered China
not an enemy of the United States, but a friend. Both sides, he
went on, have agreed to develop a "constructive and cooperative"
relationship which should lead to a new era in U.S.-China relations.
Another PRC analyst summarized the discussion by saying that all
the participants shared a "cautious optimism" because
the current situation is much better than it was a year ago, even
though problems are still there. He said that the most difficult
issue in U.S. China relations remains Taiwan, but that if we look
at that issue in a broader context, it is possible to be more positive.
Yet another PRC analyst summarized the discussion by saying that
U.S.-China relations have improved, especially after September 11,
2001, with the cooperation between the PRC and the U.S. on the war
against terrorism. There are, however, still several differences.
The Chinese side is concerned about the Taiwan issue, especially
U.S. arms sales to Taiwan and the U.S. military relationship with
Taiwan. China is also concerned about possible U.S. military actions
in the post-Afghanistan anti-terrorist campaign. The U.S. side,
he went on, is concerned about the PRC position regarding the U.S.
military presence in the Asia-Pacific region, about PRC policies
on non-proliferation and missile defense, and about impending Chinese
leadership changes. He concluded by saying that with regard to the
Taiwan issue, both sides prefer stability.
E. U. S. Perceptions of U.S.-China Relations
Several American analysts also offered cautiously optimistic assessments
of U.S.-PRC relations. One said that leaders on both sides have,
at least since the 1970s, always recognized the importance and the
benefits of good U.S.-China relations and that, without exception,
the top leaders have seen some degree of adjustment as in their
interests. He predicted that although there will be periodic crises
in the relationship, leaders will seek relations that, on balance,
are positive.
A second American analyst said that there is both a floor and a
ceiling to U.S.-China relations and that, after Sept. 11, there
exists an opportunity for an improvement in those relations, but
that it is unlikely a fundamental change will take place. He said
that the two countries should have a broad agenda befitting two
great powers.
A third American analyst said that, after Sept. 11, the United States
has been preoccupied with failed states, not rising states, and
that the "China threat" school in the United States would
lose out to the "real threat" school. He said also that
the United States and China are potential partners in the anti-terrorism
campaign, and that intelligence sharing is already outstanding.
He, too, hopes that President Bush, in his forthcoming visit to
China, will pursue a broader strategic dialogue.
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