Securing Economic Relations Across the Taiwan Straits: New challenges and opportunities

Cross-Taiwan Straits economic interaction is a political as well as an economic issue. General trends of economic interdependence and globalization that are weakening the role of the nation state should promote a focus of shared 'civilian governance' between Taiwan and mainland China. WTO entry will provide opportunities as well as challenges for cross-Strait economic relations. In anticipation of this dynamic, the new government in Taiwan is attempting to design a new national security web to guarantee Taiwan's 'economic security' in coping with Taiwan's increasing economic dependence on mainland China. As one key agent of globalization, economic cooperation in the urban areas on both sides of the Taiwan Strait may potentially improve relations between Taiwan and mainland China. As decentralization and privatization on mainland China proceed, major cities have developed closer interaction and systems of accountability with the civil society. From a prudent perspective, developing functional cooperation between Taiwan and mainland China at the urban level could be a first substantial step to confidence building between these two economies.     

Explaining Taiwan's Revisionist Diplomacy

Taiwan is a revisionist power. Its independence movement challenges a vital status-quo interest of mainland China's opposition to a de jure Taiwan declaration of independence and maintaining, however ambiguously, Taiwan's commitment to the ‘one-China’ formulation. Why is it that a small and vulnerable island off the coast of a great power has continued to challenge the vital interest of that great power and risk war? Adopting a ‘levels of analysis’ approach to Taiwan's mainland policy, this paper addresses this question by examining four prevalent explanations for Taiwan's revisionist diplomacy: (1) the mainland deterrent is ineffective, reflecting Taiwan doubts about either mainland capabilities or mainland resolve to wage a retaliatory war; (2) in an example of the security dilemma in alliance politics, US commitment to Taiwan, although aimed at deterring PRC use of force, encourages Taiwan to challenge the status quo because the Taiwan leadership is confident of US intervention and US ability to defend Taiwan; (3) because of the development of a ‘Taiwan identity’ and of corresponding domestic political pressures, the Democratic Progressive Party has been compelled to adopt a pro-independence policy; (4) Chen Shui-bian has a personal commitment to Taiwan independence and has been willing to challenge the mainland's interest in one-China, despite risk of heightened conflict and regardless of domestic political considerations.     

US 'Dual Track' Policy: Arms sales and technology transfer to China mainland and Taiwan

This article analyzes the United States 'dual track' policy on arms sales and technology transfers to the China mainland and Taiwan. Despite its 'one China' policy, the US has continued to sell arms to Taiwan and provide Taiwan with military technology. At the same time, Washington is unwilling to transfer certain technology to the China mainland. The US 'dual track' policy of arms sales and technology transfer to both sides of the Taiwan Strait has maintained a strategic balance by developing closer relations with Beijing while maintaining the security of the Republic of China on Taiwan. Washington's objectives are to enhance Sino‐American relations and to maintain Taiwan's security while not unsettling the generally positive Sino‐American relationship. While this policy has caused tensions in US‐PRC relations, this 'unbalanced balance' has served US interests in maintaining Taiwan's security and has not strained Washington‐Beijing relations to the breaking point.     

Accounting for Taiwan's economic policy toward China

This article explores the ideas, institutions, and interests in which Taiwan's economic policy toward China is embedded. The authors indicate that the ideas behind Taiwan's economic policy toward China are as vibrant as ever, the political foundation for a coherent and feasible policy is eroding, and commercial interests are digressing from the Taiwan government's policy goals. Political forces around ideas have strong hearing on the formation of Taiwan's economic policy toward China. The truthfulness or falseness of the security argument is of intrinsic value to Taiwan's decision makers. The authors also point out that in order to have a complete picture of cross‐Strait economic relations, we need to specify how trade and investment with China influence Taiwan's distribution of political interests.     

The political economy of Taiwan's mainland policy

The emerging patterns of the cross‐strait interaction present a perplexing duality, revealing both the trends toward closer economic convergence and greater political divergence. Taiwan's mainland policy is both the manifestation and the catalyst of the two contradictory processes. It is the locus of confrontation of the various economic, social, and political forces that propels the two concurrent processes. It has been propelled by the epic changes in the global political economy, the market‐oriented reform in China, and Taiwan's economic restructuring process. It has also been prompted by the perceived challenges and opportunities brought about by the transition to the post‐Cold War era, the unraveling of structural conflicts between a status‐quo power (i.e., the US) and a rising power (i.e., the PRC) and by the politics of political succession within the CCP. In more immediate terms, it has been driven by the power struggle over political succession within the KMT, the bureaucratic process, the interest group politics, the partisan politics in both the electoral and legislative arenas, and the unfolding of the national identity crisis during Taiwan's recent transition to democracy.     

US Arms Transfer Policy to Taiwan: From Carter to Clinton

The US has maintained a keen interest in Taiwan's military security for decades, and US arms transfer to Taiwan has become an especially important issue for both China and Taiwan since the normalization of US-China relations. This study attempts to examine US arms transfer policy toward Taiwan since the late 1970s. What factors have been involved in the formulation and implementation of US arms transfer policy? How have structural changes in the international system, such as the end of the Cold War, affected the policy? Since the Taiwan Relations Act in 1979 allowed continued sales for Taiwan's security and the US-PRC Joint Communique on 17 August 1982 agreed to decrease arms sales to Taiwan, how has the US resolved the contradiction between the two sets of policies? Finally, what is the effect of US arms transfer on Taiwan's national security and defense industry?     

Competing conceptions of Taiwan's identity: The irresolvable conflict in cross‐strait relations

Supporters of unification and Taiwan independence advocates view Taiwan's status through radically different logical frameworks. Unification supporters are guided by historical determinism. They believe that because Taiwan was part of China in the past, and because the island's residents have ancestral ties to mainland China, Taiwan is therefore an unalienable part of Chinese territory that must be brought under the control of the mainland Chinese state. In contrast, advocates of Taiwan independence are guided by the logic of pragmatism. In their view, cultural identity does not dictate political identity, and decisions about Taiwan's status should be guided by the will of the island's people, rather than by an abstract notion of historic destiny. Both of these approaches are rooted in long‐standing concepts of Chinese identity. Chinese ethnicity has long included both a hereditary and a cultural component. In the past, the cultural component allowed China to absorb populations on its periphery. Today, it serves as an outlet for Taiwan independence supporters seeking to redefine Taiwan as a political entity separate from the mainland Chinese state.     

Chinese nationalism,Taiwan autonomy and the prospects of a larger war

In contrast to the belief that the 1995–1996 Taiwan Straits crisis was caused by the visit of the President of Taiwan to Cornell University, in fact, the post‐Mao ruling groups in Beijing made forcing early reunification with mainland China on Taiwan a top priority soon after assuming power in 1978. This new focus on Taiwan's reunification reflects a policy switch. It is not a continuation of Mao era policies. The switch is basic. It involves a profound change in the content of Chinese nationalism from Mao era nationalism, which is seen by its critics in China as insufficiently promoting the national interests of the Chinese people. The new, post‐Mao nationalism in China not only challenges Taiwan's autonomy, it also could endanger peace in the Pacific‐Asia region. Consequently, it is important to rethink the political dynamics at work in China and in the region if the parties involved hope to avoid a larger war.     

China's good neighbor policy and its implications for Taiwan

Chinese leaders in recent years have been following a coherent policy toward Asia that emphasizes moderation and accommodation while preserving core PRC interests. China's prevailing ‘good neighbor’ policy approach—backed by improvement in US–China relations—provides important opportunities and challenges for Taiwan. It clearly inclines the PRC leaders to avoid more aggressive or harder‐line tactics in the mix of carrots and sticks that makes up China's recent approach toward Taiwan. To follow a more disruptive course would undermine the influence and advantage Beijing has been seeking with its ongoing moderate approach toward the United States and other Asian powers. The main challenge for Taiwan is how to deal with the current balance of carrots and sticks in China's policy. Much depends on the ability of Taiwan's leaders and populace to turn the prevailing balance in PRC policy to Taiwan's advantage. This presumably will involve reviving their economy, promoting effective governance and prudent defense, while consolidating relations with the United States and managing tensions in cross‐Strait relations to the advantage of Taiwan's future security and development. Unfortunately, there is no political consensus on Taiwan to mobilize domestic resources and opinion in a concerted effort to protect Taiwan's future as an entity independent of PRC control. Those outsiders who have followed with positive interest Taiwan's remarkable development over the past decades hope that Taiwan makes good use of the opportunities posed by China's good neighbor policy to adopt prudent and concrete measures beneficial to Taiwan's long range prospects.     

Neo‐authoritarianism,polarized conflict and populism in a newly democratizing regime: Taiwan's emerging mass politics

A major obstacle to the consolidation of Taiwan's new democracy lies in the island's emerging mass politics. In recent years, three inter‐related trends have come to characterize Taiwan's political culture and citizen politics: uneven development of mass beliefs in democratic legitimacy, polarization of political cleavage, and a shift to political populism. First, political liberty, meaning primarily freedom of speech and due process, and separation of power meaning parliamentary oversight and judicial independence, have yet to become widely held democratic values among Taiwan's electorate despite visible progress in the development of formal democratic institutions. Next, the polarized conflict over national identity is potentially dangerous because it could result in both internal ethnic strife and external military intervention. Last, an intense lack of confidence in representative institutions and a low level of political tolerance pose a formidable challenge to the development of constitutionalism.     

The changing role of business associations in democratizing Taiwan

This article examines the role of business associations in Taiwan. It begins by comparing the three approaches used to explain state‐society relations in modern Taiwan: capitalist, corporatist, and pluralist. Legal requirements for economic organizations reflect a corporatist impulse. However, empirical measurements of associations’ communications with government, government supervision of associations, and economic impacts on state policy demonstrate increasing pluralism. Today's business associations have greater autonomy than previously, but at the cost of reduced control over their members. SMEs and large conglomerates have growing political influence in Taiwan's changing political economy.     

Taiwan's New Grand Strategy

Since Ma Ying-jeou assumed the presidency, Taiwan's relations with Mainland China have been profoundly transformed. This article uses the perspective of a grand strategy to interpret and explain Taiwan's new approach to cross-Strait relations. It suggests that Ma's government has adopted a grand strategy of accommodation that uses assurances, confidence building, and economic integration to enhance Taiwan's security. This new grand strategy has both ideational and materialist roots. The article also assesses the preliminary results of Taiwan's new security approach and its future sustainability.     

Discussion of 'Four Contradictions Constraining China's Foreign Policy Behavior'

Chinese foreign policy behavior is constrained by different sets of contradictions, but at the same time these contradictions serve to inspire and focus Chinese foreign policy, both in negative and positive ways. As China transitions to a developed country that is fully integrated into regional and global economic, political and security regimes, these contradictions may become less salient, however. With the growth of China's comprehensive national power, the Chinese will come to view their country less as a poor nation and more as a great power and thus this dual-identity syndrome should diminish in importance as a factor constraining China's foreign policy behavior over time. The contradictory impetus behind Chinese foreign policy that derives from the desire to benefit from pursuit of 'open-door' policies and the compulsion to protect state sovereignty will similarly likely become less important as China's power grows, but only if there is mutually acceptable settlement to the Taiwan problem and Beijing's confidence in its ability to secure its territorial integrity is enhanced. A stronger, more confident China will also likely become more actively involved in regional and global issues on a pragmatic, rather than principled basis. Finally, while bilateral ties will remain important to Beijing, its participation in multilateral fora will no doubt increase, including in the security sphere, as it becomes more experienced and self-assured in multilateral interaction. Ultimately, bilateral and multilateralism may take on the role of parallel tracks in Chinese diplomacy with little tension between them.     

The Taiwan Problem in the Second George W. Bush Administration—US officials' views and their implications for US policy

The behavior of Taiwan leaders and people in 2003–2004 raised the salience of Taiwan's assertive movement toward permanent independence for US policy makers. No longer did US officials responsible for assessing cross-Strait relations and their implications for US policy take it for granted that such assertiveness and moves toward independence would be held in check by the mainstream opinion in Taiwan, previously but no longer viewed as pragmatic by US decision makers. In response to the new situation, US policy makers intervened in Taiwan politics, trying to channel Taiwan assertiveness along lines less likely to lead to war with China. US interventions were widely seen to have had a moderating effect on the Taiwan elite and public opinion in the lead-up to the December 2004 legislative election that resulted in a significant setback for President Chen Shui-bian's push toward greater independence. Taiwan's political opposition leaders pursued high-level contacts with China. Chinese leaders warmly welcomed the Taiwan opposition leaders who renounced Taiwan independence. However, Taiwan politics remained sharply divided over cross-Strait issues, with President Chen unwilling to renounce Taiwan independence or accept a version of the so-called one China principle seen by China as a prerequisite for improved relations with the Taiwan government. President Bush and other US officials encouraged both governments to show greater flexibility in order to promote dialogue that would reduce misunderstanding and ease tensions. The uncertain outlook for cross-Strait relations included the possibility of talks, improved relations, and agreements on managing cross-Strait tensions between the Taiwan and Chinese governments. On the other hand, the impasse between China and Taiwan could deepen. The Bush administration appeared to have settled on a policy that endeavored to deter China from using force against Taiwan and deter Taiwan from taking provocative steps toward independence. The main alternatives to this approach seemed less acceptable to US policy makers under prevailing conditions, suggesting that US policy is likely to persist with a dual deterrence policy for the rest of President Bush's term in office.     

National security vs. economic interests: reassessing Taiwan's mainland policy under Chen Shui‐bian

Having finished its first term, the Chen Shui‐bian Administration has found itself in deep water in the troubled cross‐Strait relations. Not only has Chen himself been making contradictory remarks, the Cabinet has been indecisive over issues related to China. The most difficult and irritating case for the DPP government has been the handling of the call made by high‐tech industries to allow them to invest in the mainland. The controversy seems to highlight a dilemma for Taiwan: while it needs the mainland market to save it from the current economic doldrums and create yet another potential ‘miracle’ of becoming a global economic powerhouse, it is worried that further economic engagement with its former rival may pose new kinds of threats to its national security. The debate over whether to allow an eight‐inch wafer foundry, the crown jewel of Taiwan's economy, to invest in the mainland market is but one case, albeit a highly significant one, of the difficult relations between the two sides of the Taiwan Strait.     

Taiwan as a Factor in China's Quest for National Identity

The premise of this paper is that China has a divided national identity, characteristic of a category of nation-states divided for political reasons since World War II. Until 1999, responsibility for this sense of national division could be diffused, but since the retrocession of Hong Kong and Macao, frustration and blame have focused on Taiwan, the last remaining symbol of China's ‘national humiliation’. Characteristic of such a divided identity are ambivalent feelings, aiming on the one hand to idealize and desire to incorporate the ‘missing’ or ‘lost’ segment of the nation, and on the other to punish it for refusing to return. It is important to understand that Chinese feelings about Taiwan are not a simple reflection of empirical developments on the island, but also project latent ideas about China's own unresolved national identity. China's attempts to overcome this division have undergone several changes, making significant progress while encountering difficult (and as yet still insuperable) obstacles.     

From functional integration to structural readjustment: Taipei–Beijing relations and the role of the United States

Regardless of the continued stalemate in the political arena, trade and economic interactions between the two sides of the Taiwan Strait have increased steadily. Both aggregate data and the results of survey research have testified to the existence of functional integration of the two societies across the Taiwan Strait. In addition to functional integration, structural readjustments have also been made by political authorities both in Taipei and Beijing so as to facilitate continuity of trade and economic relations. These types of mutual accommodations include: establishing proper ‘unofficial’ agencies on both sides to serve as instruments of practical contacts and negotiation; the more flexible definition of ‘One China’ by Beijing; and the opening of ‘small links’ between Quemoy and Amoy by Taipei. Beijing's refusal to grant Taipei any official diplomatic status and Taipei's reluctance to accept the ‘One China’ principle remain major obstacles to cross‐Taiwan Strait relations. The United States will continue playing a key role in future cross‐Strait relations. Beijing seems to be content, at least temporarily, to maintain cordial relations with the United States in exchange for the latter's adherence to the ‘One China’ principle and rejection of the option of Taiwan independence. Whether Taipei will use enhanced US commitment to Taiwan's security to strike a better deal with Beijing for gradual cross‐Strait integration or to utilize increased American protection to move onto the separatist road will be affected by domestic politics in Taiwan, future US policy toward to the island, and Beijing's response to Taipei's demand for security and international recognition.     

Beyond Power Politics: institution-building and Mainland China's Taiwan policy transition

Facing the ever-growing interdependence across the Taiwan Strait, Mainland China's strategy towards Taiwan is undergoing a profound change, that is, transcending the staunch realpolitik mentality and turning to an institutional arrangement in policy making. Especially since President Hu Jintao took up his position, the Mainland has endeavored to improve cross-Strait relations through the institutionalization of a series of sensitive issues, such as the proposals and signatures of some long-term accords aiming to advocate economic cooperation, promote social exchanges, weaken political opposition and foster mutual trust. By taking the Mainland's national development strategy shift, Taiwan's domestic reality and ‘institution deficit’ in cross-Strait relations into consideration, this paper analyzes the reasons, efforts and features of the Mainland's recent institutional-orientated policy transition.     

Identity,Sovereignty, and Economic Penetration: Beijing's responses to offshore Chinese democracies

Investigating how the PRC responds to democratization in Taiwan and Hong Kong, this paper argues that the Chinese Communist leadership has mainly developed three strategies in managing the complicated crises, including Beijing's own legitimacy crisis and the integration crisis of the Chinese nation, caused by the rise of offshore Chinese democracies. These strategies are: identity politics, sovereignty politics, and economic penetration. With ‘identity politics’, Beijing identifies ‘identification with the Communist leadership’ as the sole Chinese national identification, and utilizes the nationalistic passions of mainland and even overseas Chinese people against democrats in Taiwan and Hong Kong, by labeling the latter as ‘separatists’ or ‘national traitors’. Further, Beijing defines ‘sovereignty’ in a way in which the ‘central’ government monopolizes all possessions of the nation, and excludes ‘people's sovereignty’ from the politics of national reunification or the ‘one country, two systems’ model actualization. While appealing to both ‘soft power’ based in ‘patriotic nationalism’ and ‘hard power’ embedded in national sovereignty, however, the Chinese regime also mobilizes business resources and opportunities provided by China's growing economic power and China's dominance in Greater Chian economic integration for its political purposes of curbing offshore Chinese democracies.     

The origins of conflict across the Taiwan Strait: The problem of differences in perceptions

In 1995 and 1996, the Taiwan Strait became an area of considerable tension. Relations between Beijing and Taipei deteriorated as a result of perceptions by leaders in the People's Republic of China that Taiwan was moving toward independence, especially after President Lee Teng‐hui made a widely publicized trip to the US in the summer of 1995. An assessment of the differences in perceptions by scholars, officials and the populations on the two sides, the People's Republic of China and the Republic of China, are instructive. The author looks at five areas where disparate views are noticeable and divisive: the history of Taiwan (especially its ties with the mainland), Taiwan's legal status, views of the ‘Taiwan issue’ espoused by Beijing and Taipei, current relations between Beijing and Taipei, and the stance of the international community and the nature and structure of international politics. Scenarios are presented regarding the future of the conflict.