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Taiwan-Mainland Relations: New Trends And Implications

Fresh winds have started blowing across Taiwan Straits, separating the two parts of China – the mainland and Taiwan. Strong signals of a thaw in the Cross-Straits relations have appeared ever since the assumption of office as President by Ma Ying-Jeou of the Kuomintang (KMT) at Taipei in May 2008. Ma’s declared policy platform –Three Nos (conducting no negotiations on unification with the Mainland, No independence and No use of force), taking the 1992 consensus providing for “One China with each side having its own interpretation” as basis for resuming Cross-Straits talks and eventually signing a peace accord with the mainland – has marked a firm departure from the pro-independence line followed by the preceding Democratic Progressive Party (DPP) regime.

Reflecting a new atmosphere, the two bodies responsible for holding negotiations – Taiwan’s Straits Exchange Foundation (SEF) and the mainland’s Association for Relations Across Taiwan Straits (ARATS), resumed their dialogue on May 26,2008. Marking the first visit to Taiwan to be made by a mainland high-ranking dignitary ever since 1992, ARATS Chairman Chen Yunlin came to Taipei to continue negotiations with his Taiwanese counterpart, Chiang Pin-kung on November 3 –7, 2008. The Chen-Chiang talks have resulted in signing of important agreements, on operation of flights from Taiwan to Mainland, sea and air transport exchanges, food safety as well as postal service. Also significant has been the permission given by Taiwan to journalists from Xinhua, Peoples Daily etc to operate in Taiwan. The third round is to take place in the Mainland before June 2009.

The Taiwanese latest initiative to sign an “ Economic Co-operation Framework Agreement” (ECFA) with the Mainland, has added substance to President Ma’s new approach towards Beijing. According to him, the ECFA, to be reached with the help of negotiation mechanisms to be set up to discuss with the Mainland, issues of products, services etc, will have ‘no political-bias’ and not symbolize a “One China Market”. However, domestically, the ECFA proposal is meeting opposition from political opponents like the DPP, who are insisting on the supervision of the entire reconciliation process with Mainland by the Taiwanese legislature and citizen participation. Realization of ECFA under the circumstances would very much depend on building a domestic consensus in Taiwan, which at the moment does not appear an easy task.

A look at the response from Mainland China would be appropriate at this juncture. The six-point proposal of Chinese President Hu Jintao (Xinhua, 31 December 2008), made obviously with Ma’s initiative in mind, has provided the following – firmly adhering to ‘One China’ principle, strengthening commercial ties including negotiating an economic cooperation agreement, promoting personnel exchanges, enhancing communication and cultural links, allowing Taiwan’s reasonable participation in global organizations and negotiating a peace agreement. (Straits Times, 2 January 2009). Hu also suggested exchanges on military issues and exploration of setting up a military and security mechanism to build mutual trust, which is being seen by observers as having no precedence (Taipei Times, 15 January 2009) and as a blue print for future ‘peaceful development’ (Prof Yu Keli of the authoritative Chinese Academy of Social Sciences). ‘End to hostilities’ has been a prominent theme of Premier Wen’s comments on Taiwan in his Work Report to the National People’s Congress (Beijing, 5 March 2009).

A comparison of the viewpoints of Beijing and Taipei reveals that on the basic ‘One China’ issue, mutual differences persist. Hu made no mention of the 1992 consensus which provided for the principle of ‘one China, but with each side having its own interpretation’. In other words, both stand for “One China’, but the paths they follow on this goal, are different. Most important however is that both Taipei and Beijing are in favour of an economic cooperation agreement. If the ECFA comes through, a new Cross-Straits situation may emerge. The ruling KMT, realizing the sensitivity of the reunification subject at home, is vehemently denying the chances of a political union with the mainland subsequent to signing of ECFA with Beijing. The domestic angle has again prevented Taipei from officially responding to Hu’s Six-point proposal, particularly on setting up a military and security mechanism. A second notable point relates to Beijing’s support to Taiwan’s participation in global organizations, being seen for the first time. This, as many analysts see, has in specific created a favourable atmosphere to Taiwan’s getting the observer status in this year’s World Health Assembly, the executive arm of the WHO

What are the motivating factors for Taiwan’s new initiative on relations with the Mainland? The latter has become the largest investment destination for Taiwan (US $70.42 billion accounting for 55% of total foreign investment of Taiwan). Also, Mainland China is now Taiwan’s largest trade partner (US$130.28 billion in 2007, accounting for 28% of total trade), besides being an external factor in Taiwan’s economic growth. Taiwan may like to continue deriving benefits from such economic interdependence. It seems to be right in perceiving that Taiwan’s trade interests would greatly suffer when the ASEAN- China FTA with zero-tariff stipulations comes into effect next year and that the ECFA would act as a remedy in this regard.

Secondly, there appear to be valid reasons for Taipei to believe that ECFA-type agreements with the Mainland can lead to other nations like the US, Japan and Singapore as well as the EU and ASEAN powers getting attracted to sign Free Trade Area Agreements (FTAs) with Taiwan. If that happens, great opportunities will arise for Taiwan to end its present international marginalisation and expand its international space. Whether or not the Mainland would welcome such FTAs is anybody’s guess.

Next come the advantages to Beijing in apparently showing an ‘olive branch’ to Taiwan. There had indeed been strategic adjustments in the Mainland’s Taiwan policy over the years (shift from ‘armed liberation’ to ‘peaceful liberation’ in 1979, subsequent shift to ‘peaceful unification’ and the latest position of ‘peaceful development’ as in Hu Jintao’s six point proposal). Beijing’s present formula of a peace accord with Taiwan heralds a new strategic thinking on its part, as against the past stand to use force to take over Taiwan. Possible rationale for the same could be the Mainland’s realization that its policy of not renouncing force to recover Taiwan, if continued, would go to preserve the raison d’etre for the US in supplying arms to Taiwan.

A probable security relaxation across Taiwan Straits may have implications for major countries in the region like India and Japan, which have always been wary of China’s growing military potentials. They may be required to watch for any diversion of Chinese military resources, presently deployed in regions facing Taiwan. The point that China’s threat perceptions regarding Taiwan Straits have been downplayed in its latest 2008 Defence White Paper looks significant in this regard. Another point relates to geo-politics – the possible emergence of Taiwan as a quasi-political entity in the region with representation in regional and global organizations, as a result of Taipei-Mainland rapprochement. This may compel Asian nations to actively include Taiwan in their foreign policy formulations. In any case, much would depend on how far the Mainland-Taiwan reconciliation process would go.

(The writer, Mr D.S.Rajan, is Director, Chennai Centre for China Studies, Chennai,India.

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