A new direction for China-Taiwan relations

A new direction for China-Taiwan relations
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The rapprochement strategy strongly advocated by Taiwan’s President, Ma Ying-jeou, represents an important step in enhancing the dialogue with Beijing. However, concerns still remain that each step towards the Chinese Mainland will increasingly compromise Taiwan’s democracy and independence.

On Saturday, November 7th, after nearly six decades the leaders of the PRC and Taiwan met in Singapore for the first meeting meeting since the Kuomintang (KMT) forces, led by the General Chiang-Kai Shek, fled to Taiwan after their disastrous setback in the Chinese Civil war in 1950.

The meeting between President Xi and President Ma is a crucial opportunity to establish a common framework to strengthen cultural and economic relations between the two sides. During the meeting, President Xi stressed mutual belonging to the same family, while also endorsing “the 1992 consensus”, in which both sides recognize the existence of one China, as the main pillar for the improvement of positive interactions that have characterized the recent summit.

Despite the positive atmosphere that characterized the meeting, relations between Beijing and Taiwan have remained strained since 1996 when the PRC conducted missile exercises in the wake of the election of Lee Teng-hui (KMT), a fervent pro-independence candidate. Due to this sensitive issue, Beijing still refuses to renounce the use of military force in the event of claims for formal independence from the island, still regarding Taiwan as a renegade province.

Today, the PRC’s swift rise has deeply altered the cross-strait scenario, such that President Ma’s leadership has been characterized by an evident entente cordiale with Beijing, demonstrated by the expansion of economic ties and the establishment of commercial and tourist flights between the two sides.

Indeed, creating conditions for engaging Beijing’s government in fruitful and positive discussion over the future of cross-strait relations has become a distinct feature of President Ma’s vision based on the principles of dignity, autonomy and flexibility. During the meeting, President Ma presented a five-point strategy aimed at enhancing the level of the cross-strait relations which focused on the following issues:

  • Recognizing the 1992 Consensus as a fundamental pillar of cross-strait relations
  • Decreasing the level cross-strait confrontations
  • Enhancing dialogue and working towards a “win-win” agreement
  • Establishing a cross-strait hotline to prevent and defuse crises involving the two parties
  • Contributing to a common Chinese vision for future generations.

Both leaders have delivered separate remarks in press conferences, outlining the positive benefits coming from such a successful meeting; an historic precedent for top leaders of both sides willing to inaugurate a new phase in cross-strait relations.

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Source: CIA World Fact Book, Global Security

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Under Ma’s Administration, Taiwan has pursed closer economic ties with Beijing, characterized by the establishment of trade agreements such as the Economic Cooperation and Framework Agreements (ECFA) in 2012 and the Cross-Straits Service Trade Agreement (CSSTA) signed in the 2013. However, the controversial CSSTA sparked a marked wave of student protests in 2014 when President Ma’s coalition tried to ratify it in the legislature which led to the occupation of the legislature for over two weeks.

These agreements have represented an important step for the promotion of the liberalization of goods, services and investment, opening Taiwanese markets to Chinese investors in manufacturing, financial services and high-tech sectors. While increased trade and investment with Beijing have begun to represent a large and expanding percentage of Taiwan’s total FDI and foreign trade, there are also concerns over Beijing’s indirect control over sensitive sectors of Taiwan’s economy.

Expanding cross-strait relations provides Beijing leverage to exploit its economic relationship in ways that could undermine Taiwan’s interest on a wide range of issues, including deterring Taiwan from pursuing important policies or strategies that would unilaterally challenge the cross-strait status quo or penetrating influential political groups to pursue relevant economic or political initiatives aimed at safeguarding Beijing’s core interests.

Taiwan’s opposition Democratic Progressive Party (DPP), led by the presidential candidate Tsai Ing-wen, remains diffident about the positive outcomes resulting from the meeting and has claimed that the event merely represented an important chance for the governing KMT party to raise its profile after several setbacks suffered in the local election. The risk of President Ma losing his seat and being replaced by Tsai, characterized by a more assertive strategy relations with Beijing, still remains a pressing matters for the KMT.

For Beijing, relations with the DPP have always been tense and have resulted in several crises such as the 2001 threats by Beijing to use force in order to prevent a declaration of independence, advocated by DPP Chen Shui-bian. The Chinese Communist Party would welcome a KMT victory and some analysts argue that this historic meeting helps President Ma gain points in the upcoming campaign even though his party seems poised for defeat.

Cross-strait status quo

President Xi has offered an opportunity Taiwan to join the Asian Infrastructure Investment Bank (AIIB) and has also welcomed Taiwan’s contribution to several other multinational financial institutions as a goodwill gesture despite Beijing’s past efforts demanding other nations not establish formal ties with Taiwan, including free trade agreements that have proliferated in the region.

Taiwan’s lack of economic partners has seriously affected its export-based economy, ultimately reorienting the KMT’s decision to establish a more conciliatory dialogue with Beijing over the future of the cross-straits relations.

However, despite Taiwan’s concessions, its participation in international forums or organisations will continue to be extremely limited and the growing economic influence that Beijing is seeking to establish on the island could begin to seriously affect the Taiwanese policy-making process.

The potential victory of the DDP in the upcoming elections and its less cordial orientation toward the Mainland could surely alter the scenario, marking a deep shift from the Ma Administrations’ cross-strait strategy, jeopardising the fragile balance reached so far.

Categories: Asia Pacific, Politics

About Author

Daniele Ermito

Daniele Ermito is a London-based analyst. He is also a GRI analyst and regular contributor for the Foreign Policy Association, where he writes mostly on the Koreas ‘blog. He holds a BA (Hons) in International Relations from the University of Bologna and a MSc in Asian Politics from the School of Oriental and African Studies. His areas of research include Northeast Asia security, Japanese politics and Chinese foreign policy. You can follow him on Twitter @DanielRmito.