Historic cross-strait talks signal a new step in relations

Historic cross-strait talks signal a new step in relations

Unfortunately, improved cross-strait economic ties do little to resolve the status quo, as the final objectives of Beijing and Taipei remain fundamentally irreconcilable.

At the first governmental meeting since they split apart in 1949, China and Taiwan last week agreed to open representative offices to further strengthen cross-strait dialogue and build political trust. The talks between China’s Vice Foreign Minister Zhang Zhijun and Taiwan’s Mainland Affairs Minister Wang Yu-chi in Nanjing mark a new step for a relationship that has improved dramatically over the last two decades, and in particular since Ma Ying-jeou was elected president in 2008.

While the meeting signals an unprecedented ease of political tensions, it does nothing to approach the fundamental issue of Taiwan’s formal political status.

Taiwan rejects unification with the mainland

China has consistently emphasized that they follow the strategy of “peaceful unification” with the island, yet Beijing has also threatened military action – such as the launch of a massive invasion across the narrow strait – if the renegade province formally declares independence from the mainland. Last year Chinese President Xi Jinping said that political reconciliation cannot “be passed on from generation to generation”and that efforts must be made to reach a final solution.

Relations soured during the 2000-2008 presidency of Chen Shui-bian, who advocated formal independence. Current president Ying-jeou supports a “three noes” policy – no unification, no independence and no use of force in the relationship with the PRC.

The Taiwanese public overwhelmingly disapproves of an eventual reunification with China. Surveys indicate that two thirds support continuing the current status quo, essentially President Ying-jeou’s policy, and that merely 7 percent wants reunification. Also troublesome for China is that a distinct Taiwanese identity has consolidated during the last decades: the majority see themselves as Taiwanese while only a small minority today identifies as Chinese.

Status quo means business as usual

The Taiwanese economy has coped well under its troublesome political status, growing by 2.92 percent in the fourth quarter of 2013. Despite suffering a growing international de-recognition in the wake of Beijing’s rise to power, the export-dependent island still maintains cultural and trade offices in more than 60 countries and was recently ranked the world’s third best country for investments by the US Business Environment Risk Intelligence (BERI). It is among the top destinations for overseas investments from the US, yet it is China that has become its largest trade partner, accounting for 40 percent of exports.

Taiwanese businesses have for years invested heavily on the mainland, taking with them capital and technological know-how that China previously lacked. The relationship today is less unilateral, with over 270 Chinese investment projects on the island. After the election of Ying-jeou the two governments have attempted to formalize their healthy economic ties by signing trade and investment agreements, opening cultural exchange programs and allowing for direct commercial flights, leading to almost 3 million Chinese tourists coming to Taiwan last year.

The “Hong Kong model” is less attractive

Reunifying lost territories is of paramount importance for the Chinese Communist Party, but under the “One China, Two Systems” principle they allow distinct regions to retain their economic and political systems. Beijing has hoped that Taiwan could eventually follow the same path as Hong Kong and Macau, which were promised no interference in their internal affairs for 50 years after becoming Special Administrative Regions (SAR) in the late 1990s.

Many in Hong Kong never reconciled or accepted being subordinated to China and public hostility against China has skyrocketed as annual visitors from the mainland have surpassed 25 million.The impression that rich mainlanders are bullying natives in Hong Kong does not work in favor of convincing the Taiwanese to eventually join mother China.

Creeping normalization most likely

At the moment and for the foreseeable future, it is highly unlikely that we see any fundamental change in the relationship between China and Taiwan. Rather, a creeping normalization of the current status quo seems more probable: Taiwan remains self-governed while bilateral meetings on government level gradually improve political trust between the two countries.

Political reconciliation would formalize the already healthy economic relationship, which is good news for businesses in both countries, as a more solid relationship decreases market uncertainty and makes investments seem less risky for investors. Perhaps most important, however, is that increased political trust generally leads to less military distrust, thus reducing the likelihood of a military conflict in one of Asia’s key hotspots.

Categories: Asia Pacific, Politics

About Author

Havard Bergo

Håvard is a foreign policy analyst who works in Kampala for LPC Consult International, a consulting company that specializes on developing projects in East Africa and Mozambique. He has previously worked with the United Nations in Bangkok and as a project manager for a research project in Montreal. Håvard graduated with an MSc in International Relations from the London School of Economics (LSE).