Humphrey Hawksley argues that the Asia-Pacific region is watching how Taiwan is treated as it debates whether China can or should replace the US as the predominant power

There is now no hint of hostility on the narrow stretch of water between the Chinese megacity of Xiamen and the windswept, agricultural island of Kinmen, barely a mile offshore, which is controlled by Taiwan.

Ferries carry tourists and duty-free shoppers on the half-hour journey to Kinmen, where Chinese visitors can see old Taiwanese battle tanks and landing craft, museum exhibits of the days when the island used to be a fortress with 200,000 troops, a curfew and martial law.

This was where Mao Tse-tung’s forces, newly triumphant in the civil war on the mainland, were thrown back when they sought to complete their victory against the nationalist army, which had fled offshore. At the height of the Cold War, Kinmen was routinely shelled, and the Taiwan Strait became a flashpoint where America and China came close to direct confrontation.

But the nationalists continued to control a string of offshore islands, which on clear days loomed tantalisingly within sight of communist China. Three hundred and fifty kilometres to the east of the mainland, on the mountainous main island of Taiwan, the nationalist government watched while China stumbled through its ideological experiments – the famine of the Great Leap Forward and the nation-shredding Cultural Revolution. Taiwan, meanwhile, built institutions, infrastructure, and high-tech industries, and gradually shed its dictatorship. Within 50 years, in 1996, it became the first fully-developed democracy in a Chinese society.

In 1996, Taiwan became the first fully-developed democracy in a Chinese society

Since then, both sides have decided mostly to shelve their enmity and focus laser-like on their economies, forging such a dynamic trading relationship that it is now near-impossible to tell the difference between a Shanghai and a Taipei shopping mall. Against their economic success, doctrinal differences have faded.

Yet like a tongue on a sore tooth, Beijing’s pain over the loss of Taiwan has kept flaring up over the past 68 years. With China now determinedly spreading its tentacles through the vast region of the Asia-Pacific, this renegade province will not only become a test case on how China behaves with its new-found strength: it will have consequences well beyond Taiwan itself.

Far more than Beijing’s South China Sea military outposts, or the ports it is building from Sri Lanka to Pakistan to Djibouti, or its influence-building in Africa and Latin America, Taiwan brings together important drivers of China’s domestic and foreign policy. Like Kashmir in South Asia for Pakistan and Kosovo in Europe for Serbia, Taiwan is a symbol for Beijing of lost territory. The need to recover it is deeply embedded in the national psyche.
Central to the stability of the Taiwan Strait is the One China Policy agreed with the US in 1979. It is straightforward: Beijing will not allow any government to recognise both itself and Taipei, either bilaterally or in the United Nations and many international institutions. But because of the unresolved political situation of lost sovereign territory, the faultline remains.

High living standards and brisk commerce can only go so far, and Taiwan lies right in the middle of the fresh power rivalry between China and the United States. Although triggered by the South China Sea disputes, the issue is essentially which of the two will be predominant in the Asia-Pacific, and how they will use their power.

SAME DIFFERENCE: China and Tawain’s dynamic trading relationship means it is difficult to tell apart a Shanghai (l) and a Taipei shopping mall
SAME DIFFERENCE: China and Tawain’s dynamic trading relationship means it is difficult to tell apart a Shanghai (l) and a Taipei shopping mall

With painstaking patience, Taiwan has had decades of experience in straddling the two, taking American security while benefiting from China trade. Its relationship with China has been on a downturn since January 2016, when voters elected the independence-minded People’s Democratic Party to office. Beijing was already suspicious of the DPP, and that deepened last December, when President Tsai Ing-wen audaciously initiated her famous phone call to then President-elect Donald Trump, breaking with decades of diplomatic protocol under which the US kept Taiwan at arm’s length.

This is bound to have an impact on China’s 19th Party Congress later this year when President Xi Jinping is expected to present himself as the strongman successor to Mao and the reformist Deng Xiao-ping. The recovery of Taiwan will be a key theme, though a shooting war between the two is highly unlikely. China’s weapon to try to keep the rebel government in place is economic, and Taiwan is feeling the pain. Measures include deterring Chinese tourists, an industry worth $12 billion a year, and luring away more of the 22 countries that still recognise Taiwan as the government of China. ‘Even without military confrontation, we face a very serious challenge from China,’ said Roy Chun Lee of Taipei’s Chung-Hua Institution for Economic Research, stressing that Taiwan urgently needed to separate its economic architecture from that of the mainland.

Beijing’s pain over the loss of Taiwan has kept flaring up over the past 68 years

Rather than inch back towards a frozen conflict, it may, therefore, be time for both sides to move forwards. If China does want to oust the US as the prevalent power in the region, it will need to win trust in those countries that now rely on America to underwrite their security. It is already having problems with Hong Kong; if it allows Taiwan’s trust to deteriorate further, it risks failing further afield.

There are two elements in Beijing’s favour. One is high trade levels and common economic interests. The second is that Taiwan shares most of China’s South China Sea claims, because they represent those of the pre-1949 nationalist government. This issue could be used to peel Taiwan away from the US, but Beijing needs to tread more carefully if it wants to avoid seeing both these advantages evaporate.

First, China could take note of Taiwan’s peace initiatives in the South China Sea, and put the emphasis on the sharing of resources, not sovereignty. Second, it could loosen its grip over Taiwan’s economy, and stop using trade as a weapon. This would mean lifting its de facto veto on Taiwan’s attempt to seal free trade agreements, such as it has with Malaysia and Chile.

China could also allow Taiwan’s entry to more international institutions. The international police organisation, Interpol, and the new Asian Infrastructure Investment Bank are two from which it is currently banned. And, as with the military a generation ago, Beijing could quietly let it be known that it will only use the economy as a weapon of last resort.

Only Beijing can deliver its goal of making Taiwan feel secure enough to eventually be a willing part of some form of reunification. How it handles this will not only determine its own ambition, but will also be watched closely by the rest of the Asia-Pacific.

Over the past 68 years, Taiwan has ridden through Chinese shelling and international rebuffs, and decided to wield the semi-conductor over the Kalashnikov as its means of getting what it wants. Its 24 million citizens have done well from this policy. Taiwan is not Kashmir, Kosovo, or even Palestine, and China is fortunate to have it as a test case of how it uses its new-found power. It should not waste the opportunity.

Humphrey Hawksley, a former BBC Beijing Bureau Chief, was in Taiwan and China researching his next book, Asian Waters, due out later this year

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