China and Taiwan: modus vivendi… for now

Encouraging developments on either side of the Taiwan Straits have taken place recently, considerably reducing the ‘shrill atmospherics’ surrounding ‘independence’ and ‘invasion’ by several notches. The primary determinant driving these developments has undoubtedly been the Kuomintang’s (KMT) coming to power in the legislative elections held in March 2008. The electoral drubbing faced by the Democratic People’s Party (DPP) came about for several reasons – over-playing of the ‘independence card’, which, beyond a point, became a classic instance of the ‘law of diminishing political returns’; the overall slowing down of economic growth; continuous scandals surrounding former President Chen Shui-bian, especially during his second term in office; and, at the international level, the shrinking support for Taiwan even from “allies” like the United States, all of which necessitated a ‘course correction’ through electoral means.

To his credit, Ma Ying-jeou, the KMT leader and Taiwan President since May 20, 2008, has not wasted any time implementing his policies of a ‘closer tilt’ towards Beijing. On April 12, 2008, Vincent Siew (then Vice-President elect) met the Chinese leader Hu Jintao at Bo’ao, a seaside resort in eastern China for a brief meeting – becoming the highest ranking elected public figure from Taiwan to do so. And on May 29, 2008, Wu Poh-hsiung, Chairman of the ruling KMT held a ‘historic’ meeting with Hu Jintao, General Secretary of the Communist Party of China (CPC). Given the historical animosity the two parties have had for each other since the civil war six decades ago, this meeting by all accords was a pleasant and path breaking one. On June 13, 2008, Chiang Pin-kun, the Chairman of the Straits Exchange Foundation (SEF) based in Taiwan, resumed talks after nine years with the mainland’s Association for Relations Across the Taiwan Straits (ARATS) headed by its Chairman Chen Yunlin. The SEF and ARATS are “government approved non-government organizations” (GONGO’s) with the brief to engage in talks associated with cross-straits issues. Talks between the SEF and ARATS’ two interlocutors, Koo Chen-fu and Wang Daohan (both since deceased), were suspended in 1999, following then Taiwan president Li Teng-hui’s proposal for a special “state to state” model to mark cross-straits relations.

To reverse the current economic downturn in Taiwan, the Ma Ying-jeou administration sees closer economic relations with Beijing as a much needed incentive to spur domestic economic growth. The ‘economic agenda’ of the KMT government towards Beijing includes securing broader access to the mainland market especially the swelling ranks of the ‘new middle class’ estimated to be growing at one per cent every year, permission for financial services businesses from Taiwan to operate on the mainland, the need to end the ‘double taxation’ regime currently in force, and the removal of investment restrictions from Taiwan on the mainland. Proposals for drafting common technical standards and the creation of mechanisms to resolve commercial disagreements are on the anvil, and by any standard are far reaching proposals in their endeavour to prepare a roadmap for ‘gradual economic integration’ with the mainland.

For Ma Ying-jeou, the ‘economic agenda’ is the current priority for now, to be followed later by themes revolving around Taiwan’s shrinking “international space” and a “peace accord” – points he had raised in a recent interview carried by the New York Times. Taiwan’s constrained international appeal stems from it being recognised by only twenty three countries while Beijing is recognized by one hundred and seventy one countries. Taiwan also has been prevented from becoming a member of various multilateral forums primarily due to Beijing’s persistent lobbying. For Ma Ying-jeou, the “peace accord” he proposes would only be possible if China were to ‘remove the hundreds of short and medium range missiles it has aimed at Taiwan’ and the ‘security’ of its people is assured and not held hostage to a climate of fear and threats.

Reflecting the liveliness of domestic politics in Taiwan, the DPP naturally has been very vocal in its opposition to the current ‘winds of change’ between Beijing and Taipei. For DPP lawmakers, the Straits Exchange Foundation (SEF) Chairman Chiang Pin-kung’s suggestion on direct charter flights between the mainland and Taiwan bypassing Hong Kong – where Taiwanese airliners are currently allowed to operate – was a matter of “national security laws to be decided upon by relevant government agencies.” Chiang Pin-kung’s agreement with Beijing on establishing representative offices by both sides also came in for flak from the DPP, as not being authorised by the Mainland Affairs Council – Taiwan’s apex policy making organ on handling relations with China.

Following the agreement signed on June 13, thirty six weekend return chartered flights between the two sides will commence from July 4 to eight destinations in Taiwan (Hualien, Kaohsiung, Kinmen, Penghu, Taichung, Taipei, Taitung and Taoyuan) and five destinations on the mainland (Beijing, Guangzhou, Nanjing, Shanghai and Xiamen). Separately, in a relaxation of existing tourism norms between the two sides, Taiwan will now allow a maximum of three thousand tourists (comprising group tours only) from the mainland every day for a period not exceeding ten days. The decision to allow more tourists from the mainland has not gone down well with some sections in Taiwan who have been darkly hinting at the problems faced by Hong Kong’s Disneyland and the manner in which SARS was not acknowledged by mainland authorities when it first broke out in 2003.

The high-level visits and renewal of the “dialogue” between the SEF and ARATS have taken place with an extraordinary rapidity that for the moment has generated optimism on both sides of the Taiwan straits. Though praiseworthy, the KMT administration needs to be cautious and ensure that the ‘thaw’ does not become in the near future a case of going too soon and too fast… and not knowing where to stop!