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11/11/2015 Taiwan & the Harmonious World: Toward Peaceful Resolution ? | Connect the Dots http://ctdtoday.com/2011/09/10/taiwantheharmoniousworldtowardpeacefulresolution/ 1/11 (/) (/2013/11/01/shalegasexploitationintheuseconomicsand geopoliticsconsequences/) Shale gas exploitation in the US, economics and geopolitics consequences (/2013/11/01/shalegasexploitationintheus economicsandgeopoliticsconsequences/) November 1, 2013 (/2013/09/30/queveutlachinedemaoaucapitalisme/) Que veut la Chine ? De Mao au Capitalisme (/2013/09/30/queveut lachinedemaoaucapitalisme/) September 30, 2013 (/2013/07/16/postwarahistoryofeuropesince1945/) Postwar – A History of Europe Since 1945 (/2013/07/16/postwarahistoryofeuropesince1945/) July 16, 2013 (/2013/03/01/illfarestheland/) Ill Fares the Land (/2013/03/01/illfaresthe land/) March 1, 2013 (/2011/09/10/taiwanthe harmoniousworldtoward peacefulresolution/) Taiwan & the Harmonious World: Toward Peaceful Resolution ? (/2011/09/10/taiwantheharmoniousworldtowardpeacefulresolution/) September 10, 2011 (/2010/08/25/debunkingirannuclearmenacemyths/) Debunking Iran Nuclear Menace Myths (/2010/08/25/debunkingirannuclearmenace myths/) August 25, 2010 (/2010/07/21/thefutureofhongkong/) The Future of Hong Kong (/2010/07/21/thefutureofhongkong/) July 21, 2010 (/2010/07/03/thegraveyardtheempireandtheuglytruth/) The Graveyard, The Empire and The Ugly (Truth) (/2010/07/03/thegraveyardtheempireandtheuglytruth/) July 3, 2010 (/2010/06/06/thebiglies/) The Big Lie(s) (/2010/06/06/thebiglies/) June 6, 2010 Taiwan & the Harmonious World: Toward Peaceful Resolution ? I wrote this paper in June 2011 for my class of Political Economy of East Asia. Enjoy ! Taiwan and the Harmonious World:

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Page 1: Taiwan & the Harmonious World_ Toward Peaceful Resolution _ _ Connect the Dots

11/11/2015 Taiwan & the Harmonious World: Toward Peaceful Resolution ? | Connect the Dots

http://ctdtoday.com/2011/09/10/taiwan­the­harmonious­world­toward­peaceful­resolution/ 1/11

(/)

(/2013/11/01/shale­gas­exploitation­in­the­us­economics­and­geopolitics­consequences/)Shale gas exploitation in the US, economics and geopoliticsconsequences (/2013/11/01/shale­gas­exploitation­in­the­us­economics­and­geopolitics­consequences/)

November 1, 2013(/2013/09/30/que­veut­la­chine­de­mao­au­capitalisme/)Que veut la Chine ? De Mao au Capitalisme (/2013/09/30/que­veut­la­chine­de­mao­au­capitalisme/)September 30, 2013

(/2013/07/16/postwar­a­history­of­europe­since­1945/)Postwar – A History of Europe Since 1945(/2013/07/16/postwar­a­history­of­europe­since­1945/)July 16, 2013

(/2013/03/01/ill­fares­the­land/)Ill Fares the Land (/2013/03/01/ill­fares­the­land/)March 1, 2013

(/2011/09/10/taiwan­the­harmonious­world­toward­peaceful­resolution/)Taiwan & the HarmoniousWorld: Toward Peaceful

Resolution ? (/2011/09/10/taiwan­the­harmonious­world­toward­peaceful­resolution/)September 10, 2011

(/2010/08/25/debunking­iran­nuclear­menace­myths/)Debunking Iran Nuclear Menace Myths (/2010/08/25/debunking­iran­nuclear­menace­myths/)August 25, 2010

(/2010/07/21/the­future­of­hong­kong/)The Future of Hong Kong (/2010/07/21/the­future­of­hong­kong/)July 21, 2010

(/2010/07/03/the­graveyard­the­empire­and­the­ugly­truth/)The Graveyard, The Empire and The Ugly (Truth)(/2010/07/03/the­graveyard­the­empire­and­the­ugly­truth/)July 3, 2010

(/2010/06/06/the­big­lies/)The Big Lie(s) (/2010/06/06/the­big­lies/)June 6, 2010

Taiwan & theHarmonious World: Toward Peaceful Resolution ?I wrote this paper in June 2011 for my class of Political Economy of East Asia. Enjoy !

Taiwan and the Harmonious World:

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Toward peaceful resolution ?

June 2011

Abstract:

This paper discuss the recent development between the governments of the People’s Republic of China and theRepublic of China, especially in light of the new foreign policy adopted by Hu Jintao in 2005, the HarmoniousWorld.

The Taiwan issue has always been a very hot topic, both in the domestic area as well as on the internationalscene. Historical events have created a imbroglio in which ideologies and politics are strongly opposed.However, recent events have put some hope that a peaceful resolution can be reached.

In this paper, I review the historical background as well as the current relationship and policies across the strait. Iargue that even though political issues still undermine any resolution, economic integration can eventually reunifyTaiwan with the mainland.

Introduction

The status of Taiwan is a very sensitive one, which stirs strong emotions on both sides of the strait. Since theend of the Chinese Civil War, there have been many attempts on both sides to find a resolution to this longstanding conflict, but there was also many instances where tensions rose quickly and war wasn’t far away.

Indeed, twice already did the United States of America threatened the People’s Republic of China with nuclearretaliation in case of military actions against Taiwan. Today, both sides of the strait are heavily armed andhundreds of missiles are pointing towards each others’ cities. This fragile and dangerous situation is furtheredweakened by a long history of few or no contacts between the political entities on both sides, each governmentrefusing to discuss with what they consider to be an ‘illegitimate government.’

However, over the years, many officials from both coasts have been pleading and offering ways to resolve thisconflict peacefully. But these offers have been thwarted many times by stubborn and short sighted politicianswho do not believe in compromise and dialogue. Over the last 10 years, there has been very few contactsbetween the two sides, and tension escalated quickly. But with the election of Ma Ying Jeou in 2008 and thesubsequent reopening of dialogue, there is hope for a peaceful resolution.

In this paper, we will first analyze quickly the status of Taiwan, the claims on both sides of the strait and thecurrent cross­strait relations. We will then see how the ‘Harmonious World’ put forward by Hu Jintao offers somehope and how the issue of Taiwan could be resolved peacefully.

I. The status of Taiwan

The status of Taiwan is one of the most complex question of the 20th century. For three hundred years, Taiwanwas part of the Chinese empire. The island was first colonized by Dutch settlers during the 17th century. It wasthen ruled by Ming loyalist forces before being integrated in the Qing Empire in 1683. Even under Qing’s rule,Taiwan was at first not considered more than a ‘ball of mud beyond the pale of civilization’, neglected andministers even considered leaving the island.

However, when Western powers started to show interest for the island, the Qing Empire decided to speed up itsdevelopment: Taiwan was given the status of province in 1885, and within 10 years it became the mostmodernized county of the Qing’s empire. This was not to last: in 1895, the treaty of Shimonoseki signed at theend of the Sino­ Japanese war perpetually ceded the island to Japan, and Taiwan became part of the Japaneseempire for the next 50 years, until its defeat at the end of World War II.

During this period, Taiwanese people were divided between those who were eager to become Japanese citizens,

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those who fought to restore Taiwan to China and those who fought to achieve independence. The pro­Chineseand pro­independence groups were fought very actively by the Japanese, and the island continued to modernizeand develop very quickly. Primary education was compulsory, an efficient bureaucracy was implemented, publichealth was greatly improved, an elite constituted and a strong industrial base was expanded. The ultimate goal ofthe Japanese empire was to integrate Taiwan as part of Japan, and make Taiwan’s inhabitant loyal to theJapanese Emperor. As such, Japanese culture was widely promoted. This policy, combined with an overallincrease in standards of living and an efficient administration of the island was very successful. It should also benoted that over 125,000 Taiwanese served in the Japanese armed forces during WWII, and some 30,000 died asa result.

During the 1943 Cairo conference, the Allied Powers agreed that all Japanese territories that have been annexedor taken by force should be handed back to their previous governments. In the case of Taiwan, it was specifiedthat the island should be handed over to the Republic of China. However, this declaration was not a legalagreement, but mere statement.

In 1945, the KMT received the surrender of Japanese forces on the island, a date remembered as TaiwanRetrocession Day. The US order N°1 gave to the Republic of China the provisional control of the island on behalfof the Allies.

However, Taiwan continued to be a Japanese territory until the enforcement of the Treaty of San Francisco in1952. As neither the Republic of China nor the People’s Republic of China were invited to this conference, thesovereignty of Taiwan was still uncertain. At the exact same time, the Sino­Japanese Peace Treaty was signedbetween Japan and the Republic of China, under pressure from the US. But even though the treaty emphasizesthe renunciation of Japanese claim over Taiwan, it doesn’t explicitly provides the sovereignty transfermechanism from Japan to the PRC or the ROC.

Thus, since 1952, numerous comments have been made about the status of Taiwan, and recently Jonathan I.Charney and J. R. V. Prescott wrote in the American Journal of International Law, July 2000: “none of the post­World War II peace treaties explicitly ceded sovereignty over the covered territories to any specific state orgovernment. Rather, they formally nullified the sovereignty of Japan that was derived from the 1895 Treaty ofShimonoseki.”

In addition, in 2004, Collin Powell said: ‘Taiwan is not sovereign.’ The status of Taiwan is thus not legally clearlydefined.

With the end of the Chinese Civil War and the retreat of the KMT to Taiwan, the state of war between theRepublic of China and the People’s Republic of China continued until 1979, when the US and the PRCestablished diplomatic relations. Until then, bombardments and small scale military actions were common acrossthe strait.

In 1971, the People’s Republic of China was recognized as the sole government of China, and the Republic ofChina was expelled from China’s UN seat. Since then, the current status of Taiwan is similar to the status of thePRC before 1971. As both government don’t recognize each others, non­official organizations were created toallow dialogue across the strait, and since then most of the exchanges have been made through the StraitExchange Foundation (SEF, ROC) and the Association for Relations Across the Taiwan Straits (ARATS, PRC).

In the late 1980′s negotiations across the strait culminated in the controversial ’1992 consensus’, where both thePRC and the ROC agreed that there is only one China and that Taiwan is part of China, but that they differ on itsdefinition.

Finally, while the PRC is now a major international entity, the ROC is currently recognized by 23 mostly smallstates and is barred from entering any international organization under the name ‘China’. From 1992 to 2008,Taiwan has been applying every year for a UN seat and consistently denied. Major efforts by the PRC toundermine Taiwan’s international status succeeded, and thus, while Taiwan is a very important economic player,

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its political and international role is very small.

The actual status of Taiwan is one of status quo, a situation which is supported by most Taiwanese: the islandis not independent from mainland China, yet the PRC does not control it. In effect, Taiwan is not dejure independent, but it is de facto ruled by an independent government from mainland China.

II. Current Cross­strait Relations

Over the years, the People’s Republic of China and the Republic of China always stood by the idea that Taiwanis part of China and that their respective governments were the legitimate ones. However, Taiwan stoppedplanning for an invasion of the mainland in the mid 1950′s, when it was clearly impossible for them to retakemainland China. The US pressured the ROC government to avoid making anything that would be seen asprovocative by the PRC and that could spark war. It must also be noted that the US government doesn’t supportor recognize Taiwan’s independence.

With Taiwan’s democratic reforms of the mid 1980′s, an independence movement started to emerge.Independence was taboo during the White Terror that lasted from 1949 until 1987, since the KMT was supportingthe idea that there is only one China and that Taiwan is part of it. With the democratic reforms, independencequickly gained popularity. In 1995, the KMT chairman Lee Teng Hui, who was seen by the PRC as moving awayfrom the One China policy and supporting Taiwan independence, was a favorite for the presidential elections.

This led to the third Strait Crisis in 1995/96 during which the PRC conducted missile tests and military exercisesnear Taiwan, in order to influence the elections. It only succeeded in boosting Lee Teng Hui votes by 5%, morearm selling from the US to Taiwan and a stronger Japanese­US relationship. However, it also made theTaiwanese stock market fall by 17%, and resulted in capital flight and real estate prices going down.

The same year, Jiang Zeming offered steps toward resolution of the conflict and a peaceful reunification in his ’8points.’ However, the ROC government stubbornly refused to negotiate or talk and by 1998, all official and non­official contacts were broken.

In 2000, Chen Shuibian, another pro­independence president, was elected in Taiwan. He clearly stated that hewas against the 1992 Consensus and the ‘One China’ policy and that he favored independence. Such talk wasnot welcomed by the People’s Republic of China which answered that if all peaceful solutions were exhausted orif Taiwan was to declare independence, non­peaceful actions will be taken. This resulted in military build up, aswell as a major efforts by the PRC to undermine Taiwan’s international status.

Even though there was much tensions, some relations started to improve a bit. Charter flights across strait wereproposed, but issues over the branding of such flights were raised: the People’s Republic of China wanted toclassify those flights as ‘domestic’ and the Republic of China wanted to classify them as ‘international’. Disputesabout branding and names are all too common in cross­strait relations. The slightest subtleties are used in orderto convey the governments’ ideas.

But in the end, the PRC believed that there was much to gain from such flights and branded them as ‘special’ or‘cross­strait’. These flights were at first only operated during the Lunar Chinese New Year, and a high costresulted from these: planes had to fly over Hong Kong, Macau, South Korean or Japanese air zones. But thepublic on both side of the strait were very supportive of this initiative and, due to the popularity of the flights,direct flights were established in 2008, to much of the public enthusiasm. The traffic grew quickly and in 2010,there was 370 direct flights per day across the strait.

But in Taiwan, independence talks continued, and in May 17, 2004, Hu Jintao gave Taiwan 2 options: renounceto independence or continue to play with fire and assume the consequences. He also laid out his 7 points, callingfor the renewal of negotiations and dialogue, as well as more economic exchanges. This was mostly ignored bythe Taiwanese leadership, and officials in mainland China started to believe that previous policies in regard toTaiwan did not work.

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In 2005, as a result from the continued independence talks and other provocative moves by the government ofTaiwan, an Anti­secession law was passed in PRC, explicitly stating that non­peaceful actions will be takenshould there be any independence declaration or if peaceful means were to be exhausted. At the same time,several high level visits of KMT officials to the PRC opened the door for peaceful communication andnegotiations. It also allowed to establish more economic ties. While this initiative was welcomed in PRC, thepublic opinion in Taiwan was split.

In the last years of Chen Shuibian presidential mandate, more provocative actions were taken, such as thechange of names of SOEs, embassies and representative offices from ‘China’ to ‘Taiwan’. Many believed it wasunnecessary provocation, including the US. This was changed back with the election of the KMT in 2008. ButTaiwan was still in a grey area: a July 2007 US report stated that the US still didn’t recognized the PRC’ssovereignty over Taiwan.

While the last decade saw increased tensions in the cross­strait relations, the election of the KMT in 2008allowed some of them to ease. Talks between the Strait Exchange Foundation (SEF, ROC) and the Associationfor Relations Across the Taiwan Strait (ARATS, PRC) resumed after a decade without talks. Indeed, when thechairman of the ARATS died in 2004, he wasn’t replaced before 2008 !

Thanks to the renewal of negotiations, the Three Links (boat, air and communication services) were reopened forthe first time since 1949. When it was first proposed by the PRC in 1979, it was greeted by the ‘Three Noes’from the ROC president: ‘No contact, no compromise, no negotiation’, and over the years, struggles and pettyissues blocked the reopening of those services across the strait. It thus took about 30 years for the Three Linksto be established once again.

Overall, since the beginning of the presidency of Ma Ying Jeou, there has been a much better relationship acrossthe strait. The PRC offered 2 pandas to the Taipei Zoo, a food alert was set up across the strait and officialvisits continued. By 2009, mainland investors were allowed to invest in the Taiwanese stock market and bilateraltrade continued to grow quickly.

The current situation is thus looking brighter. As we have seen, even though the relationship across the straitwas very difficult in the past, it recently warmed up and we can only wish for the two governments to get closerand find a peaceful solution. We will now look at the ‘Harmonious World’ put forward by Hu Jintao in 2005 as thenew foreign policy for the PRC. We will see how it influences the issue of Taiwan and how it can lead to apeaceful resolution of the conflict.

III. The ‘Harmonious World’ & Taiwan

In 2005, Hu Jintao made a speech called: “Strive to Construct Harmonious World of Lasting Peace and CommonProsperity.” This was the basis for the new Chinese foreign policy. In his speech, the PRC President called formutual and equal respect, economic cooperation, win­win progress, cultural diversity, cooperation on securitymatters and peaceful settlements of conflicts, as well as environmental cooperation.

Since the end of the Cold War, the PRC decided to follow a ‘non­enemy diplomacy’, reaching to other nations inorder to build trust and cooperation. This policy largely succeeded, and in today’s world, the PRC has only fewcountries it regards as potentially threatening.

In addition to the Harmonious World policy, the PRC had a long history of establishing diplomatic relations basedon the Five Principles of Peaceful Coexistence, which are described as follow:

• Mutual respect for each other’s territorial integrity and sovereignty,

• Mutual non­aggression,

• Mutual non­interference in each other’s internal affairs,

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• Equality and mutual benefit, and

• Peaceful co­existence.

First signed with India in 1954, it was the framework on which both nations intended to cooperate, but it rapidlybecame the basis of diplomacy in Asia and in the Non­Aligned Countries creation in Belgrade in 1961. Eventhough the Sino­Indian war broke out only 8 years after the signature of these principles, it still remains one ofthe pillars of the PRC’s foreign policy.

However, since Taiwan is not a country and that the PRC maintains that it is a part of China, the HarmoniousWorld or the Five Principles of Peaceful Coexistence do not apply as guidance for cross­strait relations. In thepast, we have seen that threats on both sides could escalate very quickly and that military actions weresometimes very plausible outcomes. But restraint from using force has until now always prevailed and dialogueand negotiation have shown that a better way can be found, with both sides gaining from it.

Even though Taiwan is considered as a province of China rather than a separate country, the Harmonious Worldpolicy influences the issue strongly. Given that China is now a world superpower, with a strong economy, a UNSecurity Council seat and an ever growing international position, it faces the potential consequences of usingforce to resolve the Taiwanese issue.

As a global power, the PRC has an international responsibility that restrains the country from using power inindiscriminate ways. One of its responsibilities is toward its own citizen, by promoting economic development.As Taiwanese citizens are considered by the PRC as Chinese citizens, engaging in military actions againstTaiwan would be a breach of such responsibility.

In addition, the international community has great expectations and questions about how the PRC will use itsnewly acquired power to shape the world. Governments and people around the world will be shocked if anyforceful actions were to be taken against Taiwan: how would they then trust the PRC stated goals of peacefuldevelopment if the country uses force against what it regards as its own citizens?

The People’s Republic of China regards Taiwan as an internal matter and doesn’t welcome any foreignintervention. Over the years however, the international community was always more or less involved. During thefight for recognition that lasted from 1949 until now, both governments were courting other countries, looking forsupport and more leverage against the other side of the strait. In addition, the US have been involved heavilysince the Korean war.

It should be noted that the US did not initially support Chang Kai Shek, thinking that the Republic of China andTaiwan would soon fail and be taken over by the PRC. But with the outbreak of the Korean War and thepolarization of the world between Communism and Imperialism, the US started to support actively Taiwan,offering military protection in case of attack, military training and arm sales.

In 1971, the international community then removed the Republic of China from its UN seat. Taiwan becamequickly became increasingly isolated on the international scene. However, even 40 years after its demises, itseconomic force is still strong and Taiwan manufactures many products that the world relies on.

To conclude, should the PRC attempt to reunify Taiwan with China by force, the world will lose trust in theHarmonious World of Lasting Peace promoted by Hu Jintao. As much as Taiwan is a domestic matter for China,a peaceful resolution will prove to the international community the determination of the PRC to respect itsstatements.

IV. Toward peaceful reunification ?

On both sides of the strait, governments agree on one point: Taiwan belongs to China, and eventually the islandwill be reunified with the mainland. The main hurdle is that while mainland Chinese share this point of view, theTaiwanese public opinion is much more fragmented.

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A December 2008 poll shows that 48% of Taiwanese are opposed to reunification with China at any time, 41%prefer the current status quo and 11% only favor eventual reunification. In 2010, a similar poll indicated that 61%of Taiwanese prefer the status quo, 19% independence and 5% reunification. The young are particularly proindependence, with 75% of them considering themselves Taiwanese rather than Chinese.

The last decade of no­contact policy initiated by Lee Teng Hui and followed by Chen Shuibian is certainly forsomething in the results, and Taiwan now faces few choices: independence is out of the question with thePRC’s military threat, which could spark a regional and even international war if the US decide to intervene. Thisis not certain given that after the termination of the Sino­American Mutual Defense Treaty in 1979, the TaiwanRelation Act was signed. There was no mutual defense clause in the act, and the US have since then followed astrategy of ambiguity in case of attack against Taiwan.

The other point worth noting is that independence movements have always existed in Taiwan. Even though theymight not have been strong, and was fought actively by all countries ruling the island (Qing empire, JapaneseEmpire and Republic of China). Because of the repression of the movement during the White Terror, the modernindependence movements has roots in the US and Japan, from which it could operate without being physicallyendangered. With the democratic reforms of mid 1980′s, it was allowed to come back on the island and managedto capture a fair share of the local electoral process.

There are many arguments for Taiwan’s independence, for example the fact that over the last 100 years, it wasonly ruled by the same government as in mainland during 4 years only. In addition, during the Japanese rule ofthe island, the cultural identity was transformed from Chinese to Japanese, with the aim of integrating the islandinto the Japanese empire. While the Japanese rule lasted only 50 years, it was enough to have deep effectswithin the population.

Indeed, when the KMT fled and took over the island at the end of World War II, there was a big backlash againstit because of the corruption and the segregation implemented by the ROC government. This culminated in the’228 incident’ in 1947 which resulted in the establishment of the martial law and the beginning of the WhiteTerror, during which anyone opposing the government was jailed or killed. The martial law imposed in Taiwanlasted for 38 years, one of the longest time in the world. Independence talks were forbidden since the goal of theKMT was to retake the mainland. The ‘White Terror’ left the Taiwanese with a bitter hatred of the KMT and ofmainland Chinese in general. With the democratization process in place, this resentment was able to beexpressed in public.

One of the ‘hot topic’ that started to appear in the late 1990′s was the ‘Taiwanese identity’. Most Taiwanesebelieve that their island has a unique identity, and thus, even though they consider themselves Chinese, theydon’t believe that Taiwan is part of mainland China. However, China is a big country, with many differentethnicities, languages and culture, which are considered as ‘cultures’. For example, a mainland Chinese fromHarbin will have a different culture than someone from XinJiang or Guangdong. However, even though they havedifferent cultures, they are all part of a greater culture, ie: the Chinese culture. Local cultures can thus beconsidered as ‘sub­ cultures’, as they participate in the richness and variety of the Chinese culture. Indeed, manyhave argued that Taiwanese identity is not equal to Taiwanese independence.

Back in 2006, Ma Ying Jeou, KMT chairman and current ROC president, said that the goal of the KMT was aneventual reunification with China. After the uproar caused by his declaration, he corrected himself and supportedthe status quo. Since his accession to power, he followed the strategy of ‘No reunification, no independence andno war.’

However, his policies have been toward more openness with the PRC: he restored the Three Links, opened theisland to mainland tourists and investors and since 2008, Taiwan stopped applying for UN membership.

As a result from this opening, the PRC has not mentioned once the ‘One China’ policy. In addition, during the2008 Sichuan earthquake, the PRC allowed 4 humanitarian flights to fly back Taiwanese businessman and their

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families to the island.

Chen Yunlin, the chairman of the ARATS came to visit Taipei in 2008, the highest level official visit since 1949.While violent protests took place and much controversies arose during the visit, most Taiwanese believe it waseconomically beneficial for Taiwan.

Economic ties across the strait are getting stronger. Already, the PRC is the main export and import partner ofTaiwan, with 28% and 13% of the trade. On the other hand, Taiwan accounts for 6% of the PRC’s imports. ThePRC is a much bigger economical force than Taiwan and continues to grow rapidly. Over the years, the tensedrelations across the strait didn’t affect much of the trade: investments on both sides are numerous and thebilateral trade is about $110bn.

In 2010, the signature of the Economic Cooperation Framework Agreement will reduce tariff and commercialbarriers across the strait. As the PRC has been lobbying and using its influence to restrain other regionalcountries to establish Free Trade Agreements with the island, Taiwan has much to gain from it. In fact, there arehints that the deal has been set up to favor Taiwan: about 539 Taiwanese products and 267 mainland productswill be free of barriers, and the PRC opened 11 markets to Taiwanese investors while the ROC only opened 7.The economic benefits are clearly in favor of Taiwan, which should get about $14bn benefits while the PRCwould only have about $2.8bn.

About 10% of the Taiwanese workforce, or 1 million people are currently working in the PRC. Most of them haveestablished their own businesses, numbering about 500,000 of them. On the other hand, the opening ofTaiwanese stock markets to mainland investors was met with much greetings. While investors from PRC cannotposses more than 1/10th of the total share value of a company, it nonetheless allowed many of them to invest inkey industries. For example, China Mobile bought about 12% of Taiwan’s third largest telecom operator.

On both sides of the strait, there is the belief that economical integration will minimize the risks for war. As seenpreviously, during the 3rd Strait Crisis in 1995/96, real estate and stock market prices in Taiwan fell sharply.Should mainland investors invest significantly in Taiwanese assets, any military threat would cause them to losequite a lot of money. Thus, governments on both sides will have much more incentives to cooperate rather thanprovoking the other side.

Many taiwanese are against reunification as long as standards of living on both side of strait are not equivalent.Given the current path at which mainland China is growing, it might soon be in the range of what Taiwanesebelieve to be ‘equal’. While the PRC cannot sustain its current development growth for ever, neither can theROC. And it should be remembered that already in 1895, Taiwan was the most industrialized and modernizedprovince of the Qing empire.

Economic integration is the easiest way toward reunification, since it is based on incentives and actions thatbenefit all populations. As Taiwanese people will realize that the PRC has much to offer them, in terms ofopportunities and others, they will eventually have much less strong feelings against reunification. In addition,standards of living in coastal cities in mainland China are nearing those of Taiwan. Today’s PRC is not the samecountry as it was 40 years ago.

The example of Hong Kong and Macau can provide some examples on how reunification can be processed. Bothcities had a high level of development, quite ahead than those in mainland China. However, under the ‘OneCountry, Two Systems’, political, economic and social policies were left to the local government and themainland population is still heavily controlled when entering the two cities. So far, such retrocessions have beenlargely successful. A similar strategy has been in the heart of the propositions put forward by the People’sRepublic of China for the reunification with Taiwan.

So far, the only factors impeding a forceful reunification of the island with the mainland are the potentialinvolvement of regional and international forces, like the US or Japan, but also the fact that the PRC hascommitted itself to peaceful policies in the world. As we saw before, even though Taiwan is a domestic matter,

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the international community is heavily involved. Any military actions will be met with very strong condemnations,fear and the loss of trust in the stated policies of the PRC. Thus, even though non­peaceful means have beenformally put on the table by the PRC, a peaceful resolution of the issue will greatly benefit the PRC, both athome and abroad.

On Taiwan’s side, there are many uncertainties. So far, the US is supporting the Taiwanese government. Duringthe 1995/96 third Strait Crisis, the US 7th Fleet was once again dispatched in the area and any further escalationwas avoided. However, the rapid rise of mainland China as an economic force, an international actor and astrong military, is changing profoundly the regional balance of power. The influence of the PRC is now felt allover Asia, and the neighboring countries have come to adapt to the new regional power.

In addition, while the US still has many years to come during which it will exert its influence in the region, therise of mainland China is eclipsing its previous capacities. The current trend is that within a few decades, thePRC will be a superpower and the US will have a diminished role, at least in the Asia Pacific region.

Thus Taiwan has to face the potential withdrawal of its main supporter, arm dealer and defense provider. Oncethe US leaves the region, the island will be left on its own, facing the giant mainland China. Since the PRC isnot going to change its mind and renounce to reunify Taiwan with the mainland, there is only one option left:negotiation for reunification.

Conclusion

As we have seen, the Taiwan strait is a very complex issue, involving a lot of different factors, players andideas. However, while the situations was seen as unsolvable only a few years ago, recent steps taken by thegovernments on both sides of the strait are very encouraging. The reestablishment of the Three Links across thestrait as well as the easing of trade terms will create economic ties that will eventually unify once again Taiwanwith mainland China.

There are still many uncertainties and challenges, but governments and populations on both sides want toresolve this issue peacefully. Force is always an option on the table, however it will actually decrease thechances of reunification rather than increase them.

The Taiwanese issue is still not resolved now, but we should be confident that it will be worked out sooner thanlater.

References

Resolving Cross Strait Relations Between China and Taiwan (http://www.taiwanbasic.com/lawjrn/res­cs2.htm)

Jiang’s 8 points (http://english.cri.cn/4426/2007/01/11/[email protected])

The Entity that Dare not Speak its Name: Unrecognized Taiwan as a Right­Bearer in the InternationalLegal Order (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1015120%20%E2%80%A2%20White%20Paper­­The%20One­China%20Principle%20and%20the%20Taiwan%20Issue;%20http://www.china­%20embassy.org/eng/zt/twwt/White%20Papers/t36705.htm)

Harmonious World (http://www.nids.go.jp/english/publication/joint_research/series3/pdf/3­2.pdf)

Legal Status of Taiwan (http://en.wikipedia.org/wiki/Legal_status_of_Taiwan)

Taiwan Independence (http://en.wikipedia.org/wiki/Taiwan_independence)

Ma Ying Jeou (http://en.wikipedia.org/wiki/Ma_Ying­jeou#Cross­strait_relations) (Cross Strait Relations)

Retrocession Day (http://en.wikipedia.org/wiki/Retrocession_Day)

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Taiwan (http://en.wikipedia.org/wiki/Taiwan)

Republic of China (http://en.wikipedia.org/wiki/Republic_of_China)

Five Principles of Peaceful Coexistence (http://en.wikipedia.org/wiki/Five_Principles_of_Peaceful_Coexistence)

Cross­Strait Relations (http://en.wikipedia.org/wiki/Cross­Strait_relations)

First Taiwan Strait Crisis (http://en.wikipedia.org/wiki/First_Taiwan_Strait_crisis)

Treaty of San Francisco (http://en.wikipedia.org/wiki/Treaty_of_San_Francisco)

Treaty of Taipei (http://en.wikipedia.org/wiki/Treaty_of_Taipei)

Sino­American Mutual Defense Treaty (http://en.wikipedia.org/wiki/Sino­American_Mutual_Defense_Treaty)

Formosa Resolution (http://en.wikipedia.org/wiki/Formosa_Resolution)

Second Taiwan Strait Crisis (http://en.wikipedia.org/wiki/Second_Taiwan_Strait_Crisis)

Strait Exchange Foundation (http://en.wikipedia.org/wiki/Straits_Exchange_Foundation)

Association for Relations Across the Taiwan Straits(http://en.wikipedia.org/wiki/Association_for_Relations_Across_the_Taiwan_Straits)

1992 Consensus (http://en.wikipedia.org/wiki/1992_consensus)

2005 Pan­Blue visits to Mainland China (http://en.wikipedia.org/wiki/2005_Pan­Blue_visits_to_mainland_China)

Third Taiwan Strait Crisis (http://en.wikipedia.org/wiki/Third_Taiwan_Strait_Crisis)

Anti­Secession Law of the PRC (http://en.wikipedia.org/wiki/Anti­Secession_Law_of_the_People%20%27s_Republic_of_China)

May 17 Statement (http://en.wikipedia.org/wiki/May_17_Statement)

Cross­strait Charter (http://en.wikipedia.org/wiki/Cross­strait_charter)

Three Noes (http://en.wikipedia.org/wiki/Three_Noes)

Three Links (http://en.wikipedia.org/wiki/Three_links)

History of Taiwan (http://en.wikipedia.org/wiki/History_of_Taiwan)

Taiwan under Japanese rule (http://en.wikipedia.org/wiki/Taiwan_under_Japanese_rule)

Economic Cooperation Framework Agreement(http://en.wikipedia.org/wiki/Economic_Cooperation_Framework_Agreement)

Taiwanese identity (http://en.wikipedia.org/wiki/Taiwanese_identity)

Cairo Declaration (http://en.wikipedia.org/wiki/Cairo_Declaration)

228 incident (http://en.wikipedia.org/wiki/228_incident)

Taiwan after World War II (http://en.wikipedia.org/wiki/Taiwan_after_World_War_II)

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