China and Taiwan: The Economic Issues

Can Mao or the inheritors of Mao's authority entertain the possibility of some "separateness" for any Chinese within his egalitarian One China world? The answer to this question will influence Peking's attitudes toward peaceful coexistence with Taipei, intellectual and cultural diversities at home, and possibilities for future organization of China's economic system.

After a 20-year tradition of relentless mutual hostility, the "recognition" by the United States of the People's Republic of China, implicit in Dr. Henry Kissinger's July 8-11 visit to Peking, produced a sudden and great need for diplomatic recalculation throughout the world. It was inevitable, thereafter, that the People's Republic of China be taken into the Security Council and the General Assembly of the United Nations. And now President Nixon's February conversations with Chinese authorities have focused attention upon what Washington and Peking can agree to do about Taiwan-with Taipei, Seoul and Tokyo, not to mention Moscow, New Delhi and Southeast Asian capitals, likely to perceive transcendent strategic implications in that transaction.

At a press conference last November 30 Dr. Kissinger said: "Our position is that the ultimate disposition, the ultimate relationship of Taiwan to the People's Republic of China, should be settled by direct negotiations between Taiwan and the People's Republic of China....This is our policy, but it is without prejudice, as I have pointed out, to existing commitments." Last spring the White House had scoffed at the possibility that Taipei and Peking could engage in useful dialogue on such a subject. Which expression of White House attitude is a better reflection of reality depends upon how Peking comes to judge the acceptability of allowing Taiwan some separateness, and under what arrangement.

The United Nations has settled the issue of representation: Peking represents China. The international community now turns to consideration of security in the Taiwan Strait. As seen from Peking, that issue relates to U.S. commitments to and military presence on Taiwan, and to Japan's military potential which since the 1969 Nixon-Sato Communiqué on the Reversion of Okinawa, could be seen to be looming over the Taiwan Strait. However, another pressing issue has been largely ignored: the accommodation of the divergent economic purposes and systems which Peking and Taipei have pursued within their goal of One China.

II

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