LET TWO CHINAS BLOOM

What in the world is Taiwan up to? More than two decades ago, the Republic of China on Taiwan was forced out of the United Nations when a majority of U.N. members voted to seat the People's Republic of China. At that time Taiwan adamantly refused to endorse any formula that might have allowed it to retain its U.N. membership alongside the P.R.C., which was being given the Security Council seat. Now Taiwan is pressing for a role in the United Nations under almost any conditions. Launched in mid-1993, Taiwan's all-out campaign to return to the United Nations is being widely dismissed even by some of its friends as quixotic at best. Nevertheless, it merits serious attention in Washington, and even more so in Beijing, because it is emblematic of the rapid democratization of Taiwan's politics that is transforming its foreign policy, particularly toward the P.R.C.

The rationale for Taiwan's U.N. stance is that, while the Republic of China (R.O.C.) remains committed to the idea of one China and thus theoretically to the eventual reunification with the mainland, a separate government has ruled the island and its now 21 million residents continuously since 1949. And it has ruled well: Taiwan boasts a modern economy that provides a good living standard for the vast majority of its citizens and a political system that has virtually completed the transition to democracy. Today Taiwan outstrips most U.N. members in GNP (with the world's twentieth-largest economy), trade volume (the world's thirteenth-largest), and population (larger than that of two-thirds of the U.N. membership). Following the precedent set by Germany and Korea of dual representation for divided nations, the Republic of China on Taiwan clearly deserves a place in the U.N. system.

CHINA'S HOLLOW VICTORY

Despite the strong case made by Taiwan for U.N. membership on historical, legal, economic, and ethical grounds, its first attempt to put the issue before the United Nations in the fall of 1993 was an embarrassing failure. Only a few countries--most of them small, poor Caribbean Basin nations that receive economic assistance from Taiwan--spoke out on its behalf. The explanation for Taipei's failure was simple: Beijing fervently opposes any role in the United Nations for what it still portrays as a renegade province with an illegitimate government. With China's burgeoning economic and military power making it second in importance only to the United States in many nations' eyes, Beijing had little trouble ensuring that few would speak on Taiwan's behalf. In pragmatic terms, even U.N. members enjoying good ties with Taiwan faced an easy, expedient choice: to incur Beijing's wrath by openly supporting Taiwan's apparently hopeless quest, or to remain silent while the issue was buried in committee.

And buried in committee the issue might remain. As long as the Beijing government presides over a strong and reasonably united People's Republic, it can easily wield enough power to frustrate Taiwan's effort to reenter the United Nations. But in doing so, Beijing is hurting its own interests and retarding the cause of Chinese reunification.

Because Taiwan's U.N. prospects seem so bleak, even many of Taiwan's friends abroad have been unsettled by its U.N. campaign. Some observers have dismissed it as a product of domestic Taiwan politics. But that is precisely why Taiwan's U.N. campaign is so significant. The people of Taiwan are speaking out and, now that democracy has arrived, the government is listening carefully. At the center of Taiwan's democratic politics today is the emotional issue of Taiwan's international identity--whether to seek an independent Taiwan or some form of reunification with China, and since neither seems immediately attainable, how best to manage the ambiguity of Taiwan's current status. Although this debate is far from resolved and often conducted in veiled language, the people of newly democratic Taiwan are determined to be heard on the issue of their island's future. Indeed, the Kuomintang (KMT, or Nationalist Party) government launched its U.N. campaign, with great reluctance, only after concluding that the Taiwanese people, whatever their political allegiance, had overwhelmingly supported the main opposition party's call for U.N. membership.

So Beijing should not rest on its easy victory against Taipei at the United Nations; easy victories often prove hollow. Beijing instead could serve its own interests by trying to understand the factors, chief among them the democratic process, that drove Taiwan's government to seek U.N. membership despite the overwhelming odds against it. So far it seems that the leaders of the People's Republic of China fear but do not understand the new politics of Taiwan.

THE NEW TAIWAN

In January 1988, Lee Teng-hui became president of the R.O.C. on Taiwan and immediately made flexibility and pragmatism the official hallmarks of his foreign policy. Underlying this approach was a radical new principle that became official Taiwan policy in 1991: one China, two political entities. It asserts that in China today there are two governments, the R.O.C. and the P.R.C., each legitimately ruling the area it controls. The logical extension of this argument is that both governments deserve to be represented abroad, which might strike some as obvious. But it represents a sharp break from the previous position of the R.O.C. on Taiwan: that there is only one China, and it can have only one legitimate government. This is still the position taken by the P.R.C., which has been unrelentingly attacking the R.O.C. for shifting its stance.

Under President Lee's new policies, Taiwan began pressing vigorously for admission to international organizations. It returned in 1988 to Asian Development Bank meetings, accepting the designation it had spurned two years before. In 1990, Taiwan applied for membership in the General Agreement on Tariffs and Trade as the "Customs Territory of Taiwan, Penghu, Kinmen, and Matsu." Taiwan's GATT nomenclature paid implicit tribute to the idea of one China while reflecting the reality that Taiwan was governed separately, but Beijing refused to recognize the conciliatory gesture. In 1991, Taiwan was admitted to the Asia-Pacific Economic Cooperation forum's meetings.

Even more impressive was Taipei's drive to develop intergovernmental relations with countries that had diplomatic relations with Beijing. By mid-1994 the R.O.C. government had set up "administrative" or "representative" offices, performing many functions of a typical embassy, in about 60 countries. In another 30 countries where Taiwan was forced to adopt a lower profile, it maintained some sort of agency, such as a business office or travel bureau, as a point of contact.

In the late 1980s and early 1990s, Taiwan's unofficial relations with the United States continued to improve. In September 1992 President George Bush approved a $6 billion sale of 150 F-16 fighters to Taiwan, partly to restore a military balance of power that had been disturbed by the P.R.C.'s purchase of Su-27 bomber aircraft from Russia. Within days U.S. authorities also announced the sale of 12 SH-2F helicopters to Taiwan for $161 million. This year Congress passed legislation that effectively overturned the Reagan administration's agreement to reduce arms sales to Taiwan, declaring that the commitment of the 1979 Taiwan Relations Act to ensure that Taiwan has sufficient self-defense capability takes precedence. In September the Clinton administration announced that it was modestly expanding its official ties with Taiwan and allowing its offices in Washington and other cities to be renamed the Taipei Economic and Cultural Representative Office in the United States. A senior State Department officer, however, said visits by Taiwan's top officials would still be barred.

Taiwan has also developed extensive unofficial ties with communist and formerly communist countries. Taiwan succeeded in setting up de facto government offices throughout Central Europe, where its presence was once negligible. In Asia, Taiwan's greatest success was establishing ties with Vietnam in 1988; by 1994 Taiwan was Vietnam's leading foreign investor.

Taipei even enjoyed some minor victories in its long-standing competition with Beijing over formal diplomatic ties. Between 1989 and 1992 Taiwan convinced seven Caribbean and African nations that had diplomatic relations with Beijing to establish formal ties with Taipei. Taipei was clearly hoping that Beijing would not automatically break off relations with the countries concerned, but in every case it did, even when ties stopped short of full diplomatic relations. After Latvia decided in January 1992 to upgrade relations with Taiwan to the consulate-general level, Beijing continued to protest the arrangement until Latvia retreated this year.

CHINA OUTBIDS TAIWAN

The 1988-92 period may well have been the heyday of Taiwan's pragmatic diplomacy. Taiwan undoubtedly benefited from the temporary decline in Beijing's international standing after the Chinese leadership ordered tanks into Tiananmen Square in June 1989 to suppress anti-regime demonstrators. When China's economic growth then temporarily slowed, Taiwan clearly drew advantage from its burgeoning economy and huge foreign exchange reserves, then the largest in the world. Taiwan's economic strength, relative to the mainland's, probably reached its zenith during this period.

But by mid-1992 China's market-oriented economic reformers were back in control, with Deng Xiaoping at the vanguard, and the mainland economy had resumed its hyper-rapid growth. Eager to profit from what promised to be the biggest economic takeoff in history, the world's business leaders were beating a path to Beijing's door, and the political leaders of many industrial nations were not far behind.

With its economic, military, and political power growing rapidly, China had the resources to outbid the R.O.C. in the international arena. In August 1992 China's burgeoning economy and international trade helped lead South Korea to forsake its old and deep friendship with Taiwan and establish diplomatic ties with Beijing. France agreed to end arms sales to Taiwan after the P.R.C. made it clear that French companies would be punished if such sales continued and rewarded if they stopped. Although in 1994 the Republic of China on Taiwan still maintained formal diplomatic relations with 29 countries, only one of them, South Africa, could be classified by size, wealth, or population as large.

China now enjoys enormous power in the world community. It can prevent many things from happening or make efforts difficult for other major powers, including the United States. The P.R.C.'s veto in the Security Council is the most obvious manifestation of this fact; its ability to make or break an embargo of North Korea is another.

Taiwan's leading policymakers, who are acutely sensitive to every shift in their environment, understood that, no matter how prosperous and modern Taiwan's economy might be, it cannot directly match the international leverage inherent in a Chinese economy of enormous size growing at more than ten percent a year. Taiwan's authorities had to conclude that the rapid increase since the mid-1980s in the number and substance of its quasi-diplomatic ties with foreign countries was not necessarily going to continue indefinitely.

THE SOUTHERN STRATEGY

Even more troubling to Taiwan's political leaders was the extent to which Taiwanese businesses were being drawn to the mainland. Taiwan's businessmen, eager to escape the high land and labor costs that were crimping the profits of their labor-intensive, export-oriented industries such as toys and footwear, had begun shifting production to the mainland in the mid-1980s.

Ironically, the shift sharply accelerated soon after the Tiananmen incident and has continued to increase every year. Taiwanese businessmen shrewdly recognized that Beijing was desperate for investors when most countries hesitated to sink additional capital into the P.R.C. By 1992, according to the R.O.C. Central Bank, the mainland was absorbing 45 percent of Taiwan's capital outflow. By mid-1993 Taiwanese companies had made investment commitments on the mainland of $14.2 billion, of which more than $10 billion had already been expended. Unofficial estimates of current Taiwanese investment on the mainland run as high as $30 billion. Eyeing these trends, the leaders in Taipei realized that most of Taiwan's overseas investment capital would be sunk into mainland enterprises within a few years. This means that the P.R.C. would enjoy overwhelming leverage over Taiwan's business community and thus considerable influence over the R.O.C. government.

Taiwan's fears were anything but fanciful. After the December 1992 elections, which saw an upsurge in the strength of the pro-independence opposition, the Democratic Progressive Party (DPP), Beijing apparently realized that it was blocked politically in its drive for assimilation of Taiwan. It began emphasizing economic and trade relations over political issues, with the intent of diffusing Taiwan's independence movement through economic integration. Taiwan's leaders saw the same picture, prompting them to seek countervailing international connections to offset the risk of being absorbed economically and politically by the mainland.

This set the stage for the launching of Taiwan's U.N. campaign the following spring. The Taiwanese government also urged business leaders to slow the pace of investment on the mainland and look at investment opportunities elsewhere. Officials announced a "southern strategy" aimed at strengthening Taiwan's ties with Southeast Asia by encouraging Taiwan's businesses to invest more in that region. Until about 1990, Taiwan's investment in Southeast Asia had increased rapidly. But by then China was beckoning, and annual new investment by Taiwanese companies in Southeast Asia plummeted. By 1994 it was less than one-fifth, and possibly just one-tenth, of 1990 levels. While Taiwan's total investment in Southeast Asia is currently about $16.7 billion, that figure will soon be overtaken by investment on the Chinese mainland, if it has not been already.

Taiwan's leaders realize that they and their Southeast Asian counterparts have a strong mutual interest in steering Taiwanese investment to that region. Particularly in Indonesia, Malaysia, Singapore, and the Philippines, concern about China's economic power and military intentions is high. Their leaders are anxious about potential investors, both domestic and foreign (that is, Taiwan), being lured away by the China boom. Taiwanese authorities have been working with several Southeast Asian governments to offer incentives to Taiwanese investors, and in the Philippines and Vietnam they have helped sponsor industrial development zones aimed at attracting Taiwanese capital.

A LITTLE RESPECT

The people of Taiwan are proud of what their island nation has accomplished economically, socially, and politically. That pride is mixed with increasing resentment over their nation's international outcast status, which they consider unfair, unjust, and insulting. These feelings connect with a growing consciousness of a Taiwanese identity and a growing wariness of the mainland. These sentiments are shared by those who hope that Taiwan can one day be a separate and independent country and those still committed, however abstractly, to the ultimate goal of one China. They transcend party lines and the increasingly fuzzy division between mainlander and Taiwanese families. One aspect of this is the desire for respect, "face," or standing--call it what you will--for Taiwan in the international community.

The DPP tapped into such sentiments years ago. When the opposition DPP was founded in the fall of 1986, the party called for U.N. membership for Taiwan. It proved to be a political masterstroke and a no-lose issue for the DPP. The demand struck a sympathetic chord throughout the population. Of course, the pro-independence DPP expected the P.R.C. to fiercely oppose its U.N. plank, but this served the DPP's interest in portraying the P.R.C. as hostile to Taiwan. And as long as the DPP harped on the need for U.N. membership, it helped divert public attention from the substantial foreign policy achievements of President Lee and the KMT government.

The DPP's U.N. plank hurt the KMT not just because it won widespread popular support but also because it threatened to change the terms of political debate in Taiwan. The DPP's position made it clear that a DPP government would apply for U.N. membership as "Taiwan," a new state. In other words, the DPP's popular call for U.N. membership amounted to a backdoor endorsement of Taiwan independence. So the KMT, whose historic identity stems in part from its commitment, however abstract, to the eventual reunification of China, felt compelled to take the U.N. issue away from the DPP and redefine it as a legitimate demand that both parts of a divided nation be represented in the United Nations. The alternative for the KMT was to remain on the political defensive and risk relinquishing its dominance of the central political debate over Taiwan's identity and future.

When Taiwanese officials launched their U.N. campaign in mid-1993, their initial goal was merely to "participate" in the United Nations; they carefully avoided making their demands more explicit. They also signaled their willingness to participate initially only in peripheral U.N. organizations. Given the flexibility Taiwan's authorities have displayed over the form and legal basis of their participation in the United Nations, the P.R.C. seems once again to have missed an opportunity to advance its interests as well as the cause of reunification. If the Foreign Ministry in Beijing had been sufficiently shrewd and creative to offer Taiwan some sort of subordinate participatory role in the United Nations, it might have created a painful dilemma for Taipei. If it accepted, it could be construed as acknowledging Beijing's power to determine its international status. If it refused, its U.N. campaign would be fatally undermined, and it would appear rigid while Beijing appeared accommodating.

Unfortunately, all of this remains speculation. Beijing responded to Taiwan's U.N. initiative on September 1, 1993, with a white paper that made clear Beijing's renewed determination to block the participation of the R.O.C. in the international community, including the United Nations. Once again the P.R.C. refused to acknowledge that a legitimate, democratic government exists on the island. According to the white paper, "the sole legal government representing the entire Chinese people" is in Beijing.

While it is doubtful that any diplomat was won over by the white paper's arguments per se, it served its purpose. It reminded the world's envoys and foreign policy makers that the P.R.C. would treat as a hostile act even the mildest manifestation of support or sympathy for Taiwan's plea to participate in the United Nations. Little more needed to be said. The P.R.C. had demonstrated its willingness to punish countries economically if they maintained ties with Taiwan. The P.R.C.'s version of dollar diplomacy aside, it also enjoyed the advantages of the defender. It was not asking other countries to do anything except to ensure that the Taiwan participation issue be quietly buried by inaction--a request that undoubtedly appeals to cautious diplomats.

Certainly one could infer that Taiwan had many timid, silent sympathizers when the question of its participation in the United Nations was raised at a meeting of the U.N. General Committee on September 24, 1993. The question was simply whether to put the issue on the committee agenda. Of those committee members in attendance, three countries with whom the R.O.C. maintains diplomatic relations spoke in favor of Taiwan. Eleven countries spoke against. The majority--24--said nothing. No formal vote was taken and, as far as that year at the United Nations was concerned, the issue was moot.

Since that setback, Taiwan has not ceased promoting its case. The KMT government still seems completely committed to the U.N. campaign, even though some of the pressures that precipitated the decision to launch the campaign have eased. The slowdown in new Taiwanese investment in the mainland that began in 1993 is continuing, and since the December 1992 election, the DPP has not fared quite as well. Even so, by early this summer, Taipei's worldwide campaign for the 1994-95 U.N. season was in high gear.

THROUGH THE BACK DOOR

Some friends of Taiwan have been promoting the idea of entering the United Nations through the back door, that is, by participating in the work of the specialized U.N. agencies. Taiwan has repeatedly offered substantial financial contributions to U.N. organizations that allow it to participate. That way Taiwan would gain legal or de facto membership in the specialized agencies and could gradually enlist a two-thirds majority of U.N. members to support its application for membership.

Such suggestions seem to imply that China is economically weak or diplomatically inept. It is neither. The reality is that the P.R.C.'s diplomats are already quite aware of this proposed gradualist strategy, and are primed to react to any evidence that Taiwan is adopting it. In addition, the foundation of this strategy--using Taiwan's economic clout to make offers to U.N. agencies too generous to be refused--is flawed. Taiwan's relative economic strength vis-a-vis the P.R.C. has probably peaked; Taiwan's strong and expanding economy is no match for the sheer volume of growth generated by China's economic takeoff. This means that the P.R.C. has sufficient economic resources to prevail, directly or indirectly, in any bidding war at the United Nations. In short, the P.R.C. today has the economic clout and the diplomatic savvy to stymie a Taiwanese effort to enter the United Nations through the back door--or, for that matter, the front door.

Although they cannot publicly acknowledge it, Taiwan's top officials undoubtedly understand that the road to the United Nations ultimately goes through Beijing. Taiwan has been sending a subtle message to the P.R.C. that is part threat and part promise. The threat is that if Beijing continues to isolate and humiliate Taiwan internationally, especially by blocking its participation in the United Nations and other intergovernmental organizations, then it will foster pro-independence sentiments in Taiwan that the KMT will be unable to counter. Alternatively, Taipei officials seem to be saying, they are ready to enter serious talks aimed at eventual reunification once Beijing gives Taiwan "face" and endorses its participation in the United Nations. Taiwanese officials must measure their words carefully here because of the great wariness of the mainland that prevails in Taiwan.

Nevertheless, several Taiwanese officials have said in recent months that Beijing could promote the goal of reunification by endorsing Taiwan's U.N. bid. Given that Taipei has repeatedly made clear that the terms of its participation in the United Nations are negotiable, Beijing should recognize the opening that is being presented.

A SYMBOLIC UNION

The P.R.C. must first come to grips with the reality of a democratic Taiwan. Beijing has long acted as if its goal was to browbeat or inveigle a ruling clique on Taiwan into agreeing to peaceful reunification. That window, if it was ever open, has now closed forever. When Beijing treats the elected government of Taiwan as an illegitimate entity ruling a renegade province, it insults the people of Taiwan, including those who did not vote for the ruling party. Such tactics only promote pro-independence sentiment.

Beijing must also rid itself of the comforting delusion that Taiwan's campaign to participate in the United Nations is a concoction of Taiwan's political elite and unnamed villains in the United States, something the P.R.C. media regularly suggests. Instead, Beijing must see the U.N. campaign as a product of Taiwan's democratic process.

The P.R.C. has only one realistic option if it wants to achieve even a symbolic reunification with Taiwan, and that is to woo the people and leaders of Taiwan. Beijing has never made clear how its formula for reunification--one country, two systems--would work in Taiwan. While Hong Kong will begin operating under that formula in 1997, the transition from British rule so far has not provided a reassuring precedent for Taiwan residents. Even the director of the Institute of Taiwan Studies in Beijing acknowledges pervasive "misgivings" about one country, two systems, and the existence of public opinion polls showing that few Taiwanese support it.

Serious wooing by Beijing would mean making a creative and conciliatory proposal to Taiwan that, without surrendering the principle of one China, would respect and acknowledge Taiwan's legitimacy as a separate political entity. Any realistic arrangement would acknowledge Taiwan's right to play a role in the international community, including the United Nations. In return, Taiwan would have to join with the P.R.C. in reinvigorating the idea of one China, giving it some institutional reality, however symbolic. There are many ideas about how to accomplish that, but they will remain so much smoke until Beijing makes a genuine and generous overture to Taiwan.

Such an overture will have to wait until a younger and more flexible leadership consolidates control in the post-Deng era. A reading of the communist media in Beijing and Hong Kong suggests that Deng's rigid position on Taiwan issues is still the key factor in the P.R.C.'s Taiwan policies. Nevertheless, it is not too early for Beijing's younger leaders to contemplate the political trends in Taiwan that indicate time is not on their side.

ALL FOR ONE

What role should the United States play in all this? The short answer is, a wary but sympathetic one. While the State Department's current position is that it does not support U.N. membership for Taiwan, it should at least declare that it favors any agreement between Taiwan and the P.R.C. that would allow Taiwan to participate in the United Nations. A senior State Department official committed the United States in September to increased efforts to support Taiwan's attempts to gain admission to international organizations like GATT that do not require members to be nation-states. Beyond that, the United States must exercise caution, because Washington has a strong interest in upholding the principle of one China. The U.S. government has repeatedly acknowledged this principle ever since President Richard Nixon's joint communique‚ with Premier Zhou Enlai in 1972. If the United States were to endorse a U.N. role for Taiwan in the face of P.R.C. opposition, Beijing could then attack Washington for violating the one-China principle.

The one-China principle has gained renewed importance in light of the possibility that the DPP could gain power in Taiwan sometime in the future. The DPP's promotion of Taiwan's independence ultimately rests on an irresponsible gamble--that it could get away with provoking Beijing by declaring de facto independence because the United States would come to Taiwan's defense.

It is true that the Taiwan Relations Act declares U.S. opposition to any attempt by the P.R.C. to use force against Taiwan. Although it stops short of an explicit commitment, the act morally obliges the United States to come to Taiwan's aid if the P.R.C. attacks it. But that obligation was made in the context of the U.S. commitment to one China. The U.S. commitment to defend Taiwan would no longer be clear once a pro-independence government took power in Taiwan and repudiated the principle of one China.

Chinese military action against Taiwan would prompt a bitter debate in the United States, with some arguing that America's commitment to a democratic Taiwan was undiluted and others that the United States should not risk all-out war with China because of a rash act by Taiwan. Thus Washington has a strong interest in continuing to support the principle of one China.

The best thing Washington can do is to remind Beijing of the mutual interest of the United States and the P.R.C. in avoiding the crisis that would become inevitable if Taiwan declared independence. But responsibility for avoiding such a development is not mutual. It is up to Beijing to propose a new formula that will preserve the idea of one China while accepting Taiwan's right to a respected place in the world.

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  • Ross H. Munro is Director of the Asia Program at the Foreign Policy Research Institute. He was a correspondent in Asia for Time magazine, and The Globe and Mail during the 1970s and 1980s.
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