The Pandemic Depression
The Global Economy Will Never Be the Same
HISTORY OF A CAMPAIGN THAT FAILED
Political developments in Taiwan over the past year have effectively ended the independence movement there. What had been a major source of regional instability -- and the most likely source of a great-power war anywhere in the world -- has become increasingly irrelevant. The peaceful transformation of relations between China and Taiwan will help stabilize eastern Asia, reduce the likelihood of conflict between China and the United States, and present an opportunity for Beijing, Taipei, and Washington to adjust their defense postures -- all without hurting Taiwan's security or threatening U.S. interests.
Taiwan's independence movement gained momentum in 1995 when Washington allowed Taiwan's then president, Lee Teng-hui, to visit the United States. During his stay, Lee gave a speech at Cornell University that signaled his impatience for independence. Before that trip, the United States had long banned visits by Taiwan's leaders in deference to Beijing's insistence that Taiwan is a Chinese province. By suddenly allowing Lee to visit, Washington seemed to Beijing to be encouraging independence.
China reacted by deploying short-range missiles across the strait from Taiwan and accelerating its purchase of Russian submarines and advanced aircraft. In March 1996, it conducted provocative missile tests near the island, interfering with shipping to Taiwan and provoking the United States to deploy two aircraft carrier battle groups to the vicinity of Taiwan. Following the face-off, the Pentagon began actively planning for hostilities with China and expedited U.S. deployments to eastern Asia and its acquisition of new weaponry. Washington also pressed for closer defense ties with Taipei, which it urged to buy costly, high-profile weapons such as submarines and Patriot missile defense systems. Beijing, viewing these measures as further evidence of the United States' encouragement of Taiwan's independence, became increasingly suspicious of U.S. intentions.
After 1996, the situation remained tense, and the repeated steps toward independence taken by Chen Shui-bian, Taiwan's president since 2000, fanned the flames. Although the independence movement enjoyed a high profile internationally, it never won widespread domestic support. The increasingly unpopular Chen and his Democratic Progressive Party (DPP), the driving forces behind the independence movement in recent years, have suffered several electoral defeats, and advocates of greater cooperation with the mainland have gained ground. A new, calmer era in cross-strait relations seems to be dawning.
BREAKING UP IS HARD TO DO
Taiwan shares a culture, language, and heritage with mainland China. But after Taiwan's half century of autonomy, economic progress, and democratization, and the resulting contrast between Taiwan and authoritarian China, many on the island have developed a strong sense of "Taiwan identity," and they believe that Taiwan now merits international recognition as a sovereign country. By the mid-1990s, the "Taiwan identity" movement had become a major force in Taiwanese politics. But it has not resulted in widespread calls for a formal declaration of independence. Voters, reflecting Beijing's military and economic hold on the island, have preferred to accommodate China's opposition to Taiwan's independence. By 2000, thanks to its accelerated missile and aircraft deployments, Beijing had developed the capability to destroy Taiwan's prosperity before the United States would have time to intervene. Equally important, the rapid growth of China's economy has given Beijing leverage over Taiwan's economy. In 2001, the mainland became Taiwan's most important export market (in 2005, it bought approximately 40 percent of Taiwan's exports), and since 2002, more than half of Taiwan's foreign investment has gone there. Without firing a shot, therefore, China could cause chaos in Taiwan.
As a result of such factors, Chen and other politicians who support independence do not command much support among Taiwan's voters. For a decade, opinion polls have consistently reported that approximately 90 percent of the electorate opposes immediately declaring independence. Indeed, Chen's political success reflects electoral aberrations rather than the popularity of his policy toward the mainland. He won the presidency in 2000 with 39 percent of the vote only because the opposition split between his two competitors. Although he won a majority in 2004, it was the only time his party has done so since the country began holding presidential elections in 1996. And in 2004, Chen won by only a 0.1 percent margin -- after an alleged assassination attempt on Chen and his running mate the day before the vote. Despite the widespread belief that Taiwan has an identity separate from China's, voters have consistently backed the so-called mainlander parties, including the Kuomintang (KMT), which was long associated with violent repression of the democracy movement. The KMT attracted popular support even when it was led by a lackluster presidential candidate and was infamous for its corruption.
Despite his shallow support and the mainland's growing ability to destabilize Taiwan, Chen has continued to risk war by pushing for independence. In the run-up to the legislative elections of December 2004, for example, he and his supporters repeatedly indicated that they might seek to adopt a new constitution that would reflect what he called Taiwan's "present realities," perhaps by changing the country's formal name from "the Republic of China" to "the Republic of Taiwan" or by renouncing Taipei's formal territorial claims to the mainland. Beijing has long maintained that it would consider such changes acts of war. But Chen and his supporters dismissed such threats as empty talk, arguing that China's domestic problems (such as high unemployment, rural instability, and the regime's declining legitimacy), combined with the U.S. commitment to defend Taiwan, had reduced China to a "paper tiger." Beijing responded to Chen's provocations by escalating its threats to use force, prompting the Bush administration to step in and discourage Taipei from such moves. President George W. Bush even publicly criticized Chen and affirmed his opposition to Taiwanese independence in a joint press conference with China's president, Hu Jintao, in November 2004. The DPP lost the elections, frustrating Chen's plan to amend the constitution.
Despite voters' apprehension over Chen's independence initiatives, the opposition had long been too cautious to challenge Chen's policies toward the mainland. In particular, the KMT, Taiwan's largest opposition party, feared that advocating closer relations with Beijing would hurt them at the polls. But the DPP's setback in the December 2004 legislative elections created an opportunity for Taiwan's opposition politicians -- and they grabbed it.
In March 2005, China's legislature, the National People's Congress, passed the Anti-Secession Law, which codified Beijing's threat to go to war if Taiwan declared independence, thus inflaming public opinion in Taiwan against the mainland. Nonetheless, KMT Chair Lien Chan (Lee's former vice president) traveled to Beijing in April, the first visit to the mainland by a leader of one of Taiwan's major political parties since 1949. Lien and Hu jointly declared their opposition to Taiwan's independence and their support for the "1992 consensus," in which Taiwan and the mainland agreed that there is "one China" (although it should be noted that Taiwan held to its own interpretation of the meaning of "one China"). Lien also gave an emotional speech at Peking University, recalling the greatness of China's past and looking forward to a future of cooperation between Taiwan and the mainland. Polls taken shortly after Lien's trip showed that 56 percent of Taiwan's electorate supported his visit and that 46 percent believed that the KMT was the party most capable of handling cross-strait relations. Only 9.4 percent believed that the DPP was most capable.
Since Lien's visit, other opposition politicians have gone to Beijing, bringing home commitments by Beijing to expand cross-strait trade and cultural ties. Going around the allegedly "obstructionist" Chen, the KMT has reached trade agreements with Beijing granting preferential access to the mainland's market for Taiwan's agricultural products. In addition, the KMT and the mainland's Taiwan Affairs Office have opened bureaus to facilitate communication and the resolution of business disputes on the mainland involving Taiwanese companies. Beijing, in effect, has begun campaigning for the KMT.
The KMT's new strategy has paid off handsomely. The opposition dealt the DPP a major defeat in the December 2005 local and municipal elections; Chen's party won only 6 of the 23 open posts, while the KMT-led coalition carried the rest. Although corruption in the DPP was a major campaign issue, so too was the party's policy toward the mainland. Once again, voters opted for cross-strait stability and pragmatic diplomatic and economic policies. Since the election, support for Chen and the DPP has been in free fall. Only 10 percent of the electorate -- and 5 percent of the business community -- approved of Chen in December's polls; the DPP's approval rating was 18 percent. The DPP is riddled with growing divisions, as younger politicians trying to reorient the party toward more pragmatic policies vie for leadership with the party's "fundamentalist" pro-independence elders.
Rather than adjusting to this new political reality, Chen has denounced the KMT's cross-strait activities, blocked visits to Taiwan by mainland negotiators, and rejected the unofficial agreements negotiated with Beijing by opposition politicians. In his 2006 New Year's Day speech, Chen reiterated his support for independence and a new constitution. He also called for tightening the constraints on cross-strait economic relations, despite the widespread defection of business leaders to the KMT and government polls reporting that over 75 percent of voters support trade liberalization. In January, the mainland publicly offered to send two pandas to Taiwan, but despite a public outcry in favor of accepting them, Chen's government resisted, charging that Beijing's "panda diplomacy" was intended to undermine Taiwan's vigilance against the threat from China.
The KMT's popularity, meanwhile, has continued to surge. Following the December 2005 elections, Taipei Mayor Ma Ying-jeou, likely to be the KMT's candidate in the 2008 presidential election, received an 80 percent approval rating in opinion polls. Like Lien, Ma publicly opposes independence and supports the 1992 consensus, which he helped negotiate. To promote Taiwan's economic growth, he advocates liberalizing trade with the mainland and allowing direct shipping and direct flights to the mainland (currently, cargo and passengers are required to go through Hong Kong).
Taiwan's electorate has consistently rejected a declaration of independence; the risks are simply too great. And they will only grow as the mainland's military power continues to increase and its stranglehold over the island's economy becomes firmer. There is nothing the United States can do to protect Taiwan fully -- no defense Washington can provide against Chinese missiles, no alternative it can offer to economic engagement with China. Moreover, the urge for independence will weaken further as greater numbers of Taiwanese -- more than a million of whom already live on the mainland -- take advantage of the educational and economic opportunities in China.
The demise of Taiwan's independence movement has removed the only conceivable source of war between the United States and China. The two countries will continue to improve their military capabilities and compete for influence in eastern Asia, but as the threat of war over Taiwan recedes, they may moderate their defense policies toward each other. As Beijing gains greater confidence that Taipei seeks not independence but cooperation, it should be able to relax its military posture. Unilateral freezes on new missile deployments and redeployments of missiles away from the Taiwan Strait by Beijing would increase support among Taiwan's voters for the KMT's policy of engagement. Such actions would also promote good relations between China and other countries in the region, serving China's declared objective of a "peaceful rise."
The United States will also be relieved of the imperative to prepare for war with China. The United States will be able to reduce its pressure on Taipei to buy costly U.S. weapons that are ill suited for Taiwan's defensive needs and politically controversial. In fact, Washington should develop a new defense package for Taiwan that is more sensitive to Taiwan's strategic and budget realities and that could promote more cooperative political ties between Taipei and Washington by removing a source of acrimony from their relationship. The easing of tensions between Taipei and Washington would contribute to the emergence of less contentious relations between China and the United States and facilitate Washington's cooperation with other U.S. allies in the region. Although there is regionwide apprehension over China's threat to use force against Taiwan, there is also little sympathy in the region for Taiwan's independence movement; indeed, Washington's commitment to Taiwan has been a divisive issue in U.S. relations with South Korea and Australia.
Once freed from the immediate threat of war, Taiwan will be able to focus on promoting economic development and consolidating its still-young democracy. U.S. interests in Taiwan are undiminished by Taiwanese voters' support for the status quo in cross-strait relations, and an unprovoked Chinese attack on Taiwan would challenge those fundamental interests. Washington will remain the guarantor of Taiwan's security: U.S. defense ties with Taiwan and the United States' security commitment to the island are stronger today than at any time since the Nixon administration.
Washington has long considered Taiwan's moves toward independence a threat to U.S. security because they could lead to war. And so it was unsurprising when U.S. Deputy Secretary of State Robert Zoellick's September 2005 comprehensive review of U.S. relations with China included only three brief neutral sentences on Taiwan, signaling U.S. satisfaction with current trends in cross-strait relations. Now that Taiwan's independence movement is waning, and the risks of war between China and the United States are receding, defending U.S. interests in the region will become far easier.