China Tries a New Tactic on Taiwan - Sweet Talk
Philip Bowring International Herald Tribune
Tuesday, January 9, 2001
TAIPEI Threats and missile tests have been counter-productive so Beijing is now adopting a "good cop" routine to lure Taiwan toward eventual reunification.
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A deputy prime minister, Qian Qichen, suggested last week that China was now showing increased flexibility in its attitude, even acknowledging a degree of equality between the two sides. At the same time, opposition legislators from Taiwan were being told in Beijing that direct air, sea and telecom links across the strait were possible without a formal agreement or Taiwan's acceptance of the "one China" principle.
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Meanwhile a consensus emerged here at a weekend economic conference attended by politicians, academics and businessmen that easing of restrictions on closer links was in Taiwan's economic interest.
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However, it would be wrong to assume that direct links are now either close or inevitable, or that there has been a major strategic shift on cross-strait issues. Rather, there has been a confluence of events which have dictated new tactics on the part of Beijing and have weakened for now Taiwan's position. The new factors are:
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• Both entities are expected to join the World Trade Organization this year. Membership does not require direct links, but implies easing of some trade restrictions and enhances China's attraction as market or low-cost manufacturing base for Taiwan.
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• Taiwan's unilateral establishment last week of so-called "mini links" between its offshore islands of Quemoy and Matsu and the Chinese mainland pushed Beijing to make new overtures. Mini-links have little practical effect but are symbolic of President Chen Shui bian's attempt to be pragmatic on economic issues while standing fast on political principles.
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• Following the U.S. election, Beijing is worried that Washington may push to support Taiwan and press ahead with a proposed missile shield. Appearing to accommodate Taiwan may moderate the attitudes of the new administration and Congress to China.
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• Mr. Chen's government is obstructed by an opposition-dominated legislature and hampered by inexperience and disunity within its ranks. Its weakness is to Beijing's advantage.
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• Despite steady growth and a massive trade surplus, a sense of economic vulnerability has emerged in Taiwan. The stock market has been hurt by the end of the technology boom and by fear of a U.S. downturn. Opportunities appear better in China than in America or at home.
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• The influence of former President Lee Teng-hui has faded. Leadership of the Kuomintang, and other opposition parties, is again dominated by people of mainland origin. Beijing thus has more room to exploit political divisions within Taiwan.
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Given this background, Beijing can afford to drop threats and talk sweetly while using its economic muscle. Taiwan business leaders sympathetic to Mr. Chen and with investments on the mainland have come under pressure to lean on his government. Limits on the size and technology level of investments in China are being bypassed. Taiwan may permit investment from China. Limited tourism from the mainland is also possible.
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However, the political significance of increased commerce should not be exaggerated. When cross-strait investment and indirect trade began a decade ago, there were fears that Taiwan would become dependent on the mainland. In practice, the shift of labor intensive industries to the mainland has stimulated Taiwan's high-tech economy and made China partly dependent on Taiwanese capital and know-how. If anything, the process has strengthened Taiwan's sense of separate political identity.
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Mr. Chen has backed away from talk of independence. His new theme, outlined at the turn of the year, is gradual "integration." This concept is sufficiently vague to enable him to occupy the center ground of Taiwan politics but offers scant comfort to Beijing or to local advocates of unification.
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The net result is likely to be more cross-strait commerce, but scant progress on political issues and probably no direct links. Taiwan's future is, as ever, more subject to the geopolitics of U.S. Japan-China relations than to the ebb and flow of money and sentiments across the strait.

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