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CIAO DATE: 6/99
Cross-Strait Relations after Taiwan's 1998 Elections
February 5, 1999, New York
Mr. Chairman, distinguished guests, and ladies and gentlemen:
It is both my honor and my pleasure to address the Asia Society in New York on the topic of the political development of the Republic of China on Taiwan and the relations between the two sides of the Taiwan Strait. It is particularly meaningful at this time because elections for our National Legislature and mayors of Taipei and Kaohsiung, were just concluded this past December.
Fifty years ago, the central government of the Republic of China was moved to the island of Taiwan, when the Chinese mainland was communized in 1949 with the establishment of the government of the People's Republic of China. China was then divided into two parts; and ever since then on China has remained separated by the Taiwan Straits. The developments of the relation cross the strait have closely linked with the world political situations. The domestic political changes on either side of the Strait also inevitably affected the mode by which the two political entities have dealt with each other. In the political arena, Taiwan has made for more positive changes and advancements than the PRC in recent decades. The Republic of China has not only very well survived the threat and pressure from the PRC in the past half a century, but it has also been extremely successful in developing herself in to a full-fledged democracy in a rather short period of time. Democracy has become a protection shield for Taiwan's security; it has also become a decisive factor in the future development of the bilateral relations of the two sides.
I. Taiwan's Democratization Process
From all perspectives, the maintenance of free and fair elections is the most important yardstick to measure democratization and is the key mechanism to ensure that democracy takes root in a country. If the most important decision-making positions of a government are open to public competition, the elections are recognized as having a free, fair, and open participation process, and the population in general accepts the election results without resorting to any other means to change the government, the country is then recognized as having consolidated its democracy. For many years Taiwan has opened up the most important government decision-making offices to public competition. All political parties are free to participate in elections. Moreover, the population in general accepts the election results as demonstrated by the fact that both the Taipei and Kaohsiung City governments changed guard peacefully following the December 1998 elections. Undoubtedly, Taiwan can rightly proclaim itself a democracy and take pride in the fact that it has further consolidated this democracy.
As noted by many international news sources, the outcome of the 1998 elections is that the Chinese Nationalist Party (the Kuomitang or KMT) has made significant gains, holding for instance a comfortable majority in the National Legislature - winning 123 seats of the total 225 seats. It marks the halting or even reverse of the downward trend of popular support over recent years for the Chinese Nationalist Party, including its electoral showing in legislative elections. In the previous national legislature election of 1995, KMT won only 85 seats out of the total 164 seats, a very marginal majority, with 46% KMT votes Vs 33% DPP votes. The nation wide local government elections of 1997 was even more alarming: of the 23 county magistrate seats, the leading opposition party - the Democratic Progress Party - grabbed successfully 12 seats, KMT rest only 8 seats, 3 seats went to the independent candidates, for the first time the popular votes of the ruling KMT came below that of the DPP by 42% Vs. 41%. Last year, it was an important upturn for the KMT, of the national legislature election, 46.5% votes went to the KMT, 31% to the DPP. More noticeably, the Chinese Nationalist Party has won the race in Taipei, our temporary national capital city. Our candidate Ma Ying-jeou, a Harvard Law School Doctorate has stunningly unseated the Democratic Progressive Party's (the DPP) incumbent Chen Shui-bian, whose popularity was so high that it was difficult to predict who would be the winner of the race prior to election day. KMT candidates captured 51% of the votes; DPP incumbent garnered a 46% share.
While there are many different interpretations and analyses of the 1998 elections, the fact remains that the Chinese Nationalist Party is the most popularly supported political party in Taiwan today regardless of its authoritarian past. This time around most voters demonstrated their recognition and appreciation of the mild political stance of the KMT in formulating her economic and cross strait policies over the extreme views of the opposition parties.
In the 1970s and 1980s, Taiwan's economic growth has rapidly reached such a level that it was frequently termed an "economic miracle." Undoubtedly, Taiwan's economy could not have developed so well without the Nationalist government carefully steering the course of economic development. Because of our economic prosperity, and the availability of low-cost higher education to all citizens, Taiwan's society has been transformed into a modern and cosmopolitan one. With modern socioeconomic conditions ripe for democracy , the Nationalist government, under the leadership of Chiang Ching-kuo in the 1980s and Lee Teng-hui in the 1990s, has embarked on the most difficult task of national modernization and transformation: that of political democratization.
Since the mid 1980s, Taiwan has been guided by the Chinese Nationalist Party leadership along the irreversible road of political liberalization and democratization. Under the order of President Chiang Ching-kuo, major political liberalization efforts were made during his last year and a half of life. These efforts included: the permission to form new political parties in 1986; the lifting of Martial Law Decree and the ban on veterans to visit their mainland relatives in 1987; and the removal of the ban on registration of new newspapers in 1988. In 1990, President Lee held the National Affairs Conference which led to the abolishment of the national emergency period the following year and paved the way for both the total re-election for the National Assembly in 1991 and the National Legislature in 1992. In 1994, again under the urging of President Lee, the presidency of the Republic of China was changed via constitutional revision into a position popularly elected by the people on Taiwan. Moreover in 1996 the international mass media gathered in Taiwan to witness the first direct presidential election, hailing our achievements in political democratization as a "political miracle."
Taiwan may be the only country among the most recent wave of democratizing countries in which the ruling authoritarian political party has survived repeated contests of democratic elections. The December 1998 elections are a monumental case in point. The Chinese Nationalist Party has reasserted itself as the largest and the most popular political party of the country, with the opposition Democratic Progress Party a distant second. The New Party, once touted as the party holding the key to the delicate balance between the Chinese Nationalist Party and the Democratic Progressive Party, has fallen to its lowest ebb in political power since its founding a few years ago. With the continuous efforts of the Chinese Nationalist Party to embark on major development policies and engage in self-transformation combined with the party's ability to implement policies that meet the needs of the people, I am confident that the Chinese Nationalist Party will continue to enjoy high popular support in many future electoral competitions.
II. Full-Fledged Democracy In Taiwan And Mainland China's Misperceptions
While Taiwan's democratization has won praise from all corners of the globe, Mainland China alone views Taiwan's political transformation as a threat. They see this political change as being part of Taiwan's quest for formal independence. This assumption, however, is totally false. In reality, Taiwan's democratization is neither a top-down nor a bottom-up revolution. No single force has been able to determine the outcome of democratization, and the result has been cooperation and interaction between the state and society.
Thus there are at least two mutually influential results of Taiwan's democratization process which have been misinterpreted by the mainland and have thus lead to the unnecessary tension between the two sides.
The Contending Voices of Democracy
The first area of misunderstanding stems from the nature of democracy. Democratization creates new actors who participate in the policymaking process. In addition, social forces receive the chance to participate in the decision-making process. Policy outcomes, in turn, are thus always the result of compromise among competing groups. This is the common practice of a modern democracy.
As Taiwan is a democratic society that respects freedom of expression, both integrationist and separatist ideas are allowed to be expressed and compete in the political realm. Different political parties have emerged, often being associated with different positions on the unification issue. The New Party is considered to be on the side of fast unification with China, the Taiwan Independence Party is seen as the extreme promoter of independence, and the DPP leans towards independence but is also extremely wary of possible violent reaction by the PRC. The position of the Chinese Nationalist Party on the issue is to maintain the status quo and safeguard Taiwan's prosperity and democracy, while pursuing reconciliation and dialogue with Beijing for the purpose of an eventual unification under acceptable terms.
Moreover, public opinion surveys have consistently shown that the great majority of the people in Taiwan want to maintain the status quo, while only ten to twenty of the population is pro-independence. Thus, mainland China is bound to hear a lot of "noise" and extreme ideas about Taiwan's independence from Beijing, which is a normal phenomenon in a pluralistic society. Mainland China should, however, not exaggerate these extreme ideas and accuse the ROC government of "indulging" in independence ideas. The majority of the people in Taiwan vote for the Chinese Nationalist Party in elections precisely because they want the stability that my party's position on cross strait relations ensures.
In reality, the responsibility for limiting these extreme views lies with Beijing. Mainland China's suppressive actions against Taiwan have given a hard blow to the confidence of the Taiwanese people in unification. If mainland China continues to blockade Taiwan's international living space, radical ideas such as Taiwan independence will gather more supporters in Taiwan and thus introduce more unpredictable variables to cross-Strait relations. A reunified China is the long-term goal, but the more urgent task is to build Taiwan into a more democratic and prosperous land. This is the only way a democratic regime like the Republic of China can survive.
The New Taiwan Culture
The second influence on cross-Strait relations centers on the rise of a new Taiwan culture which has accompanied both thirty years of economic growth and the recent democratization process on Taiwan. This "New Taiwan Culture" is based on Chinese heritage, but adds new ingredients to accommodate its capitalist society and a fast-changing world. These ingredients are pragmatism, incrementalism, and compromise. As democratization progresses, a dynamic civil society and the quest to be recognized as a dignified and autonomous entity have risen. These are a natural development which stems from economic growth, but is still quite different from taking the road of Taiwan independence.
Mainland China's skepticism toward the new Taiwan culture is due to the lack of trust. President Lee Teng-hui's recent advocacy of a "New Taiwan Person" is an attempt to diminish the potential conflicts of provincial origins among the residents of Taiwan. It is also a direct challenge to the conspiracy of dividing the Taiwan inhabitants into "Chinese" and "Taiwanese". It is an effort to encourage the people on Taiwan to look forward and grasp the opportunity to integrate themselves into the "global village," and it is certainly not an attempt to mobilize the Taiwan inhabitants as a different race or people against their compatriots on the Chinese mainland.
Both my country's mainland China policy and its pragmatic diplomacy have been a reflection of our people's needs. A democratic regime must respect and implement the majority views from society and is not allowed to push policies reflecting the moral crusades of any individual leader. Political leaders cannot suppress and control public opinion like totalitarian regimes do. Thus President Lee's mainland policy is the outcome of a complex democratic process and mainland China's attacks on President Lee Teng-hui for such a policy are therefore wrongly directed.
III. Major Issues In Cross-Strait Relations
The victory by the KMT in the December 1998 elections can be seen as a vote of confidence in my party's policy towards the mainland. Thus I would like to take this opportunity to review with you two major challenges to cross-Strait relations and the policies my party has adopted to deal with them: 1) the "One China Principle" and 2) Cross-Strait economic relations.
The "One China Principle"
The first major obstacle impeding cross-Strait relations is the different interpretation by the two sides of the "One China Principle". Since President Lee Teng-hui's visit to Cornell University in 1995, mainland China has launched new rounds of propaganda accusing him of "destroying cross-Strait relations." According to Beijing's propaganda machine, President Lee has attempted to give the ROC a new international identity by creating "two Chinas", or "one China, one Taiwan," or even "an independent Taiwan." Beijing argues that for any meaningful dialogue to resume, Taiwan has to return to the "One China Principle" without hesitation.
On both the domestic and international fronts, mainland China continues to push forward its own interpretation of the so-called "One China Principle." For the PRC, "One China" means first, there is only one China, second, Taiwan is a province of China, and third, PRC is the sole legitimate government representing the whole China. China's sovereignty resides in the PRC and Taiwan can only enjoy some degree of autonomy in domestic affairs. Since Taiwan is a part or a province of China, it can participate in the international arena only as a local government. Beijing's strategy has been to press Taipei to open up people-to-people interaction across the Taiwan Strait and engage in political dialogue with mainland China while at the same time vetoing Taiwan's participation as a full-fledged political entity in international organizations. The objective of this strategy is to narrow Taiwan's options and leave Taiwan no choice but to negotiate for reunification. If this so-called "peaceful" means fail, then the PRC claims that it will use force to achieve unification.
Beijing's arbitrary interpretation of the "One China Principle" is unrealistic and neglects the political reality across the Taiwan Strait. The political reality is simply that two equal Chinese entities have governed Taiwan and mainland China separately for the last 50 years. Although both Taiwan and the mainland are Chinese territories, their political and economic systems are totally different. Mainland authorities have never controlled the soil of Taiwan after 1949. To begin a constructive process toward national unification, the Chinese government in Beijing first has to recognize this simple political reality.
Mainland China's "one country, two systems" formula for unification (which means that the PRC represents the only legitimate Chinese state and under this formula communism is practiced on the mainland and capitalism in Taiwan), is neither eligible nor feasible for Taiwan. This formula could only be applied to solve the historical question of British colonial rule in Hong Kong. Furthermore, before Hong Kong's turnover to Chinese rule, Hong Kong had not been a democratic sovereign state. Problems across the Taiwan Straits, conversely, is not the product of Western colonial rule; the Republic of China has existed as a sovereign state in the world since 1912, and will continue to be so as it strides towards the next century. However, Taiwan's realism regarding cross-Straits issues does not mean, as mainland China argues, to "formalize" the current status of separation between Taiwan and mainland China; on the contrary, it aims to treat the situation as it is, and is willing to work gradually towards eventual reunification.
Here I would like to restate the position of the Republic of China on the "One China Principle." Besides the question of China's political unification, the term "One China" also has both historical and cultural content. People on Taiwan and mainland are all Chinese; we share the same cultural heritage and historical experiences. The major difference at the current stage is our social and political systems.
In fact, the ROC government has formally announced its one China policy and the goal of national unification of various occasions. The "National Unification Guidelines," released by our government in 1991, clearly indicates that both Taiwan and mainland China are Chinese territories, with the ultimate goal of building a unified China based on freedom, democracy, and the equitable distribution of wealth. In brief, the ROC government has never abandoned the goal of national unification. What we insist upon is that the process toward unification be peaceful and based on equal footing. This arrangement would serve the interests of both peoples across the Taiwan Strait.
Economic Integration
A second focal point of cross-Strait relations has been economic interactions, which have grown at an astonishing speed in the past twelve years. When Taiwan first opened indirect trade with mainland China in 1987, Taiwan's export value to mainland China was US $1.2 billion. This total reached US $22.4 billion in 1997, or an increase by a factor of 18.7%. Due to the impact of the financial turmoil in East Asia, Taiwan's trade surplus with mainland China decreased in 1998. The estimated surplus value is around 15 billion US dollars, a decrease of about ten percent over the previous year.
In the early stages of economic transaction, investments and trade were conducted by small-scale Taiwanese businesses concentrating in mainland China's coastal areas. Investments are now gradually extending from the coast toward inland provinces and from the South to the North. The scale of investment has also changed from small to both medium and large, and the average investment amount for new projects has similarly increased. According to a recent survey, about fifty-seven percent of Taiwan's big enterprises have invested in mainland China. In addition, Taiwan has become mainland China's fourth largest trading partner, behind Japan, Hong Kong, and the U.S. Taiwan is also the second largest investor on the mainland behind Honk Kong.
Besides the quantitative change, the level of Taiwanese investment has moved from the simple transfer of outdated equipment to the use of completely new production lines, and from labor-intensive assembly and processing industries to capital intensive industries. In the 1980s, Taiwanese businessmen mainly engaged in quick-return, short-term projects in rented factory premises. In recent years, they have tended to make long-term investments with durations of 20 to 30 years, such as in the mainland's infrastructure projects and raw material industries.
However, Taiwan's economic relations with mainland China are currently asymmetric, as our economic dependence on the mainland has been on the rise in the past few years. According to statistics, the share of exports to mainland China in Taiwan's total exports has risen from 2 percent in 1987 to 18.7 percent in 1997.
For a relatively small economy like Taiwan's, we have no right to be over-optimistic or idealistic about economic interdependence and dependence. The main focus of economic interdependence should be the "quality," not just the "quantity," of the relationship. Whether an increasing number of transactions between states produce greater interdependence depends entirely on the nature of transactions. In other words, the "nature" of transaction implies first, whether these ties are costly to break, and second, whether the interdependence relationship is "asymmetric." An asymmetric relationship may increase the vulnerability of the weaker side instead of enhancing mutual benefits.
The fact that Taiwan's economy has greatly depended on the mainland market bestows on mainland China the political leverage to manipulate Taiwan's political economy. Trade could become a direct source of power, and provide a coercive alternative to war. In examining mainland China's economic policies toward Taiwan, Beijing's political intent in attracting Taiwanese trade and investment becomes quite obvious. A more obvious mainland strategy has been to "circumscribe politics with economic benefits, coercing the government through public pressure" (yi shang wei zheng, yi min bi guan). Even worse, mainland authorities have continued to intervene in pure economic affairs for political purposes. For example, due to its reluctance to recognize Taiwan as an equal partner, mainland china has refused to sign an investment protection agreement with Taiwan, arguing that protection of Taiwanese businessmen on the mainland is purely a "domestic affair," covered by mainland's domestic rules. Signing a formal agreement would raise Taiwan's international status and thus create the image of two equal political entities. All these above examples explain that Taiwan's economic dependence on mainland China has been utilized by the mainland authorities to achieve its political goals.
Trade and investment with mainland China is an inevitable trend, but this unique relationship cannot be explained by pure cost-benefit analysis. The word "interdependence" obscures the inequalities of national capability under the mistaken belief that all states are playing the same game. The real situation is rather that all states are definitely not playing the same game. A state that is heavily involved in the international economy but cannot shift to relative autarky is vulnerable. The "economic partner" which Taiwan faces is a rising hegemonic power, which has tried to incorporate Taiwan by coercive means. Therefore, Taiwan has no choice but to adopt a more prudent and incremental policy toward cross-Strait economic interactions. This is the background of ROC's "cautious and self-restrained" (Jieji Yongren) policy toward cross-Strait economic interaction.
Three official principles have been declared in regards to governing cross-Strait economic interactions. The first principle is balance between national security and economic benefits; the Taiwan government will open up economic interactions step by step, depending on the political relations across the Taiwan Strait. The second principle is protecting the national interest. The main concern in promoting cross-Strait economic relations is Taiwan's economic autonomy and its competitiveness in the international market. Economic relations with mainland China should thus enhance, rather than reduce, Taiwan's economic competitiveness. The third principle is maintaining stability across the Taiwan Strait; the long-term goal of Taiwan's economic policy toward mainland China is to promote long-term political stability across the Taiwan Strait. Under these basic guidelines, issues such as opening direct trade, postal, and shipment links are under consideration and careful study. Public opinion polls show that the general public supports the current prudent policies of the government.
The KMT's success in the December 1998 elections confirms the people's support of the government's sensible and middle way approach on her policy towards the mainland. This clearly signifies that the KMT's role in cross-Strait dialogue will increase. Therefore, Taiwan's mainland China policy will continue to be led and guided by the KMT, and will remain unchanged in the foreseeable future. This is to say that a stable and peaceful situation in Taiwan Strait will be maintained through continuous constructive dialogues between the two sides.
IV. Concluding Remarks
Some of the problems that we have with mainland China which I just stated above have existed for quite a long time. And the 1998 elections set a new reality in Taiwan to deal with those old problems. This change indeed guarantees a challenging task for us in dealing with cross-Strait relations.
The new reality in Taiwan is that the people have spoken out in the elections that they want democracy, prosperity, and stable relations with China. The new reality is that people reject the political parties and politicians that advocate either a quick unification with China or a hasty declaration of Taiwan's independence. The new reality is that the opposition Democratic Progressive Party has been trying very hard to replace the Chinese Nationalist Party as the ruling party, and is now forced to reconsider its party platform on Taiwan independence. The new reality is that people in Taiwan, no matter whether they are Taiwanese or Mainlanders, are willing to join their hands together as "new Taiwan Person" to work for the further development of the land which they all love so dearly.
However, the new reality is also that the people on Taiwan simply cannot tolerate the government in Beijing trying to dictate their future. And the very sad thing is that the PRC continues to impose its hostile view that Taiwan is nothing but a province or a part of China and Taiwan should unify with China as soon as possible on their terms.
After President Bill Clinton's visit to Beijing and Shanghai last year, China began pulling all kinds of stunts to drive our friends and allies away from us. In order to further isolate Taiwan diplomatically, Beijing is also keeping us from approaching any international organization such as the World Trade Organization and even the World Health Organization.
To our complete and utter dismay, many people in the United States actually buy the Beijing argument and say to us that Taiwan is a troublemaker in U.S.-China Relations. However, we do not want to make any trouble. We do not want to invite an invasion by China and drag the United States into a war by taking any reckless actions. We want peace with the PRC, and peace is good for both sides of China. Most important of all, we want to be what we are.
With long years of persuasion and encouragement from the United States, we have come a long way to enhance a democratic political system. Now democracy is here to stay. And since democracy has become a permanent fixture of Taiwan, it is the people and their thoughts that shape the government and its policies. Many surveys taken in recent years have shown that whenever Beijing pressures Taiwan harder, more people in Taiwan respond with more negative attitudes toward China and the issue of reunification. Accordingly, our government and various political parties will have to show more determination to resist the Chinese pressure.
My dear American friends, the Republic of China on Taiwan has truly transformed itself into a democracy and you were so right in encouraging us to be democratic. We want to be right, too, in telling the Chinese government exactly the same words that you told us before: be democratic and be on the right side of history because it is good for all.
I am so delighted to have this rare opportunity to meet all of you here and to share with you some of my personal thoughts and observations. It is from the bottom of my heart that I appreciate and adore the United States of America, not only for providing higher education to tens of thousands of students from Taiwan, but also for generously sharing the fundamental American values of democracy, freedom, and human rights with the Taiwanese people. Would not it be wonderful for us to join hands and share those wonderful values with the Chinese people as well some day in the future?
Thank you so much.
The Honorable John H. Chang is Secretary General of the Chinese Nationalist Party (Kuomintang) ROC
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