'Taiwan is an inalienable part of China's territory. The greatest threat to peace in the Taiwan Straits is from the splitist activities by the "Taiwan Independence" forces.'
Chinese President Hu Jintao, 2003
In June 2007, Taiwan was deeply hurt by a small country right across the world, Costa Rica. It turned out that Costa Rica, one of the few countries that officially recognise Taiwan, had switched allegiance and decided to support the People's Republic of China instead. It seemed that the Costa Ricans could no longer resist the lure and financial blandishments of increasingly prosperous – and big – mainland China. Costa Rica's president Oscar Arias explained it very simply as 'an act of elemental realism'. Taiwan's foreign minister James Huang was upset, replying, 'This is not something that a country that stands for peace and democracy should do, cut ties with its partner of 60 years.' Unfortunately for Taiwan, it seems likely that more of the island's dwindling band of supporters, such as Panama and Nicaragua, will follow suit. The score now stands at mainland China 170, Taiwan 24 – and most of Taiwan's team is small and poor.
It's all very different from the 1950s, when the situation was completely reversed – and all the more ironic since Taiwan is now a fully functioning democracy, whereas back then it was a military dictatorship under the rule of General Chiang Kaishek. Chiang Kaishek, the leader of China's nationalists the Guomindang (GMD), had fled to the island of Taiwan after his armies were defeated by the Communists in 1948. There he was joined by up to two million of his followers. Chiang's followers are called Mainland Chinese to distinguish them from most other people in Taiwan who also came originally from the mainland, mainly from Fujian and Guangdong, but long ago in imperial times. There are also small numbers of Taiwan aborigines.
The Chiang gang
When they arrived in 1949, Chiang and his followers – essentially the Chinese Nationalist army – quickly took control of the island and set up China's National Assembly here. For Chiang and the GMD their stay on Taiwan was always meant to be short-term. The People's Republic of China (PRC) established by the Communists on the mainland was, as far as Chiang was concerned, illegitimate, and it was only a matter of time before he and his followers returned to the mainland to re-establish the Republic of China (ROC). Taiwan was for him only a province of the ROC, even though over the years, people have come to talk of Taiwan as the Republic of China and mainland China as the People's Republic of China. The PRC, meanwhile, likewise claims that Taiwan is a province, but a province of the PRC, not the ROC.
Until 1971, it was the Communists who were regarded by the rest of the world as the renegades, and the ROC were regarded as China's only legitimate Chinese government. But the efforts of the PRC's Zhou Enlai to gain international recognition – along with US president Richard Nixon's attempt to woo China as a counterbalance to the Soviet Union – finally paid off. The UN switched diplomatic recognition to the PRC, not the ROC, which was ejected from the UN. Since then, the number of countries recognising the ROC has dwindled. The ROC maintains diplomatic links with most countries in a non-official way, however, through agencies rather than ambassadors.
Taiwan grows up
Relations between mainland China and Taiwan have always been fraught, and China always threatened to retake Taiwan from the GMD by force if necessary. Throughout the 1960s and 1970s, though, Taiwan began to develop into a hugely prosperous, dynamic country – with a booming economy that made it one of the Four Asian Tigers (along with Hong Kong, Singapore and South Korea). Taiwan's prosperity was no doubt helped by the fact that the GMD had brought with them from mainland China all China's gold reserve and foreign currency. Yet although it was becoming a modern state economically and industrially, it was still a military dictatorship under the control of Chiang Kaishek and the GMD. Effectively, Taiwan was ruled by the Mainland Chinese, who form just 14 per cent of the island's population.
In 1975, however, Chiang died and was succeeded by his son Chiang Ching-ko, and the mood began to change. In 1984 Chiang junior made the bold choice of someone outside the GMD, native Taiwanese Lee Teng-hui, as his vice-president. A few years later a party calling for democratic rule and Taiwan independence, the Democratic Progressive Party (DPP), was set up and, although banned, was tolerated. Then in 1987, Chiang Ching-Ko lifted martial law.
Once Chiang Ching-Ko died in 1988, the process of democratisation began to gather pace as Lee Teng-hui became president. Significantly, though, it was not simply a process of democratisation, as Lee Teng-hui began to make a fundamental shift in Taiwan's relationship to China. He began to abandon the pretence that Taiwan's government was just a government in waiting, ready to take over the whole of China. Instead, he shifted the focus to Taiwan alone. Instead of being issued by the Provincial Bank of Taiwan (implying Taiwan was just a province of China), bank notes were issued by the Central Bank of Taiwan, for instance. More dramatically, Lee got rid of the old Chinese National Assembly, which still had the same members as when it was elected by all of China in 1947 – except those who had died of old age, of course. In 1996, Lee was elected president by Taiwan's first democratic elections. Then, in 2000, the GMD were booted out as Chen Shui-ban of the DPP was elected as the head of the first non-GMD government. In 2004, Chen Shui-ban was elected for a second term at the head of a DPP-led coalition called the Pan-Greens, which favours proper independence for Taiwan. The opposing GMD-led Pan-Blue coalition favours eventual reunification with China.
Dire straits
All of these developments posed a dilemma for the Chinese. After decades of hostility, relations between China and Taiwan had begun to improve in the 1980s. Deng Xiaoping had even proposed the 'one state, two systems' solution, which was applied to Hong Kong and Macau. Under this, Taiwan would be part of the PRC but would be allowed some degree of autonomy and allowed to maintain its own government. In the early 1990s, President Lee unofficially renounced the ROC's claim over mainland China, though it remains in Taiwan's constitution. To the casual observer, this might seem a conciliatory move, but the PRC were worried. While the ROC still claimed China, there was a tacit assumption on both sides that they both were simply opponents in China's civil war and that Taiwan was just a province of China. The renunciation of the ROC's claim to mainland China was a clear move to separate Taiwan from China – the last thing China wanted.
When Taiwan moved towards democratic elections in 1996, China was so disturbed that it began conducting military exercises near Taiwan and fired several 'test' missiles over the island in an attempt to intimidate Lee into cancelling the elections. Immediately, President Bill Clinton ordered the biggest display of US naval power since the Korean War, sending two aircraft carriers to the Taiwan Straits to send a clear message to the Chinese. The possibility of a nuclear war between China and the USA frightened everyone back to their senses. Ruffled feathers were smoothed and the Taiwanese went ahead with their election. All the Chinese sabre-rattling had done was boost Lee's support in Taiwan and ensure he was elected.
INFO: AMERICAN FRIENDS
There is no doubt that the USA is Taiwan's most coveted friend and has been since the connection was forged during the Second World War and the Cold War, when the USA was very pro-Chiang Kaishek as a buttress against communism. It was a real test of their friendship, therefore, when the USA withdrew diplomatic recognition from Taiwan in the 1970s and transferred it to China. Despite this slap in the face for Taiwan, the Americans were unwilling to abandon it altogether and the US Congress passed the Taiwan Relations Act in 1979, which undertook to supply Taiwan with defensive weapons, and to consider any attack on Taiwan as of 'great concern' to the USA.
Just how seriously they meant that was demonstrated in 1996, when President Clinton dispatched the US navy to Taiwan in response to China's provocative missile tests. All the same, it was clear that the Americans did not want to commit themselves too far, as Clinton two years later pledged the USA would stand by 'three no's' – no to Taiwanese independence, no to China splitting in two and no to Taiwan joining any organisation that required being recognised as a state for entry (i.e. the UN). The Bush administration has perhaps been a little more hawkish. The BBC has quoted an unnamed US official briefing from 2003 that says, 'The president did tell the Chinese in no uncertain terms that we would have to get involved if China tried to use coercion or force to unilaterally change the status of Taiwan.' But there is no doubt that the USA walks a diplomatic tightrope when it comes to Taiwan. It has no wish to upset China at all, especially as China's growing prosperity accelerates trade links between the two countries. But neither is it willing to abandon Taiwan altogether. The result is that there is a lot of play on semantics. The USA 'acknowledges' rather than 'recognises' – that is, endorses – China's claim that Taiwan is part of China. It also 'does not support' rather than 'opposes' the idea of Taiwanese independence. It remains unambiguous, however, in its insistence that the situation should be resolved peacefully.
What's in a name?
Since then, Taiwan has tried to re-enter the UN – this time in its own right, rather than as representative for the whole of China as it had been when it was ejected in 1971. Under Lee, the ROC called itself the 'Republic of China on Taiwan'. Chen Shui-bian took it a little further, calling it in his first term 'Republic of China (Taiwan)'. Since he was re-elected in 2004, he has been saying that Taiwan should rejoin the UN under the name 'Taiwan'. Since it is not recognised as a sovereign nation, it would only join as an observer at first, like the Palestinians, but, of course, most people would see it as a step on the road to independent statehood. That's exactly how the PRC see it, of course, and it is determined to block Taiwan's re-entry to the UN. With China on the Security Council with a veto it is unlikely that Taiwan will make much progress.
Interestingly, though, that is just the way most Taiwanese probably like it. While support for the GMD and the idea of reunification even among the Mainland Chinese has dwindled, only a minority of Taiwanese people actually support Chen and the Pan-Greens' line of full independence. Most just want to be left to get on with their increasingly prosperous lives in peace, without upsetting their powerful neighbours. While polls show that two-thirds of Taiwanese would fight for their country if the Chinese tried to take them over, just 14 per cent wish to up the ante by making Taiwan fully independent. For the wealthier Taiwanese at least, the status quo is fine.
Money talks
There are good reasons for the pragmatic line taken by Taiwan, apart from the sheer size and military might of their mainland neighbours. In fact, over the last twenty years, people in Taiwan have been forging closer and closer ties with the mainland. After Hong Kong, Taiwan has been the biggest investor in the growing Chinese economy. Since the late 1980s, Taiwanese businesses have pumped over US$100 billion dollars into the mainland. It's not just money the Taiwanese have put on China; more than a million of them actually work there. Although no one knows for sure, 40 to 80 per cent of China's electronics exports probably come from Taiwanese-owned factories, and a huge proportion of Taiwan's exports go to China.
INFO: TAIWAN SLIPS
Knowing just what to call Taiwan has become something of a nightmare. Even those to whom it really matters occasionally slip up and get things wrong. The online encyclopedia Wikipedia lists a whole string of gaffes by politicians. Both US presidents Reagan and Bush, of course, have been right in there with the slips of the tongue, wrongly referring to Taiwan as a country, which, of course, in the official US view it isn't. Donald Rumsfeld went even further, describing Taiwan in 2005 as a 'sovereign nation'. But it isn't just the Americans. PRC Premier Zhu Rongji accidentally described mainland China and Taiwan as two countries, while when Lien Chan and the GMD visited Beijing in 2005, they were introduced by the PRC as one of Taiwan's political parties even though they were trying to negotiate with the GMD on the basis that they both saw China as a whole including Taiwan. And in February 2007, apparently, the Royal Grenada Police Band (from the Caribbean island of Grenada) played the Taiwanese national anthem to welcome a delegation from the PRC who had funded the reconstruction of a local stadium!
INFO: TAIWAN'S ELECTRONIC MASTERY
The key to Taiwan's prosperity has been the island's astonishing success in the high-tech industry. With a population of just 23 million, Taiwan has come to dominate the IT business to an extraordinary degree. If you own a personal computer, a notebook computer or an iPod, or watch DVDs on an LCD screen, you can almost guarantee that the Taiwanese have had a hand in producing it. China is coming to rival Taiwan as an IT supplier, but it's the Taiwanese who are often supplying the brains or the money behind the Chinese companies. Very few of Taiwan's IT companies are yet household names, but they are suppliers to most of the familiar global brands. Stretched out along Taiwan's west coast are outfits such as: Asustek Computer, which owns the Chinese factories that make iPods and Apple mini computers; AU Optronics, which makes Sony's PlayStation; Quanta, which is the world's leading notebook computer maker; and Taiwan Semiconductor Manufacturing Co, which makes more chips than any other company. A decade ago, Taiwan's IT business made its money mainly by supplying dirt-cheap components or machines designed elsewhere. Now,however, Taiwan has upped its game, getting the cheap manufacture done in China and becoming a key innovator itself. The government has been a key player, funding initiatives such as the Industrial Technology Research Institute in Hsinchu. The result is that the Taiwanese have a wealth of IT talent together with a degree of flexibility in responding to corporate custom-made orders that has kept them one step ahead of the competitors.
In a remarkable turnaround considering their past enmity, the GMD, with the support of many Taiwanese businessmen, have begun to get quite pally with the PRC in a bid to paint Chen and the DPP as extremist separatists. In April 2005, Lien Chan, then leader of the GMD, made a hugely publicised visit to Beijing, and millions of Taiwanese and Chinese watched live on TV as Lien Chan was entertained in a lavish state reception by China's President Hu Jintao. Lien Chan came back to Taiwan not only with two giant pandas for Taipei zoo but also a warm reception from many of Taipei's business elite.
The PRC, of course, are very much aware of their hold on Taiwanese business and, as well as wooing the GMD, they have been leaning on businesses that are seen as pro-Chen, and favouring those who are pro-China. Just before Lien Chan went to Beijing, Chen was stunned to find an open letter from an old supporter Hsu Wen-long in a Taipei newspaper criticising Chen's push for independence as a recipe for disaster. Hsu Wen-long's Chi Mei group has a lot of business in China and was keen to expand. According to the Taiwanese government, the Chinese applied a lot of pressure on Hsu.
Softening line
Over the past few years, Chen has been taking a more and more conciliatory line. All the same, support for him and a strong independence stance have been dwindling. In May 2007, the DPP voted for Frank Hsieh as their candidate for the 2008 presidential elections and rejected Chen's choice, the current prime minister Su Tseng-chang. While Su favours a tough attitude to China, Frank Hsieh takes a far softer line. The switch didn't work for voters, though, for the GMD's candidate Ma Ying-jeou has stayed ahead in the polls. It seems likely that whoever wins, Taiwan will do its best not to antagonise China.
All this is very well, but the problem remains that Taiwan's status is still ambiguous. While many Taiwanese are quite comfortable with the ambiguity, it is fraught with dangers. China's attitude is still that Taiwan is part of China, and that indeed is the internationally recognised official situation. Moreover, the Chinese retain the right to use force should Taiwan move towards independence. On the other hand, although many Taiwanese have close ties with China, an increasing number feel they are Taiwanese, not Chinese. And even those who are pro-unification, such as the GMD, will not accept Chinese overtures until there is some move towards democracy. Both sides are heavily armed, and those arms are pointed towards each other across the narrow Taiwan Straits. There is no doubt who would win if it came to an armed conflict. All that remains open is how long the Taiwanese could hold out. Some say up to a month; others say just six minutes .Would the USA come to Taiwan's rescue and, if so, could it come in time? Most observers pray these questions will never need to be answered, but while relations between China and Taiwan are better now than they have ever been, it is far from a foregone conclusion that they will not.