Int'l Herald Tribune

While Tensions Ease, Taiwan and China Drift Apart

Paris, Tuesday, June 29, 1999

By Philip Bowring International Herald Tribune.
TAIPEI - Relations across the Taiwan Strait are improving, but the two sides are drifting further apart.

That paradox may be apparent to Wang Daohan, head of China's Association for Relations Across the Taiwan Strait, who is due this year to become the most senior mainland official to visit here. Political and economic development on both sides have had consequences for prospects of eventual reunification that are different from those imagined when cross-strait commerce began in earnest in the late 1980s.

The United States and others interested in maintaining good relations with both sides need to grasp the paradox.

There is a variety of reasons for the current easing of tensions:

Both sides still bear scars from the 1996 crisis, when U.S. ships were dispatched to the Taiwan Strait after China fired blank test missiles near Taiwan's waters to try to influence the result of its elections.

There is a common economic interest in joining the World Trade Organization, which requires a stable U.S.-China-Taiwan relationship.

Under U.S. pressure, Taiwan has moderated its efforts to secure international recognition of its de facto independence.

The retirement next year of President Lee Teng-hui will, in Beijing's view, reduce Taiwan's separatist tendencies. It also requires that Beijing show a moderate face in advance of the presidential election in April.

China needs a resurgence of Taiwan investment, which has fallen sharply.

Taiwan's opposition Democratic Progressive Party has been downplaying its pro-independence views as it bids for the electoral middle ground, and seeks to avoid more splits in its own ranks.

These factors, for now, outweigh the impact of U.S.-Chinese tensions and Beijing's concerns about implicit U.S.-Japan cooperation in the strengthening of Taiwan's defenses.

However, the movement toward closer de facto links has stalled. And almost no one in Taiwan now regards unification, even under the loosest form of the ''one country, two systems'' formula, as even a remote possibility over the next decade.

The political reasons for this are obvious enough. On the mainland, political development has essentially frozen.

In Taiwan, meanwhile, the democratic process has emerged more smoothly and rapidly than expected. The Democratic Progressive Party's shift to a more pragmatic and ''responsible'' stance is mirrored by the needs of the governing Kuomintang and of all serious presidential candidates to be in tune with Taiwanese identity. No one in this democratic system will last long if seen to favor progress toward reunification over maintenance of the status quo and Taiwan's security.

Moreover, after a decade of visits - 1.5 million a year - and massive media coverage, Taiwanese now know the Chinese mainland very well. This has enhanced their sense of political and social separateness. They know that their society is prosperous, free and stable. Beijing's attempt to equate ethnic identity with the concept of a single Chinese political entity has failed.

The economics have changed, too. Taiwan's dependence on exports to the mainland stopped growing five years ago, stabilizing at below 25 percent. There is more emphasis on high-technology links to the West and Japan. Brainpower, not the proximity of the mainland, is Taiwan's ace.

Investment in the mainland has also slowed sharply because returns have often proved disappointing. Beijing's tightening up on taxes and shift in growth emphasis away from the southern coastal provinces are also negatives for investors.

As a result of slowed trade and investment activity, business pressure for direct cross-strait transport links is not as strong as before the 1996 crisis. China, too, may have second thoughts, in part because of the hugely negative impact of direct China-Taiwan links on Hong Kong's economy.

Investment in the mainland may revive when the Chinese economy picks up or yuan devaluation adds to its competitive attractions. But Taiwan is now far more excited about the new global vistas and challenges opened up for its electronics industry by the Internet revolution.

Indeed, global economic recognition is helping Taiwan toward a less neurotic view of the mainland, and providing a substitute for the push for separate political identity that so infuriates Beijing. The paradox is beneficial.