Domestic Changes and Taiwan's Engagement with Mainland China

By Tse-Kang Leng

Japan-Taiwan Research Forum, Jan. 22, 2002

Introduction

The purpose of this paper is to analyze the impact of domestic factors on Taiwan's policies toward mainland China. This paper argues that while the "one China" principle remains a controversial issue, Taiwan's democratic changes in fact invalidate Beijing's "one country, two systems" formula as a feasible solution to cross-Straits tangles. Taiwan's democratic politics and its desire to preserve the democratic system have become the first priority in initiating cross-Straits policies.  Taiwan's more prudent attitude toward mainland China is a reflection of domestic power constellation and culture shift within the island.

The first section of this paper discusses the continuity and change of the KMT and DPP administrations' policies on cross-Straits ties. The second part of the paper uses the case of talent flows in the high-tech sector to demonstrate the connections between economic security and Taiwan's desire to preserve the democratic system. Finally, the last section introduces the issue of promoting sustainable development as a potential opportunity of breakthrough across the Taiwan Straits.

Continuity and Change of Democratic Consensus in Taiwan

Democracy as a Precondition for Integration

Both the KMT and DPP governments have put forward the formation of a Taiwanese, western style of democracy as the precondition for further integration with China. This "democratic precondition" is also linked together with the international skepticism of the rise of an undemocratic and hegemonic China. The political logic of Taiwan's "democracy card" is to put Taiwan's security in the broader context of democratic peace in the post-cold war world. The argument follows that an authoritarian and communist China may be a major source of regional instability. Further to this, forcing a democratic Taiwan to accept a unification arrangement initiated by a potential hegemon is against moral justice and political reality. The two sides of the Taiwan straits may only realize "constructive dialogues" under a situation of democracy and peace.<1>  The hidden agenda of this argument is that if China does not democratize, political integration between Taiwan and Mainland China will be long delayed. 

The current DPP government has continued the  "democratic peace" argument as the guideline of cross-Straits policies. In his inauguration address, President Chen Shui-bian put  "upholding the principles of democracy and parity" as the precondition to reopen talks with China.<2>  The Chairperson of Mainland Affairs Council Tsai Ing-wen further elaborated that the controversial issue of "one China" is by no means a slogan or concept. It represents the people's preference for a value system, and choice of political systems and life style.<3> The " democratic peace" and "democratic sovereignty" issues are enhanced by the assertion that the vibrant democratic system in Taiwan rejects China's assertion that Taiwan is a part of the undemocratic system. The biggest threat for Taiwan's democratic development is PRC's military pressure. The like-minded democratic countries around the world shall help preserve Taiwan's democratic systems under the threat of Beijing. The long-term stability of cross-straits relations depends on the democratization of China.<4> The "democratic peace" argument serves as a policy guideline for engaging China and winning international supports in both KMT and DPP government. 

Democracy and the New Taiwanese Identity

Democratization has been accompanied with the rise of a new Taiwanese culture. The quest for Taiwanese autonomy has mushroomed after more than thirty years of economic prosperity in Taiwan. While a strong middle class pushes the state for deepening political liberalization, a new "Taiwanese culture” has also developed within the general public. This new "Taiwanese culture” is based on a Chinese heritage, but adds new ingredients to accommodate the capitalist society and a fast-changing world--pragmatism, incrementalism, and compromise. As democratization progresses, Taiwan’s dynamic civil society and it’s drive to be recognized as a dignified and autonomous entity will continue to rise. This is a natural development, which stems from economic growth, but is still different from taking the road to realize de jure "Taiwan independence".

During the KMT era, the quest to define the "New Taiwanese" is similarly a realization of Taiwanese identity. The gist of the New Taiwanese ideology is in fact a concerted effort to diminish the potential conflicts emanating from the differing provincial origins among the Taiwanese residents. During his tenure as the President, Lee Teng-hui once indicated that regardless of whether one is an "aboriginal", "mainlander", or "Taiwanese" on Taiwan, the only criteria to distinguish the "New Taiwanese" is the we-group feeling to develop a common future.<5>  In other words, the quest of building a "New Taiwanese" is not ethno-centric. Although the instrumentalism of the "New Taiwanese" in the election campaigns is obvious, the ultimate goal is to escape the status of "periphery" under the illusion of a "greater China" conceptualization, and to reaffirm Taiwan's identity as the first given priority.

Promoting democracy and enhancing domestic alliances have been utilized as a useful tool in the 2001 legislative Yuan election in Taiwan. DPP and TSU (Taiwan Solidarity Union) successfully labeled the pro-unification groups as anti-localization and anti-democracy. In other words, without further localizing the domestic regime in Taiwan, a consolidated democracy could not be realized. This "democratic localization " strategy are demonstrated from the following three perspectives:

(1)  The "indigenous regime" and the legitimacy of the Republic of China on Taiwan were not established until the 1996 Presidential Election. The pre-1996 KMT regime, which was controlled by the mainlanders, was an "external " regime per se. From this perspective, democratization equals to localization. The biggest crisis in Taiwan is the issue of national identity.<6> Those who support the pre-1996 KMT regime and reject the Taiwanese identity are anti-localization, and thus anti democracy.

(2)    The Pro-Unification parties in Taiwan are anti-localization and anti-democracy. The KMT has derailed from the lines of localization and democracy since Lee left the post as the Chairman in 2000. The KMT is not qualified as a political party rooted in Taiwan.<7>

(3)  The pro-unification parties have formed strategic alliance with Beijing to attack indigenous forces. Pro-unification groups exaggerate economic advantages on mainland China and suppress voices of localization and democratization in Taiwan. These groups control the mass media and the legislative branches. They are exclusively responsible for the political instability and economic downturn since the DPP came to power in 2000.

The strategy of " democratic localization" has successfully consolidated the Pan-DPP alliance and shifted the voters' attention. The Pan-DPP alliances labeled the pan-KMT alliance as pro-China, anti-localization, and thus anti-Taiwan. Lee Teng-hui's personal charisma, plus the flexible campaign strategies of DPP , facilitates the triumph of the ruling party. However, two post-election syndromes deserve further observation. First, the unspoken ethnic division was heated. The "mainlanders" and their offspring sense a crisis of identity under the waves of localization. Local roots may serve as exclusive criteria of political correctness; secondly, policies of promoting economic interaction with mainland China could easily be regarded as pro-Beijing and anti-Taipei. The anti-China sentiment stimulated during the electoral campaign may hamper Taiwan's grand strategies to incorporate mainland China into its design of economic globalization. 

Rejection of the "One China" Principle

Under the rising demands to rebuild Taiwan's identity and consolidate local regimes, Taiwan's response toward China's "one China principle" under the "one country, two systems" formula is as follows: There is no "one China" at the current stage; the "one China principle" is the future goal. Former President Lee confirmed this policy line even before the release of “special state-to-state” announcement. In an interview conducted in 1998, Lee argued that today there is only "one divided China", with Taiwan and the mainland each being a part of China. Because neither has jurisdiction over the other, neither can represent the other, much less all of China.<8> However, during KMT's governance before May 2000, Taiwan still did not rule out the possibility of a reunified China in the future. The KMT regime put special emphases that any official dialogues between Taiwan and China must be based on equal footing.  Otherwise, Taiwan's acceptance of Mainland China's "one China" principle means nothing but the demise of ROC's sovereignty. This is in fact a reaction to Mainland China's continued regard for Taiwan as a "renegade province" and it’s blockade on Taiwan's participation in the international arena as a full sovereign state. By no means is political integration between Taiwan and Mainland China seen as a process of incorporating PRC's Taiwan province into the "motherland".

The DPP government continues the "future one China" principle and adds on the "constitutional one China" to stabilize pressures from the other side of the Straits. The Chen administration reemphasizes the integration of economics, trade, and culture of the two sides as the starting point for building faith and confidence, but avoids concrete political connotation of the "one China" principle. The DPP government also abandons the "National Unification Guideline" adopted by the KMT government and postpones the symbolic "National Unification Meeting" which the President serves as the Chairman. Both KMT and DPP administrations pay lip services to the "future one China", but the possibility of political unification is basically ruled out under Chen's administration.

The "one China" principle is heated during the electoral campaign in 2001. President Chen asserted that the acceptance of "One China, respective interpretation" implies the demise of the Republic of China. It also means that Taiwan will become the "second Hong Kong" under PRC's rule.<10>  The "one China, respective interpretation" principle, according to Chen, equals to PRC's "one country, two system" formula for reunification. This argument has put KMT and PFP(People First Party) in a very difficult position since they have long supported the "one China, respective interpretation" as a solution to solve the current deadlock across the Taiwan Straits. After Chen's open rejection of the "one China, respective interpretation" principle, the DPP administration announced the new policy to release the restriction of the Taiwanese investment to mainland China. This dual strategy attracted both the fundamentalists of Taiwan independence, and moderate voters who supported middle ways to engage China.  However, with the rejection of "one China, respective interpretation" principle, common ground between Taipei and Beijing to reopen talks becomes slim.

Preserving Democracy and Promoting Globalization

Conflicting political interpretations of cross-Straits economic relations hampers further integration. However, facing rising demands from the business community, President Chen released his strategic design to balance economic globalization and national security during his presidential election campaign. Chen argued that national security and economic benefit are not necessarily mutually exclusive. After DPP came to power in 2000, Chen’s policy design demonstrated his attempts to accommodate business interests and attract more supports on the domestic front from the business community. Major concerns to open direct economic relations, therefore, are domestic factors. The Chen administration argues that before opening up, the government has to control many factors such as changes in enterprise needs, their global reaches, and their holds on market opportunities. Besides, the government has to watch capital flows and domestic employment, which are two crucial macro-economic concerns.<11>

In his 2001 New Year’s Remarks, Chen emphasized on the new perspective of “positive openness with effective management” on cross-Straits economic relations. He elaborated further and argued that the integration of Taiwan and mainland’s economies, trade, and culture can be a starting point for gradually building faith and confidence in each other. This in turn can be the basis for a new framework of permanent peace and political integration.<12> President Chen's new policy lines were realized in the "Economic Development Conference" held in the summer of 2001. The Conference replaced the "no haste, be patient" policy with the "positive openness with effective management" strategy based on the strategic openness of global planning.<13> 

Substantial steps to embrace globalization and promote cross-Straits relations need persistent efforts and effective policies. The Chen Administration expects that direct economic interaction in the WTO framework could alleviate political entangling and intensity. At the same time, the DPP administration openly expressed the anxiety that technological gap between Taiwan and mainland China is decreasing.<14> Mainland Affairs bureaucracies indicated that the real purpose of mainland China’s technology interaction with Taiwan is to copy the experiences of Hsin-Chu Science-Base Industry Park and boost mainland’s own technological development. If mainland China succeeds in integrating with the global economy smoothly, its huge economic capacities will “absorb” Taiwan and challenge Taiwan’s economic security as well as political integrity.<15>

              The issue of introducing advanced human resources from China has become a domestic as well as global concern for Taiwan. It demonstrates Taiwan's dilemma in balancing national security and economic benefits. In the past two decades, as Taiwan’s economic growth has continued, a “reverse brain-drain” effect has occurred automatically. Taiwanese students earning advanced degrees in the US chose to return and settle down in Taiwan. Although the Silicon Valley is still the most attractive place of IT industries, Taiwanese talent began to develop technology links and establish businesses on both sides of the Pacific Ocean. These returning students contribute to the take-off of Taiwan’s IT industries in the 1990s. However, the booming of Taiwan’s IT industry also brings about the problem of a shortage of advanced talent. According to a survey conducted by the Taiwan Electronics Association, Taiwan’s high-tech industries have a shortage of 57 thousand skilled workers.<16> To cope with this shortage, the Taiwanese government plans to revise the legal and policy framework to attract international talent, including skilled workers from China.<17>

              In the ideal global world, free mobility of advanced talent should be allowed and even promoted. In the real world, attracting or limiting personnel movement is always mixed with other concerns, such as national security in the broadest sense. In the beginning stage of cross-Straits interaction of advanced talent in the 1990s, Taiwan only allowed mainland Chinese academics to conduct short-term research in Taiwanese academic institutions. The Taiwanese hosts must go through a complex and prolonged reviewing process and cope with much bureaucratic red tape. In 1998, the scope of allowance was expanded to include talent in the basic and application technology fields. Mainland Chinese talent is permitted to work in the Research & Development sectors of Taiwanese industries. According to the newest regulations promulgated by the Ministry of Economic Affairs in 2001, individual Taiwanese firms can apply to bring over advanced workers from China in ten major high-tech fields. The tenure of duration has been expanded from three to six years. There is no ceiling for the total number of mainland Chinese talent, but the percentage should not exceed 10 percent of the total R & D staff of individual firms.<18>

              Despite the gradual opening to mainland Chinese talent, the total amount of mainland Chinese skilled workers working in Taiwan is still limited. Only 730 mainland Chinese high-tech workers were introduced to Taiwan by the end of September 2000.<19> While easing legal restrictions, the Mainland Affairs Council has emphasized the need to strengthen its supervising capacities in order to oversee the duration, scope, and activities of mainland Chinese professionals on Taiwan. From the industry’s perspective, the complex process of application discourages them from introducing advanced mainland Chinese IT workers to serve in Taiwan. The skeptical attitudes from the government and the general public further hinder the integration of mainland Chinese talent with the local Taiwanese environment. The result is that in order to “avoid trouble,” Taiwanese firms prefer to establish their own R & D teams in China. This move could fully utilize China’s huge advanced manpower, as well as gain access to the market.

              Political concerns and lack of trust deter the “normalization” of free movement of advanced talent across the Taiwan Straits. In many cases, state intervention conflicts with the impetus of globalizing-induced talent flows required by the business community. While the economic bureaucracies stress the shortage of technology talent in Taiwan, governmental branches in charge of mainland affairs raise worries that introducing mainland Chinese engineers may lead to the rise of the unemployment rate in Taiwan’s high-tech sectors. In a public hearing of the Legislative Yuan, Taiwan’s mainland affairs officials suggested the establishment of a software park in the remote Penghu Island to “confine” and “manage” mainland Chinese talent.<20> Since advanced human resources are mobile in nature, restrictive policies of the Taiwanese state may further distort the economic mechanism of talent interaction across the Taiwan Straits.<21>

              Sustainable Development as a Possible Breakthrough

 The preceding analysis demonstrates major domestic sources of conflicts between Taiwan and China. However, many domestic issues related to people's welfare could still serve as a good starting point for future cross-Straits cooperation. Sustainable development is a good example for discussion. 

During Taiwan’s authoritarian past, economic development was achieved at the expense of environmental deterioration. Development was not “sustainable” in Taiwan. The rise of a sustainable development consciousness had emerged coinciding with Taiwan’s democratization process. Beginning from the mid-1980s, public resistance toward bad environmental management became a spur for political democratization in Taiwan.Taiwan’s bottom-up new environmental movement has played a dual-role of pushing political democratization and sustainable development. However, the term “sustainable development” is brand-new to Taiwan even in the 1990s. To cope with the new challenges of sustainable development, the Taiwanese government has adopted various instruments to achieve balanced goals of environmental protection and economic development. Local governments and environmental non-governmental organizations (ENGOs) also get involved in the interactive process of achieving sustainable development.

At the current stage, however, Taiwan is in the transitional period of forming a consensus on sustainable development for the whole society. The state is adjusting its role in promoting balanced goals of national development. At the same time, the business community and civil society are strengthening their capacities to channel their demands. In 2001, the Taiwanese government released its plan of building a “Green Silicon Island (GSI)”. Different from the former path of economic development in the 1970s and 1980s, the GSI plan indicates that environmental protection and economic development is not incompatible; on the contrary, environmental protection is the pre-condition of economic development.<22>

However, Taiwan’s international participation in international environmental affairs is constrained by political obstacles. In the past decades, Taiwan’s participation in major international environmental organization was handicapped by the fact that Taiwan is not a member of the United Nations. Thus, Taiwan has not been able to send official representatives to participate in any UN-related environmental conferences since 1971. Taiwan could only participate in the UNFCCC COP under the status of a non-governmental organization.  Taiwan’s international isolation further distorts its rights and obligations in international environmental affairs. For instance, Taiwan lacks institutionalized channels to reports its progress and shortcomings of environmental protection in multilateral occasions<23>.

The only major international organization, which Taiwan could participate, under the title of Chinese Taipei, is APEC. From 1998 to 2001, Taiwan played the role as the Lead Shepherd in the APEC Marine Resource Conservation Working Group (MRC WG). Under the APEC framework, Taiwan has the opportunity to report its own status of sustainable development and exchange information with other Asian-Pacific countries. Taiwan’s participation in MRC WG also emphasized the role of private sectors in marine sustainable development.

One of the major drives for Taiwan to expand its international outreach is the huge market benefit of environmental protection industries, especially the market on mainland China. From the political and military perspectives, relationship between PRC and Taiwan is in constant intensity. However, Cooperation in sustainable development between Taiwan and China may promote confidence-building measures on issues connecting with people’s welfare on both sides of Taiwan Straits. Economic benefits and private momentum may become the major boosters for further cooperation in environmental protection.

According to various surveys, China will spend more than 100 billion US dollars on environmental infrastructure construction<24>. In order to host the 2008 Olympic Games in Beijing, China will pour additional funding to improve the highly polluted environment. Although Taiwan is not the global leader in environmental technologies, its practical experiences in solving problems for small and medium enterprises still help maintain competitiveness in the China market. A recent report demonstrates that about 49 percent of Taiwanese companies choose China as their first priorities to invest on the Clean Development Mechanism (CDM) projects. Due to the fact that Taiwan is not the UN member, hosting CDM under the UNFCCC framework may involve political issues especially the opposition from PRC. However, opinion poll on Taiwanese industries shows that only 3 percent of the respondents answer that Taiwanese government should refrain itself from CDM if China raises political issues to question Taiwan’s sovereignty<25>. In other words, the economic benefit has become the major concern for the private sectors on the issue of environmental cooperation across the Taiwan Straits.

Geographic vicinity and cultural similarity will invest Taiwan with a unique role to serve as a liaison to introduce foreign direct investment from multinational corporations in China's environmental market. Taiwan and a few advanced industrial countries have established stable cooperative relationships in environmental cooperation. This cooperative relationship could be extended to develop the market on mainland China collectively. For instance, Canada has signed agreements on environmental protection with governments on both sides of the Taiwan Straits. Taiwanese business community could invest on Canadian projects in hosting the CDM with China and avoid sensitive political controversies. These strategic alliances based on mutual economic benefits could realize domestic sustainable development and improve situation of environmental protection for developing countries at the same time.  Increasing international participation will facilitate a win-win situation of continuous economic development and sustainable development.

Conclusion

The preceding analysis demonstrates that one essential reason of the ascendance of political factors in cross-Straits relations is the democratic change in Taiwan. Global trend of democratization may lead to “democratic peace”, but democratic regimes ' attempts of protecting democratic norms and spreading democratic culture may as well lead to "democratic crusading" of provocative actions toward non-democratic countries. Scholars also argue that some internal characteristics of democracy, such as irrational public opinion and electoral cycles, may make external policies of liberal regimes war-prone and volatile. Different from "mature democracies", "democratizing regimes" lack coherent mechanism of regularized leadership changes, institutional stability, stability of preferences, and consensus on core national interests. Without these crucial factors of a liberal democratic regime, "democratizing" regimes may play destabilizing roles in the international system<26>. In other words, "democracy" per se is a double-edged sword. The rise of global trend of democratization links domestic political changes with the management of external relations. Peace and conflicts across the Taiwan Straits is a reflection of this democratic dilemma.

              Future points for breakthrough, however, may depend on those issues  linking people's welfare and drives for globalization on both sides of the Taiwan Straits. Topics related to sustainable development and environmental protection are domestic as well as global concerns. People on Taiwan and mainland China have suffered the environmental side-effects after high-speed economic growth. Cooperation on promoting a sustainable China in a broader sense, in domestic as well as international fronts,  provides fresh opportunities for coordination. 

Notes

<1> Lee Teng-hui, "Closing Remarks to the 14^th Plenum of the National Unification Council", April 8, 1999.

<2> "Taiwan Stands Up: Advancing to an Uplifting Era", President Chen Shui-bian's inaugural speech, May 20, 2000.

<3> Chairperson Dr.Tsai Ing-wen at the may 25 , 2001 Press Conference. Obtained from Mainland Affairs Council.

<4> Please refer to Foreign Minister Tien Hung-Mao's speech of "Taiwan's Foreign Policy in the New Age", delivered at Harvard University on September 6, 2001

<5> Lee Teng-hui, " Remarks on the Taiwan Restoration Day", October 24, 1998.

<6> Lee Teng-hui's speech in the Taiwan-US Foundation Meeting on November 17, 2001. Zhongguo Shibao (November 18, 2001).

<7> Lee Teng-hui's speech during the electoral campaign in Tainan on November 25, 2001. Zhongguo Shibao, (November 26, 2001).

<8> Lee Teng-hui, " The US Could not Ignore Taiwan", Wall Street Journal, August 2, 1998.

<9> Please refer to Prsident Chen Shui-bian's Cross-Century Remarks on December 31, 2000. http://www.president.gov.tw

<10> Lien He Bao, November 5, 2001.

<11> Chairperson Dr. Tsai Ing-wen at the May 25, 2001 Press Conference. Released by the Mainland Affairs Council.

<12> For the full text of Chen’s speech, please refer to http://www.mac.gov.tw/english/MacPolicy/ch9001e.htm

<13> Zhongguo Shibao, August 13, 2001.

<14> Zhongshi Wanbao, (29, November, 2000)

<15> Ing-wen Tsai, New Challenges and Policies of Taiwan’s Mainland Affairs, a speech delivered at the Third Overseas Chinese Affairs Meeting, May 17, 2001, Taipei. For the full text, please refer to http://www.mac.gov.tw/mlpolicy/tsai900517.htm

<16> Wu Mingji, “Development and Prospect of Taiwan's IT Industry” (in Chinese), Straits Business Monthly, No. 111, (March 10, 2001), p. 16.

<17> He Meiyue (Deputy Director of Economic Planning Commission of the Executive Yuan), Briefing on the Proposal to Promote Knowledge Economy, (November 4, 2000), p. 12.

<18> Jingji Ribao (February 20, 2001); Zhongyang Ribao (October 13, 2001).

<19> Feng Chen-yu, “Science and Technology Build a Bridge Across the Taiwan Straits,” Exchange (February, 2001), p. 36.

<20> Lien He Bao (October 21, 2000).

<21> For a full account on the issue of cross-Straits technological interaction, please refer to Tse-Kang Leng, " Economic Globalization and Talent Flows Across the Taiwan Straits", Asian Survey, forthcoming, 2002.

<22> Council for Economic Planning and Development, Proposal of Building a Green Silicon Island Economy in Taiwan （2001）available at <http://www.cepd.gov.tw/eco-plan/greenisland/bludmap.htm> .

<23> Young, Chea-Yuan “International Environmental Politics and Diplomacy: Taiwan’s Situation and Future Outlook,” manuscript, (1999), p.2.

<24> Elizabeth Economy, “Painting China Green,” Foreign Affairs, Vol. 78, No.2 (March/April 1999), p. 16.

<25> Jianming Li, “An Analysis of Taiwan’s Participation on CDM”, Working Paper, National Policy Foundation, 2000. , p. 6

<26> Kurt Taylor Gaubatz, "Democratic States and Commitment in International Relations" in Miles Kahler ed., Liberalization and Foreign Policy ( New York: Columbia University Press, 1997), pp. 27-67.

Dr. Tse-kang Leng is an associate research fellow in the Institute of International Relations of the National Chengchi University.  The paper was presented in the Japan-Taiwan Research Forum, Keio University and Taiwan Security Research Center, Taipei, Jan. 22, 2002.