* Paper delivered at the CSIS Seminar on Cross-Strait Relations at the Turn of the Century, September 21-22, 1999, Washington D.C.

When President Lee Teng-hui stated, in an interview with a German radio station, that relations between the two sides of the Taiwan Strait should be characterized as a "special state-to-state relationship," the Beijing government reacted strongly and threatened to use force to punish President Lee. Great and small powers around the world anxiously reaffirmed their "one China" policy: "there is only one China and Taiwan is part of China." The world once again showed a willingness to uphold this fiction, perhaps believing it to be the best strategy to maintain peace across the Taiwan Strait, and blamed Taiwan or Lee as a trouble-maker. Perhaps it was a diplomatic faux pas for President Lee to roil the waters. However, he reminds the international society again of the cross-strait relations issue and of the anomalous international status of Taiwan -- a situation resulting from the entanglement of political factors and legal relations, and one which shows no sign of defrosting in the Post-Cold War era.

Taiwan ambiguous status is a product of half a century of changing international and cross-strait circumstances. Geopolitical reasons and the PRC's claim to sovereignty over Taiwan are also major factors affecting the status of Taiwan and bilateral relations across the Taiwan Strait. According to international legal theories and practices, the long non-recognition by most countries in the world has also contributed to Taiwan’s dilemma. And the reasons for the non-recognition, in terms of international law, are partly due to the political nature of the international law of recognition, and partly due to the misunderstanding of the traditional idea of sovereignty in international law. This research, therefore, attempts to seek explanations for the case of Taiwan, going beyond the unification-independence dichotomy, by examining its legal status -- through traditional international law and a new approach to democratic sovereignty -- and by discussing relations between China and Taiwan. The paper is divided into three sections.

The first section presents the case of Taiwan with a brief discussion of traditional conditions for the statehood of Taiwan, and a review of the status of Taiwan through a discussion of some prominent international legal scholars. In the second section, after reviewing all the theories of sovereignty, both in political theory and international law, the research proposes the framework for a new approach to democratic sovereignty. This new approach to democratic sovereignty, both internal and external, is then applied to the case of Taiwan, in order to determine the international legal status of Taiwan and its legal personality and capacity. The third section addresses relations between China and Taiwan to reveal unique and special circumstances of the cross-strait relationship. By discussing the meaning of "one China" and relations between the two political entities across the Taiwan Strait, this research argues that, though bilateral political and private law relations remain unique and special circumstances, China and Taiwan are, in political and legal reality, two separate states.

The Government of the Republic of China (ROC) on Taiwan remains in effective control of an area of 14,000 square miles and over nearly 22 million people, each earning an average of US$ 11,500 a year. Taiwan is the world's 14th largest trading nation and holds the world's third largest foreign exchange reserves. The "Taiwan Experience," was originally used to refer to the rapid economic development of Taiwan. Since the late 1980s, however, the movement toward political liberalization and democratization in Taiwan has attracted more attention than its economic miracle. The meaning of the "Taiwan Experience" has thus expanded to include the stable political democratization of Taiwan.

Taiwan, however, is not recognized diplomatically by most countries of the world, nor has it been represented in the United Nations or other major international intergovernmental organizations since China’s seat in the UN was awarded to the Beijing government in 1971. Because of this long period of non-recognition, many international legal scholars question the legal status of Taiwan as a sovereign state. They regard Taiwan as an entity "Sui Generis", a "de facto" government, or even a local government of the PRC. Yet, due to its economic strength and political achievements, Taiwan has maintained substantive or functional relations with most countries in the world, and has participated, under different names, in some important international economic organizations. This research, therefore, characterizes the ambiguous international status of Taiwan, its diplomatic isolation, and its close substantive relations with other states as "Another Taiwan Experience."

The unique status of Taiwan is illustrated in two aspects: its bilateral relations with other countries and its membership in intergovernmental organizations. Both the number of states that recognize Taiwan and the number of international organizations of which Taiwan is a member have dropped so far as to be merely symbolic. As a result, scholars argue about the legal status of Republic of China on Taiwan: is it a sovereign state, an entity sui generis, or just a local government of the People's Republic of China (PRC)? Therefore, we will first briefly discuss the traditional conditions of the statehood of Taiwan, and then examine the status of Taiwan through a discussion of the work of some prominent international legal scholars.

According to the general opinion of international lawyers and the Montevideo Convention on Rights and Duties of States ^<1^> (signed by the United States and certain Latin American countries in 1933), a state as a juristic person in international law should possess the following four qualifications: (1) a permanent population; (2) a defined territory; (3) a government; and (4) the capacity to enter into relations with other states. The same standards are also stated in the Restatement of the Law of the Foreign Relations of the United States, which represents the general consensus of American lawyers. ^<2^> The following is an overview of how these qualifications apply to Taiwan.

First, permanent population. Currently, Taiwan has over 22 million inhabitants, more than that of 130 states in the world. Since 1949, there has been no significant migration of people in or out of Taiwan; therefore, the population has remained stable and permanent.

Second, defined territory. The meaning of "defined territory" should be understood as a state's territory that remains under its effective control and has not changed for a long period of time. The total territorial area of Taiwan, Penghu, and the offshore islands of Quemoy and Matsu, is 36,000 square kilometers (14,000 square miles). According to the latest report from the World Bank, among two hundred and twenty-six countries and territories in the world, the size of the territory of Taiwan ranks one hundred and thirty-fifth. Countries with about the same area as Taiwan include Denmark, the Netherlands, Switzerland, Belgium, Lesotho and Guinea-Bissau. Furthermore, since 1991, Taiwan has not claimed sovereignty over mainland China anymore; Taiwan has acknowledged the PRC as a political entity effectively controlling mainland China and itself as a political entity effectively controlling the Taiwan area.

Third, government. The Taipei government not only has effectively controlled the Taiwan area since the end of WWII, the government also has transformed itself from an authoritarian regime into a democratic one, with election of political leaders in every level. The government's structure is designed to fulfill Sun Yat-sen 's belief in popular democracy and a system of checks and balances between the government's branches. The President is the head of state and the supreme commander of all armed forces. President Lee Teng-hui was elected in 1996 as the first directly elected head of state in Chinese history.

Fourth, Capacity to Engage in Relations with Other States. The satisfaction of the above three qualifications are a matter of fact, not of law. So far as public international law is concerned, the last qualification, the capacity to engage in formal relations with other states, is most important and controversial. Some scholars argue that a political entity must have a recognized capacity to maintain external relations with other states; that is, the capacity of an entity to engage in relations with other entities is not a question of fact, but a matter of formal recognition. ^<3^> For those scholars, the qualification -- capacity to engage relations with other states -- should be replaced by "recognized by other states." They hold the view that recognition is constitutive, assuming that statehood is dependent on the political entity in question being recognized as a state by other states. ^<4^> It is a mistake, however, to confuse the qualifications of statehood with the problem of recognition. The result of the constitutive theory is impossible to accept, Brownlie argues, "it is clearly established that states cannot by their independent judgment establish any competence of other states which is established by international law and does not depend on agreement or concession." ^<5^> The determination of the capacity of an entity to have foreign relations is decided by the internal structure and abilities of that entity. Whether other states will or should recognize this state is another matter.

Before the 1971 U.N. Resolution, which accorded China’s seat in the United Nations to the PRC in Beijing, Taiwan was recognized by almost half of the countries in the world. Now it has diplomatic relations with 28 states. Yet Taiwan also maintains substantive relations, including semi-official, commercial, trade and cultural relations, with more than 140 states in the world. ^<6^> Taiwan has sent diplomats and trade representatives all over the globe to promote such unofficial relations with other countries. It is therefore unquestionable that the ROC on Taiwan has the capacity to engage in foreign relations with other nations. Even scholars who do not regard Taiwan as a sovereign state acknowledge that "Taiwan was under the de facto authority of a government that engaged in foreign relations and entered into international agreements with other governments." ^<7^>

The facts and legal analysis indicate that Taiwan fulfills all the traditional criteria for statehood. It has its own clearly defined territorial base, an island larger in size than 90 states in the world; it has 22 million people permanently living within its territory; it has a stable, effective, and popularly elected government; and it has the capacity and willingness to engage relations with other states. These are the rules of international law regulating the conditions of statehood. According to these criteria, the word "state" has a clear meaning and appears to be entirely applicable to Taiwan.

The status of Taiwan remains a special case in international relations and a difficult question to answer in international law. It involves problems of conditions of statehood, recognition and sovereignty in international law, and, more importantly, political realities in international relations. Except for scholars from Taiwan, most international lawyers do not pay much attention to the question of the status of Taiwan. Those who discuss the unique problem address it either in their textbooks or writings about other subjects. However, the scholarly discussion of Taiwan's status can be divided into three categories: the first, Taiwan as a sovereign state; the second, Taiwan as an entity sui generis; the third, Taiwan as a local government of the PRC.

Hungdah Chiu, professor at the University of Maryland School of Law, submitted a written statement to the Hearings on Taiwan held by the U.S. Senate's Committee on Foreign Relations in February of 1979. Here, he argued that the existence of a state was not dependent on its recognition by other states. Therefore, the "objective existence" of Taiwan demonstrates that the ROC on Taiwan is a nation-state. Professor Chiu said:

In a more recent paper on Taiwan's current legal status, Professor Lung-chu Chen (from where??) also concludes that " [i]n reality, Taiwan has existed as a sovereign, independent country for more than forty years. The question today is whether to recognize Taiwan as an independent state in name, as well as in fact." ^<9^> In his international law textbook, W. Bishop does just this, listing "China, People's Republic of" and "China, Republic of" under the heading "The following 'states' are members of the International Community." ^<10^> John Copper, too, concludes that Taiwan is a nation-state in his book, "Taiwan: Nation-State or Province?" He first examines Taiwan's status in terms of traditional international legal norms: "[t]he traditional criteria for nation-state status are adequate territory, sufficient population, a ruling government, and diplomatic ties. Taiwan's territory is larger than that of the average nation-state in the world today; its population is quite a bit larger than average. Its government is more stable than most. Although weak in diplomatic ties, Taiwan compares favorably with many Third World countries. In short, it easily qualifies using the traditional mode of defining a nation-state." ^<11^> Then, according to a modern interpretation of international law, especially the practice established by the United Nations, Copper claims Taiwan can be defined as a nation-state even more easily. He argues that "[i]f the criterion of the will of the people were employed (which has been used by the United Nations in the form of Plebiscites), Taiwan should easily be able to demonstrate its 'democratic' qualifications for statehood." ^<12^>

Alan James, Professor of International Relations at the University of Keele, also agrees that Taiwan is a sovereign state; however, he points out that Taiwan will experience difficulties in participating in the international community if it insists on using the name of China. ^<13^> James defines sovereign statehood as "constitutional independence," a circumstance in which "a state's constitution is not part of a larger constitutional arrangement." ^<14^> According to James, Taiwan should thus be viewed as a state with its own sovereign statehood. He says that "it seems very strange to see Taiwan referred to as an effective territorial entity which is none the less not a state. It certainly fulfills all the criteria for sovereign statehood." ^<15^>

James also indicates that international "practice treats sovereignty as an objective condition and separates it from the issue of the extent to which an entity is welcomed into the life of the international society." ^<16^> Therefore, for James, it is a mistake to deny a state's sovereign statehood simply because of its lack of diplomatic relations with other states. It would be more realistic to draw upon the distinction between a sovereign state's existence and its participation in international life. Taiwan could then be described as a sovereign state which is "unable to play an international part on account of its insistence on being referred to by a name which others are not free to use." ^<17^> James gives this advice to those scholars who deny the statehood of Taiwan: although "the present unsatisfactory situation regarding references to Taiwan is likely to be continued, there is no reason why students of international relations should necessarily follow the official semantic line." ^<18^>

Most of the western scholars who examine the status of Taiwan categorize Taiwan as an "entity sui generis," a non-state independent entity and subject of international law. According to their views, which differ in details, Taiwan is an independent territorial entity that possesses a de facto government and is able to engage in foreign relations. They do not regard Taiwan as an independent sovereign state, but place it in the same category, entity sui generis, with the State of the Vatican City and the Holy See. These scholars include Louis Henkin, Ian Brownlie, D. J. Harris, J.D.B. Miller and Gerhard von Glahn.^<19^>

Louis Henkin and three colleagues at Columbia University categorize Taiwan as an entity sui generis under the topic of "territorial entities other than states that have international status." This category also includes the State of the Vatican City and the Holy See. The casebook edited by Henkin et al. describes Taiwan's status as follows:

Following this paragraph, they note that before the United States recognized the PRC, it had first recognized the ROC on Taiwan. After the withdrawal of recognition, the U.S. maintained economic and cultural agreements with Taiwan under the arrangement of the Taiwan Relations Act (TRA). To support this, Henkin and his colleagues selectively list several provisions of the TRA. ^<21^>

Two problems can be found in the reasoning of Henkin and his colleagues. First, they intentionally indicate that the relations between the United States and Taiwan are purely "economic and cultural." But there is more here than meets the eye. On the one hand, the TRA, especially in the provisions omitted by Henkin et al., treats Taiwan as a state in a domestic context; on the other hand, the relations and business conducted by the American Institute in Taiwan, a "nongovernmental" organization staffed with officials temporarily on leave from the Department of State, are in fact official or "semi-official" in nature. Second, the authors are arguing on behalf of their own government's position, and regard diplomatic recognition as one of the requirements, probably the only requirement in the case of Taiwan, for establishing whether or not an entity is a nation state.

The British scholar Professor Ian Brownlie regards Taiwan as a sui generis subject of international law. For Brownlie, Taiwan has a modified personality, approximating a state, but is not truly a state. In the first three editions of his book, Principles of Public International Law, he maintained that "[c]learly it is undesirable that the population of such areas [Taiwan] should be regarded as "stateless" in law." ^<22^> Brownlie deleted this sentence in the 4th edition of the book in 1990, and replaced it with the following: "The question will arise whether Taiwan is a 'country' within a particular context." ^<23^>

D. J. Harris, Professor of Public International Law at the University of Nottingham, holds a view similar to Brownlie’s, claiming that Taiwan is a territory with an uncertain legal status. He states that "[a]n entity is not a state if it declines to be one, as in the case of Taiwan (Formosa)." ^<24^> Harris does not seem to understand the "China question" very well. Taiwan has never denied that it is as a state; on the contrary, it views itself as the constitutional successor of the state that ruled the mainland before 1949 and as the democratic government of the territory it now controls.

J.D.B. Miller, Professor of International Relations at the Australian National University, argues that to become sovereign, a political entity must satisfy two requirements. In the first place, it must "appear to be independent in the sense of not being subject to another state's control." Secondly, the entity in question must be "accepted as such by others." ^<25^> Therefore, according to Miller, if other states do not accept or recognize a particular entity, as is the case of Taiwan, then "the status of a sovereign state has not been bestowed." He states that:

This argument again treats recognition as one of the requirements of sovereign statehood. However, Miller's argument can hardly provide a precise guide to the question of whether or not a political entity constitutes a sovereign state. What about the PRC between 1949 and the early 1970s? No scholars regard the PRC during that period as a non-state territorial entity. At the very least, there is no clear standard for judgment, other than, perhaps, “the political situation at the time."

James Crawford suggests that Taiwan's status is "that of a consolidated local de facto government in a civil war situation." ^<27^> For Crawford, Taiwan is not a state but a local government of China, the PRC, although Taiwan still possesses a "limited status in international law" by which it can make treaties and certain classes of transaction. He concludes:

Two mistakes appear in his argument: first, the Republic of China on Taiwan has never declined to recognize itself as a state; second, Crawford, like many others, regards recognition as one of the criteria for deciding whether an entity is a state or not. When Crawford made this argument in the late 1970s, many states, including the United States, recognized Taiwan as the government of China. Thus, Crawford carefully constructed his argument so that it would not embarrass the position of his government, the U.K.

Malcolm N. Shaw, another British scholar, sees Taiwan as a "non-state territorial entity which is de jure part of China, but under separate administration." ^<29^> Shaw writes that "[n]o claim of separate statehood for Taiwan has been made and in such a case it is difficult to maintain that such an unsought status exists. Total lack of recognition merely reinforces this point. ^<30^> Accordingly, Taiwan would appear to be a non-state territorial entity which is de jure part of China but under separate administration." ^<31^>

In a serious scholarly discussion of the status of Taiwan, one characterization at least can be rejected – that Taiwan is a local government of the PRC. Though some governments "acknowledge the position of the Chinese Government that Taiwan is a province of the PRC"^<32^>or "recognize that Taiwan is an inalienable part of the territory of the PRC," ^<33^> the Chinese Communist government has never ruled Taiwan for a day. This fact, combined with the factual existence of Taiwan as an independent political entity allows us to reasonably reject the argument that Taiwan is a local government of the PRC. This is a question of fact, not of legal reasoning. Taiwan is manifestly not a local government of the PRC.

It is clear that this special other Taiwan experience is mainly the result of Taiwan's lack of diplomatic recognition by major states in international community. Is the question of recognition fundamentally a question of policy or law? In general, governments decide whether to recognize a foreign state or government in accordance with their own view of national interests. The decision of recognition is political in the sense of being determined by considerations of convenience and interests of the executive branch. However, the act of recognition creates the legal status of the recognized state in the municipal courts of the recognizing state. For the case of Taiwan, it is also the political decision of non-recognition that has created doubts or rejection of its legal status as a state by many international legal scholars.

Sovereignty is central to the study of both the nature of the modern state and the theory of international law. It has therefore a dual connotation: within the state and in international law, or respectively, internal and external. The idea of sovereignty began as a political idea indicating the supreme power enjoyed by a prince within a state; later, it was used to describe both internal and external power relations. The external application of the notion of sovereignty did not require as long a period to become the core concept of international law and relations as it did in the domestic context. However, sovereignty cannot be understood without reference to its specific context in time and space. Changes in the doctrine of sovereignty reflect changes in political facts, both domestic and international.

This section will briefly examine the idea of sovereignty, in theory and practice, in both its internal and external applications. The author will discuss the origin and theory of sovereignty in political theory and international law, and then offer a preliminary framework for a new approach to democratic sovereignty, both in internal and external perspectives. In the final section of this section, the author will inquire into the status of Taiwan through the new approach to democratic sovereignty.

 The notion of sovereignty appeared as a political idea in the discussion of the theory of modern states. The concept entered into "a theory of politics which claims that in every system of government there must be some absolute power of final decision exercised by some person or body recognized both as competent to decide and as able to enforce the decision. ^<34^>" As a political idea, the notion of sovereignty was first articulated by theorists like Bodin and Hobbes to support the development of the absolute monarchy. The absolutist conception of sovereignty was challenged by Locke and Rousseau's idea of popular sovereignty, which referred to a form of government in which the final power rests in the hands of the people rather than the ruler. With the coming of constitutional government, the notion of popular sovereignty gained wide support from the development of democratic political systems and near-universal lip service.

The idea of absolute sovereignty has been rejected in modern international relations and international law; however, some of the arguments still provide a valid theoretical basis for the holding of final political power within a state and the supremacy of a state's jurisdiction within its territorial boundary. Sovereignty was described by Bodin as "supreme power over citizens and subjects, unrestrained by law." ^<35^> For Hobbes, the sovereign was a legal person who represents the entire body of the realm, summing up the life of the body politic. ^<36^> The idea of popular sovereignty constituted a serious challenge to the absolutist conception of sovereignty, although the two notions were not entirely antithetical. The contract theory and, as the corollary of this doctrine, the theory of man's natural rights, contributed to the formation of the theory of popular sovereignty. Both Locke and Rouseau searched for a new source of sovereignty to replace the divine right of kings. The new thinking implied both that "all legitimate authority derives from 'man-made arrangement' and that the absolute will of the people replaces the will of God." ^<37^> It refers exclusively to a form of government in which ultimate control rests in the hands of the people rather than in the hands of an individual or a minority.

John Locke advocates majority rule and representative government. He states that "every man, by consenting with others to make one body politic under one government, puts himself under an obligation, to every one of that society, to submit to the determination of the majority, and to be concluded by it." ^<38^> The act of the majority is the establishing of legislative power. The legislature is the supreme power of the commonwealth, to which the members owe their obedience. Even so, it cannot govern absolutely or arbitrarily the lives and fortunes of the people, since its power is limited to ensuring the public good of society. ^<39^> Rousseau, too, advocates the notion of popular sovereignty because for him the source of all legitimacy is in the people at large. Thus the social contract creates the sovereign. The community could never alienate legislative power to representatives, for the sovereignty could not be represented. ^<40^>

As an international legal concept, sovereignty accorded the state supreme authority and independence within its territory boundary under international law. The external application of the idea of sovereignty has been regarded as the core concept by various international law theories. In modern times, either the domestic or international (internal or external) aspects of sovereignty remain central to all political discussions. It is therefore premature to assert the end of sovereignty. The idea needs to be refined, however, in accordance with the rapid developments of both the nature of state and international interdependence.

Sovereignty, in an international context, is also known as state sovereignty, or, when in contrast with its domestic sense, external sovereignty. Sovereignty in the sense of contemporary, public international law denotes the basic international legal quality of a state and an attribute of statehood. In terms of the relations with other states, sovereignty signifies a state's independence from them: it is not dependent upon some other state. Therefore, there are two important characteristics of sovereignty in international law and relations: internal autonomy and external independence. Based upon these two dimensions, the notion of external sovereignty entails two other major components: sovereign equality and nonintervention. Hence, Helmut Steinberger defines state sovereignty as "a state's general independence from and legal impermeability in relation to foreign powers, and the state's exclusive jurisdiction and supremacy of governmental powers over the state's territory and inhabitants." ^<41^> Similarly, John Ruggie defines sovereignty as "the institutionalization of public authority within mutually exclusive jurisdictional domains." ^<42^>In terms of legal authority, sovereignty is "the plenary competence that States prima facie possess," James Crawford argues. ^<43^> More accurately, sovereignty "refers not to the totality of powers which all States have, but to the totality of powers which States may, under international law, have." ^<44^>

Sovereignty remains the constitutive concept in the study both of the nature of the modern state and of the theory of international law. In a contemporary political and legal context, the idea of sovereignty has a dual connotation: within the state and in international law, or internal and external sovereignty. Literature in these two areas regularly treats sovereignty as the primary constitutive rule. <45> However, the principles of sovereignty are neither fixed nor constant. In the domestic application, the notion of internal sovereignty denotes the constitutional arrangements regulating the balance of power of state authority that upholds the principles of popular sovereignty. In the international context, most scholars understand the idea of external sovereignty to mean a state's independence from other states and the exclusive jurisdiction over its subjects within its territory. <46>

I will propose a new concept of "democratic sovereignty" and a preliminary framework for the new approach to sovereignty as the legal basis of state jurisdiction. The new approach integrates the domestic and international applications of the notion of sovereignty. Although sovereignty in the domestic or constitutional context is closed related to the notion of sovereignty in international law, few scholars make the theoretical connection between the two concepts. Herein lies the major difference between the new approach to sovereignty and previous approaches. The new approach detailed below represents an attempt to synthesize both discussions about the notion of sovereignty in political theory and in international law. Unlike other approaches, which either discuss the development from absolute to popular sovereignty or the relationship between autonomy and independence, the new approach integrates the dual connotation of sovereignty -- within the state and in international law.

Applied to internal sovereignty, the new concept of democratic sovereignty denotes both the substantive and procedural legitimacy of democracy: not only should the final power reside in the people, but members of the political body should have equal rights to participate in the decision-making process and governance. To fulfill the standards of internal sovereignty, a state should also have its own constitutional legal system, which is not subject to another state's control, and its own domestic jurisdiction, which is under the limitations of international law. Applied to external sovereignty, the new approach to sovereignty is simply the external application of this idea of internal sovereignty. It refers to the ideas of external independence, extraterritorial jurisdiction, and sovereign rights and immunities.

 1. Internal Sovereignty

The traditional notion of internal sovereignty, which refers to the domestic sense of the notion of sovereignty, and internal autonomy, which is the internal aspect of sovereignty in international law, have close theoretical connections. That is, based upon possession of the final political and legal power, a sovereign state holds the highest legal authority within its territorial domain. I will argue here that the idea of democratic sovereignty is now regarded as an emerging rule of international law. I will try to combine the domestic and international applications of sovereignty into a new approach to democratic sovereignty. The internal dimension of the idea of democratic sovereignty will include the ideas of democratic governance, constitutional legal system, and domestic jurisdiction, while the external dimension will contain the ideas of external independence, extraterritorial jurisdiction, and sovereign rights and immunities.

"Democratic sovereignty" means not only that sovereignty should reside within the people, but that it also recognizes the legitimacy of democratic governance. Democratic sovereignty denotes both the substantive and procedural legitimacy of democratic governance in the internal political structure of a state. Both the concepts of absolute and popular sovereignty are defined by the location and distribution of decision-making and law-making power. Because popular sovereignty merely transfers the absolute rule of the monarch to the absolute rule of the people, it might lead to anarchy or to despotism of the few in the name of the many. We have seen, in the last two hundred years, many cases of politicians acting in the name of people while exercising dictatorial rule in nature. For example, all communist countries call themselves "people's republics."

All of us proclaim ourselves democrats now. Although we are not sure whether history has truly come to an end, we are more often than not willing to agree with Fukuyama when he states that "democracy remains the only coherent political aspiration that spans different regions and cultures around the globe." ^<47^> Some international legal scholars are therefore working to establish the international legal pedigree for a right of democratic governance. Thomas Frank argues that the international community is moving to accept the legitimacy of democratic governance in every state as a global normative entitlement. ^<48^> Gregory Fox states that there is an emerging universal right to political participation: "[t]hat receipt of an electoral mandate bestows legitimacy upon government, that genuine choice in an election requires multiple political parties. ^<49^>" Therefore, the concept of "democratic sovereignty," which refers to both the idea that final political power should reside in the many, the people, and the legitimacy of democratic governance, represents a better concept for the post cold war paradigm -- the global resurgence of democracy.

The internal aspect of sovereignty in international law means that a state has the highest legal authority within its territorial boundary; this legal authority is not subject to the governmental, executive, legislative or judicial, jurisdiction of a foreign state or any foreign law other than international law. This aspect of sovereignty is also known as territorial sovereignty, which means the complete and exclusive authority a state exercises over all persons and things found on, under, or above its territory.

An autonomous state, therefore, will have its own legal system, which can exercise exclusive jurisdiction over individuals and property within its territory. The requirement of a legal system is the basis for a sovereign state to be independent from other nation's legal control. In other words, the constitutional legal system, which is not subject to another state's control, constitutes a state's internal autonomy. A closer analysis indicates that the idea of a constitutional legal system is a condensation of the non-physical qualifications of statehood, i.e., government, and the capacity to engage in foreign relations, because the existence of a constitutional legal system is the manifestation of the two characteristics of a state. A community with a constitutional legal system can thus be deemed a true self-governing and autonomous political entity.

 (3) Domestic Jurisdiction

Sovereignty in the sense of contemporary public international law denotes the basic international legal quality of a state and an attribute of statehood. Therefore, sovereignty should be viewed as the legal basis for the competence and restrictions of state jurisdiction. As Rebecca Wallance points out, "jurisdiction is an attribute of state sovereignty. ^<50^>" Quoting the words of Lord Macmillan, J. G. Starke also agrees: "It is an essential attribute of the sovereignty of this realm, as of all sovereign independent States, that is should possess jurisdiction over all persons and things within its territorial and in all causes civil and criminal arising within these limits. ^<51^>"

Jurisdiction is primarily exercised on a territorial basis, for "the territory of a state furnishes the title for the competence of the state. ^<52^>" This does not mean, however, that the limits of the territory impose boundaries on the competence of the state; there are occasions when a state may exercise jurisdiction outside its territory. In international law, jurisdiction is derived from the sovereignty of the state over its domain. Therefore, in practice, sovereignty refers to the competence of state jurisdiction, and since the exercise of sovereignty is limited by international law, there exist certain restrictions of this legal competence.

The theoretical basis of internal autonomy, which refers to the state's exclusive jurisdiction and supremacy of governmental powers over the inhabitants and property within its territory, is derived from the idea of internal sovereignty in the domestic sense. Thus, jurisdiction based on internal sovereignty, or domestic jurisdiction, refers to the competence of the state to govern persons and property by its municipal law, both criminal and civil, within its territorial domain and subject to the limits of what is permitted by international law. Territoriality and nationality are the two principles of domestic jurisdiction of internal sovereignty. Restrictions of internal sovereignty include sovereign immunity, diplomatic immunity, treatment of aliens, and innocent passage. Democratic governance, or democratic sovereignty, and respect for human rights should not be categorized as restrictions of domestic jurisdiction; instead, they are the conditions of internal sovereignty.

 2. External Sovereignty

External sovereignty traditionally refers to the international application of the idea of sovereignty. But when scholars in the past have applied the idea of sovereignty to the relations between states, they have not given enough weight to the full development of the idea of sovereignty in the domestic sense. Instead, they tend to apply only the absolute aspect of state authority to the theory of sovereignty in international law. For the new approach to democratic sovereignty described herein, external sovereignty is the external application of the idea of sovereignty as a whole. It refers to the ideas of external independence, extraterritorial jurisdiction, and sovereign rights and immunities.

The external aspect of democratic sovereignty in international law underlines the independence and equality of states and the fact that they are direct and immediate subjects of international law. According to James Crawford, "it seems preferable to restrict 'independence' to the prerequisite for statehood, and 'sovereignty' to the legal incident." ^<53^> In other words, independence, like the existence of population, a territory, and a government, is a precondition for the existence of a state, while sovereignty is the attribute of statehood once it has been established. As Krylov points out: International law stresses not only the complete autonomy of the sovereign state in its internal affairs, since this law denies interference in the internal affairs of the state, but also a second quality of sovereignty, the independence of the sovereign state. A state which is deprived of the possibility of independent entry into the international arena is not a sovereign state, even though it might preserve a certain autonomy in its internal affairs. ^<54^> Therefore, it is this aspect of sovereignty to which the rules of public international law address themselves primarily. Independence may be seen as sovereignty's external aspect; it is a concept which describes the legal right of the state generally to conduct its own affairs without direction, interference, or control by any other state.

 (2) Sovereign Rights and Immunities

Based on external sovereignty, a state can enjoy, in accordance with international law, certain rights and immunities outside its territorial domain. "Sovereign rights," a relatively new concept developed from the law of the sea, refer to the rights of the coastal states for the purposes of exploring, exploiting, conserving, and managing the natural resources of the continental shelf and the Exclusive Economic Zone (EEZ). The reason for using the word "sovereign" to characterize the concept is because these rights are exclusive in the sense that if the coastal state does not explore or exploit these, nobody can undertake activities without its express consent; nor do the rights depend on occupation, effective or notional, or on any express proclamation.

Sovereign immunities imply that states and international legal persons can enjoy certain immunities, under international law, from the exercise of jurisdiction. A degree of immunity from domestic jurisdiction may be enjoyed by foreign states, heads of foreign states, diplomatic representatives and consuls of foreign states, public ships of foreign states, armed forces of foreign states, and international intergovernmental organizations. More and more state practices no longer regard sovereign immunities as absolute; that is, a state could invoke them irrespective of the nature of their activities. According to newer or restrictive theory of sovereign immunity, the immunity of the state is recognized with regard to public acts (jure imperii) of a state, but not with respect to private acts (jure gestionis). Not all states have abandoned the doctrine of absolute immunity. The denial of immunity of any commercial acts by municipal law is not a violation of international law.

 (3) Extraterritorial Jurisdiction

External sovereignty is the legal basis for a state's extraterritorial jurisdiction, which may be based upon the effects principle, passive personality principle, protective principle, or universality principle. Based upon the legal competence of external sovereignty, states also enjoy sovereign immunity for their public actions in other states. Moreover, there exist certain sovereign rights that belong exclusively to states.

In this section, I will further inquire into the legal status of Taiwan through the new approach to democratic sovereignty outlined above. The theory provides a framework to examine all the other formal features of an entity and to decide whether it constitutes a democratic form of government. From "internal sovereignty," which includes the political democratization, constitutional legal system, policy-making process, and domestic jurisdiction, to "external sovereignty," which will cover its external independence, diplomatic efforts and extraterritorial jurisdiction, one can determine whether the ROC on Taiwan is a sovereign state by using a more objective and sophisticated method than methods traditionally used to approach this issue.

As discussed earlier, the internal aspect of democratic sovereignty entails three features: democratic governance, constitutional legal system, and domestic jurisdiction. When applying this definition to the case of Taiwan, therefore, we can examine the entity's constitutional development, recent political democratization, policy-making process, and the legal system upon which its domestic jurisdiction based. From the discussion of Taiwan's political democratization and policy-making process, one can determine whether there exists a mature democratic sovereignty in Taiwan’s internal political structure. Also, by examining Taiwan's constitutional development and its legal system, one can distinguish whether the people and government of the ROC on Taiwan hold the final political and legal power, in other words, the highest political and legal authority within Taiwan’s territorial domain.

Taiwan's political democratization took place in a unique social-historical context. Taiwan's successful economic development fostered the emergence and development of a pluralistic society that was sufficiently strong to exert pressures upon the political system to be more responsible. With the reduction of tension in the Taiwan Strait beginning in the late 1970s, and the social and economic developments within Taiwan and abroad, ^<55^> the KMT leadership realized that liberalization and democratization had become not only the fervent desire of many people, but an urgent necessity for the country to meet future developments. ^<56^> Now, though only for a relatively brief period, the ROC government has restored constitutional rule. Taiwan today has meaningful and extensive competition for government power though all levels of regular elections. Opposition parties of real significance have come into existence, and considerable civil and political liberties, including freedom of expression, freedom of the press, freedom to form organizations, freedom to demonstrate and strike, and so on have become common features of public and political life. ^<57^>

Following four decades of continuing industrialization and economic growth, Taiwan's social structure has become highly differentiated. The policy-making process in Taiwan is open to discussion and argument. Like any other democratic country, there exist many channels for citizen involvement in the policy-making process, at least for non-strategic policies. In most cases, three organizations at different levels -- the bureaucracy, the Executive Yuan Council, and the Central Standing Committee of the ruling party, the KMT -- are directly related to the task of formulating policy. ^<58^> Nevertheless, the preference of the people, the lobbying of interest groups, and the opinions of intellectuals all play important roles in the process.

"Domestic jurisdiction" refers to the competence of the state to govern persons and property by its municipal law, both criminal and civil, within its territorial domain and subject to the limits of international law. The competence of state jurisdiction is based upon the existence of an independent and comprehensive legal system. The legal system in Taiwan is close to the civil law system and based largely on German, Swiss, and Japanese models and experiences. Therefore, much of the law is codified to provide a framework for legal transactions and relationships. Bills are submitted to by the Executive Yuan to the Legislative Yuan; the legislation contains provisions that delegate authority to the various ministries, councils, and commissions of the Executive Yuan to implement these statutory provisions through detailed regulations and guidelines.

Some important laws have recently been adopted by the government of the ROC on Taiwan. These include copyright law, environmental law dealing with hazardous waste disposal, maritime law concerning shipping and the antitrust immunity and rate regulation of shipping lines, immigration and emigration law regulating the influx of refugees from mainland China, as well as new banking laws and financial rules for further deregulation and internationalization. The purpose of listing these new laws is to show that, like other independent sovereign states, the legal system and laws of the ROC are adaptive and capable of responding to new problems in the modern economic and social environments.

"External sovereignty" traditionally refers to the international manifestation of the idea of sovereignty. The external aspect of sovereignty in international law underlines the independence and equality of states, along with the fact that states constitute direct and immediate subjects of international law. The notion of external sovereignty contains the ideas of external independence and the rights that states can enjoy under international law, including extraterritorial jurisdiction, sovereign rights, and sovereign immunities. As for the Taiwan case, one can examine Taiwan's external independence from the control of other states, its foreign policy for keeping relations with the rest of world, the sovereign rights it exercises and the degree of sovereign immunities it enjoys in other states, and its exercise of extraterritorial jurisdiction. However one regards the status of Taiwan, it is difficult to deny the independent rule and existence of the ROC government in Taiwan since 1949. Though Taiwan has lost diplomatic ties with a host of nations, there has been no doubt of its constitutional independence. The ROC on Taiwan is self-governing under its own constitution and legal system, which are not under the control of any other state's constitutional arrangement.

"Independence" may be seen as sovereignty's external aspect; the concept entails the legal right of the state to generally conduct its own affairs without direction, interference, or control by any other state. The ROC on Taiwan is self-governing under its own constitution and legal system, which are not under the control of any other state's constitutional arrangement. The ROC has a territory base and support of the population, and is recognized by a stable number of other countries.

One indicator of an entity's possession of independent international personality is its independent treaty-making capacity, one not subject to another state's consent or constitutional arrangement. The ROC on Taiwan has independently entered all kinds of political, military, economic, commercial, cultural, and technical agreements with foreign states, and most of the agreements involve the exercise of government power. The ROC on Taiwan has also maintained its status as a party to some multilateral treaties.

Based on external sovereignty, states can enjoy, in accordance with international law, certain rights and immunities outside their territorial domains. Though neither a negotiating party in the Law of the Sea Conference III, nor a contracting party to the Law of the Sea Convention of 1982, Taiwan announced a 12-mile territorial sea and a 200-mile Exclusive Economic Zone on October 8, 1979. On October 2, 1980, the American Institute in Taiwan (AIT) and the Taiwanese Coordination Council for North American Affairs (CCNAA)(now known as TECRO, the Taipei Economic & Cultural Representative Office in the United States) ^<59^> signed an Agreement on Privileges, Exemptions, and Immunities, granting a number of traditional diplomatic privileges and immunities to each other. Although both sides described the Agreement as "administrative" or "functional" in character, it essentially offers both sides a qualified variant of the traditional privileges and immunities normally accorded to foreign diplomats representing a recognized government. ^<60^> Under the legal framework established by the Taiwan Relations Act and this Agreement, Taiwan enjoys the full range of sovereign immunities in the United States, except that Taiwanese representatives are not permitted to use diplomatic license plates and do not travel on diplomatic passports.

What are the political and legal relations between the two governments across the Taiwan Strait? What is "one China?" Is the cross-strait relation really a special state-to-state relation? These questions will be discussed and answered in this section so as to clarify current political and legal reality across the Taiwan Strait.

Since the late 1980s, the ROC on Taiwan and the PRC have been moving toward a different relationship -- a closer but informal tie. This section will examine a number of legal issues arising from these renewed relations, hopefully clarifying the present legal relations between the two.

1. The Development of Contacts

The relationship between the Taipei and Beijing governments has come a long way from the destroy-the-enemy or militarily-liberate-Taiwan attitudes in the 1950s. The norm in the 1990s has been non-governmental exchanges and semi-official contacts with each other. There is no simple explanation for the processes behind the changing relationship. It is perhaps best to start by dividing this 45-year period of relations into several shorter intervals: ^<61^>

This first period was characterized by intermittent fighting. The PRC's policies in the first period stressed liberating Taiwan by military force, and two small battles actually occurred in the Taiwan Strait. The KMT government on Taiwan also advocated the policy of military counterattack on the Chinese Communist Party (CCP) government and resisted the CCP by the use of force.

Following the cold-war spirit, while the shelling of Kinmen and Matsu continued on an every-other-day basis, the PRC and the ROC shifted their major battle field from actual fighting to the arena of diplomacy in the international community, and stressed the importance of the peaceful means to solve the problem of reunification. A good example is the contest for the representation of China in the United Nations in the 1960s. Another is the struggle for the diplomatic recognition of the United States

In this period, due to the mutually hostile attitude, there were only a few limited, indirect, and private contacts between the people on both sides of the Taiwan Strait. The PRC's policies from 1979 were influenced by the concept of "one country, two systems," which envisioned the ROC giving up its sovereignty and becoming the PRC's Special Administrative Region. The Taipei government officially professed the "Three Noes" policy of "no contacts, no negotiation, and no compromise." Taiwan enacted a number of special laws to ban any contact between Taiwan and the mainland. Indirect trade, therefore, could be carried out only in a clandestine manner, and the amount of trade stagnated around the dismal level of $50 million annually. ^<62^>

This period can be divided into two parts according to the change of policy and attitude on both sides' governments: 1987 - 1995 and 1995 - to the present. From 1987, there have been several important changes in Taipei's policies. As Hsin-Hsing Wu points out, "if it was Beijing that took most of the initiatives in the relations between the two Chinas during the period of 1979-86, Taipei has assumed the lead since 1987." ^<63^> That year, the KMT government lifted martial law and announced that Taiwan residents could visit mainland China for family reunion. Indirect trade between Taiwan and mainland China was allowed, and private contacts, trade, and tourism between Taiwan and mainland China rapidly increased and expanded. Many cultural, academic, artistic, scientific, and other non-governmental exchanges have also been undertaken. Furthermore, in 1991, the Taipei government adopted the "Guidelines for National Reunification," which outlined what Taipei saw as a logical process for future reunification. Meanwhile, President Lee announced that the "period of mobilization" against Communist China would be terminated on May 1, and the "temporary provisions" of the Constitution in force during the mobilization period would be annulled simultaneously. According to the White Paper on Relations Across the Taiwan Strait, issued in July 1994 by the Mainland Affairs Council of the Executive Yuan, there were two important implications about this announcement: first, "the ROC government had formally and unilaterally renounced military force as a means of national unification"; second, "the ROC government would no longer compete for the 'right to represent China' in the international arena." ^<64^>

Several institutes were founded to initiate, coordinate and implement the new policies. The National Unification Council founded in October 1990, chaired by the President, would deliberate the policy principles and guidelines; a cabinet-level Mainland Affairs Council (MAC, November 1990) would be in charge of coordinating government agencies; and the Straits Exchange Foundation (SEF, February 1991) would serve as the "white glove" for dealing with the Beijing authorities while shielding Taipei officials from direct contact with their PRC counterparts. Koo Chen-Fu, chairman of the National Association of Industry and Commerce and member of the standing committee of the central committee of the KMT, was elected chairman of the SEF. In response, the PRC decided to establish a corresponding organization - the Association for Relations Across the Taiwan Straits (ARATS). Its chairman is Wang Daohan, a former mayor of Shanghai.

On April 27 1993, Koo and Wang began their historic talks in Singapore -- the first meeting between the heads of two private but government-authorized intermediary organizations of the ROC and the PRC -- and on April 29, 1993, four agreements were concluded. These agreements include: the Agreement on the Use and Verification of Certificates of Authentication (Notarization) Across the Taiwan Straits; the Agreement on Matters Concerning Inquiry and Compensation for Lost Registered Mail Across the Taiwan Straits; the Agreement on the System for Contacts and Meetings Between the SEF and the ARATS; and the Joint Agreement of the Koo-Wang Talks. ^<65^>

This type of technical contacts and negotiations (de facto government-to-government contacts) through private organizations have become institutionalized and expanded recently. Disputes over interpretation and certain issues still exist. However, in all talks, both sides were able to reach consensus on a number of issues which have been helpful for resolving some problems. Because both sides hoped to gain political influence through the negotiations, the talks have been deadlocked at times by disputes over the jurisdiction and sovereignty issues. ^<66^>

For the first time, however, from the agreements and solutions reached from the talks between SEF and ARATS, the PRC has given de facto recognition to the jurisdiction of the ROC courts, police, and customs. Yet the Beijing government continues to reject any agreement that implies the independent legal jurisdiction or sovereignty of Taiwan. For instance, the latest talk between SEF and ARATS, which ended in Beijing on January 27, 1995, broke down over fishing disputes. Negotiators from Taipei suggested that such disputes be mediated by whichever side was closest to the dispute site. Beijing refused this proposal because it might imply that there is such a thing as Taiwanese waters -- those closer to Taiwan than to the mainland -- which might then imply the recognition of the legal jurisdiction of the Taipei government. Instead, the Beijing government said that it prefers to resolve disputes on the basis of territorial waters (without further definition of what this phrase means). Certainly, this was unacceptable to Taiwan. ^<67^>

An incident in 1995 brought another freeze in the development of relations across the straits. In response to President Lee's visit to Cornell University in June 1995, Beijing suspended the second Koo-Wang talk as well as all other SEF-ARATS exchanges and conducted live missile exercises in the Strait during Taiwan's first presidential election in March 1996. ^<68^> China stepped up its campaign of diplomatic isolation and military threats when Taiwan tried to expand its international living space. ^<69^> Beijing has asked repeatedly that two sides conduct political negotiations, a loaded term redolent of reunification that Taiwan would prefers to avoid. In Taiwan, an isolated democracy considered by Beijing to be a renegade province in need of reunification, both politicians and the mainstream public opinion reject any kind of political negotiation under Beijing's one China theology. ^<70^> The long-stalled dialogue did not resume until 1998 when Koo was able to visit China. The two sides agreed to conduct more contacts and Koo's counterpart, Wang Daohan, agreed to visit Taiwan in the fall of 1999. However, the possibility of continued dialogue may face another interruption, for Beijing has threatened to postpone Wang's visit to Taiwan due to President Lee's remark on "special state-to-state" relations with China.

There have been two avenues for change in the legal relations between Taiwan and mainland China since 1987 -- public and private law relations. Strictly speaking, however, there have been no substantive changes in the public law relations between Taiwan and China. Although the Taipei government has recognized the Beijing government as a "political entity" and accepted its jurisdiction over mainland China, the Beijing government still regards Taiwan as one of its local governments. In addition, Beijing's threat to use force to resolve the so-called "Taiwan question" leaves little space for the two governments to create an environment of political and public law talks and dialogues.

With regard to private law relations, ever since Taipei adopted its new mainland policies in 1987, private contacts across the Taiwan Strait have been permitted and, to some extent, encouraged by the governments of the ROC on Taiwan and of the PRC. These private contacts include commercial (such as indirect bilateral trade, Taiwanese investments, constructions and so on), cultural (such as academic conferences and performing arts), and tourist activities. There have also been some important developments concerning civil, criminal, and business law problems. The regular development of these private contacts raises legal questions and creates legal disputes. Issues like the legal capacity of persons, jurisdiction, and recognition and enforcement of court judgments and of arbitration awards are the basis for the development of private contacts. Other problems related to contracts, property, marriage, adoption, and succession also need to be resolved. Therefore, it is important to build a legal framework for regulating private relationships between people on both sides. However, because of the different positions on political issues such as sovereignty and reunification, certain procedural disputes such as negotiation processes and places, and a strong mutual distrust, the development of the private law relations between the ROC and the PRC has been slow and lacked long-term planning. A comprehensive legal framework regulating private law relations cannot be reached through official negotiations between the two governments.

However, as one writer points out, "generally, the problems do not raise serious theoretical difficulties. The traditional legal order, expressed in domestic substantive law, in rules of conflict, and to a lesser extent, in principles of public international law, is usually sufficient to resolve such disputes." ^<71^> The study also indicates that, according to legal theory and inter-state practices worldwide, the ROC on Taiwan and the PRC "need not reach an agreement on public recognition in order to allow full private relations, and the establishment of such relations need not lead to any public international law consequence." ^<72^> As to the legal framework for private relations, both sides adopt the "inter-regional conflict of laws" approach; each side views the other as a separate regional jurisdiction for private law purposes. This approach is closely related to the private international law theory, the choice of law among different state jurisdictions. ^<73^> Both theories insist that the application of the conflict of laws model is restricted by the "one China" principle; therefore, both argue that it is different from the common private international law. ^<74^>

Both sides' interpretations for their policies are quite different, however, and reflect their own reunification proposals. In the ROC, the Statute Governing Relations Between People of the Areas of Taiwan and Mainland China combines "one country, two regions" policy and the idea of inter-regional conflict of law to deal with private cross-strait relations. <75> In the PRC, no such comprehensive legislation deals with all aspects of private law relations between the two, but some executive orders exist that follow the idea of inter-regional conflict of laws. Under the political proposition of "one country, two systems," jurists in the PRC advocate an idea of "regional conflict of laws" to address the issues of private law relations between the people in these two areas. <76> The development of both sides' attitude and policies with regard to the regulation of private contacts shows that each realizes and acknowledges the de facto authority of the other over private matters within their respective territories, and the need to legislate related laws to facilitate private relationships. Moreover, they both emphasize that the enactment of the regulations of private relations shall not affect their respective unification proposals. <77>

Before China’s seat in the United Nations was transferred by the PRC, the Taipei government was recognized by most of the states in the international community as the sole legal government of China -- the Republic of China. Now the political meaning of the word "China" generally refers to the government of the People's Republic of China in Beijing. When the ROC on Taiwan applied to join GATT, the PRC government argued that Taiwan could not legally join GATT independently, or, at least, that Taiwan's application could only be considered after the PRC had resumed China's status as a contracting party to GATT. The Beijing government's line of reasoning was that Taiwan is an inalienable part of China, and cannot function as an international political entity. According to Beijing, Taiwan's application must be sponsored by the PRC. Otherwise, it would result in recognition of "two Chinas" or "one China, one Taiwan." ^<78^> But what does "one China" really mean? Is there only one "China"? A brief discussion of the implications of this term, to which both sides and most of the rest of the world regularly pay lip service, seems necessary.

For the Taipei government, the "one China" policy is the political ideal of a future relationship between mainland China and Taiwan. It is a future political goal, not a present legal reality. For the Beijing government, there exists only one China, and it is the PRC. In the international community, most states recognize that the PRC constitutes the government representing the state of China. Because of the traditional notion of "one state, one government," for most of states in the international community, there is only one China -- the PRC. Within the framework of international law, however, it would be an academic mistake to ignore the existence of the Republic of China on Taiwan and to assert that the PRC is the only Chinese state.

Although both governments maintain that there is only one China, they obviously interpret the term differently. To the Taipei government, before 1991, "one China" referred to the Republic of China founded in 1912. Since the termination of the period of mobilization and the adoption of the Guidelines for National Reunification in 1991, however, the Taipei government has admitted the division of China under two "political entities" -- one in Beijing, one in Taipei. Both exist within this "one China," a future unified Chinese state. ^<79^> Furthermore, the ROC maintains that "China" is not merely a country name; it also represents a cultural tradition. The tradition of Chinese culture is the most important linkage of all of the Chinese people who live in the mainland and Taiwan. The ROC government's definition of "one China" is more a geographical, cultural, and historical understanding, an attempt to dilute the political reality of the struggle for power between the two sides of the Taiwan Strait. In the political aspect, this definition of "one China" admits the current division of China -- the division of ruling power and jurisdiction. According to the ROC’s 1994 White Paper on Relations Across the Taiwan Strait, the idea includes the following: ^<80^>

It is clear from these points that the Taipei government advocates the idea of "one China, two political entities" to accept the present reality and to leave flexibility for future development. The White Paper on Relations Across the Taiwan Strait explains: "The ROC government is firm in its advocacy of "one China," and it is opposed to "two Chinas" or "one China, one Taiwan." But at the same time, given that the division between the two sides of the Taiwan Strait is a historical and political fact, the ROC government also holds that the two sides should be fully aware that each has jurisdiction over its respective territory and that they should coexist as two legal entities in the international arena. ^<81^>

To the Beijing government, "China" refers to the People's Republic of China with its capital in Beijing. Taiwan is only a province, or a "special administrative region" under the concept of "one country, two systems." ^<82^> The PRC government takes advantage of every possible opportunity to give the world the impression that because Taiwan is only a part of China, it is one province of the PRC. For instance, in the news conference of the Asia Pacific Economic Cooperation in Seattle on November 20, 1993, the PRC's President Jiang Zemin and Foreign Minister Qian Qichen said that Taiwan was under the PRC and only a province of the PRC. The essence of the PRC's "one country, two systems" formula is that the "country" -- China, of course -- is the PRC, not any other meaning of a Chinese state, and certainly not the future democratic ideal held by Taiwan. The PRC's "one China" principle may be understood through the following four positions: ^<83^>

  China's unification policy, articulated in the 1993 White Paper, has four major principles: (a) one China, (b) one country, two system, (c) a highly autonomous Taiwan, and (d) peaceful negotiation. "Peaceful negotiation" is predicated on Beijing’s assertion that "everything is negotiable within the framework of One China." The possibility of peaceful negotiations notwithstanding, Beijing insists that "as a sovereign state, the Chinese government is entitled to use all necessary means (including military force) to protect its sovereignty and territorial integrity." ^<84^> Under its "one China" principle, the "one country, two systems" framework is the PRC's strategy for peaceful reunification, but not the only way to achieve national reunification. On many occasions, the PRC has announced that it will never promise to renounce using force against Taiwan under any circumstance. The "one China" principle has given Beijing justification to prevent any foreign concerns over the "Taiwan issue," since, according to Beijing, the reunification of Taiwan is completely a Chinese "internal affair." One (mainland Chinese) writer even argues that "from an international legal point of view, the PRC can use its sovereign power to justify any military action against Taiwan, and other countries have no right to interfere in its internal affairs. Technically, the PRC can declare the [military] blockade, a military quarantine of the renegade Taiwan province." ^<85^>

Beijing's "one China" principle leaves no room for other states to recognize both the ROC on Taiwan and the PRC. The "one China" policy, therefore, for most of the states in the international community, means that the Beijing government is the government of China. This perception is no doubt one of the reasons why Beijing has to act and behave like a central government of China and to treat Taiwan as a local government: every major country has implicitly or explicitly accepted China's version of "one China" principle that "there is only one China and Taiwan is part of China." Even the United States seems to be modifying its long-standing "strategic ambiguity" policy toward Taiwan. When President Clinton visited China in July 1998, he announced his own "three noes" policy, asserting not only that there are no "two Chinas" but also that there is no "one China, one Taiwan." ^<86^>

The "one China" principle, whatever the definition is, places other countries in a legal/political dilemma: if a country recognizes Beijing as the effective government of a "China" state, then that country cannot simultaneously consider Taipei to govern a "China" state, and still agree with Beijing that Taiwan is part of China. It is important to remember that despite all of its rhetoric of Taiwan being a part of China, the PRC has never, since its founding in 1949, extended actual jurisdiction and effective control over Taiwan -- not for a single day. The "one China" rhetoric is a major obstacle to Taipei’s diplomatic relations with other countries and participation in international activities. This question of semantics, coupled with Beijing's relentless effort to deny Taiwan's membership in intergovernmental organizations and recognition from other countries, continues to threaten Taiwan's tenuous international status. There is also growing frustration in the Taipei government at Beijing's attempts to force Taiwan to accept its definition of "one China," and therefore to be in a politically inferior position in cross-strait dialogues.

 C. PRC and ROC: Special State-to-State Relations

  Objective observation indicates that there are indeed two states -- the People's Republic of China on the mainland and the Republic of China on Taiwan. As we discussed above, the ROC remains in existence and maintains a title on Taiwan and a close relationship with the international community, officially or unofficially. Furthermore, the analysis above has shown that the ROC on Taiwan is a democratic sovereign state. Since 1949, the PRC regime in Beijing has been the de facto government of the mainland territory, and the ROC regime in Taipei has been the de facto government of Taiwan. That there exist in reality two separate states across the Taiwan Strait seems quite difficult to deny.

As to the relationship between Taiwan and China, Taiwan's 1991 Guidelines for National Unification offer the idea of "one China, two equal political entities" as a way of defining the present situation and future development of cross-Strait relations. Taiwan's strategy is to admit the existence of two Chinese states: both are de facto and de jure states controlling their own territories, but neither one of them is the legal government representing both mainland China and Taiwan. The "one China, two political entities" policy is designed to bypass the argument over sovereignty -- which is the legitimate government for all of China. One important indication of the policy -- admitting that there are two political entities across the Taiwan Strait, but expecting the ultimate goal of reunification of whole China -- is that since 1993 the government of the ROC on Taiwan has renewed its bid for a seat in the U.N., seeking parallel representation for the PRC and the ROC under the idea of a divided China. ^<87^>

Also in 1993, Taiwan developed another expression to address current cross-strait relations, that is, the "two Chinas in transition" policy: while upholding the ultimate goal of reunification, the policy implicitly admits the existence of two Chinese states. This "two Chinas in transition" policy was presented at the APEC press meeting in Seattle on November 20, 1993. There, in response to Beijing's public claims of sovereignty over the island, the Economics Minister P. K. Chiang announced that "the ROC government is now pursuing a 'transitional' 'Two Chinas Policy' and that there are now two sovereign nations across the Taiwan Strait." ^<88^> This "two Chinas in transition" policy also summarized the reality -- the long existence of two political entities divided as a result of civil war -- without changing the ROC's ultimate goal of unifying China.

The latest remark was made in July 1999, when President Lee Teng-hui was asked by a Deutsche Welle radio interviewer to comment on China's description of Taiwan as a "renegade province." Lee pointed out that "Taiwan has an elected, democratic government," and the definition of the cross-strait relationship is "at least a special state-to-state relationship." President Lee also mentioned that "under such special state-to-state relations, there is no longer any need to declare Taiwan independence," and then urged China to "proceed with democratic reforms at an early date to create better conditions for democratic reunification with Taiwan." ^<89^> Beijing has once more accused President Lee of embarking on a quest for Taiwan independence, which could provoke a Chinese military attack. However, subsequent statements made by President Lee and other Taiwanese officials stressed that Taiwan had not abandoned unification as an ultimate goal and the new remark was only a modest and logical extension of a previous position.

One analyst argues that President Lee's remark reflects growing frustration with Beijing's refusal to accord Taiwan a politically equal position in the cross-straits talks. ^<90^> Beijing fails to understand that Taiwan's democratization in recent years has changed its state structure and mainland policy. A libertarian-civic Taiwanese society driven by popular support demands more equal treatment in cross-strait relations and more breathing space in the international community. ^<91^> Taipei argues that "Beijing has denigrated the ROC as a local government through its hegemonistic one-China principle. It downgraded the ROC in cross-strait exchanges, and appropriated the 'one-China principle' as the premise for all cross-strait negotiations, in order to force us to gradually acquiesce to the 'one country, two systems' formula." ^<92^> According to one of President Lee's advisers, Tien Hung-mao, as long as Beijing claims to be the only government of all of China, and attempts to force Taiwan to move directly to political talks about reunification, Taiwan "is negotiating for defeat." ^<93^> For Taipei, therefore, "one China" is something for the future, a democratic union with a mainland China that is far different from that of today. For now, Taipei’s insistence that the current cross-strait situation is a "special state-to-state relation," is designed to guarantee that cross-straits dialogues and exchanges are conducted on a basis of equality. ^<94^>

Taiwan's top negotiator, Koo Chen-fu, made a statement in response to the recent rise in cross-strait tension and sent it to his mainland counterparts in late July. In the statement, Koo pointed out that Taipei has not changed its policy and still seeks eventual unification with the mainland China. He said:  

However, Taipei then issued a new official terminology to describe its relations with mainland China as "one nation, two states." The articulation of the relationship is indeed one step away from the previous policy of "one China, two political entities." The major difference between these two descriptions is the replacement of "one China" by "one nation." Taipei’s reasoning is that the term “one China” has been used by Beijing to promote itself as a superior sovereign entity and further isolate Taiwan's government. ^<96^> In essence, these remarks about "one nation, two states," "two Chinas in transition," or "special state-to-state relations" represent not only the changes of policy toward cross-straits relations, they are also strategies designed to cope with the legal/political dilemma posed by Beijing's "one China" rhetoric.

Legally speaking, when President Lee addresses the cross-strait relation as a "special state-to-state" relation, it is an accurate description of the current relations between China and Taiwan. On one hand, Taiwan is a state, though an isolated democracy. On the other hand, the relationship between Taiwan and China is a special state-to-state relationship – a unique situation and special relationship that has never arisen before, and that is different from the two Germanys and the two Koreas. Taiwan and China share the same cultural heritage and historical ties, and could achieve the common goal of integrating in the future. The Taiwan government's position on President Lee's remark argues that "this practical and forward-looking view fully voiced the aspirations of the twenty-two million people in Taiwan. It is designed to lay a foundation of parity for the two sides, to elevate the level of dialogue, to build a mechanism for democratic and peaceful cross-strait interactions, and to usher in a new era of cross-strait relations"^<97^>

This paper is an attempt to examine Taiwan's legal status and relations with mainland China in light of current political and legal facts and reality. In addition to traditional conditions of statehood, the research proposes a framework for a new approach to democratic sovereignty. This new approach to democratic sovereignty, both internal and external, can be applied to determine a political entity's international legal status and its legal personality and capacity. Therefore, by both reviewing traditional conditions of the statehood of Taiwan and applying the framework of democratic sovereignty to the case of Taiwan, this research has shown that the ROC on Taiwan is a democratic sovereign state, with a flourishing economy and democratic polity.

Due to the entanglement of political factors and legal relations, however, Taiwan does not share diplomatic relations with most countries in the international community and thus cannot participate in major inter-governmental organizations. In addressing relations between China and Taiwan, this paper has also revealed the unique and special circumstances of the cross-strait relationship. By discussing the meaning of "one China" and the relation between the two political entities across the Taiwan Strait, this research concludes that the PRC and the ROC are, in political and legal reality, two separate states with a unique and special relationship.

Many countries fail to understand a very important structural change in Taiwan and its relations with China, that is, Taiwan is a democracy now. As discussed in the body of this paper, a democratic political community with its own constitution and final control of legal jurisdiction is a democratic sovereign state, and that China has never exercised jurisdiction over it. Taiwan is not part of the PRC, and it is not part of the "China" defined by the PRC and other states. But it seems that the US, and the rest of the world, are scared to admit the reality of the cross-strait relation. Most states, while they understand the factual and legal situations between the two states, take advantage of the rhetoric game between Beijing and Taipei. These false acknowledgments disregard the reality that there is a democratic sovereign state existing on Taiwan, and they neither respect the freedom and rights of the people in Taiwan; they lend Beijing the justification that Taiwan is only a part of China. As an active member of most of the non-political activities in the international arena, therefore, Taiwan is denied the rights to liberty, participation, and self-respect.

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