The Far Eastern Economic Review described it as "a beacon of economic resilience in a region struggling to claw its way out of recession" (February 11, 1999 issue), however Taiwan occupied the headlines for most of 1999 due to a deterioration in relations with mainland China. The resolution of the dispute affects all of us in the region as our prosperity is dependent on stability and thus, the ramifications of military conflict are enormous. Australia with the first visit by a Chinese President followed by participation in the APEC meeting in New Zealand has the opportunity to continue to play an important role as an intermediary. In attempting to understand why the situation between Taiwan and China has deteriorated to the 'grave danger' that President Jiang referred to recently, we thought it useful to provide some background.
Facts and Figures
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Taiwan Land Area: Taiwan is less than one-half of Tasmania's at 32,260 square kms
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Population: 22 million, made up of ethnic Taiwanese and Chinese mainlanders (and descendants)
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GDP - US$262 billion in 1998 (China US$1 trillion)
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Total trade in 1998: US$215 billion (China US$320 billion)
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Economic growth 1979-97: 7.3%; 1998: 4.8% and forecast 5.7% for 1999 (China 9.8% - 1st in the world; 7.8% in 1998 and forecast 7% for 1999) Taiwan is now in the top 15 trading nations in the world (China is ranked 11th);
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Reserves: Taiwan - US$100 billion (4th); China - US$150 billion - 3rd in world after European Union and Japan
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Taiwan and Mainland China two-way trade: US$24 billion in 1998 of which exports to the Mainland represented 85% . Indeed, Taiwan's trade dependence on the Mainland has been rising.
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Government: Taiwan is a democracy and will hold its next elections in March 2000. The ruling party is the Chinese Nationalist Party (KMT).
HISTORY
The island was originally settled by Malayo-Polynesians (known as aborigines). Chinese migration did not commence until the 15th Century when Chinese fishermen, merchants and soldiers settled on the island, mostly from the provinces of Zhejiang and Fujian. There was a group of Hakka people from Henan who also migrated there. The Portuguese invaded in 1517 and the Dutch in 1624; the Spanish briefly controlled the north up until the middle of the 17th century.
Defeated refugees from China's Ming Dynasty (1368 - 1644) fled there in the mid-seventeenth century, and subsequently the Manchu Qing Dynasty (1644 - 1911) won control and held Taiwan for over 200 years. Substantial migration from Fujian continued and Taiwan changed status from a county of Fujian Province to a province of China in 1887.
In 1895, the Qing Dynasty ceded Taiwan to Japan as a war prize and Japan controlled the island until 1945. The last dynasty was overthrown in mainland China in 1911 and the mainland disintegrated into warlordism for the next 20 years. The Japanese invasion followed in 1931 which together with the prolonged civil war between the Communists and Nationalists (Guomindang or KMT) devastated the country. The KMT fled to Taiwan in the face of defeat under leader Chiang Kai-shek with two million followers. The People's Republic of China was established in 1949 and with the KMT (Chinese Nationalist Party) transferring its Republic of China status to Taiwan, 'Two Chinas' was born.
Taiwan thrived economically and held a United Nations seat until 1971. Gough Whitlam, incidentally, established Diplomatic Relations with the PRC in 1972 and as a result, severed relations with Taiwan. Shortly after, the United States also recognised the People's Republic of China and broke diplomatic relations with Taiwan but, like most countries, maintains strong business links with the island.
Every now and then the Taiwan-China relationship has flared up, for example when Taiwan was lobbying to try and obtain a seat in the UN, when President Lee visited America (missile tests in the strait followed) and prior to Taiwan's last elections, the visit by the Dalai Lama and the recent 'war of words' initiated by President Lee.
There are elections to be held in Taiwan in March 2000 and if the actions of Beijing during the last elections three years ago are any indication, the poll will be a test of Taiwan's infant democracy. Three years ago there was a barrage of military exercises and missile tests interceded in by the US which sent some aircraft carriers into the region.
From the Mainland Chinese perspective Taiwan is 'Chinese with capitalist characteristics' and has been under Chinese rule since the 15th Century (except from 1895 - 1945 when under Japanese colonial rule). Like Hong Kong and Macau, it must be reunited with the motherland.
Foreign Minister Tang Jiaxuan, said that Chinese civilization has proved that "prosperity and development are associated with unity, while war and conflict come from separation." One cannot underestimate the determination of China - this is a matter of national honour and integrity; China has determined that it never wants to be attacked and humiliated by other countries again.
From a Taiwan perspective however, the island is 'Taiwanese with Chinese features'. Taiwan had maintained the same political goal - to retake mainland China - but not as a communist power meaning the reinstatement of the KMT Government in Beijing. After the election of President Lee Teng Hui, this has changed. He has affirmed Taiwanese identity and caused rifts within Taiwan's politics. He is the first Taiwanese to rule Taiwan; he has also been popularly elected. He has been accused of 'Taiwanisation' - betraying the Nationalist Party's objective of retaking the mainland. Most Taiwanese do not support reunification however.
THE RECENT RHETORIC - WILL A WAR OF WORDS ESCALATE?
On 9 July,1999, Taiwan President Lee Teng Hui said that Beijing should treat Taiwan as a 'state' in negotiations over the future of cross-strait ties. Prior to this, each side of the Strait saw itself as part of one China, with each claiming to be the country's legitimate rulers. The KMT (Taiwan's ruling party) has now formally written the 'two states' concept into its party charter.
The phrase 'One China' has been interpreted differently creating recent tensions: President Lee called it state-to-state relations; a Taipei government spokesperson has since said that what Mr Lee meant was not 'two states in one nation' but 'a special state-to-state relationship' the spokesperson clarified that it meant the two are equals; Beijing denies they are equals and regards the island as a province and that its sovereignty died when it was defeated on the mainland in 1949. Taiwan's President sees that 'One China' is only possible after democratic reunification.
Taiwan's ruling Nationalist Party candidate for the forthcoming Presidential poll, Vice-President Lien Chan, has pledged to continue Taiwan's struggle for recognition and blamed China for the latest tensions and that a 'one country, two systems' formula such as is in place in Hong Kong would cost Taiwan its sovereignty and dignity.
China has threatened military action to stop Taiwan taking any steps toward independence: a senior Politburo member in China describing the mainland and what it needs to do: "finish the great enterprise of national reunification through all means - at whatever cost and sacrifice".
The United States is critical in the China-Taiwan equation and it has maintained deliberate vagueness about whether it would support Taiwan in any military action; the forthcoming US Presidential election next year could increase pressure on Washington to declare its position. And many Americans support a democratic and free-market Taiwan and will not support any compromises by Clinton. With the 50th anniversary of the founding of the PRC imminent, China does not want to be cast in the role of international villain either.
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