Taiwan-China Ties to Cool
Image Credit: Office of the President of Taiwan

Taiwan-China Ties to Cool


The seventh quasi-official meeting between Beijing and Taipei has been postponed due to a stalemate in negotiations over an investment protection agreement. The two sides disagree on the need for a third-party arbiter, with Taipei wanting a third-party mechanism, while Beijing prefers to have an arbiter on the mainland.

The dispute is a sign that it’s time for both sides to consider new ways of helping prevent a deterioration in cross-strait relations – and involving a third party in cross-Strait economic affairs would be a very good start.

The two sides’ differences ultimately revolve around sovereignty, a core issue that both sides have managed to avoid thus far by reaching agreements only on economic or functional issues. Although this has led to 15 agreements over the past three years, including an FTA-like ‘Economic Cooperation Framework Agreement’ (ECFA) in the middle of last year, the forward momentum in cross-Strait relations that has prevailed since mid-2008 is grinding to a halt.

Meanwhile, the benefits of closer cross-Strait economic ties, mostly on the Taiwanese side, are falling away. In the first half of 2011, the growth rate for investment flowing to the island from mainland Taiwanese enterprises shrank from 17.2 percent to 10.4 percent on the previous year. Taiwan’s employment, meanwhile, didn’t increase after implementing the ECFA, nor did President Ma Yin-jeou’s popularity rise. The number of Chinese tour groups coming to Taiwan is diminishing, while the number of mainland individual tourists – an option that was launched in June – hasn’t met expectations. For Taiwan, then, the current situation with the mainland seems to be as good as it will get.

Some might argue that this is a short-term slowdown resulting from Taiwan’s upcoming presidential campaign. Certainly, the neck-and-neck race between Ma and opposition hopeful Tsai Ing-wen makes both sides of the Strait hesitant to move forward. However, neither candidate can turn the clock back to 2008. If Ma wins, Beijing may well demand negotiations on political issues. If Tsai wins, Beijing might give Taiwan the cold shoulder because of her rejection of the ‘1992 consensus.’ Even if Beijing is willing to be patient with whoever is in office, relations are likely to deteriorate with all the ‘easy’ agreements having been made.  

The fact is that the honeymoon is over. Beijing has realized that its economic favours no longer appeal to many Taiwanese, with the number of people supporting unification remaining low.Yet scaling back those ‘favours’ would only worsen Beijing’s standing in Taiwan.And, although Beijing seems ready to put international or military issues on the table for political talks, Taipei has avoided such discussions.Whether the next Chinese leader will continue to be patientwith Taipei remains to be seen. For its part, Taipei has realized that Ostpolitik hasn’t improved its security, as China’s launch of an aircraft carrier and a PLA fighter jet crossing the middle line of the Strait has demonstrated.

In addition, Beijing’s objections to US-Taiwan arms deals have exacerbated Taipei’s concerns. Fear of losing US arms sales makes Taipei more reluctant to discuss difficult issues with Beijing, meaning that difficult bilateral negotiations are likely to stagnate.

My point is not to sound pessimistic about cross-Strait relations, but rather to avoid the kind of excessive optimism that has dominated thinking on both sides over the past three years. Remember the early-1990s détente between Beijing and Taipei? It ended in a crisis from 1995 to 1996.

The shadow of the two leadership transitions looming over both sides is creating even greater uncertainty. Aware of this, Su Chi, former secretary of Taiwan’s National Security Council, recently launched a think tank aimed at consensus-building within the island and across the Strait. Still, however necessary the move, it has likely come a little too late.

With all this in mind, then, Beijing and Taipei should consider the introduction of a third party in cross-Strait economic affairs. Given that both sides enjoy separate jurisdiction and legal systems, incorporating a third party guarantee seems both practical and reasonable. Singapore would be a good option as a third party, not least for its sound legal system and experience with cross-Strait affairs. A third party mechanism would help allay Taiwan’s concerns in interacting with a stronger party, encouraging Taipei to cooperate with Beijing on broader issues. Beijing, for its part, wouldn’t need to worry about ‘internationalizing’ cross-Strait affairs – no country is likely to challenge China on the Taiwan issue, meaning Beijing has more leeway to compromise on this issue than before.

Inviting a third party into cross-Strait economic affairs would be a breakthrough for China, especially if Beijing finally realizes that its position will actually be consolidated by other states’ recognition. It will also help alleviate other countries’ concerns. After all, the impact of developments in cross-Strait relations goes beyond the region. Sharing Beijing-Taipei peace dividends with other states could also provide an added incentive for the two nations to maintain a stable cross-Strait relationship and improve regional stability.

Nien-chung Chang Liao is a Ph.D. candidate at the Graduate Institute of East Asian Studies at the National Chengchi University, Taiwan.

Tron vokoyo
November 25, 2011 at 22:55

“According to Japanese maps officially published before 1895, the Diaoyu Islands were never drafted into Japan’s map,” Ju Deyuan said.

“And changes on lots of Japanese maps tell the real ownership of the Diaoyu Islands.”

In 1945, the Japanese Government accepted the Potsdam Declaration, which stipulated that Japan must return all territories it seized from China. From then on, the Diaoyu Islands were deleted from Japanese maps.

“Such changes actually mean Japan has returned the Diaoyu Islands to China,” Ju Deyuan said.

“However, in 1971, the Japanese Government announced that the Diaoyu Islands belong to Japan, which showed that Japan is in conflict with its commitment to the Potsdam Declaration.”

September 12, 2011 at 01:45

Learn History lest you repeat the mistakes of the past.

September 12, 2011 at 01:23

I am loling at this statement. Invaders? If we are talking about invaders it should be China. Those islands belong to ASEAN and you have not RIGHT to them whatsoever.

If you think your Red Communist Country can just take over the Spratly’s, then go ahead and try if things would not result to severe repercussions for China. Especially if you are stupid enough to attack the Philippines, Guam is near and the B-2 are there.

September 10, 2011 at 12:48

John Chan wrote:
“I am nobody in China. My only consolation is that China could maintain its current course regardless.”

John, you are not nobody.

You are a droplet of water in the ocean. Every amazon river starts with one droplet of water, its why its a river.

Its why, the worlds people listen to every chinese voice who promotes ethnocentric nationalism. We are the descendants of those who didn’t listen to the fascist Germans and the Japanese before WW2 and we are the canaries in the coal mine.

We listen and we sing, when we hear certain ideals promoted as normal. Be at one with peace and you will not listen to us sing, but seek domination as a ethno chinese issue and our voices will ring. Be at war with us, and know there will be no end.

John Chan
September 9, 2011 at 18:38

@Lord Macartney:
I am nobody in China. My only consolation is that China could maintain its current course regardless.

I am glad that I can bring you a different perspective you have never exposed before. Now you know the West is not the World, there are other human beings besides the westerners in this earth planet too. Those human beings have their own views and own ways of doing things. Westerners’ bombing and killing is barbaric and it will not convince anybody the West is democratic and cares human rights.

You attitude is same as Qing court in its dying days, refusing to accept reality. Self-righteous bragging is not going to win you anything.

Lord Macartney
September 8, 2011 at 19:34

John Chan: Thank you for always contributing to these blogs. You are the truest example of Chinese patriotism. Your arrogance and ignorance are most welcome. For while America makes countless mistakes in its continued “decline” (haven’t heard that before), people like you show why the China hype is so overblown. Your hubris will be the end of your flirtation with great power status. While I used to go mad with frustration trying to make sense of the completely illogical and delusional Chinese world view, I can finally sit back and laugh at its ridiculousness. The best tool that American diplomacy has is Chinese soft power, which is somehow capable of even making those countries who count China as one of their few international friends (DPRK, Myanmar, Iran, Sudan, etc) incapable of liking China. So Johnny boy, jia you and keep up the good work.

September 8, 2011 at 15:38

Leonard R.:
You said these not for the sake of those Chinese living in Taiwan, but for your hate of Chinese in general.


John Chan
September 8, 2011 at 14:40

@Leonard R:
The US should sell arms to whomever it pleases, what a morally bankrupted statement. I wonder why the West is making big fuzz about whether China has sell arms to Libya? The West is turning every stone for clues so that they can lecture China from their fake moral high ground, yet they are still bombing and killing in Libya indiscriminately.

Taiwan’s situation is not new, it happens everywhere. Canada and Mexico are facing the same situation against USA in the NAFTA. USA levies tariffs on Canadian and Mexican goods against NAFTA even NAFTA tribunal ruled against USA.

All Taiwan has to do is to stand firm, and fight for better mechanism to resolve disputes.

John Chan
September 8, 2011 at 14:17

You are getting hysteria and bashing other bloggers whose opinions are not to your liking viciously. What’s more can be a better illustration than Lee Teng-hui for a ‘cloaked Japanese Wannabe separatist’ in the Chinese eyes? Are you having difficulty to relating them?

You are acting out of bound and smear other nation’s leaders maliciously. Lee is a Chinese, I was only criticizing another Chinese. As a foreigner what right do you have to bad mouth a Chinese leader without provocation? Your behaviour is a disgrace to the USA, and you just prove why USA is declining, because the quality of its citizen is declining.

Taiwan is an integral part of China; it will be reined in by China soon. It is better for USA and Japan get out of way, so they won’t get hurt.

Leonard R.
September 8, 2011 at 03:58

1. The definition of knee-deep mud, is trying to negotiate anything with the PRC. Don’t do it. Walk away.

2. Wisdom begins by looking at a map. After that, consider demographic, economic, linguistic and cultural facts.

3. In the case of Taiwan, all those weigh in the PRC’s favor.

4. But if the PRC doesn’t want the US to supply arms to Taiwan, fine. It can pay the US not to sell them. And it can pay more than the Taiwanese would pay to buy them. That’s simple enough. Everybody knows where they stand.

5. Otherwise, the US should sell arms to whomever it pleases and it should give special package deals to the enemies of the PRC.

September 8, 2011 at 00:55

Thank you for answering the question by refusing to answer it. Clearly what you really mean is ‘national stereotype buzzword to hide poor English skills’. It makes as much sense as saying Hu Jintao is a ‘subversive treacherous East Asian militant’.

John Chan
September 8, 2011 at 00:44

People like Lee Teng-hui is a ‘cloaked Japanese wannabe separatist.’

September 7, 2011 at 21:57

A ‘cloaked Japanese wannabe separatist’? What does that even mean? And in what world are Vietnam and the Philippines invaders simply for existing?

September 7, 2011 at 21:56

Who would the third party be? The U.N? China’s a major power at the U.N while Taiwan is a nonentity. The ASEAN? They could barely handle a border skirmish. The U.S? China would never accept that. There isn’t a credible organization or state.

John Chan
September 6, 2011 at 23:34

I am not sure whether the author has been living in the ivory tower too long hence is disconnected from reality, or a cloaked Japanese wannabe separatist. Asking a foreign entity to arbitrate China’s internal affairs is equivalent to surrounding China’s sovereignty to the arbitrator. Shameless Japanese wannabe Taiwanese may be willing to play the role of betraying motherland, no one in China will permit such treacherous event ever to happen.

If inviting a third part into cross-strait economic affairs is acceptable to China, how is China going to reconcile the strong actions rebuffing USA’s attempt to meddling China’s territory issues in South China Sea? How is China going to assert sovereignty delineated by that nine dashes in SCS and recover those islets illegally occupied by the invaders Vietnam and Philippines who are banking on a third party to arbitrate the disputes in their favour?

The author must be reminded that Taiwan is an integral part of China, issues between Taiwan and China are China’s internal matters, no foreign entity is allow to interfere China’s internal affairs. It is to Taiwan’s advantage to actively working towards reuniting Taiwan and China, anything else is delusion.

September 6, 2011 at 00:49

Well done, but in reality power and time is on China’s side. China will never give in to a 3rd party arbitrator. Why should they? That would give Taiwan equal footing in any negotiation. Impossible.

My take is China will play it cool until after the election. A KMT win results in heavy political pressure to talk. This means Taiwan get “Vito Corleoned.” China gives the KMT a deal “they can’t refuse.” Taiwan has to cave in: forty percent of the island’s business is with China; ECFA has resulted in no external trade deals or international space (very over sold!); a few hundred thousand Taiwanese living in China; Taiwan’s military is down to 200,000 troops; conscription only requires 14 months of service—hardly long enough to train a capable military. You get the idea.

Whatever the result of the January election in Taiwan, the 23 million on the island are going to feel the pressure—ouch!

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