Taiwan-China Relations

Many Taiwanese businesses in China advertise their connection to Taiwan as a mark of distinction, such as this wedding photo studio found in Shanghai.

For decades, potential conflict in the Taiwan Strait has remained a serious threat to the stability of the Asia-Pacific region and world peace. Even today as trade, business, and private contacts between the two sides are rapidly expanding, the Beijing authorities on the Chinese mainland still refuse to renounce the use of force against Taiwan.

In recent years, both sides of the Taiwan Strait have faced major internal and external challenges. Taiwan has implemented thoroughgoing democratization leading to an unprecedented change of governing party; China is undergoing economic and political transition; cross-strait interactions have increased following the accession of both sides to the World Trade Organization; and the strategic environment of the Asia-Pacific region is being reshaped in the aftermath of the September 11 attacks in the United States. Cross-strait relations are no longer merely a regional issue but have become an important item on the agenda of international relations. The two sides therefore need to develop new perspectives and learn to coexist and co-prosper under an international framework.

Historical Overview

Founded in 1912, the Republic of China (ROC) was Asia’s first constitutional republic. When the Chinese Communist Party established the People’s Republic of China (PRC) on the Chinese mainland in 1949, the ROC government, led by the Kuomintang (KMT), moved to Taiwan. Since then it has maintained jurisdiction over Taiwan, Penghu, Kinmen, Matsu, and numerous other islets. The two sides of the Taiwan Strait have since been governed as separate territories and developed separate identities.

The two sides have had no official contact since 1949. For many years after gaining control of the Chinese mainland, China sought to “liberate” Taiwan by force. In 1979, Beijing began pursuing a course of peaceful confrontation by launching an intensive united front campaign, to which the KMT on Taiwan responded with the “Three No’s” policy (no contacts, no negotiations, and no compromise).

Throughout the 1980s, economic liberalization, social diversification, and political democratization increased in Taiwan. With the lifting of the Emergency Decree in 1987, the ROC government adopted a more open policy toward the PRC. Cross-strait economic, cultural, and educational exchanges increased rapidly afterwards.

In 1990, the KMT government set up the National Unification Council (NUC) 國家統一委員會, which, in February 1991, drafted the Guidelines for National Unification 國家統一綱領 calling for a phased approach toward unification. In May 1991, President Lee Teng-hui announced the termination of the Period of National Mobilization for Suppression of the Communist Rebellion 動員戡亂時期, acknowledging at the constitutional level the fact that the two sides of the strait were under separate rule.

In response to increased cross-strait exchanges, the Statute Governing the Relations Between the People of the Taiwan Area and the Mainland Area 臺灣地區與大陸地區人民關係條例, the most significant piece of legislation governing cross-strait activities, was adopted by the Legislative Yuan in July 1992. A three-tier organizational framework consisting of the National Unification Council, Mainland Affairs Council (MAC) 行政院大陸委員會, and Straits Exchange Foundation (SEF) 海峽交流基金會 was also set up between 1990 and 1991. The NUC functions as an advisory board to the president, the cabinet-level MAC is the formal administrative agency responsible for overall planning, coordination, evaluation, and implementation of the government’s mainland policies, and the SEF is the only private organization empowered by the government to handle technical or business matters with China.

Cross-strait Consultations

The resumption of private cross-strait exchanges in 1987 allowed many families in Taiwan to finally reunite with relatives in China following decades of separation. (Photo by Hua-chi Pu)

In April 1993, the Straits Exchange Foundation and its mainland counterpart, the Association for Relations Across the Taiwan Straits (ARATS) 海峽兩岸關係協會, met in Singapore for the first bilateral talks in over four decades. The discussions were led by SEF Chairman Koo Chen-fu 辜振甫 and ARATS Chairman Wang Daohan 汪道涵.

Despite these talks, cross-strait relations began to deteriorate shortly thereafter. The PRC authorities indefinitely postponed the second round of Koo-Wang talks, which had been scheduled for Beijing in July 1995, as their way of protesting President Lee Teng-hui’s June 1995 visit to Cornell University, his alma mater in the US.

In March 1996, immediately before Taiwan’s first direct presidential election, Beijing test-fired guided missiles off the coast of Taiwan. In spite of the Beijing authorities’ hostile attitude, Taiwan’s government consistently made public appeals to the PRC to resume communications and consultations.

In October 1998, after a more-than-three-year hiatus, SEF Chairman Koo Chen-fu met with ARATS Chairman Wang Daohan in Shanghai. Although the two organizations agreed to expand exchanges at various levels, no significant breakthroughs were achieved on the most difficult issues during the meetings in China.

Beijing again unilaterally suspended negotiations after President Lee Teng-hui described the cross-strait situation as “special state-to-state relations” 特殊國與國關係 during an interview with a German radio station in 1999.

A New Era

Chen Shui-bian of the Democratic Progressive Party 民主進步黨 won Taiwan’s 2000 presidential election. This marked the first democratic transfer of governing power in Chinese history and ended five decades of rule by the KMT. Cross-strait relations also entered a new era.

In his May 20 inaugural speech, President Chen stated that “goodwill, active cooperation, and permanent peace” were the principles behind his mainland policy. He also pledged that, as long as the Beijing authorities have no intention of using military force against Taiwan, during his term in office, he will not declare independence, change the name of the nation, push for the inclusion of the so-called “State-to-state” description in the Constitution, nor promote a referendum on the question of independence or unification. Furthermore, there is no question of abolishing the Guidelines for National Unification or the National Unification Council.

During the past three years, many cross-strait policies have been introduced as concrete expressions of goodwill, including the opening of the “Mini-three-links” 小三通 (direct transportation, postal services, and trade between China and the offshore islands of Kinmen and Matsu), expanding the functions and scope of the offshore shipping center (for transshipment of cargoes from China), and opening Taiwan to PRC tourists. With regard to China-bound investments, the “No haste, be patient” 戒急用忍 policy has been replaced by the principle of “Proactive liberalization with effective management” 積極開放，有效管理.

Regrettably, China has not made any specific or positive response to Taiwan’s recent policies of goodwill. On the contrary, China still refuses to renounce the use of force, continues to obstruct Taiwan’s international presence, and insists on its “one China” principle as the precondition for bilateral talks, thereby bringing cross-strait relations to a stalemate.

China’s refusal to communicate and dialogue with Taiwan has increased the risk of misunderstanding between the two sides. Under these circumstances, President Chen felt the need to clarify the background of, and considerations behind, the announcements made previously in his inaugural speech. On August 3, 2002, he noted that the current reality of the Taiwan Strait situation is of “Taiwan and China standing on opposite sides of the strait, one country on each side” 一邊一國. President Chen’s remarks were made to emphasize to the international community that the ROC, as a sovereign state, should not be downgraded, marginalized, or treated as a local government. Nevertheless, President Chen’s fundamental policies regarding Taipei-Beijing relations remain the same, and the process of liberalizing cross-strait economic and trade policies will continue.

Cross-strait Exchanges

Private exchanges between the two sides began in 1987 when the government allowed citizens to visit their relatives in China, and have increased rapidly over the past 15 years. In 2002, over 3.6 million Taiwan citizens visited China and over 150,000 PRC visitors came to Taiwan for family visits or private exchanges. From November 2002, PRC journalists have been allowed to gather news in Taiwan, and since January 2002, people of the PRC have been able to visit Taiwan as tourists.

Cross-strait economic and trade activities have also expanded dramatically over the past decade. In 2002, cross-strait trade amounted to US$37.39 billion, of which, US$29.45 billion (78.8 percent) were Taiwan exports to China and US$7.95 billion (21.2 percent) were imports from China, making China the number one source of Taiwan’s trade surplus.

Taiwan is the fourth largest investor in China. According to the Investment Commission of Taiwan’s Ministry of Economic Affairs 經濟部投資審議委員會, between 1991 and December 2002, approved investment by Taiwan companies in China amounted to 27,276 cases with a total value of US$26.61 billion.

Conclusion

Over the past three years, President Chen and his administration have sought consistently to normalize cross-strait relations and resume cross-strait talks, while implementing significant adjustments to Taiwan’s China policy. Cross-strait relations have thus remained relatively stable. Bilateral economic, cultural, and educational exchanges have continued to increase.

Political disputes in the Taiwan Strait cannot be resolved overnight, but it would be mutually beneficial if the two sides could develop a structural and constructive cooperative relationship. President Chen has said repeatedly that he is willing to resume talks at any time on any subject as long as no preconditions are set. He has also suggested in his Cross-century Remarks that economic, trade, and cultural integration between the two sides, which help build faith and confidence, can be the starting point for a new framework of lasting peace and political integration. Taiwan looks forward to reciprocity of goodwill from Beijing and hopes the PRC authorities can set aside their prejudices, replace confrontation with negotiation and conflict with dialogue, and pursue cross-strait relations with pragmatism. This will benefit the people on both sides, while ensuring peace and prosperity for not just the Asia-Pacific region but for the world.