13th annual Municipal Finance Conference


13th annual Municipal Finance Conference


Communication for Better Understanding and Improvement of Cross-Taiwan Strait Relations

Part I: Cross-Strait Academic Dialogue

Since early 2008, with the valuable support of the MacArthur Foundation’s Asian Security Initiative, the Institute of International Strategic and Development Studies (IISDS) of Tsinghua University in Beijing, China and the Institute for International Relations (IIR) at National Chengchi University in Taiwan have organized a series of private workshops, collectively called the “Academic Dialogue,” on cross-Taiwan Strait relations.

Former Visiting Fellows of Brookings’s Center for Northeast Asian Policy Studies (CNAPS) have been involved in these meetings in both leadership and participant roles. Participants on the Mainland side include scholars, governmental officials and military officers/scholars in their personal capacities, business people, and students from Beijing, Shanghai, Hangzhou, and Guangzhou. On the Taiwan side, participants include academic experts, officers from the Mainland Affairs Council, business people, and news media journalists. During the workshops taking place in Taiwan, the Mainland participants also visited Taiwan governmental agencies and academic and research institutions, talking with officials and experts, as well as politicians, on various aspects of cross-Strait relations.

IISDS and IIR have organized two workshops each year for the past two years, one in Taiwan and the other in Mainland China. IISDS has also organized some workshops and meetings in Mainland China with governmental, academic, business, and news media institutions in the Mainland.

The goal of this process is to spread, enhance, and enlarge the dialogues, communication, and understanding across the two sides of the Taiwan Strait, in order to support and complement to the official engagement across the Strait that has taken place since 2008. The Academic Dialogue series is intended to help the governments and societies of Mainland China and Taiwan to locate the problems, concerns, demands, and misunderstandings of the two sides across the Strait, in order to improve the communication, stabilization, and progress in cross-Strait relations.

Communication on Key Issues, Problems, Differences, and Concerns of the Two Sides of the Taiwan Strait

Over the past three years, since May 2008 when Ma Ying-jeou and his Nationalist Party (KMT) took power in Taiwan, cross-Strait relations have been improving, and the relationship has been relatively peaceful and stable. This substantial and significant improvement in the relationship is the first in about fifteen years, since the mid-1990s. Soon after Ma Ying-jeou took office in May 2008, the two sides across the Strait resumed semi-official contacts through the Strait Exchange Foundation (SEF, in Taiwan) and the Association for Relations Across the Taiwan Strait (ARATS, on the Mainland). In the past three years, the two sides have negotiated and concluded 15 agreements on economic and social issues, which may be called the “normalization process” of cross-Taiwan Strait social and economic relations after 60 years of estrangement since 1949, when the People’s Republic of China (PRC) was founded.

The Academic Dialogue organized by the two institutions on either side of the Strait more or less mirror the official discussions, and can often go beyond them. The series of meetings enables participants to express and discuss, in frank and detailed ways, the issues and concerns that are raised in the official negotiation and agreements.

For example, when the SEF-ARATS meetings were focused on the issue of direct flights between Taiwan and the Mainland, the discussion in the Academic Dialogues centered on sensitive issues such as security concerns that Taiwan felt in opening up to Mainland planes, flight lines and zones, cities served, and prices of the flights. Dialogue continues on the price issue, as passengers from both sides consider fares to be too high. Part of the reason for the high prices is that there are fewer flights than needed to serve the existing market, so the Mainland participants in the Academic Dialogue have kept reporting to their governmental organizations on the Taiwanese demands for increasing the number of flights across the Strait.

Agreement on allowing Mainland people to travel to Taiwan for tourism has been one of the major achievements across the Strait in the last three years. The two sides negotiated the issue and reached agreement in June 2008. However, in the first 18 months that the agreement was in effect, the numbers of Mainland visits in Taiwan did not reach the expected number of 3,000 per day.

The Academic Dialogue at that time focused on how to increase the numbers of Mainland tourists and help the governments of the two sides to understand the problems, and proposed measures to resolve them. We emphasized that the requirement that tourist trips take place in groups was one of the problems, as regulations and approval processes on both sides delayed the trips, causing difficulties in planning for the travel agencies and the visitors themselves. For years at every meeting of the Academic Dialogue, we called for (and are still calling for) “individual trips.” The system used for individual visitors to Hong Kong and Macau for more than ten years has been very helpful and successful for mass travels from the Mainland, and has increased the number of visitors and contributed to the economies of Hong Kong and Macau. There has not been an abnormal number of illegal immigrants from the Mainland to Hong Kong and Macau under this system and, therefore, the Taiwan side should not worry too much about the possible illegal immigration problem.

During the talks over the Economic Cooperation Framework Agreement (ECFA), the Taiwanese worried about the cheaper Mainland goods in the Taiwan market, especially the impact that Mainland agricultural goods might have on Taiwan farmers and the possibility that Mainland laborers in Taiwan might cause more unemployment on the island. The Mainland participants in the Academic Dialogue shared the sensitivity of Taiwan participants and communicated with Mainland government, news media, and people about the Taiwanese concerns, and explained to the Taiwan side that the Mainland side understood the sensitivity of those issues, and would take care those concerns. The result of our efforts, as one of many between the two sides, has been to help light the way toward an agreement, and thus to strengthen the economic ties and development of the two economies.

After the signing of the ECFA, the Mainland participants emphasized the implementation of the good agreement, making it helpful in promoting economic development on both sides, especially in Taiwan, and to the benefit ordinary citizens. The Academic Dialogue participants from the business and economic communities discussed the possible areas that Mainland investment may be growing in Taiwan after ECFA.

Of course, the Academic Dialogue has also covered a range of political and security issues across Taiwan Strait, in this respect going well beyond topics that SEF and ARATS have been able to discuss. Because one of the functions of the Academic Dialogue is to look forward and provide policy recommendations, the governments of the two sides have been encouraging the academic community to do the job, as the governments will start to talk about those issue in the future.

One of those “political issues” is the very concept of “political talks” between the Mainland and Taiwan. Mainland participants have tried hard to explain why political talks are necessary, the importance of the talks in “normalizing” cross-Strait relations, and that the goal of “political talks” is to stabilize cross-Strait relations systematically and in longer-term – the goal of “political talks” is not “reunification” or “separation.” Mainland participants are also trying to locate the major issues and challenges in the future “political talks.”

The other major “political issue” that has been discussed in the Academic Dialogue is security concerns, especially U.S. arms sales to Taiwan, and “Mainland missiles targeting Taiwan.” The Mainland participants understand that military deployment toward Taiwan is a very important concern in Taiwan and believe the Mainland side should understand it and do what is necessary to ease Taiwanese security concerns. However, the Mainland participants have also tried to explain to the Taiwan side that the resolution of this problem can only be the outcome of “political talks” and a “peace agreement” to set long-term stability across the Strait. Before reaching the long-term and systematic peace mechanism between the two sides, the Mainland side has to rely on military deployment to some degree, to deter possible Taiwan movement toward the independence, especially if a pro-independence force such as the Democratic Progress Party (DPP) comes to power in Taiwan in the future. Besides, the Mainland participants try to convey to the Taiwan side that the Mainland military deployment along its cost is no longer focusing on Taiwan, but increasingly goes beyond Taiwan and counters growing American military activities in the Western Pacific, which are certainly a threat to China’s national security.

“International space” for Taiwan has been another major “political issue” discussed in the Academic Dialogue. In the dialogue process, the Mainland participants understand that not only the Taiwan government, but also the people and society of Taiwan, regard international space and international participation, including participation in non-governmental organizations, as a fundamental interest to them. The Mainland participants agree with the Taiwan side that the Mainland side should understand this and do more to address the Taiwanese concerns and interests. And the Mainland participants also try to convey to the Taiwan side that international space/participation is one of the “political issues” that need to be talked about, and a general agreement reached, between the two sides. Since the Taiwan side does not want to have the “political talks” now and the two sides cannot make a general agreement on “international space for Taiwan,” then the Mainland can only agree to cooperate with Taiwan on a “case by case” approach, which is hardly an overall and satisfactory solution. And since there has not been a general agreement on new rules, then the Mainland foreign affairs ministries can only follow the old rules on “Taiwan international space/participation” issues which have caused Taiwan’s unhappiness.

Mainland participants in the Academic Dialogue have also called for large scale student and educational exchanges across the Taiwan Strait; such exchanges are a significant part of people-to-people relations. Currently there are well over one million Mainland students studying abroad, and many of them are in places without high standards in education. Taiwan has a good number of universities and colleges, and it is much easier for Mainland students to study and live there than in many other places. A larger scale of student and educational exchanges would be very beneficial for both sides across the Taiwan Strait, and the two sides should work more to strengthen such exchanges.

Part II: Further Dialogue Needed for Future Challenges

With the 15 SEF-ARATS agreements on economic and social issues, we believe that the “normalization process” on economic and social areas of across the Taiwan Strait relations has been basically completed, and the remaining work is to implement the agreements and improve them through practice.

As official political talks cannot start soon and Taiwan will have another round of major elections in January 2012, the Mainland participants believe that the Academic Dialogue led by IISDS and IIR should now focus future trends and challenges. While governments work in today’s reality, academics should look and work ahead for the governments and societies.

And looking ahead in cross-Strait relations, there are the reasons for concern. If the DPP regains power next year, the impact on cross-Strait relations and the “normalization process” between the two sides would be fundamental and significant. The relationship may not be set back, because the existing economic and social agreements are in the interest of the people on both sides and no ruling parties are quite able to change them. However, the relationship may not be able to go ahead, and business may not go on as usual, because the two sides will have returned to their fundamental differences and even confrontation on the fundamental issues between them. The Mainland side insists that the “One China Principle” and “the 1992 Consensus” form the necessary foundation and pre-condition for official contact, dialogue, and improvement of cross-Taiwan Strait relations in the past, today, and future. But the DPP’s positions on “One China” and “the 1992 Consensus” remain clear and strong: that is, the party does not accept the concepts, or agree with them.

Therefore, if the DPP wins the election in Taiwan next year, cross-Strait relations may come to a standstill again, even if the confrontation of a few years ago may not resume.

And if Ma Ying-jeou and his party gain a second term, then there is great expectation from the Mainland that the two sides should begin political talks, and establish a long-term framework for peace, stability, and development across the Taiwan Strait.

However, there are some important limitations for how far the relationship can go. It certainly will not progress to reunification until far into the future. And whether the two sides can begin political talks and make major progress in political and security issues, such as a peace treaty, a political framework for relations, confidence building measures (CBMs), greater international space for Taiwan, and post-ECFA economic issues, is highly uncertain, at least for now and in next few years.

Constraints inside Taiwan

The first difficulty and limitation is the political or “peace” talks and possible “peace agreement” between Taiwan and Mainland China. Political or peace talks and an agreement have actually been called for by the Taiwan side for a long time, after an initial move and then retrenchment by the Mainland in 1979. It started in Lee Teng-hui’s era in the 1980s and 1990s, and Chen Shui-bian also called for such talks and agreement several times during his administration. Until a few years ago, the Mainland did not accept these calls and did not show any interest in the idea. Only after the 2005 talks and joint statement by the KMT and the Communist Party of China (CPC) about cross-strait relations, did the Mainland begin to agree to talks, and even call for them itself. Hu Jintao has repeated such a call a couple of times in recent years when he addressed cross-Strait relations, and such a call has been put into the major official documents of the Chinese Communist Party’s congresses and the Mainland government.

But now the Taiwan side has become reluctant about political or peace talks and possible agreement between the two sides of the Taiwan Strait. The Ma Ying-jeou administration has thought and talked about the idea, but it insists that such talks will not take place soon, and it has not made the decision whether and when to start the political or peace talks with the Mainland.

Ma Ying-jeou and the KMT government have reasons to be hesitant about political or peace talks with the Mainland. The first concern and constraint is the division, and even confrontation, within Taiwan on cross-Strait issues.

Taiwan’s society and politics have been deeply divided for a long time, since the early 1990s, and looks likely to be so for a relatively long time in the future, no matter who and which party is in power. Elections in the past twenty years indicate that the so-called Pan-Blue, Pan-Green, and the Middle each has roughly one-third of support on major political issues in Taiwan, including on cross-Strait relations. The Pan-Green camp is led by the DPP, which defines itself as a “Taiwan independence party,” for its party platform and final goal is the independence of Taiwan.

The DPP lost power in Taiwan in the major elections of the legislature and executive in the first half of the 2008, and this heavy loss caused the party to engage in some level of internal debate on its positions and policies, including on cross-Strait relations. However, the moderate debate and change of the DPP party leadership have not led to a major shift in the party’s nature, positions, and policies on cross-Strait relations and other issues. The DPP is still a Taiwan independence party, and it seems to depend heavily on this position and related efforts in order remain a major political force in Taiwan, and to unite itself and its major supporters on the island.

Therefore, the DPP would continue its basic line on Taiwan independence and opposition to anything related to Mainland China (feng zhong bi fan), including even welcoming pandas from Mainland China to zoos in Taiwan, now and in the future. The DPP and Pan-Green not only irrationally oppose Mainland China and anything related to Mainland China as their strategy, positions, and policies, they also insist on the confrontational, irrational, even violent approaches to carry out their strategies and policies, including physically beating the Mainland officials or former officials going to Taiwan for exchanging views and talks when those officials are on streets, visiting sites, or in buildings in Taiwan.

Such a confrontational nature, strategy, policy, and tactics adopted by the DPP and Pan-Green cause heavy conflicts, confrontation, and fighting in Taiwan on political issues such as cross-Strait relations, and thus places great constraints on the KMT government in its policy and approach to deal with the Mainland, including the normalization and stabilization of economic, social, and political relations. Facing that confrontation and conflicts in such a heavily divided society, it is understandable that Ma Ying-jeou and his government are hesitant to take major steps to improve and stabilize political relations with the Mainland, especially when the economic situation in Taiwan is not very positive, Ma’s approval rating is not very high, and the elections approaching before and in 2012 are not set.

Ma Ying-jeou and his administration may enter into political talks with the Mainland in his second term after 2012, assuming he wins a second term. Even if the two sides of the Strait do engage in political talks, the process would not be easy, and the outcome will not be certain, compared with the talks and negotiations on economic and social issues, including ECFA, in the past years.

Major Political Differences between Taiwan and Mainland China

In addition to internal divisions within Taiwan, there also exist, of course, serious divisions between Taiwan and the Mainland which have persisted for more than 60 years. Such a huge political disagreement, which is centered on the “sovereignty gap,” are characteristic not only of Pan-Green views of China, but also the Pan-Blue. Indeed, the sovereignty gap originated with Chiang Kai-shek and Chiang Ching-kuo, when they were in power in Taiwan until more than twenty years ago. 

  • The “State Issue”

As noted above, while the Pan-Blue and the Mainland agree and accept that there is “one China” and both sides of the Strait belong to the “one China,” they still have fundamental differences over how that one China is defined; this situation is described as the “1992 Consensus.” For the Taiwan side, “one China” means “the Republic of China” (ROC), and for the Mainland, “one China” is “the People’s Republic of China” (PRC). There seems no possibility that either side can accept that it belongs to the other. The Pan-Blue suggests a policy of “non-denial.” That is, each does not deny other’s name or title, but it is impossible for either side to recognize the other’s claims of sovereignty over it.

So it appears difficult, and even almost impossible, for the two sides to move ahead from the current “1992 Consensus” position. Taiwan states that the ROC is the one China, and the Mainland claims that the one China is the PRC. This position is controversial within Taiwan, and therefore there is no political foundation in Taiwan to move ahead. What the two sides can do, at best, is to construct a framework to maintain and stabilize the consensus, or status quo, for a relatively long time in the future, just as they have reached agreement on their economic relations by signing the ECFA.

At the moment, the political status quo of “one China” is upheld only by unilateral decisions, which are made by the constitutions and laws of each side, and is not supported by any bilateral agreement between the two sides of the Taiwan Strait. And since the status quo is set by the unilateral approach, there is the possibility that each of the two sides can change the status quo at any time. If this were to happen, the relationship between the two sides would be unstable in the longer term, which would be a dangerous situation.

Therefore, if the two sides cross the Taiwan Strait want to have a relatively long and stable relationship and environment, they need a bilateral framework. The framework, at best, would be based on a commitment to maintain the status quo of the relationship as set by the constitutions and laws of each side, and would include the commitment that no side will or should take unilateral actions to change the status quo across the Taiwan Strait, now or in the future. It will require creativity and hard work to find the proper words that will allow both sides to reach such an agreement and make such a commitment.

A bilateral agreement or a framework to maintain the political status quo is not desirable to either side across the Taiwan Strait, but it is the best they can do in political talks between them. And even that kind of agreement or framework would meet with great resistance and opposition from the Pan-Green side of Taiwan. Whether Ma Ying-jeou can go ahead with cross-Strait political talks with the objective of constructing such a framework is highly questionable and uncertain, at least at the present time.

  • The “Governmental Issue”

Even if the two sides can recognize and accept the status-quo―that is, live with the facts that both “ROC” and “PRC” exist and claim to be the sovereign state of “the one China”―it will be much more difficult to resolve the “governmental issue.” That is, if the status quo remains and neither side challenges the sovereignty claims of the other, can they recognize each as legal governments within the “one China”? This is a difficult problem that the two sides across the Strait could not resolve even when they agreed on “one China” and both sides were parts of the “one China” during the Chiang Kai-shek and Chiang Ching-kuo eras, and during the early time of Lee Teng-hui administration in the late 1980s and early 1990s. (Indeed, the “governmental issue” was the cause of the Chinese Civil War of that raged in various forms from the 1920s until 1949, and which has continued as a cold war since then.)

It is a dilemma, and a pity, how each side should address the other when they meet, because they do not recognize the other as a legal government within “one China” (it is really that the Mainland side does not recognize Taiwan). Chen Yunlin and other Mainland officials call Ma Ying-jeou “Mr. Ma Ying-jeou,” rather than “President,” and Ma himself addresses Mainland officials as “Mr.”, without their official titles. This is because the serious position of the Mainland government is that people from the Mainland must not call any Taiwanese official by their title when they meet, because the Mainland government doe not recognize the Taiwanese government as a legal government in China. The Mainland still identifies the Taiwan governments as the “Taiwan authority” and “Taiwan local leaders,” not as the “Taiwan government,” much less using the names “President Ma” or “Minister Lai.”

Can the two sides recognize each as a legal government within the “one China” in political talks, if they hold that sort of discussion in the future? They should. If the two sides want to normalize and stabilize their relations for a relatively long time, they cannot reach that goal without resolving the problem of the “governmental issue,” after they resolve the “state issue.” They should not and cannot continue indefinitely to refer to the other as an “authority” and “Mr.” or “Ms.” when they meet officially. It is not normal, not productive, and not a respectful way to deal with each other.

And can one country have two equal-level of “central governments”? Normally, a state should not. But the two sides of the Taiwan Strait are not a normal state, therefore they cannot have completely normal governmental relations. In such a circumstance, they should accept and recognize the other as a “central government” within the “one China.” They should accept and work with the facts that there are two equal level governments within the current framework, and should normally call each other as the normal leaders and officials of a normal government.

Security Issues

The two sides across the Taiwan Strait look set to be divided for a long time into the future. Maintaining basic peace and stability between them is therefore a great and important challenge. Peace and stability are in everyone’s fundamental interest, and a systematic arrangement is required to maintain them.

If the two sides can engage in political talks and reach a peace or political agreement on the nature of their political and governmental relations, then it should be possible for them to make a long-term arrangement or mechanism for maintaining peace and stability between them. They can officially and formally agree on “a center line” through the physical space of the Taiwan Strait, and agree that units of the two militaries should not cross over that line. They can also set up an official, normal, and regular contact between the two militaries, including a dedicated communication mechanism, to avoid misunderstanding and miscommunication. They can even talk about the military deployment and arms build-up issues, including arms purchases.

Taiwan’s “International Space”

The Taiwan side would like to participate more in international organizations now and in the future, and would demand the Mainland side to agree that Taiwan has, and will have, such a need. The limitation from the Mainland side is the so called “one China” principle: that is, any agreement, including on foreign relations issues of both Mainland China and Taiwan, would be within the framework of “one China.” This is the bottom line of the Mainland in its relations with Taiwan.

The “One China principle” sets the limitation of Taiwan’s status in international participation and activities as a “non-independent state.” The two sides have the model of “Chinese Taipei” or “Tai-Peng-Jin-Ma Tax Zone” for Taiwan’s participation at the Olympics, the World Trade Organization, the World Bank, and APEC. When the two sides reach the agreement on their basic political relations, the Mainland is likely to agree to greater participation and activities for Taiwan in Asia and world. For the Mainland would not worry that such participation would challenge the “one China” principle and framework or would help Taiwan’s independence efforts and movement. Without the agreement and framework of long-term and stable relations between the two sides of the Strait, any international participation and space of Taiwan under the independence forces that might be governing Taiwan would be seen in Mainland China as efforts and momentum toward Taiwan independence, and thus the Mainland would do whatever it could to prevent and stop that.

Part III: Conclusion

With a number of agreements on economic and social issues in the past two years, and especially with the ECFA, the two sides of the Taiwan Strait have normalized their economic and social relations the first time in more than sixty years.

The next step is to implement those good agreements and to ensure that they can help reach the designed goal to help the economic and social development of both sides, and to benefit people on both sides, especially on the Taiwan side. Then, whether and when the two sides can normalize and stabilize their political and security relations will remain uncertain and a challenge.

And even if the two sides can start political talks before or after 2012, that process will be more difficult than the economic and social talks, including the ECFA negotiation. For political, security, and international participation issues are more sensitive, controversial, and divisive, both between the two sides and inside Taiwan. Clearly, certain difficulties and limitations in the cross-Strait relationship exist now, and will remain into the future.