The Dynamics of Cross-Strait Relations: Heading for Peace or Unknown Ground?

Since taking office in May 2008, Taiwan President Ma Ying-jeou has directed his government to take a positive approach to relations across the Taiwan Strait. With cooperation from Beijing, Taipei has made tremendous progress in improving cross-Strait ties: with 15 agreements signed and one consensus reached over the last six rounds of talks between Taiwan’s Strait Exchange Foundation (SEF) and China’s Association for Relations Across the Taiwan Strait (ARATS), the peace process has been further strengthened. Concern about potential conflict in the Strait has been substantially reduced by the joint efforts of the two sides. Although Beijing and Taipei retain differing perspectives on many issues, they are determined to continue putting forward initiatives aimed at facilitating positive development in their relationship.

But important and immediate questions need answers. What is the next step for the cross-Strait cooperation? What are the possible challenges to the present positive trend? Could that trend be stalled, or even reversed? Since the SEF-ARATS Talks resumed in June 2008 after a 10 year interruption, each of the six rounds of talks so far has ended with signed agreements. This record has created strong momentum for the two sides to continue to push ahead, and expectations in the two societies have increased. Now, public opinion in Taiwan seems much more supportive of the talks than in the past, if the negotiations result in signed agreements that seem to benefit Taiwanese. While the two sides have moved quickly to sign agreements on pressing issues over the last three years, are they now moving into a much tougher phase of establishing cooperative relations? Many observers are even wondering if the current efforts have reached their limit, at least for the time being. Taipei continues to adhere to a principle of “economic relations first and politics later.” What would the ramifications be if a round of SEF-ARATS talks were to end without an agreement? Would it be interpreted as a failure?

With three years of solid progress behind us, observers should be optimistic about the future. However, the upcoming combined presidential and Legislative Yuan elections in Taiwan, to be held on January 14, 2012, could present challenges to the current stable and warm relationship, as the presidential candidate of the current opposition party, the Democratic Progressive Party (DPP), could win the election and could potentially shift Taiwan’s approach to rapprochement in the Strait. As President Ma Ying-jeou currently does not enjoy a high approval rating in Taiwan, concern is increasingly high in the region. Therefore, the largest variable in cross-Strait relations in the next months before the election will be the orientation of the DPP’s China policy, which could potentially cause a political fight with the KMT at home, as well as political confrontation with Beijing. This would change the current equilibrium in the region and would alter the present euphoria.

Now, because of these perceptions, everything seems to depend on the outcome of the election next year. Two schools of thoughts are now prevailing in Beijing. The first argues that China should be more cautious in everything related to cross-Strait development. Proponents of this school argue that the reasonable policy approach is to slow down the process and not push for a major breakthrough. In case Beijing’s worst case scenario, a return to power by the DPP, does take place next year, Beijing could still manage the relationship comfortably and would not have over-extended itself. The second school of thought holds that, even if the DPP returns in 2012, Beijing must take advantage of the present strategic opportunity to work with the KMT government, and accelerate efforts to further institutionalize the cross-Strait relationship. The idea here is to establish as many institutional linkages as possible, so that it would be much harder for anyone to change the course of the present relationship.

What are the real dynamics of cross-Strait development?

Since 2008, Taipei and Beijing have enabled this progress by sidestepping China’s “one-China principle” and tacitly agreeing to proceed on the basis of the more ambiguous “1992 consensus,” in which each side recognizes that there is one China, but hold their own perceptions of the identity of that one China.[1] This agreement to disagree allowed the two sides to trust each other enough to begin to negotiate the agreements they have already reached. But in order to go down the road for further cooperation, they have to solve the fundamental difference from very beginning.

Following the confrontational era under the DPP government (2000-2008), both Taiwan and China are hoping for peace and trying to build a solid foundation of common interests. Although political differences may not be able to be overcome in the short term, both sides have been realistic enough to realize that their relationship should be put on a more systematic basis. For Beijing, it is clear that every step moving forward carries its political aspiration of peaceful unification. Political incentive thus is always topping its policy agenda. For Taiwan, the KMT government wants to stabilize cross-Strait relations first by institutionalizing contacts and talks, and it recognizes that economic interests are the only possible short-term goal―it is not yet possible to discuss political issues. Even if Taipei and Beijing differ in their goals, the interactions between the two have accelerated, and have brought about the effect of mutual interdependence.

The Ma administration has built upon the policies of its predecessors―sometimes taking a radically different approach to China, sometimes accelerating previous policies, and sometimes realizing agreements that were already under discussion. Concrete advances have been made in three primary areas: establishment the “Big Three Links” of direct passenger flights, maritime shipping, and postal links, following up on limited steps taken by Chen Shui-bian’s DPP administration; the agreement to allow mainland Chinese tourists to visit Taiwan, first in organized groups and now as individuals; and the Economic Cooperation Framework Agreement (ECFA), a landmark agreement signed in June 2010 which has liberalized trade across the Strait, mostly in Taiwan’s favor, and which has spawned the creation of a new official cross-Strait mechanism, the Cross-Strait Economic Cooperation Committee. These specific accomplishments have been made possible by the institutionalization of cross-Strait contact between Taiwan’s SEF and China’s ARATS.

What are the main obstacles remaining?

Despite the increased institutionalization, it seems that Taiwan and China have harvested all the low-hanging fruit, and may not be able to further develop their relationship for the time being. Today, the main obstacles to further enhancement are firstly within Taiwan’s domestic politics. Taiwan does not have a domestic consensus on the best way to approach its relationship with China. From the outset, the Ma administration has been self-constrained by the political pressure applied by the opposition, as if every inch forward in cross-Strait relations needs to be agreed fully by all political forces in Taiwan. Psychologically, while Ma continues to worry about the lack of consensus on mainland policy, he also has to worry about the DPP painting an image of him as being “pro-China,” which may have a negative impact on his upcoming reelection campaign. Ironically, as it worries too much about the opposition’s attacks on its mainland policy, the government is seen passive and not proactive and is accused of fumbling in its mainland policy making and execution. Therefore, the positive progress in cross-Strait relations cannot be felt satisfactorily and is not portrayed in the media. In this environment, it is understandable that the government will become very cautious.

The second obstacle is the deep distrust between the KMT and the DPP, and between Taipei and Beijing. On defining the nature of cross-Strait relations, both the KMT and DPP find it hard to agree with each other. While the KMT bases its approach to cross-Strait relations on the “1992 consensus,” the DPP rejects both the term and the substance of the term. The distrust is so deep that the two parties can rarely reach consensus on identifying and protecting Taiwan’s best interests. To make matters worse, on January 14, 2012, Taiwan will hold its presidential and legislative elections on the same day for the first time. This will raise the pressure on both parties to present distinct visions for the China relationship, and will lessen the chances of reaching consensus in the coming months.

The third obstacle is the existence of different dreams for the future on the two sides of the Strait. Beijing regards that every step forward in cross-Strait relations implies increased opportunities for peaceful unification. It always takes a long term perspective to cross-Strait relations. Taiwan, however, is very much driven by short term interests. Taiwan wants to stabilize relations and get along with China well. But this does not mean that Taiwan will necessarily go down the path of peaceful unification completely; at the moment, Taiwan is at best undecided on this question. In this context, it would not be correct to interpret any short term drift away from integration with mainland China as a permanent feature. As long as both Taipei and Beijing can continue to dialogue with each other, such differences can be resolved.

What would be the next policy effort?

The January 14 presidential and legislative elections will decide who should run Taiwan’s government until 2016, and of course will be a major factor in determining which direction cross-Strait relations may turn. In order not to incur further criticism from the opposition during the election campaign, the KMT government has since late 2010 been very careful to slow down the pace of cross-Strait development, allowing only economic affairs to be negotiated and leaving political issues untouched. It seems that President Ma would like to put his mainland policy to a new test of public support, before any further progress in cross-Strait cooperation can be developed further. To many observers however, the KMT government’s self-restraint and flexibility have made it vulnerable to attacks by the opposition.

Over the last few months, especially after the ECFA was signed, a push to maintain momentum and achieve further policy progress began on both sides. However, the government is intentionally keeping the pace slow and does not want to make any mistake ahead of the big election. Nevertheless, informal discussion on further cooperation in other areas, such as cultural cooperation, deepening transportation links, has begun.

Many believe that if President Ma wins re-election in January, his new government would probably be able to move beyond economic issues and pursue broader progress in cross-Strait relations with more confidence and flexibility. Judging from the complicated domestic politics, it takes a great deal of political will on both sides of the Strait to jump beyond economic affairs. As noted above, Beijing believes that any step forward in cross-Strait relations implies future peaceful unification. Without hope for eventual unification, Beijing would have no incentive to work with any Taiwan government. The essence of future cross-Strait relations would have to be based on a hopeful roadmap through which both China and Taiwan could have positive expectations, or at least seek common goals.

Even if President Ma can win re-election and if the high expectations result in the start of talks on political issues, the cross-Strait political reality will remain challenging because China will also be going through a leadership transition in 2012-2013. In Taiwan, there is and will be considerable pressure for upgrading Taiwan’s international status and expanding international space. Since there is no single formula that will be acceptable to both sides, it will take a long time for Taipei and Beijing to work out a comfortable way forward. Thus―especially during a time of transition―negotiation on political and security issues may not come as soon as many imagine. For now, pragmatism rules on both sides of the Taiwan Strait.

It is expected that before the election any positive developments in cross-Strait relations will be easily and immediately politicized in Taiwan. However, a certain momentum has been created over the past three years, and both Taipei and Beijing must understand that the best strategy is to deepen what they have already developed, to upgrade the dialogue mechanisms to the official level, and to materialize the substance of agreements. This will provide long-term stability, enabling the relationship to withstand short-term shocks which may result from politics in Taiwan, or external factors.


Cross-Strait relations are currently considered to be at their best point since 1949, when the Communists established the PRC and the Nationalists retreated to Taiwan. In spite of the present lively relationship, deep mistrust between the two sides and Beijing’s stubborn refusal to provide concessions to Taiwan, and the confrontations that it provokes in international politics, remain. This indicates that inter-agency coordination inside the Chinese government is still a serious problem. On the one hand, cross-Strait cooperation on economic affairs has moved quickly, but Chinese diplomatic suppression of Taiwan remains unchanged in the international community. This intransigence harms the credibility of President Ma’s “flexible diplomacy” and reduces opportunities for further cross-Strait cooperation. In addition, the warm relationship has not influenced China’s hostile strategic posture. It is ironic to view that frequent communication between China and Taiwan does not change China’s military deployment against Taiwan at all.

Despite the dim prospects for major achievements in the near future, there is one development that both sides, and all parties in Taiwan, should make a priority. Both Beijing and Taipei have been very careful not to upset the warm relationship. They have relied on the regular SEF-ARATS talks to regulate and negotiate new terms for future developments. This mechanism, however, cannot cope with sudden incidents, such as accidents at sea, natural or industrial disasters, or third-party actions, which may have negative impacts on cross-Strait relations. In order to protect the existing SEF-ARATS process, and the progress that has been made to date, a crisis management mechanism is badly needed. If the two sides cannot develop further links in the next few months, they will at least have to be sure that nothing will deny and disturb the developing progress.

[1] Taiwan, under the KMT, claims that it is the Republic of China, whose government is based in Taipei; while the mainland claims that it is the People’s Republic of China, with a government based in Beijing.