The Taiwan Issue in the Context of New Sino-U.S. Strategic Cooperation

Yuan Peng
Yuan Peng Senior Fellow & Vice President, China Institute of Contemporary International Relations - CEAP Visiting Fellow, 2001-2002, The Brookings Institution

November 1, 2004

Since Chen Shui-bian won his Presidential reelection bid in March 2004 by fostering and promoting a “Taiwan identity” and “de-sinification,” the Taiwan issue has once again become a hot topic for the region and the world. Thus, dealing with this potentially explosive issue on a bilateral basis becomes the most pressing concern between China and the United States.

For China, which believes that Chen is determined to achieve or at least advance his goal of formal Taiwan independence, deterring Taiwan from de jure independence and simultaneously framing a new Taiwan policy has become one of the two top policy priorities, the other being preventing its economy from over-heating. For the United States, the Taiwan issue has recently become one of its most significant national security issues, just behind post-war reconstruction in Iraq and just as urgent as the North Korean nuclear crisis. Without proper management of the Taiwan issue, not only could the American counter-terrorism strategy possibly be damaged, but other hotspots worldwide could become explosive as well, forcing the United States to face constant crises at the cost of its national power.

The Taiwan issue has also become a key indicator for future Sino-U.S. relations: will the current strategic cooperation last and lead to a second normalization? Or will a New Cold War or even military conflict take place? The outcome will depend on whether the two countries can correct existing misperceptions and achieve new strategic understanding on the radically changing Taiwan issue. This paper will put the Taiwan issue in the context of the post 9/11 and post-Korea strategic cooperation between China and the U.S. It will discuss the potential problems surrounding the Taiwan issue: the risks of mutual misperceptions, the leverage America holds in relation to Taiwan, the orientation of China’s new Taiwan policy, and the possibilities for U.S.-China cooperation. Finally, several policy recommendations will be put forward.