Monday, February 28, 2011

Taiwan's commonsense consensus

Economic integration with China is not doing what China hoped and the opposition feared

Two elderly men in baseball caps have been touring Taipei’s government district this week with a loud-hailer. The slogans they shout are plastered over their battered little van: “Warmly welcome Chen Yunlin and the inauguration of the Economic Co-operation Committee!” It is not catchy, and nobody pays a blind bit of notice.

Their excitement about two of the latest signs of Taiwan’s burgeoning ties with China is not widely shared.

Mr Chen is a Chinese official who has been leading negotiations with Taiwan. Since Ma Ying-jeou was elected Taiwan’s president in 2008, these have led to 15 cross-strait agreements, including last year’s “ECFA” (Economic Co-operation Framework Agreement)—a free-trade agreement in embryo. Mr Chen arrived in Taiwan on February 23rd with a group of businessmen, scouting investment opportunities. The day before, an Economic Co-operation Committee (ECC), a joint China-Taiwan body to oversee implementation of the ECFA, met for the first time.

All this is par for the course these days. Exchanges between the two sides have been booming for over 20 years. China and Hong Kong take more than 40% of Taiwan’s exports; its businesses have at least $90 billion invested in the mainland, where some 800,000 Taiwanese live. And the past couple of years have seen a remarkable acceleration in exchanges. Besides Mr Chen and the ECC members, 400 Chinese travel agents arrived on February 22nd. The previous week saw the mayor of Nanjing fly in with 100 people in tow, and the governor of Liaoning province with 800. Regular direct flights began only in July 2008. Yet last year 1.6m Chinese tourists visited.

For both Mr Ma’s Nationalist Party, the Kuomintang (KMT), and the Chinese Communist Party, this is a deliberate political strategy. The KMT hopes to show voters the benefits of better ties with China, after the fraught eight-year presidency of Chen Shui-bian, of the Democratic Progressive Party (DPP), which believes Taiwan is independent of China.

Taiwan’s economy grew by over 10% in 2010, when Taiwan recorded a surplus on bilateral trade of more than $70 billion with China and Hong Kong. China hopes economic interdependence will win hearts and minds. This will keep the more congenial KMT in power. And it will bring closer the day when Taiwan’s people fall willingly back, as China sees it, into the warm embrace of the motherland and “reunify”.

This cunning plan does not seem to be working. In local elections in November, the DPP won more votes than the KMT. Despite being trounced in the presidential election in 2008, and seeing its former leader, Mr Chen, jailed for corruption, the DPP now has a realistic chance of winning back the presidency next year. And in polls on Taiwan’s future reported by the government’s Mainland Affairs Council, support for unification “as soon as possible” is as low as it has ever been, at 1.2%. Even the numbers wanting “status quo now/unification later”, at 17.6%, have barely budged since the 2008 election. In the same period, support for independence, now or later, has climbed from 30.5% to 35.5%.

Perhaps this is not so surprising. Taiwan has long behaved as a normal country in almost everything except its dealings with its large neighbour. As those become easier, the status quo seems even more desirable. And increased contact highlights points of difference as much as a shared ethnic and cultural heritage. Knowing China better makes Taiwanese even more aware of how lucky they are to be prosperous and free.

So Mr Ma has to balance his economic romance with China with political aloofness. In response to the upheavals in the Middle East, he has called for reform in China. He keeps asking America to sell Taiwan new fighter jets. This week he berated an envoy from the Philippines, with which Taiwan is furious for deporting Taiwan citizens accused of fraud to China.

Perversely, the traditionally “pro-independence” DPP is better placed to profit from the heightened sense of a distinct Taiwanese identity that increased contacts are spawning. But it too faces a dilemma. People undoubtedly do like the economic benefits of co-operation with China. The KMT has negotiated them under a weird formula known as the “1992 consensus”, in which China and Taiwan sit down together agreeing there is only “one China”, while keeping silent about what that means.

The DPP rejects this. The rival contenders for its presidential candidacy next year are competing to come up with other “consensuses” to propose as a substitute. They know that to be a credible party of government again, they have to be able to deal with China. As one supporter puts it, “that’s not a consensus, it’s common sense.” So this week the DPP launched a think-tank intended both to devise a workable China policy and to act as a channel for cross-strait talks. China seems ready to give the DPP a chance. The trip by Chen Yunlin, the senior Chinese negotiator, includes a foray into the party’s heartlands in the south of the island. The DPP itself is for once not to stage any protests against his visit, though doubtless plenty of citizens will.

Make me free or Chinese. But not yet

The KMT likes to portray the DPP as dangerous hotheads who might force China to carry out its threat of invasion if Taiwan declares independence. The DPP paints the KMT as a party of Chinese stooges leading Taiwan blindfold towards absorption by the mainland. In fact, the two parties are having a more sophisticated argument: not about independence or unification, but about how best to preserve a status quo most people in Taiwan cherish. The danger is how China might react as it becomes clear that present policies are bringing unification no closer. The hope is that, with so much else to preoccupy it, its leaders will enjoy the smoother relations and not ask where they are leading. By Banyan for The Economist

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