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Dancing with the Enemy a Survey of Taiwan January 15Th 2005

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Dancing with the Enemy a Survey of Taiwan January 15Th 2005 Dancing with the enemy A survey of Taiwan January 15th 2005 Republication, copying or redistribution by any means is expressly prohibited without the prior written permission of The Economist The Economist January 15th 2005 A survey of Taiwan 1 Dancing with the enemy Also in this section Turning Taiwanese The islanders are developing a distinct identity. Page 2 The dragon next door War with China may not be likely, but if it hap- pened it would be devastating. Page 4 Onshoring Taiwan is shifting much of its manufacturing to the mainland. Page 5 Come and see my mineelds A tourist attraction with a dierence. Page 6 Moving on Manufacturing is out, knowledge-based industries are in. Page 7 For all the hostility between Taiwan and mainland China, their respective economies are now deeply interdependent, says My fab is bigger than yours James Miles. That should help to keep the peace A cross-strait chip-making competition. IVE back our rivers and moun- dence from China, ideallythough it dare Page 8 Gtains, says a slogan inside a mili- not say soa permanent one. But the bar- tary base on the tip of Kinmen (also rack routine of shouting slogans calling for known as Quemoy), a tiny island con- the reunication of Taiwan with the main- Separate ways trolled by Taiwan but shrouded by the land was abolished only last September. But the two neighbours must play it softly. same polluted haze that envelops Xiamen, China knows that Taiwan is slipping Page 9 a port city on the communist-controlled ever further away. Since 2000, the island Chinese mainland. A soldier on guard says has been led by Chen Shui-bian, its rst giant loudspeakers inside the base still president from outside the Nationalist broadcast music across the 2km (1.2 mile) Party or Kuomintang (KMT) since the civil 100km stretch of water to Xiamen. war. The main aim of his Democratic Pro- Fuzhou The easy-listening fare, selected by Tai- gressive Party (DPP) is to bring about the is- East China CHINA wan’s political warfare troops, is a curi- land’s formal independence from China. Sea ous cold-war legacy on this fortress of an Its charter calls for a Republic of Taiwan, island. Taiwan’s defence ministry will not not a Republic of China, as the island now say what it is for. But the original purpose confusingly calls itself. Mr Chen himself Taipei of these broadcasts, which began after the has vowed not to go this far, but China’s Xiamen Taiwan inconclusive end of China’s civil war in leaders do not trust him. They have given Kinmen Strait Taichung 1949, was to undermine the mainland’s warning that a declaration of de jure inde- faith in communism and help to restore pendence (such as by a change of name) South TAIWAN Taiwan’s government as that of the whole would mean war. China of China. China had loudspeakers too, but Pessimistsand there are plenty of Sea they fell silent in 1991. It is decades since them in both Beijing and Washingtonar- Tainan the two sides lobbed artillery shells at gue that in the remaining years of Mr each other’s broadcasting facilities. Chen’s presidency, which runs to 2008, Kaohsiung Oddly, China would love it if Taiwan tension between China and Taiwan could really wanted to regain control of the escalate, even to the point of armed con- mainland. But the broadcasting station ict. Such a war could drag in the United and the slogans are merely anachronisms. States, Taiwan’s main provider of moral Acknowledgments and a list of sources can be found Taiwan’s armed forces, led by ocers who and military support. If America decided online were either born on the mainland or had to intervene, two nuclear powers would www.economist.com/surveys fathers who were, have found it hard to be pitted against each other. Japan, from keep step with the rapid changes on the is- where America would probably launch An audio interview with the author is at land. These days the goal of Taiwan’s gov- any bid to defend Taiwan, could nd itself www.economist.com/audio ernment is to assert the island’s indepen- sucked in. The whole region could be1 2 A survey of Taiwan The Economist January 15th 2005 nationalism in check. In parliamentary (the world’s 20th biggest economy), China Mostly solid 1 elections in December, the KMT and its al- (number seven) and America (number Taiwan’s GDP growth lies caused a surprise by maintaining their one). Doomsayers in Taiwan, who a few % increase on a year earlier slim majority in the legislature. These par- years ago gave warning of a rapid hollow- 8 ties won support for their less confronta- ing out of their country’s economy as 6 tional stance towards China, despite their manufacturing migrated to China, have * lack of appeal to many native Taiwanese. been proved manifestly wrong. China, † 4 But around the region and in America, with Taiwan’s abundant help but not to 2 there are worries that Mr Chen will con- the island’s detriment, has become the pre- + tinue to rile the Chinese, who might one eminent manufacturing base for many of 0 – day lose patience and respond with force. the world’s information-technology (IT) 2 This survey will argue that the chances products. Even the initially sceptical Mr 4 of conict are slim. For all the nationalistic Chen is beginning to realise that Taiwan 1995 97 99 2001 03 05 exuberance of China, there is no sign of a can only gain by working with China to re- *Estimate †Forecast shift away from the fundamentally prag- move the remaining barriers to cross-strait Sources: Economist Intelligence Unit; national accounts matic external policy of the last quarter- ows of people, goods and capital. century. And Taiwan’s leaders, for all their In the next few years there will be 2 plunged into turmoil. braggadocio, are pragmatists too. Not just plenty of pro-independence rhetoric as Both China (economically) and Taiwan China, but America, Japan and other big the debate gets under way on Taiwan’s (politically) are evolving so rapidly that powers are urging them not to go too far. A proposed constitutional revisions that Mr talk of preserving the status quo between renamed or redened republic recognised Chen has said will be endorsed in 2006 them is no longer meaningful. Taiwan’s by the same handful of insignicant states and enacted two years later. But if he is smooth and rapid democratisation has al- that now recognise Taiwan would gain sensible, the main achievement of his lowed its people to redene their identity. nothing and probably lose a lot. President eight years in oce will be not that he Increasingly, they no longer think of them- Chen may resent America’s restraining made Taiwan truly independent (which, selves as Chinese. They are Taiwanese, hand, but he cannot do without it. in almost every respect, it has been for 55 and mainlanders are foreigners. In China, There is another remarkable transfor- years), but that he helped his country to too, nationalist sentiments are surging as mation under way that will put just as gain unprecedented prosperity, shoulder the nation becomes more prosperous and powerful a brake on any slide towards to shoulder with China. To get there, he the armed forces far more powerful. war: the rapidly growing economic inte- will need to ride the tide of Taiwanese Fear of China helps to keep Taiwan’s gration and interdependence of Taiwan identity with skilland some caution. 7 Turning Taiwanese The islanders are developing a distinct identity AIWAN’S deep fascination with a tele- years ago from Fujian province on the form in Japanese and adjust their plots to Tvised form of puppet theatre illustrates mainland coast facing Taiwan. Budaixi is extol the Japanese martial spirit. the complexity of what it means to be Tai- the name for it in standard spoken Chi- The end of Japanese rule in 1945 wanese. Budaixi, as the art form is known, nese, which the KMT forced the Taiwanese brought little relief to the puppeteers. Bu- is an omnipresent feature of Taiwan’s cul- to use, but the natives still mostly speak a daixi now had to be performed in standard tural and political life. The island’s biggest Fujian dialect. They are the descendants of Chinese. In the 1960s, televised budaixi budaixi production company, PiLi Interna- Fujianese who ed to the island to escape was banned for allegedly distracting is- tional Multimedia, says it has an annual upheavals on the mainland. Some trace landers from their work. By the time Tai- turnover of $35m. A million people a week their ancestry to the island’s original in- wan began moving towards a multi-party rent the latest PiLi shows on DVD. Budaixi habitants, Malayo-Polynesian-speaking democracy in the 1990s, budaixi was in puppets feature the wooden expressions peoples akin to those of Indonesia and the danger of dying out, but it became inter- and jerky movements of early TV anima- Philippines. China incorporated the island twined with a movement to revive Tai- tions, but the characters, costumes and into its empire after putting down an in- wanese culture, wrote Wu Sue-mei, a plots draw on ancient Chinese sources, surrection there in the late 17th century. scholar at Carnegie Mellon University. with a heavy dose of martial arts and spe- In 1895, China ceded Taiwan to Japan For all its moorings in the culture of the cial eects.
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