Thinking outside of the One China box How to undo the Gordian knot in the Cross-Strait impasse?∗

JYRKI KALLIO AND MIKAEL MATTLIN

To be presented at the Inaugural Conference of the European Association of Taiwan Studies at The London School of Oriental and African Studies (SOAS), 17–18 April, 2004

This paper starts from the premise that the status quo between Taiwan and mainland China is not stable, and discusses the resulting pressures for the parties to change their policies accordingly. We suggest a solution to the stalemate in the form of a “confederation with Chinese characteristics”: a confederation in form but not in name, based on the unity of Zhonghua (Chinese civilization) having a concrete form in shared organs and symbols. Emphasis is put on the choices of Taiwan, as Taiwan appears to be moving towards final separation from the mainland, which, if formalized, would lead to war. The mainland accuses Chen Shui-bian of aiming at rewriting the constitution in 2006 and declaring formal independence in 2008. The legitimacy of the Communist regime is tied to reunification, whereas it is unrealistic to expect Taiwan, a state-like democracy, to accept direct rule by mainland China. The coming few years present a window of opportunity, but also potential for disaster. The key issue to the solution is the concept of One China, which there is no consensus of. There is an urgent need to create an interpretation of the concept which would meet the concerns of both parties internally as well as internationally. The proposed solution would strike a delicate balance guaranteeing the complete self-determination of Taiwan in a de facto confederation and elevating it to an equal position with the mainland, while creating an image of a unified China through the establishment of a formal “ceiling” structure, modeled after the British Commonwealth. In the age old spirit of the Rectification of Names, the creation of a united Zhonghua could make the reality look like a victory for everyone.

∗ The political solution proposed herewith is based on the ideas presented by the two authors in a Finnish language article in Kosmopolis 33, No. 1 (2003): 39-58. An earlier, shorter version of this paper was published in Issues & Studies, Vol. 39, No. 4 (December 2003). – The authors are aware of the similarities between this paper and an International Crisis Group report, co-authored by Linda Jakobson, B.A., from Finland, Taiwan Strait IV: How an ultimate political solution might look (26 February 2004, ICG Asia Report no. 75, Beijing/Taipei/Washington/Brussels), as well as an article by the same author, “Taiwan’s Challenge to China and the World – Part II: A ‘Greater Chinese Union’ offers best political solution” (YaleGlobal, 15 March 2004). The authors wish to point out that the model proposed in this paper is based entirely on the above mentioned article in Kosmopolis, published in March 2003, while neither of Jakobson’s publications contain any references to that article.

JYRKI KALLIO, M.Soc.Sc., Department of East Asian Studies, University of Helsinki, Finland, is a doctoral candidate currently working on translating pre-Qin texts from Guwen guanzhi (____) into Finnish. He holds office as Counselor at the Ministry for Foreign Affairs of Finland, Unit for Asia and Oceania. The views expressed in this paper do not represent Finland’s official policy. He can be reached at .

MIKAEL MATTLIN, M.Soc.Sc., Department of Political Science, University of Helsinki, Finland, is a doctoral candidate and member of the Finnish Graduate School of East and Southeast Asian Studies. His main research interests are informal political structures and political economy in both Taiwan and mainland China, and Chinese government strategies for building knowledge-based industries. He can be reached at .

1 2 The current status quo of the Taiwan question is not stable. Despite extensive economic links and interdependencies across the Taiwan Strait, there is as yet no sign of any spillover from economic integration to politics. On the contrary, Taiwan appears to be moving towards final separation from the mainland. The Chen Shui-bian (___) government has introduced several initiatives that could be interpreted as “creeping” formal independence, such as adding the word “Taiwan” to passports, introducing a referendum law (which Beijing fears will later be used for a vote on independence), and announcing that a new constitution will be drafted in coming years.

On the political front, time is not working for the reunificationists. On the other hand, military1 and economic2 realities are not in favor of the separatists. Reunification is the only acceptable outcome to mainland China. Beijing resolutely maintains that, if need be, a final separation will be prevented by military means. However, it is unrealistic to expect Taiwan—a state-like democracy—to accept direct rule by mainland China.

The Taiwan question differs from other cases of a divided state in that neither side has accepted the de facto division of China, nor has a clear line of separation been drawn between “West” and “East” China.”3 The current line of demarcation is defined not by trenches, but rather by different interpretations of China and of how many “Chinas” there are in existence. The traditional Chinese conception of legitimacy, power, and

1 According to most estimates, Beijing will achieve military supremacy some time between 2005 and 2007. The U.S. government has become increasingly worried that Beijing’s missile build-up is aimed at a quick military strike to bring Taiwan to its knees. See “Cross-Strait Security Issues,” chapter 8 in The National Security Implications of the Economic Relationship Between the United States and China, Report to Congress of the U.S.-China Security Review Commission, July 2002, http://www.uscc.gov/researchreports/2000_2003/reports/ch8_02.htm (accessed March 9, 2004).

2 China has already clearly surpassed both the United States and Japan as Taiwan’s main trading partner. In 2003, Taiwan’s trade with mainland China (including Hong Kong) amounted to US$62.5 billion (23.0 percent of Taiwan’s total trade). Excluding Hong Kong, Taiwan’s trade with mainland China was approximately US$46.3 billion. In exports, the dependence on China is even clearer, with 34.5 percent of Taiwan exports destined for mainland China and Hong Kong, as against 18.0 percent destined for the United States and 8.3 percent for Japan, Taiwan’s other main trading partners. Data sources: ROC Ministry of Economic Affairs, http://www.moea.gov.tw (accessed March 8, 2004); and “Cross-Strait Trade Increases to Record US$46.3m in 2003,” Taipei Times, March 8, 2004, 10.

3 Taiwan has not given up and neither has China taken by force the islands of Jinmen (__) and Mazu (__) close to the mainland. See, for example, Thomas E. Stolper, China, Taiwan, and the Offshore Islands: Together with an Implication for Outer Mongolia and Sino-Soviet Relations (Armonk, N.Y.: M.E. Sharpe, 1985).

3 well-being culminates (especially from the point of the view of the PRC) in the Taiwan question. The division of the country would mean loss of the legitimacy of the ruler. In imperial China, the emperor’s true power hardly reached further than the walls of the Forbidden City.4 In such a setting, the state could remain united only if the emperor possessed a strong moral legitimacy and if power was highly ritualized.5 As Lucian W. Pye has aptly stated, China is a “civilization trying to squeeze itself into the format of a modern state.”6 This aspect of civilization comes forward in the term Zhonghua (__), used in the official names of both the Republic and the People’s Republic of China.

We believe it is possible to start constructing the basis for modern Chinese unity at the level of culture, instead of unity as a state. Even Taiwan’s Vice-President Lü Hsiu-lien (___), a leading independence advocate in the Democratic Progressive Party (DPP, _____), which assumed power in 2000, has said that Taiwanese can accept one Zhonghua but not one Zhongguo (__). According to Lü, Taiwanese do not want to call themselves Zhongguoren (___)—a general term for Chinese, which refers in particular to citizens of the Chinese state—but see themselves as Zhonghua ernü (____),7 i.e., the sons and daughters of “Chineseness.”

We believe that a confederation based on one unified Zhonghua, instead of one Zhongguo, provides a model which would give a ritual form to the unity of Chinese

4 See Ray Huang, 1587. A Year of No Significance. The Ming Dynasty in Decline (New Haven and London: Yale University Press, 1981) for a vivid illustration of the limits of the Emperor’s actual power.

5 That is to say, the basis of unity lay in orthopraxy, not orthodoxy. See James L. Watson, “Rites or Beliefs? The Construction of a Unified China in Late Imperial China,” in China’s Quest for National Identity, ed. Lowell Dittmer and Samuel S. Kim (Ithaca, N.Y.: Cornell University Press, 1993), 80-103.

6 Lucian W. Pye, The Spirit of Chinese Politics (Cambridge, Mass.: Harvard University Press, 1992), 235-36.

7 See Allen T. Cheng, “Being Chinese,” Asiaweek, November 2, 2001, http://www.asiaweek.com/asiaweek/magazine/dateline/0,8782,182319,00.html (accessed March 9, 2004). The mainland Chinese leadership has also used the same term to describe all Chinese on the mainland as well as in Taiwan. See Jiang Zemin, “Quanmian jianshe xiaokang shehui, kaichuang Zhongguo tese shehui zhuyi shiye xin jumian” (Zai Zhongguo Gongchandang dishiliuci quanguo daibiao dahui shang de baogao) (November 8, 2002), http://www.gmw.com.cn/gmrb/gmrbhomepage.nsf/documentview/2002-11-18-01-57983 (accessed November 22, 2003); and “Zhu Rongji shuo, zuguo de wanquan tongyi yiding nenggou zaori shixian,” Guangmingwang, March 5, 2003, http://www.gmw.com.cn/2_zhuanti/shizheng/lh/2003/lhxw/0305/0305_005.htm (accessed March 6, 2003).

4 civilization without overly altering the status quo of the Chinese states. The “confederation in form but not in name,” which we depict in this article, would see mainland China and Taiwan as equal in practice, while both sides would recognize the formal sovereignty of a unified China as a “ceiling structure.” Such a solution could ensure the de facto independence of Taiwan, while preventing a final division of China.

In our view, a solution can be found only by clearly separating the symbolical unity from the practical level and addressing both at the same time. If we postulate that Beijing cares more about symbolical unity, while Taiwan and the United States are more concerned about maintaining the actual separation, a solution should theoretically be possible by separating the two levels. A solution could then be reached in a state similar to the Nash equilibrium, where neither side any longer can (barring a change in external circumstances) better its bargaining position by changing its own strategy.8

Chinese, Taiwanese, and American Positions To mainland China, reunification, modernization, and national security form one inseparable whole, the basis on which the legitimacy of the Communist Party rests. A high-ranking Taiwanese official and expert on mainland China urges us to separate Beijing’s impressively stable strategy (i.e., reunification and upholding “one China” both internationally and as a model for reunification) from the very flexible tactical measures adopted by Beijing to reach this goal.9 Beijing’s bottom line is that a final breakup of China has to be staved off and that China’s territorial integrity and sovereignty must be safeguarded.10

8 Roger B. Myerson, “Nash Equilibrium and the History of Economic Theory” (published on the Internet, 1999), http://home.uchicago.edu/~rmyerson/research/jelnash.pdf (accessed March 10, 2004).

9 Lin Chong-pin, “Beijing’s Agile Tactics on Taiwan” (Paper presented at the conference “The Political and Economic Reforms of Mainland China in a Changing Global Society,” College of Social Sciences, National Taiwan University, Taipei, June 2002). In between strategy and tactics, Lin Chong- pin identifies “operations,” which are longer-lasting tactical moves. The current Beijing policy towards Taiwan can be described as an operation. E-mail correspondence with Lin Chong-pin, March 2004.

10 On the domestic constraints influencing Beijing policy toward Taiwan, see Hsu Szu-chien, “The Impact of the PRC’s Domestic Politics on Cross-Strait Relations,” Issues & Studies 38, no. 1 (March 2002): 130-64, http://iir.nccu.edu.tw/ise/content/ise200201f.pdf (accessed March 9, 2004).

5 Following political liberalization, Taiwan has been moving further away from mainland China politically, while economically the two sides have been moving closer to each other. Economic ties between the island and the mainland have never been stronger than today, and in many coastal cities—such as Shanghai and Xiamen—the last few years have seen a kind of cultural “Taiwanization,” i.e., the Taiwanese have brought their music, pastimes, snacks, and even business habits to the mainland.11 Politically, however, the gulf is wider than ever. Taiwan seems to be irrevocably moving towards final separation from the mainland. While there has long been a strong consensus in Taiwan to maintain the status quo for the time being, the meaning of the status quo has subtly been moving towards de facto independence in recent years.12

Both public pursuit of independence and the political support of the United States are the last aces in the hands of the Taiwanese, since they have progressively lost international recognition and their economy has become tightly integrated with that of the mainland. The Taiwanese will not give up these aces easily, as they are effective in putting pressure on mainland China. Neither are the Taiwanese willing to accept a political solution that does not guarantee some degree of external security, international recognition, and (external) guarantees that China will not interfere in Taiwan’s internal affairs—i.e., a continuance of Taiwan’s de facto independence.

Washington’s bottom line in the dispute is not as clearly laid down as that of Beijing or Taipei, as Washington’s priorities tend to shift with changes of administration. The United States has two partly contradictory goals in the Taiwan dispute: on the one hand, Washington tries to maintain stability in the Taiwan Strait; on the other, it probably wants for strategic reasons to prevent China from controlling the Taiwan Strait and the island. Washington’s stated main aim in China-Taiwan relations is to maintain peace and stability in the area, while not compromising Taiwan’s security.13 It would seem that Washington’s second priority revolves around keeping mainland China from

11 Hsing You-tien, Making Capitalism in China—The Taiwan Connection (New York: Oxford University Press, 1998).

12 Cf. Jean-Pierre Cabestan, “Taiwan’s Mainland Policy: Normalization, Yes; Reunification, Later,” The China Quarterly, no. 148 (December 1996): 1260-83.

13 See note 1 above.

6 exercising direct involvement in the running of Taiwan affairs, including gaining control over Taiwan’s technological and financial resources.14 Washington is probably open to the consideration of political solutions, as long as this premise is not violated.

(Con)federation models and an interim agreement Western scholars have tended to see the solution to the Taiwan issue as rather straightforward, comparing mainland China and Taiwan to other divided states. One oft-heard proposal is that mainland China and Taiwan could reunify under a confederation or federation framework.15 The PRC leadership has, however, rejected outright all federational or confederational solutions to the conflict.16 A confederation would in practice mean the birth of another China, or an independent Taiwan, in addition to the PRC. Furthermore, a federation or a confederation could inspire political activists in Xinjiang and Tibet, or leaders of the rich coastal provinces, to seek greater autonomy for their areas. From Taiwan’s perspective, a federation is the same as belonging to the PRC, while for Beijing it would mean the beginning of the dissolution of the state. Neither side accepts this solution. A confederation might do for the Taiwanese, but mainland China’s policy, or at least its preferred tactic, would seem to reject that solution as well.

14 Donald S. Zagoria, “Cross-Strait Relations: Breaking the Impasse” (Interim Report, with Policy Recommendations, on U.S.-China Policy and Cross-Strait Relations), National Committee on American Foreign Policy, 2000, http://www.ncafp.org/legacy/projects/USchina.htm (accessed March 9, 2004); and The White House, The National Security Strategy of the United States of America, 28, http://www.whitehouse.gov/nsc/nss.pdf (accessed March 9, 2004).

15 See, for example, Johan Galtung and Dietrich Fischer, “A Chinese Confederation” (1996), http://www.transcend.org/CHINA.HTM (accessed March 14, 2003). Chinese scholars have also looked into the confederation model. See, for example, Li Jing, “Lun banglianzhi yu Zhongguo de tongyi,” Taiwan yanjiu (Beijing), 2001, no. 3:44-51. The Kuomintang (KMT, ___), too, has embraced the idea of a cross-Strait confederation. See “KMT Adds ‘Confederation’ Concept to Party Platform,” Taiwan Headlines, June 29, 2001, http://th.gio.gov.tw/show.cfm?news_id=9452 (accessed March 22, 2004).

16 “Liang’an guanxi—Beijing kaibuchu xin silu,” China Times (Interactive), http://dailynews.sinanet.com/china/chinatimes/1998/1015/3.html (accessed October 15, 1998); “China Opposes ‘Confederation’ System in Solving Taiwan Issue,” People’s Daily, April 3, 2001, http://www.china.org.cn/english/8436.htm (accessed March 9, 2004); and “KMT’s Confederation Idea Rejected by China,” Straits Times, July 11, 2001, http://taiwansecurity.org/News/2001/ST-071101.htm (accessed March 5, 2003).

7 Several Western and Taiwanese scholars have proposed some kind of interim agreement as a first step towards solving the conflict.17 During the Clinton presidency, this idea received some official support.18 The main idea behind the interim agreement has usually been that mainland China would refrain from using armed force as a way to solve the dispute, while Taiwan would promise not to seek formal independence. Such an idea was inherent also in the proposal that to date has received the most attention: the one presented by China expert Kenneth Lieberthal, formerly of the U.S. National Security Council. The second main element of Lieberthal’s proposal was that reunification would be postponed by fifty years, or as long as the interim agreement would be in force.19 An interim agreement would stabilize the situation, but only in the interim, so it cannot form a real solution in and by itself.

As long as Beijing does not treat Taipei as an equal party to the conflict,20 Taipei is not keen on seeking a negotiated solution.21 However, recognizing Taiwan’s equal status is almost impossible for China, as it would in practice mean recognizing the legitimacy of

17 Alastair Iain Johnston, “Solving the China-Taiwan Standoff: A Modest Proposal” (Undated), http://www.people.fas.harvard.edu/~johnston/Taiwan_proposal.pdf (accessed February 24, 2003); Robert A. Manning and Ronald N. Montaperto, “Time for a New Cross-Strait Bargain,” The Strategic Forum 103 (Institute for National Strategic Studies, National Defense University, 1997), http://www.ndu.edu/inss/strforum/forum103.html (accessed March 17, 2003); Chang Ya-chung, “Liang’an weilai: you guan qianshu ’liang’an jichu xieding’ de sikao,” Wenti yu yanjiu (Issues & Studies) (Taipei) 38, no. 9 (1999): 1-28; and Ralph N. Clough, “Negotiating an Interim Agreement Between Taiwan and the PRC,” American Foreign Policy Interests 22, no. 1 (2000).

18 Greg May, “Mending U.S.-Taiwan Relations After State-to-State,” Taiwan International Review 5, no. 6 (1999): 44-47, http://www.nixoncenter.org/publications/articles/12_29_99tir.htm (accessed March 15, 2003).

19 Kenneth Lieberthal, “Cross-Strait Relations” (Paper presented at the International Conference on the PRC After the Fifteenth Party Congress, Taipei, February 19-20, 1998); and Lin Cheng-yi, “The U.S. Role in Taiwan-China Military Relations” (Paper presented at the International Conference on United States-Taiwan Relations: Twenty Years After the Taiwan Relations Act, Institute of European and American Studies, Academia Sinica, Taipei, 1999), http://www.taipei.org/tra/sinica/sinica-04.htm (accessed March 16, 2003).

20 In handling the issue, Beijing prefers dealing with Washington rather than directly with Taipei, even as it exhorts the United States not to interfere in the issue. See Joseph Kahn, “Chinese Seek Help from Bush to Stop Taiwan Referendum,” International Herald Tribune, February 6, 2004, http://www.iht.com/articles/128371.html (accessed March 10, 2004).

21 Mikael Mattlin, interview with a high-ranking Taiwan government official, Taipei, August 9, 2002; and Jean-Pierre Cabestan, “Is There a Solution to the China-Taiwan Quarrel?” China Perspectives, no. 34 (March-April 2001): 4.

8 the Taiwan government. As a result, no start of direct negotiations based on the existing models of conflict resolution is in sight.

9 A Confederation with Chinese Characteristics We contend that the solution to the Taiwan issue must be sought in the big gray area of politics. In the Taiwan conflict, too much clarity carries a price, benefiting only hard- liners in mainland China and Taiwan. In our view, a workable solution would need to take into account at least the following points:

• The Communist Party’s concern over its legitimacy and sovereignty, the unity of the country, and the party’s “face”; • Taiwan’s concerns over its internal autonomy including its ability to maintain its own social and political system, security, and international position; • The U.S. desire that China not gain de facto control over Taiwan.

In order to take all these things into account simultaneously, a solution to the conflict needs to combine different elements in a creative manner so that they together exceed the bottom lines of all three parties for accepting a political solution (see Figure 1). Key to finding any solution to the problem is the proper treatment of the “one China” principle, which Beijing cannot drop and which Taipei does not want to interpret too literally.

Figure 1. Achieving a win-win-win situation by exceeding the bottom-line of all three parties. The main concerns of the conflict parties appear outside of the triangle, the minimum needed to exceed the bottom-lines in the triangle.

China Taiwan

Breakup of China, Mainland interference in Communist Party’s Taiwan affairs, no security, Taiwan’s complete autonomy, loss of legitimacy no international position security and international position guaranteed; China’s unity and sovereignty safeguarded; no Chinese de facto control over Taiwan

United States

China’s de facto control over Taiwan

10 An interim agreement would only freeze the status quo. How would it be possible to move further towards a more enduring solution? Our own proposal is based on a confederation model in form, but not in name. Despite all its potential difficulties, a confederation is still the best available possibility, as only a confederation could guarantee that Taiwan’s social, political, and economic systems would stay wholly intact, while still retaining China’s unity at some level. In our model, “one China” would be realized as a kind of “ceiling structure”—similar to the monarch of the United Kingdom, who acts as a symbol of the unity of the British Commonwealth.22 This ceiling structure would be the highest cooperative forum of the confederation, which formally would represent the sovereignty of a unified China. Under this model, the increasing de facto independence of Taiwan would not have to imply either the breakup of China or the coexistence of two Chinas.23

The ceiling structure might find a suitable concrete form in some sort of a joint presidium or a council of elders or “wise men.” This presidium or council would have representatives from both the mainland and Taiwan. The powers of the presidium or council would best be kept symbolic, but the ceiling structure could have its own flag and national anthem in order to stress unity.24 Taking into account mainland China’s sensitivity to the issue of unity, Taiwanese would be wise to accept that the presidium or council would have its permanent location on the mainland (being “the origin of Chinese civilization”)—if not in Beijing, then perhaps in Xi’an or Nanjing.

22 The idea of a ceiling symbolizing the unity of one China emerged in Taiwan in the beginning of the 1990s. See, for example, Li Shuiwang, “‘Dong-Xi De moshi’ yu haixia liang’an guanxi” and Wang Xiaobo, “Lun ‘yige Zhongguo’ yuanze yu liang’an guanxi—jian ping Guotonghui zhizao ‘liangge Zhongguo’ de qitu” (Papers presented at the Second Forum on Cross-Strait Relations, Beijing, 1992).

23 Cf. Jyrki Kallio and Antero Leitzinger, Taiwan—Kiinan tasavalta (Helsinki: Kirja-Leitzinger, 1994), 50-51. A Chinese Commonwealth was proposed inter alia by the former chairman of the DPP, Shih Ming-teh (___), in 1998. See Donald S. Zagoria, “The National Committee on American Foreign Policy's Project on U.S.-China Policy and Cross-Strait Relations” (Paper presented at the International Conference on United States-Taiwan Relations: Twenty Years After the Taiwan Relations Act, Institute of European and American Studies, Academia Sinica, Taipei, 1999), www.taipei.org/tra/sinica/sinica-11.htm (accessed March 15, 2003).

24 Chinese authorities have suggested that the symbols of statehood and the name of a new, united China can be discussed. See, for example, “Zhongguo zhongyang youguan bumen guanyuan: Taiwan zhi yao chengren yi Zhong, guohao, guoqi, guoge ke xieshang,” Singapore Zaobao (online), November 6, 2001, http://www.zaobao.com/gj/zg003_061101.html (accessed November 6, 2001).

11 In the international arena, the two parties might use the Presidium for joint representation. For example, in the United Nations there would be two possibilities: either the Presidium would represent the whole of China in the General Assembly and the Security Council, or China would maintain its present status in the UN with the Presidium being given a separate observer status,25 and Taiwan being allowed to participate as a separate entity in the work of UN agencies other than the Security Council and the General Assembly. In either case, the two parties could represent themselves in UN agencies.

Could the United States consent to the birth of a Chinese confederation—would it not mean the loss of the “unsinkable aircraft carrier”? With the removal, or at least the diminishment of the threat to Taiwan posed by China, the United States would have to decrease its military cooperation with Taiwan. In this age of high-tech warfare, however, the geo-strategic importance of Taiwan has diminished. In addition, a solution to the Taiwan issue would remove, or at least reduce, the biggest obstacle to good relations with China.

The Taiwan Relations Act (TRA)26 and the three joint communiqués could conceivably give way to an interim agreement by which Washington would bind itself to accepting a political solution negotiated between Beijing and Taipei, while simultaneously announcing that the United States has a continuing interest in the well-being and security of Taiwan. Washington would at the same time promise both to observe closely developments relevant to Taiwan’s security and to ensure the preservation of its social system during a certain period of time (e.g., thirty to fifty years) without, however, directly saying that the likelihood of U.S. involvement would be related to mainland China’s behavior. In other words, the United States would continue to

25 Members with an observer status maintain a permanent representation at the UN and may participate in the work of the General Assembly. For current members with an observer status, see United Nations A/INF/56/4 General Assembly Fifty-Sixth Session, http://www.un.org/documents/ga/docs/56/ainf564.pdf (accessed March 13, 2003).

26 On the function of the TRA during different U.S. administrations, see Steven M. Goldstein and Randall Schriver, “An Uncertain Relationship: The United States, Taiwan and the Taiwan Relations Act,” The China Quarterly, no. 165 (March 2001): 147-72.

12 guarantee Taiwan’s security if mainland China does not live up to its part of the agreement.

Even without formal mediation between Beijing and Taipei, a solution would probably be furthered by services facilitating contacts offered on ”neutral ground,” particularly in the phase preceding actual political negotiations. In our opinion, such mediation would have to come from countries that do not have an immediate interest in the conflict, e.g. from the EU. Potential services offered could be from the standard measures of unofficial diplomacy: facilitating first contacts, various confidence-building measures (CBMs), Wilton House rules discussions etc. Negotiations would have to maintain as low a profile as possible, as Beijing cannot let itself be seen as “giving in” to negotiations on an equal footing with Taipei.

To reiterate, these are the main elements of our solution:

• A confederation where Taiwan recognizes the formal sovereignty of the unified China (and not the PRC) in exchange for continuation of their present de facto independence. Due to political sensitivities, this confederation would, however, not be called a confederation; • A UN solution, whereby a Presidium represents the whole unified China in the General Assembly and the Security Council, while mainland China and Taiwan have separate representation in other UN agencies; alternatively mainland China’s present UN representation is left intact, while the Presidium is given an observer status (like the Commonwealth or the European Commission), and Taiwan is allowed to participate as a separate entity in UN organizations other than the Security Council and the General Assembly; • Continuance of U.S. security guarantees to Taiwan in the form of an interim agreement, which would be in effect for a predetermined period of time (e.g., thirty years), combined with a pledge to reduce arms sales27 and a public pledge not to support Taiwan independence in any form; and • Political negotiations between Beijing and Taipei, which would be conducted as an internal affair without official external mediators and with as low a profile as possible. However, before actual negotiations and during their course, other actors can “silently” offer their help in the form of good offices, in order to facilitate contacts and discussions.

27 According to SIPRI, both Taiwan and mainland China were among the five largest purchasers of conventional arms in 1997-2001. See SIPRI Yearbook 2002: Armaments, Disarmament and International Security (SIPRI/Oxford University Press, 2002).

13 The name of the confederation is crucial for symbolical reasons. We suggest that based on the concept Zhonghua, the two parties could be called “Zhonghua renmin gongheguo” (______, Chinese People’s Republic) and “Zhonghua Taiwan gongheguo” (______, Chinese Republic of Taiwan), respectively.28 Mainland China could thus maintain its current Chinese name,29 while Taiwan’s name would be a compromise between those who want a Republic of Taiwan and those who wish to maintain the cultural link to China. It is also vital from Beijing’s point of view that the name used for Taiwan imply clearly that the island is not an entirely separate entity, but part of the larger Zhonghua. The “confederation” could then have a name comprising the two, such as “Zhonghua da gongheguo” (______, The Great Chinese Republics).30

A Lost Window of Opportunity? Chen’s tight victory in the 2004 presidential elections constitutes a water-shed in

Taiwan’s internal politics, despite the narrow margin. With Lien Chan’s (__) victory, the pan-blue team’s future in Taiwan politics would have looked considerably brighter. It now seems likely that the pan-greens will receive more than half of the seats in the Legislative Yuan elections at the end of 2004. Barring any scandal involving the Chen shooting incident on March 19, the question is not whether the pan-blues can retain their legislative majority in the year-end legislative elections, but rather whether the DPP alone—without the help of Taiwan Solidarity Union (TSU, ______)—can get 50% of the vote? If this happens, the DPP will likely rule Taiwan for the foreseeable future.

That would also considerably strengthen Chen Shui-bian’s hand, allowing him to push through legislative initiatives that previously stalled. Chen and pan-green leaders have

28 As a name for an independent Taiwan the most common suggestion is “Taiwan gongheguo.” Lee Teng-hui (___) has used the name “Taiwan Zhonghua minguo” to describe Taiwan’s current status, including reference to the Republic of China and recognition of Taiwanese identity.

29 Note that although the Chinese name of mainland China would remain the same, it could be translated differently to better suit the character of the new confederation.

30 Note that there is no difference between singular and plural forms in Chinese; therefore, the Chinese name of the confederation conveys a sense of unity even if the English translation is in the plural.

14 left little doubt that they are going to push through a new constitution in 2006, and a referendum on it in 2008, right before the Beijing Olympics. From the point of view of those in Taiwan looking for formal independence, 2008 forms a line of demarcation.31 After 2008, international attention due to the Olympics is turned away, Taiwan’s economic integration with the mainland has probably progressed beyond the point of no return, and the military balance has likely shifted decisively in favour of Beijing. There is therefore a great sense of urgency among the independence-minded.32

In terms of seeking a peaceful solution to the Cross-Strait conflict, the election result was probably the worst possible. Chen stays in power and his ability to push through controversial initiatives strengthened markedly. At the same time, the narrow margin and the fact that the referendum yes-votes did not exceed 50%, allows Beijing to continue ignoring Chen, while still living in the illusion that there could be a more favourable counterpart in the future. What Beijing still does not want to admit, is that Chen would have more leeway internally within Taiwan to push through negotiations with Beijing. In Taiwan’s starkly polarized political environment, Lien Chan—not to mention Soong Chu-yu (___)—would instantly come under severe pressure and allegations from the green side of “selling Taiwan out”, if they were to propose negotiations with the PRC.

Without the pressure for changing the circumstances originating in Taiwan, Beijing could well afford to wait. Cross-Strait economic integration and the military balance are inexorably turning in Beijing’s favour. But the constitution and referendum talk by Chen is now setting a clear timetable in the conflict for the first time, which forces the PRC to seriously contemplate taking some preventive action before that. Hardball and brinksmanship are the right words to describe Chen’s tactics.

31 It is noteworthy that Taiwan’s constitution needs a rewrite for several reasons other than those directly related to independence.

32 Mattlin, interview with Dr Wu Yu-shan, Head of the Institute of Political Science, Academia Sinica, April 2, 2004.

15 After the election, China has with an unprecedented sense of emergency communicated to foreign capitals that if lives and prosperity of their Taiwanese compatriots are endangered due to the rioting on the island, China cannot remain an onlooker.33 Although one shouldn’t read too much in this statement, it is worthwhile to remember that internal chaos is believed to be one of the preconditions for intervention34. Could the international community consent to such an argument by Beijing and, tacitly if not openly, endorse a “stabilizing intervention” by Beijing? A few years ago the whole question would have seemed ridiculous. After the recent comments by French, German and other leaders,35 one hesitates to rule out the possibility.

In these circumstances it is a blessing that mainland China does not have decisive military supremacy over Taiwan yet.36 A military solution aside, also a political solution is easier to achieve given that Beijing is not able to dictate it. A new window of opportunity may, however, arise in 2005, provided that the DPP wins the election. Then Chen Shui-bian could be expected to revert to more moderate policies, and China might come to realize that it has to open negotiations with Chen as there is no alternative to be expected anymore. Next year China’s own reshuffling of its leadership will have settled down a bit, possibly providing the stability to launch new initiatives. Finally, there may be a Democratic president in the United States in 2005.

Come what may, Taiwan’s future is tied to the future of the whole of China, not least in an economic sense. Taiwanese companies have invested heavily on the mainland, and

33 Cf. “Guo Taiban fayanren fabiao tanhua”, Guangmingwang, March 27, 2004, http://www.guangmingdaily.com.cn/01gmrb/2004-03/27/content_8338.htm (accessed April 6, 2004).

34 See Paul Lin, “What really is China’s bottom line?”, Taipei Times, January 20, 2004, http://www.taipeitimes.com/News/edit/archives/2004/01/20/2003092115/print (accessed April 5, 2004).

35 “Germany urges Taiwan to rethink on referendum issue”. Reuters, March 14, 2004. “South Korea concerned over Taiwan’s referendum plan,” Associated Press February 28, 2004. “France backs China against Taiwan as it eyes trade deals,” Agence France Presse, January 27, 2004.

36 In the opinion of an observer who has worked closely with the leadership in Beijing, once Beijing achieves decisive military superiority, a military confrontation may become inevitable. Mikael Mattlin, interview in Hong Kong, April 25, 2001. See also Guan Jie, “Jiang Zemin de dui Tai mimi baogao, tidao jiejue Taiwan wenti de shixian shi er-ling-yi-yi nian”, Zhengming (Hong Kong) 2002:3 17–18.

16 mainland China has already become Taiwan’s most important trading partner. In these circumstances, it is hard to see how Taiwan can hold out indefinitely on negotiating a political solution with China. Moreover, if China feels secure territorially and in international politics, it may well make concessions on the back of its strong position. In such circumstances, flexibility could be shown even with the current holy principle of reunification: “one country, two systems” (____),37 especially if Jiang Zemin (___) has moved on to meet Mao and Deng by then.38 A potential stumbling block may be the domestic audiences on both sides, neither of which are likely to accept anything that looks like a “sell out.” The solution, then, will have to maintain a substantial amount of ambiguity, so that both sides will be able to claim victory domestically.39

37“Hu, Wen Want Review of ‘One Country, Two Systems’,” Taipei Times, March 8, 2004, 1, http://www.taipeitimes.com/News/front/archives/2004/03/08/2003101601 (accessed March 10, 2004).

38 Jiang Zemin is still very much an éminence grise behind the Hu–Wen regime, and the line set by him in relation to the Taiwan Issue cannot conceivably be changed without his consent. Being able to realize the reunification of the motherland would enable him to go down in history as a comparable figure to Mao Zedong (___) and Deng Xiaoping (___), an ambition he seems to have as judged by the latest amendment to China’s constitution, i.e. adding his “Three Represents” in the Preamble. Cf. Chu Yun-han, “Power Transition and the Making of Beijing’s Policy towards Taiwan”, The China Quarterly, no. 176 (December 2003): 960–980.

39 Lin Jih-wen, “Two-Level Games Between Rival Regimes: Domestic Politics and the Remaking of Cross-Strait Relations,” Issues & Studies 36, no. 6 (November/December 2000): 1-26.

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