COM 02/2016

The Taiwan Question after the 2016 Elections: Significance for Cross-Straits Relations

Prof. Dr. Chin-peng Chu, Vice-President of National Dong Hwa University, Hualien, Taiwan

Jean Monnet Chair, Professor and Director of the Department of Public Administration, National Dong Hwa  University, President of Friends of Europe in Taiwan and former Minister of the Research, Development and Evaluation Commission of the Executive Yuan

For both sides of the Taiwan straits, the “Taiwan Question” is a topic of vital significance. But it is also especially complicated, because it is seen “also with regard to the military, which is the biggest political hot spot of the Chinese foreign affairs” from the perspective of some scholars. This is connected with the danger of a military conflict. The Taiwan question or the so-called cross-strait relation is not only a central problem of the low-politics, but also it correlates with the military balance of power and with the general view of security policy in the Asia-Pacific region as well as the appropriate role of the USA for this region. The 1996 Taiwan straits crisis can be seen as an example. From 1996 to 2016, six direct presidential elections have taken place in Taiwan. In the recent presidential and legislative elections on January 16, 2016, the Democratic Progressive Party (DPP) won both the presidency (winning 56 percent of the vote) and a majority in the Legislature (picking up 68 out of 113 seats). The DPP leader Tsai Ing- wen has become the first woman to hold the office of President and, also for the first time in history, voters gave DPP, which is skeptical of closer ties to main- land China, broad authority in administrative and legislative powers. The ruling Kuomintang (KMT) which has long been regarded as the party to develop and maintain peace and stability in the Taiwan Strait suffered its worst electoral defeat in history, and the New Power Party (NPP) which emerged from the Sunflower Student Movement in 2014 and advocates also for Taiwan’s independence won 5 seats in parliament and became the third-largest party, a fact that might be observed as a significant indicator for the future development of the cross-strait relations. This article discusses firstly Taiwan’s international legal status; secondly, it will examine the cross strait relations in the historic context, especially focusing on Ma Ying-jeou’s administration since 2008; and finally the article will explain the significance of Cross-Strait relations in after the aftermath of the DPP’s victory and how Beijing will interact with Taiwan’s new government.

Cross-strait Relations from a Legal and Economic Perspective

The issue of the international legal status of the Re- public of China (Taiwan) concerns the question if Taiwan shows all elements, after the current criteria, of a state in the sense of the international law. With regard to the necessary criteria, the so-called “Three elements theory of state” of the German Professor of constitutional law, Georg Jellinek, is significant. Namely, the state must exercise authority that is outwards only bound by international law (external sovereignty) and is internally autonomous (internal sovereignty); second, it must be assigned to a people; and third, it must be assigned to an enclosed territory. Therefore, there is no real doubt about an existent duality (China and Taiwan) – in the sense of international law. So, their respective territory is not to deny as well the existence of the current population. Also, they both have own governments in Beijing and in Taipei that can control effectively and constantly the current population and the current territory inside and outwards. It was therefore evidently impossible for Taiwan as well as for China to access effectively to the current other territory or population. Appropriately, under international law, we can differ between a constitutive and a declaratory theory of legal effect of state recognition. However, it is not to hide that – this is the case in legal arguments – next to polar opinions there exist also conciliatory opinions that should not be taken into consideration here. The representatives of the declaratory theory are of the opinion that the state quality is given by fulfilling the named characteristics of a state. The state is born by realization of these characteristics, the act of state is executed.

During the period of 1952 to 1980, Taiwan had registered an average annual growth rate of up to 9%, maintaining a stabilized economy and equitable distribution of income. Praised as a miracle, Taiwan’s economy was a fine example that many countries in the world try and take as a model. In the mid-1980s, changes in the international economic environment could be observed in two aspects. On the one hand, newly industrialized countries had seen rapid growth and had shown strong competitiveness in the traditional international market; on the other hand, protectionism dominated the international trade.

Changes in Taiwan’s domestic environment could be observed from political, social and economic aspects. Since the beginning of the 1980s, Taiwan authorities, with a deliberate push of those in power, had loosened its grip step by step, leading to the lifting of martial law in 1987, imposed over the past several decades. This trend had further stimulated the democratic spirit in Taiwan’s society. All kinds of social movement, such as self-help, environmental and labor consciousness, as well as claims, came along successively, which had undoubtedly a very negative influence on the business environment in Taiwan. Facing significant changes in domestic and international economic circumstances, various industries encountered more and more problems in their developments, which seriously discouraged the willingness of investment of the private sector. In or- der to adapt to the new economic context, Taiwan’s government implemented policies, on the one hand, to reinforce assistance to traditional labor-intensive industries so as to increase the labor productivity and to bring their products into a higher bracket, and on the other hand, to accelerate the development of capital-intensive or technology-intensive industries in order to upgrade rapidly Taiwan’s industries. Along with the intensification of globalization and international competition, China has now become Taiwan’s second largest trading partner, the largest export market, the second largest import source and the number one source of trade surplus. In addition, China is the hot spot for overseas investment of Taiwanese companies.

The development of cross-strait bilateral trade is closely related to the investment of Taiwanese companies in China. In particular, these two elements appear to be complementary. In other words, investment pushes forward trade and prompts the rapid development of cross-strait bilateral trade, along with the ongoing economic development of China. At large, as a result of the augmentation of the scale of cross-strait economic exchanges, the economic integration of Taiwan and China has grown deeper and deeper, which basically offers more benefit than harm to Taiwan’s economic development. However, the opposite argument says that Taiwan, after sever- al decades of economic development, is confronted with the pressure of structural transformation.

Moreover, it  should  be  underlined  that  cross- strait economic exchange has not been normalized as of yet because of the existing political confrontation even though cross-strait economic relations have gone though a rapid development over the past twenty years. Particularly as from 1995, the political antagonism between Taiwan and China has aggravated, rather than being pacified. Zero-sum games in the diplomatic arena and missiles targeting Tai- wan deployed in certain mainland China’s offshore regions by the Chinese government have intensified the hostility across the Taiwan Strait. This political conflict impedes not only normal bilateral economic exchanges. Besides, cross-strait problems have be- come a bone of contention between the ruling party and the opposition one, affecting the political stability and social harmony in Taiwan.

KMT’s and DDP’s Mainland China Policy Com- pared (2000-2016)

The two sides of the Taiwan Straits have been separate for almost 60 years. They experienced military conflicts and confrontation during the period of the Cold War. Until Taiwan took measures to allow compatriots in Taiwan to visit mainland China on November 2, 1987, the interaction between Taiwan and China has been increased. With regard to the low-politics level, economic, trade, scientific, technical, academic and non-political contacts continue to develop as both sides increase external ties. With regard to political topics for discussion, China advocated the “one country, two systems” doctrine and “three direct links of trade, mail, and air and ship- ping services and bilateral exchanges”. The Taiwanese authorities responded with “one country, two governments” and the so-called “Three-no” policy, namely no contact, no talks and no compromise.

From the historical perspective, the cross-straits relationship went through several reconfigurations before the current contradiction between growing economic interaction and serious political issues. The paradigmatic shift in cross-straits tensions was the ROC’s loss of international legitimacy that followed its withdrawal from the UN in 1971 and the recognition of the People’s Republic of China (PRC) by the US and Japan in 1979. Internally, both the ROC and PRC underwent significant leadership shifts in the mid-1970s which led to a degree of policy sclerosis and conservatism in approaches to cross- straits relations. For much of the 1980s, the initiative in cross-straits relations shifted to the PRC. Taiwan continued to enjoy high rates of economic growth. The political and economic transformations initiated by Deng Xiaoping along with a sophisticated diplomatic strategy with respect to both the US and Japan supported the “peaceful reunification” strategy. The policy position adopted by the Chinese Communist Party (CCP) was to promote reunification under the banner of “One Country, Two Systems” and this has remained at the heart of the PRC’s strategy since that time. In Taiwan, in the early 1980s, its policy on cross-straits relations was sclerotic not only in domestic but in international issues.

Until the late 1980s, the Taiwan question was a spectrum of two-dimensional politics: politics at the intersection of the ongoing Chinese civil war and the shifting international Cold War. The 1970s rep- resented a critical turning point in the evolution of politics concerning Taiwan issues. Taiwan lost its marginal strategic edge in the context of the global Cold War. At the international level, there emerged the one-China framework, which substantially cor- responds to PRC’s version of one-China at the expense of de-legitimizing Republic of China (ROC) as an independent sovereign entity in the international community. Since 1949, the conflict between mainland and Taiwan has remained basically a civil war. But during the past 20 years, this conflict has evolved into a choice between reunification and independence. The issue of national identity has become an extremely hot issue in political life in Taiwan. Many scholars and officials from the PRC refuse to accept the idea that the nature of the PRC-Taiwan conflict is based on identity. The reasons are not only due to the difference in values and the political and social system. Additionally, Taiwan’s isolation in the international community and the military threat from the mainland have also strengthened Taiwan’s sense of solidarity.

In 1999, Taiwan’s President Lee Teng-Hui dropped another political bomb by declaring cross- straits relation as a “special state-to-state relation- ship”, which challenged the one-China policy principle and almost led to a political crisis. Lee’s statement has been defined usually as the “Two states theory”. The significance of the “special state- to-state” announcement is that it may have represented an abandonment of the one-China policy and may be a strategy in a process of declaring Taiwan’s independence. However, a regime change occurred in March 2000, from the normally pro-unification KMT to the normally pro-independence Democratic Progressive Party/DPP. Chen Shui-bian won the 2000 Presidential elections and the DPP become the ruling party. During his first ruling period, Chen’s policy on national identity and cross-straits relations emphasized Taiwan nationalism and Taiwan consciousness, but did not directly challenge China’s position on Taiwan independence. In his inaugural speech in May 2000, he indicated “5 Nos”, namely he would not declare Taiwan’s independence, change the national title, enshrine the “state-to- state” model of cross-straits relations in the constitution or endorse a referendum on independence, as long as China did not use military force against Tai- wan. Only two years after Chen’s declaration, Chen took a much sharper position on cross-straits relations in 2002, advancing a theory of “one country on each side of the Taiwan Strait”. Thus, in the 2004 Presidential elections, Chen emphasized Taiwanese nationalism and initiated an issue to promote major constitutional change and revision. Therefore, both the Chen’s administration and China’s regime have used nationalism to gain popular support and ruling legitimacy. The cross-straits relations have become what Robert Putnam terms a “two-level game” at both the domestic and international levels influencing each other. Beijing also chose to ignore Chen Shui-bian because the DPP government refused to acknowledge the 1992 consensus on the “One China” principle, the so-called “yi zhong ge biao” policy of one China with their own interpretations. Facing the domestic changes in Taiwan, China worried that the trend toward a separate Taiwanese identity may make peaceful reunification impossible. Thus, China repeatedly emphasized the possible use of force to deter Taiwan from declaring de jure independence. To sum up, despite his “4 Nos and one without” pledge, the DPP government had no interest in dealing with the mainland under the one-China concept. Both sides were unable to open a dialogue on “three direct-links” and Beijing prolonged its “wait-and-see” strategy dealing with regard to the DPP government.

In the year 2008, Taiwan’s newly elected President Ma Ying-jeou gave the go-ahead to further relax cross-strait economic policies. Ma reaffirmed the so-called “1992 consensus” with the mainland, under which both sides agree to accept that there is “one China” but differ over how to define it. It means, the dispute over sovereignty was set aside in the interests of better relations. In his inaugural speech, Ma stated that both sides should “face reality, pioneer a new future, shelve  controversies and pursue a win-win solution”. Ma’s views were very much in line with CCP’s president Hu Jintao’s proposed “four continuations”, namely “building mutual trust, shelving controversies, finding commonalities despite differences, and creating together a win-win solution”. According to Ma’s speech, he was committing himself to the maintenance of the present limbo, of Taiwan’s de facto but no de jure independence. He urged China to “seize the historic opportunity to achieve peace and co-prosperity”. Ma kept using the word “Taiwan” to demonstrate his determination to protect the island. The aim was to map out a cunning path between “one China” and “Taiwan identity”.

Since Ma Ying-jeou’s Presidential election, the political atmosphere has been improved between both sides. Ma’s administration is associated with a dramatic process of the KMT opening up towards China. Undoubtedly, Ma’s government realized that the positive development of cross-strait relations will affect Taiwan’s economy the most. That means, when cross-strait relations are peaceful and trade is normalized, Taiwan’s economy will fare better than that of other countries. Based on the above thinking, the Association for Relations across the Taiwan Strait (ARATS) and Straits Exchange Foundation (SEF) held 11 summits and signed 23 agreements and reached 2 consensus since 2008. Most meaningful for the political dialogue were not only Cross- strait ministerial high-level talks, but also Ma Ying- jeou’s and Xi Jinping’s first meeting in Singapore on Nov. 7 2015 as a historic step marking the first meeting after the separation of both sides since 1949.

However, under the new circumstances, the political economy of the Taiwan question has begun to take new dimensions. At the level of cross-strait relations, the new dynamic politics have manifested themselves predominately on political, diplomatic and military fronts since 2000, according to the anal- ysis of some scholars. On the political front, there has emerged a renewed political confrontation across the Taiwan straits over the issues of unification and independence. On the diplomatic front, Taipei and Beijing have been fighting intensive battles over the status of Taiwan in the international community as Taipei is determined to challenge the one-China international framework. And on the military front, the Taiwan straits has become one of the “hot spots” in the international security arena because of growing arms races. Compared with Chen Shui-bian’s government, Ma Ying-jeou’s administration indicated their hopes to maintain the status quo of Taiwan Straits and to establish peaceful a China-US-Taiwan relationship on the diplomatic level. Furthermore, politically, Ma has taken a moderate and friendly stance towards the mainland by repeating his “three- no” policy – no reunification, no independence, no war –, which effectively allayed fears and created an environment for a peaceful development of cross- strait relations. He asked for the withdrawal of Chinese missiles which threatened Taiwan’s security for creating a peaceful framework or peaceful agreement in the military fields. Lastly, economically, Ma boosted the progress of the “Three Links”, hoping this would bring economic benefits from the main- land. Basically, Ma advocated that the future cross- strait relations should shift from “mutual non-recognition” to “mutual non-denial”.

In sum, the economic and social interaction between Taiwan and the Mainland is broad and deep. The sovereignty and security issues are the two substantive strands of the cross-strait knot. Taiwanese identity politics has focused more on securing a democratic system and gaining international respect than on creating a separate state. The fundamental difference between the KMT and the DDP is the degree of the tilt. The KMT claims that the ’status quo’ leans Taiwan closer to China through greater region- al economic integration, like within the framework of Economic Cooperation Framework Agreement (ECFA), the participation in Regional Comprehensive Economic Partnership (RCEP), or the newly approaching Asian Infrastructure Investment Bank (AIIB) and One Belt One Road etc., while the DDP’s thinking is more about maintaining distance between both sides.

New era for Cross-strait Relations after DPP’s Victory in the 2016 Elections

When the Sunflower Movement occurred in 2014, there were some characteristics which may be seen as a turning point in cross-strait relations and also as a radical response to the top-down decision-making process within the KMT and CCP. On the one hand, there was the movement against the “Cross- strait Service Trade Agreement (CSSTA)” without ratification of “Cross-strait Agreement Oversight Legislature” by the Legislative Yuan, and on the other hand, the main leaders of the movement publicly expressed their support for searching Taiwan’s in- dependence. Since then, the mainland policy agenda regarding negotiations for Cross-Strait Service Trade Agreement (CSSTA) and Trade-in-Goods are conditioned to the adaptation of the above mentioned “Oversight Legislature”. In this context, the DPP appears to be the main political beneficiary, not only in the November 2014 nine-in-one municipal (local) elections, but also by winning the presidential and legislative elections in 2016. Certainly, there are many factors which contributed to the KMT’s failure and defeat, including: the rise of socio-economic inequalities, income distribution, housing costs, food safety, pension reform concerning public servants, the dissatisfaction of younger voters be- tween 20-39 years with the KMT government etc. Consequently, the Cross-straits relations issue was quite unimportant in the elections, even though Ma Ying-jeou and Xi Jinping had created a mechanism for a future meeting of the national leaders under the principle of the “1992 Consensus”.

The DPP victory is absolutely not a fluke. But the election results demonstrate that the new Taiwan administration has to face an open fundamental question: Are there any possibilities for Cross- strait shifts? Do the election results reflect a more fundamental shift in political attitudes than simply a dissatisfaction with Ma Ying-jeou’s policies and their consequences? Richard C. Bush stated such a fundamental shift “would not only change the balance of power within Taiwan, but also the continued feasibility of China’s approach to reaching its goal of unification”. For China, Prime Minister Li Kequi- ang’s work report to the National People’s Congress in March 2014 regarding Taiwan may contain important principles, namely (1) from the 1992 Consensus to a ‘one China framework’; (2) reversing the order of importance between political and economic issues to prioritize politics through diversified communication channels; (3) pushing the new concept of a Cross-strait family to describe the relations with Taiwan. Xi Jinping also spoke of the same cultural and blood lineages on both sides of the Taiwan Strait during his meeting with Ma Ying-jeou in Singapore and he emphasized that “no one will be successful in dividing us”, “holding the family together“ appealing to ethnic solidarity and national unity, and raised four points: adhering to the ‘1992 Consensus’; developing Cross-strait peace; expanding the effects of prosperity to more segments of the population and cooperatively pursuing a ‘Chinese Renaissance’. For China, in short, a divided country is by definition a ‘weak country’.

For Taiwan, the identity of Taiwanese people is drifting. Some public opinion surveys and the election results have shown that the majority of the people under 40 years consider themselves more as Taiwanese than Chinese, and that there is a major generation gap. The education and social narratives have played a key role in recent decades in shifting Taiwan’s identity. The KMT’s defeat shows that it ’lost the ardent support of the people’. The turnout of the presidential election was only 66.27% of the voters, around 10% lower compared with the election 2012, the lowest turnout since 1996.

What is the DPP able to do in the new era? Ac- cording to the report of DPP’s Secretary-General

Joseph Wu which he delivered at the Center for Strategic and International Studies (CSIS), Washington, DC, on January 19, 2016, major issues include: a stable majority in parliament; the Trans Pacific Partner- ship (TPP) participation, pension reform, the cross- strait agreement oversight legislation for domestic reconciliation; economic structural reform; building of external relations and foreign policy agenda in terms of friendship, improving relations with China not at the cost of Taiwan’s relations with the broader international community. With regard to the Cross- strait issue, especially to the question of the ‘1992 consensus’, DPP leader Tsai Ing-wen emphasized that “the DPP has never denied the historical fact of the cross-strait dialogues that took place in 1992, and indeed acknowledges the shared desire of the two sides at that time to advance cross-strait relations by fostering mutual understanding”. After the election results were announced, Tsai Ing-wen told the press that she seeks a mutually acceptable way of interacting with mainland China on the basis of equal dignity while avoiding confrontation and pre- venting surprises. The DPP also emphasized that in the new session of the legislature it will put forward the Cross-Strait Agreement Oversight Legislation as a priority to highlight its interest in peaceful and stable relations with mainland China. A more important and significant sign is that Tsai Ing-wen expressed that she will follow the status quo of the ROC constitution. From this aspect, people may expect that the DPP’s mainland policy will not go back to the period of Chen Shui-bian.

However, Tsai Ing-wen has so far avoided direct reference to the “1992 Consensus” and this will create considerable uncertainty for the future of cross-strait relations. In this context, any avoidance of endorsing the “1992 Consensus” can only “be interpreted by Beijing to mean a denial of the status quo in the Taiwan Strait”, said Songling Zhu, Professor at the Institute of Taiwan Studies at Beijing

Union University. Moreover, China still remains a deeply distrustful and pragmatic approach towards the DPP and Tsai Ing-wen’s long-term intentions. The DPP has yet to rescind the party’s 2007 Normal Nation Resolution or the 1999 Resolution on Tai- wan’s Future, which are premised on the notion of Taiwan as a sovereign entity separate from China. The other is Tsai Ing-wen’s role in the crafting of the controversial “Two States Theory” during Lee Teng-hui’s period and as a Chairwoman of Taiwan’s Mainland Affairs Council from 2000-2004, a period when cross-strait relations were particularly tense and fraught. Thus, gaining Beijing’s trust and confidence depends on what Tsai Ing-wen says and how the DPP’s Mainland China policy is implemented.