Wednesday, February 02, 2005

China's Marlin Strategy Towards Taiwan

Consider for a moment the current context; terrorists with a totalitarian ideology attacked the United States. In response, President Bush decided the old strategy of measured response, i.e., small attacks, diplomatic pressure and essentially ignoring the larger problem of state sponsored terrorism, would no longer suffice. He adopted a bold strategy of literally attacking the states that sponsored the terrorists, and demanding that the rest of the world declare that they are “…either with us, or with the terrorists.” (President Bush, Message to Congress, Sept 20, 2001) President Bush took bold steps to personally intervene in the Israeli-Palestinian Conflict while at the same time allowing Israel to destroy Palestinian terror groups. He bluntly warned Syria and Iran that he is watching them closely to ensure they harbor no al Qeida terrorists or weapons of mass destruction. He told Europe that changes are coming to NATO, with many US troops now based there heading to other regions of the world. After labeling them as part of the “Axis of Evil,” the President has unflinchingly confronted North Korea over that country’s nuclear weapon’s program and has instituted a form of blockade with the help of Australia and Japan. President Bush also told the Republic of Korea that US troops are moving out of there as well so American soldiers will not be subject to North Korean nuclear blackmail.
he common theme that runs through all these various responses to the events of September 11, 2001 is boldness. The world is now in an era of new thinking to confront what have to now seemed to be intractable problems. The relations between the PRC and Taiwan would certainly meet the definition of a “seemingly intractable problem.” Hence, approaches that might have been unthinkable two years ago can now be seriously entertained. And it is only by utilizing a previously unthinkable solution will Taiwan be able to find a solution to the PRC threat.

First some background on relations between China and Taiwan. After Chiang Kai Shek withdrew to Taiwan in 1946, the PRC treated the ROC as a hostile power. The PRC overly threatened invasion of Taiwan and actually shelled Jinmen and Matsu Islands. However, subsequent to 1950 when President Truman sent 7th Fleet to patrol the Taiwan Straits, the PRC was forced to temper its desire to forcibly reunify with Taiwan, knowing that attacks on Taiwan itself would bring a military response from the US.

The late 60’s saw a shift in the dynamic amongst Taiwan, China and the US. Because the US was looking for ways to counterbalance the USSR, President Nixon began the process of reaching out to China to the exclusion of Taiwan. This policy reached its culmination in 1978 with President Carter, and the Second Communiqué. Among the many results of this policy was the rekindling of the notion within the minds of some in the PRC that should “peaceful reunification” not work out, then Taiwan could be forcefully brought back to China without risk of intervention by the US. This notion was finally dashed in 1996 when the most pro-PRC President the US has ever had, President Clinton, once again sent 7th Fleet to the coast of Taiwan in response to China’s menacing missile shots.

This intervention by the US was a wake-up to the Communist Party. While their desire to rule Taiwan did not lessen, it is clear that a decision was taken to adopt a new strategy to achieve their ends. Bullying and treats were not effective, and were, in fact, counterproductive. The threats energized the people of Taiwan to elect an explicit proponent of independence, and compelled an otherwise pro-China US administration to intervene on behalf of Taiwan. So, instead of bullying, China decided to be as accommodating as possible to Taiwan business interests on the theory that peoples’ hearts and minds will be where ever their wallets are. As a result of this change in policy, Taiwan investment this year in China is up approximately 3000% from 1996 levels. MOEA, June 2003 link

While the PRC’s attempt to militarily coerce Taiwan into reunification was a failure in practical terms, it was successful in one respect. It instilled or at least helped foster a sense of fear among people living in Taiwan that the next time, China would launch missiles into, rather than over, Taipei. The events of 1996 also caused many in Taiwan to look inside their own desires to determine the type of relationship Taiwan should have vis-a-vis the PRC. Broadly speaking, the choices are two; independence or status quo. When polled, the people of Taiwan by large margins say they support the status quo and the promise of some kind of peaceful resolution to the cross-strait standoff. To most people in Taiwan, there are legitimate fears that talk of independence is likely to bring missiles raining down on Taipei.


The status quo, or “strategic ambiguity,” as it has been called, allows those in Taiwan who support the status quo to color it with their own aspirations. There are those who hope that the Taiwan authorities would say little to draw attention from Beijing so that Taiwanese businessmen could continue making money on the Mainland without disruption. Others favor the status quo so that Taiwan can continue to refine its democracy to serve as an example to pull China towards freedom. Both these groups of status quo supporters favor engagement with China. The entrepreneurs do so to continue making money in the Mainland gold rush. The “freedom exporters” (a phrase ironically coined by Karl Marx; Link) do so in order to serve as examples of free Chinese living in the midst of the people of the PRC.
The concrete results of these policies are the large investment transfers mentioned above and the large number of Taiwanese businessmen living on the Mainland. For example, there are approximately 50,000 businessmen and a total of 500,000 Taiwanese living in China. These people are a large moneyed constituency which has a strong interest in protecting their investments and maintaining their access to the Mainland market. Changes in the status quo, especially a status quo that is working to make money would be upsetting to this group, and would be resisted.

There is nothing uniquely “Taiwanese” to this point of view. Businessmen everywhere in the world prefer governments to have policies that encourage business. What makes the point of view of the Taiwanese businessmen notable is how it dovetails with PRC political and foreign policy interests. The PRC has effectively given up the policy of military coercion and has instead adopted what might be called the “marlin” policy.

When a deep-sea fisherman hooks a marlin, the fisherman allows the fish to take as much line as it wants, while at the same time backing the boat toward the fish and reeling the line in when he can. The marlin will jump high out of the water, thrash around, swim wildly away at high speeds, yet all the while, the fisherman’s boat is slowly, quietly moving toward the fish, as the line is patiently reeled in. The end result is a tired fish in the boat, waiting to be made into a trophy.

The PRC has used this policy to great effect in the last few years. While the examples are many, four stand out. These include: an increased deployment of offensive ballistic missiles aimed at Taiwan, a commitment to accept Generally Accepted Accounting Practices (GAAP), relentless pressure to isolate Taiwanese diplomats and an absolute refusal to acquiesce to Taiwan’s participation in international organizations. First, the missiles.

China has approximately 600+ ballistic missiles aimed at Taiwan. These missiles represent the combined explosive power of almost 20 fully laden B-52s. China has put two Sovremenyy Class Destroyers to sea, each with missiles capable of sinking an aircraft carrier. China has upgraded its coastal submarine fleet and its air force. Day by day, China becomes a more lethal adversary. Yet in the face of this threat, Taiwan has cut its defense expenditures, a move which is deeply worrying to the US. 14 Feb 2003 Link

Coupled with this increased actual threat has been a reduction in the level of overt threatening rhetoric. While it is probably not good to characterize the Chinese policy as a “charm offensive,” perhaps it is better to label it a “lack-of-bile offensive.” Even though Taiwan authorities have consistently made pronouncements in the last few years that would have caused Beijing to rattle sabers in response, since the ascension of Hu to the Premiership seven months ago, Beijing instead has reacted with measured statements read by low-level staffers. Most recently, the Ministry of Foreign Affairs announced that passports would include the word “Taiwan” on the cover. The PRC Foreign Ministry put out a bland statement in response:

The Taiwan authority is using the so-called 'official name' as an excuse, always changing their tactics, to pursue ‘gradual Taiwan independence.’ This kind of motherland-splitting base conduct is unpopular and doomed to failure. 13 Jun 2003, MSNBC Link

The face Beijing presents to the world is calm, while at the same time, China increases arms deployments threatening to Taiwan without fanfare. Yet still, even knowing Beijing as it does, Taiwan cuts its defense spending. Has Taipei also been lulled by China’s relative calmness? Or is there just no more money for defense? The answer is probably “both,” with China’s new found accounting practices hastening the capital flight away from Taiwan’s coffers and toward Mainland industry.
China accounting standards have long been plagued with a troubling lack of transparency. The accounting problems which hinder financial transparency in China as noted by the World Bank include: the presence of guanxi, stock exchange listing rules demanding profitability, the shortage of trained accountants, and a rudimentary legal framework, among others. Link

The PRC government recognized these deficiencies and worked with foreign firms to bring China’s accounting standards into compliance with international standards. Great strides have been made in this regard since 2001, increasing investor confidence. It is no coincidence that investment in China from Taiwan has increased significantly in this time period, further strengthening the links between Taiwanese business, and the location of their money, China. Link

In the diplomatic sphere, China has quietly been able to scuttle visits by Taiwan diplomats to numerous countries around the world. Thailand, Philippines, Indonesia have all felt the pressure from China and rescinded invitations to Taiwan diplomats in the past year. Most disgraceful was the treatment afforded President Chen by Belgium in March of this year. These episodes highlight the fact that China is willing to threaten anyone with undiplomatic language to thwart Taiwan’s leadership. The fact that small democracies in Asia submit to this type of pressure is regrettable but understandable. But why Europe would show such pusillanimity bears more scrutiny.

The text of the letter written by China’s ambassador to the EU, Guan Cheng Yuan, is undiplomatic but on the surface, not overly threatening:

This not only runs against the One China policy that the EU sticks to but will also be seen by the Taiwan independence force as a kind of connivance and support for their attempt to separate China. If the invitation is extended, it will deeply hurt the feelings and the national pride of the Chinese people and gravely undermine the China-EU relations. (17 Mar 03, Agence France Presse Link

The language here is not particularly bellicose, so how to explain the EU’s cowardice? Possible explanations include: 1) The EU is full of cowards afraid of any controversy and therefore susceptible to even mild threats. 2) China made even more explicit economic and/or diplomatic threats behind the scenes, in an effort to prevent Chen Shui Bian from traveling. If the second explanation is the case, then it is clear that China will do all it can, especially behind the scenes, even risking the ire of the large, important European trading bloc, simply to further isolate Taiwan.

China has also been adamantly opposing Taiwan’s entry into international bodies. The situation with the World Health Organization (WHO) is particularly illustrative. It would seem that in the midst of a worldwide outbreak of a killer disease that was hitting Taiwan particularly hard, China would not oppose Taiwan from simply “observing” WHO activities. Yet China came out forcibly against even this simple humanitarian gesture and was able through pressure to prevent the WHO from seating Taiwan. This callous disregard for Taiwan makes sense when it is seen as part of a larger plan to exhaust Taiwan and make it more amenable to reunification. China has been able to prevent the movement of Taiwan’s leadership and has thwarted Taiwan’s entry into even humanitarian organizations. Taiwan is arguably more isolated now than it has ever been, while China continues to rise in worldwide esteem from its post Tianamen depths. Now, go back to the marlin analogy; the fish thrashes to no avail, only tiring itself more quickly and allowing itself to be captured. However, if the fish would cut the line with its swordlike nose, it could escape. Taiwan screams and rages that it is prevented from joining WHO, that its diplomats cannot travel and that it is hemorrhaging capital to China. Taiwan continues to work through accepted diplomatic channels but China has become ever more adept at countering Taiwan’s efforts. Realistically, there is only one thing for Taiwan left to do that would ensure its equitable treatment in the world, and that is to make a decision between independence and reunification.


Regardless of how much many in Taiwan may wish to continue with the status quo, the status quo is no longer tenable. The status quo requires good faith on both sides of the Straits, but it is apparent that the PRC has decided they prefer something in variance from the status quo. Taiwan should consider taking a similar decision. Taking such a decision would require great courage, but as mentioned in the introduction, we are now in an era where statesmen display courage and are rewarded with great, fortuitous changes in their nation’s fortunes. The world is also in an era where democracies are ascendant; Eastern Europe is democratizing at a rapid rate, the Middle East now has three new democracies, and South America has repudiated would be dictators in Venezuela and Argentina.

Further, there is little likelihood that China will alter its “marlin” policy towards Taiwan; the policy has proved too effective. The Taiwan’s response to the policy has played into the hands of China, exhausting the Taiwanese, and has made reunification on China’s terms approach ever closer. Continuing of the current path will result in yet more instances where Taiwan is thwarted, and its small allies gradually picked off by China until Taiwan is utterly isolated and completely exhausted. Most ominously, it is probably only a matter of time before China compels the WTO to change Taiwan’s status. As displayed in the Chen-EU Visa situation, the one thing that international bureaucrats lack when standing up to China, is the courage to stand up to China.

The current trend in the world coupled with China’s contrary intransigence points to an obvious course of action for Taiwan, if Taiwan wants to maintain the freedom to dictate its own way in the world, and that course of action is independence. Scholars recently echoed this thought, that the world can no longer abide “strategic ambiguity” but will accept the PRC interpretation of it in the absence of anything more compelling from the government of Taiwan:
“Unfortunately, the world would not play along with the game of inconsistency." The scholar Hu Ching-Shan, recommended the country add to its Constitution a clause - saying unequivocally Taiwan and China are two separate states - as the first step to cast off the inconsistency. (16 June 2003, Etaiwan News Link

And soon, the Taiwanese people will given the opportunity to cast off this inconsistency. The upcoming presidential election will have the Pan-blue (Guo Ming Dang, or KMT and the People First Party or PFP) ticket of Lien Chan and James Soong against the Democratic People’s Party (DPP) ticket of current President Chen Shui Bian. The Pan Blues have made no secret of their desire for reunification with China whereas the DPP was originally formed as a pro-independence group. For the core supporters of these two parties, the issue of cross-strait relations is paramount. The Pan Blue faithful demand that their representatives speak soothingly of eventual reunification. The DPP faithful want talk of independence. However, the key to the election will be the undecideds in the middle who make up perhaps a 1/3 of the electorate votes on economic issues. Both sides will work hard to keep their base supporters happy, while promising economic benefits to those in the middle.

Who will win is not clear. But what seems clear is that in March voters in Taiwan will present the world with a clear statement on how Taiwan perceives itself. And the voters of Taiwan must not lie to themselves but should recognize the facts. A vote for the Pan Blues will mean Taiwan prefers the status quo which will inexorably lead Taiwan into the “boat.” A vote for DPP will signal the world that Taiwan is prepared for independence.

The key is the reaction of the US. The US should unambiguously say to the world that it will respect whatever decision that Taiwan makes for itself, a policy consistent with America’s recent championing of democracy around the world. And that if Taiwan decides on closer integration with China, the US would find this as acceptable as independence. Such a signal from the US would allow Taiwan to make a decision based on the merits and on Taiwan’s own desires.
China’s reaction to such a democratic expression of will should it go against their interests, is unclear. There is a real chance that China would lash out with their missiles and aircraft, perhaps even try some kind of invasion. But scholars are now saying what even casual observer have noticed, the current US President will not allow dictators to menace democracies: Koh Sekai a Japanese professor at Providence University noted that “the U.S. would not sit around watching China bully neighboring states.” 16 Jun 03 Etaiwan News Link The PRC leadership knows this about the US as well. The leadership of China may well decide that militarily confronting Taiwan and risking a clash with US forces would be so fraught with danger to their own grip on power that the better course of action would be to continue the “marlin” policy as if nothing had changed.

There should be no mistake, Taiwan is in a decisive era of its history. When its people go the polls in March, they will be deciding on the direction Taiwan will take for the immediate future and for their children’s future. Making such a decision, regardless of the path chosen, requires real courage. Taiwan must not shirk from this duty.
The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of his country; but he that stands NOW, deserves the love and thanks of man and woman. Tyranny, like hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph. What we obtain too cheap, we esteem too lightly.
Thomas Paine, “American Crisis”