The Australia-China Chamber of Commerce and Industry of New South
Newsletter No. 23
10 July 2000
ACCCI ELECTRONIC NEWSLETTER NO. 23
The focus for this Newsletter is the Taiwan
Issue. Many Australians are
perplexed by recent cross-strait developments, and, on the basis of recent
media reports, many others are equally perplexed. Since early this year, the issue occupied a considerable amount
of attention in both Beijing and Taipei.
Its continuation elevates concerns about trade and investment, as well
as regional security. We direct our
attention mainly at the sources of perplexity.
The original settlers in Taiwan (more than 12,000 years
ago) were part of the Malayo-Polynesian group of people who are now referred
to by anthropologists as Austronesians.
Migration from the Chinese mainland began around 500 A.D.
Though the original name, Formosa, was given by the
Portuguese, Dutch traders were the first Europeans to claim the island in
1624 and used it as a base for trade with Japan and the China coast. Two years later, the Spanish established a
settlement on the northwest coast and remained until 1642 when they were
driven out by the Dutch.
Following the Manchu invasion of the Chinese
Empire, which brought an end to the Ming Dynasty, substantial migration
occurred mainly from Fujian Province and Guangdong Province. In 1664, Zheng Chen Gong, known in the
West as Koxinga, retreated from the mainland with Ming loyalists, expelled
the Dutch and occupied the island.
After attempts to retake the mainland failed,
Koxinga's followers submitted to the Qing Dynasty in 1683. Migration from the mainland increased
during the 18th and 19th centuries and ethnic Chinese soon outnumbered the
aboriginal population. Taiwan was
initially a prefecture, then divided into a north and south prefecture and
became a province in 1887. In 1895, a
weakened Imperial China ceded Taiwan to Japan in the Treaty of Shimonoseki
following the first Sino-Japanese war.
During its 50-year rule, Japan went to considerable
length in developing Taiwan's economy, mainly in agriculture, food processing
and the extractive industries.
Efforts were also made during the period for a
"Japanisation" of the island, including compulsory Japanese
education and forcing residents of Taiwan to adopt Japanese names.
At the end of World War II in 1945, Taiwan and the
Penghu Archipelago reverted to Chinese rule under the Cairo Declaration. During the immediate post-war period,
Chinese Nationalist People's Party (which is spelled as Kuomintang according
to the Wade-Giles system of Chinese romanisation and generally abbreviated as
KMT) administration on Taiwan was considered to be repressive and corrupt,
leading to local discontent.
Anti-mainlander violence flared on 28 February
1947, prompted by an incident in which a cigarette seller was injured and a
passer-by was killed by Nationalist authorities. Rioting followed and thousands of Taiwanese were killed by
Nationalist troops. This is referred to as the "2-28 Incident".
When China's civil war ended in 1949, about two
million refugees, consisting mainly of KMT officials, military and business
supporters, fled to the island that was then occupied by about 5.7 million
"native Taiwanese". The
People's Republic of China was founded on 1 October 1949. Shortly after that, the Beijing government
informed the United Nations that the KMT authorities had "lost all
basis, both de jure and de facto, to represent the Chinese people," and
therefore had no right to represent China.
In December 1949, Chiang Kai-shek established a
"provisional" KMT capital in Taipei, but on 5 January 1950,
President Truman issued a statement saying that the U.S. and other Allied
countries recognised China's exercise of sovereignty over Taiwan Island in
the four years since 1945.
With the outbreak of the Korean War in June 1950,
the U.S. government allocated military forces to support the KMT against a
possible invasion from the mainland.
As is generally recognised, Truman believed at the time that the
invasion by North Korean forces across the 38th parallel was a precursor to
other planned invasions in both Asia and Europe. The status of the People's Republic of China was declared
"uncertain" at least until its role in these "planned
invasions" could be deduced.
The only Allied power to establish diplomatic
recognition of the Beijing government between October 1949 and June 1950 was
the U.K. The Scandinavian countries
and Switzerland also recognised the new regime, but they were not considered
among the "powers".
The Chifley government in Australia had intended to
do so, but lost the election in December of 1949. The Menzies government showed some interest in establishing diplomatic
relations after the Geneva Conference on Indochina, but the U. S. discouraged
The Taipei government retained a seat in the United
Nations until 1971. During that period,
it was officially known as the Republic of China, which was the designation
of the mainland government when it was under KMT control. Unofficially it was referred to in the
West as "Nationalist China" and the People's Republic of China was
called "Red China" or "Communist China". This suggests that the West retained an
unofficial view of "two Chinas", but this was out of synch with the
The Taiwan Chinese View
The KMT in Taiwan established a National Assembly consisting
of representatives of mainland provinces, and claimed to be the sole
legitimate government of all of China.
The representatives of mainland provinces were those who were elected
in the 1947-48 period and held their seats "indefinitely".
The duties of the National Assembly were to choose
the president and to amend the constitution.
The principal lawmaking body is the Legislative Yuan and was formed in
the late 1940s in parallel with the National Assembly. The KMT authorities also established a
provincial government for Taiwan, consisting of a governor, vice governors
and administrative units. Municipal
governments existed for Taipei and Kaoshiung.
This lasted for more than 40 years, thus continuing
after the United Nations General Assembly adopted Resolution 2758 at its 26th
session in October 1971, which expelled the representatives of the Taiwan
authorities and restored the seat and all the lawful rights of the government
of the People's Republic of China in the United Nations.
Why did the Taiwanese persist in the view that they
represented all of China? The simplest answer is that neither of the key
elements in the KMT-imposed rule over the Taiwanese could be easily removed
without questioning the legitimacy of that rule. A government-in exile was
one of those elements. This perpetuated the hostilities with the mainland and
gave rise to the second element, namely, the role of the KMT in defending the
The Mainland View
Since 1949, the Beijing government has been
consistent in stating that the Central People's Government of the PRC
replaced the government of the Republic of China to become the only legal
government of the whole of China, including Taiwan and the Penghu
Moreover, the Beijing government underscored the One-China
Principle as followed by the Taiwan government. In October 1958, when the
People's Liberation Army was engaged in the battle to bombard Kinmen Island
(near the mainland coast), Chairman Mao Zedong declared to the Taiwan
authorities, "There is only one China, not two, in the world. You agree
with us on this point, as indicated in your leaders' proclamations."
In January 1979, the Standing Committee of the
National People's Congress issued a "Message to Taiwan
Compatriots", pointing out that "the Taiwan authorities have always
stood firm on the One-China position and opposed the independence of Taiwan.
This is our common stand and our basis for co-operation."
This consistency nevertheless had a few anomalies.
Despite the fact that foreign trade between Taiwan and the mainland did not
exist, and could not exist since Taiwan was part of China, the Beijing
authorities granted tariff concessions to goods made in Taiwan. Nations that
established diplomatic relations with the People's Government of China agreed
to handle their relations with Taiwan within the One-China framework, but
that framework did not provide a way to do so.
In June 1990 the Council of Grand Justices in Taiwan
mandated the retirement, effective December 1991 of all remaining,
"indefinitely appointed" members of the National Assembly and other
bodies. In that same year, the authorities on Taiwan abandoned their claim of
governing mainland China, stating that they do not "dispute the fact
that the PRC controls mainland China”.
Other changes in the Taiwan government occurred at
the same time, and are relevant to recent events. The second National
Assembly, elected in 1991, was composed of 325 members. The majority was
elected directly; 100 were chosen from party slates in proportion to the
popular vote. This National Assembly amended the constitution in 1994, paving
the way for the direct election of the president and vice president that was
held in March 1996.
The third National Assembly, also elected in March 1996, comprised 334 members serving 4-year terms. The National Assembly's powers now are to amend the constitution, recall or impeach the president and the vice president, and ratify certain senior-level presidential appointments.
As the same time that the National Assembly took
action in 1994 to allow for the popular election of the President, the
Legislative Yuan passed legislation to allow for the direct election of the
governor of Taiwan Province and the mayors of Taipei and Kaohsiung
Municipalities. In a move to streamline the administration, the position of
elected governor and many other elements of the Taiwan Provincial Government
were eliminated at the end of 1998.
Increased democratisation and a less complex system
of government in Taiwan stemmed from several sources. Internally, the
anachronistic views displayed by Chiang Kai-shek began to change when his
son, Chiang Ching-kuo took over as president in the 1980s, and the pace of
change picked up after martial law was lifted in 1987. When Lee Teng-hui
succeeded Chiang Ching-kuo as president on 13 January 1988 the conditions
were set for the changes mentioned above.
Externally, China's "open door" policy
attracted many nations away from Taiwan, as diplomatic recognition of the
People's Republic of China required breaking off diplomatic relations with
Taiwan. Thus, Taiwan became increasingly isolated. For example, when an
outbreak of serious viral disease struck Taiwan's children, the World Health
Organisation, under PRC pressure, provided no assistance.
Economic relations between Taiwan and the mainland
nevertheless flourished. Following the sharp drop in foreign direct
investment into mainland China after the Tiananmen Square incident, the Beijing
authorities solicited and obtained substantial investment from Taiwan.
Co-operation increased together with greater economic interdependency, but
the One-China Principle continued to dominate relations between the People's
Republic of China and all other nations.
Before the 1986 elections in Taiwan, many
"non-partisans" grouped together to create Taiwan's first new
political party, the Democratic Progressive Party (DPP). Despite the official
ban on forming new political parties, Taiwan authorities did not prohibit the
DPP from operating, and in the 1986 elections DPP and independent candidates
captured more than 20 per cent of the vote.
The DPP membership is made up largely of
"native Taiwanese”. Its platform includes outspoken positions on some of
the most sensitive issues in Taiwan politics. For example, the DPP maintains
that Taiwan is an entity separate from mainland China, in contrast to the KMT
position that Taiwan and the mainland, though currently divided, are both
part of "one China."
In sharp contrast to the tenets of both KMT and
mainland policy, a number of ranking DPP officials openly advocate
independence for Taiwan. The recent downplaying of Taiwan independence by the
DPP, as a party, led to the formation by hard-line advocates of a new
political party called the Taiwan Independence Party in December 1996.
Perhaps as a response to these changing views
within Taiwan, Lee Teng-hui softened the pronouncement of the One-China
Principle and used phrases such as "two governments", "two
reciprocal political entities", "independent sovereignty" for
Taiwan and "state-to-state" negotiations. Some observers viewed
this as a means for acquiring greater status in cross-straits negotiations.
Taiwan was different from Hong Kong and Macao in
its relative stature. Although Taiwan was never classified as a separate
nation by the rest of the world, the Taiwan government was treated as a
national government from 1949 to 1973. This seemed to deserve special
If Lee Teng-hui's intentions were to preserve KMT
influence, they failed in May of this year when Chen Shui-bian, the DPP
candidate was inaugurated as president, thus ending 50 years of rule by the
KMT. Presumably, to many Taiwanese, and perhaps to others as well, Lee
Teng-hui was not fully convincing in departing from the traditional One-China
Principle. Additionally, the renovation within the KMT left it severely
divided, thus making it easier for the DPP to gain more control. All this
occurred despite increasingly stronger statements from the mainland.
On 1 May 1995, President Jiang Zemin put forward
eight propositions on the development of relations between the two sides of the
Taiwan Straits. The fundamental proposition stated: "Adhering to the
One-China Principle is the basis and prerequisite for peaceful
The propositions asserted that the state of
hostility between the two sides of the Straits had not formally ended. In
order to safeguard China's sovereignty and territorial integrity and realise
the reunification of the two sides of the Straits, the Chinese government
expressed the right to resort to any necessary means.
Jiang Zemin's statement also attempted to take
political reality into account and "out of consideration for the Taiwan
authorities' request for the negotiations to be held on an equal
footing", suggested that negotiations should be held between the Chinese
Communist Party (CCP) and the Chinese KMT on a reciprocal basis. It
nevertheless gave the appearance of talks between central authorities and
provincial authorities, and this was not acceptable to non-KMT voters.
The "five nos" promised by Chen Shui-bian
in his inaugural address were: no formal declaration of independence, no
changing of Taiwan's official name (the Republic of China to the Republic of
Taiwan), no revision of the constitution to establish a
"state-to-state" relationship across the Taiwan Strait, no
referendum on Taiwan's independence and no abolition of the National
Reunification Council. These were, however, conditional upon: "as long
as the Chinese Communist Party regime has no intention to use military force
Although the views expressed by media commentators
seem to reflect prior judgments about Taiwan versus the PRC, as much if not
more than recent statements, there is nevertheless a growing belief that Chen
Shui-bian, in particular, is seeking a means to end the stalemate of "no
talks". However, he apparently will not agree to adherence to the
One-China Principle prior to such "talks" since part of the reason
for the "talks" is to clarify the content of the One-China
It is important to note that the concept of a state
as the "set of institutions that possess the means of legitimate
coercion that is exercised over a defined territory and its population"
is a Western concept. Allowance is made for sub-national governments, but in
all such cases, the national government necessarily has powers defined either
by a constitution or by law to exercise specified "legitimate
coercion" over the sub-national constituencies.
Thus, to Westerners, the "state" and
"nation" are inextricably linked in the sense that one implies the
other. The traditional Chinese view differs. A "nation" is more
broadly defined in terms of the people and territories those people traditionally
occupy, as well as what those people influence. For example, for most of the
Chosen Period (Yi Dynasty from 1388 to 1910) the Korean peninsula was
considered part of China, in the "tribute" sense, with China as a
"big brother". No "legitimate coercion" was exercised and
Korea was considered to be independent.
Although Taiwanese are indeed ethnic Chinese, they
have become less traditional than most mainlanders in terms of political
philosophy. It is not surprising therefore that the Beijing authorities
insisted on seeing the Chinese version of Lee Teng-hui's
"state-to-state" remarks to be certain what he meant. Unfortunately
for the traditional Chinese view, international institutions are defined
principally by Western traditions that, as mentioned above, link "state"
The ultimate solution to the "Taiwan
Issue" will most probably be something between the two
"traditions" and it is difficult at this point to predict what that
will be. Western commentators are likely to continue getting media coverage
in describing the rhetoric as "theological" and
"metaphysical". They may also receive some attention in suggesting
that China and Taiwan form a commonwealth in a way that is similar to the
British Commonwealth. None of that will be constructive, however, since it is
irrelevant to the "Taiwan Issue".
The solution to the Taiwan Issue is obviously one
that must be worked out between the government in Beijing and the government
in Taipei. There is little we can do to assist, but at least we should avoid
making it more difficult for them.
"Background Notes: China", August 1999,
released by the Bureau of East Asian and Pacific Affairs, U.S. Department of
State; available at: http://www.state.gov/www/background_notes/china_899_bgn.html.
Background Notes: Taiwan", August 1999,
released by the Bureau of East Asian and Pacific Affairs, U.S. Department of State;
"History of Constitutional Revisions in the
Republic of China", Foreign Policy Institue; available at: http://newtaiwan.virtualave.net/constitution07.htm.
"Taiwan's New President: One If and Five
Nos", by Harvey Sicherman, Foreign Policy Institute; available at: http://newtaiwan.virtualave.net/fpri03.htm.
"The One-China Principle and the Taiwan
Issue", released by the Taiwan Affairs Office and the Information Office
of the State Council, reproduced by New York Times, 21 February 2000.
"China's Threat to Taiwan: Likelihood of
Attack Deemed Low", by Craig S. Smith, New York Times, 7 March
"What Does 'One China' Mean", by Frank
Ching, Far Eastern Economic Review, 11 May 2000.
"Banking on China: Taiwan's Evergreen Group
Has Lots Riding on Cross-Straits Peace", by Allen T. Cheng, Asiaweek,
12 May 2000.
"Inspired by Korean Peace Talks, Taiwan Makes
Overture to China", by Mark Landler, The New York Times, 21 June
Taiwan Diary #11: Forgetting and Remembering",
by Dr Scott Simon, ChinaOnline Commentary, undated.
"Confusing the Nature of War Is Blocking
National Reunification", People's Daily, 21 June 2000.
"The Master Stroke of Taiwan's New
President", by Ambassador Harvey Feldman, Heritage Foundation; reprinted
in ChinaOnline, 26 June 2000.
"The 'One China' Bandwagon's Back in
Town", by John Tkacik, ChinaOnline Commentary, 29 June 2000.
New York Times: http://www.nyt.com
Far Eastern Economic Review: http://www.feer.com
People's Daily: http://www.peopledaily.com.cn
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