Taiwan Strait Ties

Ralph Murphy

(4/17/2014) Taiwan, or the Republic of China (ROC) as it has historically been known, is a "cast off" from its once venerated role as a United Nations Security Council member. Today it is recognized as a nation by only 21 of the United Nations’ 193 member countries. It is not recognized by the United Nations and the United States officially severed ties in 1979 in favor of the Peoples Republic of China (PRC or China). China took Taiwan’s UN Security Council seat and associated duties in 1971.

Protests in Taiwan recently erupted on 18 March in response to "fallout from" an Economic Free Trade Deal (EFTD) with the People's Republic of China (PRC) that the Democratic People's Party (DPP), founded in September 1986. Taiwan has argued that this is a further step towards a territorial annexation by China. The protestors stormed the Taipei Parliament building, and appear to have had friends inside the Taipei government because they remain inside Parliament as of now.

The Kuomintang, or KMT, has ruled Taiwan since fleeing mainland China's civil war in 1949. They are separated from the mainland by the formidable Taiwan Strait- an area that was never seriously threatened with military takeover by China. As an "aircraft carrier" against the Chinese Communists it was widely supported by the West as the legitimate government of China. Taiwan even ascended to a UN Security Council seat in 1946 as the civil war was still raging on the mainland. The island continued in that capacity even after the Communist takeover of the mainland in 1949.

Chinese Communists were relatively insular compared to their Russian counterparts. They sought to consolidate their revolution at home, always claiming Taiwan to be their territorial possession, but with help of extensive trade ties with western powers- some of which still exist today. They never posed a serious danger to Taiwan militarily- other than to threaten the use of missiles against them.

. The traditional Western defense relations with Taiwan, eroded dramatically as the nation fell from its leadership role at the UN to that of a political non-entity. Taiwan met multiple UN requirements for statehood, but was no longer considered as such by the vast majority of UN member nations.

China’s acquisition of Hong Kong and Macau from their colonial rulers were the result of long term treaty arrangements. Taiwan had understandings but was legally abandoned as a recognized nation by most of the world, to include the United States that severed diplomatic recognition with Taipei in favor of Beijing in 1979.

While legally abandoning the concept of Taiwan as a sovereign entity, the Americans continued to have considerable economic dealings with this capitalist area, especially as the Chinese pro- market reforms in the post Mao Zedong era were embryonic and very slow-paced. Taipei had backers in the US government to include Congress, which passed the "Taiwan Relations Act" of 1979 to express solidarity with the people there despite the diplomatic barriers. The act allowed that the Americans "maintain the capacity of the US to resist any resort to force or other forms of coercion that would jeopardize the security or the social or economic system of the people of Taiwan."

Taiwan was never subsequently attacked following passage of the bill, and they continued as a valuable ally in the region given their dynamic economy and pro Western orientation. That is- until China’s economy became largely capitalist in the ensuing years. The Chinese government brutally suppressed an uprising at Tiananmen Square in June of 1989 that would have brought a conventional, relatively democratic government to power. The Communist leadership continues to this day, but serves capitalist, business interests in an unlikely alliance that is certain to fail. For now, the economy is working as it generated annual earnings of $9.4 trillion in 2013. This is second only to the United States that earned an estimated $17.4 trillion last year. Unfortunately, the American government's national debt is also at about the level of the nation’s annual earnings, and China owns $1.28 trillion of it in Treasury bills.

Since President Carter's administration in the late ‘70s, the US has quietly drifted toward closer, economic ties with Beijing. This, despite a World Bank finding that over 150 million Chinese live below the international poverty line of $1.25 a day income. Subsidizing them is another source of apprehension for the Taiwanese who enjoyed a robust GDP of $474 billion for a population of 23.3 million in 2013.

Despite Beijing and Taipei's bellicose, rhetorical relationship, they have strengthened their ties in recent years. This, as traditional powers have lost interest in Taipei or have been crowded out by the Chinese. In December, 2008 shortly after winning the Taiwanese Presidential election, Ma Ying-Jeou called for "military confidence building measures" between Taiwan and China. His call was warmly received by Chinese President Xi Jintao who allowed for "engagement and exchange on military issues and exploratory discussions on establishing a mechanism of mutual trust for military security."

The close military ties were followed in June, 2010 by the Economic Cooperation Framework Agreement (ECFA), signed in the southwest Chinese city of Chongqing. This pact boosted bilateral trade between the two areas, and was considered the "most significant agreement since the two sides split after the Chinese civil war in 1949." 539 Taiwanese products enjoyed tariff reductions in China as a result of the agreement, while 267 goods were similarly treated in Taiwan. $ 13.8 billion went to Taiwan, $ 2.68 billion to China. Eleven service sectors in China were opened to the Taiwanese, while seven Chinese units gained access to Taiwan. The agreement covered primarily banking, securities, insurance, and hospital enterprises.

"Tens of thousands" immediately protested in Taiwan against the agreement. It was, however, promoted by the hitherto stalwart, nationalist KMT leadership. The "Cross Strait Service Trade Agreement" (CSSTA) was a major follow up to the ECFA, and "further opened cross strait (economic) exchanges." It was signed on 21 June, 2013 in Shanghai by representatives of the two regions.

If the Cross Strait Service Trade Agreement had been promoted by the opposition Democratic Progressive Party, it was unlikely to have had a chance. However, it benefited from dealings with the ruling Kuomintang- the only power structure to have retained Taiwanese leadership. The Democratic Progressive Party, espousing generally liberal issues as an opposition element called for protests against the measure, and created the "Sunflower Student Movement" made up of student and civic groups. They seized the Parliament in Taipei on 18 March and appear to have had friends within the police and military as the area is still occupied despite scuffles and arrests.

Taiwan's position as a landmass without additional international legal status is unlikely to endure the apparent trend of the ruling Kuomintang towards rapprochement with Beijing. Taiwan has drifted from a pinnacle of international power as a Security Council member, to the status of a political football that Beijing appears to control. Taiwan dropped the ball by failing to adapt to the changing times. China has recovered their fumble.

Ralph Murphy is a former member of the CIA Headquarters Staff in Langley, VA.