Foreign Policy Research Institute A Nation Must Think Before it Acts U.S. Policy Toward Taiwan: Sustaining the Status Quo

U.S. Policy Toward Taiwan: Sustaining the Status Quo

The first several months of the George W. Bush administration have underscored a simple but vexing truth about the United States’ Taiwan policy: the basic goal is deceptively easy to state but crafting the means for achieving it is devilishly difficult.

The aim of a sensible policy is clear: the U.S. national interest and American values favor preservation of the fundamental status quo. Measured against a baseline of a prosperous and increasingly democratic Taiwan that is de facto (although not de jure) independent from a still- reforming and increasingly powerful and assertive PRC, imaginable big changes would be bad for the United States. That much is obvious and must be the lodestar for U.S. policy.

Under current and foreseeable conditions, the basic goal has two relatively clear but general corollaries: (1) do not give Beijing reasons to coerce Taiwan— either by allowing doubt about the U.S. commitment to preserving Taiwan’s autonomy or by threatening to cross Beijing’s threshold of intolerable “interference” to “separate” Taiwan from China; and (2) do not give Taipei reasons to more nearly approach a declaration of formal independence— either by creating excessive confidence that the United States will stand fully behind Taiwan in a cross-strait crisis produced by “unprovoked” moves toward full separate statehood or by creating excessive worry about the United States’ commitment to Taiwan such that moves toward a claim of de jure independence look like a reasonable gamble in perilous circumstances.

It is far harder to discern and implement specific policy choices and positions that advance the relatively uncontroversial end of preventing erosion of the status quo, as we were reminded during the new presidency’s first 100 days by controversies over arms sales to Taiwan and the decision to replace the annual arms sale review with ad hoc assessments of Taiwan’s defense needs, the multilateral wrangling over Taiwan’s possible inclusion in a planned Theater Missile Defense (TMD), President Bush’s statement in an interview that the United States would do “whatever it takes” to help Taiwan defend itself, and the decision to allow Taiwan’s President Chen Shui-bian to make an ostensibly private but exceptionally “presidential” visit that included meetings with members of Congress and other activities exceeding the polite fiction of a transit stop (and to do so without the concededly ineffective fig leaf deployed for then-President Lee Teng-hui’s “personal” trip to attend a Cornell reunion in 1995).

American Values and Interests

The cross-strait status quo serves American strategic interests. Although the prowess of Taiwan’s military is often exaggerated and its effectiveness is undercut by the narrow limits that the politics of U.S.-PRC relations impose on U.S.-Taiwan defense cooperation and integration, a friendly, autonomous Taiwan with significant (though limited) capacity to defend itself remains a substantial asset for the United States in the Western Pacific. In international relations as in real estate, location matters. And there are few locations more important than one that lies between Korea/Japan and Southeast Asia and just off the Chinese coast.

True, the great strategic value that Taiwan held for the U.S. during much of the postwar era has declined substantially and the downside of support for Taiwan is real. Risks to international stability emanate from America’s long-standing commitment to Taiwan’s security. That commitment, born in the 1950s, was reentrenched in the Taiwan Relations Act (TRA), punctuated recently by the show of naval force during the Clinton years and by periodic weapons sales, including most dramatically those of the Bush administrations in 1992 and 2001. It was preserved despite the apparent accommodations to PRC positions incorporated in the three U.S.-PRC Joint Communiques, President Clinton’s “three nos” (no support for Taiwan independence, for two Chinas or one-China, one-Taiwan, or for Taiwan’s membership in states-only organizations) and carefully crafted policy statements embodying a policy of “strategic ambiguity” (which appears to survive as the official position despite comments by the new president that some saw as a shift toward a clearer commitment to defend Taiwan in a broader range of circumstances). As it has been for the nearly three decades since Sino-American rapprochement began, the Taiwan question remains the single greatest irritant and the most likely focus of armed conflict in what is arguably becoming the world’s most important bilateral relationship. The issue of recovering Taiwan— or at least not “losing” it— is among the most powerful spurs to a more aggressive PRC nationalism, military spending and force modernization. While there is much posturing and puffery in Beijing’s outrage over American interference in what it deems China’s internal affairs, much of the offense and the purported threat to the PRC’s security and national interest is genuinely believed, or at least reflects a position that no leader in Beijing can abandon.

And that is the point. While the costs of a precipitous and lasting deterioration in U.S.-PRC relations weigh decisively against Washington’s leaning too far toward Taipei, Beijing’s indignation and intermittent saber-rattling over American “interference” are eloquent testimony to an important fact: a de facto independent and unreconciled Taiwan is both an important measure and a non-trivial source of constraints on the PRC’s emergence as a dominant or highly assertive regional— or super-regional— power. And, given what has long been understood to be the U.S. position with respect to Taiwan, maintaining this status quo preserves confidence in American commitments throughout the region and gives American allies in East Asia less cause for serious reassessment of regional power arrangements.

The status quo also is the best situation we can reasonably expect for the advance of American values, including democracy, human rights, the rule of law and economic markets. Over the last two decades and within the international space created by Taiwan’s U.S.-backed de-facto-but-not-de-jure independence, Taiwan has changed dramatically, from a one-party dictatorship that jailed and sometimes killed political opponents into a contentious multiparty democracy (albeit one plagued by fractiousness and corruption) in which the ruling party has ceded offices after losing elections at ever higher levels, culminating in the transfer of the presidency last year. Taiwan’s human rights record no longer draws significant criticism. The economic miracle that produced rapid industrialization and a meteoric rise in the global rankings of per capita income has continued— despite the Asian financial crisis and the current economic slump. And it has done so under policies that have become increasingly market-oriented internally and internationally.

Despite the grist that the Taiwan question has provided for the mills of relatively reform-unfriendly elements in PRC politics, the cross-strait ties that have burgeoned under the status quo have contributed substantially to the advancement of U.S. values and interests in the U.S.-PRC relationship as well. Taiwanese investment and trade have been vital and escalating sources of rapid economic growth— specifically, of market-based and internationally open growth— on the mainland, especially in Shanghai, Fujian, and other areas along China’s southeast coast. With economic ties have come flows of people— including millions of visitors and tens of thousands of long-term residents— and, with them, liberal ideas about political and social order. Such individual contacts and the broader demonstration effect of Taiwan as a Chinese example of democracy, human rights, a market economy and the rule of law are forces for change in the PRC that U.S. policy-makers would be unwise to discount. At the same time, PRC-Taiwan economic ties have served U.S. strategic interests. They have increased the PRC’s stake in the existing international order by accelerating China’s integration into the global economy and giving Beijing material incentives not to behave in ways that badly disrupt the status quo.

A Status Quo Under Siege

The good news for the U.S. is that the broad status quo is sustainable. Near-term measures to alter it radically are relatively unlikely as well as highly unwelcome. The bad news is that the status quo is neither stable nor static. It is besieged by powerful but contradictory forces of long- term developments in each of the principal parties. They create difficult currents that the United States must navigate in framing its Taiwan policy.

Beijing’s largely economically-motivated quest for integration into the international system (through membership in the World Trade Organization and creation of an environment attractive to foreign investors) and the vast and growing importance of Taiwanese trade and investment to China push toward tolerance and flexibility. Yet these same ties also have given Beijing new leverage— directly in international organizations and diplomatic fora and indirectly through segments of the American and Taiwanese business communities that seek or depend on mainland trade and investment— to press an assertive agenda on cross- strait issues.

Beijing’s abandonment of radical foreign policy rhetoric, its desire for a stable and peaceful international environment in which to pursue development, and its drive for acceptance as a normal, responsible participant in world affairs have favored moderation on Taiwan issues. So too has the related goal of smooth reintegration of Hong Kong. On the other hand, the demise of revolutionary radicalism in foreign policy (which was always more pretense than substance) has not meant the abandonment of the quest to fulfill the nationalist imperative of reunifying the country and redeeming China’s nineteenth-century humiliation, which is now principally a matter of recovering Taiwan. Nor can it mask the embarrassment that an unrecovered Taiwan poses for the PRC’s self-conscious and irrepressible (and, in some quarters, long prematurely recognized) rise to great power status.

Domestic political changes in the PRC during the reform era have similarly Janus-faced implications. Having staked its legitimacy largely on economic performance, the regime depends on easy access to international capital and technology, foreign markets and concessionary loans— all of which counsel accommodation on Taiwan. Yet, nationalism has been a key pillar too, and increasingly so as the economy has hit rough patches and as nationalism’s non-accommodationist strain has been fueled by incidents such as the Belgrade embassy bombing and, to a lesser degree, the Hainan spy-plane incident. Increased pluralism in elite and bureaucratic politics has given significant influence to those who see a softer line on Taiwan as serving their personal or organizational interests (often by avoiding the adverse economic, diplomatic or strategic consequences that might attend a harsher line) or the interests of their social constituencies (such as the business interests concentrated along southeast China’s “gold coast”) which have become more salient in the PRC’s increasingly corporatist politics. At the same time, pluralism and, to a lesser degree, corporatism also have created openings for those who endorse a harder line on cross-strait issues, either because it fits their sense of partisan or institutional mission or because their sectoral responsibilities are sufficiently insulated from Taiwan policy that they can embrace such an approach as part of a broader package of “leftist” or “conservative” positions (in the oddly synonymous meanings of those terms in the PRC political lexicon). Chinese leaders now pay more attention to public opinion and they know from polling and other sources that there is little support for risking or spending much to recover Taiwan under current circumstances. Yet, public opinion still matters relatively little and remains, as the mass demonstrations following the Belgrade embassy bombing incident underscored, manipulable by the leadership.

For now, the PRC’s military-strategic situation still favors caution, given the leadership’s acute awareness of its inability to cow Taiwan by threats or to take the island by force (presumably by an amphibious assault that wags deride as the “million-man swim”) or without destroying the prize or risking a sobering engagement with the U.S. military. Over the long haul, however, the PRC’s ability and thus temptation to threaten credibly to use force rises with the inexorable shift in the cross-strait balance, amid the mainland’s continued economic development, Beijing’s sustained program of defense modernization, and the P.L.A.’s ability to claim massive budgetary resources. The PRC’s military exercises and missile tests in the strait in 1995- 96 reflect the broader dynamic: While they yielded only a transient rattling of confidence on Taiwan, they prompted a highly visible demonstration of American commitment, yet they also suggested a trajectory toward greater, potentially more effective efforts to influence Taiwanese politics in years to come.

On Taiwan, soaring cross-strait economic integration has generated in the increasingly politically powerful business community a strong commitment to good relations with the PRC in order to protect and expand trade and investment stakes on the mainland. The exponential growth of social and economic ties across the strait also has brought greater understanding among Taiwanese of how much China has been changing and how much it remains a cultural home. This has made eventual reunification a less frightening concept. At the same time, fears of economic dependence and resulting political vulnerability continue to underpin government policies (albeit not terribly successful and now-eroding policies) to limit the extent of cross-strait investment. For many Taiwanese, familiarity with the mainland has brought contempt for what they see as economic backwardness, official corruption, rampant lawlessness, and political repression on the mainland— smoldering concerns inflamed by episodes such as robbery or murder of Taiwanese tourists or PRC authorities pressuring or retaliating against Taiwanese business leaders with mainland economic interests and excessively anti-reunification views.

Taiwan’s domestic political transformation during the past fifteen years has produced a popular consensus favoring the status quo, with public opinion generally favoring neither significant moves toward reunification nor further steps toward formal independence, and with cross-strait policy producing relatively little disagreement among the three major candidates in the 2000 presidential election including, most strikingly, the victor and standard-bearer for the “pro-independence” Democratic Progressive Party (DPP), Chen Shui-bian, who backed away from out-going President Lee Teng-hui’s “state-to-state” formula (which Beijing had characterized as an unacceptable “two-states theory”). Yet this consensus is potentially fragile in two respects: first, it reflects a choice among the alternatives as currently framed by changeable external factors, including the level and character of PRC threats and American commitments; second, it is playing a less central role in Taiwanese politics which, as is typical in democratic systems, increasingly focuses on domestic political and economic issues and is therefore increasingly likely to produce leaders chosen without much regard for— or in spite of— their positions on mainland relations.

For the United States, the end of the Cold War and the march of globalization, along with the ebb and flow of inter- branch politics, have led to the diffusion and fragmentation of the politics of international relations in general and of Taiwan policy (as well as the inextricably related issues of China policy) in particular. After an initial spike in legislative (and, in turn, judicial) involvement in Taiwan policy due to congressional ire at its exclusion from the ROC-derecognition / PRC-normalization process— pique that produced the Taiwan Relations Act and litigation reaching the Supreme Court— Taiwan policy (and much of China policy) was for a long time left largely to the executive branch. That is no longer the case. Taiwan policy is now de- linked from the largely presidential province of managing strategic triangular relations. China policy and, to a degree, Taiwan policy now focus instead on the effects on American jobs or the investments of U.S. multinationals or human rights and other “values” issues. In a one-superpower world, there is more “space” for a larger group of U.S. policy-makers and law-makers to demand attention to such issues. With increased global interdependence there is arguably more reason— and with the “CNN effect” and the “NGO effect,” clearly more inclination— for them to do so. Congress’s flirtation with the Taiwan Security Enhancement Act (TSEA), the executive branch’s concern with congressional reaction concerning visas for Lee Teng-hui and Chen Shui-bian, and the law that required the new administration for the first time to consult with Congress before making the annual arms sales decision are indicia of this pattern. So too are a series of federal court decisions — arising in transnational commercial disputes as well as in more human rights-related contexts— that have grappled with the question of whether Taiwan is a state. The same underlying changes in the politics of American foreign policy also have established greater room in recent years for conflict and divergence over Taiwan-related issues within Congress and the executive branch— including those among and within State, Defense, Commerce, the Trade Representative’s office and other arms of the bureaucracy.

The status quo is further buffeted by more short-term political uncertainty affecting all three principal players’ approaches to cross-strait issues. In the PRC, absent a crisis-triggered or crisis-provoking change of plans, Jiang Zemin will soon step down from his major leadership posts. Whether or not this marks a sharp decline is his power, it will bring a significant reassignment of authority near the apex of the Chinese system and an occasion for measuring or securing Jiang’s legacy. Although Jiang’s sense of his historical mission appears to be primarily that of deepening economic reform, which is compatible with a relatively “soft” line on Taiwan, his comments on the Taiwan issue have suggested that he wants to move toward completing the irridentist task that his shadow-casting predecessor Deng Xiaoping advanced with Hong Kong and Macau. At slightly lower levels, senior personnel on Taiwan affairs have been in flux, with Vice Premier Qian Qichen being succeeded as foreign minister by Tang Jiaxuan; Wang Daohan, longtime head of the Association for Relations Across the Taiwan Straits (ARATS), becoming superannuated; and Zhang Mingfu becoming the Taiwan Affairs Office’s new pointperson. There are signs of fragmentation and dissension on Taiwan policy, with indications of distinct “Shanghai” and “Beijing” views, with the State Council’s Taiwan Affairs Office and the quasi- unofficial ARATS not always being on the same page (and with the former taking relatively soft and hard lines with different audiences), and with an official post-election policy on Chen Shui-bian that amounts, at best, to a seemingly paralyzed “wait-and-see” stance (saying that Beijing will “listen to what he says and watch what he does” while in the interim continuing to snub all overtures).

On Taiwan, the dust has yet to settle from the 2000 presidential transition. President Chen has had to rule with a mandate from a minority of the electorate, a quasi-coalition cabinet, a legislature with a majority of seats held by the Kuomintang (KMT) many of whose adherents seem bent on opposition for opposition’s sake, a good deal of sniping and defection from Chen’s own DPP, threats of recall and of no-confidence votes against his premier, a cold shoulder from Beijing, a weakening economy and a hypertrophic controversy over a nuclear power plant. Absent immediate crises with the PRC, such messy politics has shoved cross-strait policy down the political agenda and thus into greater uncertainty. Questions about the allocation of responsibility for mainland policy— including the role of the long-prominent National Unification Council and, more broadly, of a foreign affairs and cross-strait bureaucracy recruited under KMT rule— added to the apparent unsettledness of mainland policy. Crucial legislative elections loom at year’s end, and the party system is in disarray, with the KMT fractionalized and in near-melt-down, the DPP divided over the “independence” issue that used to define it and over new issues such as nuclear power and the environment as well, the impact of former KMT eminence and independent presidential candidate James Soong’s People First Party (PFP) or Lee Teng-hui’s newly founded Taiwan Solidarity Union still uncertain, and the roles of the small “purist” factions that split from a reforming KMT and a moderating DPP still murky as well.

America’s Taiwan policy must cope not only with these current circumstances on both sides of the strait, but also with the consequences of PRC and Taiwanese uncertainty and uneasiness about U.S. policy and policy-making. The accumulated stresses of recent years— Lee Teng-hui’s visa, the TSEA, Clinton’s “three nos,” the dispatch of U.S. naval forces in response to PRC actions in the strait, TMD, and the fall-out for Taiwan policy of a contentious, fractious and shifting U.S. China policy— have taken their toll. Added to these is the unpredictability that comes with both the GOP and the Democrats being deeply divided internally over Taiwan and China policy.

American Policy

In this environment, what, concretely, should a sensible U.S. policy for Taiwan include? Despite the complex forces for change and the current uncertainties, some imperatives are clear, at least for the relatively near term.

First, the U.S. should continue to support Taiwan’s quest for international diplomatic and legal space and status, including its membership in international organizations for which statehood is not a requirement (such as membership in the WTO and significant participation in some U.N.-affiliate bodies) and through extensive opportunities to participate in the international institutional order and multinational fora. Such moves can signal a strong U.S. commitment to Taiwan’s continued autonomy (without crossing the Rubicon to supporting independence or overstepping what are likely the real limits to Beijing’s tolerance), enhance Taiwan’s sense of security, and quell pressures in Taiwan for a more assertive stance on statehood.

Second, the U.S. should not tinker with the arcane terms of the cross-strait catechism. True, the legal-diplomatic formulae have been fraying ever since the strange consensus reflected in the 1972 Shanghai Communique (that is, that everyone accepts that there is one China but the PRC and Taiwan disagree about whether the regime in Beijing or Taipei is its rightful government) began to unravel amid such proffered neologisms as “one country, two systems,” “two essentially equal political entities,” “special state-to-state relations,” “the one China principle,” a return to the purported “1992 consensus” (or its “spirit”) of agreeing to disagree about what “one China” means, a “future one China,” or the possibilities of a “federal” or “confederal” arrangement or “economic integration” leading to “political integration.” While none of these PRC- or ROC-proposed models has won cross-strait consent, it remains the case that any new formulation must come from Beijing and Taipei. And it will come only when the underlying political will to work out a new arrangement has been developed on both sides of the strait.

In the interim, the U.S. should not take any steps that cast doubt on the key sacred texts, which include the three U.S.-PRC Joint Communiques, the Taiwan Relations Act and the policy positions that have grown up around them. As we have been reminded by experiences with the Lee Teng-hui visa, the TSEA, and the “three nos” during the last administration and with George W. Bush’s comments about “doing whatever it takes” to help Taiwan defend itself and Colin Powell’s reference in congressional testimony to the “Republic of China” during the Bush administration’s opening weeks, we are operating in a realm of touchy symbolic politics. Every U.S. comment, whether advertent or inadvertent, is potentially destabilizing, subjected to intense scrutiny on the Taiwan side for hints of change in the American commitment and on the PRC side for the same reasons and for any opportunity it provides to howl about affronts to Chinese sovereignty and thereby to gain leverage on other fronts in Sino-American relations. For now, there is plenty of room within the established theology for the sorts of policy adjustments that are likely to be necessary (as the six assurances of the Reagan era, which remain policy, suggest). There is little to be gained and something to be lost by seeming to undertake a rewrite, as the still- continuing tumult over the Clinton administration’s “three nos” attests).

Third, the United States should continue to sell weapons to Taiwan to address PRC moves that threaten to shift the military balance, but these sales should still stop short, for now, of items on Beijing’s list of unacceptable, truly crisis-provoking transfers. The reason for this is simple: weapons sales to Taiwan are more about signals than hardware. While it is important for the United States to assure that Taiwanese forces have sufficient capability to keep the island from being easy pickings for the People’s Liberation Army (PLA) and thereby coercible into capitulation, the United States is not going to supply Taiwan with the wherewithal to defeat or deter a PRC attack entirely on its own. The only real guarantee of Taiwan’s security is the understood commitment (only minimally fuzzed up by a doctrine of “strategic ambiguity”) to use American military force under certain circumstances. Arms sales that reaffirm the United States’ commitment are useful amid the ongoing PLA modernization even if the systems in question— such as the diesel submarines in the new administration’s first package— are of limited military value and may prove undeliverable. On the other hand, a sharp qualitative step- up in the systems provided would be ill advised. It might add nothing to Taiwan’s defense capacity (to the extent that it would involve systems that are not deliverable in the near term, such as Aegis or more generally incorporating Taiwan into TMD). It would be unnecessary to Taiwan’s true security (which depends on a credible threat of U.S. involvement), and it would be gratuitously provocative to the extent that it transgresses Beijing’s “red line” of unacceptable sales and so long as Beijing’s list remains relatively limited. (On this last front, it is an encouraging sign that, although Beijing stiffly opposed the sale of Aegis and Arleigh Burke-class destroyers, Beijing ultimately— if grumpily— acquiesced in the sale of the near-term deliverable Kidd class destroyers and anti- submarine aircraft.)

Fourth, the United States should continue to insist that the only acceptable solution to the question of unification is one that is genuinely acceptable to the people of Taiwan. Here, the U.S. can have its cake and eat it too. Because there is no significant popular support on the island for near-term reunification on terms Beijing will accept, the U.S. interest in maintaining a de facto independent Taiwan can be reinforced and its possibly offensive interventionist quality masked by a commitment to preserving democracy and rights in Taiwan and by an ostensibly “neutral,” “proceduralist” definition of an acceptable solution to the reunification question.

Fifth, the U.S. should undertake no major initiatives in the economic aspects of Taiwan policy because none are necessary. Despite its recent difficulties, Taiwan’s economy is not in serious long-term trouble. U.S. policy can do little about the most unsettling aspect of Taiwan’s foreign economic relations— its growing economic dependence on the mainland. Bilateral U.S.-Taiwan trade issues are not the irritant that they are in U.S.-PRC relations. While Taiwan’s economic openness (particularly on investment access), market reforms (particularly with respect to state-owned enterprises), and economic rule of law (including intellectual property protection and corruption issues) may not have gone as far as the U.S. might wish, progress has been substantial over the past decade or more and will continue once Taiwan enters the WTO on the heels of the PRC’s accession. Only if Beijing were, against all expectations, to reverse itself and oppose Taiwan’s joining the WTO would the economic aspects of the U.S.’s Taiwan policy require serious attention.

What recommends these elements of a U.S. policy toward Taiwan is not that they promise to help manage the specific problems presented by the current issues and conditions on both sides of the strait and in cross-strait relations. Nor are these policies sensible because— with sufficient presidential or cabinet-level attention and leadership— they are saleable to the relevant governmental actors and constituencies in the United States. While any successful policies must meet those conditions, they must also be a means to the broader end that the policies sketched here seek first and foremost to advance: preserving a serviceable but under-stress status-quo.