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As China’s leaders discuss future policies and strategies at the summer resort of Beidaihe, future cross-strait strategy is high on their list of priorities. President Jiang Zemin has been roundly and openly criticized for mishandling events leading up to Chen Shui-bian’s election as Taiwan’s first non-Nationalist Party leader. Some, particularly within the Chinese military, think Jiang was too soft, but most feel he painted himself (and China) into a corner, which now makes it difficult to deal constructively with a surprisingly conciliatory Chen.

Chen has already made a series of unilateral concessions to Beijing. His list of “nos” includes no statement of independence, no referendum on Taiwan’s desired status, no institutionalization of former President Lee Teng-hui’s controversial “special state-to-state relations” stance, no change to Taiwan’s constitution, no name change, no termination of the National Unification Council, and no abolishment of the National Unification Guidelines; all significant departures from previous Democratic Progressive Party positions. Chen has even flirted with various “one China” formulations, expressing a willingness “to embrace the spirit of 1992” (when both sides agreed to disagree over its definition).

This is about as far as Chen can realistically go, given his own political constraints and the domestic challenges that must remain among his top priorities. It is highly unlikely, in light of current attacks against Chen from members of his own party for being too soft on China, that he will utter the words that the mainland (unrealistically) demands to hear relating to one China . . . nor should he, at least not until Beijing shows some recognition and appreciation for how much Chen has already conceded.

Instead Chen appears to have decided to take the moral highroad. Unlike his predecessor — who seemed to take great delight in poking a stick in the dragon’s eye while reminding Washington and others not to take Taiwan for granted — Chen has embarked on a charm offensive aimed at strengthening his backing in Washington and Tokyo (and elsewhere) without unnecessarily irritating Beijing.

Chen has also opted for a more pragmatic approach to international diplomacy, one that focuses on maintaining Taipei’s current diplomatic ties rather than trying to buy (or rent) new friends. Significantly, his stopover in Los Angeles this past Sunday night, while en route to visit Central America, was done in an extremely low-key way. Of course, Beijing and Washington would have preferred no stopover at all, but it would have been as politically impossible for Chen not to request the layover as it was for Washington to deny it.

In dealing with the mainland, Chen has attempted to keep the ball in Beijing’s court. Surely he realized that Beijing would reject his calls for direct talks without preconditions and Taipei’s overtures to get the U.S. more intimately involved in “facilitating” (if not actually mediating) cross-strait dialogue. But such initiatives play extremely well in Washington and Tokyo. Beijing’s already worn out stock response — that Chen still lacks “sincerity” — appears increasingly lame. As Chinese leaders plot future strategy in Beidaihe, they must come up with a more effective way of dealing with Chen’s “smile offensive.”

One emerging Chinese strategy that already shows signs of backfiring is an apparent decision to “mix politics and economics,” despite Beijing’s constant admonition to Washington and others not to do so in dealing with China. Support for one China and nonsupport for DPP “splitists” have emerged as litmus tests for Taiwan entrepreneurs wanting to conduct business on the mainland. Whereas Beijing objected when Lee tried to moderate Taiwan investment there, now Beijing is threatening to kill its own golden goose. Similarly, after years of trying to pressure Taipei to yield on the “three links,” now Beijing seems intent on hinging direct cross-strait economic interaction to a one-China pronouncement. Beijing would do well to go back and read its own admonitions about why mixing politics and economics makes little sense.

Taiwan also appears to be refining its approach to participation in multilateral organizations. Taipei is backing away somewhat from the previous administration’s aggressive, but futile attempts to gain entry into various U.N. gatherings. In fact, at one point it appeared Chen would not tilt at that windmill at all this year, but wiser heads failed to prevail, again more out of concern for giving up too much unilaterally to Beijing. The Foreign Ministry has announced however that greater priority will be placed in the future on achieving increased participation in nongovernmental organizations, which falls outside of the mainland’s “three nos” policy to which Washington (among others) subscribes.

The key question is how Beijing will react. It could encourage or help facilitate (or at a minimum not attempt to hinder) greater Taiwan participation in nongovernmental organizations as a subtle means of “rewarding” Chen for his many concessions. Or, more true to form, Beijing may elect to put up more roadblocks along this path as well, thus helping to convince Taipei that its nonconfrontational approach will yield few dividends. This latter course of action, if followed, could eventually force Chen, as it did Lee before him, to devise steps to remind China and the rest of the international community that Taiwan cannot be ignored or completely isolated.

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