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Wednesday, Jan. 22, 2003

Politics still trumps business in China-Taiwan relations


HONG KONG -- The new year has begun with conciliatory messages from both sides of the Taiwan Strait, suggesting that both China and Taiwan want to avoid too much tension in their relationship, although neither side seems likely in the short term to yield any ground on the sensitive issue of "One China."

In a New Year address, Chinese President Jiang Zemin wished "Taiwan compatriots" happiness and good health. He emphasized China's policy of "peaceful reunification" and "one country, two systems" without threatening to use force if Taiwan should refuse to negotiate.

In his New Year's message, Taiwan President Chen Shui-bian also avoided making provocative statements. Instead, he repeated the promise that his government would not declare Taiwan independence, change the country's name, change the constitution or hold a referendum on Taiwan's future.

This is significant, as in August Chen had referred to Taiwan and the mainland as two separate countries, and had indicated support for passage of a law on the holding of referendums in Taiwan.

Instead, Chen said, his administration "has pursued stability in cross-strait relations while exploring possibilities for breakthroughs." Both sides, he said, must promote constructive development in cross-strait relations based on the principles of good will, reconciliation, active cooperation and permanent peace.

Chen struck a moderate tone when he referred to the new Communist Party leadership on the mainland, installed during a party congress in November. "This outcome reinforces our belief that steady progress must be maintained on both sides of the strait in order to ensure the welfare of both our peoples," he said.

Chen called for Taiwan and the mainland "to strive toward building a framework of interaction for peace and stability" and to make that "a primary goal at this stage of cross-strait development."

"In these first two decades of the 21st century," he said, "let us begin by creating a common niche for economic development, thus fostering an environment conducive to long-term engagement."

These words should be pleasing to Beijing's ears, but Chen has a track record of making U-turns in cross-strait policy, especially when talking to different constituencies. So the mainland will likely be watching to see if Chen actually forgoes proindependence policies and statements.

Neither side, however, budged from its position on the "One China" issue. Beijing insists that Chen must first embrace the "one China" concept, in which China and Taiwan are considered as one country. But Chen refuses to do so.

To China, this is a question of principle and, as long as the Chen administration refuses to accept "one China," then Beijing will not deal with it officially. Chen, argues that there should not be any precondition to talks and says that he is willing to discuss the possibility of a future "one China."

These differences have prevented the two sides from having direct transport, mail and trade links, although their economies are becoming intertwined. Such links would facilitate business transactions between the two sides. However, while China says agreements can be worked out between commercial organizations, such as airlines, Taiwan insists that agreements cannot be made without direct government involvement.

Thus a Taiwan official recently reiterated that direct cross-strait links have to be established through bilateral negotiations. Chinese Vice Premier Qian Qichen then said the mainland would push for implementation of the three links and wouldn't let political disputes affect cross-strait economic cooperation.

He said the issue of direct links "is a purely economic affair," and so it is not necessary to for the two sides to agree on "the political meaning of one China." This is a concession on China's part, which had previously insisted that Taiwan must accept "one China" before there could be direct links.

However, Qian gave no indication that Beijing was willing to hold government-to-government talks with Taiwan on this issue. While Beijing has, indeed, become more pragmatic and flexible in its cross-strait policy, its unwillingness to countenance official contact with Taiwan indicates that political considerations are still more important than economic ones.

The same can be said of Taiwan. Chen last May said Taiwan could negotiate direct links with the mainland the same way it negotiated an aviation agreement with Hong Kong, that is, through commercial organizations acting as front men while government officials acted as "advisers" in the background. Since then, however, he has backtracked and now insists on governmental negotiations.

Thus both China and Taiwan have put politics ahead of economics. If neither side budges, it is unlikely that the "three links" will be realized anytime soon.

Frank Ching is a Hong Kong-based commentator.


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