China's Leaders See Taiwan's President as a Dwindling Force

Strategic Insights -

Taipei -- China's leaders have significantly toned down their alarmist posture towards Taiwan since the election of President Chen Shui-bian in March. Now, they believe that instead of moving towards independence, Chen is being compelled by political and economic pressures to accept Beijing's terms for talks. Beijing's "united front strategy" aims to settle tensions with Taiwan's main external backers, Japan and the United States, while winning over opposition politicians and business executives with favorable treatment and trade opportunities. However, this strategy may face challenges ahead, particularly with the impending deadlines for sensitive arms sales to Taiwan by the administration of President George W. Bush.

Key Takeaways:

  • China's leaders perceive President Chen Shui-bian as struggling to assemble a working coalition in the Taiwan Legislative Yuan and facing opposition within his own Democratic Progressive Party.
  • The Taiwanese economy is experiencing a downturn, with the global market for its high-tech goods declining, and the old practice of inducing banks to lend to unprofitable traditional enterprises has largely ended, threatening higher unemployment and lower stock prices.
  • The opposition politicians have received a tolerant reaction from the Taiwanese public for their increasing proximity to Beijing, and entrepreneurs are being lured to the mainland with promising business opportunities.
  • President Chen's caution in handling relations with Beijing has relieved the Chinese leadership of its worst fears of a lurch towards independence.
  • Beijing is demanding that Taipei recognize the "principle of one China" with Taiwan as an integral part of it, and President Chen appears to be trying to persuade the pro-independence wing of his party to accept a more flexible definition.
  • China believes that President Chen has no realistic choice but to accept its position due to the souring economy and the need for a policy success.
  • China is maintaining a stable relationship with the United States and Japan, but faces a crucial crossroad when the Bush administration decides on arms sales to Taiwan in April, which includes conventional submarines and Aegis defense technology.

Statistics:

  • The Taiwanese economy is experiencing a downturn, with the global market for its high-tech goods declining.
  • The old practice of inducing banks to lend to unprofitable traditional enterprises has largely ended, threatening higher unemployment.
  • The Taiwanese stock prices are expected to decline due to the economic downturn.
  • China sees the Aegis system as a precursor to Washington providing Taiwan with a Theater Missile Defense shield.
  • Beijing expects to make significant gains in the Taiwan relations but is aware of the risks of heightened tensions between Washington and Beijing.

Sources:

  • Douglas H. Paal, "Taiwan's Troubles and China's Prerogative," International Herald Tribune, no date specified.
  • China's Ministry of Foreign Affairs, "China's Position on the Taiwan Question," no date specified.
  • The White House, "Press Briefing by Ari Fleischer," April 2001.