Taiwan: The Development of an Asian Tiger 9781626378360

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Taiwan

TAIWAN The Development of an Asian Tiger

edited by

Hans Stockton Yao-Yuan Yeh

b o u l d e r l o n d o n

Published in the United States of America in 2020 by Lynne Rienner Publishers, Inc. 1800 30th Street, Boulder, Colorado 80301 www.rienner.com

and in the United Kingdom by Lynne Rienner Publishers, Inc. Gray’s Inn House, 127 Clerkenwell Road, London EC1 5DB © 2020 by Lynne Rienner Publishers, Inc. All rights reserved Library of Congress Cataloging-in-Publication Data Names: Stockton, Hans, editor. | Yeh, Yao-Yuan, editor. Title: Taiwan : the development of an Asian tiger / edited by Hans Stockton and Yao-Yuan Yeh. Other titles: Taiwan (Lynne Rienner Publishers) Description: Boulder, Colorado : Lynne Rienner Publishers, Inc. 2019. | Includes bibliographical references and index. | Summary: “Assesses Taiwan’s successful trajectory since 1949, as well as its prospects for the future”— Provided by publisher. Identifiers: LCCN 2019013164 (print) | LCCN 2019980931 (ebook) | ISBN 9781626378346 (hardcover) | ISBN 9781626378360 (ebook) Subjects: LCSH: Taiwan—Politics and government—1949– | Taiwan—Economic conditions. | Taiwan—Foreign relations. | Taiwan—Foreign economic relations. Classification: LCC DS799.816 .T328 2019 (print) | LCC DS799.816 (ebook) | DDC 951.24905—dc23 LC record available at https://lccn.loc.gov/2019013164 LC ebook record available at https://lccn.loc.gov/2019980931

British Cataloguing in Publication Data A Cataloguing in Publication record for this book is available from the British Library.

Printed and bound in the United States of America

The paper used in this publication meets the requirements of the American National Standard for Permanence of Paper for Printed Library Materials Z39.48-1992. 5 4 3 2 1

Contents

Acknowledgments

1

The Development of an Asian Tiger Hans Stockton and Yao-Yuan Yeh

vii 1

Part 1 Contemporary Taiwan in Context 2 3 4

From Authoritarianism to Democracy Shelley Rigger

Evolution of a Global Economic Power Chien-Pin Li

The Trajectory of Taiwan-US Relations Dennis V. Hickey

11 27 47

Part 2 The Tsai Administration 5 6 7

Politics in the Tsai Ing-wen Era Kharis Templeman

Social Issues and Social Policy Ching-Hsing Wang and Dennis Lu-Chung Weng

Political Cleavage and Generational Politics T. Y. Wang and Su-Feng Cheng

v

67 97 117

vi

8 9 10

Contents

The New Southbound Policy Karl Ho, Cal Clark, and Alexander C. Tan The Dynamics of Cross-Strait Relations Wei-Chin Lee

International Law and Institutions Jacques deLisle

133 149 171

Part 3 Conclusion 11

Beyond Regime Consolidations Hans Stockton and Yao-Yuan Yeh

Bibliography The Contributors Index About the Book

209

219 231 233 247

Acknowledgments

This book, Taiwan: The Development of an Asian Tiger, was inspired by a conference titled “The Maturation of a Mini-Dragon: Seventy Years of the Republic of China on Taiwan,” held by the Taiwan and East Asia Studies Program of the Center for International Studies at the University of St. Thomas. The conference was graciously sponsored by a Taiwan studies grant from the Ministry of Education of the Republic of China on Taiwan and the Taiwanese Chamber of Commerce of Greater Houston. We would like to thank the Ministry of Education of the Republic of China on Taiwan for two Taiwan studies grants (2016–2018 and 2019– 2023) that have allowed for our expansion of Taiwan studies via curriculum, conferences, and scholarly exchanges. We extend a special thanks to Sophie Hui-Yi Chou, director of the Education Division at the Taipei Economic and Cultural Office in Houston, for her unwavering support and friendship. An additional special debt is owed to the support of community leaders including Jackson Chang, Amy Coburn, Frank Fong, Sue Hsiao, Rocky Lai, Frank Liang, Sue-jen Tsai, Don Wang, Jack Wu, and Louis Wu. In addition, we are grateful to the contributors to the volume. Their knowledge and expertise profoundly impact the way we all seek to understand Taiwan and its role in the world. It is our honor to work with these distinguished scholars, and we are pleased to be their colleagues in promoting Taiwan studies throughout North America and the world. Special thanks to our acquisitions editor, Marie-Claire Antoine, for her guidance and immense patience during this project. vii

viii Acknowledgments Last but not least, we acknowledge with gratitude the loving support of our families. We ultimately dedicate this work to them: Hans Stockton—to my wife, Sharon, and my children, Lily Rose and Mia Sophie. Yao-Yuan Yeh—to my wife, Yu-Lin Huang, and my children, MuLiang and Rousi.

1 The Development of an Asian Tiger Hans Stockton and Yao-Yuan Yeh

The seventieth anniversary of the Republic of China’s (ROC) retreat to Taiwan in 1949 is an opportune time to assess Taiwan’s remarkable developmental trajectory.1 Retracing its path from the brink of catastrophic failure to wealth, democracy, and social stability shows how Taiwan has successfully transcended multiple, overlapping crises not only to survive, but also to flourish. In this volume, we argue that Taiwan’s success resulted from sequential, interconnected, and mutually reinforcing economic, political, and social regime transitions. These transitions occurred in a largely linear manner, despite the growing threats of military and economic coercion from the People’s Republic of China (PRC) and changing relations between the United States and Taiwan. The starting point was the consolidation of the ROC state and Nationalist government after 1949, which entailed centralized economic planning, one-party authoritarian rule, “re-sinification” campaigns, and strict control of Taiwan’s civil society. The Cold War and outbreak of the Korean War secured US aid, which provided external security, much-needed capital, and regime legitimacy as a viable “China” alternative to Beijing by the early 1950s. From then on, Taiwan went through multiple regime transitions and consolidations (see Table 1.1). Rather than experiencing simultaneous transitions and turmoil, however, we argue that the polity on Taiwan enjoyed the benefits of managing one regime struggle at a time.

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Table 1.1 Regime Transition and Consolidation in Taiwan, 1950–2018 1950–1986 1986–1996 1996–2008 2008–2018

Economic Regime

Political Regime

Consolidating Services/High Tech

Transitional Liberalizing

Transitional Industrializing

Consolidated

Social Regime

Resilient Authoritarian

Resilient/Co-opted Corporatized

Consolidating Democracy

Transitional Liberalizing

Consolidated

Softening

Consolidating Pluralist

Taiwan’s Economic, Political, and Social Regimes Up to the early 1980s, Taiwan’s economy was transitional. The 1950s and 1960s were characterized by policies to stabilize the economy, industrialize, and adopt import substitution and export orientation. During the 1970s and 1980s, planners moved the country toward heavy industrialization and privatization, and began early transitioning into higher-technology enterprises. At this point, the primary structures and actors for Taiwan’s subsequent economic regime consolidation were in place, and Taiwan’s evolution continued to the next phase toward an information technology and a service-based economy. Building a vibrant economy was a crucial element for legitimizing the rule of the Chinese Nationalist Party (Kuomintang [KMT]) and maintaining social stability, or at least acquiescence. In addition, US diplomatic recognition of the Republic of China until 1979 was an important external affirmation of the legitimacy of both the Republic of China and the KMT. The internal legitimation of the KMT was essential to avoid a mass uprising against its rule and to keep effectively co-opting potential opposition. With the loss of its seat at the United Nations to the People’s Republic of China in 1971 and diplomatic de-recognition by the United States as of January 1, 1979, the need for the KMT to deliver economic returns became paramount. During this initial thirty-year period, the Nationalist government relied extensively on a mixture of political and social repression and mobilizational authoritarianism. When the KMT was unable to suppress its opponents, it would often successfully co-opt or preempt opposition elements through resource allocation. Land reform, rising wages, near-full employment, and a process of bottom-up industrialization through small and medium-sized enterprises encouraged popular

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acceptance of strict controls. Further, the lack of accountability and transparency allowed the ruling party to implement the policies and laws that technocrats and politicians felt were necessary to maintain their monopoly of power and build the country’s economic structures. This resilient authoritarianism persisted into the 1980s, when the economy entered its consolidation phase and democratic transition began with the legalization of political opposition, new political parties such as the Democratic Progressive Party (DPP), and competitive local and national elections. By the mid-1990s, economic structures, actors, and processes were largely fixed, or consolidated. Taiwan had become an export-oriented, service-based, and market economy. But the KMT’s successes sowed the seeds of its demise. Economic stability and growth required an educated work force, provided rising wages and discretionary income, and produced a new middle class who were no longer satisfied with the KMT’s monopoly on ideology and power, lack of accountability, and suppression of civil society and political opposition. This period of democratic transition culminated with the first direct, multiparty election for president in 1996. The consolidation of Taiwan’s basic economic regime and the beginning of the democratic regime consolidation allowed for social regime transition. During the authoritarian period, associational life, especially for trades and labor, had been highly corporatized. Although civil society activation can be traced back to the democracy movement of the 1970s and 1980s, much of it was illegal and subject to severe suppression. Only after democratic institutions were put in place could civil society movements truly coalesce, mobilize, and advocate in the public realm. This period saw a growth of organic, non-state-sponsored organizations dedicated to many issues, including family issues and health, public education and welfare, national identity, anti-unification, environmental protection, and anti-nuclear power, to name a few. The second peaceful alternation of the ruling party, in 2008, identified Taiwan as a consolidated democracy. The eight subsequent years of KMT rule under the presidency of Ma Ying-jeou marked changes and reversals in certain policy areas from those of his predecessors, but not in the general democratic orientation of Taiwan’s politics. Taiwanese society continued to be divided over Taiwan’s future in relation to the mainland, but there was considerable consensus that this did not include unification with the mainland. The other major area of historical contention, that of national or ethnic identity, was also reaching greater consensus. A growing majority of citizens began to self-identify as Taiwanese and fewer and fewer as Chinese. Citizens became increasingly concerned

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that President Ma’s rapprochement with Beijing would draw Taiwan too close into China’s orbit, regardless of popular disapproval. After more than twenty cross-Strait agreements with Beijing were signed, the controversy surrounding the Cross-Strait Service Trade Agreement in March 2014 led to the Sunflower Movement and student occupation of the Legislative Yuan. The Sunflower Movement, along with plummeting approval ratings for President Ma and his KMT legislative majority, set the stage for the fall of the KMT and the rise of the Democratic Progressive Party in 2014’s local elections and 2016’s legislative and presidential elections. Following the inauguration of Tsai Ing-wen as Taiwan’s second DPP president, social movements continued to form and agitate over issues related to pension reform, holiday and labor laws, and marriage equality, which is why we consider the social regime as consolidating and on the verge of being consolidated. The Tsai Administration If the political, economic, and social regime transitions and consolidations have indeed reached near fruition, then this should be a new era for Taiwan’s domestic politics. Long criticized for being driven not by policy debates, but by those of nationalism and identity, Taiwan’s political parties should now be more focused on matters of law and public administration compared to a decade ago. Civil society movements should be diverse, relatively autonomous, and also focused on policy issues. With Taiwan plagued with slow growth, overreliance on Chinese trade and tourism, loss of manufacturing employment, and a move toward information technology and automation, the largest questions facing Taiwan’s economic decisionmakers are how and where to find new markets and how to effectively educate, train, and employ the next generation of workers and entrepreneurs. And, of course, there remain the issues of Taipei’s relations with Beijing and with Washington. President Ma’s rapprochement, diplomatic truce, and limited international space for Taipei came to an end with Tsai’s election. In contrast to the relative structural stability provided by the consolidation of Taiwan’s domestic regimes, the Tsai administration faces growing friction with Beijing and an unpredictable US president. Beijing has been turning a cold, and increasingly hostile, shoulder to Taipei following Tsai’s refusal to accede to its preferred reading of the “1992 Consensus.” Since Tsai’s election, the PRC has stepped up its efforts to coerce ROC diplomatic allies to switch recognition. By 2019, only sixteen countries held diplomatic relations with the ROC.

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The first nationwide test of Tsai’s presidency and chairmanship of the DPP came about with November 2018 local elections. Since the legislature is elected as one body, these local elections approximate the feedback function of midterm elections in presidential systems. The results were a major setback for the Tsai presidency. Having previously held thirteen of twenty-two municipalities and counties, the DPP emerged with control of only six, including its first loss of a major stronghold in the south (Kaohsiung). Tsai stepped down as the DPP party chair to take personal responsibility and this was followed by the mass resignation of her cabinet in January 2019 as means for the party to take responsibility. Structure of the Book In Part 1 of this book, the authors place Taiwan in context by assessing its democratic and economic trajectories as well as cross-Strait relations between 1949 and 2016. Part 2 focuses on the Tsai administration from the 2016 campaign to the November 2018 elections. We begin with Shelley Rigger, who demonstrates in Chapter 2 how state security and social stability came at the cost of political rights, civil liberties, and legalized opposition. Despite years of growing wealth and the rise of a new middle class, authoritarianism remained entrenched into the 1980s. Rigger notes, however, that although Taiwan’s democratic transition may have been relatively slow in coming relative to its third-wave counterparts, democracy has become more normalized and embedded in Taiwan than in cases where the transition has happened more rapidly. Taiwan also underwent major economic transitions, and in Chapter 3, Chien-Pin Li chronicles Taiwan’s road from least-developed country to an economic “miracle” or “mini-dragon” in the 1980s and to a major economic contributor to globalization in the twenty-first century. Juxtaposing neoclassical and developmental state theorists, he argues that, in the case of Taiwan, state and market were interrelated and overlapping. As well, Taiwan’s economic development was particularly subject to external actors and forces. Accepting and internalizing these two facts early on, Taiwan’s economic policymakers were able to design and implement successful policies that not only produced highly effective state planning, but also allowed the marketplace and innovation to prosper. Taiwan’s political and economic development has unfolded within the central context of the triangular relationship between Taipei, Washington, and Beijing. In Chapter 4, Dennis V. Hickey discusses the several

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phases of the relationship between the United States and Taiwan, from abandonment to alliance, back to abandonment, to the current state of unofficial relations. The driving dynamics, according to Hickey, have been changes in US strategic interests, China’s growing economic and strategic influence, and Taiwan’s ruling-party orientations toward eventual unification or independence. Hickey suggests, however, that despite momentous changes, some key features of the relationship have remained remarkably constant. Having reviewed Taiwan’s historical, political, and economic evolution, we then move on to the Tsai administration. After the 2016 national elections, and for the first time since Taiwan’s “retrocession” to the Republic of China in 1945, both executive and legislative branches of government were captured by a non-KMT party, the Democratic Progressive Party. The rise of the DPP and Tsai Ing-wen’s presidency are discussed by Kharis Templeman in Chapter 5. Templeman argues that the success of the DPP’s ambitious policy agenda will likely be tempered by how much President Tsai and her party can accomplish within the extant ROC constitutional framework. Additionally, he addresses the question of which political reforms appear most needed, contrasted against those that may be more politically feasible. Templeman also presents two under-the-radar trends in Taiwan’s institutional evolution since the first direct election of the president in 1996: the nationalization of political competition and a concomitant shift toward simple majority rule at the central government level. In Chapter 6, Ching-Hsing Wang and Dennis Lu-Chung Weng then address the Tsai administration’s social policies, such as those related to low wages, income inequality, housing prices, food safety, education, annuity reform, and judicial reform. Their study reveals the public’s perception of policy priorities and intensity of various social problems, and finds that there is little public consensus on many of them. In addition, they argue that declining social capital on Taiwan further reduces the ability of the ruling party to build politically essential consensus, which represents the key policy challenge faced by President Tsai and the DPP in their efforts to address these various social policy issues. The two political divides that Tsai and the DPP face are the questions of ethnic identity and of Taiwan’s unification with Beijing under a single Chinese state. Both have been major factors in identity formation, which is the focus of Chapter 7. Looking across generational cohorts, T. Y. Wang and Su-Feng Cheng find that the main cleavages of Taiwanese society after 1949 were linguistic and ethnic. However, based on responses by younger generations, this has attenuated and the main divide is now found in differences over Taiwan’s future relation-

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ship with China. Wang and Cheng argue that a Taiwan-centered political narrative has emerged that emphasizes the island’s cultural distinctiveness and self-determination, but that for many younger Taiwanese, this coexists with acceptance of China as a civilizational root. Lacking major economic or class divides, Taiwan is therefore characterized as having a single cleavage, which is manifested in its citizens’ position on the unification/independence question. In a major contrast to the cross-Strait political divide, China has become Taiwan’s single largest trade partner. In 2018, nearly 28 percent of Taiwan’s exports were going to China, with another 13 percent to Hong Kong, providing Beijing with considerable leverage over Taiwan’s economy and, consequently, domestic politics. In Chapter 8, Karl Ho, Cal Clark, and Alexander Tan consider the political and structural challenges to President Tsai’s New Southbound Policy as a strategy for reducing Beijing’s economic leverage over Taipei and for reviving Taiwan’s economic dynamism. They trace the decline of Taiwan’s “miracle economy” into one of stagnation or low growth to highlight the need for new strategies and partners. Under President Ma, deeper integration with China’s economy was the solution to Taiwan’s slowing growth. Although Tsai has promoted less reliance on China, and political rapprochement between Taipei and Beijing has ended, growth in certain aspects of cross-Strait interaction have continued alongside a decline in other areas, such as tourism from China. Ho, Clark, and Tan find that diversification through the New Southbound Policy makes strong economic sense. A major thread that connects all of the prior chapters is the ebb and flow of the Taipei-Beijing, or cross-Strait, relationship. In Chapter 9, Wei-Chin Lee chronicles the dynamics of the cross-Strait relationship since the Lee Teng-hui presidency. He describes the successive policy features and examines why the relationship under President Ma led to the DPP’s 2016 victory and the profound political ramifications of the regime change. He highlights four major challenges that President Tsai and the DPP may face in coming years to ensure smooth and stable crossStrait interactions in the future. These challenges include the quest for a new workable cross-Strait consensus, the intricacy and complexity of the cross-Strait political economy, the essential role of the United States with respect to Taiwan’s security, and the Tsai government’s coordination of diverse domestic constituencies for a solid coalition to support the DPP’s cross-Strait policy. In Chapter 10, Jacques deLisle addresses Taiwan’s quest for international status under its third president lawyer and the potential benefits for its security. An important part of Tsai’s agenda has been focused on

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international norms and related institutions. However, how Taiwan engages with them is being increasingly challenged by a changing external environment primarily shaped by China and the United States. In the concluding chapter, the editors provide a summary of Taiwan’s political and economic regime consolidations and a discussion of the ongoing consolidation of the social regime. Relatively sequenced progress in the transition and consolidation of this set of regimes has allowed Taiwan to prosper. In the context of near-term public and economic policy challenges and opportunities, the next phases of development for Taiwan’s polity are then discussed. While the polity will increasingly turn its attention to public policy debates typical of modern democracies, macro issues of national sovereignty, cross-Strait relations, automation and workforce displacement, and the scale and scope of civil society activation remain frontiers for further development. Taiwan’s trajectory over the past seventy years reveals a history of struggle and of periodic restructuring of the state, politics, and society. It also highlights how, despite constant irredentist threats from Beijing, declining diplomatic recognition, and exclusion from international governmental organizations, Taiwan has flourished into one of the wealthiest liberal democracies in Asia. Note 1. The terms “Taiwan” and “Republic of China” are used interchangeably throughout this book.

2 From Authoritarianism to Democracy Shelley Rigger

In this chapter I discuss Taiwan’s single-party regime as an example of resilient authoritarianism, as well as how the country transformed into a vibrant democracy. Looking at Taiwan today, it is hard to believe that it was a single-party authoritarian state under martial law until three decades ago. It is now a wealthy, free-wheeling society with active (some might say hyperactive) political and civic organizations. Its regular elections are fought hard, but within the guardrails of democratic rules and norms. Its elected leaders have a tough job, but they do their best within their nation’s constitutional framework. Surveys show that as frustrated as Taiwanese may be with any given set of leaders, they would not want to go back to strongman or single-party rule. Democracy is, as the theorists of democratic consolidation like to say, the only game in town. As firm and inevitable as its democracy appears today, however, in the 1980s Taiwan was seen as a puzzling exception to the democratization trend that was changing states in Europe, Latin America, and Asia. It was Taiwan’s failure to democratize that political scientists struggled to explain. Scholars studying democratization in the 1970s and 1980s identified a number of factors associated with transitions from authoritarian to democratic rule. The most powerful driver, they found, was economic development. Development—industrialization, urbanization, improvements in technology and education—transformed societies. As citizens became wealthier, more educated, and more integrated into domestic and even international networks and institutions, they began to demand more say in how they were governed. A powerful comparative study of democratization led by Guillermo O’Donnell and Philippe Schmitter found that once 11

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a society had been mobilized in this way, it began to put pressure on its authoritarian regime.1 That pressure, in turn, split authoritarian states’ leaders into two factions: those who were willing to retain power at all costs, and those who saw political liberalization as a necessary condition for domestic peace and development. Liberalization, in turn, often turned out to be a way station on the road to full-on democratization. The puzzle that Taiwan, South Korea, and a handful of other countries posed to this theory was that they managed to reach high levels of development without undergoing significant liberalization. Both of East Asia’s “little dragons” were still authoritarian at a time when other, far less wealthy countries were democratizing. In the late 1980s, Samuel Huntington identified a “transition zone”—a per capita gross domestic product (GDP) of US$1,000–$3,000—below which nearly all countries were authoritarian and above which nearly all were democratic.2 Taiwan’s per capita GDP of US$2,400 in 1980 put it in the transition zone. By 1985 it was above the zone, at US$3,300—yet the country was still under martial law. When per capita GDP reached US$8,200 in 1990, liberalization had begun, but it had taken an unusually long time (and an abnormally wealthy economy) to reach that point. T. J. Cheng addressed this puzzle in an article published in 1989. In an effort to explain the island’s slow progress toward democracy, despite what seemed to be favorable conditions for a transition, Cheng argued that democratization is not the inevitable result of structural conditions. Instead, he observed, authoritarian regimes can be quite resilient: Democratic inclinations or impulses alone do not ensure regime transformation. . . . Economic development may move a country to “a zone of political transition,” but . . . economic performance may well make an authoritarian regime more resilient. . . . An authoritarian regime may succeed in co-opting or containing counter-elites. In the calculus of the attentive public, the opportunity cost of democratic movement may be too high to bear. Minimum concessions to popular demand for a greater say in politics may well extend the life of an existing authoritarian regime.3

In short, Cheng concluded, certain features of Taiwan’s political, economic, and social reality had allowed it to avoid democratization, despite favorable conditions. The Sources of Taiwan’s Resilient Authoritarianism Cheng’s summary suggests the broad outline of an explanation for how Taiwan’s authoritarianism persisted as long as it did, despite a strong

From Authoritarianism to Democracy

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opposition movement and rapidly changing socioeconomic circumstances. He calls our attention to economic factors, political strategies such as co-optation and limited liberalization, as well as the repression of dissent. Each of these factors did, in fact, play an important role in prolonging Taiwan’s single-party authoritarianism. At the same time, the regime also benefited from factors in Taiwan’s external environment. Taiwan’s longtime ruling party, the Nationalist Party (Kuomintang [KMT]), drew a great deal of strength from Taiwan’s economic performance during the decades it was in power. Taiwan experienced extremely high GDP growth—around 10 percent per year on average— in the 1960s, 1970s, and 1980s. But growth alone is not enough to keep an authoritarian regime in power. What made the KMT especially able to use economic performance to legitimize its monopoly on power was the quality of Taiwan’s growth. Taiwan’s growth was based on bottomup industrialization supported by state institutions that facilitated an environment for manufacturing but did not interfere too closely. The state played a guiding and facilitating role (in some cases, such as high tech, pushing hard to enable Taiwanese firms to enter the sector), not an ownership or dictatorial role. The primary driver of egalitarian growth was entrepreneurship. Taiwan’s economic “miracle” was rooted in a massive expansion of small and medium-sized enterprises (SMEs) founded by entrepreneurs and run, in most cases, as family businesses. Because many SME employees occupied multiple economic niches, providing household and agricultural labor as well as working in manufacturing when needed, SMEs were a sponge that soaked up labor in moments of high demand, but could release it when demand waned. The capital for SME growth was generated within the SME sector; Taiwanese were not reliant on state institutions for economic opportunities. In many developing countries, state-driven development divides the society by privileging certain sectors. In Taiwan, the laissez-faire approach to business development meant that Taiwanese entrepreneurs had few expectations that the state would support them. The state did support SMEs by making inputs available from state-owned firms in upstream sectors such as steel, shipping, and petrochemicals, and by helping them access foreign markets as contract manufacturers. The result of these policies was a form of growth with strong positive developmental side-effects, including a much more equitable distribution of income and wealth than is typical of late developers (such as China). The relatively even distribution of Taiwan’s growing economic pie was the consequence of wage and ownership patterns, not top-down redistribution. As a result, groups in society did not feel left out of a

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redistributive scheme and turn against one another. Relying on wage and ownership to maintain an egalitarian distribution also allowed Taiwan’s government to set tax rates relatively low. The political consequences of these economic trends were powerful. The KMT governed Taiwan single-handedly throughout the entire high-growth period, and it was at pains to remind Taiwanese that the economic abundance they enjoyed had come on its watch. And while there were plenty of other factors that contributed to Taiwan’s success, including a strong economic foundation built during the Japanese colonial period (1895–1945) and an extraordinarily ambitious, hardworking, and entrepreneurial population, sound economic policy of the sort provided by the KMT during those decades played an important role. Given how badly most developing economies were run during that period—how rapacious and incompetent leaders were in Taiwan’s peer nations—it is not surprising that the KMT was rewarded with strong support. To give one point of comparison, in 1950 the Philippines’ per capita GDP was 40 percent higher than Taiwan’s. Forty years later, Taiwan’s per capita GDP was more than ten times that of the Philippines. The logic underlying Huntington’s notion of a “transition zone” linked to per capita GDP is that as a society becomes wealthier, it comes to expect more of its government. In particular, its people become accustomed to making complex decisions for themselves in business; their competence and confidence increase. They are less and less willing to put their affairs in the hands of unelected officials who promise that democracy will be permitted “when the time is right.” At a certain point, they decide that the time is right now. In Taiwan, that time came relatively late, because the KMT was delivering excellent economic results. Taiwanese did eventually lose patience, but they did so much later in the economic growth cycle than people in less-well-governed nations. Taiwan’s economic performance under the KMT facilitated another important pillar of its authoritarian resilience: co-optation of large segments of society into the KMT’s political coalition. The KMT used two political strategies to maintain widespread support: corporatism and mobilizational authoritarianism. Corporatism is a strategy of incorporating as many groups in society as possible into state institutions. In Taiwan, the state created organizations to represent and serve all the major economic sectors—agriculture, business, and labor—as well as some noneconomic groups, such as youth and women. These official associations had guaranteed access to the state, including its decisionmaking processes as well as its resources. The state used corporatism to balance the interests of different groups in ways that maximized support for the regime across social sectors.

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Mobilizational authoritarianism included propaganda and education designed to promote support for the KMT and the state it ruled— officially the Republic of China—and a rich set of local political and electoral practices that gave many Taiwanese a stake in the regime. Beginning in the 1940s, Taiwan’s local governments were constituted through elections that became increasingly competitive over the decades. The candidates pursued office aggressively, and the voters were well-informed about their choices. Until the late 1970s, nearly all of the candidates were affiliated with the KMT, which recruited those who could prove their popularity at the ballot box. The legacy of these elections—including the enthusiastic participation in the KMT by many ordinary Taiwanese who might have been expected to support the opposition—lasted well into the democratic era. For those who could not be tempted to support the regime by economic benefits or the opportunity to become part of the local party-state through a KMT-monopolized electoral process, there remained yet another powerful tool: repression. From the very beginning of its time on Taiwan, the KMT used repressive measures to crush dissent, both among the local population and among the people who came with the KMT from the mainland during and after the Chinese civil war. Many of those people—known in histories of Taiwan as “mainlanders” or “’49ers” (in contrast to the island’s longtime residents, the “Taiwanese” or “native Taiwanese”)—had supported democratization on the mainland. Their continued agitation for liberal causes on Taiwan made them enemies of the KMT and its ironfisted leader, Chiang Kai-shek. In addition to the mainlanders who hoped to soften the regime and restore the democratic promises inherent in Taiwan’s constitution and founding philosophy, the regime also kept a tight rein on Taiwanese who expressed opposing views. The most dangerous of these views was the idea that the KMT’s monopoly power was unjustified. The KMT held itself up as the legitimate ruler of all of China, temporarily exiled to Taiwan by the Communist victory in 1949; it froze representatives elected in the 1940s in office for decades on the theory that they could not be replaced by Taiwanese voters alone. Taiwan, according to this logic, must be subordinated to the larger goal of national unification under the Republic of China state. Demands for democracy could not be met so long as that project remained unfinished, and anyone who questioned the legitimacy of KMT rule—much less the unification project itself—was an enemy of China. This ideology justified suppression of democracy activists as well as those who questioned the KMT’s unification goal. In addition to these internal factors, Taiwan’s external environment helped reinforce its resilient authoritarianism. That environment included

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two elements: the threat posed by the People’s Republic of China (PRC) and the support provided by the United States. The PRC threat was straightforward: since the end of the Chinese civil war, the PRC government has never foresworn the use of force against Taiwan. During the Mao era (which includes most of Taiwan’s authoritarian period) the threat was active and explicit: the PRC promised to “liberate” Taiwan by force, and it used occasional military action to substantiate that promise. In the mid-1970s, Beijing’s policy shifted to one of “peaceful unification,” but the threat of force was ever-present. Taiwanese society was highly militarized during the authoritarian period in response to these threats. Militarization facilitated repression of dissidents at the same time the military threat convinced many Taiwanese that political change was risky. Meanwhile, Taiwan played an important role in Washington’s geopolitical strategy as a “bulwark against communist expansion in Asia,” with the United States providing economic and military assistance and strong political support to the authoritarian regime. When the opening of the United States to China in the 1970s threw the relationship of the United States with Taiwan into doubt, the KMT-led regime found itself facing serious and unprecedented dangers. Taiwan’s Authoritarian Resilience on the Wane Like other resilient authoritarian regimes, Taiwan’s single-party state seemed as if it could go on forever. Until, that is, it suddenly became obvious that it could not. In 1984, only two years before the island’s first opposition party was founded (the Democratic Progressive Party [DPP]) and three years before the KMT’s leaders lifted martial law, political scientist Edwin Winckler published the first scholarly article suggesting that political change might be brewing in Taiwan.4 But Winckler was reluctant to commit too strongly to his position; he gave his article a tentative title: “Institutionalization and Participation on Taiwan: From Hard to Soft Authoritarianism?” In the three years following the publication of that article, the changes Winckler noticed accelerated, and by the early 1990s it was clear that Taiwan would soon become a full-fledged liberal democracy. How did KMT-led single-party authoritarianism go from resilience to eclipse so quickly? Just as economic change had supported the regime for decades, economic change eventually helped to undermine it. It happened later (in terms of the level of development) than political scientists had predicted, but it happened. And it happened for the very reasons scholars had postulated. Combined with other changes in politics and society,

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economic development (which entailed sharp increases in consumption, education, exposure to the outside world, and urbanization) prompted many Taiwanese to question the value of single-party rule. Under KMT leadership Taiwan had made extraordinary economic achievements, but it was increasingly difficult to see how authoritarian rule was either necessary or sufficient for those achievements to continue. While economic change alone might not have been the decisive factor driving political change, it had a permissive role in relation to other factors. The KMT’s political strategies, too, had paradoxical consequences. Corporatism and mobilizational authoritarianism strengthened the KMT state in the early decades, but by the 1970s they were delivering diminishing returns. Corporatism guaranteed that privileged organizations would have access to the state, but this meant other groups seeking to represent interests in society were systematically excluded from participation. As Taiwan’s economy and society became more complicated, satisfying the competing interests of many different groups became impossible. Independent organizations representing consumers and women were among the first on the scene, but they were followed by other interest groups that were hard to ignore. Mobilizational authoritarianism also delivered diminishing—and eventually negative—returns. As the society became more educated, networked, and internationally aware, it also became less amenable to the state’s propaganda efforts. Meanwhile, local politicians’ ambitions expanded along with their political skills and popularity. In the late 1960s the regime was forced to open some seats in the national legislature to Taiwan-elected officials, because while the members elected in the mainland in the 1940s were still in place, representing their home provinces, their numbers had dwindled to the point where the body’s ability to function was in question. Taiwanese leapt at the opportunity to compete for these more consequential offices. Meanwhile, local factions the KMT had sponsored as a way to structure competition for local offices within a single-party framework became ever more independent from party bosses; when independent candidates began contesting offices in large numbers in the late 1970s, local factions used strategic cooperation with independents to gain leverage over the KMT. And a society that had been mobilized through local elections was more than ready to apply the practices learned in those races to elect higher-level officials. One development without which Taiwan’s peaceful democratization likely would have been impossible was the changing external environment. Through the 1960s, Taiwan was widely recognized in the international community as the legitimate government of China, and it enjoyed strong support from the United States as an anticommunist ally in East

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Asia. In the early 1970s, both of these realities changed. To many governments, the PRC had become too large to ignore, and one after another, they began to normalize relations with Beijing, which meant derecognizing Taipei. Taiwan lost the Chinese seat at the United Nations in 1971; that same year, the United States began its own journey toward normalization with China, a journey it completed in 1979. Flagging international support damaged the KMT regime’s legitimacy in three ways. First, losing other governments’ support for its claim to be the government of all of China made that claim less persuasive to audiences within Taiwan. The KMT had denied Taiwanese the right to self-government under the logic that a single province should not govern the rest of China. But if the ROC was not all of China, then on what basis could it justify denying Taiwanese the opportunity to elect not just some, but all, of their national leaders? The KMT continued to defend its claim, but without international affirmation the power of its argument dwindled. Second, the single-party regime’s legitimacy also suffered when Taiwanese began to realize that important countries—even the United States—were no longer willing to backstop and defend the regime. Some Western politicians continued to support Taipei and its claims, but their position was no longer uncontested. Without the support of the United States, it was hard to imagine how the ROC could survive, given Beijing’s determination to achieve its goal of “peaceful unification.” Third, another trend within the United States further complicated the KMT’s position: human rights and pro-democracy diplomacy. Beginning in the 1970s, the single-minded emphasis on anticommunism gave way to a new emphasis on democratization and human rights. Taiwan soon found itself in the crosshairs of this movement, especially after a series of high-profile human rights abuses attracted attention from the US Congress. Being anticommunist was no longer enough to secure the enthusiastic support of the United States; Taipei was under real pressure to live up to its Cold War moniker of “Free China.” Facing challenges both internal and external, Taiwan’s KMT-led regime began to tolerate political dissent to a greater extent than ever before. Although crackdowns continued into the very early 1990s, the regime was unable to crush the opposition movement entirely. In the 1970s, dissidents coalesced around a loosely organized group that called itself the Dangwai, or “nonparty” movement. The Dangwai included people with many different economic backgrounds and political ideologies, but it shared a single goal: ending the KMT’s monopoly on power. Dangwai activists used the more liberal communications environment to circulate new ideas; they also used local elections (and the limited

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national elections) to win positions in the government. Some even collaborated with KMT local factions to undermine the ruling party’s monopoly position in particular areas. In 1986 the Dangwai renamed itself the Democratic Progressive Party, and although opposition parties technically were illegal under martial law, the regime did not attempt to crush the DPP. Less than a year later, martial law was lifted, along with the ban on new parties. As the Dangwai grew stronger, repression became more difficult, and new ideas entered the public debate. While democracy was its primary demand, the Dangwai/DPP had another item on its agenda: justice for the island’s Taiwanese majority, who were was largely excluded from political power (except for locally elected positions, the state was dominated by mainlanders). Democracy and ethnic justice were closely linked: a majoritarian political system inevitably would bring the Taiwanese majority to power, but for many Taiwanese the issue went beyond simple calculations of power. They were angry that the KMT had denigrated and suppressed Taiwanese culture and identity in favor of an elitist version of Chinese culture that mainlanders demanded Taiwanese embrace. Their demand that the mainlander-dominated state respect Taiwanese identity and make room for Taiwanese people within its institutions was the basis for the debate around national identity that emerged alongside the democratic transition. The sum of these internal and external changes forced the KMT-led regime to acknowledge what it had long refused to see: the Republic of China would not survive as a single-party authoritarian state. Without reorienting the ROC as a democracy, the regime would come under increasing pressure from the United States, the Taiwanese majority, and the PRC. It is impossible to say what the outcome would have been had the KMT not yielded to the demand for democracy—insurrection? forced unification?—but as it turned out the KMT did yield to that demand, and Taiwan became a democracy through a series of incremental steps in the 1980s and 1990s. Perhaps the most visible of these came in 1996, when Taiwan held its first direct presidential election. The democratization process followed a template that is familiar to those who have read O’Donnell and Schmitter’s studies.5 The KMT split along predictable lines: those who could not accept the change insisted that the ROC’s destiny was to use itself as a base from which to pursue unification. This faction rejected the participation of Taiwanese whose goal was self-determination. Others, most notably Lee Teng-hui, Taiwan’s president from 1988 to 2000, believed that the only way for the ROC to survive was to accept democratic reform and allow all points of view to compete for popular support. For several years Lee

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was able to boost the KMT’s popularity by linking it to the success of democratic reform; the political wind in his sails was the strong popular support for reform made evident in the DPP’s increasing popularity. Then, in the late 1990s, the split within the KMT became unbridgeable, and the longtime ruling party lost control of the transition. In 2000 a divided KMT lost its first national election and yielded the presidency to the DPP’s Chen Shui-bian. Chen Shui-bian’s victory was a milestone in Taiwan’s democratic transition, but it was a frustratingly incomplete victory for the DPP. The KMT retained its majority in the legislature, where it worked doggedly to block Chen’s initiatives. His presidency achieved few of the DPP’s policy goals, and many felt that Chen’s inability to translate his party’s ideas into policy was evidence that Taiwan had not yet fully democratized. It seemed the KMT was still in charge, still enjoying political advantages so strong that some DPP-linked scholars and activists assessed the democratization process to have stalled. In 2008, the KMT recovered the presidency with the victory of Ma Ying-jeou, and it held the legislative majority too. The new administration pursued legal action against Chen, who ended up in prison. It was only in 2016, twenty years after the first direct presidential election, that the DPP finally gained a majority in the legislature (along with its second presidential victory). Why did it take so long for that key institution, among others, to reflect the island’s deep political change? The KMT’s Long Twilight: 1996–2016 The KMT’s legislative majority, combined with its strong standing within Taiwan’s civil service and local governments, enabled the longtime ruling party to remain the dominant player in Taiwan politics through the first decade and a half of the twenty-first century. At its weakest it retained a veto over actions of the state, and throughout most of the period it was more able than any other political force to implement its priorities (although its ability to do so during the Ma era was surprisingly limited, given that it controlled both the executive and the legislative function). The reasons for this “long twilight” include advantages the KMT enjoyed as well as disadvantages facing the DPP. The reasons for the KMT’s lingering influence fall into three categories: contextual factors (forces beyond the immediate control of the KMT or its opponents, including international pressure and Taiwan’s conservative political culture); KMT advantages (characteristics of the domestic political scene that benefited the KMT, such as Taiwan’s insti-

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tutional setup and the KMT’s own actions); and DPP weaknesses. Some of the DPP’s weaknesses were structural, but others resulted from political errors and misjudgments. During the KMT’s “long twilight,” contextual factors worked strongly in its favor. Both Taiwan’s main adversary, the PRC, and its closest partner, the United States, preferred KMT leadership throughout this period. China, of course, dreaded the idea that the DPP might take control of Taiwan’s government. The DPP’s fundamental policy positions, which included Taiwan’s continued political separation from the PRC, were anathema to Beijing. The preference of the United States for the KMT was much less pronounced (and never asserted openly), but it was evident in US officials’ statements about Chen Shui-bian, including President George W. Bush’s open rebuke of Chen in 2003. Meanwhile, implicit (and occasionally explicit) threats from Beijing, including the 2005 law on anti-secession, which authorized the use of force to compel Taiwan to accept unification under certain circumstances, made it easy for the KMT to portray itself to Taiwan’s electorate as the “safe” alternative. The KMT also benefited from a number of features of Taiwan’s political arena that gave it outsized (one might say unfair) advantages. Well into the 2000s, the KMT controlled significant public resources with which it rewarded its political allies. The legacies of the KMT’s long rule also included an overhang of administrative and judicial favoritism. Meanwhile, mobilizational authoritarianism endowed the KMT with a vast network of local political supporters, many of whom were rewarded with material benefits. They, in turn, provided material benefits to voters: vote-buying was widespread into the 2000s. The electoral system used in legislative elections prior to 2008 reduced the efficacy of electoral campaigns based on issues, party identification, and candidate qualifications—the DPP’s strengths—and enhanced the utility of grassroots mobilization—the KMT’s forte. The DPP was never able to build patronage networks that could rival the KMT’s. Another factor that slowed the DPP’s rise and extended the KMT’s dominance was the old ruling party’s massive wealth, some of it seized from the Japanese colonial government, the rest accumulated during the decades of rapid economic growth. In addition, the KMT enjoyed favorable media coverage, a holdover from the days when television and radio broadcasting stations were owned by the party and state and the publishers of the major newspapers were KMT officials. Even after the government lifted restrictions on independent media outlets, the overwhelming competitive advantage enjoyed by established, KMT-controlled media organizations made it difficult for non-KMT outlets to survive. These legacies mostly worked against the DPP, but over time their role became

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more complicated as Taiwanese began to view them as unfair advantages. Opposing “black-gold” (corruption) and “party assets” became popular slogans for the DPP to use against the KMT. The DPP itself helped prolong the KMT’s dominance by accepting partial reform. The grand bargain the two parties struck at a conference on national affairs in 1990 made huge strides toward democratization: it forced open legislative elections and set in motion the process that eventually allowed direct presidential elections. However, that bargain did nothing to dismantle the KMT’s political machine or undermine its ability to use corruption and patronage to dominate elections. In other words, the pact addressed institutional issues, but it left in place many of the unfair practices that helped extend the KMT’s political dominance. The KMT also benefited from its policy successes. Most Taiwanese believed it was the “safe” party on cross-Strait issues, in contrast to the DPP, which was widely perceived as “reckless.” Most voters also credited the KMT with the island’s economic performance, and they preferred the old ruling party on economic issues. The KMT also benefited from its broad social base—the consequence of its corporatist approach to society. The KMT did not represent a particular social or economic class; its supporters came from all walks of life, and that allowed it to embrace all manner of popular causes without worrying about ideological consistency. Its broad composition left the DPP with no choice but to construct a cross-class coalition of its own, picking off individuals who were unhappy with KMT rule rather than mobilizing a class of people who had been excluded under the authoritarian system. The necessity to mirror the KMT’s broad-based composition limited the range of issues on which the DPP could mobilize voters. While many in the party were sympathetic to social welfare programs, environmental protection, and other center-left positions, the party’s funding came primarily from entrepreneurs whose motivation for joining the party was opposition to the KMT, not sympathy with economic underdogs. What held the party together were dislike for the KMT, a desire for democracy, and a related hope that Taiwan could be governed by and for the Taiwanese people. But the strong version of selfdetermination, while attractive to many of the DPP faithful, was a bridge too far for most voters. The DPP’s decision to write support for Taiwan independence into its party charter in 1991 was a political gift to the KMT. The public was unprepared to support such a high-risk position, so the DPP’s embrace of independence prolonged the KMT’s dominance. We can see this in the DPP’s demonstrably worse electoral performance in elections (such as the 1996 presidential election) when its candidates emphasized independence. The opposition’s breakthrough

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in 2000 was possible because Chen Shui-bian’s platform was more welcoming to engagement with the mainland than were the platforms of his opponents—and even then he won with less than 40 percent of the vote in a three-way race. Normal Politics at Last? 2016 and 2018 The KMT’s many advantages allowed it to play a dominant role well into the twenty-first century, but in 2016 the party lost control of the legislature for the first time, and with it (for the second time) the presidency. The forces that had kept the party in power (more or less) since the 1940s finally were exhausted, and the KMT, for the first time since the Chinese civil war sent it scrambling to Taiwan, had completely lost its access to the levers of power. The KMT’s 2016 defeat was a classic example of an overdetermined event. The real mystery is not why it happened, but why it took so long. Nonetheless, it is worth thinking through why the forces that had sustained the KMT’s dominant position declined, and what the KMT’s loss of both executive and legislative power may mean. One way to understand both of these questions is that Taiwan’s democracy has reached a state of normalcy; that is, the features of the system that prevented the KMT from losing power have finally disappeared, and Taiwan has become a fully competitive democracy in which neither major party enjoys a structural advantage. The simplest explanation for the KMT’s 2016 defeat—especially in the presidential race—is that in consolidated democracies, political parties rarely manage to secure three consecutive presidential terms. Alternation in power is the norm in an established democracy—in a sense, it is the whole point of democracy. If alternation does not occur, it suggests there is some kind of structural advantage—institutional or political or both—that allows one party to win again and again. During the KMT’s twilight, that was true of Taiwan: the institutions of government made it nearly impossible for the DPP to win a legislative majority and the political environment made it nearly impossible for the DPP to elect a president (unless the KMT was divided). The 2016 election results prove that the KMT’s structural advantages are no longer determinative. Institutional reforms adopted more than a decade ago were a key factor in the DPP’s 2016 legislative victory. The formula of the single nontransferable vote (SNTV) inherited from the Japanese colonial regime had been a major source of strength for the KMT’s mobilizational authoritarianism. This complex voting system produced a strong

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advantage for political parties with a broad base and ample resources; it rewarded political strategies that de-emphasized policy and partisanship in favor of personal voting and patronage. The KMT mastered the art of SNTV electioneering early on, and it was able to use that mastery to achieve legislative majorities that were disproportionately large relative to its share of the vote. As a result, the DPP was unable to translate its popular support into legislative muscle in SNTV elections. In 2005 Taiwan’s legislature voted to replace the SNTV system with a hybrid system in which seventy-three representatives are elected in single-member districts, thirty-four according to party-list proportional representation (PR) rules, and six by Taiwan’s aboriginal voters. The PR component of the new formula was designed to leave some room for small parties, but the system as a whole strongly favors large parties—indeed, this was the reform’s intended result. Even the PR element, which has a 5 percent threshold for representation, was designed to restrain the emergence of small parties. The new system was first used in the 2008 legislative elections. As expected, the results favored the large parties, the KMT and DPP, and the system’s inherent disproportionality enhanced the winning party’s influence. In 2008, the KMT won 65 percent of the seats with 51 percent of the vote. The new system had similarly disproportional effects in 2012, when the KMT won 60 percent of seats with 45 percent of the vote and (in a different direction) in 2016, when the DPP won 60 percent of the seats with 44 percent of the vote. Moreover, because the legislative and presidential elections were held on the same day, the impulse for party alternation affected both branches simultaneously, and increased the likelihood of unified government. The new electoral system has strengthened Taiwan’s two-party system. During the KMT’s twilight years, both major parties split repeatedly, in part because the SNTV system made it possible for candidates to win without support from a big party. The new system restricts the power of small parties, and it structures legislative elections as a head-to-head race. By foregrounding partisan competition, the new system also allows parties to emphasize their positions on issues— something they were reluctant to do under the old rules. But because Taiwan’s median voter is a moderate, the new system also has accelerated the process of party convergence. While the parties are still embroiled in internal policy debates, both parties’ mainstream tendencies are more centrist than extremist. The DPP (largely) has shed its reputation as a radical party willing to risk Taiwan’s safety for independence and the KMT (largely) has shed its reputation as a hyper-conservative party that puts Chinese unification ahead of Taiwan’s well-being.

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Taiwan’s democracy has shifted from one in which one political party is perceived as significantly more safe and competent than the other to one in which both major parties are perceived as capable of governing. Both parties have won presidential and legislative elections; neither is any longer at a permanent advantage or disadvantage in terms of institutions or public opinion (although the KMT is undergoing significant internal turmoil at the moment). This state of affairs is consistent with “normal” democratic functioning. The fact that both parties are viable options for governing is important, because it allows voters to use elections to hold parties accountable for their performance in office. That brings us to another important reason for the 2016 electoral outcomes: widespread dissatisfaction with the KMT’s economic performance. By the middle of President Ma’s second term, many voters had lost faith in his economic vision. They wanted a new president who would bring a new approach to the island’s economic future, so they chose Tsai Ing-wen. The local elections that took place in November 2018 underscored the degree to which Taiwan’s elections have come to function as opportunities for voters to supervise their government officials. During her first two years in office, President Tsai worked hard to strengthen Taiwan’s economic future, but some of the measures she undertook had short-term costs, while their long-term benefits were a matter of faith. For example, in order to secure the country’s fiscal future, Tsai cut government workers’ generous pensions. She also spent a great deal of effort developing plans to diversify Taiwan’s economy and reduce its dependence on the PRC. These measures should pay off in the future, but many voters expected faster results. They showed their disapproval at the ballot box, voting-in a wave of KMT-backed local officials. Just two years after it seemed the KMT was in for a long spell in the opposition, pundits were giving even odds that the next president would wear a blue KMT lapel pin. Conclusion The wave of democratic transitions that occurred in the 1970s and 1980s has receded since 2000. While Taiwan’s democracy has matured and normalized, its experience is not universal. Countries that once were lauded for their democratic transitions—Poland, Hungary, Turkey, and Venezuela, to name a few—are experiencing democratic deterioration. Some have even reverted to authoritarianism. Others—most notably China—have not yet undergone a democratic transition of any kind,

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even though their high level of economic development predicts that they should. These are today’s resilient authoritarians. In 2005, Bruce Dickson wrote of the PRC: The CCP [Chinese Communist Party] is pursuing a variety of political reforms that are intended to enhance the capacity of the state to govern effectively, if not democratically. It has used a mix of measures to shore up popular support, resolve local protests, and incorporate the beneficiaries of economic reform into the political system. In turn, it also forcefully represses efforts to challenge its authority and monopoly on political power and organization. As a result, public opinion is surprisingly complacent.6

Dickson wrote his description of the PRC more than a decade ago, yet it remains accurate today. That same description would have rung true to observers of Taiwan in 1975. Authoritarianism can be very resilient; breaking down the pillars that support an authoritarian regime can be difficult and take time. Nonetheless, Taiwan’s experience shows that resilient authoritarianism does not necessarily mean permanent authoritarianism. In the 1980s, scholars of democratic transition envisioned a linear process from authoritarian breakdown to democratic transition to democratic consolidation. They were careful, however, to acknowledge that democratization was neither inevitable nor irreversible. In Taiwan’s case, a combination of internal and external forces drove a transition that was slow by global standards. It took decades to shed the legacies of the authoritarian system, and the possibility of a return to authoritarianism (perhaps under Chinese Communist Party rule) is an ever-present shadow over Taiwan’s democracy. Nonetheless, the political system that replaced Taiwan’s once-resilient authoritarianism is a liberal democracy with robust party competition and a lively civil society. It is a healthy political regime and a healthy society, despite its long genesis and many challenges. Notes 1. O’Donnell and Schmitter, Transitions from Authoritarianism. 2. Huntington, The Third Wave. 3. Cheng, “Democratizing the Quasi-Leninist Regime in Taiwan,” p. 472. 4. Winckler, “Institutionalization and Participation on Taiwan.” 5. O’Donnell and Schmitter, Transitions from Authoritarianism. 6. Dickson, “Populist Authoritarianism,” pp. 1–2.

3 Evolution of a Global Economic Power Chien-Pin Li

Over the past six decades, Taiwan’s economic development has been marked by sustained growth, structural changes, and equitable income distribution. Between 1952 and 2015, Taiwan’s gross domestic product (GDP) rose from US$1.68 billion to US$523 billion, and GDP per capita from US$208 to US$22,294.1 From 1960 to 2010, its average growth rate of GDP per capita, measured in purchasing power parity, was 9.53 percent. Rapid and sustained growth is uncommon in the modern era, as growth rates tend to fluctuate over time.2 Accompanying the rapid growth was the shift in economic structure, as Taiwan evolved from an agrarian economy to an industrial economy. In 1952, agriculture accounted for 56.1 percent of Taiwan’s employment and 32.1 percent of its GDP. In 2015, the agricultural sector hired only 5 percent of Taiwan’s labor force for 1.8 percent of GDP. The change of product structure is also seen in trade structure. Industrial products accounted for 8 percent of Taiwan’s exports in the early 1950s, compared to 98.6 percent in 2015. Changes also occurred within the manufacturing sector. In the 1950s, industry consisted of primary processing of agricultural and forest products, and gradually expanded from labor-intensive manufacturing to capital- and skillintensive manufacturing. As a key player in the global information and communications technology, Taiwan in 2015 was the top supplier of foundry service and information and communications packaging and testing, accounting for 67.3 percent and 48 percent of the global market share, respectively. While the service sector held steady in the early stage of the development, it began to expand in the mid-1980s. As of 27

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2015, services composed 62.8 percent of Taiwan’s GDP, much higher than the share of industry at 35.4 percent. Another notable achievement has been Taiwan’s ability to maintain relatively equitable income distribution. Its Gini index was at 0.322 in 1965, and 0.336 in 2014.3 The highest quintile of income in 2014 was 6.05 times the lowest, a smaller gap than those of the United States (15.90 in 2013) and Hong Kong (20.70 in 2011). The record defies the conventional wisdom that income inequality tends to rise with rapid economic growth, due to uneven performance between productive and nonproductive sectors. What accounted for such an impressive economic performance? While economic development is a complicated process concerning multiple factors, there has been a long-standing debate over the relative role of the market and state in facilitating economic development. For neoclassical economists, factors contributing to economic development and expansion, such as accumulation of capital, technological innovation, economic specialization, and free trade, take place within a competitive market framework. Industrialization was possible because the market forces were allowed to operate without excessive state intervention. For neoclassical economists, Taiwan represents a case in which the government created a stable macroeconomic environment, promoted exports, invested in human capital, and created a legal framework for enforcement mechanisms to maintain a productive market economy.4 At the opposite end are those who view economic development from national and strategic perspectives and express doubts about the selfregulating virtue of the market. Developmental-state theorists argued that development in East Asia was the result of the design and implementation of a grand plan for industrialization and productivity growth.5 Relatively insulated agencies with competent economic bureaucrats carried out government guidelines in an economic system marked by institutionalized government-business cooperation and coordination. Notwithstanding opposing views of the classical/neoclassical and statist perspectives, they share one assumption: viewing the market and the state as two distinct, alternative arrangements without recognizing the connection between the two. In so doing, they ignore the fact that the market and state coexist, overlap, and interact. The state and the market are not mutually exclusive. Rather, all economies are a blend of the market and the state, which are interconnected through formal and informal networks. Thus, for a comprehensive, inclusive view of Taiwan’s course of economic development, I would situate its experience within historically grounded contexts and examine the interplay of major actors as well as the development and implementation of key policies.

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Japanese Colonial Rule: 1895–1945 Taiwan was ceded to Japan in 1895 after China’s defeat in the first Sino-Japanese war (1894). Soon after taking over Taiwan, the Japanese administration undertook a cadastral survey to establish landownership for tax purposes. Under Japanese colonial rule, Taiwan’s main economic function was to supply Japan with rice and sugar. To increase production of rice and sugar, the colonial government built irrigation structures and established institutional support such as agricultural research stations, agricultural schools, and farmer organizations to introduce improved farming methods such as fertilizers and new seeds to increase crop yields. The construction of 16,000 kilometers of roads, 6,000 kilometers of railways, and two large harbors facilitated the export of agricultural products in support of economic development in Japan. Industrial development in Taiwan, however, received a lower priority and was restricted for Japanese nationals, with limited entry for Taiwan’s native population. Sugar refining, primarily handled by largescale Japanese sugar companies, became the main modern industry on the island. After the 1930s, to support Japan’s military activities in Southeast Asia, a few industrial plants in machine tools, industrial chemicals, and aluminum were built. They were largely owned and managed by the Japanese. Japanese ownership of industrial enterprises meant that very few Taiwanese were in a position to gain monopolistic control of industries, which was favorable for equitable distribution of manufacturing assets in the postcolonial era.

Transitions and Economic Reforms: 1950s–1960s Political and Economic Transitions

Toward the end of the World War II, heavy bombing by the Allies caused extensive damage in Taiwan, destroying three-quarters of its industrial capacity.6 In 1946, Taiwan’s economic production was estimated to be only 55 percent of its level of 1937.7 Economic recovery was hampered by runaway inflation because of widespread shortage of commodities, and government deficit spending to finance postwar rehabilitation and reconstruction. The vicious inflation on mainland China further exacerbated the situation, raising the price of industrial goods shipped to Taiwan. Inflation was at a rate of 500 percent annually between 1946 and 1948, and rose sharply to 3.000 percent in the first half of 1949.8 Furthermore, the escalating civil war caused approximately a million civilians

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and soldiers to flee from China to Taiwan, adding to the economic burden of the island. While the influx of refugees caused economic crisis in the short term, the migration also brought skills and talents for long-term economic growth. Many of the civilian refugees were educated managers and entrepreneurs from China, ready to fill in the void left by the Japanese colonialists. For example, ten of the eleven textile companies founded between 1948 and 1951 were established by the Chinese from Shanghai who brought capital and technical expertise to Taiwan. With the establishment of the People’s Republic of China (PRC) in Beijing in October 1949, and the retreat of Chiang Kai-shek and the Kuomintang (KMT) to Taiwan in December of that year, Taiwan began to separate politically and economically from China. In the early days of the political and economic transitions, economic stabilization and selfsufficiency in food production were top priorities for the KMT government. Economic Stabilization

To curb hyperinflation, the state bank of Taiwan implemented monetary reform, issuing a new Taiwanese dollar (NT$) in June 1949 to replace the old dollar that had been in circulation since 1947. Linked up with the value of the US dollar (initially set at the rate of NT$5 to US$1), the new Taiwanese dollar was backed by 100 percent reserves in gold and foreign exchange to inspire confidence. Furthermore, the authorities imposed strict control over gold and foreign currency to prevent their outflow and keep the balance of payment in line. Importers were required to put forth a deposit equivalent to 50 percent (and subsequently raised to 100 percent in 1955) of the foreign currency applied for, and were not allowed to import luxury goods. Interest rates on savings and loans were set at high levels, such as 7 percent for a month or 9 percent for three months, to attract new time deposits. Within months, the time-deposit totals in all banks increased more than seventeenfold, absorbing the excessive liquidity in the economy.9 With these measures, inflation was brought down to 300 percent in 1950. By 1952, the hyperinflation was under control. The government also strived to achieve a balanced budget by limiting spending, not by heavy taxation. From 1951 to 1955, tax revenues accounted for merely 10 percent of gross national product (GNP), and the percentage increased slightly to 11.7 percent from 1956 to 1960.10 Nevertheless, with the military threat from the mainland, Taiwan had to maintain a sizable defense. In the 1950s, its defense expenditures accounted for 60 percent of the government budget, or 10 percent of its GNP,11 and were a significant drain on its resources. The delivery of US

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aid in 1951 was a welcome relief for Taiwan in this regard. A considerable amount of foreign transfers in the form of US aid supplemented the government budget and produced surplus in government savings. US Economic Aid

After the outbreak of the Korean War on June 25, 1950, President Harry Truman sent the Seventh Fleet to patrol the Taiwan Strait. In October 1951, the US Congress approved the Mutual Security Act, which included Taiwan in its economic and military assistance to strengthen collective defense. From 1951 to 1965, Taiwan received approximately US$4 billion in aid, over 60 percent of which was in the form of military assistance.12 Throughout the 1950s, US aid accounted for approximately 40 to 68 percent of Taiwan’s disposable savings and was the primary source of domestic investment. Aid from the United States helped stabilize the economy, covered the shortfall in foreign currency, and financed imports of machinery, equipment, and industrial materials that were critical for Taiwan’s economic growth. It also lessened the dilemma in resource allocation between economic growth and military strength. A significant part of the US aid, 67 percent, was allocated to public enterprises, while private enterprises and mixed enterprises received 6 percent and 27 percent, respectively. In terms of economic sectors, infrastructure projects, including electricity, transportation, and communications, accounted for 40 percent of US economic aid, followed by 24 percent in agriculture, 20 percent in human resource, and 15 percent in industry.13 The contribution of US aid to private sectors was through construction of public infrastructure. Efficient and reliable power supply helped support the development of industries in fertilizer, aluminum, textile, and cement. Without US aid, Taiwan’s GNP in 1964 would have been only 58 percent of its actual level.14 The contribution of US aid to Taiwan’s overall economic success, however, needs to be put in perspective. From 1951 to 1962, the ratio of foreign transfer receipts (primarily US aid) to domestic investment ranged from 31 to 52 percent,15 indicating Taiwan’s heavy dependence on foreign savings for growth. Yet from 1963 to 1972, the average of this ratio dropped to nearly zero.16 This indicates that foreign aid had significant impact on Taiwan’s economic development in the 1950s. Since then, its direct effect has been minimal. The aid package, however, did give the United States leverage over Taiwan’s economic policy. US officials played a direct role not only in aid administration, but also in overall economic planning for Taiwan, including matters related to banking, currency, and foreign exchange. The Mutual Security Mission

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to China of the International Cooperation Administration (ICA, the precursor to the US Agency for International Development [USAID]) had the authority to review economic aid programs down to the project level, while the Military Assistance Advisory Group (MAAG), which assisted in personnel training, military equipment, and the supply of necessities, handled the military aid. On the Taiwan side, the Industrial Development Commission (IDC, 1953–1958), the Economic Stabilization Board (ESB, 1953–1958), and the Council on US Aid (CUSA, 1959–1963) were established to coordinate with US advisers, who studied and made recommendations on economic and financial policies. These US aid–financed agencies were relatively free from normal civil service regulations to be able to pay much higher salaries to recruit and train highly competent staff. Prior to the mid-1960s, they played a more important role than the Ministry of Economic Affairs and Ministry of Finance in initiating economic and industrial plans. The director of the US aid mission and the economic counselor of the US embassy both participated in CUSA and ESB decisionmaking concerning Taiwan’s economy.17 US officials played a similar role in agricultural policy through the Joint Commission on Rural Reconstruction (JCRR), as developing agriculture was an early priority. The JCRR was established in October 1948 in Nanjing as a binational agency between the US and Chinese governments. It moved to Taipei in 1949, managing US technical aid, economic aid, and food aid for rural development in Taiwan. It provided funding for agricultural research and experimentation, promoting innovative farming techniques. For example, its projects in asparagus and mushroom cultivation were a huge success, opening new opportunities for export. Land Reforms

Although the Japanese constructed irrigation structures and developed agroindustries in Taiwan, they did little to change the distributions of land and income. At the end of the Japanese rule in 1945, over 50 percent of the population in Taiwan were farmers, of whom 70 percent were tenants, who turned over 50 to 70 percent of their crop as rents to the landlords. Rent payments had to be made in advance for anticipated harvest, without adjustments for crop failures. There was no security of tenure; tenants could be evicted at will. The KMT regime implemented agricultural reforms in three phases: the compulsory reduction of land rents, the sale of public land to tenants, and the “Land-to-the-Tiller” program. In 1949, farm rents were set to a maximum of 37.5 percent of the yield of the main crops. Tenants would

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not need to pay their rents in advance, and were protected by fixed leases of three to six years. The rent reduction program affected more than 70 percent of tenant households, raising their income and making it easier for them to benefit from their increased efforts to produce more. In the second phase, beginning in 1951, public lands previously owned by the Japanese and taken over by the government were sold to landless tenants at a fixed rate of two and a half times the average yield, which was much lower than the market value of five to eight times the annual yield. Loans were provided to farmers, who could repay in kind over a ten-year period. Nearly 72,000 hectares of land (8 percent of the total cultivated area) were sold to 20 percent of Taiwan’s farming households. The sale of public land demonstrated the determination of the government to redistribute land and set the stage for the final phase of the reform in 1953—the “Land-to-the-Tiller” program. Landlords were forced to sell their landholdings in excess of 2.9 hectares to the government at the same rate of government land sales—that is, a price of two and a half times the yield. Landlords were compensated over a period of ten years. They received 70 percent of the purchase price in commodity bonds denominated in kind (with 4 percent interest per annum), and 30 percent in stocks from four government-owned companies taken over from the Japanese (Taiwan Cement Corporation, Taiwan Pulp and Paper Corporation, Taiwan Industrial and Mining Corporation, and Taiwan Agriculture and Forestry Development Corporation). The government then resold the lands at the same price to nearly 200,000 farming families, who would make payments in kind in twenty installments over ten years at an interest rate of 4 percent. Under the program, ownership changed in approximately 144,000 hectares of land (16 percent of the total cultivated area). The loss of the landlords’ wealth, calculated by the difference between the government-set price and the market value of the land, was estimated to be 13 percent of Taiwan’s GDP in 1952.18 Two factors contributed to land reform success in Taiwan. First, the KMT had limited relationship with Taiwanese landlords. Second, the project received financial and technical assistance from the JCRR, which played a vital role in planning and guiding agricultural development. Land reforms changed the land tenure arrangement as well as the landholding pattern. Land cultivated by owner-cultivators increased from 50.5 percent of all land held in 1949 to 75.4 percent in 1953, and tenantcultivated land fell from 41.8 percent to 16.3 percent over the same period. By the early 1970s, 80 percent of the agricultural population were owner-cultivators. Furthermore, large landholdings were eliminated. Small owner-cultivator families became the dominant group in Taiwan’s countryside, with an average farm size of one hectare.19

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Land reforms had profound implications for Taiwan’s economic and political development. First, the program incentivized the new ownercultivators to increase their production, because the resulting economic gains were largely theirs. From 1949 to 1960, rice production increased by 50 percent, and farmers’ net income more than tripled.20 The food supply produced by the agricultural sector was sufficient for the demand of domestic consumption, with some extras for export. Agricultural selfsufficiency helped preserve foreign exchange, which was important for Taiwan’s balance of payments before its trade balance first turned positive in 1969. Although other factors such as increased work efforts, adoption of new agricultural technologies, and increased investment may have also contributed to productivity increase, the importance of land reforms cannot be discounted. Second, land reform regulations were deliberate in preventing concentrated landownership for the future.21 Thus, as land investment was no longer an option, capital was encouraged to flow away from the agricultural sector to industry and commerce. Through ownership of the four industrial enterprises, the landlords had the opportunity to participate in industrial development. And third, land reforms created a political base for the KMT government. Farmers who are ownercultivators tend to be more supportive of the existing political order than tenants or the landless. Improvement of economic welfare for a large number of farm households further solidified the political standing of the KMT in rural areas, as the dismantling of the landlord class meant the removal of a group who could be powerful politically and economically. The political climate made it easier for the authorities to transfer resources from agriculture to industry. Land reform helped raise agricultural productivity. Between 1952 and 1964, the population of agricultural workers increased by 33 percent (from 4.3 million to 5.8 million); the real net domestic product by agricultural origin had an 80 percent growth, or an average of 5 percent growth each year, while the total area of cultivated land remained nearly unchanged.22 To industrialize the economy, resources need to be shifted from the productive agricultural sector to other industrial sectors. Growth in agricultural productivity contributed to Taiwan’s economic growth through net transfers of capital and labor from agriculture to other sectors. The transfer in Taiwan was not entirely due to market forces; rather, government played an important role in managing the transfer.23 As early as 1947, a compulsory system of rice purchase was put in place to secure the food supply for army personnel and government employees. In September 1948, a rice-for-fertilizer barter system was

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implemented. The official rice prices set by the Provincial Food Bureau were on average 20 to 30 percent below market prices.24 Fertilizer was overpriced in rice terms as well. Thus farmers routinely paid rice for fertilizers at a price that was almost 40 percent higher than that paid by farmers in other countries.25 These measures constituted hidden rice taxes. As a result, surplus in agriculture was transferred to nonagriculture sectors through monopolistic buying arrangements made by the government (the Taiwan Provincial Food Bureau) with terms unfavorable to farmers. The magnitude of capital resources transferred from the agricultural sector to the rest of the economy was estimated to be 22 percent of total agricultural production from 1950 to 1955, and 15 percent between 1956 and 1969. Yet it was a net transfer, not a gross transfer. Considerable gross investment through credit allocation and improved agricultural technology from nonagriculture sectors was made to agriculture to ensure vigorous growth of agricultural productivity to allow it to provide a net transfer. For example, by 1960, Taiwan had more agricultural research workers compared to farmers than did Japan (79 versus 60 per 100,000).26 Thus, agriculture was “squeezed” to provide capital for nonagricultural growth, but it was not neglected. A robust agriculture sector was important for Taiwan’s industrial growth. Through mechanisms such as a fertilizer-to-rice barter system, compulsory purchase of rice from landowners, and land tax collection in-kind and repayment in-kind of loans, the government controlled nearly 30 percent of the rice produced between 1960 and 1965.27 Maintaining a stable rice supply for wage earners prevented industrial wages from rising prematurely, and allowed industrial goods to be competitive. Also, the agricultural sector provided a relatively strong domestic market for the expanding consumer goods industry, building the base for industrialization. Market Economy

Along with land reforms, an important economic policy at that time was to establish a productive market economy in Taiwan. A group of capable economic bureaucrats, led by K. Y. Yin, proposed the path of a privateenterprise market economy. Although they enjoyed a certain degree of political support from the top political leadership, they had to contend with different perspectives of the factions within the KMT. While some factions advocated the establishment of private-enterprise system to nurture a new entrepreneurial class for political legitimacy and long-term governance, others preferred a planned economy to ensure efficient use of national resources through the use of state-owned enterprises.28

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In the end, the decision to institute a market economy prevailed. A series of laws were enacted to establish a productive market economy, including abolition of the government’s control over cotton yarn (to encourage the textile industry and promote its exports); allowing private enterprises to raise capital by issuing stocks; providing tax relief to capital-intensive enterprises; and encouraging investment from foreign and overseas Chinese. Collectively, these rules and regulations created the institutional foundation for private enterprises, signaling the creation of a new economic culture in support of a market economy. In 1954, the aforementioned four public enterprises (Taiwan Cement Corporation, Taiwan Pulp and Paper Corporation, Taiwan Industrial and Mining Corporation, and Taiwan Agriculture and Forestry Development Corporation) were privatized to compensate the landlords. Nevertheless, the government retained control over those “monopoly” enterprises—that is, industries in utilities, railroads, shipbuilding, and iron and steels that were vital to national defense or produced upstream goods. Furthermore, the financial sector was exclusively under state authority. Prior to the 1980s, there were deliberate efforts to prevent the formation of business conglomerates. For example, the Company Law restricted the amount of capital one company could invest in another. The absence of large-scale business groups to challenge the state ensured the dominance of the KMT position in economic decisionmaking. Import Substitution

In 1952, the ESB presented its first draft of a four-year economic plan; the final draft was implemented in 1953. The plan adopted an importsubstitution policy through import restrictions and high tariffs. This inward-looking policy was prompted in part by the sizable trade deficit and in part by the need to expand the consumer goods industry to meet the demand of the domestic market. An array of policies were employed to accomplish the goal, including exchange controls, import restrictions, protective tariffs, multiple exchange rates, and an increasingly overvalued currency.29 A number of private firms in chemical fertilizers, plastics, and textiles received government support to become involved in import-substitution production. The fertilizer industry helped stimulate the development of the machinery and repair industry, inducing forward and backward linkages to synthetic resins, plastics, dyeing, medicine, and machine tools. The textile industry, relocated from Shanghai to Taiwan at the end of 1949, used local Taiwanese labor in combination with capital and experienced management teams from Shanghai. Textile firms enjoyed a monopolistic position from 1954 to 1960. Importsubstitution industries such as textiles, bicycles, wood products, and

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rubber and leather goods gradually replaced food processing as the main components in manufacturing production. Easy import substitution soon came to an end for two reasons. First, the size of the domestic market was limited, unable as it was to absorb fully the goods produced. In the late 1950s, industrial surveys noted increasing excess capacity in textiles, paper, and rubber goods. Once domestic markets for consumer goods were exhausted, overproduction led to a slowdown in industrial output and rising unemployment. One of the solutions was to redirect the manufacture of consumer goods to international markets for export expansion. As early as the summer of 1954, economists T. C. Liu and S. C. Tsiang, then representatives of the International Monetary Fund (IMF), recommended economic reforms to remove import restrictions and to permit market forces to determine the foreign exchange rate. Second, by the late 1950s, the purpose of US aid began to change from defense support to development, with loans increasingly replacing grants. Furthermore, US economic aid was to phase out soon. With their extensive experience in a free-enterprise system, US aid officials attempted to make Taiwan’s economy more market-driven and development-oriented, urging authorities to liberalize production and trade, and abolish import restrictions and exchange controls. USAID recommendations were similar to those suggested by Liu and Tsiang, demanding the relaxation of many controls imposed in the early 1950s. Export-Oriented Industrialization

Following the end of the second Taiwan Strait crisis over Quemoy and Matsu (August 1958–January 1959), USAID officials formally urged Taiwan to adopt economic reforms. The proposed package comprised eight key components: limiting resources devoted to the military; noninflationary fiscal and monetary policies; encouraging private sector investment through tax reforms; a uniform and realistic exchange rate; liberalizing trade and exchange controls; realistic utility pricing; reorganization of the banking system; and reducing the state role in economic activities and the sale of public enterprises to the private sectors. USAID was willing to make available loans of up to US$30 million to smooth the transition, if the proposed reforms were implemented. Given the limitation of its domestic market, Taiwan would have to integrate with the international economy to sustain its economic growth. The shift in policy, however, did not occur overnight. Economic reforms aimed for the transition to export-oriented industrialization (EOI) and promotion of foreign investment involved persuasion and pressure. 30 While the leading state bankers were concerned about the effect of

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deregulation of foreign exchange and imports on inflation, the military and the state-owned enterprises (SOEs) were averse to the idea. The military opposed the idea on grounds of economic self-sufficiency and war-preparedness. Political leaders used the support of USAID to silence the critics, but did not privatize the SOEs. Policy changes took place gradually, reflecting the authorities’ increasing confidence in the viability of the Taiwanese economy. The package of reform measures implemented between 1958 and 1960 led to a fundamental change in the orientation of the economy. In 1958, the government abolished the dual-exchange-rate system and encouraged industries to export. The change in policy attitudes began with a nineteenpoint economic and financial reform program in 1960. The program included measures designed to encourage saving and private investment, to liberalize trade regulations, and to simplify the multiple-exchange-rate system. A statute to encourage investment was enacted to provide tax exemptions and deductions. Qualified enterprises could be exempted from income tax for a period of five years, as the maximum rate of business income tax was reduced. The scope of tax deductions and exemptions was further expanded in 1965. Enterprises enjoyed tax rebates for exports, applicable to customs duties and commodity tax. Rebates accounted for an increasingly large proportion of levied taxes for exports from the 1960s onward, reaching the highest point from 1971 to 1975.31 An export loan program with preferential interest rates for export financing was launched, although the total amount of preferential loans accounted for only a small portion of total loans. Exports became the major propelling force behind Taiwan’s economic growth beginning in the 1960s. According to Shirley Kuo, export expansion became increasingly important as a source of output growth for Taiwan: from 35 percent (1961 to 1966), to 45.9 percent (1966 to 1971), to 67.7 percent (1971 to 1976).32 Textile exports replaced sugar as the top export item in 1965, and industrial share of exports reached 55 percent in 1966, overtaking for the first time processed agricultural products.33 In 1966, Taiwan established its first export processing zone (EPZ), in Kaohsiung, using low labor cost and tax incentives to attract foreign capital and technology. Firms established in the EPZ were entitled to import raw or intermediate materials duty-free, without having to go through tax-rebate procedures. Duty exemption was also extended to plant equipment for all plants without exception. The idea was an immediate success. Between 1966 and 1970, the EPZ attracted a total of US$33 million in foreign direct investment (FDI), or 13.8 percent of total foreign investment.34 Two more EPZs opened in 1971. The majority of investors were from Japan and the United States with investment proj-

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ects in areas such as textiles, garment, machinery, and electronics, facilitating technology transfers and the opening of international markets for Taiwan. Although the EPZs represented a new, efficient pattern to develop an export-oriented economy, they accounted for merely 3.7 percent of manufacturing employment, and 7.4 percent of total exports.35 An interesting feature of the export industries in Taiwan was that over 95 percent of the manufacturers were small- and medium-sized enterprises (SMEs) located outside export processing zones in rural areas throughout Taiwan. With industrial estates spread throughout the island and in the countryside, a large percentage of farmers became part-time workers. The entry barrier to export promotion was low. The incentive for export promotion was universalistic and nondiscriminatory. Given low-entry barriers to small industry, it was common for laborers to open their own businesses after gaining experience in the big factories. Forming the manufacturing networks, SMEs turned to upstream big business such as the state-own enterprises and large enterprises for supply of intermediate goods and services in response to demands of foreign buyers. The three-tier interconnected business model marks the industrial structure of Taiwan, with the SOEs dominating the upstream commanding heights, local large enterprises the midstream intermediate goods, and SMEs the downstream exports. One advantage of decentralized industrial development in rural Taiwan was that factories could absorb rural labor on a full-time or part-time basis. The employment pattern provided supplemental income to farmers and improved their standard of living. Additionally, it minimized the need for rural-to-urban migration. The fluid migration between agricultural and industrial sectors contributed to a more equal income distribution.36 Industrial Upgrading: 1970s–1980s In the early 1970s, Taiwan faced new political and economic challenges. While it became more dependent on the world market, as seen in its high ratio between foreign trade and GNP, it began to lose ground in its international political status. In 1971, Taiwan had to withdraw from the United Nations (UN), as the majority of the General Assembly supported China’s UN membership. Economically, rising labor cost and creeping protectionism in the West also became obstacles for the success of the EOI strategy. For example, at the request of the United States, Taiwan had to restrain “voluntarily” its textile exports. The first oil crisis, of 1973, accentuated Taiwan’s economic vulnerability. Inflation ran up to 40.6 percent in 1974, FDI dropped 50 percent from 1973 to 1975, while the economy barely grew at 1.1 percent in 1974.

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Basic and Heavy Industries

Government responded to the 1973 oil crisis by raising interest rates, cutting taxes, and increasing public spending. A program involving ten major construction projects, conceived in the sixth four-year economic plan, of 1972, was launched in 1974 to augment railways, airports, seaports, electricity, and other basic infrastructure, and to promote the country’s upstream supply of basic raw materials development such as petrochemicals and steel. The scale was massive, with estimated capital investment at close to US$6 billion, including state capital and foreign borrowings. The original goal of the ten major projects was to upgrade infrastructure and develop heavy industries, not to counter the business cycle. Nevertheless, the timing was opportune, contributing to Taiwan’s rapid recovery in 1975. Oil and electricity prices went through a onetime adjustment in early 1974 to meet the higher cost of oil products, but they were kept relatively low to maintain the competitiveness of manufacture exports. Consequently, feeling no urgency to upgrade the equipment and production processes, the manufacturing sector reacted rather slowly to oil-induced changes in the 1970s. In the wake of the second oil crisis, of 1979, energy prices were raised every year to reflect the import cost. High-Tech Industries

Manufacturing of labor-intensive consumer electronics such as televisions, videocassette recorders, and calculators in Taiwan created manufacturing expertise and supply infrastructure for parts and materials that were critical for transition to information technology. The government established the Industrial Technology Research Institute (ITRI) in 1973 to provide joint research, technical services, and advice to Taiwan’s SMEs. Training local scientists and engineers for the industry, and assisting in foreign technology transfers, ITRI was designed to be a platform for broad public-private interactions to facilitate the growth of domestic hightech firms. Based on advice from a group of overseas Chinese American engineers, one of the top priorities for ITRI was the semiconductor industry. In 1974, ITRI created a subsidiary, the Electronics Research and Service Organization (ERSO), for semiconductor research. ERSO spun off the United Microelectronics Corporation in 1980, and the Taiwan Semiconductor Manufacturing Corporation in 1987. Beginning in 1979, the National Science Council was entrusted with the development and management of the science-park projects. In 1980, the Hsinchu Science-Based Industrial Park (HSIP) was established to attract foreign and overseas Chinese investments in research-oriented companies. Qualified firms received generous tax incentives, including a five-

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year tax holiday followed by a maximum tax rate of 22 percent, duty-free import of key equipment, and commodity tax exemption for exports. The HSIP served primarily as a low-cost subcontractor for foreign personal computers. It was not until the 1990s that local integrated-circuit companies started to compete for quality and innovation, as the HSIP began to attract more and more US-educated Taiwanese engineers and entrepreneurs who had worked previously in high-tech industries. Bringing back technical expertise and organizational and managerial skills, the HSIP was instrumental in shifting Taiwan to the technological frontier. While development of the HSIP and the high-tech industries reflects state activism in promoting strategic industries, it was the networks and connections of entrepreneurs that made it work. Economic Liberalization

After decades of economic growth based on export expansion, Taiwan faced the challenge of economic restructuring in the 1980s, as rising labor and land costs weakened its international competitiveness, while competition from the Southeast Asian countries intensified. Politically, it also entered a period of transition toward a more democratic rule. The opposition Democratic Progressive Party (DPP) was formally established in 1986, and martial law was lifted in 1987. As the political system became more competitive, interest groups and business organizations gained greater influence in articulating their interests. At the beginning of the 1980s, the government adopted the goals of liberalization and internationalization. The decision was driven in part by economic pressures and in part by international political calculation. It was imperative for Taiwan to maintain and foster broad international economic ties as a surrogate for political ties as its diplomatic status continued to erode, as evidenced in the huge setback it suffered in 1978, when Washington decided to transfer diplomatic recognition from Taipei to Beijing. In February 1979, the foreign exchange–rate system converted from a fixed-rate system to a floating-rate system. In the early 1980s, the massive amount of foreign reserves created by continuous trade and current account surpluses put pressure on exchange-rate adjustment. In the wake of the 1985 Plaza Accord, the United States set an implicit target zone for currency appreciation for East Asian economies. The new Taiwanese dollar appreciated by nearly 40 percent against the US dollar from 1985 to 1987, causing a sharp increase in manufacturing costs for export industries. To ease the impact on exporters, Taiwan’s central bank decided to adopt a gradual appreciation policy, but this resulted in massive inflow of foreign exchange as currency speculators anticipated further appreciation

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of the new Taiwanese dollar. The inflow triggered speculation in real estate and stock markets, creating more economic uncertainty. In a series of trade negotiations, the United States demanded that Taiwan reduce tariffs, eliminate nontariff barriers, and open service markets in banking and securities. Along with US diplomatic pressure came mounting social pressure because of political democratization that demanded increasing access to the financial sector. The external and internal forces converged to seek financial reforms in banking and securities. The law on securities transactions of 1988 and the law on banking of 1992 were modified to allow the establishment of new banks and securities houses. Taiwanese firms obtained new channels to raise funds; the government no longer had monopolistic control over credit allocation. It was evident that Taiwan’s own policy agenda was to prioritize liberalization over internationalization. While the government shifted from a positive- to negative-list approach to FDI applications in 1988, Taiwan’s central bank throughout the 1990s continued to attach stringent conditions to control cross-border short-term capital movement, for the sake of monetary and financial stability. In the same vein, the government set a strict investment cap for foreign investors, and raised it only gradually when it opened up the stock market in 1991. Thus, liberalization and deregulation went together with re-regulation, as the government sought to maintain financial stability against excessive external shocks. Consequently, it was able to emerge from the 1997–1998 Asian financial crisis relatively unscathed. Nevertheless, as Taiwan sought accession to the World Trade Organization, it made further concessions to liberalize foreign investment, including in agriculture and services. Coping with External and Internal Challenges: 1990s–Present Chiang Ching-kuo died in 1988, and was succeeded by Lee Teng-hui, the first president born on the island. In the power struggle with the mainlander elites in the KMT, Lee built political coalitions with local politicians, appealing to the nativization (or indigenization) movement. With the first full elections for the Legislative Yuan in 1992, the first elections for governor in 1994, and the first direct presidential election of 1996, Taiwan gradually evolved into an electoral democracy. In 2000, Chen Shui-bian led the DPP to overturn more than fifty years of KMT rule, while the KMT’s Ma Ying-jeou took back power from 2008 to 2016. Since the mid-1990s, Taiwan’s economic growth has steadily decelerated, from 5.92 percent (1996–2000), to 4.06 percent (2001–2005), to

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4.36 percent (2006–2010), to 2.54 percent (2011–2015). The unemployment rate was below 2 percent prior to 1995, but has stayed in the range of 4 to 5 percent since 2001.37 Economic Relations with China

Due to the security concern of a deeper integration with China, the Taiwanese government encouraged trade and investment with Association of Southeast Asian Nations (ASEAN) countries rather than China to lower labor and environment costs. The official position included Lee Teng-hui’s “No Haste, Go Slow” policy and Chen Shui-bian’s “Active Management, Effective Opening” policy. Neither was effective in managing trade or investment flows with China. Bilateral trade between China and Taiwan started in 1980 through an indirect route via Hong Kong and other places and grew alongside China’s economic reforms and Taiwan’s liberalization. By the mid-1990s, China had become Taiwan’s third largest trading partner (after the United States and Japan), and Taiwan was China’s fourth largest trading partner (after Japan, the United States, and Hong Kong). After 2004, China became Taiwan’s largest trading partner. In 2015, China accounted for 25.7 percent of Taiwan’s total exports, and 19.1 percent of its imports. Furthermore, Taiwan has invested heavily in China, which accounted for 62 percent of total stock of Taiwan’s outward FDI as of 2015. From 1991 to 2015, Taiwan’s cumulative approved investment in mainland China reached US$154.9 billion. The stock of outward FDI as percentage of total GDP was at 50 percent in 2014, much higher than Japan’s 25 percent.38 The trend began in the late 1980s, as many Taiwanese manufacturers opted for relocation and outsourcing via foreign investment to reduce labor costs. From 1987 to 1991, FDI to China was carried out by laborintensive SMEs in plastics, footwear, toys, and garment industries. The pace of capital flow accelerated after 1992, when Deng Xiaoping reaffirmed commitment to economic reforms. In the post-2000 period, Taiwan’s computer and microelectronics companies started massive investments in China. As of 2015, 87 percent of Taiwan’s exports in information communications technology were manufactured in China. Despite the grave concern about its overdependence on the Chinese economy, Taiwan has not been able to devise an effective strategy to meet both the economic and security needs in an age of globalization. The development of the global supply chain is one of the reasons why it is difficult to contain cross-Strait economic interactions. In recent decades, advances in communication and transportation technologies have helped create an integrated manufacturing process, as multinational

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enterprises transport parts, materials, and finished products based on their global production strategies. International trade has shifted from inter-industry to intra-industry. The rise of China as the final assembly point for many products, coupled with Taiwan’s role as a subcontracting manufacturer in original equipment manufacturing (OEM), generated this ambivalent partnership. In fact, this division-of-labor model is under strain, as real wages in China are rising, and so are the values of other inputs. Furthermore, Taiwanese business is having difficulty holding on to the advantages it once possessed, such as technical, financial, and managerial expertise, as Chinese businesses are catching up. Business Environment

In recent years, Taiwan itself is losing its attractiveness and competitive edge as a place to do business. For example, in the Doing Business Survey conducted by the World Bank in 2017, Taiwan ranked 11th in ease of doing business in the world, behind Singapore (ranked 2nd), Hong Kong (ranked 4th), and South Korea (ranked 5th).39 It had particularly low rankings in areas such as protecting minority investors (22nd), getting credits (62nd), paying taxes (30th), and trading across borders (68th).40 While the Survey of Global Competitiveness Index compiled by the World Economic Forum in 2016 ranked Taiwan a respectable 14th out of 138 states, investors did not show much confidence in the efficiency of its legal framework (ranked 65th), or judicial independence (ranked 52nd).41 The most problematic factors identified by investors were policy instability, insufficient capacity to innovate, and inefficient government bureaucracy. These surveys reveal a somewhat negative view of the business community toward Taiwan’s deteriorating business environment. Taiwan received US$2.8 billion and US$2.4 billion in FDI in 2014 and 2015, respectively.42 The amounts were significantly less than the flows to South Korea (US$9.3 billion in 2014 and US$5.0 billion in 2015). In 2014, Taiwan’s stock of inward FDI was valued at US$69.9 billion, compared with US$179.2 billion in South Korea. Taiwan’s subpar performance in attracting FDI in recent years reflects the concerns of the international business community about its investment climate. Although some studies pointed to the ability of Taiwan’s economic bureaucracy to retain strong if somewhat transformed developmental capabilities in the democratic era,43 others found clientelism, policy paralysis, and influence peddling in economic decisionmaking with the ultimate goal of mobilizing political support rather than achieving longterm developmental goals.44 In the democratic era, the introduction of national-level elections led to a growing influence of political machinery

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and business conglomerates who provided political and financial support for parties and politicians. As democratization amplified the effect of money politics, it also increased the voices of domestic interest groups such as labor unions and local factions. Economic bureaucrats gradually lost their policy influence, as electoral calculations weakened bureaucratic autonomy and governance. Public infrastructure projects and science parks in Tainan and Taichung were developed on grounds of solidifying political support, not industrial or technological upgrading. During Taiwan’s 2018 local elections, one of the victories scored by the KMT was Han Kuo-you’s election as the mayor of Kaohsiung. Han, a little-known candidate with few ties to Kaohsiung, a DPP stronghold, ran on the slogan of “Sell Goods and Welcome People” to address Kaohsiung’s economic stagnation. His popularity soared within months during the campaign period and attracted nationwide attention. Han’s success was viewed as an indication of the public’s dissatisfaction with Taiwan’s recent anemic economic performance, and nostalgia for the glorious past of Taiwan’s economic dynamism. Conclusion

For the past six decades, Taiwan has demonstrated its ability to mobilize people and resources to shape its economic institutions and policies in response to internal and external challenges. During the 1950s and 1960s, Taiwan built economic institutions and initiated reforms to pursue economic stability and industrialization, with heavy dependence on US economic assistance. In the 1970s and 1980s, it developed basic and heavy industries, and engaged in economic liberalization to cope with changing political and economic landscapes. Since the 1990s, Taiwan has evolved into a democracy in a globalized environment. Although it was able to survive the 1997–1998 Asian financial crisis relatively unharmed, its economic growth has steadily declined since. International political uncertainty and domestic power struggles seem to have hampered its ability to adapt and innovate. Its ability to overcome these challenges will be critical for its future development and growth. Notes

1. National Development Council, Economic Development R.O.C. (Taiwan), 2015; National Development Council, Taiwan Statistical Data Book. 2. Kim and Heo, “Comparative Analysis of Economic Development in South Korea and Taiwan,” p. 18. 3. Central Intelligence Agency, “Country Comparison.” 4. See Balassa, “The Lessons of East Asian Development”; Galenson, Economic Growth and Structural Change in Taiwan; Kuo, The Taiwan Economy in Transition; Myers, “The Economic Transformation of the Republic of China on Taiwan.”

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5. Amsden, “The State and Taiwan’s Economic Development”; Haggard, Pathways from the Periphery; Leftwich, “Bringing Politics Back In”; Wade, Governing the Market. 6. Little, “An Economic Reconnaissance,” p. 454. 7. Kuznets, “Growth and Structural Shifts,” pp. 33–36. 8. Kuo, “Government Policy in the Taiwanese Development Process,” p. 46. 9. Ibid., pp. 46–48. 10. Ibid., p. 55. 11. Myers, “The Economic Transformation of the Republic of China on Taiwan,” p. 514. 12. Jacoby, U.S. Aid to Taiwan, p. 118. 13. Hsiao and Hsiao, Economic Development of Taiwan, p. 57. 14. Jacoby, U.S. Aid to Taiwan, p. 153. 15. Kuo, “Government Policy in the Taiwanese Development Process,” p. 53. 16. Ho, “Economics, Economic Bureaucracy, and Taiwan’s Economic Development,” p. 232. 17. Gold, State and Society in the Taiwan Miracle, pp. 136–137; Haggard and Zheng, “Institutional Innovation and Investment in Taiwan,” p. 441. 18. Fei, Ranis, and Kuo, Growth with Equity: The Taiwan Case, p. 43. 19. Christensen, Taiwan’s Agricultural Development, p. 4. 20. See Koo, “Economic Consequences of Land Reform in Taiwan.” 21. Ho, “Economics, Economic Bureaucracy, and Taiwan’s Economic Development,” p. 236. 22. Fei, Ranis, and Kuo, Growth with Equity, pp. 46–48. 23. Amsden, “The State and Taiwan’s Economic Development,” p. 353. 24. Christensen, Taiwan’s Agricultural Development, p. 64; Koo, “Economic Consequences of Land Reform in Taiwan,” p. 154. 25. Amsden, “The State and Taiwan’s Economic Development,” p. 357. 26. Bräutigam, “What Can Africa Learn from Taiwan?” p. 117. 27. Christensen, Taiwan’s Agricultural Development, p. 64. 28. Kuo and Myers, Taiwan’s Economic Transformation, p. 58. 29. Ranis, “Industrial Development,” p. 212. 30. Cheng, “Political Regimes and Development Strategies,” pp. 154–156. 31. Kuo, “Government Policy in the Taiwanese Development Process,” p. 61. 32. Kuo, The Taiwan Economy in Transition, p. 150. 33. Hsiao and Hsiao, Economic Development of Taiwan, p. 94. 34. Haggard and Zheng, “Institutional Innovation and Investment in Taiwan,” p. 449. 35. Hsiao and Hsiao, Economic Development of Taiwan, p. 95. 36. Thorbecke, “Agricultural Development,” p. 204. 37. National Development Council, Taiwan Statistical Data Book. 38. Chow, “Taiwan in International Economic Relations,” pp. 539–541. 39. World Bank, “Doing Business,” http://www.doingbusiness.org/rankings. 40. Ibid. 41. Schwab, The Global Competitiveness Report, 2016–2017. 42. United Nations Conference on Trade and Development, “UNCTADstat,” http://unctadstat.unctad.org/wds/TableViewer/tableView.aspx. 43. See Chu and Lee, “Globalization and Economic Governance in Taiwan.” 44. See Hsu, “State Transformation and Regional Development in Taiwan”; Lauridsen, “Governance and Economic Transformation in Taiwan”; Wu, “Taiwan’s Developmental State.”

4 The Trajectory of Taiwan-US Relations Dennis V. Hickey

In this chapter I examine the relationship between the Republic of China (ROC, or Taiwan) and the United States from 1949 to 2016. (The relationship since 2016 is addressed in Chapter 10.) In order to place this unusual partnership into the proper historical perspective, I begin with an overview of relations from 1949 to 1979—the year that the United States terminated formal diplomatic relations with the ROC. From Abandonment to Alliance and Back Again: 1949–1979 In keeping with wartime agreements—most notably the Cairo Declaration—the island of Taiwan was returned to the ROC in 1945. On December 8, 1949, the remnants of Generalissimo Chiang Kai-shek’s Kuomintang (KMT) government retreated to this offshore outpost—generally regarded as a backwater of Chinese politics—along with the nation’s art treasures, official seal and hard currency, and gold and silver reserves. Almost 2 million troops, government and party officials, and refugees poured into Taiwan. During the three decades that followed, relations between the United States and Taiwan passed through several phases. Phase One: Abandonment

When the ROC retreated to Taiwan in late 1949, it appeared that its days were numbered. The administration of Harry Truman seemed 47

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resigned to the fact that Taiwan would fall to the People’s Republic of China (PRC). In fact, in 1948, the US Joint Chiefs and General Douglas MacArthur had reached the conclusion that any chances for Chiang’s forces to hold out on the mainland (or Chinese islands such as Hainan or Taiwan) had vanished.1 On April 10, 1950, the US Central Intelligence Agency (CIA) reported that “the fall of Taiwan before the end of 1950 still seems the most likely course of future developments.”2 After Chairman Mao Zedong’s troops “liberated” Hainan Island on May 17, the US chargé in China cabled the US secretary of state that the “fate of Taiwan [is] sealed.”3 Two days later, the US Department of State advised all Americans to withdraw from Taiwan as soon as possible.4 The State Department also instructed US representatives stationed overseas to respond publicly to the ROC’s downfall by declaring that Taiwan “politically, geographically and strategically, is part of China in no way distinguished or important.”5 Officials were advised to stress that Taiwan had “no special military significance” and will provide the PRC with “no special strategic advantage.”6 Interestingly, such pronouncements conflicted with the calculations of George Yeh, ROC foreign minister, who had advised Chiang to move his forces to Taiwan. He had informed the generalissimo that because the Americans “consider Taiwan an essential link in its Western Pacific defense chain there was little likelihood that it would be allowed to fall to the Reds.”7 It was during this time that some in the Truman administration began to consider plans to rescue the ROC. The studies were not motivated by a desire to save Chiang. Indeed, President Truman detested him. During his retirement, the former president revealed that “I never changed my mind about Chiang and his gang. . . . [E]very damn one of them ought to be in jail, and I’d like to live to see the day they are.”8 Truman’s opinion was no secret. In 1950, General Douglas MacArthur observed that the president held “a violent animosity toward Chiang Kai-shek.”9 But even MacArthur, so often touted as a great supporter of the generalissimo, privately argued that the United States should encourage Chiang to land on the mainland because “it might be a good idea to let him land and get rid of him that way.”10 Furthermore, the Truman administration was aware of ROC military conspiracies to remove Chiang in a coup d’état. This information was not shared with Taipei. Despite some talk about preventing the fall of Chiang’s regime— studies motivated largely by domestic political considerations and the geopolitical significance of Taiwan—the Truman administration did nothing. Rather, the United States planned to wait until the new Chinese government established control over both the mainland and Taiwan

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before extending diplomatic recognition to it.11 In short, it appeared that the ROC on Taiwan was doomed. The outbreak of the Korean conflict on June 25, 1950, prompted Truman to revise US policy. Strategic calculations played a key role in the decision. The president believed that the North Korean invasion was orchestrated by Moscow and Beijing. As such, it represented an important battle in the war against communist expansionism. On June 27, Truman announced that “the occupation of Formosa by Communist forces would be a direct threat to the security of the Pacific area and the US forces performing their lawful and necessary functions in that area.”12 The president then ordered the US Seventh Fleet to “prevent any attack on Formosa [and] . . . the Chinese government on Formosa to cease all air and sea operations against the mainland.”13 With this order, Truman interjected the United States squarely into the middle of the Chinese civil war. Taiwan was saved. Phase Two: Tacit Alliance Partners

Truman’s decision set the stage for the United States and the ROC to become alliance partners. From the outset, however, the relationship was fraught with the same tensions and suspicions that characterize most alliances. As Glen Snyder explained in his classic study “The Security Dilemma in Alliance Politics,” the partners in an alliance often fear abandonment or entrapment or both.14 If a state considers itself more dependent on its ally, it will fear abandonment. Conversely, if a state perceives that an ally’s security interests deviate from its own defense concerns, it will fear that it will be entrapped in a conflict with other states over issues that are of little concern to its own security. From the very beginning of the US-ROC security partnership—four years before a formal defense pact was inked—tensions between the two allies were discernable. To be sure, the news that the US Seventh Fleet would be deployed to the Taiwan Strait was welcomed by the ROC. After all, the deployment prevented the annihilation of Chiang’s regime. But Taipei was disappointed that Truman’s statement did not mention Chiang or the ROC government. Even more distressing was the US president’s claim in the same announcement that “the determination of the future status of Formosa must await the restoration of security in the Pacific, a peace settlement with Japan or consideration by the United Nations.” 15 This proclamation conflicted with President Truman’s earlier statements about the international status of Taiwan. On December 22, 1949, Truman had declared that Taiwan “is not a free country . . . it is part of Nationalist China.”16 And on January 5, 1950,

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the president had affirmed that, “in keeping with these declarations [Cairo and Potsdam], Formosa was surrendered to Generalissimo Chiang Kai-shek, and for the past four years the US and other Allied Powers have accepted Chinese authority over the island.”17 The new position toward the international status of Taiwan infuriated the ROC government. Chiang grumbled that the US president “ignored our sovereignty, treating us worse than a colonial nation.”18 Chiang feared more than “abandonment.” He complained that the Americans thought the ROC was “already gone.”19 When he learned that Taipei was not invited to the negotiations on a peace treaty with Japan in 1951 (a treaty that held the potential to determine the status of Taiwan), Chiang told his staff that he planned to break diplomatic relations with the United States and blasted Truman and Dean Acheson, US secretary of state, as “rotten and stupid.”20 By late 1951, the Truman administration had taken steps to ensure that the so-called Taiwan question was not going to be settled by the United Nations (UN), the Japan Peace Treaty, or an armistice in Korea.21 But other elements in the US-ROC relationship continued to rankle Taipei. For example, the United States had promised a substantial US military aid package in 1951. But it was delayed until 1952. And rather than welcome the arrival of the new US Military Assistance Advisory Group (MAAG), Chiang suspected that the driving force behind MAAG recommendations for military reforms was a scheme to “liquidate” his government.22 For its part, the Truman administration feared that the ROC might entrap the United States in a wider conflict than the war already raging on the Korean peninsula. After the outbreak of hostilities, George Yeh advised Chiang to offer to deploy 33,000 ROC troops to Korea in order to assist the US war effort (he assured the generalissimo that Washington would reject the offer). After this offer was rejected (as predicted), Chiang upped the ante. The generalissimo now called for US military support to land and “rescue” portions of mainland China. The deployment, he argued, would hamper the PRC war effort in Korea (China intervened in the bloody conflict in late 1950).23 General MacArthur supported the proposal and Republican senator Joseph McCarthy called for Truman’s impeachment if he did not accept it.24 But the administration declined Chiang’s offer. It feared that a ROC counterattack might ignite a world war with the PRC and Soviet Union. Phase Three: Formal Alliance Partners

By the time of the US presidential election in 1952, US-ROC relations had changed significantly. Rather than abandon Chiang and his regime, Washington now propped up the exiled government. The US Seventh

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Fleet protected Taiwan, and US military and economic aid had begun to pour into the island (from 1951 to 1964 this economic aid totaled US$1.5 billion). But Taipei still longed for a more supportive government in Washington. During the 1952 US presidential campaign, Republican candidates blamed the Truman administration for the “loss of China.” Rather than support containment, they argued it was time to “roll back” communism. Senator Richard M. Nixon, the Republican candidate for vice president, sought to link the “loss of China” to the Korean conflict. He reasoned that if the communists had been stopped in the Chinese mainland, Americans would not be fighting communists in Korea. As the campaign progressed, “Korea and the inevitably linked China issue would emerge as a central theme of the Eisenhower-Nixon campaign.”25 Nixon even branded Adlai Stevenson, the Democratic candidate for president, with the nickname “Adlai the Appeaser.” Given the rhetoric of the Eisenhower campaign, it should come as little surprise that Chiang’s government was pulling for a Republican victory. In fact, the ROC government interfered in the campaign by secretly funneling information (some fabricated) to Senator McCarthy and other enemies of the Truman administration about the “disloyal” activities of US State Department personnel who had previously served in mainland China.26 In many respects, the Republican victory in the 1952 presidential election proved beneficial to the ROC. In 1954, the two governments signed a mutual defense pact. The alliance yielded more dividends than those one normally associates with a security pact—extended deterrence and military assistance during a conflict. The ROC also gained both domestic and international legitimacy. For almost two decades, US support enabled Taipei to hold on to its seat on the UN Security Council and to seats in other international organizations, and to maintain formal diplomatic relations with many important states in the global community. US support also bolstered Taipei’s claim to be the legitimate government of all China. Despite the appearance of a warm relationship, however, many strains evident during the Truman administration persisted. From the outset, Eisenhower made it clear to Taipei that he would not support any scheme to retake the mainland. Rather, the president preferred “peaceful rollback” (and a reduction in US military spending). One of Eisenhower’s first moves as president was to change the mission of the US Seventh Fleet from “neutralizing” the Taiwan Strait to shielding Taiwan. In a secret communication, however, the United States insisted that Taipei agree that any attack on the mainland must first be approved by Washington. 27 In other words, the administration

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had not yielded to the voices calling for the United States to “unleash” Chiang Kai-shek. Fears of entrapment also shaped the contours of the US-ROC defense treaty. Once again, the United States insisted on an exchange of letters agreeing that any ROC attack on the mainland must first be approved by Washington.28 This diplomatic corollary made it clear that “the president was not about to let the Chinese Nationalist leader drag America into another war.”29 Moreover, the Eisenhower administration deliberately sought to “fuzz up” the US-ROC security pact in such a way that the territories covered by the document were unclear.30 This prevented the United States from being treaty-bound to protect the offshore islands (technically a part of Fujian province). Similarly, the socalled Formosa Resolution, a congressional measure authorizing the president to protect the ROC offshore islands, permitted the defense of territories such as Quemoy or Matsu only if such an attack were judged to be a prelude to a full-scale attack on Taiwan. Eisenhower’s maneuvering did not impress the generalissimo. He complained that the new administration’s policy was “the same as the past” and feared that the United States hoped ultimately to replace him and transform Mao into another Tito.31 But Chiang was careful not to push the Americans too far. For example, when the United States intercepted and decoded Chiang’s secret telegrams to Syngman Rhee, ROK president, criticizing Eisenhower’s efforts to achieve a ceasefire on the Korean peninsula, John Foster Dulles, US secretary of state, threatened that if Rhee did not cooperate, the United States would “reconsider its policy toward Taiwan.”32 Chiang changed his tune. To be sure, fears of abandonment prevented Chiang from pushing the United States too far. But the United States was also careful not to provoke Chiang. Rather than tell the generalissimo that there was no hope to recover the mainland, whenever the matter was raised US officials claimed that the time was not yet ripe for an attack. The United States also approved and supported small ROC raids on the PRC, reasoning that this could boost ROC morale. Perhaps most significant, Taipei sought and received assurances that it would receive briefings about the content of all US contacts with the PRC during talks conducted in Warsaw and Geneva during the 1950s and 1960s. Such moves could be traced to US intelligence studies warning that pushing Chiang too far might cause the generalissimo to ignite a war between the United States and the PRC or “defect” from the alliance and patch up relations with Chairman Mao.33 By and large, the US-ROC relationship that took shape during the Eisenhower administration endured during the two succeeding US

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administrations. Ironically, Eisenhower appeared to be less of a “cold warrior” than John F. Kennedy. For example, in 1953, John Foster Dulles told the press that the United States was “not forever opposed to a recognition of the Communist government in China,” and that Washington might help find a way for both Taipei and Beijing to participate in the UN.34 Ten years later, Kennedy also appeared to hold out an olive branch to Beijing when he declared that, “when the Red Chinese indicate a desire to live at peace with the US, with other countries surrounding it, then quite obviously the US would reappraise its policies. We are not wedded to a policy of hostility to Red China.”35 But during his brief tenure as president, Kennedy “remained faithful to the line of containment and isolation that had governed America’s posture since the founding of the PRC, in large part a product of both JFK’s political caution and his profound suspicion of the communist regime.”36 There were no major changes in the US-ROC relationship during the Lyndon Baines Johnson administration (1963–1968). But there were hints of things to come. In the mid-1960s, the administration eased the ban on some travel to the PRC.37 At roughly the same time, President Johnson began to reassure Beijing that US military operations in Vietnam were not intended to threaten China (against Chiang’s advice, Johnson had begun to deploy US combat troops to Vietnam). And a 1965 proposal by Chiang to land his army in mainland China was met with the same reception that had greeted earlier schemes. Perhaps most significant during the Johnson years were the highly publicized congressional hearings examining America’s China policy. In March 1966, a parade of witnesses testified before the US Senate Committee on Foreign Relations. They called for lifting the embargo on all nonstrategic trade with China and voiced support for a “two Chinas” solution to the UN representation issue. These proposals were endorsed in a petition signed by 198 academic experts. The impact of the hearings was far-reaching: [Senator] Fulbright’s China hearings marked something of a watershed. This highly publicized forum effectively legitimized the airing of views that would have been considered heresy in the Red-baiting climate of the 1950s . . . [and] emboldened proponents of China policy reform inside and outside government to press their agenda. Polling results throughout the spring and summer of 1966 revealed growing openness to expanding relations with the PRC.38

The Senate hearings did not go unnoticed in Taipei. But the ROC government was more unsettled when Washington quietly informed Taipei that it was studying options whereby both Chinese governments

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could be seated at the UN. The administration explained that Taipei’s continued presence in the global body was becoming increasingly precarious. As in the past, Chiang threatened to walk out of the UN if it adopted a “two-China policy.”39 Fortunately for Taipei, the onset of China’s Great Proletarian Cultural Revolution (1966–1976) prompted Washington to drop the matter. Ironically, the chaos in the Chinese mainland strengthened Taipei’s position at the UN and its ability to maintain diplomatic relations with foreign governments. Phase Four: Returning to Abandonment

The series of steps that led ultimately to the rapprochement between Washington and Beijing have been extensively documented elsewhere and there is no need to recite them here. Given the Nixon administration’s public spin on events, however, it is useful to understand how far the United States moved toward the abandonment of Taiwan during the 1970s. It is also important to understand Taipei’s response to the danger. In their memoirs, both Nixon and Henry Kissinger stressed that their negotiations with Chinese leaders focused largely on issues other than Taiwan—especially the common threat posed by the Soviet Union. With respect to the ROC, President Nixon claimed that he held firm to the belief that the United States “could not and should not abandon the Taiwanese” because the United States was “committed to Taiwan’s right to exist as an independent nation.”40 In private communications, Nixon reassured ROC leaders that he would never forsake Taiwan. For example, in April 1970, when meeting with Chiang Ching-kuo, then ROC vice premier (and the generalissimo’s handpicked successor), Nixon emphasized that “the US will never sell you down the river.”41 The following day, Kissinger told Chiang that “we believe very strongly in standing by our friends.”42 Declassified documents, however, reveal that Nixon and Kissinger sought to mislead ROC officials, some members of the administration, and the American people. During the Eisenhower administration, Taipei had sought and obtained a formal pledge that “the US will not enter into negotiations dealing with the territories or rights of the ROC except in cooperation with the ROC.”43 Nixon broke that promise shortly after entering the White House. With respect to the international status of Taiwan, during the series of meetings in Beijing during 1971 and 1972, Nixon and Kissinger reassured PRC officials that the United States opposed Taiwan’s independence. Nixon stated plainly that Taiwan was a part of China and Kissinger boasted that any US official favoring independence would be sacked. With respect to the future of Taiwan, Kissinger appeared to concede that

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Taiwan would eventually become a part of the PRC. He assured Zhou Enlai, PRC premier, that Taiwan’s “political evolution is likely to be in the direction which Prime Minister Zhou Enlai indicated.”44 Kissinger added that, while the United States could not say anything publicly at the time, “we will not stand in the way of basic evolution, once you and we have come to a basic understanding.”45 Furthermore, Kissinger “made clear that the US would not insist on the People’s Republic using peaceful means to reunite the island with China.”46 In fact, Nixon criticized such a stipulation as “inconceivable.”47 Finally, the Chinese were informed that Washington would sever all military and diplomatic relations and dump Taipei during Nixon’s second term in office. Nixon’s “China game” represented the gravest threat to the ROC since 1949. However, Taipei did not respond hysterically. In part, Taiwan’s stoic attitude could be traced to the fact that top ROC leaders were not caught off-guard by the US diplomatic maneuvers. During an interview in 1996, retired general Chiang Wego, son of Chiang Kai-shek, confirmed to me that his father had maintained clandestine contacts with top PRC leaders—including Zhou Enlai and Lin Biao—after moving to Taiwan in 1949.48 Recent studies reveal that Zhou kept the generalissimo informed of the diplomatic initiatives undertaken by Nixon and Kissinger. Indeed, the top leaders of the ROC and PRC appear to have teamed up to devise strategies to thwart any US effort to create “two Chinas” or “one China, one Taiwan” or allow Japan to retake Taiwan.49 When speaking privately, Chiang Kai-shek blasted Nixon as disloyal, insincere, and scheming.50 In public, however, ROC leaders remained reserved and avoided displays of anger. When a high-ranking official in the Ministry of Foreign Affairs called for Taipei to retaliate against Washington by teaming up with Moscow, he was fired. Always the pragmatist, Chiang Ching-kuo tried to make the best of a bad situation. He patiently waited to see how events transpired with an eye toward maintaining bilateral economic and military ties after being dropped by Washington. It is also noteworthy that US actions likely pushed Chiang Ching-kuo to seek to boost the regime’s domestic legitimacy by accelerating democratic reforms and bringing more Taiwanese into the government. The Tacit Alliance: 1979–2016 A series of unanticipated circumstances and events beyond the control of decisionmakers in Taipei prevented the ROC from being abandoned in the mid-1970s. However, on December 15, 1978, the administration

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of President Jimmy Carter finally announced the establishment of full diplomatic relations with the PRC, to become effective January 1, 1979. The move came as a devastating blow to Taiwan. For only the second time since 1949, anti-American riots broke out in Taiwan.51 The US-ROC relationship during the post-normalization era did not lead to an abandonment of Taiwan. Indeed, President Chiang Ching-kuo eventually concluded that the US-ROC relationship during the post-normalization period was closer than ever before.52 Decades later, Taiwan’s leadership still agreed with this assessment. Tensions in the Tacit Alliance: 1979–2008

Domestic political problems within the United States and PRC during the mid-1970s provided Chiang Ching-kuo with time to prepare for the inevitable break in diplomatic relations with the United States and the end of the US-ROC alliance. As president, he ordered the government to study strategies that might help offset the ramifications of the end of the formal partnership. Buying missions were dispatched to the United States and influential Americans were actively courted. Chiang worked hard to convince Americans that, while he understood the need for Washington to recognize Beijing, Taipei hoped for assurances that USROC ties would continue essentially as in the past. Clandestine intelligence operations and other covert activities within the United States also accelerated.53 After the United States announced that it had agreed to the PRC’s three conditions for normalization of relations—termination of formal diplomatic relations with the ROC, abrogation of the 1954 Mutual Defense Treaty, and removal of all US troops from Taiwan—Chiang’s work yielded dividends. The US Congress rejected the Carter administration’s legislative proposal for “unofficial” relations with the ROC—the Taiwan Enabling Act—as too weak and ambiguous. The act made no provisions for Taiwan’s security, arms transfers, operation of “unofficial” representative offices, and other important matters. Rather than revise the president’s proposal, the legislative branch drafted new legislation—the Taiwan Relations Act—and passed the bill with “veto-proof” majorities in both chambers. During this process, Chiang shrewdly turned down invitations to journey to the United States and declined to criticize the administration. As he explained, “It would be a mistake to destroy relations with the Democratic Party, Taiwan will still need broad sympathy in the US.”54 The Taiwan Relations Act and the three US-China communiqués guide America’s relations with Taiwan and the Chinese mainland. Many legal experts, however, agree that the Taiwan Relations Act trumps all

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other documents and statements of policy. The law promotes the maintenance of economic linkages and “unofficial” political ties. Perhaps most significant, however, are the provisions for Taiwan’s security. Some even describe the Taiwan Relations Act as a “tacit alliance.” Like the “fuzzed up” 1954 US-ROC defense pact, the Taiwan Relations Act provides a US president with the option of going to war to protect Taiwan. It does not contain an ironclad security guarantee. Unlike the mutual defense treaty, however, the act cannot be abrogated by a president—a president must seek congressional approval to abandon Taiwan. The law also provides a US administration an option to sell arms to Taiwan. The PRC was enraged by the passage of the Taiwan Relations Act. What probably convinced Deng Xiaoping, China’s paramount leader, to proceed with the normalization process were secret US assurances that China’s reunification would likely be realized within several years.55 The administration also pledged that arms sales would be “restrained.”56 In other words, Carter appeared to be following in Nixon’s footsteps. But Carter was defeated in the 1980 US presidential election. In the 1980s—the first full decade of the “unofficial” US-ROC relationship—bilateral ties remained largely on track. During the 1980 presidential campaign, Ronald Reagan, the Republican candidate, threatened to reestablish diplomatic relations with Taiwan. But this did not happen. Two years later, Reagan promised that the United States would reduce arms sales to Taiwan in the 1982 US-China communiqué. This also did not happen. Other than a brief skirmish over the discovery of a secret ROC program to develop nuclear weapons in December 1987 (under US pressure the program was abandoned), the United States and Taiwan enjoyed a robust “unofficial” relationship. Economic ties continued to expand and many prominent Americans—including influential members of the US Congress—applauded the political reforms in Taiwan initiated by President Chiang Ching-kuo and his efforts to reduce tensions with the PRC.57 Chiang Ching-kuo died in office on January 13, 1988. His successor, Vice President Lee Teng-hui, initially appeared determined to follow in the late president’s footsteps. President Lee pushed meaningful democratic reforms in Taiwan. Interestingly, he also remained faithful to the “one China” principle, opposed Taiwan’s independence, and spoke optimistically about the nation’s eventual reunification. When I asked him some years later why he made such statements, the former president replied that these were “strategic moves” designed to “help consolidate my position.”58 He explained that he was seeking only to outwit and outmaneuver the KMT’s old guard.

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In addition to spearheading political reforms—including the direct election of the ROC president—Lee took steps to end Taiwan’s isolation. He launched an initiative known as “pragmatic diplomacy.” The strategy was intended to restore diplomatic relations with foreign governments, boost “informal” or “substantive” relations, and enable Taipei to return to international organizations. He even launched a noisy drive to return to the UN. Lee’s new policies yielded mixed dividends. He managed to slightly elevate Taiwan’s “unofficial” ties with some governments—including the United States—and even wrangled an invitation out of a reluctant Clinton administration to visit the United States in 1995. But no important countries reestablished diplomatic relations with the ROC and the UN campaign went nowhere. Perhaps most worrisome for Washington, however, Lee put Taipei on a collision course with Beijing. By the mid-1990s, Beijing had concluded that Lee Teng-hui was promoting Taiwan’s de jure independence. This led to a sharp downturn in cross-Strait relations. It also contributed to tensions in US-ROC relations. The Clinton administration feared that Taiwan would entrap the United States in a conflict with China. These worries grew after China’s so-called missile tests off Taiwan’s coastline in 1995 and 1996. Unlike past decades, the United States now began to fear entrapment in a war with the PRC over Taiwan’s drive for independence. In order to assuage Chinese concerns about US policy, President Bill Clinton journeyed to China in 1998 and outlined the “three no’s.” During a speech in Shanghai, he reaffirmed that Washington would not support “two Chinas” or “one China, one Taiwan,” “Taiwan independence,” or Taiwan’s membership in international organizations for which statehood was a prerequisite. Moreover, rather than remain silent whenever the Taiwan representation issue was raised at the UN, Washington began to support Beijing and vote against Taipei’s membership. As one study observed, Taiwan’s behavior was endangering the United States, which “feared being unnecessarily dragged into a messy situation not of its own making.”59 Matters took a turn for the worse after Chen Shui-bian was elected president in 2000. Chen initiated a series of surprises. These “bombshells” included inflammatory statements about Taiwanese independence, shelving the government’s National Unification Council and national unification guidelines, changing the names of state corporations, and controversial calls for island-wide referendums and a new constitution. US officials viewed the moves as irresponsible and dangerous. When meeting with PRC officials on December 9, 2003, President George W. Bush warned that “the comments and actions by the leader of Taiwan

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indicate that he may be willing to make decisions unilaterally that change the status quo, which we oppose.”60 Other US officials issued similar warnings. In October 2004, Colin Powell, US secretary of state, proclaimed that “there is only one China, Taiwan is not independent. It does not enjoy sovereignty as a nation and that remains our policy, our firm policy.”61 Dennis Wilder, senior director of Asian affairs at the National Security Council, used similar language to explain US opposition to Taiwan’s referendums and drive to join the UN as a new country. Wilder claimed that “membership in the UN requires statehood. Taiwan, or the Republic of China, is not at this point a state in the international community.”62 Following each Chen surprise, administration officials warned Taipei about its behavior. In December 2004, Richard Armitage, US deputy secretary of state, described Taiwan as the “biggest landmine” in Sino-American relations and observed that the Taiwan Relations Act does not require the United States to defend Taiwan.63 Some months later, Republican representative James Leach threatened that “a unilateral political effort by Taiwan to seek independence and dissolve all bonds with China would cause America’s commitments under the [Taiwan Relations Act] to become inoperable.”64 On June 8, 2005, President Bush appeared to agree with Leach when he said that “if Taiwan were to declare independence, it would be a unilateral decision, that would change the US equation.”65 In the final analysis, it is unclear whether the US threats and actions had a discernible impact on President Chen. Some Chen supporters believed that the US threats were not credible—Washington would never abandon Taiwan. Perhaps reflecting this attitude, Chen shrugged off US actions by observing that “the US has its interests, while we have ours. Sometimes the two correspond and sometimes they even clash.”66 Parallel Progress: 2008–2016

After Taiwan’s 2008 presidential election, US-ROC relations returned to an even keel. President Ma Ying-jeou junked Chen’s provocative policies toward the PRC. And he sought to patch up relations with the United States. Taiwan’s new administration succeeded in both areas. During the 2008 presidential campaign, Ma promised to follow a “three no’s” approach to relations with Beijing—no unification, no independence, and no war. Following his election, the new president endorsed the “1992 consensus” and cross-Strait relations moved forward. By the time he left office in 2016, a total of twenty-three landmark agreements had been signed with the PRC. Beijing had also

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acquiesced to Taipei’s participation in the World Health Organization and other intergovernmental organizations. Moreover, the two sides had somehow agreed to a diplomatic truce whereby they would stop stealing each other’s diplomatic allies. In short, cross-Strait tensions nosedived to the lowest level since the two sides were split by civil war in 1949. As President Ma observed during an interview with myself in March 2017, while he never signed a peace agreement with the mainland, each of the twenty-three cross-Strait agreements could be considered a small peace agreement.67 Not surprisingly, Washington welcomed the disappearance of “Taiwan the Troublemaker.” Following his election in 2008, President Barack Obama announced that he strongly supported efforts by Taipei and Beijing to “resolve their differences peacefully and through dialogue.” 68 Dennis Blair, then director of US national intelligence, described Taiwan’s new approach to the Chinese mainland as “positive” and “very encouraging.”69 On May 19, 2009, Raymond Burghart, then chairman of the American Institute in Taiwan, summarized the US position when he gushed that “we really and truly are enthusiastic about the kind of stability we now see.”70 Indeed, US support for the cross-Strait rapprochement was enshrined in the US National Security Strategy of 2010. Given such enthusiasm, it should come as little surprise that the bilateral US-ROC relationship moved forward after Taiwan’s 2008 presidential election. Obama, during his two terms as president, approved arms sales to Taiwan totaling roughly US$14 billion—meaning he sold more arms than all other US presidents combined since 1979.71 The weapons helped boost Taiwan’s defenses while underscoring Washington’s support for Taipei. Officials responded to PRC complaints by explaining that the president was only following the law while also reassuring the Chinese that the United States would remain committed to its one-China policy. The US-ROC relationship improved in other ways. For example, Washington championed Taipei’s drive to secure a voice in intergovernmental organizations and praised its democracy. In 2012, the United States announced Taiwan’s membership in its visa-waiver program. The following year, the two sides signed an agreement giving Taiwan’s diplomats the same privileges and immunities enjoyed by diplomats from other countries. On December 23, 2016, Obama signed legislation calling for an increase in the level of military exchanges with Taiwan. In sum, as President Ma Ying-jeou explained in 2015, “our relations with the United States are closer now than prior to the severance of our diplomatic ties in 1979.”72

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Conclusion After the ROC retreated to Taiwan in 1949, Washington’s relations with Taipei went through a complete cycle that started with abandonment, moved to alliance, and finally returned to abandonment. In 1950, events beyond Taiwan’s control—a conflict on the Korean peninsula— prompted the United States to save the island. During the years of USROC alliance, “there was certainly no love lost between the mutually suspicious partners.”73 Then, in the early 1970s, seismic changes in the international system once again led US leaders to seek to abandon Taiwan. At this critical juncture, however, external developments intervened and conspired to save Taiwan. Political scandals in the United States (leading to Nixon’s resignation in 1974) and the death of Chairman Mao in 1976 put a brake on the move toward a normalization of relations between Washington and Beijing. The United States did not “abandon” Taiwan in 1979. But many of the overarching tensions that characterized the formal alliance—including fears of abandonment and entrapment—have continued to influence the relationship in the post-normalization era. This fact became glaringly evident during the administrations of Lee Teng-hui and Chen Shui-bian. Another enduring feature of the US-ROC relationship also merits brief mention, namely that many elements of US policy toward Taiwan remain ambiguous and unclear. For example, US policy toward the international status of Taiwan is inconsistent. Declarations of US policy toward this thorny issue provide activists with ample ammunition to argue either side of the issue (namely that US policy holds that Taiwan is a part of China or is not a part of China). The US position toward the future of Taiwan also remains opaque. It appears that Washington will support unification, independence, or something else—so long as any resolution of the Taiwan issue is peaceful. And the US security commitment to Taiwan has been “fuzzed up” since the early 1950s. Even the formal 1954 defense pact did not provide the island with an ironclad security guarantee. As noted, the Taiwan Relations Act provides a US president with only an option to defend Taiwan. To be sure, portions of US policy do appear unclear. But one may still identify a consistent trend in US-ROC relations after Washington severed diplomatic relations with Taipei, namely that the United States and Taiwan have moved steadily closer during the post-normalization period. This trend is not unique to any particular administration. The trend is evident in both Democratic and Republican administrations. As Hillary Clinton, then US secretary of state, observed during the Obama era, “we’ve strengthened our unofficial relationship with Taiwan.”74

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And it is noteworthy that the trend continued after the stunning election victory of Donald Trump, an unconventional presidential candidate, on November 8, 2016. Notes 1. See Taylor, The Generalissimo, p. 395. 2. “Memorandum by the Assistant Secretary of State for Far Eastern Affairs (Rusk) to the Secretary of State, April 17, 1950,” p. 330. 3. “The Charge in China (Strong) to the Secretary of State, May 17, 1950,” p. 340. 4. “The Acting Secretary of State to the Embassy in China, May 19, 1950,” p. 343. 5. See Garver, The Sino-American Alliance, p. 20. 6. Ibid. 7. See Hickey, Foreign Policy Making in Taiwan, p. 27. 8. See Miller, Plain Speaking, p. 283. 9. Hickey, Foreign Policy Making in Taiwan, p. 28. 10. “Extracts of a Memorandum of Conversations, by Mr. W. Averell Harriman,” p. 428. 11. See Garver, The Sino-American Alliance, p. 220. 12. “Statement by the President on the Situation in Korea,” p. 492. 13. Ibid. 14. Snyder, “The Security Dilemma in Alliance Politics.” 15. “Statement by the President on the Situation in Korea,” p. 492. 16. “President’s News Conference of December 22, 1949,” p. 586. 17. “President’s News Conference of January 5, 1950,” p. 11. 18. See Taylor, The Generalissimo, p. 437. 19. Ibid., p. 438. 20. Ibid., p. 451. 21. For more information, see Hickey, “US Policy and the International Status of Taiwan.” 22. Taylor, The Generalissimo, p. 452. 23. When Chiang made these offers, he was careful to include conditions that made any acceptance unlikely. For example, he wanted mountains of military equipment and two years of US-led military training for his forces before any deployment. See Taylor, The Generalissimo, p. 448. 24. Taylor, The Generalissimo, p. 448. 25. See Speer, Richard Nixon’s Position on Communist China, 1949–1960, p. 30. 26. Taylor, The Generalissimo, p. 457. 27. Ibid., p. 458. 28. Ibid., p. 475. 29. Speer, Richard Nixon’s Position on Communist China, 1949–1960, p. 198. 30. In order to accomplish this task, the wording of the treaty was changed from providing for US protection against an attack “on” the ROC to protection from an attack “against” the ROC. For more information see Hickey, “America, the Offshore Island Crisis of 1954–55, and Calculated Ambiguity.” 31. Taylor, The Generalissimo, p. 460. 32. Ibid., p. 461. 33. See ibid., p. 469. See also Garver, The Sino-American Alliance, p. 84. 34. See Speer, Richard Nixon’s Position on Communist China, 1949–1960, pp. 63–64.

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35. Lumbers, Piercing the Bamboo Curtain, p. 41. 36. Ibid., p. 12. 37. See ibid., p. 147. 38. Ibid., p. 155. 39. Ibid., pp. 162–163. 40. See Nixon, The Memoirs of Richard Nixon, vol. 2, p. 40. 41. Taylor, The Generalissimo, p. 552. 42. Ibid. 43. Hickey, Foreign Policy Making in Taiwan, p. 30. 44. Ibid., p. 33. 45. Taylor, The Generalissimo, p. 565. 46. Ibid., p. 573. 47. Ibid., p. 575. 48. Author interview with General Chiang Wego (retired), Taipei, February 5, 1996. 49. See Taylor, The Generalissimo, pp. 547–589. 50. Ibid., p. 561. 51. Taipei was swept by anti-US riots in 1957 following the murder of a ROC soldier by a US soldier. 52. See Taylor, The Generalissimo’s Son, p. 412. 53. Hickey, Foreign Policy Making in Taiwan, p. 86. 54. Ibid., p. 87. 55. See Vogel, Deng Xiaoping and the Transformation of China, p. 331. 56. Ibid. 57. President Chiang lifted martial law in 1987—a move ending the decades-old ban on opposition parties in Taiwan. He also lifted the ban on travel to the PRC. See Hickey, Foreign Policy Making in Taiwan, pp. 83–87. 58. Author interview with Lee Teng-hui, former president of the ROC, Taipei, November 25, 2005. 59. See Lee, “Sayonara to the Lee Teng-hui Era,” p. 16. 60. Hickey, “Parallel Progress: US-Taiwan Relations During an Era of CrossStrait Rapprochement,” p. 371. 61. Ibid. 62. See Hickey, “Friction Between Friends,” p. 20. 63. Hickey, “Parallel Progress.” 64. Ibid., p. 372. 65. Ibid. 66. See Hickey, “Friction Between Friends,” pp. 23–24. 67. Author interview with President Ma Ying-jeou, Taipei, March 16, 2017. 68. See Hickey, “Parallel Progress,” p. 377. 69. Ibid. 70. Ibid. 71. The United States has sold roughly US$24 billion in arms to Taiwan since 1979, and the Obama administration has sold approximately US$14 billion of that total. 72. See Hickey, “Parallel Progress,” p. 384. 73. Lumbers, Piercing the Bamboo Curtain, p. 250. 74. Portions of this conclusion (including this quotation) may be found in Hickey, “US Policy Toward Taiwan.”

5 Politics in the Tsai Ing-wen Era Kharis Templeman

To most casual observers, the victory of Tsai Ing-wen and the Democratic Progressive Party (DPP) in the January 2016 general elections appeared to mark the start of a new political era in Taiwan. For the first time, the DPP won both the presidency and a comfortable majority in the Legislative Yuan, bringing a decisive end to more than seventy years of Kuomintang (KMT) control over at least one branch of the political system of the Republic of China (ROC). President Tsai came into office with an unprecedented opportunity to push forward sweeping changes not only to policy but also to core political institutions. The DPP’s ambitious political reform agenda ranged from the symbolic, such as changing the national flag and redefining the national territory; to the prosaic, such as lowering the voting age and amending the Assembly and Parade Act; to the fundamental, such as switching from a semi-presidential to full presidential or parliamentary regime and abolishing the Control and Examination Yuans. Nevertheless, the defining characteristic of Taiwan’s political evolution from a one-party dictatorship to a vibrant, pluralist, multiparty democracy has been its gradualism, and President Tsai and the DPP leadership have in practice continued this pattern of slow consensusbuilding and piecemeal reform of institutions. The new ruling party has moved hesitantly on even minor changes to the political regime: as of this writing, proposals to revamp the electoral system, the judiciary, campaign and party finance regulations, assembly and protest laws, the organization of the legislature, and Legislative Yuan oversight of crossStrait relations remain only at the discussion stage. The lack of any 67

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consensus even within the DPP on most of these issues, let alone between the four parties now holding seats in the legislature, suggests that major institutional changes are unlikely over the next few years. Moreover, the last round of reforms, in 2005, made it much more difficult to amend the constitution, so that only proposals with broad, crossparty consensus have any chance of passing. Thus, the success of the DPP’s broader policy agenda will probably be determined by how much President Tsai and her party can accomplish within the existing Republic of China constitutional framework. In this chapter, I consider the politics of political reform in the Tsai Ing-wen era. In the first section, I discuss two important, under-the-radar trends in Taiwan’s institutional evolution since the first direct election of the president in 1996: the nationalization of the party system and a concurrent shift toward simple majority rule at the central government level. At the beginning of the transition to democracy in 1986, much of the energy of election campaigns was directed at local offices, and the political power of county, city, and township-based factions was considerable. But today, electoral competition has become oriented toward the top posts in the regime—the presidency, the legislature, and the mayors of special municipalities—and the partisan, as opposed to the personal or factional, element in elections to these offices has become increasingly decisive. It is now unusual for independent candidates or factions to be able to obtain many votes above and beyond what the partisan leaning of a constituency is in a given national election. Over the same period, the number of institutional veto players within the central government has been reduced to only two: the president and the legislature. And the introduction of concurrent terms and elections, along with a more majoritarian electoral system, has made unified single-party control of both institutions much more likely than in the past. Thus, beginning with the 2008 elections, political power has been concentrated at the central government level, at that level within a single majority party, and within that party in the office of the president. Given that the president has also typically chaired the ruling party—true for both President Tsai and her KMT predecessor, Ma Ying-jeou—the contemporary Taiwanese political system appears to give the president extraordinary influence over not only executive functions but also the legislative agenda. In short, the institutional changes of the past two decades have led to a constitutional framework that is both highly centralized and majoritarian, and they have created what former premier Jiang Yi-huah has termed a “super-presidency.”1 The second section considers the greatest institutional puzzle of the post–Chen Shui-bian era: despite the enormous concentration of formal

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power in their hands, both President Ma and President Tsai have struggled to get their policy priorities passed by the legislature and adopted into law. The most obvious example from the Ma era is the review of the now-infamous Cross-Strait Services Trade Agreement (CSSTA), which triggered a backlash, first by the legislature, and then by the student-led protest known as the Sunflower Movement that occupied the Legislative Yuan. But Ma’s government also struggled to pass changes in a number of other high-profile areas: in taxes, pension reform, and agricultural imports, for instance. Tsai Ing-wen thus far has won passage of some notable high-profile legislation, including bills vociferously opposed by the KMT dealing with “ill-gotten” party assets, transitional justice, labor law amendments, and civil servant and military pension reforms. But overall, her government’s success rate in the legislature has not been any higher than Ma Ying-jeou’s during his first term, and she too has struggled with low public approval ratings, frequent turnover of cabinet ministers, intra-party criticism, and continued slow progress on many elements of an ambitious agenda. The political difficulties that both Ma and Tsai have faced indicate that there is more to the story than an analysis of the first-order institutions of the regime can tell us, and they draw our attention to some of the second-order rules and informal conventions that blunt the power of the president to exercise control over the executive, the ruling party, and especially the legislature. Among these is the decentralized and consensus-oriented nature of the Legislative Yuan, and the greater responsiveness of individual legislators to their constituencies and to public opinion rather than to the party leader under the new electoral system. In the third section, I discuss the political reform agenda of Tsai Ingwen and the DPP before the 2016 election. The criticisms and reform proposals raised by the DPP and others during the Ma era fell into three broad categories. The first was strengthening legislative oversight of the executive branch, particularly the National Security Council and agencies that handle cross-Strait relations. The second related to increasing avenues for direct democracy and the influence of smaller groups in the political system, including changes to the electoral system, recall, and referendum laws. And the third was reforms of accountability institutions, especially the judiciary, prosecutoriate, and Control Yuan. In the fourth section, I consider what the Tsai administration has actually prioritized during her first three years in power, and how the DPP’s political reform agenda has fared. In contrast to the party’s highminded rhetoric during the Ma era, the issue at the top of the DPP’s agenda in practice has been dealing with the remaining legacies of the party-state era or, to put it less charitably, on crippling the KMT. The

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DPP’s preoccupation with reducing the KMT’s remaining structural and financial advantages is because these measures satisfy three conditions: they are uncontroversial within the DPP, enjoy majority support in public opinion polls, and advance the DPP’s political interests at the expense of their major rival. Most other reform proposals, however, do not meet all these conditions, and have languished as a result. I conclude with some discussion of the likely track of political reform over the next few years. The main takeaway is continuity: President Tsai and the DPP enjoy many of the same advantages that Ma and the KMT did in Ma’s first term, but they also face similar constraints on their ability to implement fundamental institutional change. The experience of the Ma era suggests that public opinion and cross-party consensus will decide most of the critical reform issues, and the lack of broad agreement on most political reform issues makes it unlikely we will see major change to the political system in the near future. The Evolution of Taiwan’s Political Regime Since Democratization Over the past three decades, Taiwan’s political regime has evolved in two important but subtle ways: electoral competition and the party system have become increasingly nationalized, and single-party rule with unified executive-legislative control of the central government has become much more likely. Toward a Nationalized Party System

By a “nationalized” party system, I mean several things. One element is the increasingly partisan nature of elections. At all levels of electoral competition, but most strongly at the top, the importance of partisan factors in determining individual vote choice and collective election outcomes has increased at the expense of incumbency, factional ties, and other personal and idiosyncratic factors.2 Since the early 2000s, a voter’s partisan identification has been the strongest predictor of how she or he will vote in any given race, and split-ticket voting, once common in Taiwanese elections, is now relatively uncommon, especially in central elections and across political camps.3 The second element is the uniformity of the party system across districts and jurisdictions. Scott Morgenstern and colleagues have termed this feature “static” nationalization: the parties nominating candidates are the same across the country, and the shares of the vote they

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get are similar as well.4 Although Taiwan’s two major parties have long had clear regional strongholds—the KMT in parts of the north, east, and offshore islands, and the DPP in the south5—they also are each the principal opposition party almost everywhere they do not hold office. Thus, Taiwan today has a well-institutionalized two-party system that typically provides voters with a binary choice, in both presidential and legislative elections at the national level, and also in local executive races.6 This pattern has been reinforced since the new mixed-member parallel electoral system was introduced for the Legislative Yuan in 2008, creating powerful incentives in the new single-member districts to coalesce around one of two party nominees.7 Small parties have survived and persisted in the legislature, thanks mostly to the proportional representation tier of seats, but even after 2016 they held only 9 of 113 seats, or less than 8 percent. The third element is that the swings in vote share from one party to another across different elections are also increasingly uniform (what Morgenstern et al. designate “dynamic nationalization”). The last three presidential elections in Taiwan have featured remarkable geographic consistency in the two-party swing at the county level.8 Many observers have noted the monotonic increase in the DPP’s presidential vote share9 from 2008 to 2012 to 2016, but the consistency of this increase across localities is startling. For instance, Tsai Ing-wen won 45.63 percent of the vote in 2012, an increase of 4.12 percent over the 41.55 percent that DPP nominee Frank Hsieh won in 2008. Incredibly, although she did not win the election, Tsai did better than Hsieh in every single county and city on the island, and her increase varied by only about 2.5 points, from a low of 2.45 percent in Taipei to a high of 4.94 percent in Pingtung. Tsai’s big victory in 2016, when she won 10.49 percent more than in 2012, featured a bit higher variance in increase across localities, but she still won at least 5 percent more in every single jurisdiction than in 2012: her smallest gain was in Penghu, where she captured 5.16 percent more of the vote, and her largest was in Taipei, where she won 12.4 percent more. This uniformity of swing is another indication that national factors have outweighed local ones in recent presidential elections.10 The final element of nationalization is that “national” issues are increasingly important even in local races. In the past, independents and local-faction-linked KMT candidates won a majority of seats in local elections, particularly council elections, even as the DPP made inroads in legislative and county executive races. But partisanship has trickled down to lower levels as well, and national factors increasingly drive voting behavior even in local elections.11 The KMT’s sweeping defeat in the 2014 elections, for instance, was remarkable not only for its breadth—the

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party lost nine of the fifteen executive seats it previously held—but also for the uniformity of its decline in vote share across these races. The deep unpopularity of president and KMT party chairman Ma Ying-jeou at this juncture clearly contributed to the broad downturn in the party’s electoral fortunes. In another striking parallel, the opposite happened in 2018: wide dissatisfaction with President Tsai Ing-wen and the ruling DPP contributed to the party’s rout in the most recent local elections, including defeats in high-profile races in New Taipei and Taichung and stunning losses in localities the DPP had long held such as Kaohsiung City and Yilan and Yunlin counties. A significant factor behind this trend is the consolidation of local governments and their election cycles. In the late 2000s, six localities were combined into three: Taichung, Tainan, and Kaohsiung were merged with their namesake counties and, along with Taoyuan and Taipei counties, elevated to special municipality status. This reform converted the former townships and towns of the counties into municipal districts and abolished the directly elected offices of township heads and representatives in these jurisdictions. Township offices had been important positions of influence and key nodes in local factions, and it is plausible that their elimination has weakened factional influence over elections, policy, and patronage in the new special municipalities.12 At the same time, terms and election cycles for all local officials were synchronized beginning in 2014, so that the nine different kinds of local elections, formerly held at different times, are now all held on a single day every four years. By ensuring the composition of the electorate is the same for each type of local election, and by strengthening incentives for party candidates to coordinate their campaigns, the new format has increased the importance of national partisan trends in local elections, making these more like “midterm” federal elections in the United States.13 These elements of a fully nationalized party system have emerged gradually and almost imperceptibly since the beginning of the transition to democracy in the late 1980s. But the cumulative effect has been to produce a political system in which the parties running in each district and jurisdiction, the issues they campaign on, and the determinants of voting behavior from one election to the next appear similar across most regions and levels of government in Taiwan. Toward Single-Party Majority Rule

The second under-the-radar trend has been the reduction of the number of formal veto players. By “veto player” I mean actors whose approval is needed for a change in the policy status quo.14 These can be institu-

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tional—that is, formal authority to block policy change is granted by the constitution or other basic laws—or partisan—a political party controls one or more institutions such that any decision the party agrees on will be implemented by those institutions. Taiwan today has only two effective institutional veto players in most spheres of policymaking: the president and the Legislative Yuan. The Executive Yuan (the ROC’s cabinet), which directs most of the government ministries, is accountable directly to the president via her or his power to unilaterally appoint and remove its leader, the premier, and is therefore not an independent veto player in the political system. In addition, because presidential and legislative elections are now held concurrently, it is more likely than not that the party of the incoming president will also control a majority of seats in the Legislative Yuan, giving that party unified control of the central government and reducing the number of effective veto players to only one: the ruling party itself. In this sense, then, Taiwan’s institutional reforms of the past two decades have produced a political system that tends strongly toward single-party majority rule.15 This shift toward majoritarianism at the central government level occurred gradually, and without obvious intention, through a series of constitutional amendments in the 1990s and 2000s. At the beginning of the transition to democracy in the late 1980s, the Republic of China on Taiwan had three representative bodies that could make a claim to be part of the national parliament: the National Assembly, the Legislative Yuan, and the Control Yuan. In addition, the Taiwan Provincial Assembly had traditionally served as the body with the best claim to represent the people of Taiwan, since it was the only one fully elected from Taiwanese constituencies. The reforms of the 1990s and 2000s, however, in turn eliminated each of these bodies as competing power centers, leaving the Legislative Yuan as Taiwan’s only national representative assembly and giving its members unparalleled visibility and a platform to influence public opinion and national debates. 16 The Legislative Yuan has also accrued many additional constitutional powers over the past two decades. To its exclusive authority to pass new laws and to approve the government budget, it has added the right to approve presidential nominations to the Control, Judicial, and Examination Yuans; to dissolve the Executive Yuan via a vote of no confidence; to compel government officials to testify under oath to the legislature; and to initiate constitutional amendments. Over the same time period, party representation in the legislature has become far less proportional than it used to be. The institutional change that has attracted by far the most attention and study in Taiwanese politics has been the reform of the Legislative Yuan electoral

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system. In 2008, it was switched from the single nontransferable vote (SNTV) system in high-magnitude districts to a mixed-member parallel system with about 70 percent of the seats elected via plurality rule from single-member districts, and a smaller number of proportional representation seats distributed to parties via a separate, second ballot. At the same time, the size of the legislature was cut in half, from 225 to 113 members, and the term of the legislature was extended from three to four years, to coincide with the length of the presidential term. These changes together made it much more likely that the same party that won the presidency would also obtain a majority of seats in the legislature. This expectation was borne out in the 2008 election, the first held under the new electoral system: the KMT won a supermajority of 81 out of 113 seats, the DPP caucus was reduced to less than a quarter of the seats, and the smaller People First Party (PFP) and Taiwan Solidarity Union (TSU) were all but eliminated from the legislature entirely. Thus, for the first time since 2001 a single party controlled a majority of the seats in the Legislative Yuan, and for the first time since Chen Shui-bian took office in May 2000 the executive and legislative branches were unified under the rule of a single party.17 When President Ma won reelection in 2012, the KMT maintained control of the legislature, though with a reduced majority. Then in 2016, Tsai Ing-wen’s sweeping victory in the presidential race contributed to the defeat of many incumbent KMT legislators, carrying into office a new DPP Legislative Yuan majority. The changes in appointment procedures for the Judicial and Control Yuans have also increased the president’s ability to shape the makeup of these nominally independent branches to his or her liking. For instance, term limits on the Grand Justices allowed Ma to replace a majority of the court during his first term, and by 2016 every Grand Justice was a Ma appointee. Tsai has had the same opportunities: by 2019 her appointees will already make up a majority of the court. The Control Yuan has undergone a similar partisan transformation. It had become dormant during Chen Shui-bian’s second term when the KMT majority in the legislature refused to vote on his nominees; when Ma assumed office, he filled it with his own appointees, who were quickly confirmed by the new KMT majority. Thus it became broadly deferential to the Ma administration and the ruling party. Similarly, since Tsai Ing-wen took office, she has already been able to replace a majority of the Control Yuan’s members with her own nominees, and the Control Yuan’s activities have come into much greater alignment with the DPP’s partisan priorities. Thus, the overall effect of Taiwan’s current political framework is that single-party majorities in the legislature, unified control of the exec-

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utive and legislative branches, and presidential leadership of and judicial deference to the ruling party are the norm. The presidency, in particular, is on paper a remarkably powerful institution, with the tools to dominate the entire political system if wielded by a skillful hand. In practice, however, both President Ma and President Tsai have been much less decisive on policy than expected, which should turn our attention to other, secondorder features of the political system that have worked to limit presidential prerogatives and constrain executive authority. Majorities Without Majoritarianism: The Post-2008 Puzzle Both Ma Ying-jeou and Tsai Ing-wen began their presidencies with an immense concentration of formal power in their hands. Both took office after decisive electoral victories, and their own parties won commanding majorities in the legislature. They both held the chairmanship of their respective parties (Ma after 2009, Tsai until 2018), and initially faced a divided and demoralized opposition. Yet both presidents struggled to win legislative passage of bills that their cabinets approved and submitted to the Legislative Yuan for consideration. The best data we have on this question come from an exhaustive study of legislative proposals in the Chen, Ma, and Tsai eras by Shi-hao Huang and Shing-yuan Sheng.18 They find that of the Ma administration’s more than 1,200 bills proposing new laws, major or minor revisions to existing laws, or repeals of laws, only about half were eventually approved in their original form by the legislature during his eight years in office. By comparative standards, Huang and Sheng find, this is an exceptionally low success rate: bills introduced by the government in pure parliamentary regimes are approved at least 85 percent of the time, and in presidential or semi-presidential regimes as varied as Brazil, Korea, Poland, Portugal, and Mexico, passage rates are consistently above 70 percent. It is particularly striking that the Ma administration’s success rate is not that much higher than that of the previous Chen Shui-bian administration, which saw 42 percent of its proposals enacted into law despite facing an opposition legislative majority. A similar pattern is already emerging for the Tsai administration: through the first Legislative Yuan session of 2018, Tsai’s government had won passage for only 55 percent of all the legislation it had formally introduced, despite the presence of a large DPP majority there. To put it bluntly, for most of the democratic era in Taiwan, the Legislative Yuan has been the place where government proposals go to die.

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In practice it has not mattered much whether the president’s party holds a majority of the seats in the legislature, or faces a majority from the opposition: her or his legislative initiatives have little better than equal odds of passage even under the best conditions. The idea that a singleparty majority confers on the president wide latitude to “get things done” is widespread in Taiwan, even among perceptive observers of the political scene. But that idea rests on a misunderstanding: it is simply not true that executive-branch priorities will get an expedited review even when the president is the party chair, and his or her party holds a large majority of the seats. A single-party majority in the legislature is better than no majority, but it confers far less than full control over legislative business. To understand why, we need to consider the secondorder institutions of the Legislative Yuan itself and their constraints on the president in government policymaking. In fact, as Huang and Sheng point out, there are at least five distinct ways in which the rules and organization of the legislature limit the majority party’s ability to control the agenda and pass legislation important to its leadership. First, the hurdle for introducing legislation in the Legislative Yuan is quite low. In addition to bills proposed by the other branches of government,19 bills can also be initiated in the legislature. Since 1999, individual party caucuses have had the power to propose legislation; because the minimum for forming a caucus is three legislators, parties with as few as three seats can introduce legislation on their own, giving disproportionate influence to legislators from small parties. In addition, bills can also be introduced with the cosponsorship of fifteen individual Legislative Yuan members (13.3 percent of the total membership). In practice, legislators simply do not have the resources or expertise to draft long, complex pieces of legislation, so they typically attempt to introduce bills that differ only slightly from Executive Yuan or party-caucus proposals. Nevertheless, there is no government or majority-party advantage over bill initiation; instead, this power is scattered widely across the party caucuses and individual legislators.20 Second, the majority party has only limited control over legislative committees. The Legislative Yuan includes at least eight permanent standing committees.21 Seats on these committees are assigned in proportion to each party’s seat share in the legislature as a whole. These committees in turn elect two22 cochairs or “conveners” who preside over committee meetings and collectively share control over the committee’s agenda. Conveners are elected anew each legislative session under SNTV rules; if all party members coordinate and vote strategically, then a minority party with at least one-third of the seats in the committee can ensure the selection of one of its own as co-convener. The convener

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position alternates on a weekly basis, so during at least some meetings of the committee the opposition party is in control of the committee’s agenda and can decide what legislative business to take up. As a consequence, the majority party can exercise control over committee business only half the time, unless it has at least two-thirds of the seats on the committee needed to secure both convener positions. The presence of dual (and dueling) committee conveners can create major delays in the consideration of bills that are of high priority to the majority but opposed by the minority, since the opposition’s convener can block their review for the weeks he or she is in charge. This authority is especially important in the Legislative Yuan’s Procedure Committee, which decides the agenda for each legislative session, including the items to be considered, the order in which they will be reviewed, and the committees to which they will be assigned. With a minority-party member sometimes in charge of this role as well, a unified and dedicated opposition can use creative tactics to delay, if not indefinitely block, the review of legislation that it opposes and to advance bills opposed by the ruling party. Third, a requirement for cross-party deliberations is enshrined in a super-committee that effectively supersedes all other formal legislative committees: the Cross-Party Negotiation Committee (CPNC). Also known as the inter-party caucus mechanism or ruling-opposition negotiation mechanism, the CPNC exists as a kind of “committee of last resort” that handles all inter-party disputes over any part of the Legislative Yuan’s business. Every party caucus in the legislature, no matter how small or large its membership, sends two representatives to the CPNC to negotiate on their behalf. An agreement in the CPNC must be reached by unanimous consent; once all party-caucus representatives sign off, the agreement is read into the legislative record and becomes binding on all caucuses and their members. This provision gives every party caucus a temporary veto over all legislation. To prevent total gridlock, the CPNC statute specifies that if an agreement is not reached within a month, the speaker can bring the legislation in question to the floor for a formal vote, breaking the deadlock and resolving the disagreement in favor of the majority party. In practice, however, KMT speaker Wang Jin-pyng was very reluctant to take this step over the opposition of the DPP. Thus, the CPNC during the Ma era acted as a real veto gate, providing the opposition party-caucus leaders, especially those from the DPP, the ability to indefinitely delay legislation they opposed. Fourth, the most potent minority weapon, and the one on which the previous three ultimately rest, is the systematic violation of the rules of

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order. As strange as it might seem to outsiders, disorderly conduct has evolved into a rational, strategic, and routine part of the legislative process in Taiwan. These violations can range from actions as simple as interrupting a colleague’s speech to elaborate organized demonstrations on the legislature’s chamber floor, complete with placards and slogans aimed at a television audience. But the single most effective form of disruption is a “blockade” or “occupation” of the speaker’s podium to prevent him or her from officially gaveling the session into order and bringing items up for consideration by the floor. These disruptions have in recent years worked in practice something like a filibuster in the US Senate, giving the opposition parties additional leverage in negotiations within the CPNC. During the Ma era, the occupation of the speaker’s podium became a potent weapon that the DPP and other opposition parties routinely employed to prevent the KMT from advancing legislation out of the CPNC for a floor vote. By one count, the DPP resorted to this tactic at least eighty different times during President Ma’s second term. As a consequence, the one-month limit for cross-party negotiations was effectively rendered moot by these opposition blockades, which in turn served to convert the DPP’s ability to stall legislation into something closer to a full and permanent veto in the CPNC. The KMT leadership was forced to bargain in good faith with the DPP, because the opposition could credibly threaten to blockade the podium and tie up all legislative business if legislation was brought out of cross-party negotiations without its consent. A final weakness of the majority party is the limited power that the party chair wields over the legislative caucus. In both the KMT and the DPP, the party chair’s authority has waxed and waned across the years. But in both parties, the chairperson has traditionally enjoyed enough authority in combination with control over the party’s Executive Committee to threaten real, negative consequences against sitting legislators if they cross the party leadership. Punishments include not being renominated, being denied funding for campaigns, being shut out of decisionmaking and denied influence over policies of personal interest, or even being expelled from the party. Thus it was a surprise in the Ma era that holding the party chairmanship plus the presidency did not provide him sufficient leverage to bend recalcitrant KMT legislators to his will. A similar pattern has emerged during the Tsai era so far, where President Tsai has either by choice or by necessity used the chair’s position to play a coordinating rather than a whipping role in intra-party debates over legislation. It is not obvious why the president’s influence over his or her legislative caucus has been so limited since 2008. But one plausible expla-

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nation is that the change in electoral system made district legislators more sensitive to public opinion, and less dependent on ruling-party endorsement and resources, than under the previous SNTV system. Prior to 2008, incumbent legislators had to compete for votes with other members of their own party in each election; and all but the most wellknown ones depended on the party’s nomination and vote-equalization strategies to maximize their chances of reelection. The switch to singlemember districts, however, has changed this calculus in two ways. By creating a number of relatively safe DPP and KMT districts, most incumbent legislators who represented these districts no longer face intra-party threats to their seats. That, in turn, makes them less dependent on the party center for reelection, and less willing to support the executive branch’s position on difficult issues in the legislature. In competitive single-member districts, by contrast, the median voter has tended to be a swing voter whose views closely reflect national public opinion; incumbent legislators in these districts need to be responsive to these voters, and to develop a strong personal reputation independent of their parties, to maximize their chances at reelection. Thus, the change in electoral rules has probably weakened the party leadership’s leverage over individual legislators and, during the Ma administration at least, led to more frequent defections on government priorities that were unpopular with the electorate.23 A Political Reform Agenda for the Tsai Ing-wen Era The victory of Tsai Ing-wen in the January 2016 general elections handed her and her party an unprecedented opportunity to remake the political regime of the Republic of China on Taiwan. With its newfound majority in the Legislative Yuan and its control of most local municipalities, the DPP came into office with a rare opportunity to push forward sweeping changes, including to core political institutions, that DPP members had long advocated—reforms that had previously been stymied or kept off the agenda altogether by the KMT. The practical items24 on this institutional reform agenda fall into three broad areas. Strengthening Legislative Oversight of the Presidential Office and Cross-Strait Relations

First, the DPP as well as social movement activists, academics, media personalities, and the smaller political parties all criticized to varying extents the “super-presidency” that emerged under unified government

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during the Ma era, and in particular the lack of effective oversight by the legislature and other bodies over the presidential office.25 The Legislative Yuan is equipped with broad powers to monitor and sanction the Executive Yuan: it can compel testimony in front of legislative committees by any member of the cabinet, including the premier; legislators can cut (although not add or reallocate) items in the executive’s budget proposal and freeze portions of executive ministry budgets to compel responses from the Executive Yuan; and at the extreme, it can force the entire cabinet to resign via a vote of no-confidence. Nevertheless, these powers of supervision do not reach into the presidential office or to its key policy-coordination body, the National Security Council (NSC). Since President Chiang Kai-shek created it as a body within the presidential office in 1967, the NSC has played a critical coordinating role in domestic as well as foreign policy. It is chaired by the president and includes the vice president, the president’s chief of staff and chief military aide, the chairman and vice chairman of the president’s Strategic Advisory Committee, the premier and vice premier, the defense minister, the foreign minister, the minister of economic affairs, the finance minister, the chief of the general staff of the armed forces, the NSC secretary-general (typically a political “handler” for the president), and anybody else the president wants. The National Security Council has remained extremely powerful because of its membership and the breadth of its policy responsibilities. Although in theory it meets only for issues and policy domains related to “national security,” in practice the NSC can claim dominion over virtually any government function through an exceptionally broad definition of that term. For example, in 2014 the NSC labeled both a food safety scandal and the global Ebola pandemic as issues relevant to national security, allowing President Ma to take direct control of the response to these issues. What made this development especially problematic from a constitutional standpoint was that the NSC—and indeed all of the executive functions housed in the presidential office—was beyond the reach of oversight by the Legislative Yuan. Once an issue is categorized as involving national security, the decisions taken by the president and executed through the NSC are not subject to direct scrutiny and review, although legislators can question the heads of the Executive Yuan ministries involved in implementing NSC decisions. These limits on the legislature’s role in overseeing executive-branch actions are particularly fraught in the case of cross-Strait relations. Under the Act Governing Relations between the People of the Taiwan Area and the Mainland Area—often shortened to the Cross-Strait Relations Act—the cabinet-level Mainland Affairs Council (MAC) is respon-

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sible for handling research, planning, review, and coordination of mainland policies and affairs. The Cross-Strait Relations Act also established a semi-official body, the Straits Exchange Foundation, to handle cross-Strait negotiations, meetings, and other activities authorized by the MAC, in order to get around the thorny sovereignty problems that afflict all cross-Strait interaction. While in theory the MAC chairman is supposed to formulate and oversee the implementation of cross-Strait policies under the supervision of the premier, in practice the president has taken a strong direct role in cross-Strait relations, exercised through the NSC, the premier, and even via direct instructions to individual ministries. The negotiations and implementation of the Economic Cooperation Framework Agreement, for instance, were supervised closely by President Ma through the NSC so that they did not have to be reported to the Legislative Yuan. While legal, this practice at the very least contravened the spirit of the Cross-Strait Relations Act, which delegates power over such matters to the MAC and guarantees a formal oversight role to the legislature. A related complaint was the way that cross-Strait agreements were reviewed by the Legislative Yuan after being signed by the Ma administration. It is striking that most agreements were not even subject to the same standard of scrutiny and approval that formal treaties were under the ROC constitution: of the twenty-two formal agreements26 signed between the cross-Strait bodies during the Ma era, only three required an affirmative vote from the Legislative Yuan to take effect.27 The reason is that the Cross-Strait Relations Act specifies three different procedures under which agreements will be considered by the legislature. Those requiring no changes to existing laws, only to executive orders, are submitted only for record, and take effect automatically unless the Legislative Yuan acts within three months to block their implementation. Those that require changes to existing laws must be submitted to the legislature for review; there is no time limit for the Legislative Yuan to act on these agreements, and no legal requirement that they be reviewed as a single package and given an up-or-down vote. And those that deal with sea and air links and immigration require that the legislature actively approve them; however, if no vote on the agreement is held within a month, it will be considered to have been approved. So in practice, this procedure has the same effect as filing a change for record—it requires positive action by the Legislative Yuan within a set time limit to prevent the agreement from taking effect. The weakness of Legislative Yuan oversight of highly sensitive cross-Strait interactions, combined with rules that make the reversion point the approval rather than rejection of an agreement, attracted a great

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deal of criticism from the DPP and other opponents of the Ma administration’s cross-Strait initiatives. In response, a number of proposals to strengthen the legislature’s ability to monitor and scrutinize cross-Strait negotiations were floated during the late Ma era, ranging from requiring legislators from all party caucuses to be included in any discussions, to simply tightening the procedure by which agreements would have to be approved by the Legislative Yuan. But they had in common a desire to increase the Legislative Yuan’s power to affect cross-Strait relations. The DPP also highlighted another hidden source of the power imbalance between the executive and legislative branches: policy expertise. The Executive Yuan has traditionally dominated policy development and execution, while the legislature has had few independent sources of expertise and information with which to evaluate Executive Yuan policy claims. Thus, Tsai Ing-wen included in her 2016 election platform a promise to seek to increase staff support and resources for legislators’ offices to lessen this imbalance.28 Reforming the Electoral Process

A second area of complaints from civil society, academics, and especially smaller third parties was the Legislative Yuan electoral system. After it was used for the first time in 2008, this system quickly became the target of bitter complaints from activists and politicians from smaller parties, who were clearly disadvantaged under its more majoritarian features. The DPP, too, criticized this system after it exacerbated the party’s sweeping defeat in the 2008 elections, when it won only 23 percent of the seats with 38 percent of the district vote. In addition to disproportionality, the system is also potentially skewed toward the KMT: because each county must have at least one representative, the KMT strongholds of Jinmen and Matsu and the east-coast counties of Hualien and Taitung all elect their own legislators despite being significantly less populous than other districts. The six seats elected from special indigenous districts have had a similar effect: they are overrepresented relative to overall population and also tend to elect KMT or PFP representatives.29 Thus, from the first time it was used, the electoral system became a major focus of reform proposals.30 Oddly, however, much of the discussion in the run-up to Tsai Ing-wen’s inauguration was not about the district components of the system but instead concerned the proportional representation party-list tier of seats, through which only about a quarter of all seats are chosen.31 New parties formed after the 2014 Sunflower Movement wanted a better shot at winning seats, and the easiest way to do that from their perspective was to lower the 5 percent thresh-

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old to qualify for party list seats. This proposal ignored the fact that the legislature’s disproportionality was due to the single-member districts and the lack of any compensatory component in the proportional representation tier of the electoral system. Some advocates of constitutional reform also took aim at two legal threshold provisions that severely limited the use of “direct democracy”— referendums and recalls—to effect political change. The referendum act adopted during the Chen Shui-bian era included a stringent turnout requirement: at least 50 percent of all registered voters had to cast ballots for a national referendum to be considered valid. This requirement caused all six referendums held during the Chen era to fail. Pro-independence advocates, in particular, took issue with this limitation, and they consistently advocated lowering or abolishing this restriction to make referendums easier to pass. Activists associated with the New Power Party (NPP) had similar complaints about the recall law, which had the same turnout requirement; this threshold prevented a recall campaign against three KMT legislators in 2014 from succeeding. Thus, elements of Tsai Ingwen’s 2016 election coalition wanted to see both of these restrictions loosened or eliminated, and signature requirements lowered as well.32 An assortment of other proposed changes fell into this category as well, from strengthening campaign reporting requirements and enforcement, to relaxing or eliminating the permit requirements in the law on assembly and protest. Reform advocates on both sides of the partisan divide also supported lowering the voting age to eighteen, from twenty, and introducing some kind of absentee balloting or early voting in elections.33 Strengthening Accountability Institutions

A third area of concern to reformers was Taiwan’s accountability institutions—that is, the court system in the Judicial Yuan, prosecutors’ offices under the Ministry of Justice, and the Control Yuan. During the Ma era, the most effective independent oversight of the government and ruling party came not from either the Legislative or Control Yuan but instead from the judicial branch, particularly local prosecutors. The independence and professionalism of prosecutors’ offices was one of the most important, and hard-fought, achievements of Taiwan’s young democracy during the Chen Shui-bian era.34 Despite still being formally accountable to the minister of justice—a presidential appointee via the premier’s office—prosecutors remained for the most part free of direct political control during the Ma era, and took on a number of politically sensitive cases that ensnared ruling-party officials.35 In one prominent

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instance in 2012, for example, after media reports exposed his involvement in a bribery case, the Taipei district prosecutor’s office detained and charged with corruption Lin Yi-shih, a former vice chairman of the KMT and the sitting secretary-general of the Executive Yuan. He was eventually convicted and sentenced to more than thirteen years in prison for bribe-taking.36 In another case, Liu Cheng-chi, the brother of KMT Miaoli county executive Liu Cheng-hung, was arrested for illegally constructing a mansion on public land in Yangmingshan National Park, and dozens of National Property Administration officials were detained for questioning by the Taipei district prosecutor’s office on suspicion of helping Liu obtain the land; the mansion was eventually demolished at Liu’s expense.37 (In a revealing contrast, Liu Cheng-hung himself was later impeached by the Control Yuan for breaching local government debt limits, but only in October 2016, after Tsai’s first appointees had been seated there and well after he had left office in December 2014.)38 Nevertheless, in other cases, prosecutors’ offices appeared reticent to investigate suspect practices within the executive branch and in local governments controlled by KMT officials. One of the most prominent instances was in Taipei, where KMT mayor Hau Lung-bin had overseen the awarding of a lucrative construction contract to the Farglory Land Development Company to construct the Taipei Dome, a 40,000-seat, publicly funded indoor stadium. After independent mayor Ko Wen-je took office in 2014, he publicly criticized the contract for being overly generous to Farglory and the design of the building as unsafe.39 After years of accusations and rumors, the Taipei district office finally arrested the Farglory founder in June 2017 for bribing Taipei city officials to win favorable contract terms.40 Another case that was belatedly investigated only after the change in ruling party was KMT legislator Alex Tsai, who was indicted in July 2017 for embezzlement of KMT funds in a corporate ownership transfer scheme.41 The case eventually ensnared former president Ma Ying-jeou as well; the Taipei district prosecutor’s office indicted him in July 2018 for his role in the transfer of KMT assets to Tsai, in a move that immediately caused a political uproar.42 In these and other cases, prosecutors gave the appearance of political favoritism by waiting to act on public corruption cases until after the officials involved had left office. Perhaps the most alarming example of the politicization of investigative bodies during the Ma era was the Special Investigative Division of the office of the supreme prosecutor. The division was created during the late Chen Shui-bian era to prosecute corruption by high-level public officials, including Chen himself. It opened a new case against then-candidate Tsai Ing-wen in December 2011, less than a month before the 2012 presidential

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election, to investigate Tsai’s ties to a government-backed company that she had helped create in 2007, when she was still deputy premier.43 The accusations hung over Tsai during the last part of the election campaign; only well after the election, in August 2012, did the Special Investigative Division announce that it had cleared Tsai of any wrongdoing.44 In September 2013, the division came under even more intense scrutiny and criticism, this time from across the political spectrum. Huang Shih-ming, the director of the Special Investigative Division, reported directly to President Ma about a wiretap of the Legislative Yuan speaker, Wang Jin-pyng, that recorded an apparent attempt by Wang to influence a local prosecutor’s office not to proceed with an appeal of a case against the DPP caucus leader, Ker Chien-ming. Although Wang was a KMT member, he had become by that point a major problem for the Ma administration: he had consistently worked to preserve Legislative Yuan autonomy from the executive branch, and he had only two months earlier negotiated stricter rules of review for the Cross-Strait Services Trade Agreement that made its approval unlikely. Thus Ma quickly went public with the Special Investigative Division’s accusations against Wang, and used the information to try to force Wang out of the party.45 At least three aspects of this incident were problematic. First, the Special Investigative Division was revealed to be wiretapping phones of the legislature without appropriate warrants, raising questions about illegal procedure and potential intimidation of legislators. Second, the division was supposed to operate as an independent prosecutorial body, not directly under the control of and reporting to the president. Yet Huang informed Ma as soon as he learned the details of the wiretapping. Third, Ma immediately used this information for a transparently political purpose: to try to replace the speaker of the Legislative Yuan with someone friendlier to his administration’s agenda.46 Thus, when Tsai took office, accountability institutions were one of the top items on the DPP’s political reform agenda. Members of the party leadership openly advocated replacing or removing judges, enhancing the independence of prosecutors, and reforming or abolishing the Control Yuan47 and Special Investigative Division of the office of the supreme prosecutor, both of which had become entangled in the 2012 election campaign and partisan politics. The Politics of Political Reform in the Tsai Era Now that Tsai Ing-wen and the DPP majority have been in office nearly three years, the patterns of this era have started to come into focus.

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Most striking is the strong continuity with the previous government of Ma Ying-jeou and the KMT. In several important ways, President Tsai’s management style and her policy priorities, successes, and failures are remarkably similar to those of her predecessor. The DPP’s Half-Hearted Institutional Reforms: New Boss, Same as the Old Boss?

First, policymaking under the new DPP administration has remained centralized within the presidential office. Tsai’s first cabinet was staffed mostly with nonpartisan technocrats rather than party officials, exemplified by her choice of premier, Lin Chuan, an academic without a power base in the DPP or previous experience in electoral politics.48 In addition, Tsai retained the party chairmanship as she took office, and she rather than the premier served as the direct link between the DPP’s caucus in the Legislative Yuan and the Executive Yuan for her first year in office. As her polling numbers fell precipitously, she turned in September 2017 to a popular local DPP leader, Tainan mayor Lai Ching-te, to replace Lin Chuan as premier and to shore up support within the party, but most other cabinet members remained or were shuffled between posts. DPP party leaders, including prominent legislators, were brought into regular decisionmaking meetings but clearly played a secondary role in the formulation of the administration’s priorities under both premiers. Second, the institutional reform proposals to strengthen legislative oversight that were so enthusiastically supported by party elites and in DPP-friendly media before the election, detailed earlier, almost entirely disappeared from the party’s agenda after President Tsai was inaugurated.49 Most notably, the DPP legislative caucus’s strident demands for greater oversight of the MAC and Straits Exchange Foundation faded away once a DPP member took up residence in the Presidential Hall. President Tsai herself signaled even before she took office that she would oppose new legislation creating a greater role for the Legislative Yuan in the conduct of cross-Strait affairs.50 Nor has talk of introducing formal Legislative Yuan oversight of the National Security Council and other bodies that are currently outside its constitutional purview been turned into concrete change. More fundamental reform proposals such as moving toward a more fully presidential system have also been stalled by partisan objections, this time from the KMT. Instead, the Legislative Yuan’s main avenues of influence over the executive branch continue to be via interpellation of Executive Yuan officials and budget freezes or cuts; the NSC remains in a legal gray area, and individual

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legislators are still at a distinct disadvantage in the policymaking process in terms of expertise, resources, and information. In fact, the modest changes that have been introduced since the DPP assumed control have, on balance, strengthened the executive branch’s position rather than the legislature’s. In February 2016, Su Jia-chyuan was elected the new speaker of the Legislative Yuan, replacing Wang Jin-pyng. Su is a DPP loyalist and an ally of Tsai Ing-wen (he ran as the vice presidential candidate on the 2012 ticket), and his elevation has helped ease the way for smoother executive-legislative coordination. The KMT has tried to adopt the same tactics that the DPP used with such success during its years in the minority, but it has often overplayed its hand, and though it has succeeded in stalling consideration of individual bills for weeks or even months, it has ultimately lost almost every prominent legislative fight to date. When the DPP caucus is unified behind a bill and prioritizes its passage, the party’s majority has been enough to force a vote on legislation opposed by the KMT, most notably on the law creating the Ill-Gotten Party Assets Committee to investigate the transfer of public resources and property to the KMT during the martial law era.51 Third, most other institutional reforms have been strikingly absent from the DPP’s first-term agenda. For instance, changes to the electoral system that would reduce the disproportionality of the legislature face poor prospects, since they would require support from three-quarters of the Legislative Yuan as well as approval in a referendum, and the DPP now is the biggest beneficiary of the current system. The only reforms that appear to have any near-term chance at passage are lowering the voting age from twenty to eighteen, and reducing the proportional representation list threshold from 5 percent to 3 percent—a change that would have no effect on the 65 percent of seats that are currently elected from single-member districts, and thus would do almost nothing to improve proportionality or make single-party majorities less likely. Fourth, President Tsai and the DPP have moved cautiously on proposed reforms to the ROC’s accountability institutions: the judiciary, the prosecutoriate, and the Control Yuan. Early in her first year, Tsai appointed an advisory committee to review and recommend reform proposals for the judicial branch, but it was dogged by accusations that the outcome was predetermined, and several members quit in protest;52 little that it has recommended has become law.53 Rather than abolish or radically reform the Control Yuan, President Tsai nominated a new slate of candidates to replace the Ma appointees whose terms were ending, and she did the same for the Council of Grand Justices. True to form, the Control Yuan has now taken on a decidedly DPP political

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tint: in February 2018, for instance, one of its newly confirmed members vowed to open an investigation into a derogatory skit about expresident Chen Shui-bian performed by local prosecutors in 2009,54 and in January 2019 Control Yuan members voted to impeach newly seated National Taiwan University president Kuan Chung-min for writing paid opinion pieces while he was a cabinet official in the Ma administration.55 Tsai Ing-wen’s one accountability reform to date has been the abolition of the Special Investigation Division of the office of the supreme prosecutor, a move that had broad backing within the DPP.56 This change handed authority for high-level prosecutions back to ordinary prosecutor offices, but did not change the lines of authority within the prosecutoriate: the prosecutor-general, a political appointee nominated by the president and confirmed by the Legislative Yuan, still directly oversees all prosecutor offices. President Tsai and the DPP’s half-hearted institutional reforms have had the greatest impact in the area of “direct democracy,” by making it easier to recall elected officials and to hold national referendums. In December 2016, the ruling party supported an amendment to the act on elections and recall that lowered signature and turnout thresholds for recalling elected officials. The bill was heavily promoted by the New Power Party, who saw it as a way to increase the feasibility of recall of unpopular officials.57 But by changing the recall law to require only 25 percent approval of all registered voters in a district, and lowering the share of signatures required to qualify a recall for the ballot, the amendment made it easier for any intensely motivated group to mount a serious recall challenge against elected representatives. Ironically, the first case of a recall under the new rules was directed against the leader of the NPP himself, Huang Kuo-chang, who had championed the rule changes when it appeared they were thwarting efforts to unseat unpopular KMT incumbents.58 A year later, again facing pressure from the NPP caucus as well as advocates of independence and direct democracy, the DPP supported a similar amendment to the act on referendums. 59 The political downsides for the DPP (and Taiwan’s democracy) of this ham-fisted reform quickly became apparent: activists and politicians from across the political spectrum, including opponents of same-sex marriage, nuclear power advocates, and the opposition KMT, rushed to take advantage of the new tool to bypass the central government and commandeer the national political agenda. The flurry of controversial referendum proposals, many of which were opposed by the DPP and never would have seen the light of day in the legislature, immediately put the ruling party on the political defensive. The Central Election Commission,

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which had to work out practical procedures to determine which had qualified for the ballot under the vague terms of the act on referendums, also was suddenly subjected to intense partisan pressure. When it found signature fraud in several cases and disqualified proposed questions as a result, it faced harsh attacks from the KMT; when it approved several anti-same-sex marriage questions, it was roundly criticized by gay rights activists. The Central Election Commission was faced with yet another difficult situation when, as a result of a clause in the act on referendums, it was required to hold a vote on the ten referendum questions on the same day as the nine-in-one local elections in November 2018. Thus voters were ultimately faced with a set of ten extra ballots, each with a confusingly worded referendum question, in addition to as many as five separate ballots for local races; as a result, the voting process took much longer than usual, and voters faced lines of two hours or more to cast their ballots. In some cases they were still waiting in line as other polling places began announcing their vote totals. The results of the referendums were a broad repudiation of DPP leadership. The seven referendums associated with anti-DPP or antiTsai positions, including three anti–lesbian, gay, bisexual, and transgender (LGBT) questions, all passed, while the three questions put forward with DPP-aligned groups failed. But the referendum results also highlighted flaws with the way the referendum law was written, as well as with the broader direct democracy agenda of the ruling party and the NPP. For one, despite stating that votes will be binding, the act on referendums contains no compulsory self-execution clause that would compel government agencies to comply with the results.60 The vagueness of many of the questions that qualified for the ballot meant that, even if the government sincerely intended to respect and follow the results, there was still no simple way to proceed with policy changes. Furthermore, the LGBT questions were in obvious conflict with a previous Council of Grand Justices ruling from 2017 that decided same-sex marriage should be legal in some form; shortly after the results were announced, the chief justice unilaterally announced that referendums could not overturn Court decisions, creating additional legal and constitutional confusion about Taiwan’s same-sex marriage policies.61 Overall, then, the amendments to the acts on referendums and elections and recall have introduced a volatile new element to Taiwanese politics, creating a set of legal and policy challenges that will not be easily resolved. These reforms have also further complicated the policymaking process, leaving at best a mixed legacy for Taiwan’s democracy.

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The DPP Reform Agenda in Practice: Crippling the KMT

In practice, rather than pursuing a broad institutional reform agenda, President Tsai and the DPP have instead placed the greatest priority on addressing the lingering legacies of the party-state era or, to put it less charitably, on crippling the KMT. Even as it oversaw a transition to liberal democracy in the 1990s, the KMT retained considerable structural and financial advantages that it accumulated during the authoritarian period, when party and state personnel, financing, and other resources were opaquely intermingled. These legacies of the martial law era have, in the view of many DPP members, given that party an unfair electoral advantage, one that needs to be eliminated to complete Taiwan’s democratic consolidation. Even before Tsai Ing-wen took office in 2016, the new DPP majority in the Legislative Yuan had begun work on legislation that would ensure a thorough review of the KMT’s assets and force the disgorgement of properties and funding that legitimately belonged to the public coffers. The bill was passed over strenuous KMT protests in July 2016, and the committee it created has since brought a number of controversial cases to light and put pressure on the KMT to provide a fuller accounting of party assets. It also imposed a temporary freeze on several KMT bank accounts, rendering the party temporarily unable to pay salaries of party workers.62 The committee has also gone after the assets and personnel of other organizations linked to the KMT in the authoritarian era, including the China Youth League, the China Red Cross, and the National Women’s League. Beyond the issue of party assets, Tsai and the DPP have taken other steps to undercut the KMT’s traditional advantages, from reducing pension payments to KMT party workers, to disrupting the KMT’s longstanding ties to local patronage networks. Early in 2016, for instance, the DPP-majority Legislative Yuan passed a bill requiring elections for council speaker and deputy speakers to be on the record, a reaction to an infamous case of vote-buying in the Tainan City Council speaker’s race that cost the DPP control of that position.63 Later, after a long and acrimonious debate, the legislature cut and reformed civil servant pensions, which had disproportionately benefited retirees who served the KMT during the martial law era.64 More recently, the Legislative Yuan passed a new law on nongovernmental organizations that banned political parties from running businesses, a move that disproportionately affects the KMT.65 The DPP majority also passed a Tsai administration proposal to make the heads of local farmer associations appointed, rather than elected, positions, potentially breaking KMT-leaning factions’ grip on these positions.66 And the ruling party has proposed elim-

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inating elections for township leaders, who traditionally served as crucial links in factional structures in rural areas.67 Most of these initiatives have moved forward because they satisfy three conditions: they are uncontroversial within the DPP, enjoy majority support in public opinion polls, and advance the DPP’s political interests at the expense of their major rival. Most other reform proposals, however, do not meet all these conditions, and are likely to languish as a result. Thus, for the rest of Tsai Ing-wen’s first term at least, we are likely to see this pattern repeat itself: legislation that reforms the political regime in a way that benefits the DPP’s interests, and harms the KMT’s, will remain at the forefront of the agenda in the legislature. Reform proposals that do not have an intra-DPP consensus behind them, by contrast, let alone a cross-party consensus, will probably never see the light of day. The Future of Taiwan’s Domestic Political Regime President Tsai Ing-wen and the DPP are likely to change the political regime of the ROC around the edges in some ways, but not fundamentally reform it. The greatest impact of the DPP’s reforms may well be on the KMT itself, rather than on the broader sets of institutions that make up the Republic of China on Taiwan. Changes to the electoral system, to the terms and appointment procedures of members of the Judicial and Control Yuans, and to the constitutionally muddled relationship between the executive and legislative branches, look almost impossible to achieve, because they would require passing a constitutional amendment: winning a three-fourths vote of the legislature in addition to a referendum. Reforms that require only statutory changes, such as reorganization of the Legislative Yuan to give the ruling party greater control over the agenda or to privilege government bills, are more likely, but again only if they aid the DPP’s own interests and can be introduced over vociferous opposition from the other parties. It remains an open question whether President Tsai and her party will manage to adopt significant judicial reforms, but these certainly look more feasible than changes to the electoral system or executive-legislative relations. Nevertheless, the most likely track of political reform over the next few years is one of continuity, not dramatic change. President Tsai and the DPP enjoy many of the same advantages that Ma and the KMT did in Ma’s first term, but they also face similar constraints on their ability to implement fundamental institutional reforms. The experience of the Ma era suggests that public opinion and cross-party consensus will

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decide most of the critical policy issues, and the lack of a clear consensus on constitutional reforms makes it unlikely we will see major change to the political system in the near future. In many ways, this is unfortunate for Taiwan’s democratic development. The current political system has fundamental flaws: it is highly centralized and majoritarian; its institutions of accountability are widely distrusted and insufficiently autonomous, nonpartisan, and professional; and the minority parties in the legislature are incentivized to engage in grandstanding and obstruction rather than constructive criticism or cooperation with the ruling party and the executive branch. The current configuration is a worst-of-both-worlds kind of outcome: it ensures neither proportionality of representation nor decisive majorities, and it suffers from poor clarity of responsibility. The amendments to the act on referendums have made this situation even worse: the lack of a binding execution clause and clear wording in referendum questions have introduced yet more ambiguity into the policymaking process. Without addressing these weaknesses, the potential is there for the Tsai administration to go the way of the Ma era: to suffer a sharp reaction as it becomes more unpopular, gets swept out of power, and is returned to opposition. The best way for the DPP to guard against this experience, and to improve Taiwan’s democratic structure, is to increase the impartiality, autonomy, and professionalism of the ROC’s accountability institutions. It is an open question whether Tsai and the DPP have the wisdom, the will, and the ability to meet this need. Yet on a more positive note, Taiwanese leaders of all political stripes have muddled through so far despite all these flaws in the regime’s institutional “hardware.” The commitment of the political elite, and the mass public, to democratic ideals—its “software”—appears firm. The strong traditions of political debate, respect for the right to voice alternative points of view, and freedoms of media and assembly have not been compromised and remain a critical part of Taiwan’s democratic resilience. The fact of Taiwan’s long institutional continuity is an important part of the regime’s underlying strength. The defining characteristic of Taiwan’s political evolution from a one-party dictatorship to a vibrant, pluralist, multiparty democracy has been its gradualism, and that bodes well for the regime’s long-term sustainability. Notes 1. Chou, “Conference on Direct Presidential Elections and Taiwan’s Democracy.” 2. Yu, “Parties, Partisans, and Independents in Taiwan,” pp. 79–81.

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3. Huang and Wang, “Presidential Coattails in Taiwan.” Note that by “split-ticket voting” I am referring here to casting a vote for one party’s candidate in the executive election, and another party’s candidate in the legislative district race. Splitting one’s district and party-list votes is now possible and, apparently, fairly common in legislative elections. See Wang, Lin, and Hsiao, “Split-Ticket Voting Under MMM.” 4. Morgenstern, Hecimovich, and Siavelis, “Seven Imperatives for Improving the Measurement of Party Nationalization.” 5. Lay, Yap, and Chen, “The Transition of Taiwan’s Political Geography.” 6. Cheng and Hsu, “Long in the Making.” 7. Huang, Kuo, and Stockton, “The Consequences of MMM on Party Systems.” 8. Kharis Templeman, “The Party System During the Ma Ying-jeou Era,” in Democracy in Taiwan: The Ma Ying-jeou Era, edited by Yun-han Chu, Larry Diamond, and Kharis Templeman (Boulder: Lynne Rienner, forthcoming). 9. I report the DPP’s swing rather than the KMT’s because of splits in KMT support in these elections. The DPP’s share of the vote gives a more consistent indicator of shifts between DPP and KMT camps than does the KMT’s. For representative commentary on the DPP’s gains in elections from 2008 to 2016, see Hsieh, “Taiwan’s 2016 Elections: Critical Elections?” pp. 9–23; Fell, Government and Politics in Taiwan; Hsiao, “2016 Taiwan Elections.” 10. Figures drawn from Templeman, “The Party System During the Ma Yingjeou Era.” 11. Tsai, Wang, and Wang, “Analysis of a Compound Campaign in the 2005 Three-in-One Election”; Huang and Hsiao, “Government Performance and Vote Choice in Local Elections.” 12. For some suggestive evidence of these trends, see Hsu, The Influences upon Local Factions After the Merger of Kaohsiung City and County; Hsu, Institutional Change and the Development of Local Factions. 13. Council seats remain important, though partial, exceptions to these general trends. The more permissive and personalist STNV electoral system is still in use for council seats, which allows small parties and independents a greater shot at winning seats. But here, too, the shifts upward and downward in the two major parties’ share of council seats is closely correlated with their national performance. For instance, the KMT lost thirty-three seats in 2014, or 7.9 percent, while the DPP lost fifty-three in 2018, or 18.2 percent. In elected offices below the city/county level, such as ward and village chief elections, the small size of electorates seems to render partisan considerations less important, and most winning candidates are independents. See Wang, “Duverger’s Law as Scale Effect.” 14. Tsebelis, Veto Players. 15. Wu, “Comparing Taiwan and the CEE Trio.” 16. For a good overview of constitutional reform in Taiwan, see Yeh, “Constitutional Reform and Democratization in Taiwan, 1945–2000.” 17. See Stockton, “How Rules Matter.” 18. Huang and Sheng, “Decentralized Legislative Organization and Its Consequences for Policy-Making in the Ma Ying-jeou Era.” 19. Bills can also be introduced by the Judicial, Control, and Examination Yuans, although in practice the Executive Yuan submits more than 90 percent of all bills that originate from another branch of government. 20. Much of this discussion is based on Huang and Sheng, “Decentralized Legislative Organization and Its Consequences for Policymaking in the Ma Ying-jeou Era.” 21. Article 10 of the Legislative Organization Act, following Article 67 of the Constitution, establishes the following permanent committees in the Legislative Yuan: Interior, Foreign Affairs and Defense, Economics, Finance, Education and

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Culture, Communications/Transportation, Justice and Law, and Social Welfare and Environmental Health. Others may be created as needed. The Legislative Organization Act also establishes a Procedural Committee (Article 7), a Records Committee (Article 8), and a Constitutional Reform Committee (Article 9). 22. When the size of the legislature was cut in half in 2008, from 225 to 113 members, the number of co-conveners in each committee was reduced from three to two. 23. In a remarkably prescient article, Nathan Batto predicted this effect of the electoral reform in 2009. See Batto, “Change and Continuity in the Personal Vote After Electoral Reform in Taiwan.” 24. I leave aside here any discussion of symbolic issues such as changing the name of the country, redefining the national territory, or adopting a new flag and anthem. Despite passionate views about these issues, the constitutional and geopolitical obstacles to these kinds of reforms, including opposition from the PRC and the United States, are so great as to render them impossible for the foreseeable future. 25. See Lin Chieh-chin, “Taiwan: A Patchwork Constitution,” March 28, 2015, http://constitutionnet.org/news/taiwan-patchwork-constitution. 26. In addition to the 22 formal agreements, the executive branch also submitted to the legislature for record the minutes of the first talks in June 2008, two statements of consensus, and three joint memorandums of understanding. 27. The Cross-Strait Services Trade Agreement was not one of these three; it was subject to review only because the legislature intervened to change the reversion point. On June 25, 2013, the Cross-Party Negotiation Committee issued a statement of consensus that the legislature would hold hearings and an item-by-item vote before the CSSTA would take effect. 28. “Tsai Ing-wen’s Five Major Reforms,” August 16, 2015, http://iing.tw/en/21. 29. Templeman, “When Do Electoral Quotas Advance Indigenous Representation?” 30. For instance, see Tsai Ing-wen’s op-ed in the Apple Daily, “My Positions on Constitutional Reform,” May 26, 2014, https://tw.appledaily.com/headline/daily /20140526/35852858. 31. Chang Hsiao-ti and Jonathan Chin, “Alliance Touts Constitutional Reforms,” Taipei Times, March 16, 2016, p. 3, http://www.taipeitimes.com/News/taiwan/archives /2016/03/16/2003641702. 32. Chen Wei-han, “NPP Tables Amendments to Referendum Act,” Taipei Times, March 23, 2016, p. 3, http://www.taipeitimes.com/News/taiwan/archives/2016/03/23 /2003642241. 33. “Democracies Around the World Are Giving Voting Rights to 18-Year-Olds: Will the Republic of China Follow?” News Lens, June 28, 2015, https://www .thenewslens.com/article/19198. 34. See Chen and Hsu, “Horizontal Accountability and the Rule of Law”; Wang, “Democratic Progressive Party Clientelism.” 35. Goebel, “Taiwan’s Fight Against Corruption.” Toward the end of the Ma era, a power struggle broke out between the minister of justice, Lo Ying-shay, and district prosecutors over Lo’s discretion over prosecutorial appointments. See Jason Pan, “Court Rejects Prosecutor’s Injunction Bid,” Taipei Times, July 23, 2015, http://www.taipeitimes.com/News/taiwan/archives/2015/07/23/2003623716. 36. Jason Pan, “Lin Yi-shih Sentenced to More Than 13 Years in Jail,” Taipei Times, February 27, 2016, p. 3, http://www.taipeitimes.com/News/taiwan/archives /2016/02/27/2003640332. 37. Katherine Wei, “Ex-Official Charged in Land Grab Gets Bail,” China Post, December 5, 2013, http://www.taipeitimes.com/News/taiwan/archives/2013/12/17 /2003579213; Stacey Hsu, “Controversial Yangmingshan Mansion Demolished,” Taipei Times, December 17, 2013, p. 3, http://www.taipeitimes.com/News/taiwan /archives/2013/12/17/2003579213.

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38. Lin Liang-sheng, Cheng Tseng-hsun, and Hsu Chan-yi, “Control Yuan Impeaches Former Miaoli Official,” Taipei Times, October 6, 2016, p. 3, http:// www.taipeitimes.com/News/taiwan/archives/2016/10/08/2003656740. 39. Abraham Gerber, “Taipei, Farglory Negotiations on ‘Dome’ Fall Apart,” Taipei Times, January 24, 2015, p. 1, http://www.taipeitimes.com/News/front/archives /2015/01/24/2003609954. 40. “Property Tycoon Detained on Bribery, Embezzlement Allegations,” July 1, 2017, http://focustaiwan.tw/news/asoc/201707010013.aspx. 41. “Prosecutors Seek to Hold Alex Tsai in CPMC Case,” Taipei Times, July 19, 2017, p. 1, http://www.taipeitimes.com/News/front/archives/2017/07/19/2003674845. 42. Stacy Hsu and Sean Lin, “Ma Rejects His Indictment as ‘Absurd,’” Taipei Times, July 11, 2018, p. 3, http://www.taipeitimes.com/News/taiwan/archives/2018 /07/11/2003696476. 43. Yang Kuo-wen and Lin Ching-chuan, “2012 Elections: SID Probe May Influence Voters, Legal Experts Say,” Taipei Times, December 16, 2011, p. 1, http:// www.taipeitimes.com/News/front/archives/2011/12/16/2003520855. 44. Rich Chang, “Tsai Ing-wen Cleared of Yu Chang Allegations,” Taipei Times, August 15, 2012, p. 1, http://www.taipeitimes.com/News/front/archives/2012/08/15 /2003540320. 45. Ma was later indicted for his handling of classified information in this case. See Chris Horton, “Taiwan’s Ex-President Ma Ying-jeou Indicted in Wiretapping Case,” New York Times, March 14, 2017, https://www.nytimes.com/2017/03/14 /world/asia/taiwan-president-ma-ying-jeou-charged.html. 46. Here, too, the Control Yuan failed to exercise effective oversight: a proposal to impeach Huang Shih-ming for leaking classified information went down to defeat in January 2014. See Chen Ching-ming and Stacy Hsu, “Top Prosecutor Escapes Punishment,” Taipei Times, January 8, 2014, p. 1, http://www.taipeitimes.com/News /front/archives/2014/01/08/2003580788. 47. Tseng Ying-yu, Wen Kuei-hsiang, and Y. L. Kao, “Opposition Pushes for Abolition of Control Yuan,” August 19, 2013, http://focustaiwan.tw/news/aipl /201308190030.aspx. 48. Lauren Dickey, “Team Tsai Ing-wen: A Who’s Who of the New Cabinet,” China Brief, June 1, 2016, https://jamestown.org/program/team-tsai-ing-wen-a -whos-who-of-the-new-cabinet. 49. In recent months, the DPP has conveniently rediscovered its enthusiasm for legislative oversight of cross-Strait relations, now that the KMT looks like it could win the presidency again in 2020. 50. Tzou, “Interview: DPP’s Oversight Bill Flawed, Sunflower Activist Says,” p. 3. 51. Jake Chung, “Legislature Approves Law on Ill-Gotten Party Assets,” Taipei Times, July 26, 2016, p. 1, http://www.taipeitimes.com/News/front/archives/2016 /07/26/2003651800. 52. Jason Pan, “Jury System Advocates Call for Inclusion in Package,” Taipei Times, August 12, 2017, p. 3, http://www.taipeitimes.com/News/taiwan/archives /2017/08/12/2003676377; Huang Hsin-po and Jake Chung, “Second Judicial Reform Member Quits,” Taipei Times, April 29, 2017, p. 3, http://www.taipeitimes .com/News/taiwan/archives/2017/04/29/2003669625. 53. “Tsai Doubles Down on Justice Issues and Reform,” Taipei Times, December 30, 2018, p. 3, http://www.taipeitimes.com/News/taiwan/archives/2018/12/30/2003707049. 54. Chung Li-hua and Jake Chung, “Control Yuan to Investigate Chen Skit,” Taipei Times, February 23, 2018, p. 1, http://www.taipeitimes.com/News/front /archives/2018/02/23/2003688073. 55. Sherry Hsiao, “Control Yuan Votes to Impeach Kuan,” Taipei Times, January 16, 2019, p. 1, http://www.taipeitimes.com/News/front/archives/2019/01/16/2003708007.

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56. Chen Yu-fu and Jake Chung, “SID Abolished as Legislature Hands Prosecutors the Reins,” Taipei Times, November 19, 2016, p. 1, http://www.taipeitimes.com /News/front/archives/2016/11/19/2003659559. 57. Chen, “NPP Tables Amendment to the Referendum Act,” p. 3. 58. Fang Hsiao-ting, Chen Yu-fu, and Jake Chung, “Legislators Laud New Recall Provisions,” Taipei Times, November 30, 2016, p. 1, http://www.taipeitimes .com/News/front/archives/2016/11/30/2003660265; J. Michael Cole, “The Recall Attempt Against Huang Kuo-chang: What’s at Stake,” Taiwan Sentinel, October 26, 2017, https://sentinel.tw/recall-huang-whats-at-stake. 59. “Legislature Passes Amendment Bill to Lower Referendum Thresholds,” Focus Taiwan, December 12, 2017, http://focustaiwan.tw/news/aipl/201712120011.aspx. 60. “Taiwan’s Referendums Binding, But May Not Be Enforceable: Experts,” Focus Taiwan, November 20, 2018, http://focustaiwan.tw/search/201810200004.aspx ?q=referendum. 61. Benjamin Hass, “Taiwan’s Top Court Rules in Favour of Same-Sex Marriage,” The Guardian, May 24, 2017, https://www.theguardian.com/world/2017/may /24/taiwans-top-court-rules-in-favour-of-same-sex-marriage. 62. “From Riches to Rags: Taiwan’s Kuomintang Party Is Broke and Adrift,” The Economist, December 15, 2016, https://www.economist.com/asia/2016/12/15 /taiwans-kuomintang-party-is-broke-and-adrift. 63. Alison Hsiao, “Local Government Act Reform Passed,” Taipei Times, May 28, 2016, http://www.taipeitimes.com/News/taiwan/archives/2016/05/28/2003647313. 64. Sean Lin, “Civil Servants’ Pensions Bill Approved,” Taipei Times, June 28, 2017, http://www.taipeitimes.com/News/front/archives/2017/06/28/2003673441. 65. Matthew Strong, “Taiwan Law Bans Political Parties from Running Businesses,” Taiwan News, November 10, 2017, https://www.taiwannews.com.tw/en/news /3294842. 66. “Leaders of Irrigation Association to Be Appointed by Government,” January 16, 2018, http://focustaiwan.tw/news/aipl/201801170001.aspx; Shih Hsiao-kuang and William Hetherington, “KMT Pans Change on Irrigation Body Political Neutrality,” Taipei Times, May 8, 2018, http://www.taipeitimes.com/News/taiwan/archives/2018 /05/08/2003692711. 67. Aaron Tu, “Proposal Aims to End Election of Township Mayors,” Taipei Times, March 28, 2016, p. 3, http://www.taipeitimes.com/News/taiwan/archives/2016 /03/28/2003642622.

6 Social Issues and Social Policy Ching-Hsing Wang and Dennis Lu-Chung Weng

Before the 2016 presidential election, the Kuomintang (KMT), which held the presidency and the majority in the legislature, had suffered severe criticism from the public about its government performance. Ma Ying-jeou could not keep his electoral promise to improve the economy. Not only have Taiwan’s real salaries retreated to the level of a decade and a half ago, but also income inequality has increased significantly in Taiwan.1 Shortly after winning reelection, President Ma Yingjeou raised electricity and gasoline prices, regardless of popular discontent. A series of policies such as twelve-year national basic education, securities transactions tax, US beef imports, adoption of electronic toll collection for highways, and updates of the household registration system resulted in public opposition and dissatisfaction. What was worse, a series of food safety events that happened in 2014 reflected the government’s inability to address livelihood issues and considerably decreased public trust in the central government. Even the public cast doubt on the collusion between the government and big business. Given these adverse electoral factors, it was not surprising that Tsai Ing-wen won the 2016 presidential election and became the first female president in Taiwan. More important, the Democratic Progressive Party (DPP) won a landslide victory in the 2016 legislative elections and became the majority party in the legislature for the first time, ending the KMT’s seventy years of dominance over legislative power. Therefore, the results of the 2016 elections signified a historic turning point in Taiwan—a non-KMT party simultaneously controlling the presidency and a majority in the legislature—ushering in a new era of politics for Taiwan. 97

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Given this absolute control over both the president and the legislature, Taiwanese people have placed high expectations on Tsai Ing-wen and the DPP to realize necessary political, economic, and social reforms. The previous two chapters have discussed the challenges and opportunities that Tsai Ing-wen and the DPP might confront in terms of political and economic issues. In this chapter, we switch attention to social issues facing Taiwan today that Tsai Ing-wen and the DPP need to manage. Current State of Social Issues Social issues are matters of concern to the government and society. They reflect problems of society that people living in the same place or country are concerned about and want to solve. Social issues can be defined as the problems that are perceived by a considerable number of individuals as requiring some kind of action for their change.2 Social issues may be broadly or narrowly focused and include poverty, crime, justice, healthcare, education, and human rights. During Ma Ying-jeou’s eightyear presidency, Taiwanese society had confronted a variety of social issues that required immediate attention and solutions. Unfortunately, the Ma Ying-jeou administration failed to find effective solutions to these social issues, leading directly to the KMT’s continuous defeats in the 2014 local elections and the 2016 presidential and legislative elections. Table 6.1 shows the trend in public satisfaction of presidential performance from September 2012 to September 2018.3 The data covering the period between September 2012 and December 2016 report public satisfaction with Ma Ying-jeou’s performance as president. As shown in the table, the public’s overall satisfaction with Ma Ying-jeou’s performance as president was quite low during this period. The lowest satisfaction rating was 12.6 percent in December 2014, whereas the highest satisfaction rating was 29.4 percent in March 2016, just about two months before Ma Ying-jeou stepped down. It is clear that the public were very dissatisfied with Ma Ying-jeou’s performance in economic development compared to his performance in cross-Strait relations, diplomacy, and national defense. Moreover, the public were also very dissatisfied with Ma Yingjeou’s performance in handling issues of livelihood. The satisfaction rating on this score was never higher than 20 percent and varied between 10.2 percent and 19.9 percent during the period between September 2012 and March 2016. It might not be surprising to observe low levels of public satisfaction with Ma’s performance on issues of livelihood given low salary, price inflation, high housing prices, worry about food safety, and other such problems. Although livelihood issues simply reflect some

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Table 6.1 Public Satisfaction with Presidential Performance in Taiwan, 2012–2018 (percentages) President

Ma Ying-jeou September 2012 December 2012 March 2013 June 2013 September 2013 December 2013 March 2014 June 2014 September 2014 December 2014 March 2015 June 2015 September 2015 December 2015 March 2016 Tsai Ing-wen June 2016 September 2016 December 2016 March 2017 June 2017 September 2017 December 2017 March 2018 June 2018 September 2018

Overall Performance

Cross-Strait National Economic Livelihood Relations Diplomacy Defense Development Issues

19.5 17.3 20.2 19.1 16.7 14.0 15.4 18.6 19.4 12.6 16.3 22.3 19.7 20.0 29.4

34.7 37.1 33.6 28.4 30.5 29.1 26.9 27.2 26.4 23.5 25.6 34.6 28.8 34.3 41.0

31.8 37.7 41.9 29.5 34.6 25.8 30.7 31.3 35.9 28.9 33.6 39.3 35.8 37.6 41.4

27.4 29.5 28.9 26.0 22.1 22.8 21.1 25.4 31.4 25.2 30.8 29.9 26.9 26.9 34.9

12.3 14.1 15.6 18.1 13.1 12.4 13.8 18.9 19.5 17.7 19.3 21.9 19.6 15.0 19.4

12.7 14.5 14.9 17.3 13.2 11.6 10.2 15.1 14.2 10.5 15.9 19.9 19.6 13.6 19.7

76.5 49.5 42.0 41.2 32.3 41.0 35.0 32.7 28.5 29.7

62.7 39.6 37.5 36.2 27.9 31.9 29.8 27.0 25.4 25.0

77.9 47.3 45.3 46.1 36.0 38.6 38.0 37.2 26.0 25.7

76.5 49.8 47.4 44.5 47.5 45.2 36.1 39.9 42.1 43.5

57.3 34.4 32.0 30.2 22.5 27.8 23.7 20.9 21.1 21.1

65.6 48.1 35.2 32.4 29.0 36.5 28.1 26.5 24.6 25.8

Source: Taiwan’s Election and Democratization Studies (TEDS), Telephone Interview and Internet Survey of the Presidential Satisfaction and Telephone and Mobile Phone Interview Survey of the Presidential Satisfaction (Waves 1–25).

dimension of social issues, to some extent the public’s dissatisfaction with Ma’s performance on this score might imply Ma Ying-jeou’s inability to handle social issues. Taiwanese society has been confronted with a variety of social issues and people might have different opinions about which social issues should be the priorities of the government. We use three surveys conducted by the Election Study Center at National Chengchi University after Tsai Ing-wen assumed office to identify important social issues to which Taiwanese people think the government should give priority. First, the survey conducted soon after Tsai Ing-wen assumed office showed that 40 percent of respondents viewed economic development as the priority problem that the government should deal with (see Table 6.2). This

100 Ching-Hsing Wang and Dennis Lu-Chung Weng Table 6.2 The Priority Problem President Tsai Ing-wen Should Handle, 2016 (percentages) Cross-Strait relations Economic development Education policy Food safety Annuity reform Energy policy Judicial reform Transitional justice Other issues Nonresponse

June 2016a 10.7 40.0 13.5 10.3 11.4 4.2 1.4

1.9 6.7

September 2016b

December 2016c

13.5

10.3

14.3 41.7 11.0

7.4 2.7 1.6 7.9

15.5 44.4 11.6

6.8 2.6

7.5

Sources: Taiwan’s Election and Democratization Studies (TEDS), Telephone Interview and Internet Survey of the Presidential Satisfaction (Wave 16); TEDS, Telephone and Mobile Phone Interview Survey of the Presidential Satisfaction (Waves 17–18). Notes: a. Other issues included labor policy, livelihood issues, employment, crime, social welfare, diplomatic issues, competition between the KMT and DPP, and low wages. b. Other issues included labor policy, livelihood issues, employment, social order, social welfare, diplomatic issues, ill-gained party assets, and corruption. c. Other issues included food safety, labor policy, livelihood issues, traffic, social welfare, ill-gained party assets, and the Chen Shui-bian amnesty issue.

might not be surprising given long-term economic recession in Taiwan. In addition to economic development, at least 10 percent of respondents thought of education policy (13.5 percent), annuity reform (11.4 percent), cross-Strait relations (10.7 percent), and food safety (10.3 percent) as priority problems. The second survey, conducted in September 2016, showed similar results, with 41.7 percent of respondents identifying economic development as the number one priority, followed by cross-Strait relations at 14.3 percent, annuity reform at 13.5 percent, education policy at 11.0 percent, and judicial reform at 7.4 percent. Finally, the third survey, conducted in December 2016, demonstrated a similar pattern as the second survey, with economic development (44.4 percent), crossStrait relations (15.5 percent), education policy (11.6 percent), annuity reform (10.3 percent), and judicial reform (6.8 percent) occupying the top five positions of priority. Based on these results, we can infer that the majority of Taiwanese people are most concerned about economic issues. However, some social issues such as education policy, annuity reform, judicial reform, and food safety have also attracted public attention. When it comes to livelihood issues, the problem of low salary might first arouse most Taiwanese people’s concern. While Taiwan’s economy has grown every year since a 2009 recession, the real wage has stagnated in past years, or even retreated to the level of the early 2000s. As shown in Figure 6.1, the real wage in 2016 was NT$46,425 per month, which is

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similar to the amounts in 2002 (NT$46,332) and 2005 (NT$46,446) and is only slightly higher than that of 1999 (NT$46,040). A good sign is that the real wage increased to NT$47,271 per month in 2017, reaching its highest point. More time is needed to observe whether this trend of increase will continue. However, although Taiwan has maintained economic growth over the past two decades, Taiwanese people overall have not received relative increases in wage. There has been a clear gap between wage growth and economic growth (see Figure 6.2), although the gap has seemed to narrow in past years. This reflects that the salaried class does not share the fruits of economic growth, which is why the majority of Taiwanese people have no sense of feeling the benefits of economic growth. Furthermore, the average wage and salary growth rate in Taiwan have been lower than that existing in Hong Kong, Singapore, and South Korea—the other three Asian Tigers. Low salaries are the main factor driving the outflow of talent from Taiwan. According to a survey conducted by Business Weekly in 2016, 62.3 percent of Taiwanese people aged twenty to thirty-five are willing to work abroad. When asked why, 89.2 percent said that low starting salaries drive them to leave the country, whereas 75.9 percent thought there were few opportunities for career development in Taiwan. If the Taiwanese government fails to solve the problem of low salary, it will become much more difficult to Figure 6.1 Real Monthly Wage in Taiwan, 1996–2017

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Source: Directorate-General of Budget, Accounting, and Statistics, Executive Yuan, Taiwan. Note: Real wage = nominal wage divided by the Consumer Price Index.

102 Ching-Hsing Wang and Dennis Lu-Chung Weng Figure 6.2 Salary and Economic Growth Rates in Taiwan, 1996–2017

!

Source: Directorate-General of Budget, Accounting, and Statistics, Executive Yuan, Taiwan.

retain Taiwan’s talent, or even recruit more foreign talent to work in Taiwan. Given that human capital plays a pivotal role in economic growth and development,4 the low salaries paid to quality talent in Taiwan will become a constraint on the country’s economic growth. The second problem related to livelihood issues is income inequality. Income inequality within most advanced and developing countries has increased, and Taiwan is no exception. In Taiwan, income inequality has increased since the early 1980s even though the rate of economic growth has declined since then.5 Figure 6.3 displays the change in the Gini coefficient in Taiwan during the period between 1981 and 2014. The Gini coefficient has been widely used to measure income inequality in a country; higher values indicate worse income inequality. As shown in the figure, over the past three decades the Gini coefficient in Taiwan has been worsening, from 28.1 in 1981, reaching the highest value of 35.0 in 2001, to 33.6 in 2014. While the Gini coefficient has risen in Taiwan, the trend seems to suggest that, in general, income inequality should be of little concern in Taiwan because the Gini coefficient has increased by merely 5.5 from 1981 to 2014. Nevertheless, if we adopt a different perspective to examine income inequality in Taiwan, we would arrive at a different conclusion. Figure 6.4 reports the change in the

103 Figure 6.3 Gini Coefficient for Taiwan, 1981–2014

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Source: Directorate-General of Budget, Accounting, and Statistics, Executive Yuan, Taiwan.

Figure 6.4 Income Inequality in Taiwan: Ratio of the Highest 5 Percent to the Lowest 5 Percent of Average Income, 1998–2014

!

Source: Fiscal Information Agency, Ministry of Finance, Taiwan.

104 Ching-Hsing Wang and Dennis Lu-Chung Weng ratio of the highest 5 percent of average income to the lowest 5 percent of average income from 1998 to 2014. It is obvious that the ratio has significantly increased, from 32.7 in 1998 to 94.8 in 2011. Although the ratio decreased to 83.9 in 2012, it again elevated, to 111.8, in 2014. The figure implies that rich people have become richer and poor people have become poorer in Taiwan. The results from survey data also show that the great majority of Taiwanese people believe that the gap between the rich and the poor is widening. As demonstrated in Table 6.3, 93.0 percent of Taiwanese people either strongly agreed or agreed that there was an increasing gap between the rich and the poor in 2013, whereas the percentage slightly decreased to 88.9 percent in 2016. Past studies have found that income inequality can increase crime,6 decrease average level of education,7 lead to political inequality,8 and have a negative influence on individual health.9 Given these negative effects, the government should take action to reduce income inequality. Another two issues related to livelihood that have aroused public concern are housing prices and food safety. Housing prices in Taiwan have increased hugely since the 2000s. Although the Taiwanese government has made some efforts to curb rising housing prices, which have slightly dropped since 2015, overall housing prices have remained too high for the majority of Taiwanese people to afford a house. For young people, the situation might be even more difficult. Under the pressures of low salary and high housing prices, the majority of young people cannot afford to buy homes. According to a survey conducted in April 2017, only 12.1 percent of office workers under forty years of age were able to purchase their own homes.10 In 2011 the Ma administration imposed a so-called luxury tax of 10 percent and 15 percent on real estate sold within two years and one year, respectively. However, the policy failed to deliver a long-term solution to the problem of property hoarding, because the most affluent people could afford to hold on to the investment for more than two years and avoid the additional taxation.11 In short, the government needs to come up Table 6.3 Public Perception of the Growing Gap Between Rich and Poor in Taiwan, 2013–2016 (percentages) Strongly agree Agree Disagree Strongly disagree

2013

75.7 17.3 4.7 2.3

2014

72.5 16.6 7.6 3.4

2015

72.4 17.2 6.5 3.9

2016

67.2 21.7 7.9 3.1

Source: Taiwan’s Election and Democratization Studies (TEDS), Telephone Interview and Internet Survey of the Presidential Satisfaction (Waves 5, 9, 13, 15).

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with a more effective approach to solving the housing problem. In addition, a series of food safety incidents have occurred in Taiwan since 2011, and the 2014 scandal has especially destroyed public confidence in food safety and left the public concerned about the reliability of the food supply. Since then the government has been compelled to enforce stricter regulations on food safety, but the problem is not easy to resolve given the large number of unregistered factories and food providers.12 We now switch attention to education policy in Taiwan. Ever since the 1990s, the Taiwanese government has initiated a series of education reforms. Nonetheless, it seems that these education reforms do not solve the problems but create more problems. For example, higher education in Taiwan experienced a period of unprecedented expansion beginning in the mid-1990s, with the number of colleges and universities increasing from 105 in 1986 to 163 in 2012. However, due to low birth rates, more and more colleges and universities cannot recruit a sufficient number of students, with many even forced to close. Moreover, because of the shortage of students, colleges and universities have become unwilling to hire full-time faculty and instead hire part-time faculty to share teaching responsibility. Accordingly, the number of part-time faculty is greater than that of full-time faculty in some colleges and universities. Since most part-time faculty teach courses in several colleges and universities at the same time, it is difficult to expect that part-time faculty are able to take care of students’ needs. Consequently, the quality of education students receive will be significantly influenced. Besides, many education policies, such as multiple-entrance programs, the grade one-to-nine curriculum, reform mathematics, and curriculum reform, are not carefully deliberated and are put into effect in a rush without sufficient supporting measures. As a result, education reforms in Taiwan not only fail to reduce students’ education burden, but also deepen parents’ worries about the education their children will receive. Another issue that has been long debated in Taiwan is annuity reform. In 2008, Taiwan initiated a new national annuity system for individuals who are not covered by any other public annuity system, mainly including the national annuity program and the labor insurance program. A few years after the implementation of this new annuity system, Taiwan began to face the problem that overpayment of annuity endangers national finance. It is estimated that the annuity funds will go bankrupt by 2019 for the military annuity fund, by 2027 for the teacher and labor insurance systems, and by 2031 for the civil servant annuity scheme.13 Although support for annuity reform gained momentum in 2012, it hastily disappeared and the government did not take any substantive action to deal with the problem. According to a survey conducted in

106 Ching-Hsing Wang and Dennis Lu-Chung Weng January 2017, up to 70 percent of respondents agreed that annuity reform was needed, whereas only 14.1 percent held the opposite opinion.14 Moreover, 64.9 percent of respondents supported the government’s plan to complete annuity reform in 2017, whereas 29.0 percent expressed opposition. In general, the majority of Taiwanese people agree on the necessity of annuity reform. The Tsai administration and the legislature worked together to pass the annuity reform plan for civil servants and public school teachers in 2017 and military personnel in 2018. The new annuity system went into effect on July 1, 2018. The final issue that has long existed in Taiwan is judicial reform. Perhaps because of the long-term authoritarian governance before the transition to democracy, Taiwanese people have displayed low levels of trust in the judiciary. Figure 6.5 shows the trend of public trust in judges and prosecutors from 2010 to 2018. Public trust in prosecutors increased from 26.1 percent in 2010 to 30.6 percent in 2016, but then decreased to 24.6 percent in 2018. Meanwhile, public trust in judges decreased from 22.1 percent in 2010 to 15.4 percent in 2015, and then increased to 23.1 percent in 2018. On the whole, although public trust in prosecutors has been relatively higher than that in judges, it is obvious that overall trust in the judiciary has been low in Taiwan. This may be partly because the verdicts in some cases receiving media attention contradict public expectations, with the result that the public loses trust in the judiciary. AccordFigure 6.5 Trust in Judges and Prosecutors in Taiwan, 2010–2018

!

Source: National Survey on Crime Victims and the Government’s Maintenance of Public Security, 2010–2018.

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ing to results from a 2017 survey on public perceptions of the judiciary conducted by the Judicial Yuan, 48.1 percent of the respondents think that there is a large gap in cases receiving media attention between the verdicts and their expectations, whereas another 38.9 percent perceive a slight gap (see Figure 6.6). Of course, verdicts should be made based on facts and laws, rather than public opinion, and the government must ensure that justice can be achieved. As a new president, Tsai Ing-wen shoulders much expectation from the Taiwanese people. Particularly, with the DPP achieving an absolute majority in the Legislative Yuan, Tsai Ing-wen should be able to carry out major reforms without many obstacles. We now turn to how Tsai Ing-wen and the DPP are responding to these social problems. Responses of Tsai and the DPP to Social Issues During her campaign, Tsai Ing-wen proposed a fivefold plan for social stability: living at ease, food safety, community care, sustainable annuity, and public safety.15 Three out of these five address the previously discussed social issues related to housing prices, food safety, and annuity reform. Specifically, the living-at-ease program is based Figure 6.6 Perceptions About Court Cases Receiving Media Attention: The Gap Between Verdicts and Expectations in Taiwan, 2017

!

Data: Survey on Public Perceptions of Judiciary, 2017.

108 Ching-Hsing Wang and Dennis Lu-Chung Weng on social housing and involves building 200,000 households over eight years by cooperating with county and city governments. Moreover, the social housing would be rented with reasonable leases tailored particularly for the youth, middle-class workers, single-parent families, the disabled, and the elderly.16 Although Tsai Ing-wen reiterated in December 2016 that the goal of building 200,000 social housing units in eight years would not be changed, only time will tell whether the policy can be realized. For the food safety program, Tsai Ing-wen has supported stricter food safety regulations and advocated that the act governing food safety and sanitation should be amended to ensure that food producers are more responsible for the food they supply and to set up a traceable production database for food supply. In August 2016, Tsai Ing-wen attended a food safety summit and vowed to set up a food safety risk assessment committee and to increase funding for food safety measures by 50 percent in 2017. The food safety risk assessment committee would mainly assess the handling of major food scandals and strengthen inspections of products that failed tests in the past. The government would also simplify standards required for achieving the national seal of quality for the purpose of encouraging agricultural development and food education as well as increasing food safety incentives for producers.17 The final goal is to restore public confidence in food safety and Taiwan’s international reputation as a gastronomic paradise. However, the large numbers of eggs contaminated by pesticide use in 2017 again shook public confidence in food safety. Although the Tsai administration has instituted a number of regulatory reforms in an effort to deal with food safety, it remains uncertain whether the current system is sufficient to address this problem. For sustainable annuity, Tsai Ing-wen has advocated holding a national meeting to discuss reform with experts from various fields. Immediately after she assumed office, Tsai Ing-wen established an annuity reform committee under the office of the president as a main institution in charge of annuity reform. The national conference on annuity reform was held on January 22, 2017, although some groups protested outside the location of the meeting. As mentioned previously, the majority of Taiwanese people support the annuity reform and expect the government to complete it as soon as possible. In June 2017, Taiwan’s Legislative Yuan passed an act governing civil servant retirement, discharge, and pensions and an act governing the retirement and pensions of public school teachers and employees. Both acts took effect on July 1, 2018. Furthermore, in June 2018 the Legislative Yuan passed an act on military service for officers and noncommissioned

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officers of the armed forces. The act also took effect on July 1, 2018. The main reforms include a decrease in the retirement income replacement rate; elimination of the preferential, government-subsidized 18 percent interest rate on savings; and a gradual increase in the retirement age. This represents a very important step for Taiwan’s annuity reform process. As a result of the annuity reform, government spending on annuity will save NT$1.3 trillion, which could reduce the government’s financial burden. According to a 2018 survey, 64.2 percent of respondents expressed support for the new annuity system, while 25.3 percent voiced disapproval. Moreover, 57.5 percent thought that the reforms would be positive for Taiwan’s general development, while 34.7 percent held the opposite view.18 While retired civil servants, teachers, and military personnel are resolutely opposed to the annuity reform, it is evident that the majority of Taiwanese people are satisfied with the annuity reform carried out by the Tsai administration. As Tsai Ing-wen stated: “The annuity reform is not meant to encourage a group of people to fight another group of people.” Also, the annuity reform “is not a call on a class to stand up against another class.”19 In short, annuity reform is not meant to generate group conflict or class conflict. The purpose of annuity reform is to create a sustainable annuity system to protect the livelihood of retirees. With regard to the problem of low salary, Tsai Ing-wen vowed during her campaign to improve workers’ rights by amending laws to promote a shorter workweek and a higher minimum wage. She also clearly stressed in her inaugural address on May 20, 2016, that young people suffer from low wages and feel helpless and confused about the future. Tsai Ing-wen promised that the government would initiate actions immediately to solve the problem of low salary. The Tsai administration did put several new policies into force on October 1, 2016, including a hike in the minimum hourly wage and a new labor rule forbidding employers from making workers stay on the job for more than six days in a row. The minimum hourly wage was increased from NT$120 to NT$126 (US$4.17). Moreover, the minimum hourly wage was raised further to NT$133 (US$4.29) and the minimum monthly wage was increased from NT$20,008 to NT$21,009 (US$677.96), both of which took effect on January 1, 2017. In September 2017, the minimum hourly wage was increased again to NT$140 (US$4.52) and the minimum monthly wage was increased to NT$22,000 (US$709.94), both of which went into effect on January 1, 2018. In September 2018, the Executive Yuan announced that the monthly minimum wage would be increased by 5 percent the next year, while the hourly minimum wage would rise by 7.14 percent. That is, the hourly minimum wage of

110 Ching-Hsing Wang and Dennis Lu-Chung Weng NT$140 was raised to NT$150 (US$4.84), while the monthly minimum wage of NT$22,000 (US$714) was increased to NT$23,100 (US$745.44). The changes were to take effect on January 1, 2019. Although the Tsai administration’s minimum-wage policy cannot really solve the problem of low salary, it represents a positive act by the government to increase the salary level. To reduce weekly work hours, a new regulation requiring workers to have two days off (one fixed day off and a rest day) every seven days was also implemented. The actual day of the fixed day off and that of the rest day shall be decided by the employers and the workers. Although this policy generated controversy between labor groups and business associations and was even blamed for increasing inflation, overall it should have a positive influence on protection of labor rights to adequate rest and improvement of workers’ lives. In terms of education, Tsai Ing-wen proposed four important goals for education reform during her campaign: let students learn happily, reduce parents’ burden, let education keep up with the times, and cultivate mature eighteen-year-old citizens. To achieve these goals, Tsai Ing-wen came up with six policy directions involving nursery education, compulsory education, technical and vocational education, higher education, professional teachers, and prospective education. 20 Nevertheless, Tsai Ing-wen and her administration have not offered specific approaches to carrying out education reforms since assuming office. On April 18, 2017, the Ministry of Science and Technology announced a new program—Leaders in Future Trends (LIFT)—to attract overseas Taiwanese technology talent to return home. The new program, which was officially launched in May 2017, is to give 100 Taiwanese citizens under forty-five years old with a doctorate degree from an overseas university a chance to return to Taiwan on a professional exchange that comes with a government grant of NT$1.5 million (US$49,000) for up to one year. 21 To support universities in Taiwan to attract the world’s elite by providing internationally competitive salaries and benefits, the Ministry of Education also initiated the Jade Mountain Scholars Project in August 2017. In particular, Jade Mountain Scholars will receive a supplemental salary of NT$5 million (US$163,333) per year for three consecutive years, and Jade Mountain Young Scholars will receive a supplemental salary of NT$1.5 million (US$49,000) for five consecutive years. At present, it is too early to evaluate the policy effects of these new programs, but to some extent they reflect the government’s determination to attract overseas Taiwanese talent back to Taiwan. Given the importance of education in national development, the gov-

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ernment should do more to improve the quality of different levels of the education system in Taiwan. With regard to judicial reform, Tsai Ing-wen clearly stated in her inaugural address that the Taiwanese judicial system has lost the trust of the people and promised that the government would actively promote judicial reform. On November 21, 2016, the office of the president established the preparatory committee for a national congress on judicial reform. The committee comprised seventeen members, with legal professionals accounting for no more than half and any single sex no less than a third, with Tsai Ing-wen serving as the convener. The committee held its first meeting on November 25, 2017, and Tsai Ing-wen stated that Taiwan would achieve progress toward judicial reform by relying on diverse voices and broad popular participation. The national congress on judicial reform was divided into three stages: opinion solicitation, a subgroup meeting, and a summary meeting. The stage of opinion solicitation took place from November 1, 2016, to December 31, 2016, and aimed to collect public opinion on judicial reform via a network platform and mail. The stage of the subgroup meeting took place from February 20, 2017, to June 3, 2017. Five subgroups were formed and each group comprised fifteen to twenty people, including the members of the preparatory committee and designated people. To ensure transparency, all meeting minutes could be found on the website of the office of the president. Finally, the stage of the summary meeting, which aimed to arrive at a conclusion on judicial reform, took place on August 12, 2017, and the final report was released on September 8, 2017.22 According to a survey conducted by the Crime Research Center at National Chung Cheng University in June 2018, more than four-fifths (83.6 percent) of respondents were dissatisfied with the government’s effectiveness at judicial reform. Therefore, the Tsai administration might need to put in more effort to win the public’s confidence in the judiciary. Finally, in contrast to the above-mentioned social issues, Tsai Ingwen seemed to put less emphasis on the problem of income inequality. However, she indeed has noticed that the wealth gap has continued to widen in Taiwan. Specifically, Tsai Ing-wen attempted to address the rise in income inequality through social welfare policy. For example, she proposed to expand care for the elderly and shore up the social safety net through greater government spending. Nevertheless, social welfare policy might not be the best way to solve the problem of income inequality. To effectively address income inequality, the government might need to find new sources of growth in national income and, more important, ensure equitable distribution.

112 Ching-Hsing Wang and Dennis Lu-Chung Weng Future Challenges and Obstacles of Societal Changes Under Tsai and the DPP All the aforementioned social issues are important and need to be dealt with in the years to come. To address these social issues, one must acknowledge that economic development is at their center. The challenges and obstacles of societal changes associated with concern about economic development derive from a twofold cause: external and internal. The external cause refers to the concerns arising from the reality that Taiwan’s economic condition is not what it used to be and that it is difficult for the Taiwanese government to afford any social policies. In addition, Tsai and her administration also face the internal cause, referring to the worries due to the lack of social trust that leads individual perception of every social issue to fluctuate by partisan position. The discussion on the external cause of Taiwan’s future social challenges may start from learning the pattern of Taiwan’s development. Looking back to the history of Taiwan’s economic development, despite the lack of abundant natural resources, some social policies enforced during the initial stage of development, such as land reform, building up farmer associations, and establishing cooperative bank networks, deserve credit because they have contributed to strengthening Taiwan’s ability to grow. Most people neglect the effect of social policies on the early success of Taiwan’s agricultural production, which made Taiwan a famous export country in the world and also provided a much needed financial foundation to Taiwan. More important, the surplus earned from Taiwan’s initial agricultural growth helped it in developing infrastructure throughout the entire island. Soon after the completion of building infrastructure, Taiwan’s industrial sector gradually shifted focus from agricultural/food production to the export of labor-intensive industrial products (electronic assembly, umbrellas, toys, etc.). Since then, Taiwan’s economic development has always been closely tied with its human capital through its economic transition from a labor-intensive to a capital-intensive country. To secure sufficient work force, from 1949 to late 1980s the entire society was held under martial law by the ruling KMT, which dominated most labor organizations by assigning party members and security agents to keep a careful eye on the workers. In so doing, the martial law and KMT policy had heavy control over Taiwan’s labor force. During the “economic miracle” era, the ruling party even tried to entice foreign investors with promises of “well-behaved laborers.” Although the essentially nondemocratic, single-party government did not protect workers’ rights, Taiwan’s policies that helped industries produce their products more efficiently played an imperative role in its early development. Fol-

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lowing the lifting of martial law and Taiwan’s democratization, there were more union activities and labor movements. However, the political and economic establishments continued to restrict workers’ rights, as they saw that restrictions generated benefits. At the beginning of the post–martial law era, labor groups that sought to promote free and democratic labor unions found themselves subject to political harassment, both directly and indirectly. While experiencing the process of democratization, the public has gradually become more supportive of fighting for labor rights in recent years. It is no secret that Taiwan’s cheap but skilled labor force has played an essential role in its economic development, especially when Taiwan enters and competes in the global technology information industry. So, what makes Taiwan’s human capital competitive? The overall development not only brings a shift of industrial structure but also increases the demand for high-quality human capital. To answer the demand, in 1968 Taiwan decided to implement its nine-year compulsory education system. Four decades later, in 2010, a twelve-year compulsory curriculum was announced and implemented in Taiwan. Starting from the late 1990s, a series of reforms of the system of higher education allowed most of the vocational and training schools to transform into comprehensive universities. The rapid expansion of the system of higher education and the upgrading of vocational and professional schools were believed to be a solution for generating a more competent work force for Taiwan. However, though the total number of college graduates has indeed increased in recent years, the quality of the work force has declined notoriously. According to official reports,23 the increasing number of college graduates has made the unemployment rate of the work force with a university degree higher than that for individuals without the college degree. What is worse is that the birth rate in Taiwan has declined in recent years, and it is now lower than that in most of the countries in the world. To deal with the birth rate crisis, lowering the requirements in the universities for keeping students enrolled has become the unspoken rule in Taiwan’s higher education, and thus the declining quality of human capital should not be a surprise. Furthermore, with the signing of the Economic Cooperation Framework Agreement, the economic ties between Taiwan and China encourage an outflow of Taiwan’s high-quality human capital to China. The demand for a high-quality work force remains, but the supply has diminished. In addition to the declining quality of human capital, as well as the aging of Taiwanese society, Taiwan is experiencing the same problems occurring in other post-industrial societies, such as a rise in income inequality, polarization of society, social welfare issues, and environmental problems. Needless to say, these social issues are associated with

114 Ching-Hsing Wang and Dennis Lu-Chung Weng Taiwan’s future economic development, namely the external cause of social challenges. Social policies that could facilitate retaining businesses and a high-quality work force are an immediate need for Taiwan. In addition to the societal challenges derived from the economic realities in Taiwan, Tsai and her administration are facing the enduring obstacle of declining social capital. As Robert Putnam points out in his seminal work Bowling Alone,24 social capital refers to the personal or societal ties that can be viewed as potentially valuable assets for improving societal stability. Interpersonal ties within the society do not necessarily promote any improvement of individual well-being. However, if people residing in the same society cannot trust each other and work with each other, then improving the society for everyone is unlikely. Undoubtedly, an effective social policy involves close cooperation between the government and social groups, and this cooperation cannot be taken for granted. While the purpose of social policy is to improve the living conditions of some people if not all, a lack of social trust can result in the perception that particular social policies benefit only certain politicians or political parties. For instance, the challenge of carrying out the annuity reform is not to convince the retired civil servants, public school teachers, and military personnel whether an annuity system would face possible bankruptcy in the next few years, but rather how to convince them that the current government has no intention to attack their specific group. Unfortunately, politicians and political parties are not very trustworthy in the eye of Taiwanese people. Results from the sixth wave of the World Values Survey showed that 49.3 percent of Taiwanese citizens viewed the government as either not very trustworthy or not at all trustworthy, whereas 70.0 percent of Taiwanese people had an even worse perception about trustworthiness of political parties in Taiwan.25 Among others, 75.9 percent of Taiwanese people with a college degree were even more dissatisfied with political parties. The survey results indicated that without ameliorating the tension between social groups and political views, Tsai and the DPP administration face the challenge of perceived untrustworthiness, and any future political leaders of Taiwan may also encounter the same obstacle. In short, the societal challenge derived from the internal cause needs to be resolved by reestablishing social trust and accumulating social capital within society. Conclusion Although this chapter has focused on such social issues as low salary, income inequality, housing prices, food safety, education, annuity reform,

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and judicial reform, this does not mean that the other social issues do not matter. Some social issues related to protection of rights for specific groups such as the lesbian, gay, bisexual, and transgender (LGBT) community, aborigines, and new immigrants have captured public attention in the past several years. For some social issues, the public have not achieved consensus in the short run. The value of democracy lies in its guarantee of freedom of expression, so that each group has the opportunity to express its opinion and let the government hear its voice. Because some social issues might generate controversies between different groups, it is important for the government to negotiate with different groups and find a compromise that is acceptable to each related party. Since assuming office, Tsai and her administration have made a great effort to carry out major social reforms. However, the public seem to feel dissatisfied with the reforms. As shown in Table 6.1, the percentages of people who are satisfied with Tsai Ing-wen’s performance in economic development and livelihood issues have decreased. That might partly explain why the DPP was confronted with severe electoral defeat in the 2018 local elections. The outcome of the 2018 elections represents a warning signal for Tsai and her administration. They need to rethink their reform strategies in order to respond to the voices and needs of the people in terms of social issues. Some social reforms will have an especially significant impact on future generations and overall national development. If Tsai Ing-wen and the DPP are still not able to meet the public’s expectations about social reform, they might be confronted with another defeat in the 2020 presidential and legislative elections. Notes 1. During his eight-year term, Ma Ying-jeou had failed to realize his “633 Plan,” which promised an economic growth rate of 6 percent, an unemployment rate of less than 3 percent, and a per capita income of more than US$30,000. 2. Lauer, “Defining Social Problems.” 3. Data analyzed in this article were obtained from Taiwan’s Election and Democratization Studies (TEDS) in their telephone interview and internet survey of presidential satisfaction, and telephone and mobile phone interview of presidential satisfaction. The principal investigator is Professor Chi Huang of National Chengchi University. More information can be found on the TEDS website at http://www .tedsnet.org. We appreciate the assistance in providing data by the institute and Professor Huang. The authors are alone responsible for views expressed herein. 4. Benhabib and Spiegel, “The Role of Human Capital in Economic Development Evidence from Aggregate Cross-Country Data”; Hanushek and Kimko, “Schooling, Labor-Force Quality, and the Growth of Nations.” 5. Lee, “Economic Growth and Income Inequality.”

116 Ching-Hsing Wang and Dennis Lu-Chung Weng 6. Stolzenberg, Eitle, and D’Alessio, “Race, Economic Inequality, and Violent Crime.” 7. Thorbecke and Charumilind, “Economic Inequality and Its Socioeconomic Impact.” 8. Solt, “Economic Inequality and Democratic Political Engagement.” 9. Truesdale1 and Jencks, “The Health Effects of Income Inequality.” 10. Detailed information can be found at http://focustaiwan.tw/news/aeco /201704070010.aspx. 11. Piasecki, “Taiwan’s Presidential Campaign Exposes Housing Problem.” 12. Ferry, “How Safe Is Taiwan’s Food?” 13. Detailed information can be found at http://www.pensionfundsonline.co.uk /content/country-profiles/taiwan/100. 14. Detailed information can be found at https://news.cnyes.com/news/id/3694413. 15. Detailed information about the five social stability plans can be found at http://iing.tw/policies/fssp. 16. Chao, “Tsai Announces 5 Social Stability Pledges.” 17. Chao, “Tsai Pledges Food Safety Risk Committee.” 18. Detailed information can be found at http://focustaiwan.tw/news/aipl /201807020029.aspx. 19. “Tsai Refuses to Be Judged by First 100 Days.” 20. Detailed information can be found at http://iing.tw/posts/357. 21. Lee, “LIFT Program Unveiled.” 22. Detailed information about the national congress on judicial reform can be found at https://justice.president.gov.tw. 23. See Ministry of Education white paper at http://www.naer.edu.tw/ezfiles /0/1000/attach/5/pta_2189_2524507_39227.pdf; Department of Statistics data at https://stats.moe.gov.tw and https://stats.moe.gov.tw/files/ebook/Education_in_Taiwan /2013-2014_Education_in_Taiwan.pdf. 24. Putnam, Bowling Alone, p. 19. 25. The sixth wave of the World Values Survey was carried out during the period 2011–2012 in Taiwan. While the public were distrustful of President Tsai and the DPP administration, the overall level of trustworthiness toward the government remained low.

7 Political Cleavage and Generational Politics T. Y. Wang and Su-Feng Cheng

Political cleavage is generally conceptualized as a division among groups of people in a society. The divisive power of political cleavage has long been recognized in scholarly literature. A rich theoretical and empirical literature shows that political cleavage is a powerful determinant of individuals’ attitudes and behaviors.1 The basis of cleavage comes from different sources. Some may be based on objective demographic characteristics such as class, ethnicity, and religion.2 Others may originate from subjective perceptions of differences in ideologies or issues.3 The saliency of these features is likely to determine the nature and the intensity of political cleavage in the society.4 Once a cleavage is formed, it structures citizens’ views of the surrounding environment, their attitudes toward each other, and their political behaviors. Meanwhile, society is an aggregate of individual human beings, which changes with the infusion of new members. Each generation of members occupies a distinct location in the historical continuum that provides them with an array of experiences. These idiosyncratic experiences predispose members of the generation “for a certain characteristic mode of thought and experience, and a characteristic type of historically relevant action.”5 Different generations in the society therefore are differentiated by their historical experiences, which shape their political attitudes, including those on the key issues that divide the society. Political cleavages of a society may therefore transform as new generations emerge. Taiwan is no exception to these rules. Unlike other societies that are divided along race, language, or religion, Taiwan has a homogeneous population with a shared culture and a common historical tradition. Neither is 117

118 T. Y. Wang and Su-Feng Cheng the society differentiated by class, a common divide in Western European countries. The main gulf of Taiwanese society has been linguistic and ethnic, but that cleavage has attenuated over time and been replaced by differences over Taiwan’s future relationship with China—an increasingly powerful but hostile country nearby.6 Taiwan is therefore characterized as having a single cleavage that is manifested in the island citizens’ identity as Taiwanese/Chinese and their unification/independence stand.7 This principal divide affects almost all aspects of Taiwanese citizens’ political attitudes and behaviors. That said, the recent political development seems to show that a Taiwan-centered political narrative has emerged that emphasizes the island’s cultural distinctiveness and self-determination. The manifestation of this narrative is particularly prominent among the youngest islanders as demonstrated by a number of protests led by students.8 Employing survey data collected over the past two decades, we aim in this chapter to examine the generational differences regarding this narrative and their effects on the key political cleavage on the island. Specific focus will be placed on the youngest generation, because it is they who will have to meet the challenge of a rising and hostile China. Indeed, leaders in Beijing have persistently viewed Taiwan as a renegade province and vowed to achieve China’s unification with force if necessary. The fact that Taiwan’s relationship with China constitutes the island country’s key political cleavage makes the view of the youngest cohort more important. Knowing their stands on the principal divide not only is interesting in itself but also has important policy implications to cross-Strait relations and the peace and stability of East Asia. Specifically, are there identity differences between young and old generations in Taiwan? Has the attachment to the Taiwan-centered narrative affected their stands on the unification/independence issue, and therefore transformed the country’s principal divide? The Origin and Transformation of Political Cleavage in Taiwan Taiwan’s political cleavage originates from its close relations with the Chinese mainland. After being defeated by Communist troops on the mainland, the authoritarian Nationalist (Kuomintang [KMT]) government retreated to Taiwan in 1949. To continue their claim of being the legitimate rulers of China, the KMT elites upheld the “one China” principle and employed a series of “Sinicization” measures to foster a Chinese identity that considered Taiwan and the Chinese mainland parts of

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a greater China. The unification of two sides of the Taiwan Strait was considered a sacred mission that should be accomplished without reservation. Activities that might encourage the development of Taiwanese identity or support Taiwan’s independence were censored and suppressed. These authoritarian measures and the infamous tragic event known as the “228” incident—a bloody crackdown against the local population—created a major gulf between the local population and those who arrived with the KMT government from the Chinese mainland, known as the mainlanders.9 As discussed elsewhere,10 the ethnic divide gradually attenuated with the passage of time and was replaced by the emergence of a Taiwanese consciousness. Indeed, while Taiwan’s unification with China was taken for granted during the authoritarian era, a number of subsequent developments transformed the narrative about the island’s relationship with the Chinese mainland. First of all, the loss of the membership in the United Nations (UN) in 1971 was a significant blow to Taipei’s external and internal legitimacy. Immediately after its retreat to the island, Taipei’s KMT government was able to block Beijing’s attempt to take its UN seat with support from the United States and other countries. Backing for the Chinese Communist government nevertheless started to rise in the late 1960s, which eventually led to the adoption of Resolution 2758 by the UN General Assembly recognizing Beijing as “the only lawful representatives of China to the United Nations.”11 In the subsequent two decades, the number of Taiwan’s allies dropped significantly and Taipei also lost official membership in all but a few international organizations. The loss of the UN seat was not only a decisive victory for the Beijing government in the world community but also a devastating setback to the KMT government’s claim of being the sole legitimate ruler of greater China. Second, the rapid democratization starting in the mid-1980s also provided Taiwanese citizens with the opportunity to reflect on the island’s relationship with China. The establishment of the Democratic Progressive Party (DPP) in 1986 as the first opposition political party was the watershed of Taiwan’s political development, as it led to rapid liberalization and, later, democratization. After martial law was lifted, new political parties were allowed to form, and public assembly and freedom of speech became constitutional rights protected by law. Previously restricted or banned subjects became popular and widely discussed. Exiled dissidents safely returned to the island and openly advocated Taiwan’s independence. The constitutional changes and the various Taiwanization measures during the tenure of Lee Teng-hui, the first native-born president, further weakened the heritage brought by the KMT from the Chinese mainland.

120 T. Y. Wang and Su-Feng Cheng Indeed, scholars generally agreed that the new high school curriculum adopted by the Lee administration in the mid-1990s started the transformation of the historical memory on the island. The new curriculum, titled “Knowing Taiwan,” deviated from the previously Chinacentered contents and emphasized Taiwanese culture and history. It presented an alternative narrative of the island’s relationship with the Chinese mainland. While the new curriculum was controversial and encountered substantial objection, it was finally implemented in 1997.12 As the rivalry between a Taiwan-centered and a China-centered narrative intensified, Taiwan’s future relationship with China became the key political cleavage on the island. The election of the pro-independence Chen Shui-bian of the Democratic Progressive Party in 2000 provided further impetus to the development of a Taiwan-centered narrative. During Chen’s eight-year presidency, his administration rejected the “one China with different interpretations.” Dubbed as the “1992 Consensus,” it is a presumed verbal agreement between Taipei and Beijing in 1992 that both Taiwan and the Chinese mainland were part of China even though each of the two governments had its own interpretation of what “one China” was.13 The Chen administration considered the consensus the same as Beijing’s “one China” principle in substance and only differing in name with an objective of annexing Taiwan. To advance the narrative that the island is an independent and separate political entity from China, the DPP government implemented a series of “de-Sinicization” measures and selectively celebrated the historical memories of Taiwan while attacking those related to China in the process. These measures included adding the phrase “Issued in Taiwan” to the island country’s passport cover, launching the Rectification Movement,14 and holding a referendum for UN membership in 2008. Serious efforts were also taken to expand Taiwan-centered curricula in schools. The island’s history, for instance, was separated from Chinese history, which was discussed as a subject of world history, effectively treating China as a foreign country. Like the KMT regime during the authoritarian era, the Chen administration employed education as a tool to change the collective memories of Taiwanese citizens. The Taiwanization and de-Sinicization measures implemented by the Lee and the Chen administrations naturally irked Beijing’s leaders and strained the cross-Strait relationship. The KMT returned to power in 2008. To improve cross-Strait relations, the newly elected president Ma Ying-jeou adopted a policy of rapprochement toward China by endorsing the 1992 Consensus and pursuing a three-no policy of no unification, no independence, and no use of military force. The Ma administration also moved away from his

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predecessor’s policy of de-Sinicization. These initiatives essentially reversed his predecessors’ pro-independence policies and were thus welcomed by Chinese leaders. As tension between Taipei and Beijing attenuated, cross-Strait exchanges expanded substantially and more than twenty agreements were reached between the two governments. Ironically, despite the rapidly expanded economic relationship between Taiwan and the Chinese mainland, Beijing’s diplomatic isolation of Taipei under the “one China” principle persisted. Chinese leaders continued to view the island as a renegade province and refused to renounce the use of force to resolve cross-Strait differences. Since China is viewed as a hostile regime, many Taiwanese citizens feared that rapid expansion of economic exchanges with China would deepen Taiwan’s dependence on the Chinese market and increase its vulnerability. Some on the island therefore believe that a KMT-led government would betray the Taiwanese people and “sell out” the island country’s sovereignty to Beijing. Such discontents may explain the student-led protest known as the Sunflower Movement against a proposed crossStrait trade-in-service agreement.15 Thus, the younger generation in Taiwan grew up in an environment characterized by openness and democracy. Unlike the older generations, they either have very limited experiences with authoritarian rule or no experience at all and are distant from such infamous tragic events as the 228 incident. The vast majority of them do not have much family connection and emotional attachment with the Chinese mainland. China represents simultaneously a source of security threat and economic opportunity. Given their distinctive experiences on the historical continuum, the following sections will examine the youngest cohort’s political attitudes and stances on the principal cleavage on the island. Generation and Cleavage Generational analysis of social changes involves the examination of the contributions of various age groups to social order. Such interpretations are not new but Karl Mannheim16 was attributed as the person who “most systematically developed the notion of historical consciousness and social organization as manifest in emerging generations.”17 Mannheim’s formulation of generation is based on the interaction of demographic characteristics of age groups and their shared locations in the social and historical process. The interactions thereby “limit them to a specific range of potential experiences, predisposing them for a certain characteristic mode of thought and experience, and a characteristic type of historically relevant

122 T. Y. Wang and Su-Feng Cheng action.”18 Following Mannheim’s formulation, subsequent studies generally conceptualize a generation as a group of people who share common experiences and historical memories because they are born in the same period and live through the same social and economic environment. Because the biological birth date is treated as a starting point for an individual’s sociological experiences, this conceptualization implies that coexistence in the same time period is not the defining characteristic of a generation. Instead, it is the “common experiences, the same decisive influences, [and] similar historic problems” that define people as belonging to a generation.19 With this conceptualization in mind, several significant events in the modern Taiwanese history can serve as criteria for identifying various political generations.20 As noted earlier, the first major event was the retreat of the KMT government to the island in 1949, which started the era of Sinicization. The principle of “one China” was taken for granted and Taiwan’s unification with the Chinese mainland was considered a sacred mission. The loss of the UN seat in 1971 was a devastating blow to the claim of Taipei’s leaders of being the legitimate ruler of China and is considered the second important event in the island country’s modern history. The subsequent establishment of the DPP in 1986 as the first opposition political party is meaningful because it marked the beginning of the end of the authoritarian era. Finally, the implementation of the new high school curriculum in 1997 is considered the forth significant event, as the Taiwan-centered content effectively revised the shared historical memory on the island. Based on these significant events in Taiwan’s modern history, we use four cutting points—1931, 1953, 1969, and 1985—to divide respondents into five groups. Such a classification is based on the premise that respondents of the first four generations would have reached at least the age of eighteen when the relevant events occurred, while the fifth generation would have been at the age of twelve to receive the Taiwan-centered curriculum in high schools.21 Specifically, the first-generation respondents are those who were born on or before 1931 and experienced Japanese colonial rule and the infamous 228 tragedy. These respondents also include those who retreated to Taiwan with the KMT government in 1949. Respondents born between 1932 and 1953 are the second generation, who experienced the island’s rapid economic growth in the 1960s and 1970s and lived through the shock of Taiwan’s loss of its UN seat. The third generation includes respondents born between 1953 and 1968, who lived through the authoritarian era as well as the onset of Taiwan’s transition to democracy. Those who were born between 1969 and 1984 are classified as the fourth generation. During their formative years, they

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experienced the rapid democratization in the 1990s, the intense intimidation from Beijing during the 1996 and 2000 presidential elections, and the first peaceful transfer of political power at the national level in the island country’s political history.22 Finally, those who were born after 1985 are the fifth generation. These youngest citizens, aged thirty-two or younger as of 2017, received the Taiwan-centered curriculum when it was first implemented in 1997. Because the first-generation respondents are increasingly dying off and compose only a small proportion of the sample, we combine the first and second generations in our analysis. As demonstrated elsewhere,23 Taiwan citizens’ identities have undergone substantial changes during the past two and a half decades. Starting in the mid-1990s, an increasing number of the island residents began to identify themselves as Taiwanese. By 2009, one year after the Chinafriendly president Ma Ying-jeou took office, the ratio of Taiwanese identifiers on the island exceeded 50 percent and continued to rise to close to 60 percent by 2016. During the same period, the proportion of Chinese identifiers declined substantially to less than 4 percent. Meanwhile, the proportion of those holding the dual identity—that is, seeing themselves as both Chinese and Taiwanese—also witnessed a significant decline, from 50 percent just two decades ago to less than 40 percent in 2016. Thus, very few Taiwanese citizens currently subscribe to the Chinese identity alone, while more than 90 percent of them now consider at least a part of their identity as being Taiwanese. The trend of identity change of each generation on the island resembles this overall tendency. That is, there has been a steady increase of Taiwanese identity holders and a continual decline of Chinese identifiers for each of the five generations. However, the level and the rate of identity change of the youngest islanders are particularly noteworthy, as Figures 7.1 and 7.2 demonstrate. First of all, the fifth generation has a higher tendency to embrace the Taiwanese identity, from 49 percent in 2005—the first year that their identities were recorded in surveys—to 72 percent in 2016. This is about 6–9 percent (in 2005) and 13–21 percent (in 2016) higher than other age cohorts. In only a decade, the percentage of Taiwanese identifiers of the fifth generation increased by more than 20 percent. While a substantial number of the fifth generation held a dual identity in 2005, the proportion has declined rapidly over the past decade. This is different from other age cohorts, as 40–50 percent of them continue to accept Chinese as a part of their identity. One logical explanation for the differences lies in the formal education they received.24 Indeed, older generations received the China-centered curriculum during their formative years, whereas the course content for the fifth generation has been Taiwan-centered. Although the Ma administration reversed the

124 T. Y. Wang and Su-Feng Cheng Figure 7.1 “Taiwanese Identity” by Generation, 1994–2016

Source: Election Study Center, National Chengchi University, “Important Political Attitude Trend Distribution.” Figure 7.2 “Dual Identity” by Generation, 1994–2016

Source: Election Study Center, National Chengchi University, “Important Political Attitude Trend Distribution.”

policies of Taiwanization and de-Sinicization of his predecessors, the political development in the previous decade significantly changed the islanders’ identity, particularly that of the youngest citizens on the island. With a rising Taiwanese identity on the island, it is not surprising that the majority of the citizens consider Taiwan an independent country

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and that the youngest respondents demonstrate the strongest tendency, as Figure 7.3 shows. Indeed, more than 80 percent of the fifth generation now view Taiwan as a separate political entity from China, an increase of 20 percent since 2010. Interestingly, despite the strong Taiwan-centered identity, Figure 7.4 shows that the majority of the fifth-generation respondents, like those of other generations, feel that people in Taiwan and on the Chinese mainland share the same cultural roots. The sense of shared cultural heritage may be explained by the common language, religious practices, and customs such as celebrations of Spring Festival and Mid-Autumn Festival on both sides of the Taiwan Strait. This seemingly contradictory evidence suggests that, to Taiwanese citizens as a whole and to the youngest islanders in particular, the term Chinese (Zhongguoren) has two meanings. Externally, it refers to citizens of the People’s Republic of China (PRC), a political designation that they reject. Internally, the term is conceptualized more as “ethnic Chinese” (Huaren) which displays the cultural and ethnic affinity. The rise of a Taiwan-centered identity is thus accompanied by the emergence of an independent-leaning fifth generation, even though they value their shared cultural heritage with those on the Chinese mainland. The DPP leaders and their supporters have joyfully characterized these youngest islanders as the “naturally independent” (zirandu) generation.25 They believe that they can pass the baton to the new generation, who will continue the mission of pursuing Taiwan’s de jure independence. Figure 7.3 “Taiwan and China Are Different Countries,” by Generation, 2010–2017

Sources: Cheng, Taiwan Identity (2011A); Cheng, A Study of Presidential Popularity and Its Political Effects; Cheng, An Analysis of Taiwanese/Chinese Identity and Its Implications; Cheng, Generation Difference of Taiwan Identity and Its Political Effects; Yu, Continuity and Change of People’s Preference.

126 T. Y. Wang and Su-Feng Cheng Figure 7.4 “Taiwan and China Share the Same Culture,” by Generation, 2010–2017

Sources: Cheng, Taiwan Identity (2011A); Cheng, A Study of Presidential Popularity and Its Political Effects (2011B); Cheng, An Analysis of Taiwanese/Chinese Identity and Its Implications; Cheng, Generation Difference of Taiwan Identity and Its Political Effects; Yu, Continuity and Change of People’s Preference.

A careful examination of Figures 7.5 and 7.6 seems to show that the DPP leaders’ characterization of the youngest generation may be only partially correct. Given their strong Taiwanese identity, it is not surprising that the youngest islanders provide the most support for the pursuit of Taiwan’s independence, at a rate of 30 to 37 percent since 2011, which is higher than that of the older generations by 10 to 15 percent. That said, about 40 percent of them have steadily been “undetermined” regarding their preferences over Taiwan’s future relationship with China, on a par with the third and the fourth generations. 26 This shows that a substantial proportion of the youngest islanders are not as determined to pursue Taiwan’s independence as the DPP has characterized. Most important, as Figures 7.7 and 7.8 show, when being asked what they will do if Beijing launches military attacks due to Taipei’s declaring independence, less than 20 percent of the fifth generation are willing to engage in active resistance. More than 60 percent of them, like respondents of other age cohorts, adopt more passive attitudes, including adapting to whatever the situation may be and escaping from the war. Interestingly, the pattern is reversed when respondents are asked what they believe other Taiwanese citizens would do. The majority of them believe that others will actively engage in defending the country even though few of them are willing to do so themselves.

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Figure 7.5 Prefer Independence for Taiwan, by Generation, 1994–2016

Source: Election Study Center, National Chengchi University, “Important Political Attitude Trend Distribution.” Figure 7.6 Undetermined About Taiwan’s Future Relationship with China, by Generation, 1994–2016

Source: Election Study Center, National Chengchi University, “Important Political Attitude Trend Distribution.”

Also note that the fifth generation’s stand on the 1992 Consensus is divided, as Figure 7.9 demonstrates. Indeed, a majority of older generations consistently believe that the “agree to disagree” formula is an acceptable compromise between Taipei and Beijing to maintain a stable cross-Strait status quo. Only about 40 percent of the youngest islanders

128 T. Y. Wang and Su-Feng Cheng Figure 7.7 Willingness to Actively Resist an Attack on Taiwan by China, by Generation, 2003–2016

Source: Niou, Taiwan National Security Studies Surveys. Figure 7.8 Believing Others Would Actively Defend Taiwan Should China Attack, by Generation, 2003–2016

Source: Niou, Taiwan National Security Studies Surveys.

consider the 1992 Consensus a good idea, which is significantly lower than other age cohorts by 5 to 17 percent. Also note that an almost equal proportion of them want to renounce it as the basis of cross-Strait exchanges. That said, Figure 7.10 shows that, like the third and the fourth generations, the majority of the youngest cohort support expand-

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Figure 7.9 Support for 1992 Consensus, by Generation, 2005–2017

Sources: Cheng, Generation Difference of Taiwan Identity and Its Political Effects; Niou, Taiwan National Security Studies Surveys.

Figure 7.10 Desire for Expansion of Cross-Strait Economic Exchange, by Generation, 2004–2016

Source: Niou, Taiwan National Security Studies Surveys.

ing cross-Strait economic exchanges. Apparently, they want to take advantage of the benefits of active economic activities with the Chinese mainland even though they have no desire for a cross-Strait political integration. Judging from Beijing’s cold reception to the incumbent Tsai administration’s rejection of the 1992 Consensus, the fifth generation’s expectation may not be realistic.

130 T. Y. Wang and Su-Feng Cheng Conclusion Taiwan has been characterized as a single-issue society because the island’s relationship with China is the principal political cleavage in the society. The divisive power of the cleavage is manifested in the island citizens’ identity as Chinese/Taiwanese and their stand on the issue of unification/independence. The infusion of new generations, especially those who were born in the mid-1980s, has provided a new dynamic for the political discourse of the principal cleavage on the island. With a specific focus on the fifth generation on the island, the current analysis reveals a pragmatic outlook of the youngest Taiwanese citizens, who have been able to reconcile the seemingly contradictory attitudes and positions. Indeed, compared with other age cohorts, the fifth generation has largely embraced the Taiwanese identity and the vast majority of them consider Taiwan to be an independent and separate political entity from China. Like those in other age cohorts, very few of them are sole Chinese identity holders but most of them value their Chinese cultural heritage. The fact that the youngest islanders can settle the apparent contradiction between treasuring the Taiwanese identity and cherishing Chinese cultural heritage suggests that the term “Chinese” has more cultural and ethnic connotation and is less a political designation. Few of the youngest islanders have expressed a desire for a crossStrait unification. Compared with other age cohorts, they exhibit the strongest support for Taiwan’s independence but even more of them take a wait-and-see attitude regarding the island’s future relations with the Chinese mainland. Interestingly, the youngest islanders also express a strong desire for expanding cross-Strait economic exchanges. While fifthgeneration citizens provide the least support for the 1992 Consensus, they are divided on the issue, as almost an equal proportion of them think that such an “agree to disagree” formula can serve as a useful mechanism of maintaining cross-Strait peace and stability. These findings suggest that a “naturally independent” generation has indeed emerged in Taiwan, as leaders of the pro-independence DPP and their supporters joyfully declared. However, these independence-leaning citizens are more pragmatic. Unlike their counterparts of older generations, who generally dislike or even resent anything related to “China,” the youngest generation treats China as an economic opportunity. While they cherish the island country’s political independence and display no desire for cross-Strait unification, many young citizens in Taiwan also believe that their future lies in close engagement with the Chinese mainland. Thus the fifth generation provide the most support for the pursuit of Taiwan’s independence, but a slightly larger proportion of them also

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take a wait-and-see attitude. Few of the youngest generation want to participate in a war with China should Taipei declare independence. Such findings may be a disappointment to advocates of Taiwan’s independence who believe they could pass the torch to the next generation. The emergence of an independent-leaning but pragmatic younger generation has important implications to Taiwan’s domestic politics. Over the last decade, the DPP has been able to employ its pro-independence and anti-China stand to garner electoral support. The recent electoral victory of KMT candidate Han Kuo-yu in the 2018 Kaohsiung mayoral race seems to show that the DPP’s ideology-based electoral strategy is no longer effective. In addition to the DPP government’s poor performance and President Tsai Ing-wen’s lower approval rating, Han’s charisma, coupled with his “it’s the economy” message, as well as the pragmatic tone toward cross-Strait relations, appealed to many citizens, including younger voters, and thus made his electoral success in a traditionally DPP-dominated city possible. As younger generations increasingly replace older ones, pragmatism will become an important principle of governance for both political parties, even though they may take different positions along key political cleavage on the island. Looking ahead, Taiwan’s key political cleavage will have changes and continuities. There is a convergence of identity as more and more of the younger generation embrace the Taiwanese identity and consider Taiwan as an independent and separate political entity from China. Even though few of them prefer a cross-Strait political unification, the youngest citizens appear to be divided on how to deal with an increasingly powerful but hostile China. The significance of this finding will depend on whether Taiwan’s relationship with China continues to be the dominant issue in Taiwanese society. When there are multiple issues of concern, individuals may be pulled or “cross-pressured” in different directions.27 The crosscutting cleavages make it difficult to build a single, overarching coalition, because few people are solely associated with any given cleavage. As political divides crosscut each other, polarizing the conflict, voting and partisan support may be weakened.28 This means that polarization is generally the most intense when there is only one major cleavage in society, as demonstrated during the eight-year term of former president Chen. These findings also have important policy implications for the Beijing government. Chinese leaders’ uncompromising attitude toward Taiwan’s sovereignty and their tactics of imposing diplomatic isolation and military threats only consolidate the perception of a hostile China in the minds of the youngest generation. As a substantial proportion of the youngest generation still hold a wait-and-see attitude, Beijing’s leaders need to reflect on how to win the hearts and minds of Taiwan’s citizens.

132 T. Y. Wang and Su-Feng Cheng Notes

1. Bonilla et al., “Social or Political Cleavages?”; Dahrendorf, Class and Class Conflict in Industrial Society; Dunning and Harrison, “Cross-Cutting Cleavages and Ethnic Voting”; Lipset and Rokkan, “Cleavage Structure, Party Systems, and Voter Alignments”; Powell, “Political Cleavage Structure, Cross-Pressure Processes, and Partisanship”; Tilley, Evans, and Mitchell, “Consociationalism and the Evolution of Political Cleavages in Northern Ireland, 1989–2004.” 2. Powell, “Political Cleavage Structure, Cross-Pressure Processes, and Partisanship”; Zukerman, “Political Cleavage.” 3. Lipset and Rokkan, “Cleavage Structure, Party Systems, and Voter Alignments.” 4. Zukerman, “Political Cleavage.” 5. Mannheim, Essays on the Sociology of Knowledge, p. 291. 6. Chang and Wang, “Taiwanese or Chinese? Independence or Unification?”; Hsieh and Niou, “Issue Voting in the Republic of China on Taiwan’s 1992 Legislative Yuan Election”; Wang, “Changing Boundaries.” 7. Achen and Wang, The Taiwan Voter. 8. The most notable protests led by young students include the Sunflower Movement of 2014 and the movement against changes in school curricula of 2015. 9. Lai, Myers, and Wei, A Tragic Beginning. 10. Wang, “Changing Boundaries.” 11. “Restoration of the Lawful Rights of the People’s Republic of China in the United Nations,” Resolution 2758. 12. Wang, “National Imagination, Ethnic Consciousness, and History.” 13. Su and Cheng, One China, Different Interpretations. 14. During the Rectification Movement, the Chen administration changed the names of a number of state-run enterprises and public facilities by replacing “China” in the names with “Taiwan.” For instance, the China Petroleum Corporation was renamed as CPC Corporation, Taiwan, and the postal system as Taiwan Post. Other renamed agencies included the island country’s shipbuilding corporation and its central bank. See Bishop and Dickie, “Taiwan Drops ‘China’ in Identity Move.” 15. J. R., “Politics in Taiwan.” 16. Mannheim, Essays on the Sociology of Knowledge. 17. Bengtson, Furlong, and Laufer, “Time, Aging, and the Continuity of Social Structure,” p. 4. 18. Mannheim, Essays on the Sociology of Knowledge, p. 291. 19. Neumann, Permanent Revolution, p. 235. 20. Using significant events to identify relevant generations has also been employed in previous studies. See, for example, Liu, “Generational Discrepancies in Public Attitude on Taiwan’s Unification Issue”; and Chang and Wang, “Taiwanese or Chinese? Independence or Unification?” 21. Age eighteen is used as a cutoff point because respondents would become more mature and live in a relatively free environment that facilitated independent thinking. 22. Garver, Face Off; Wang, “Cross-Strait Relations After the 2000 Election in Taiwan.” 23. Wang, “Changing Boundaries.” 24. For an analysis of the effect of the Taiwan-centered curriculum, see Huang, “Generation Effects?” 25. The characterization of “naturally independent” originated from Taiwanese president Tsai Ing-wen in 2014 in her capacity as the DPP chairwoman. See “Tsai: Taiwan Independence Is the Natural Element of the Younger Generation.” 26. Cross-Strait unification and maintaining the status quo indefinitely are the leastpreferred options for the fifth generation, at about 10 percent and 15 percent, respectively. 27. Rae and Taylor, The Analysis of Political Cleavages, p. 86. 28. Powell, “Political Cleavage Structure, Cross-Pressure Processes, and Partisanship”; Rae and Taylor, The Analysis of Political Cleavages; Zukerman, “Political Cleavage.”

8 The New Southbound Policy Karl Ho, Cal Clark, and Alexander C. Tan

The Democratic Progressive Party (DPP) scored a historic victory in Taiwan’s January 2016 elections: not only was Tsai Ing-wen elected president with a decisive 56 percent of the vote, but also the party secured a majority in the Legislative Yuan for the first time in its history. Tsai and the DPP campaigned on the need to reorient Taiwan’s strong economic ties with China to reduce the diplomatic leverage of a country that claimed political sovereignty over Taiwan.1 In addition, Taiwan’s economy was facing growing problems of stagnating growth and escalating inequality that called for a reset of the nation’s economic strategy. The new DPP administration quickly responded with its New Southbound Policy, aimed at reorienting the country’s economic interactions away from China to potentially important new partners. It is probably too soon to make a sound evaluation of the New Southbound Policy. However, the surprisingly strong showing of the KMT in the local elections of November 2018 indicates that the Tsai government has yet to sell its economic vision to the Taiwanese public. In this chapter we consider President Tsai’s New Southbound Policy as a strategy for reducing Beijing’s economic leverage over Taipei and for reviving Taiwan’s economic dynamism. From Economic Miracle to Growing Stagnation Economically, Taiwan advanced quite rapidly from a poor agricultural economy in the 1950s to a world leader in semiconductors in the 1990s. Moreover, the fruits of economic development were widely shared, as 133

134 Karl Ho, Cal Clark, and Alexander C. Tan poverty and income inequality were reduced substantially, creating a record of “growth with equity.” Thus Taiwan was widely hailed for its “economic miracle.”2 Over the past quarter century, in contrast, the country’s economic performance has declined, especially after the Great Recession struck in 2008.3 Given the difficulties in achieving structural transformations, perhaps the most impressive facet of Taiwan’s “economic miracle” was that the country successfully negotiated several sharp economic transformations with what, in retrospect, appears to be surprisingly few problems. In particular, three periods of major structural transformations can be discerned between 1950 and 1990. The first occurred during the 1950s, when the transformation away from an agricultural economy was consolidated, as domestic light industry developed rapidly. Second, the 1960s and the early 1970s witnessed an impressive export boom for light industry and assembly products that revolutionized the economy and set off significant social changes as well. Finally, another substantial economic upgrading into the heavy and high-tech industries occurred between the middle 1970s and the early 1990s that was accompanied by the emergence of a middle-class society. To summarize and help understand the nature of Taiwan’s development model, Figure 8.1 conceptualizes each of the economic transformations that occurred during this period in terms of two principal components. The first listing for each period contains the major economic and political changes that defined the transformation, such as land reform in the 1950s and the explosion of the high-tech industry during the 1990s. The second then summarizes the major resources that were created in each period. This figure suggests the following pattern or model of successful structural transformation in Taiwan. At each stage, significant economic change occurred that resulted in the creation of major new societal resources. These resources, in turn, formed the basis for the upgrading of the island’s economy in the next stage. During the first stage in the 1950s, there were two major economic changes that brought very significant progress to the country. First, a dramatic land reform led to greatly increased productivity in agriculture, which both helped to alleviate poverty in the rural sector and created resources that were used to finance industrialization. Second, the government introduced import-substitution policies (import controls and protection) to stimulate the rapid growth of light industry. State policy also greatly enhanced the resources that could be devoted to Taiwan’s development. Most important, mass education created human capital; and the government substantially increased its economic leadership capability by bringing skilled technocrats into the top levels of the regime.4

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Figure 8.1 Structural Transformation in Taiwan’s Economy Transformation from Agriculture, 1950s

Basic Transformations Land reform Import substitution in light industry Mass elementary education Co-optation of technocrats into top policymaking positions Resource Creation Productive capabilities in agriculture and light industry Human capital (basic education) Technocratic ability of government Export Boom, 1960s to early 1970s

Basic Transformations Export-stimulating liberalization Resource Creation Entrepreneurial skills of small business in light industry Continuing expansion of basic human capital

Industrial Upgrading, 1970s to early 1990s

Basic Transformations Heavy industry led by state corporations Beginning of high tech Resource Creation Productive capabilities in heavy industry Entrepreneurial upgrading to more sophisticated products Qualitative jump in human capital (middle-class dynamism)

Despite the initial success of the first transformation, import substitution soon reached its inevitable high point with the saturation of the local market for light industrial goods, setting off a new challenge for Taiwan. It responded by making a fateful decision to promote exports in the hope that Taiwan’s products could become competitive on world markets, especially in the developed world. There were two prongs to this strategy: attracting foreign investment for assembly operations in export-processing zones, and getting domestic businesses to export. The resulting export boom probably succeeded well beyond the expectations of even its proponents. Taiwan’s economy boomed, promoting both rising prosperity and a tremendous drop in the level of income inequality. For example, the ratio of the total income of the richest fifth of the population to that of the poorest fifth plummeted from 20.5 in the early 1950s to 4.4 in 1973, which was low even by the standards of the developed world. The resources accumulated during the first stage formed a vital foundation for this new transformation during the 1960s and early 1970s. The technocrats

136 Karl Ho, Cal Clark, and Alexander C. Tan conceived and implemented the major policy changes that made this transformation possible, while its success rested on the human capital that had been developed in the work force and business community. For example, many managers would go to work in foreign companies, learn the business and production techniques, and then start their own businesses.5 Just as with import substitution, the success of Taiwan’s export-led strategy contained the “seeds of its own destruction” in the sense that the island’s rising prosperity and wages began to price it out of the niche of low-cost manufactured products in the world economy. Taiwan responded to this new challenge with two somewhat disparate transformations. First, there was a state-led push into heavy industry, such as steel and petrochemicals; second, the small-scale business sector began to upgrade its production techniques into such fields as advanced electronics.6 Considerable change occurred in the social realm as well with the emergence of a strong middle class.7 All these trends represented an upgrading of Taiwan’s economic and social capabilities. Yet the end of the economic miracle was at hand. In terms of overall growth, Taiwan definitely conforms to the pattern of economic maturity bringing lower growth rates.8 For example, during the 1990s Taiwan averaged 6.6 percent annual growth compared to 9.3 percent during the industrial upgrading of the 1970s and 1980s; and the first decade of the twenty-first century was marked by somewhat lower growth between the recessions at its beginning and end. Beyond these raw numbers, furthermore, the people of Taiwan were clearly far from satisfied with their country’s economic performance, as first the Chen Shui-bian administration (2000–2008) and then the Ma Ying-jeou administration (2008–2016) received widespread harsh criticism for their economic policies.9 Figure 8.2 sketches a model of Taiwan’s period of economic maturation. Unlike the first three periods of the economic miracle described earlier, when the state created a conducive environment for the country’s entrepreneurial businesses, these economic dynamics were decidedly contradictory, to say the least. On the one hand, Taiwan had considerable success in upgrading into some high-tech industries, such as computers and semiconductors. On the other, the loss of basic industries offshore, especially to China, undercut the ability of Taiwan’s vaunted small and medium enterprises (SMEs) to stay competitive; and more recently, some problems seem to be emerging in the high-tech sector. Further, all these trends have combined to challenge the country’s reputation for “growth with equity.” Taiwan developed an internationally competitive high-technology industry in a relatively short time. The centerpiece of Taiwan’s high-tech revolution was the electronics industry, which evolved quite rapidly from

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Figure 8.2 Dynamics of Economic Maturation in Taiwan

Surprising success in high tech

Rapid climb up international product cycle

Growing prosperity and human capital development

Emerging problems in high tech

Stagnating growth Growing inequality

Loss of basic industries

Decline of dynamic small and medium enterprises

low-tech assembly to high-tech success in just a couple decades, with the developments of each successive stage creating a foundation for the subsequent upgrading. Alice Amsden and Wan-Wen Chu termed these the television, calculator, and notebook-computer eras.10 For example, Taiwan made extremely rapid progress in semiconductor technology to reach the world frontier in the early 1990s, and was fourth in the world in semiconductor production by the mid-1990s. Most striking, this was primarily the result of the domestic industry, which received support from the state in the form of basic research and development, and the development of the Science-Based Industrial Park in Hsinchu.11 The performance of Taiwan’s high-tech industries is not entirely positive, however, as two significant problems have emerged in the early twenty-first century. First, even the country’s high-tech leaders, such as the Taiwan Semiconductor Manufacturing Corporation, had moved considerable and increasingly sophisticated parts of their production processes to China.12 Second, Taiwan has been much less successful in the most advanced high-tech industries, such as biotechnology, than it has been in computers and semiconductors,13 suggesting that Taiwanese corporations may be reaching their limits of being able to challenge global leaders at the top of the international product cycle. Second, the increasing loss of basic industries undercut a vital sector for Taiwan’s economic miracle. Small and medium enterprises had provided the dynamism for Taiwan’s export boom from the 1960s through the 1980s. Their flexibility and entrepreneurship allowed them to take advantage of changing market conditions, and they proved to be surprisingly capable of upgrading to the production of advanced electronic goods. 14 They then were able to take advantage of the growing integration across the Taiwan Strait during the 1990s by moving production to China.15

138 Karl Ho, Cal Clark, and Alexander C. Tan However, over the past two decades they have become increasingly squeezed between low-cost producers from developing nations and much larger and more sophisticated corporations in the developed world.16 For example, from a high of a 70 percent share of total exports in 1982, the SMEs’ share of Taiwan’s total exports declined to a respectable proportion of 49 percent in 1997 and then to a much lower level of 28 percent by 2006.17 From this perspective, we can infer that the structure of the SMEs has become a constraint making it difficult for them to meet the challenge of transforming themselves into knowledge-based industries. Finally, both strands of Taiwan’s economic maturation have combined to put its record “growth with equity” at risk.18 The earlier decline of agriculture and the offshore exodus of its labor-intensive industries that began to accelerate in the late 1980s hit the poorest and least-skilled segments of the population, who had always faced marginalization in Taiwan,19 especially hard. For its part, the successful upgrading into high-tech industries created jobs for the highly skilled but did not help those at the bottom of the income distribution that much. Consequently, the ratio of the income of the richest fifth of the population to that of the poorest fifth jumped dramatically from 4.5 in 1987 to 6.0 in 2008.20 This was especially troubling because of Taiwan’s history of very low support for social welfare policies, reflecting the Confucian tradition of family responsibility for caring for its members. The competitive push from the democratization of the early 1990s brought some increase in social support programs. By far the most important and spectacular was in the field of healthcare. Taiwan enacted universal healthcare in 1995, successfully resisted retrenchment in the late 1990s when its high costs became apparent, and is now widely regarded as having one of the best healthcare systems in the world.21 Still, social welfare support remains fairly limited in Taiwan.22 Table 8.1 provides a more detailed picture of Taiwan’s economic performance during the early twenty-first century by presenting the growth rates of gross domestic product (GDP), exports, manufacturing, and services. Following the recession of 2001, when the economy contracted by 1.7 percent due to the global bursting of the high-tech bubble, GDP grew by an average of 5.5 percent for the next six years, although this growth was somewhat discounted by many in Taiwan because of growing inequality internally and the comparatively better performance of several Asian countries.23 Initially, Taiwan appeared to survive the Great Recession without too much trauma, as growth dropped sharply to 0.7 percent in 2008 and –1.6 percent in 2009 before jumping to 10.6 percent in 2010. However, the revival was short-lived, as growth dropped again to 2.3 percent for the next eight years. Another facet of these data is that GDP, exports, and manufacturing moved in tandem, implying that exports, which constituted 54 percent of GDP in 2015,24 are a principal

The New Southbound Policy Table 8.1 Growth Rates in Taiwan, 2001–2017 (percentages) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

GDP

–1.7 5.3 3.7 6.2 4.7 5.4 6.5 0.7 –1.6 10.6 3.8 2.1 2.1 3.8 0.8 1.5 2.9

Exports –14.8 6.2 7.7 17.5 3.2 4.6 10.5 0.6 –8.4 25.7 4.2 0.4 3.5 5.9 0.9 1.9 7.5

Manufacturing –6.9 11.7 10.1 10.3 7.9 9.0 9.8 0.7 –3.4 22.2 6.9 3.7 1.5 6.3 –0.6 3.1 4.3

139

Services 0.1 2.9 2.6 5.2 3.9 4.2 4.4 0.8 –0.7 5.8 3.0 1.3 2.2 2.3 0.4 1.3 2.3

Sources: National Development Council, Taiwan Statistical Data Book 2010, pp. 4–5, Taiwan Statistical Data Book 2016, pp. 4–5, and Taiwan Statistical Data Book 2018, pp. 4–5.

driver of the nation’s economic performance. In contrast, there is much less volatility in the growth of the service sector, indicating that it has yet to replace manufacturing as a major source of growth. President Ma Ying-jeou (2008–2016) argued that greater economic integration with China would revive Taiwan’s economic dynamism, while the DPP stridently criticized Ma’s policy on both national security and economic terms.25 The data in Table 8.1 on growth definitively show that Ma’s economic hopes did not materialize, as growth declined significantly during his administration. This suggests that we should take a closer look at the nature of China-Taiwan economic relations. Taiwan faced a fundamental dilemma in its economic relations with China. On the one hand, it could benefit from economic complementarities with the People’s Republic of China (PRC). On the other, China represented a dire threat to the very existence of Taiwan, over which it claimed sovereignty.26 Over the past quarter century, therefore, Taiwan has walked a tightrope between the threat and opportunity of engaging with the Chinese economy. By the late 1980s, Taiwan was losing many of its basic industries, as its growing prosperity priced it out of the low-wage production niche in the global economy. President Lee Teng-hui (1988–2000) tried to minimize this outflow toward China with his “Go South” and “Go Slow, Be Patient” policies.27 However, cultural similarity and geographic proximity resulted in a growing economic integration between Taiwan and China, in which labor-intensive production was moved to China, while design and the manufacturing of advanced components stayed in Taiwan; and over time the

140 Karl Ho, Cal Clark, and Alexander C. Tan nature of Taiwanese investments and exports became more diversified.28 Early in this process, most of Taiwan’s exports to China were transshipped through Hong Kong, although this had become marginal by the middle of the first decade of the twenty-first century. Thus we include two overlapping data series in Table 8.2 on the percentage of Taiwan’s exports going to China: the first column (1991–2010) includes transshipments through Hong Kong, and the second column (1999–2016) excludes them. The general stereotype is that the KMT has promoted and the DPP has resisted the huge increase in cross-Strait economic interactions. Yet the data in Table 8.2 are inconsistent with this “political” explanation. There were two growth spurts as indicated by the data in the first column in Table 8.2. The first occurred between 1991 and 1995, despite President Lee’s less than enthusiastic attitude when China’s share of Taiwan’s total exports rose sharply from 10 percent to 17 percent. The second occurred during the presidency of the pro-independence DPP Chen Shui-bian, between 2000 and 2005, when it jumped from 16 percent to 28 percent, associated with President Chen’s “Active Opening” reforms in 2001. During the administration of Ma Ying-jeou, in contrast, the second column shows that there was little change in the proportion of China’s exports going to China, despite such major cross-Strait trade agreements as the Three Links and the Economic Cooperation Framework Agreement. Overall, as summarized in Figure 8.3 on the nation’s real GDP growth, Taiwan has experienced four economic periods of ten to twenty years each. During the first three “economic miracle” stages, the government helped the development of new industries that made Taiwan increasingly prosperous. Growth slowed over the past quarter century, however, as economic integration with China became a central factor in Taiwan’s “mature” economy. Ironically perhaps, the government played a clearly reduced role in this transition; and Chen’s “Active Opening” reform had a much greater impact than Ma’s “Prosper Again” program.29 This is a “good news, bad news” situation for President Tsai and the DPP. On the one hand, there is a strong case that the country needs a new economic reorientation. On the other, there is little evidence pointing toward what this reorientation should be.

The New Southbound Policy Under the Tsai Administration One of Tsai Ing-wen’s central campaign promises had been the diversification of economic partnerships, both to reduce China’s leverage over Taiwan and to develop and strengthen international economic and political partners. Once she assumed the presidency in March 2016, her admin-

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Table 8.2 Taiwan’s Exports to China as Percentage of All Exports, 1991–2016

1991 1995 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Including Hong Kong Transshipment 10 17 17 16 20 23 25 27 28 28 30 29 30 31

Excluding Hong Kong Transshipment 1 2 2 4 15 20 22 23 25 26 27 28 27 27 27 27 26 26

Sources: Clark and Tan, Taiwan’s Political Economy, p. 97; Mainland Affairs Council, Cross-Strait Economic Statistics Monthly 286, p. 2-2; National Development Council, Taiwan Statistical Data Book 2016, p. 228.

istration moved quickly in this area. In mid-September, the government announced its New Southbound Policy.30 It was focused on the eighteen countries south of Taiwan, which are listed in Table 8.3 (ten from the Association of Southeast Asian Nations [ASEAN], six from South Asia, and two from Oceania). This initiative made sense geographically and economically. The region is generally one of the more dynamic ones in the global economy; and the New Southbound Policy countries were the second largest recipient of Taiwan’s exports in 2015 at 15.6 percent combined, compared to 25.7 percent going to the PRC.31 The government supported the program with a significant budget of US$132 million.32 While a central goal of the New Southbound Policy is to build a new regional economic alliance with these countries, it is much more widely conceived than Lee Teng-hui’s “Go South” economic policy of the 1990s. Rather, it visualizes the development of a regional community encompassing a growing array of business, people-to-people, and direct or indirect governmental contacts. The program is designed to “forge a new and mutually beneficial model of cooperation and ultimately create a sense of economic community.”33 According to the official statement of the Executive Yuan, the New Southbound Policy comprises four central tasks or areas of policy initiatives: promote economic collaboration, conduct talent exchange, share resources, and forge regional links.34

142 Figure 8.3 Taiwan’s Real GDP Growth Rate, 1951–2015 (in percentages)

Sources: Clark and Tan, Taiwan’s Political Economy, pp. 12, 15, 20, 26, 82; National Development Council, Taiwan Statistical Data Book 2016, p. 4.

Table 8.3 Nations Included in Taiwan’s New Southbound Policy ASEAN

Brunei Cambodia Indonesia Malaysia Myanmar Laos Philippines Singapore Thailand Vietnam

South Asia

Bangladesh Bhutan India Nepal Pakistan Sri Lanka

Oceania

Australia New Zealand

Source: Ministry of Foreign Affairs, “New Southbound Policy Portal,” http://nspp.mofa .gov.tw/nsppe.

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Promoting economic collaboration involves three major activities. First, the New Southbound Policy will help Taiwanese firms integrate with local supply chains with special emphasis on Taiwan’s advanced technological capabilities. Second, sophisticated analyses of New Southbound Policy domestic demand should help Taiwanese exporters enter and expand in local markets, as well as promote bilateral trade. Finally, Taiwan should help the economic development of partners by participating in large-scale infrastructure projects in such areas as energy, petrochemicals, and the environment. In the area of talent exchanges, there are three types of programs as well. Educational programs include scholarships to bring students from New Southbound Policy countries for university and encouraging Taiwanese universities to set up campuses and programs abroad. The two other initiatives focus on technical and professional training and on helping immigrants adjust to Taiwan. Sharing resources focuses on bilateral and multilateral cooperation in healthcare, culture, tourism, technology, and agriculture. Finally, forging regional links includes economic cooperation agreements, negotiations and dialogue, strategic alliances, and expanding overseas Taiwanese networks.35 Two key factors in enhancing the economic community between Taiwan and the New Southbound Policy countries are Taiwanese exports to and investment in them. The first is vital because of the export-driven nature of Taiwan’s economy; and the second is important because many of Taiwan’s exports are embedded in multinational supply chains.36 In the 1980s, the United States dominated Taiwan’s exports, as it accounted for close to half of the total export volume.37 Hong Kong entered the picture in the 1990s (in part as a transshipment route in Taiwan-China trade) and joined the United States to become one of the top partners in trade with Taiwan, together accounting for about 50 percent. Beginning in the 2000s, China surpassed the United States and Hong Kong and emerged as Taiwan’s top export destination, taking over a quarter of total exports for the ten-year period of 2007–2016. The share of Taiwan’s exports going to the New Southbound Policy states gently increased from approximately 10 percent to 18 percent during 2011–2013 before declining slightly to 16 percent in 2015, making the New Southbound Policy countries the second largest recipient of Taiwan’s exports. This gradual trend is primarily the result of increasing trade with Singapore, with which Taiwan signed a free trade pact in 2013,38 and the Philippines. The composition of Taiwan’s exports is important as well because it determines trade potential, at least in the short run. Structurally speaking, Taiwan’s exports are highly dependent on electronic and computer products, which are responsible for over half (55 percent in 2016) of all exports.39 This strong emphasis of the highly sophisticated

144 Karl Ho, Cal Clark, and Alexander C. Tan and technology-based products coincides well with the pattern of trading with China where electrical machinery, equipment, and parts constituted 56 percent of total Taiwanese exports to the PRC and Hong Kong in 2016,40 indicating a partnership in information technology–related industries between investors across the Strait. Taiwanese investment abroad is perhaps even more important than foreign trade because of its role in creating the supply chains that stimulate exports. Table 8.4 shows the pattern of Taiwan’s changing foreign direct investment (FDI) in the PRC. In 2000 and 2001, between 34 percent and 39 percent of Taiwanese outbound FDI went to China (excluding Hong Kong). These figures are almost certainly significantly understated, however, because of indirect investments through third countries to circumvent the restrictions of Lee’s “No Haste” policy.41 President Chen Shui-bian’s “Active Opening” reforms in 2001 had an immediate impact, as the PRC’s share of Taiwan’s FDI jumped to two-thirds in 2002 and peaked at 71 percent in 2005. It then dropped back to 61 percent in 2007 as hostility between President Chen and China roiled cross-Strait relations during his second term. The election of Ma Ying-jeou, who became president in May 2008 and who proposed to revive Taiwan’s economy by expanding economic links with China, had an immediate impact on investment in the PRC, as China’s share of Taiwan’s FDI jumped back to 71 percent in 2008 and even higher to 80 percent in 2010–2011. However, it then fell by almost a quarter to about 60 percent over the next three years, despite the passage of the Economic Cooperation Framework Agreement in 2010, and then dropped again to 51 percent in 2015 and 44 percent in 2016, suggesting that a reorientation of Taiwanese investment is occurring.42 If Taiwan’s investment is moving away from China as the data in Table 8.4 indicate, it does not appear to be the result of political change in Taiwan, confirming the previous pattern in which cross-Strait economic interactions appear to respond primarily to economic rather than political factors.43 It is obviously far too soon to evaluate the success or even the potential of the New Southbound Policy. Still, the data in Table 8.5 on the share of Taiwan’s exports going to the six New Southbound Policy nations considered to be among Taiwan’s major trade partners and to China and Hong Kong would definitely be considered disappointing from the DPP’s perspective. First, only six of the eighteen New Southbound Policy nations received 1 percent or more of Taiwan’s exports in 2017, indicating that most were still marginal in their economic interactions. Second, Singapore is clearly the leading importer of Taiwanese goods among these countries. The major impetus for this, however, was the free trade pact that was negotiated by the Ma administration in 2013.44 Moreover, Singapore’s share of Taiwan’s exports fell significantly from 6.1 percent to 5.6 percent between 2015 and 2017. Malaysia and the Philippines have

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Table 8.4 Percentage of Taiwan’s Outbound Investment Going to China, 2000–2016 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Percentage 34 39 67 66 67 71 64 61 71 70 84 80 61 64 58 51 44

Sources: Lin, Taiwan’s China Dilemma, p. 5; Mainland Affairs Council, Cross-Strait Economic Statistics Monthly 274, pp. 2–12, and Cross-Strait Economic Statistics Monthly 286, pp. 2–13.

had steady increases over both periods from about 2 percent to 3 percent. There are two somewhat contradictory interpretations of this. On the one hand, there seems to be a basis for long-term growth; on the other, the Tsai period does not really stand out from the Ma era. Otherwise, there was little change in the export shares of Thailand and Australia, while Indonesia actually suffered a significant decline between 2010 and 2015. Overall, therefore, this table strongly implies that a major change in the economic relations between Taiwan and the New Southbound Policy nations has yet to occur. The Tsai government has also failed to reduce its economic ties with China as would have been expected. Between 2015 and 2017, China’s share of Taiwan’s exports actually increased from 26.7 percent to 28.0 percent, although this was somewhat counterbalanced by a 0.7 percent decline in Hong Kong’s share. Two other topics are also relevant here. First, the destination of Taiwan’s foreign investment is certainly important. We saw earlier in Table 8.4 that the share of Taiwan’s outbound FDI going to China plummeted from 80 percent to 44 percent between 2011 and 2016. The latest data (January–September 2018), as shown in Table 8.6, show no recovery in Taiwan’s investment in China and Hong Kong. However, there is little evidence of a major shift toward the New Southbound Policy nations. China (43.1 percent) and Hong Kong (2.4 percent) received 45.5 percent of Taiwan’s foreign investments during the first three quarters of 2018. In sharp contrast, the four New Southbound Policy nations that took 0.8

146 Karl Ho, Cal Clark, and Alexander C. Tan Table 8.5 Percentage of Taiwan’s Exports Going to Major New Southbound Policy Trading Partners and to China and Hong Kong, 2010–2017

New Southbound Policy Trading Partners Singapore Malaysia Philippines Thailand Australia Indonesia Total China and Hong Kong China Hong Kong Total

2010

2015

Change 2010–2015

2017

Change 2015–2017

4.4 2.0 2.2 1.9 1.2 1.9 13.6

6.1 2.5 2.6 2.0 1.2 1.1 15.5

2.7 0.5 0.4 0.1 0.0 –0.8 2.9

5.6 3.3 3.0 2.0 1.0 1.0 15.9

–0.5 0.8 0.4 0.0 –0.2 –0.1 0.4

28.0 13.8 41.8

26.7 13.7 40.4

–1.3 –0.1 –1.4

28.0 13.0 41.0

1.3 –0.7 0.6

Source: National Development Council, Taiwan Statistical Data Book 2018, pp. 226–227.

percent or more of Taiwan’s capital exports only accounted for 8.4 percent of the total, with Vietnam getting the lion’s share at 4.9 percent. Second, Taiwan and China have very similar export profiles that are dominated by electronics, machinery, and computers. Consequently, since China has excluded Taiwan from the Regional Comprehensive Economic Partnership and the “One Belt, One Road” project, to which most New Southbound Policy countries belong, it may become a strong economic competitor to Taiwan in this region.45 Implications

It is hard to argue with President Tsai Ing-wen’s conclusion that Taiwan needs an economic reorientation both to reduce China’s leverage over the country and to revive its stagnant economy. From this perspective, the New Southbound Policy makes eminent sense, although its economic component must overcome the several significant structural challenges just summarized. It is obviously far too soon to evaluate the success or even the potential of the New Southbound Policy. Still, there are some hopeful signs even in the economic area. Economic growth has picked up somewhat from 0.8 percent in 2015 to 2.9 percent in 2017;46 and in January 2016 the number of tourists from New Southbound Policy countries had jumped 43 percent and the value of exports had increased 20 percent compared to the previous January.47 Furthermore, the New Southbound Policy is not just limited to trade and investment. Its other focus on “soft power” links could strengthen Taiwan’s longterm ties with the New Southbound Policy countries that already share

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Table 8.6 Percentage of Taiwan’s Outbound Investment Going to Major Economic Partners, January–September 2018 China Hong Kong Total Vietnam India Philippines Thailand Total

Percentage 43.1 2.4 45.5

4.9 1.8 0.9 0.8 8.4

Source: Mainland Affairs Council, Cross-Strait Economic Statistics Monthly 307, pp. 2–13.

societal and second-tier connections, such as student exchange, immigrant assimilation in Taiwan, and technology transfer in areas such as clean energy. The advantages of Taiwan may not be in direct and capital investment but more in its governance performance attributed to its democratization success and the industrial capabilities given its strong ties with the United States. These could constitute the area in which the New Southbound Policy will reap the best harvest in the long run. However, the results of the 2018 local elections indicate that Taiwanese voters have limited patience with the DPP. Notes

1. Clark, Ho, and Tan, “Was 2016 a Realigning Election?”; Copper, “Taiwan’s 2016 Presidential/Vice Presidential and Legislative Elections.” 2. Chan and Clark, Flexibility, Foresight, and Fortuna in Taiwan’s Development; Clark and Tan, Taiwan’s Political Economy; Galenson, Economic Growth and Structural Change in Taiwan; Gold, State and Society in the Taiwan Miracle; Wade, Governing the Market. 3. Clark and Tan, Taiwan’s Political Economy; Galenson, Economic Growth and Structural Change in Taiwan; Lin, Taiwan’s China Dilemma. 4. Galenson, Economic Growth and Structural Change in Taiwan; Ho, Economic Development in Taiwan, 1860–1970; Lin, Industrialization in Taiwan, 1946–1972. 5. Fei, Ranis, and Kuo, Growth with Equity; Galenson, Economic Growth and Structural Change in Taiwan; Ho, Economic Development in Taiwan, 1860–1970; Gold, State and Society in the Taiwan Miracle; Lin, Industrialization in Taiwan, 1946–1972; Wade, Governing the Market. 6. Fields, Enterprise and the State in South Korea and Taiwan; Gold, State and Society in the Taiwan Miracle; Greene, The Origins of the Developmental State in Taiwan; Kuo, Global Competitiveness and Industrial Growth in Taiwan and the Philippines; Wade, Governing the Market. 7. Cheng, “Political Regimes and Development Strategies”; Hsiao, “The Changing State-Society Relations in the ROC.” 8. Gilpin, The Political Economy of International Relations. 9. Clark and Tan, Taiwan’s Political Economy.

148 Karl Ho, Cal Clark, and Alexander C. Tan 10. Amsden and Chu, Beyond Late Development. 11. Ibid.; Berger and Lester, Global Taiwan; Greene, The Origins of the Developmental State in Taiwan; Mathews and Cho, Tiger Technology; Wong, Betting on Biotech. 12. Chu, “Semiconductor Interconnectivity Across the Taiwan Strait”; Lin, “Assessing the Impacts of the Integration of the ICT Investments”; Wong, Betting on Biotech. 13. Wong, Betting on Biotech. 14. Harrell, “Why Do the Chinese Work So Hard?”; Lam and Clark, “Beyond the Developmental State”; Wu and Huang, “Entrepreneurship in Taiwan.” 15. Naughton, The China Circle. 16. Wu and Huang, “Entrepreneurship in Taiwan.” 17. Small and Medium Enterprise Administration, 2008 White Paper on SMEs in Taiwan; Wu and Huang, “Entrepreneurship in Taiwan.” 18. Greenhalgh, “Supranational Processes of Income Distribution”; Kuo, Ranis, and Fei, The Taiwan Success Story. 19. Gates, Chinese Working-Class Lives. 20. Clark and Tan, Taiwan’s Political Economy. 21. Wong, Healthy Democracies. 22. Lin and Chou, “Globalization, Regime Transformation, and Social Policy Development.” 23. Clark and Tan, Taiwan’s Political Economy. 24. National Development Council, Taiwan Statistical Data Book 2016, pp. 19, 21. 25. Clark and Tan, Taiwan’s Political Economy; Lin, Taiwan’s China Dilemma. 26. Lin, Taiwan’s China Dilemma. 27. Ibid. 28. Clark and Tan, Taiwan’s Political Economy; Lin, Taiwan’s China Dilemma; Wu, “Economic Reform, Cross-Straits Relations, and the Politics of Issue Linkage.” 29. Lin, Taiwan’s China Dilemma. 30. Chiou, “Prospects and Risk of New Policy”; Hsu, “Tsai Elaborates on ‘Southbound Policy.’” 31. National Development Council, Taiwan Statistical Data Book 2016. 32. Chiou, “Prospects and Risk of New Policy.” 33. Ministry of Foreign Affairs, “New Southbound Policy Portal,” http://nspp .mofa.gov.tw/nsppe. 34. Ibid. 35. Chiou, “Prospects and Risk of New Policy”; Glaser, Funaiole, and Jin, “Unpacking Tsai Ing-wen’s New Southbound Policy”; Ministry of Foreign Affairs, “New Southbound Policy Portal,” http://nspp.mofa.gov.tw/nsppe; Winglee, “On Taiwan, the Honeymoon Is Over.” 36. Clark and Tan, Taiwan’s Political Economy; Lin, Taiwan’s China Dilemma. 37. National Development Council, Taiwan Statistical Data Book 2016. 38. Shih, “Taiwan, Singapore Sign Free-Trade Pact.” 39. Workman, “Taiwan’s Top 10 Exports.” 40. Mainland Affairs Council, Cross-Strait Economic Statistics Monthly 286, pp. 2–4. 41. Lin, Taiwan’s China Dilemma. 42. Clark and Tan, Taiwan’s Political Economy; Lin, Taiwan’s China Dilemma. 43. Clark and Tan, Taiwan’s Political Economy. 44. Shih, “Taiwan, Singapore Sign Free-Trade Pact.” 45. Chiou, “Prospects and Risk of New Policy.” 46. National Developmental Council, Taiwan Statistical Data Book 2018, p. 4. 47. “Southeast, South Asian Numbers Set Tourism Record High”; Tang and Wu, “Taiwan’s New Southbound Policy Sees Initial Fruit.”

9 The Dynamics of Cross-Strait Relations Wei-Chin Lee

In 2016, Taiwan’s contested presidential election resulted in a victory for the Democratic Progressive Party (DPP) and the ousting of the Nationalist Party (Kuomintang [KMT]). An immediate policy directive by the newly elected president Tsai Ing-wen of the DPP ended her predecessor’s cross-Strait policy of 2008–2016 based on the “1992 Consensus.” In elections prior to 2016, including Tsai’s loss to Ma in the 2012 presidential election, the DPP’s cross-Strait policy had been considered its Achilles’ heel. However, the cross-Strait policy’s dynamic nature, touted as the KMT’s ace card to defeat the DPP, appeared to have lost its luster in the 2016 election. The 2016 electoral result thus prompts a review of the path of past cross-Strait relations, an investigation of contributing variables for the twists and turns between Taiwan and China, and a reflection on past development for future meaningful and fruitful exchanges. Cross-Strait Relations Under Lee Teng-hui: 1988–2000 When China began its economic modernization in 1978, the cross-Strait tension eased with Taiwan’s gradual outflow of investment capital into China for market opportunities. Taiwan’s official relaxation of its crossStrait ban on mutual exchanges under President Chiang Ching-kuo in 1987 further brought both sides into a web of economic and social interdependence. China began to soften its harsh tone of “liberation of Taiwan” to a “peaceful unification of the motherland” in correspondence to 149

150 Wei-Chin Lee Taiwan’s official renunciation of its martial law previously implemented to combat against the Communist insurrection. Taiwan then adopted the Guidelines for National Unification in 1991 as a roadmap to navigate future cross-Strait relations under President Lee Teng-hui, who succeeded President Chiang Ching-kuo in 1988. The initial encounters frequently cost valuable time and effort for both in ironing out divergent views of nomenclatures and agents of representation in interactions to avoid disrupting domestic stability and international status. Several rounds of negotiation resulted in Taiwan’s establishment of the Mainland Affairs Council within the government for interagency policy coordination and a “private” Straits Exchange Foundation as a white glove to conduct cross-Strait relations in an unofficial manner. 1 China set up the unofficial Association for Relations Across the Taiwan Straits as a counterpart to the Straits Exchange Foundation under the Beijing government’s Taiwan Affairs Office. With the bilateral institutional setup, both sides commenced with the resolution of practical matters, such as piracy and smuggling. Reiterated bickering about the sensitive issue of the “one China” principle and the appropriateness of nomenclature for representation and negotiation led to a pragmatic and workable approach: both sides decided to table the “one China” issue and permit each side to define and interpret the substance of “China” in its own way for their domestic audiences.2 Both the KMT and the Chinese Communist Party (CCP) coined this mutual understanding as the “1992 Consensus” after the negotiation in Hong Kong in 1992 and an exchange of communications afterward. Although the DPP in Taiwan declined to accept such a consensus, the breakthrough facilitated the successful 1993 talks between the chairman of the Straits Exchange Foundation, Chen-fu Koo, and the chairman of the Association for Relations Across the Taiwan Straits, Taohan Wang, in Singapore.3 Several cross-Strait meetings were later conducted after the 1993 Koo-Wang talks. The consensual settlement of cross-Strait relations permitted President Lee to focus his effort and time on the internal arena and his agenda for a democratic transition by conducting a multitrack strategy of domestic politicking in combination with calling for an indigenous Taiwanese identity. The manipulation of identity politics and his role as a handpicked successor by Chiang Ching-kuo gave him domestic support to fight pressures mounted by KMT senior elites to consolidate his intra-party predominant authority. In a multilevel game for a delicate power equilibrium, Lee’s brandishing of indigenous identity and constant talks of democratization soothed the then opposition party, the DPP, to accept Lee’s reform agenda without challenging

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Lee’s power hegemony. Lee’s issuance of the Guidelines for National Unification in the National Unification Council convinced China of the Taiwanese government’s sincerity in future advancement of crossStrait relations. 4 In this case, Lee’s sensational electoral campaigns and persistent rhetoric of Taiwan’s separation and differences from China surely alarmed China, fostering suspicions that Lee’s tactics sought to push forward a long-term agenda for Taiwan’s independence away from China’s domain. Thus, the cordial relations in the mid-1990s gradually deteriorated into a period of distrust and suspicion. Lee’s visit to the United States to deliver a commencement address at Cornell in May 1995 provoked China to react forcefully with military exercises and missile tests in 1995 and 1996 and to close the door of cross-Strait consultation. China’s threat sparked a US dispatch of two aircraft carrier battle groups to Taiwan in 1996. 5 Although the second Koo-Wang talks in China resumed in 1998, China canceled Wang’s visit to Taiwan in 1999 after Lee’s proclamation of a “special state-to-state relationship” (two-state theory), assisted by Tsai Ing-wen in formulation, as a framework to govern cross-Strait relations.6 One noted phenomenon at the end of the Lee Teng-hui era was that bilateral trade continued without any sign of slowing down under Lee Teng-hui’s “No Haste, Be Patient” policy in 1996. Lee’s policy was intended to prevent Taiwan from overly relying on China for economic growth, and thus avoid unwanted spillover impacts on Taiwan’s domestic development. Even so, Taiwan constantly faced an uphill battle with Beijing’s insistence on the “one China” principle against Taiwan’s desire to expand its participation in the international community. The Reign of DPP President Chen Shui-bian: 2000–2008 Taiwan’s regime change in 2000 from the KMT to the DPP under President Chen Shui-bian did not relieve the already strained cross-Strait relations precipitated by Lee’s “state-to-state” theory. In contrast to the KMT’s “engagement with China” policy, the DPP’s firm belief in Taiwan’s independence naturally guided the government’s strategic logic and policy direction.7 However, the DPP’s narrow margin in the 2000 presidential election and a national legislature controlled by the opposition KMT party weakened the DPP government’s electoral mandate and legislative muscle to launch any significant policy change to fulfill the party’s vision. At his inauguration, President Chen proclaimed his “Five No’s” policy: Taiwan would not declare its independence, would not

152 Wei-Chin Lee change the national title from the Republic of China (ROC) to the Republic of Taiwan, would not include Lee’s “two-state” theory in the constitution, would not initiate a referendum on Taiwan’s independence or unification with China, and would not abolish the Guidelines for National Unification and the National Unification Council. China responded cautiously to Chen’s moderate posture with a “wait and see” approach. The wording and tone of Chen’s pledges also appeased both China-skeptic and China-friendly constituencies in Taiwan regarding Taiwan’s future. The DPP then passed a resolution in October 2001 to place its 1999 resolution regarding Taiwan’s future on equal footing with the Taiwanese independence clause in its party platform. The DPP’s 1999 resolution expressed the party’s willingness to accept “Republic of China” as the official name of the country without the necessity of declaring a new national title for independence. The intent was to change public impression of the DPP’s adventurism, at least on the rhetorical front. Of course, judging from President Chen’s past words and deeds, DPP supporters would not question Chen’s impeccable credential as a pro–Taiwanese independence advocate and thus would be unlikely to betray Taiwan’s best interests. However, Chen’s past China-unfriendly record tarnished any of his olive branch attempts across the Strait. Both China and Chen’s domestic opponents remained unconvinced of Chen’s sincerity in the improvement of cross-Strait relations. In their views, Chen’s mollifying message and compromising position were simply shrewd political swindling rather than a heartfelt commitment to China’s “one China” principle. Failing to convince China to reciprocate and to expand his electoral support from the KMT-leaning camp in polls, Chen shifted gears to lean further toward the independence side of Taiwan’s political spectrum. He came to the realization that his attempt to cajole those domestic Chinafriendly supporters was meaningless. Under this circumstance, Chen’s sine qua non was to consolidate his DPP electoral base, which had expressed concerns and resentments of Chen’s knee-bending efforts to reach out to China. The several key policy issues that characterized Chen’s strategic reversal toward China and the subsequent deterioration of cross-Strait relations were based on the DPP’s electoral calculation, identity conviction, and political belief in Taiwan’s independence. First, finding himself stonewalled by China and facing disappointing approval ratings of his management of cross-Strait relations, Chen discarded his inauguration pledge by abolishing the Guidelines for National Unification and terminating the functionality of the National Unification Council. In fact, the council met only once during Chen’s terms of presidency. Eventually, the council’s extremely meager budget

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made it impossible to operate in 2006. Although Chen claimed that the abolishment of the council would not affect the cross-Strait status quo, China considered it as a subtle step toward Taiwan’s independence. Second, Chen’s intent to seek Taiwan’s separation from China on the political front coincided with subtle sociolinguistic tactics to propagate an indigenization movement for a solid Taiwan-centered identity, as opposed to the former KMT regime’s China-centered identity construct, by launching a series of government policies, such as textbook revision and name changes of parks and public buildings. Consequently, identity polarization dichotomized the strategic vision, party platform, and policy approach of different parties. The DPP-leaning camp emphasized a nativist push to de-legitimize the China-friendly position proposed by the KMT-oriented camp. Armed with its self-justified legitimacy of upholding the Taiwanese identity shield, the DPP camp frequently accused the KMT camp of “betraying” the noble trust of the Taiwanese people. On the contrary, the KMT charged the DPP with intentionally cutting off inherent linkages with China socially and culturally to facilitate its political independence agenda, and that this would invite China’s risky move of military unification without striving for any possibility of peaceful resolution of cross-Strait division. National electoral campaigns become a contentious battleground for trading charges and accusations of identity deception and political double-dealings. One central issue in party competition was the DPP’s rejection of the 1992 Consensus, a mutual understanding of the “one China, different interpretations” principle agreed at the 1992 bilateral talks in Hong Kong. While China insists that “one China” refers to the People’s Republic of China (PRC), Taiwan claims that the “interpretation” of China represents the ROC. The crux of the 1992 Consensus is to “agree to disagree” to the content of “one China” to facilitate cross-Strait negotiation on matters of mutual concern. However, with the emphatic suggestion of Tsai Ing-wen, then serving in Chen’s government as the director of the Mainland Affairs Council, Chen decided to not honor the validity of the 1992 Consensus, putting cross-Strait relations into a stall. In its assessment of cross-Strait power asymmetry, the DPP worried that the increasingly powerful presence of the PRC would eventually be the final and full articulator of the substance of “one China” and the sole possessor of the “China” domain in international society, with the ROC on Taiwan being marginalized as a regional entity within China. In brief, the 1992 Consensus would undercut the DPP’s aspiration for Taiwan as an independent state. Therefore, the Chen regime continued Lee Tenghui’s identity indigenization efforts by skillfully and subtly replacing any symbols of and semantic references to “China” and “Chinese” with

154 Wei-Chin Lee “Taiwan” and “Taiwanese” in official documents, public announcements, and rhetorical expression as much as possible.8 Third, the Chen government’s de-Sinicization efforts had not reversed the close economic ties between China and Taiwan. During the Chen Shui-bian era, Taiwan’s cross-Strait trade and investment policy moved from Lee Teng-hui’s restrictive “Be Patient, Go Slow” policy to a relatively cordial, liberal policy of “proactive liberalization with effective management” in 2001. While both President Lee Teng-hui and President Chen Shui-bian introduced “Go South” policy to redirect Taiwan’s investment into Southeast Asia, Taiwanese business investment continued to flow into the Chinese market, which accounted for 65 percent of Taiwan’s foreign investment in 2004. Obviously, the Taiwanese government’s policy directive to cool off bilateral economic fever in order to avoid negative political consequences could not hold back the profitdriven desires of its businessmen. Rather than challenging the crossStrait economic wave, the Chen regime hence adopted a pragmatic policy of “active management and effective opening” in 2006.9 The issue about political impacts of Taiwan’s close economic ties with China becomes a perennial debate tormenting every Taiwanese government, which intends to find the golden mean between Taiwan’s economic sustainability and political desire across the Strait. Taiwan’s economic overdependence on China was increasingly visible and alarmingly felt among both the elites and the masses as the share of cross-Strait trade in Taiwan’s total foreign trade grew from 10.7 percent in 2000 to 21.2 percent at the end of 2008, as estimated by Taiwan’s Mainland Affairs Council. In 2008, the share of Taiwan’s exports to China reached nearly 30 percent, while only slightly over 13 percent of Taiwan’s import came from China.10 This trade gap, an illustration of Taiwan’s trade dependency, was a constant source of public exasperation.11 Fourth, Chen’s foreign policy also repeatedly confronted China’s “one China” policy and intended to modify the US status quo position in cross-Strait relations. As early as August 2002, Chen proclaimed his “one country on each side” of the Taiwan Strait, a slogan comparable to Lee Teng-hui’s “two-state theory,” at a teleconference of the World Federation of Taiwanese Association. China severely criticized Chen’s proclamation as a blunt charge against the “one China” policy and the United States swiftly cautioned Chen of the deviation from his inaugural promises of “Five No’s” in 2000. Undeterred, Chen expressed his intent to establish a referendum law for a new state constitution to be in force by the end of his second term in 2008, for Taiwan’s “normalcy” as an independent state.12 Reportedly, some neoconservatives in the United

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States had been quietly hinting or encouraging Chen and the DPP to do so since 2001, but the announcement without prior consultation still infuriated the US administration.13 US president George W. Bush had to step forward and explicitly and deliberately object to Taiwan’s referendum during a meeting with Chinese premier Wen Jiabao on December 9, 2003, thereby pacifying China’s concerns as well as displaying his anger over Chen’s ill-thought move.14 Even so, Chen continued to press on with revised referendums.15 The referendum proposals, though they failed, and an unsuccessful assassination attempt on the eve of the 2004 presidential election, secured Chen a victory by a narrow margin in his bid for the second term of presidency.16 Chen’s reelection bid and the pursuit of his desire for independence cost Taiwan immense political capital in foreign policy. During Chen’s second term, 2004–2008, the United States closely monitored his policies and explicitly stated that the United States did not support independence for Taiwan or any unilateral moves that would change the status quo defined by the United States. The twists and severity of political events unfolding in 2003–2004 created the unintended consequence of nudging the United States and China together in jointly harnessing Taiwan within the gambit of cross-Strait relations defined by both countries.17 As a precautionary measure, China passed an anti-secession law in 2005 to curb Taiwan’s propensity toward independence. The year 2005 also witnessed separate visits to China by chairpersons Lian Zhan of the KMT and James Soong of the People First Party (PFP). Both visits inspired media sensation over “China fever” and public endorsement of their cross-Strait agenda in Taiwan in contrast to Chen’s suspension of the function of the National Unification Council and the Guidelines for National Unification in 2006.18 Chen hence bore heavy pressure from the United States, which considered those moves unhelpful and indeed dangerous to the cross-Strait status quo. The Bush administration retaliated by restricting Chen’s transit stops in US cities, Hawaii, and Alaska during his visit to Paraguay and Costa Rica in May 2006.19 Chen’s unfriendly encounters with the United States corresponded with widespread reports and intense scrutiny of his family’s corruption scandals, which further damaged Chen’s political legitimacy through the end of his second term. President Chen’s administration appeared to be down and out for any optimistic improvement of cross-Strait relations. China, meanwhile, desperately sought US assistance to rein in Taiwan’s radical moves during the Chen presidency.20 Both the United States and China were ready for Taiwan’s next president to push a considerable fix of the deteriorated cross-Strait relations.

156 Wei-Chin Lee Regime Shift to the KMT’s Ma Ying-jeou: 2008–2016 Ma Ying-jeou’s ascension to the presidency signaled a drastic change for cross-Strait relations. In contrast to the DPP’s aspiration for Taiwan’s independence, the KMT’s nonconfrontational China-engagement policy aimed to cultivate mutual understandings and reduce tensions across the Strait, to adopt a “no surprise and no disturbance” policy toward the US-conceived status quo situation, and to advocate a tacitly agreed diplomatic truce with China to maintain Taiwan’s stable diplomatic profile and meaningful participation in international organizations. Ma proclaimed “no unification, no independence, and no use of force” as the core principle in tackling cross-Strait interactions. Different from Chen’s denouncement of the 1992 Consensus, Ma’s endorsement of the 1992 Consensus resonated well and fit nicely with China’s “one China” policy, though Ma and the KMT persistently advocated Taiwan’s reference to the “one China” as the ROC, not the PRC. In this way, Ma’s cross-Strait policy won approval by KMT supporters after eight years of the DPP’s adventurist policy. The core of Ma’s policy was to operate under the “framework of the Republic of China” for the 1992 Consensus—“one China, different interpretations.” An extension from the consensus, in Ma’s proposition, was a new thinking of “mutual nondenial” of either polity’s administrative authority and competence across the Strait, with each having legitimacy of governance in separate territorial spheres, though each side would not need to recognize the other side’s state sovereignty. It was a pragmatic attempt to resolve non–politically sensitive issues such as joint combat against transnational crimes, expeditiously and conveniently for mutual benefits. The acceptance of each other’s de facto administrative competence did not imply de jure recognition of sovereign right in status.21 By pressing the “reset” button to depart from his predecessor’s policy, Ma’s decision inevitably brought in anxiety and fear for DPP supporters. Long-standing identity polarization and diverse perspectives toward China still engulfed public opinion and accelerated partisan attacks in Taiwan. Even inside the KMT, intra-party division existed within the moderate, indigenous faction, which favored an incrementalistic approach toward China to avoid potential electoral setbacks from moving too far and too fast in cross-Strait relations on the one side, and the nonindigenous faction, which championed for active engagement for better and closer linkages with China for Taiwan’s own economic sustainability and eventual political conciliation across the Strait. President Ma thus encountered not only hostile opposition from the DPP and its supporters but also passive resistance from his own fis-

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sured and factious party in his execution of cross-Strait policy agendas. His scrupulous leadership style and unwillingness to Machiavellize a solid unity within the KMT party for political efficacy resulted in a slump in his approval rating and a waning of his legitimacy in party leadership. His long-running feuds with Wang Jin-Pyng, the Legislative Yuan’s speaker and a heavyweight party figure representing the KTM’s indigenous faction, were widely known. Ma had long felt irritated by Speaker Wang’s snail-like process in legislative conciliation and consensus-building over agenda items that Ma hoped to pass promptly to illustrate his administrative achievements. The intra-party dispute and the lack of coordination between the executive branch and the legislative branch affected Ma’s cross-Strait policy, even though the KMT held a majority of the parliament seats. The last straw of their comity on the surface dropped and their working relations completely broke down after Ma accused Speaker Wang of judicial wrongdoings in “influence peddling” following a wiretapping investigation of an embezzlement case concerning the DPP’s powerful legislator Ker Chien-ming in September 2013. President Ma’s public accusation of Wang’s political improprieties and follow-up moves to remove him from the legislature failed miserably and caused Ma’s popular support to dip to 9.2 percent.22 His critics, opponents, and even some of his allies lambasted him for politically unwise and potentially illegal intervention in the ongoing judicial inquiry, mistreatment of a political rival without due process of law, and, most important, derailment of the legislative process of the CrossStrait Service Trade Agreement, signed earlier in June 2013. The agreement is one of the follow-up agreements to the 2010 cross-Strait Economic Cooperation Framework Agreement, which had generated strong political opposition and social protests by the DPP and active “Chinasuspicion” civil society groups. Ma regarded the Cross-Strait Service Trade Agreement as a landmark deal with China and eagerly sought its approval, but Speaker Wang had accepted the DPP’s demand for an article-by-article review of agreement, instead of a review of the entire package for an outright acceptance or rejection like the US fast-track trade deal’s legislative process. The Ma-Wang feud naturally resulted in a severe discord within the KMT. Even so, Speaker Wang’s long-term cultivation of political capital within the KMT and the legislative branch won him substantial support. Wang’s court victory against the party’s removal of his KMT party membership also permitted him to serve as the president of Taiwan’s Legislative Yuan. Still, the collateral damage was that the Ma-Wang rupture contributed partially to Speaker Wang’s inaction or lack of enthusiasm to form a united front with President Ma

158 Wei-Chin Lee to resolve the student Sunflower Movement in 2014. It sealed the doomed fate of the Cross-Strait Service Trade Agreement to cross the legislative hurdle for passage. Furthermore, the Sunflower Movement’s anti-China message led to the KMT’s political domains shrinking in the 2014 local and mayoral elections and paved the way for the KMT’s catastrophic defeat in the 2016 presidential election. On March 18, 2014, the rush of KMT legislators to railroad through the legislative review of the Cross-Strait Service Trade Agreement sparked protests by students and social movement activists. With the active support of the DPP legislators and Speaker Wang’s conciliatory gesture, the movement grew into a large-scale occupation by younger students and lasted for more than twenty days. The occupation ended peacefully, and the movement’s triumph brought political activists into the formation of the New Power Party and the Social Democratic Party for the 2016 legislative elections, highlighted a political pendulum tilt from the KMT to the DPP, and signaled a tectonic shift in Taiwan’s public attitudes toward China, which swung from China-friendly to Chinaskeptic in 2014. The landmark event reflected the younger generation’s strong “anti-China” sentiment. It further strengthened their inclination toward the vision of Taiwan’s independence, even though they might not have agreed fully with most of the DPP’s party policies and practices.23 An overwhelming 70 percent majority of respondents in a TVBS survey conducted during the Sunflower Movement supported article-byarticle review of the Cross-Strait Service Trade Agreement, with only 11 percent supporting outright approval or rejection of the whole deal.24 The political implication of the Sunflower Movement for the KMT was that the Taiwanese public had lost confidence in its capability to defend Taiwan’s legitimate right of existence against China’s threats. The KMT’s frequent claim of benefits of cross-Strait stability and economic exchanges had lost its public appeal. Instead, the public was in favor of the DPP’s criticisms that cross-Strait exchanges under the KMT profited only KMT politicians and cross-Strait “compradors,” major business conglomerates, and selected industrial sectors with privileged access to the China market without sharing wealth with small and medium-sized enterprises and the masses in Taiwan. During the period 2007–2014, China’s share of Taiwan’s exports increased from 39.5 percent to 42 percent.25 Even so, the overall sociotropic perceptions—mass public perceptions of how trade affects the whole country—and outgroup anxiety intertwined with identity stances led the public to not feel the concrete distributional benefits of booming cross-Strait market exchanges.26 In addition, the KMT’s rush to pass the Cross-Strait Service Trade Agreement confirmed opponents’ suspicion of a “black box”–

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like undemocratic process of legislation without public scrutiny and accountability. Whatever President Ma and the KMT proposed only fed public perception and anxiety that the whole deal was a political trap by China intended to suck Taiwan further into a point of no return and embracing China’s end goal of political unification. In the wake of the Sunflower Movement, the rise of younger generations with tenacious anti-China sentiment put the KMT in a dismally weak position in defense of Ma’s cross-Strait discourse. On the contrary, the DPP surged with confidence, casting off any shameful reputation engendered by former president Chen’s corruption scandals, which had doomed the DPP’s political luck in two separate presidential elections. The KMT’s usual strong suit in cross-Strait relations during past presidential elections lost its magic touch to consolidate supporters. Even the KMT’s last-ditch effort of setting up an unprecedented Ma-Xi meeting in Singapore in November 2015 failed to conjure among voters the party’s essentiality and irreplaceability in keeping cross-Strait peace and stability.27 Ma’s public reference of the 1992 Consensus in the MaXi meeting failed to include “separate interpretations” of the “one China” principle. This gave his critics ample ammunition to downgrade the meeting’s significance and implication.28 Whatever policies China adopted, including economic concessions to Taiwan, would be suspected as sugar-coated pills or Trojan horse schemes. Ma’s cross-Strait policy revision from Chen’s confrontational and tense approach offered a fairly stable and peaceful political atmosphere for mutual exchanges. Ma frequently reminded his audiences of the remarkable result of Taiwan’s stable diplomatic relations with allies, excepting the loss of Gambia, which severed ties with Taiwan in 2013. China’s tacit endorsement of diplomatic truce also permitted Taiwan to participate in both consecutive World Health Assembly meetings as an observer since 2009 and the International Civil Aviation Organization in 2013 as a guest. Additionally, Taiwan gained visa-free or visa-on-arrival permission from more than 140 countries and territories. Finally, the signing of a fishery accord with Japan in 2013 in the disputed East China Sea area, separate free trade agreements with Singapore and New Zealand in 2013, and firm assertion of Taiwan’s South China Sea claims all showed a record for Ma better than his predecessor’s loss of nine diplomatic allies and frequent setbacks in international participation because of the DPP’s scorched-earth diplomacy in competition with China for higher political profile in the international community. On the economic side, ten rounds of bilateral talks and the signing of twenty-one cross-Strait economic and functional agreements by Taiwan’s Straits Exchange Foundation and China’s Association for

160 Wei-Chin Lee Relations Across the Taiwan Straits during Ma’s presidency facilitated direct flights, lifted the ban on cross-Strait investments, and offered Taiwanese agricultural and fishery products access to China. The result was substantial growth in tourism, student exchanges, trade, and economic collaborations.29 Even so, Taiwan’s smooth and cordial relations with China as part of Ma’s evenhanded approach to both the United States and China ran the risk of arousing suspicion and anxiety from the United States. When the United States reconfigurated its global strategy to “pivoting to Asia” or “rebalancing” policy to counter China’s rapid rise and challenge since 2011, Taiwan had to tread carefully to avoid unnecessary suspicion and anxiety from either side on contentious issues.30 The maritime disputes in the East China Sea and the South China Sea are two notable issues that put Taiwan in an awkward position as it bore simultaneous pressure from China, which urged for jointly defending “both Chinas’ territorial claims,” and from the United States, which wished for Taiwan’s collaboration to undercut China’s stance.31 Likewise, Taiwan’s geoeconomic proximity and affinity toward China’s market also spawned US geostrategic concerns over Taiwan’s reliability and mutuality as a solid partner in the overall US strategic layout on the Western Pacific.32 The undisputed message was that, regardless of Taipei’s tip-toed, well-balanced relations with Washington, the United States would be the final arbiter of the appropriateness of Taiwan’s cross-Strait policy conduct based on US national interests. In the case of Chen Shui-bian, Washington branded him as a troublemaker and complained about his unorthodox and undesirable cross-Strait policy moves insofar as Chen’s conduct affected the desperate need of US-China collaboration in the US global war on terrorism.33 Conversely, Ma’s no-surprise rapprochement policy toward China prompted anxiety and doubts from Washington concerning Taipei’s security commitment to itself and to the United States, given the strengthening of cross-Strait ties at the same time that Washington revised its global strategy vis-à-vis China’s forceful assertion in the 2010s. Moving too close or too far to either Beijing or Washington unquestionably invites unwanted speculations and concerns for Taiwan. Likewise, Ma’s supposedly admirable efforts in bridging and accelerating cross-Strait economic exchanges naturally encountered domestic anxiety, doubts, and protests. Prior to the 2014 Cross-Strait Service Trade Agreement attempt, the 2010 Economic Cooperation Framework Agreement, a pact intending to lower tariffs and relax market access for 539 Taiwanese products to China and 267 Chinese products to Taiwan, triggered waves of street protest and partisan opposition expressing fear of the irreversible economic dependency on China leading to political

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entrapment and unification. 34 While Taiwan’s trade deals with other countries would receive a rational assessment of market cost-andbenefit without a high level of political alertness, any economic deal with China would automatically be viewed through an ideological and identity lens in the assessment of its economic and political pros and cons. On this point, Ma’s inability to significantly lessen the degree of economic dependency on China reduced the KMT’s chance in the electoral campaign against the DPP in 2016. In sum, both Taiwan and China have remained closer in economic transactions, but have drifted apart politically. Economic interdependence has failed to generate sufficient positive spillover effects into a merge of hearts and minds in the political arena. As Samuel Huntington stated: “For peoples seeking identity and reinventing ethnicity, enemies are essential.” 35 The consideration of China as a security adversary embedded in the antiChina sentiment both strains and solidifies Taiwanese identity formulation. Huntington’s logic of a clash of civilizations resonates well in cross-Strait relations. Indeed, one omen for the KMT’s demise in managing cross-Strait relations was the shifting macro-trend of identity affiliation among Taiwanese people. Solely “Taiwanese” identifiers climbed from 19.5 percent of Taiwan’s population in 1992 to 59–60 percent in 2015, along with a drop from 25.5 percent for solely “Chinese identity” respondents to a low of 3.3–3.5 percent during the same period. Ma’s eight years of rapprochement policy toward China did not stop the trend.36 Meanwhile, the centrist position of “status quo” in the unification-independence spectrum gained 83.3 percent support in 2015, an 11.4 percent increase from 1994.37 This is where the DPP and candidate Tsai chose to strategize their electoral campaigns to regain their governance in 2016. Return of the DPP Regime Under President Tsai Ing-wen: 2016 The DPP devised a three-prong campaign strategy in the 2016 elections. First, it engaged in coalition-building with a multitude of civil society groups and advocacy organizations on various issues to form a united front for targeting and denouncing policies by Ma and the KMT, such as school textbook revisions, safety concerns about nuclear power plants, wrongful treatment and death of military service members, housing disputes in urban renewal, and trade agreements with China. Second, the DPP reinvented its campaign slogan and rephrased its narratives in cross-Strait policy by convincing voters that the cross-Strait policy was

162 Wei-Chin Lee not an exclusive domain of the KMT. Rather than repeating its long-term conviction for Taiwan’s independence, the DPP accentuated its interest in “maintaining the status quo”—an ambiguous, broad, and centrist position—to catch the largest vote share from both sides of the Taiwanese identity spectrum and to offer prospective supports room for imagination that the DPP did not intend to deviate far away from the KMT’s position. As a frontrunner with a double-digit lead in election polls, candidate Tsai and the DPP spinners had no urgency to elaborate the concrete substance of “status quo” whenever prodded for details by reporters or audiences. In this case, the KMT’s forte of cross-Strait management lost its distinctive and dominant appeal to gain voters’ support. Thus, Tsai and the DPP conveyed a softened image to the public, from an adamant seeker for Taiwan’s independence to a rational, reasonable, and responsible party for “status quo maintenance,” which became an electoral mantra sufficient to satisfy voters’ expectation. Moreover, the DPP’s relentless pursuit in the past for Taiwan’s independence gave it credibility as the guardian of Taiwan’s best interests in dealing with China, should China compel Taiwan into a corner for political concession. Third, on the international front, it was widely perceived that the restrained endorsement by the United States of Tsai’s candidacy in her 2012 presidential bid was a contributing factor to her loss. Therefore, public perception of a strong endorsement from the United States of her cross-Strait agenda would help the DPP uplift its campaign dynamics, dispel any doubts about her strategic vision, and revise the party’s previous image of adventurism constructed during the Chen Shui-bian era. No matter how “void and empty” her “status quo” pledge was perceived by Tsai’s opponents and critics, Tsai’s twelve-day visit to the United States starting on May 31, 2015, boosted her presidential qualification and received Washington’s stamp of approval that her strategic plan would remain within the ambit of the US-defined status quo. Eventually Tsai and the DPP did reveal more details of her “status quo maintenance” campaign pledge in her electoral victory speech in January 2016. Her cross-Strait policy would be based on “the Republic of China constitutional order, the results of cross-strait negotiations, interactions and exchanges, and democratic principles and the will of the Taiwanese people.”38 It confirmed her support of the ROC constitutional order, mitigating any sense of anxiety and fear among the public regarding her intention to uphold the institutional constraints laid out in the ROC constitution. Surely, as the Taiwanese democratic will evolves and public sentiment shifts, the constitutional framework as a living institutional instrument may accordingly follow. Hence, the interpretation of and adaptation to the “status quo” will then have to follow the will of the

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people. On this point, Tsai and the DPP elites envisioned that younger eligible voters would tend to be “natural supporters of Taiwan independence” in the 2016 elections, and that they would be a massive advocacy coalition through the generational alteration, yielding a newly contextualized “status quo” in formation and Taiwanese independence in the end. In her inaugural speech in May 2016, President Tsai further elaborated that the new government “will conduct cross-Strait affairs in accordance with the Republic of China Constitution, the Act Governing Relations Between the People of Taiwan Area and the Mainland Area, and other relevant legislation.” She also stated that it was necessary for the “existing realities and political foundations that the stable and peaceful development of the cross-Strait relationship must be continuously promoted.” In Tsai’s view, the status quo would rely on several key elements. The first element is the fact of the 1992 talks between the two institutions representing each side across the Strait [the Straits Exchange Foundation and Association for Relations Across the Taiwan Straits], when there was joint acknowledgement of setting aside differences to seek common ground. This is a historical fact. The second element is the existing Republic of China constitutional order. The third element pertains to the outcomes of over twenty years of negotiations and interactions across the Strait. And the fourth relates to the democratic principle and prevalent will of the people of Taiwan.39

Fundamentally, she repeated her rejection of China’s “one China” principle—the idea that mainland China and Taiwan are a single nation. All relevant laws governing cross-Strait relations would be added to constitute a broad gauge of the ROC constitutional order in her government’s policies toward China. With a supermajority in the Legislative Yuan and the DPP’s unique party unity in party agenda implementation, the Tsai government was in a much better position in cross-Strait policy design and execution than were previous governments. In her view, the rejected 1992 Consensus was only a historical fact or joint acknowledgment and set of understandings reached between both sides at the 1992 meeting. Understandably, her speech failed to satisfy China’s single demand of the acceptance of the 1992 Consensus. Cross-Strait relations stalled after her inauguration, as both sides searched for a compromising solution. The unwillingness of either side to yield led to a static, somewhat morbid “status quo” without official contacts across the Strait. China shut down bilateral official channels of consultation and collaboration on issues related to mutual judicial assistance and collaboration in combating frauds and crimes. The number of Chinese tourists to Taiwan plummeted

164 Wei-Chin Lee visibly. São Tomé and Príncipe’s termination of diplomatic relations with Taiwan in December 2016 and the downgrading of several of Taiwan’s diplomatic missions abroad sparked speculations about a domino effect on Taiwan’s diplomatic relations with its existing allies. Likewise, Taiwan’s participation in international organizations, such as the World Health Assembly, encountered difficulty due to China’s excessive intervention to bind Taiwan within the “one China” framework. In brief, Tsai’s denial of the 1992 Consensus and her insistence on the status quo have not worked in cross-Strait relations so far. Nevertheless, Tsai’s surprising phone call to US president-elect Trump in December 2016 was considered as a diplomatic victory, hinting at a possible US policy adjustment to Taiwan, though subsequent developments seemed to show President Trump’s use of Taiwan as a chip in his geopolitical bargaining with China.40 Meanwhile, Taiwan’s calculation of counting on the United States to ward off China’s pressure and economic dependency by joining the US-directed twelve-party regional trade pact, the TransPacific Partnership, has been cut short by the US withdrawal from the partnership in 2017, not to mention US pressure on Taiwan on the South China Sea issue and the arbitration case of the Philippines versus China in July 2016.41 Chinese military aircraft flying close to Taiwan’s defense perimeter and its aircraft carrier, the Liaoning, cruising through Taiwan’s surrounding area have increasingly become a normality since 2017 and have signaled China’s powerful posture against Taiwan. Challenges at Tsai’s Midterm: 2018 The devastating defeat of the DPP and the resurgence of the KMT in Taiwan’s local elections in November 2018 appeared to vindicate the impracticability of Tsai’s cross-Strait policy. Along with several turnovers of local governments in the 2018 midterm elections, the DPP’s biggest loss of its stronghold of Kaohsiung, the southern port city under its solid domain for twenty years, to a KMT candidate’s explicit campaign pledge for the recognition of the 1992 Consensus symbolized the swing of public sentiment toward better relations with China for economic gains. As a result, the Tsai government and the DPP will encounter several challenges during the first term of presidency. First and foremost is the Tsai government and the DPP’s denial of the 1992 Consensus, a principle supported by both the preceding KMT government and China in past consultation and collaboration. The denial has pushed mutual interactions to a tense showdown. With China’s insistence on the “one China”

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principle, and Taiwan’s assertion of its dignity, distinctive separateness, and representative equality in bilateral interactions, the quest for common ground is expected to be an endless and unraveling Sisyphean task. Like a modus operandi, the 1992 Consensus permitted Taiwan to assert its own interpretation of “one China” as the ROC, though China seldom reciprocated clearly during the Ma presidency. China’s unwillingness to regard the ROC as a legitimate, equal counterpart has naturally fed into Taiwanese public perception of China’s “bossy, bully, and narcissistic” attitude and subsequently diminished any political gains for China from its policy of economic concessions to Taiwan during the Ma era. Combined with domestic woes in economic development, income disparity, and the opposition parties’ persistent attacks and instigation, the popular sense of loss of Taiwan’s dignity as a democratic entity has only further instigated anti-China attitudes and the continuous rise of Taiwanese identity affiliation. Indeed, the solid show of Taiwanese identity affiliation will continuously turn cross-Strait relations into a distraught duel, like a game of chicken between China’s unyielding stand on the “one China” principle and the DPP government’s aspiration for a new and independent state during Tsai’s presidency. The likely result is that each side may adopt a trench mentality on its high moral ground; no party feels humbled in years of on-and-off contentious negotiations, and most important policies at home and abroad, ranging from immigration to tourism, industrial development, and relations with the United States, Japan, and other states, are inevitably viewed with a cross-Strait lens for design, deliberation, and decision. The challenge is for both the Tsai government and China to be innovative rhetorically in branding for a mutually agreeable term to kick-start a virtuous cycle for the meeting of minds across the Strait.42 Second, Taiwan’s wish to join the Trans-Pacific Partnership has proven unlikely since the withdrawal of the United States from the partnership.43 China’s powerful presence in the Regional Comprehensive Economic Partnership, proposed by the Association of Southeast Asian Nations (ASEAN), also makes Taiwan’s participation in the latter partnership unrealistic. Tsai hence pursued the New Southbound Policy by expanding Taiwan’s trade and investments in Southeast Asia and South Asia to reduce economic dependence on the China market. Lee Tenghui had initiated a similar southward policy in the 1990s to gain implicit political clout and to enhance Taiwan’s international status via its economic linkage with countries in Southeast Asia.44 Even so, the New Southbound Policy deserves further deliberation regarding its feasibility as a dynamic substitute to Taiwan’s economic interactions with China. After all, China’s sheer size and contemporary economic strength have

166 Wei-Chin Lee made Taiwan’s southbound policy difficult to match. China remained the largest export destination for Taiwan in 2015, receiving 39 percent of Taiwan’s exports. The period 2008–2015 under Ma’s rule witnessed Taiwan’s investment of US$84 billion into China.45 Any intent to reduce economic dependency on China in a sizable way by redirecting trade orientation southward requires not just government policy, but also an equivalently optimistic assessment by business enterprises of the region’s market projection, political stability, infrastructure facility, and economic benefits of goods and service invested. Should the New Southbound Policy be unable to register any significant return after the shrinking of the China market caused by the denial of the 1992 Consensus and the Trump administration’s “America first” protectionist policy, the Tsai government would be faced with the challenging task of coming up with a timely alternative plan to revitalize Taiwan’s longawaited economic panacea. Signs of failure of its New Southbound Policy may redirect the business community and the public to reconsider the China option for better business results. After all, the Taiwanese public overwhelmingly prioritized economic interaction (72.5 percent) over independence (17.1 percent) in a late 2016 survey, when prompted to choose between options of “pursuit of independence” and “continuation of cross-Strait economic interaction.”46 The survey delivers a bitter message that any radical attempt to upend cross-Strait relations by pursuing Taiwan’s independence to the extent of endangering Taiwan’s economic sustainability will confront a strong public backlash in elections and policy implementation.47 The third challenge is the connectivity between Taiwan’s foreign policy and cross-Strait policy with respect to the role of the United States in Taiwan’s security. Given the asymmetrical nature of the USTaiwan security framework, the national interests of the United States in its global strategic framework are the paramount factor in calibrating its policy toward China as well as Taiwan. Since a weaker party such as Taiwan could deliberately entrap the stronger United States into an unwanted conflict with China by intentionally triggering China’s hostile responses, the United States would need to ensure that Taiwan acts within the designated confines of US security pledges. Because China has persistently declared that Taiwan’s declaration of independence would prompt its military option for unification, the United States has adopted a dual-deterrence strategy to deter China from the use of military force against Taiwan and to deter Taiwan from the declaration of its independence. Still, Taiwan’s viable democracy, passionate politicking, and ideological polarization could make domestic politics look as though it were teetering on the precipice of calling for its independence.

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In this case, the United States would have to harness Taipei’s move to avoid the Taiwanese leader’s misunderstanding that US security support is unconditional. That means that Taiwan’s excessive and zealous crossStrait maneuvering attempt to upset cross-Strait stability would encounter US reprimands and punitive pressures, as was clearly evidenced during the second term of Chen Shui-bian’s presidency. The same applied to Ma when he defied US advice by visiting the contested Taiping Island in January 2016 in order to strengthen Taiwan’s South China Sea assertion. Washington later characterized Ma’s island visit as “extremely unhelpful” in the midst of US-China tension in the South China Sea dispute, even though Ma’s objective was to assert Taiwan’s territorial right and the island’s qualification as an island in accordance with the 1982 United Nations Law of the Sea Convention to counter the claim of the Philippines in the 2016 arbitration case. Upon reflection, US-Taiwan relations underline Taiwan’s dilemma as the weaker party vis-à-vis a strong United States on issues related to cross-Strait relations. The United States was concerned that the unpredictable Chen Shui-bian presidency might jeopardize the stability of USChina relations in global power politics. On the contrary, Ma’s rapprochement policy and nonconfrontational style in maintaining cross-Strait stability also led the United States to watch closely and worry profoundly about the geostrategic implications of Taiwan’s moves across the Strait. Tsai will encounter a similar predicament. Like her predecessors, Tsai’s challenge will be figuring out how to balance between the United States and China for the augmentation of Taiwan’s national interests, though Tsai has chosen to tilt closer to the US side.48 Fourth, while Beijing under Xi has tried everything it could to bring Taiwan into its track of ultimate unification, Taiwanese society apparently has different thoughts. China’s persistent efforts in strengthening economic and social ties with Taiwan, and Xi’s “charm” offensive in agreeing to meet Ma in late 2015 in Singapore have paralleled with the subtle enactment of a national security law claiming responsibility for protecting state sovereignty and territorial integrity of all Chinese compatriots from Hong Kong, Macao, and Taiwan in July 2015. Without any consultation with Taiwan, China also issued an electronic identity card to all Taiwanese residents living in China, for close monitoring. Upon ascending into governance in 2016, Tsai’s countermove was to accelerate the process of identity reconstruction by repeating tasks similar to those of Chen Shui-bian’s presidency of 2000–2008. As Akhil Gupta and James Ferguson point out, “states play a crucial role in the popular politics of place making and in the creation of naturalized links between places and peoples” in campaigns for self-determination and

168 Wei-Chin Lee sovereignty.49 It is politically understandable and electorally advantageous for the DPP regime to continue portraying the KMT as the alien regime and China as the contested “other”—a different and eventually irrelevant entity to Taiwan’s existence in time. The DPP’s reiterated and routinized interpretation and narratives of Taiwan’s past and present are intended to cultivate a friendly cognitive environment for a new Taiwan entity. The question is whether exogenous events and forces will occur—for example from China—that gravely threaten Taiwan’s existential security beyond the control of the DPP regime. Will the public accept a less desired “self” in identity construction and a lower degree of political status as a compromising solution?50 Indeed, the DPP’s tempo and rhyme in political maneuvers in recent years have almost resembled those usual characteristics of populism— the “politics of anti-politics”—by cultivating a special leader-masses bond based not only in cognitive-rational elements but also in the outpouring of emotion, conveying rosy promises to the masses, pledging for plebiscitary-like consultation for problem solving, and agreeing to “symbolic empowerment to popular sectors while retaining a power appropriation of voice by the leader.”51 The mobilization of public support with some populist tactics delivered the DPP an electoral victory in the 2016 elections. The challenging task for the DPP and President Tsai is whether the party as well as the government can confidently restrain those populist groups from undermining some of the basic institutions of representative democracy in Taiwan, or from heavily meddling in Tsai’s presumably rational and reasonable cross-Strait policymaking process. In other words, the last and not least challenge for the Tsai government will be to steer cross-Strait relations on a steady course without being hijacked domestically by intransigent Taiwanese independence constituencies that may incite a critical situation that jeopardizes Taiwan’s security. Notes 1. For the relationship between the Mainland Affairs Council and the Straits Exchange Foundation, see Leng, The Taiwan-China Connection, pp. 57–70. 2. Ma, “Cross-Strait Relations at a Crossroad,” pp. 43–45. 3. For a summary of the 1993 talks, see Chiu, Koo-Wang Talks and the Prospect of Building Constructive and Stable Relations; Hughes, Taiwan and Chinese Nationalism, pp. 120–121. Qiu Jinyi, a participant in the 1993 Koo-Wang meeting, later recalled the process of meeting in Xin Xinwen [The Journalist Weekly], October 18–24, 1998, pp. 41–44. 4. Lee, “One Talk, Two Tables”; Lee, “Sayonara to the Lee Teng-hui Era.” 5. Garver, Face Off; Tucker, China Confidential, pp. 482–490; Wang, The United States and China, pp. 282–285.

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6. Bush, “Lee Teng-hui and ‘Separatism,’” pp. 70–92. 7. “The Party Platform of the DPP,” http://www.dpp.org.tw/history.php. 8. Lee, “Taiwan’s Cultural Reconstruction Movement”; Clark and Tan, Taiwan’s Political Economy, pp. 133–156. 9. Liou, “Cross-Taiwan Straits Economic Relations and the ECFA,” pp. 160– 161; Cheng, “China-Taiwan Economic Linkage.” 10. Mainland Affairs Council, Cross-Strait Economic Statistics Monthly 205, tab. 8, “The Share of Cross-Straits Trade in Taiwan Total Foreign Trade.” 11. Keohane and Nye, Power and Interdependence, chap. 1; Knorr, “International Economic Leverage and Its Use.” 12. Lee, “Cross-Taiwan Straits Relations and Ma Ying-jeou’s Policy of Diplomatic Truce,” pp. 192–193; Tedards, “Taiwan”; Voyer, “Taiwan.” 13. Stein, “Defense Officials Tried to Reverse China Policy.” 14. “Bush Opposes Taiwan Independence.” 15. Lin, “Taiwan’s Referendum Act and the Stability of the Status Quo.” 16. For a description of the Chen Shui-bian era, see Rigger, Why Taiwan Matters. 17. James A. Kelly, assistant secretary of state for East Asian and Pacific affairs, “Overview of US Policy Toward Taiwan,” testimony at a hearing on Taiwan, House International Relations Committee, Washington, DC, April 21, 2004; Kan, “Taiwan.” 18. Regan, “Taiwan’s President Abolishes China Reunification Committee.” The State Department’s official response can be found in “Taiwan—Senior Taiwan Officials’ Comments on National Unification Council,” https://2001-2009.state.gov/r /pa/prs/ps/2006/62488.htm. 19. Snyder and Tsao, “US Decides on Transit Plan.” 20. Rigger, “Taiwan in US-China Relations,” p. 304. 21. Su, “Professor Hungdah Chiu, Taiwan, and Cross-Strait Relations.” For a general description and assessment of Ma’s first term, see Sutter, US-Chinese Relations, pp. 227–233. 22. “Politics in Taiwan.” 23. Tao, “The ‘Sunflower Movement’ and the 2016 Taiwan Presidential Elections”; Ho, “Occupy Congress in Taiwan.” 24. TVBS poll on the Cross-Strait Service Trade Agreement and students’ occupation of the legislative Yuan on March 21, 2014, http://other.tvbs.com.tw/export /sites/tvbs/file/other/poll-center/20140321224523298.pdf. 25. “Relations Across the Taiwan Strait,” p. 135. 26. Mansfield and Mutz, “Support for Free Trade.” 27. An earlier attempt to set up a Ma-Xi meeting across the Strait in December 2013 failed to materialize. See Zhu, “An Assessment of the Political Situation in Taiwan.” 28. Buckley and Li, “Leaders of China and Taiwan Talk of Peace Across the Strait”; Zou, “Perspective from Inside.” 29. Tsai, “Ma’s Golden Decade of Achievement”; Wei and Lai, “Identities, Rationality, and Taiwan’s China Policy.” 30. Silove, “The Pivot Before the Pivot,” pp. 83–84. 31. Zhang, “Disputes over Territories and Maritime Rights and Interests,” pp. 126–132. 32. Cabestan and deLisle, “Introduction: Taiwan at a Crossroads,” pp. 3–4; “Relations Across the Taiwan Strait,” p. 135. 33. Yahuda, The International Politics of the Asia-Pacific, pp. 258–259. 34. “Historic Taiwan-China Trade Deal Takes Effect.” 35. Huntington, The Clash of Civilizations and the Remaking of World Order, p. 20. See also Huntington, “The Clash of Civilizations?”

170 Wei-Chin Lee 36. Data may vary slightly subject to the date of survey conducted. See Ho and Liu, “The Taiwanese/Chinese Identity of the Taiwan People in the 1990s,” p. 171; Election Study Center, National Chengchi University, “Taiwanese/Chinese Identification Trend Distribution in Taiwan (1992/06–2015/06),” http://esc.nccu.edu.tw /app/news.php?Sn=166#. Duke’s University’s Taiwan National Security Survey in October 2015 showed 4.5 percent of respondents considering “Chinese identity” in comparison to 35 percent of dual identity and 57.4 percent preferring “Taiwanese identity”; see Taiwan National Identity Survey, Duke University, http://dl .dropboxusercontent.com/u/43428880/index.html, question C36. The 2016 survey is available at http://sites.duke.edu/pass/taiwan-national-security-survey. 37. Election Study Center, National Chengchi University, “Taiwan Independence vs. Unification with the Mainland Trend Distribution in Taiwan (1992/06–2015/06),” http://esc.nccu.edu.tw/course/news.php?Sn=167. A similar trend can be seen in “Taiwan National Security Survey” files, 2002–2015, Duke University, http://dl .dropboxusercontent.com/u/43428880/index.html. See questions C12 and C33 in the 2014 and 2015 survey results, and question C36 for the 2016 survey at http:// sites.duke.edu/pass/taiwan-national-security-survey. 38. The text of Tsai’s speech in Chinese and English after her electoral victory can be found at http://iing.tw/posts/533. The English translation is slightly different from the Chinese text. 39. “Full Text of President Tsai’s Inaugural Address.” 40. Landler and Perlez, “Trump’s Call with Taiwan.” 41. Cheng and Lee, “Wrestling over the Trans-Pacific Partnership”; Lee, “Taiwan, the South China Sea Dispute, and the 2016 Arbitration Decision.” 42. “ARATS Visit Would Be Welcomed.” 43. Nealer and Fimbres, “Taiwan and Regional Trade Organizations.” 44. Chen, “Taiwan’s Economic Growth and Its Southward Policy in Asia.” 45. Jing, “Taiwan’s 2016 Elections and Relations with ASEAN.” 46. Taiwan National Security Survey, 2016, Duke University, question C24, http://sites.duke.edu/pass/taiwan-national-security-survey. 47. Chan and Clark, Flexibility, Foresight, and Fortuna in Taiwan’s Development. 48. Taiwan National Security Survey, 2016, Duke University, question C19, http://sites.duke.edu/pass/taiwan-national-security-survey. 49. Gupta and Ferguson, “Beyond ‘Culture,’” p. 12. 50. Mitzen, “Ontological Security in World Politics.” 51. Roniger, “Modern Populism in Latin America.”

10 International Law and Institutions Jacques deLisle

In her inaugural address on May 20, 2016, in her response to Chinese leader Xi Jinping’s speech on the fortieth anniversary of Beijing’s January 1979 “Message to Taiwan Compatriots,” and on other occasions as well, Taiwan’s president Tsai Ing-wen affirmed that Taiwan would continue its long-running quest for international status and the benefits it offers for Taiwan’s security. Taiwan under Tsai—as under her predecessors—has pursued a multipronged agenda for “international space” that includes seeking access to international institutions, both well-established and newly emerging; preserving relations with various states, both formal ties with a dwindling number of diplomatic allies and robust informal relationships with major powers; and acting “as if” Taiwan were a member of key international regimes that it is not allowed formally to join. International legal norms and related institutions have been an important part of the agenda for international stature pursued under Taiwan’s second consecutive international lawyer-president—and third-in-a-row lawyer-president. The international organizations targeted by Taiwan are significant creators, and creations, of international law. Relations, formal and informal, with powers great and small, remain indicia of statehood or statelike status in international law, as well as sources of external political support. The international regimes that Taiwan has engaged on an “as if” basis are anchored by treaties that reflect or instantiate international legal norms, and Taiwan’s efforts to engage them have relied extensively on law-centered methods. Taiwan adjusted this long-standing strategy after Tsai and the Democratic Progressive Party (DPP) succeeded Ma Ying-jeou and the 171

172 Jacques deLisle Kuomintang (KMT). The relatively modest changes partly reflected the preferences and priorities of a new government led by a different party. But Taiwan under Tsai and the DPP also faced a changing external environment, primarily shaped by Beijing and Washington, that has raised the stakes and increased the challenges for Taiwan. Challenging Environments: China and the United States Two elections in 2016 led to a more problematic context for Taiwan’s pursuit of international status and standing through engaging international institutions and regimes. Victories by Tsai and the DPP in Taiwan’s presidential and legislative elections prompted a harder line from Beijing, compared to the preceding eight years. Donald Trump’s election in the United States introduced near-term volatility, longer-term uncertainty, and a generally fraught quality to Washington’s policies toward Taiwan, China, and East Asia, and also sowed doubts about whether the United States would hew to traditional positions that had been generally favorable to Taiwan and stability in cross-Strait relations. Beijing’s Reaction to Tsai

The People’s Republic of China (PRC) remains the principal gatekeeper to Taiwan’s formal or meaningful participation in the international system, and the biggest threat to Taiwan’s security. Beijing reacted negatively to Tsai’s refusal to meet its requirement that Tsai accept, as Ma had, the “1992 Consensus” and the “one China” principle. Tsai offered assurances that her government would pursue continuity in policies toward the mainland. Echoing themes from her campaign, Tsai affirmed this position in the singularly high-profile and, on cross-Strait policy, traditionally significant occasion of her inaugural address. She committed to “maintain peace and stability in cross-Strait relations.” She acknowledged the “historical fact” of the 1992 meeting in Hong Kong that, retroactively, provided the basis for the 1992 Consensus, and pledged that she would respect the “existing realities” of “over twenty years of interactions and negotiations” and the “accumulated outcomes” they had produced in cross-Strait relations. Tsai stated that the basis for her mainland policy would be the Republic of China (ROC) constitution (or the broader constitutional order) and the articles governing relations between the people of Taiwan and the mainland—two legal texts that were arguably consistent with some version of “one China.”1 In office, Tsai largely reprised and extended these themes, notwithstanding rebuffs from Beijing. For example, in her October 2017 National

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Day speech, she vowed to continue “goodwill” toward Beijing and not to “revert to the old path of confrontation,” calling this her “consistent position on cross-Strait relations.” At a symposium on three decades of crossStrait relations, held soon after the nineteenth national congress of the Chinese Communist Party (CCP) and the somewhat toughened tone on Taiwan adopted in Xi’s address, Tsai described the DPP as having sought progress in cross-Strait relations since Chen Shui-bian’s presidency, reiterated her government’s support for peace, stability, and development in cross-Strait ties, pledged continued goodwill toward the mainland and no return to confrontation, and characterized the CCP congress as an opportunity for both sides to embrace harmony and moderation and to pursue a breakthrough in relations.2 In responding to Xi’s January 2019 “Message to Taiwan Compatriots” speech and its sharpened insistence that reunification with Taiwan would follow the “one country, two systems” model (first adopted for Hong Kong and deeply unpopular in Taiwan), Tsai insisted that during her presidency Taiwan was “actively contributing to cross-Strait . . . peace and stability” and that Taiwan “did not provoke” and had not “abandoned [its] fundamental position and commitments regarding cross-Strait relations.”3 For Beijing, this was not enough. The PRC’s Taiwan Affairs Office dismissed Tsai’s inaugural address as an “incomplete test paper.”4 She had not retained Ma’s embrace of the 1992 Consensus and the related notion of “one China, respective interpretations.” PRC sources regularly stressed that these positions were the indispensable foundation for cross-Strait ties and that Tsai’s refusal to accept them meant—in a phrase favored by Xi—that “the earth will move and the mountains will shake.”5 Cross-Strait relations fell into what has been characterized as a “cold peace” or “cold confrontation.”6 Chinese sources spoke increasingly of concerns about “soft” or “creeping” or “cultural” independence, and “de-Sinicization” in Taiwan under Tsai.7 Politburo Standing Committee member Yu Zhengsheng warned in early 2017 of an “even more complex and grim” relationship ahead.8 Statements by Xi, including in his high-profile speech to the nineteenth CCP congress, reiterated the mantra that China would not allow anyone to split Taiwan from China in any form (and, in some iterations, any name). Such language echoed the 2005 Anti-Secession Law that China had adopted in response to what it regarded as unacceptably pro-independence moves by Taiwan’s previous president from the DPP, Chen Shui-bian.9 What had become customary references to pursuing unification with the support of the people in Taiwan, and offering benefits to them, were absent from Xi’s nineteenth CCP congress address.10 Taiwan’s Mainland Affairs Council characterized Xi’s comments as “regrettable” and reflecting a lack of appreciation that his insistence on

174 Jacques deLisle the “one country, two systems” policy and the “one China” principle would alienate the people of Taiwan.11 The fallout from Taiwan’s local elections in November 2018, and dueling speeches by Tsai and Xi in January 2019, reprised and extended this pattern. A Taiwan Affairs Office spokesperson cast the DPP’s electoral setback as reflecting “the strong wishes of Taiwan’s general public” to continue “the benefits of peaceful developments” in cross-Strait relations (rather than follow the path taken by Tsai and the DPP).12 In his 2019 “Message to Taiwan Compatriots” speech, Xi again underscored Beijing’s insistence “on the common political basis of adhering to the ‘1992 Consensus’ and opposing ‘Taiwan independence’” as preconditions for any Taiwan-side participation in his vague proposal for “extensive and in-depth democratic consultations” concerning the promotion of “peaceful development of cross-Strait relations” and more pointedly pressed “one country, two systems” as the basis for reunification.13 Tsai’s response characterized Taiwan’s election results as “absolutely . . . not mean[ing] that grassroots public opinion in Taiwan favors abandoning our sovereignty . . . or want[ing] to make concessions regarding Taiwanese identity,” and reiterated that “Taiwan absolutely will not accept ‘one country, two systems,’” which Tsai characterized as Beijing’s “definition” of the 1992 Consensus.14 Not every signal from Beijing was newly and strikingly unaccommodating. Much of the language and content concerning Taiwan in Xi’s nineteenth CCP congress and “Message to Taiwan Compatriots” speeches were familiar. Long-standing warnings against overt or subtle secessionist moves were coupled with familiar expressions of confidence that progress toward peaceful reunification could be achieved.15 Some mainland sources suggested that Beijing might be satisfied with a framework for cross-Strait relations that was in substance consistent with the 1992 Consensus and the “one China” principle even if the Taiwan side did not adopt the specific terminology.16 Older phraseology such as “the Mainland and Taiwan belong to one China” or a “one China framework” persisted in comments from PRC sources.17 Still, overall, Beijing’s policy became more hard-edged toward Taiwan under Tsai. Beijing accompanied its toughened rhetoric and policy pronouncements with concrete actions that implemented a toughened line. Beijing suspended exchanges between Taiwan’s Straits Exchange Foundation and Beijing’s Association for Relations Across the Taiwan Strait—the “official unofficial” organs for cross-Strait negotiations that had been revived during Ma’s tenure and played a central role in crossStrait rapprochement from 2008 to 2016. Beijing froze the nascent government-to-government contacts that had begun late in Ma’s tenure,

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including between the Taiwan Affairs Office and Mainland Affairs Council—the two sides’ major government organs for cross-Strait issues. Beijing called a halt to discussions on additional follow-on agreements to the 2008 Economic Cooperation Framework Agreement, which had been a major component of rapidly advancing cross-Strait ties under Ma (and, in the case of the Cross-Strait Trade in Services Agreement, a source of controversy and the Sunflower Movement mass protests in Taiwan). China explicitly linked the suspensions to Tsai’s refusal to endorse the 1992 Consensus and the “one China” principle.18 Beijing plied economic levers with, for example, group tourism from the mainland falling sharply, and Chinese tourists who did travel to Taiwan reportedly being steered toward KMT-supporting regions.19 China took more assertive measures with its military, sending the aircraft carrier Liaoning and ancillary ships on missions through the Taiwan Strait,20 dispatching military aircraft to circle Taiwan,21 announcing medium-range missiles targeting Taiwan,22 and activating a new civilian aircraft flight path closer to the median line in the Taiwan Strait.23 Overall, PRC pressure on Taiwan’s international participation and status increased significantly, creating a more difficult external environment for Taiwan under Tsai. Beijing’s moves included multifaceted efforts to restrict Taiwan’s participation in international institutions, which are the focus of later sections of this chapter. Developments in the United States added to the challenges Taiwan faced from Beijing. Early in Tsai’s presidency, Beijing reacted sharply to the prospect that Washington might encourage Taiwan’s apostasy and depart from its own “one China” policy. When president-elect Donald Trump took Tsai’s congratulatory telephone call in December 2016 and suggested that the “one China” policy of the United States might be up for reconsideration, Beijing’s responses ranged from blaming Tsai for tricking a naive new US leader to warning of dire consequences for US-China relations if Trump did not reaffirm established US policy.24 The United States Under Trump

As Tsai’s government encountered new difficulties from Beijing, Washington’s positions became more unsettled and uncertain. As a candidate, Trump had suggested that US allies in East Asia—including Korea and Japan—would have to cooperate more or fend for themselves. Such language was a cause for concern in Taiwan.25 After all, the US security relationship with Taiwan has been less robust than with fullfledged allies ever since the United States terminated a mutual defense pact with Taiwan upon normalization of US-PRC relations in 1979. For

176 Jacques deLisle years, the Taiwan policy of the United States has been beset by occasional calls from policy intellectuals to “abandon Taiwan” in the service of larger US strategic interests.26 Trump’s win was followed by strikingly mixed signals. Some seemed to promise enhanced support: the December 2016 phone call between the US president-elect and Taiwan’s president (unique in the post-de-recognition era), Trump’s initially prickly reaction to Beijing’s criticism of the call (tweeting that China had no business telling him what to do, given that China did not “ask us if it was ok to devalue their currency . . . heavily tax our products . . . or . . . build a massive military complex in the South China Sea”),27 and his statements that the “one China” policy of the United States might be up for reconsideration (telling Fox News that “I don’t know why we have to be bound by a ‘one China’ policy unless we make a deal with China having to do with other things, including trade” and saying to the Wall Street Journal that “everything is under negotiation, including One China”).28 Early moves with Trump in office undercut any expectations for major policy shifts benefiting Taiwan: Trump’s reassurance in a postinauguration call with Xi that the “one China” policy would remain unchanged, Trump’s reported rebuff of a proposed second call from Tsai, his promise to Xi at Mar-a-Lago that he would consult Beijing before speaking with Taiwan’s leader, Secretary of State Rex Tillerson’s adoption of his Chinese hosts’ preferred Taiwan-related language of “mutual respect” for “core interests,” and the new administration’s eager pursuit of Beijing’s cooperation on North Korea.29 In Taiwan, fears grew that Taiwan might be used as a bargaining chip in the US government’s dealings with Beijing.30 When Trump set out on a trip to Asia in November 2017, officials and policy analysts in Taipei worried about possible adverse consequences for Taiwan.31 Other developments in US Taiwan policy after Trump came to power—ranging from statements by high-level officials, to arms sales, to legislation—are addressed later in this chapter in the context of Taiwan’s seeking to sustain and enhance informal relations with the United States. Overall, Trump-era developments pointed to relatively strong US support for Taiwan, but with significant caveats. The possible fragility and potential volatility of Trump foreign policy commitments, and Trump’s transactional approach to foreign relations, extend to Taiwan policy, and broader contexts of US policy and foreign relations shifted under Trump in ways that create or threaten adversity for Taiwan. Among the issues giving rise to the second of this pair of concerns, US-China relations oscillated, and generally deteriorated, in ways that portended challenges—albeit along with some possible opportunities—for Taiwan. The Trump administration—following the

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Trump campaign—sent signals on China policy that fluctuated and generally spiraled downward: highly positive accounts of meetings and the relationship between the two countries’ leaders, alternating praise and condemnation of China’s cooperation and lack of cooperation on North Korea, a National Security Strategy that depicted China as a threat and rival on almost every front, a speech by Vice President Mike Pence that condemned China across a vast range of issues (including economic policies at home and practices abroad, human rights violations, assertive behavior in the South China Sea, and nefarious attempts to influence US politics and elections), a notable drop in Washington’s criticism of shortcomings or deterioration in China’s record on human rights and political reform (including Trump’s admiration for Xi’s move to remain in power beyond the customary and constitutional limit of ten years), escalating tensions over trade and other aspects of economic relations (including investment restrictions, intellectual property protection, and high-tech industrial policy) that were the focal points of an emerging trade war, and a deepening entanglement between economic and security concerns (most prominently in the form of the Trump administration’s moves to exclude the Chinese firm Huawei from 5G network building and US government procurement).32 All of this occurred against the background of a collapse of the former pro-engagement consensus among experts and interest groups that long have been influential in shaping US China policy. Trump administration policy toward the wider region has been more mixed and complex, with correspondingly complicated implications for Taiwan. Trump’s oft-proclaimed “America First” foreign policy raised concerns in East Asia by suggesting that even treaty allies such as Japan and South Korea might have to rely more on self-help, or that Washington’s security commitments might be contingent on concessions on economic issues (especially in the case of South Korea), or that the United States was no longer prepared to bear its post–World War II burden of providing international public goods for the region. Meanwhile, senior foreign policy and national security officials made repeated and concerted efforts to reassure regional friends and allies of Washington’s continued commitment—an approach that was rattled by Secretary of Defense James Mattis’s biting resignation in late 2018.33 Rising and falling tensions between the United States and North Korea roiled assessments of whether the United States would retreat from its traditional security roles, all the more so given the juxtaposition of a seemingly close relationship between Trump and Japanese prime minister Abe Shinzo (who favored a relatively hard line toward North Korea) and notable divergence in views of how to deal with Pyongyang between Washington (where Trump swung between threats of “fire and fury” and visions of a Nobel Peace Prize for securing peace and

178 Jacques deLisle denuclearization on the peninsula) and Seoul (under the engagementoriented regime of President Moon Jae-in). The Trump administration was relatively unambiguous in its hostility toward trade agreements and other foundations of US economic engagement with East Asia that are generally and plausibly seen as underpinning Washington’s security commitments. Taiwan has been excluded, largely due to Beijing’s opposition, from free trade agreements in the region, and from the first round of the once-US-led TransPacific Partnership (TPP). Nonetheless, the prospect of the United States turning away from institutionally robust and generally liberal engagement with the major economies of East Asia was an unwelcome development for Taiwan, economically and politically. Trump’s general views on trade policy pointed to possible trouble for Taiwan, which, like Korea and Japan, runs a surplus with the United States that is relatively large as a percentage of bilateral trade.34 US foreign policy under Trump also de-emphasized democracy, human rights, and related “values” issues that have been an enduring, if unevenly pursued, core component of Washington’s diplomacy for decades.35 This shift threatened to weaken one of Taiwan’s strong points in drawing support from the United States. In this varied and shifting pattern of US foreign policy and foreign relations, there is much that points to continuity and stability of the US factor in Taiwan’s international environment. Washington had greeted the prospect of Tsai’s 2016 victory with much greater equanimity than it had her 2012 candidacy.36 The US assessment of Beijing’s reactions to Tsai assigned blame primarily to Beijing for the downturn in crossStrait relations, implying significant continuity of a supportive US policy.37 The Tsai government’s representative in Washington echoed thenpresident Ma’s earlier assessment of US-Taiwan relations as being the best they had been since the United States normalized relations with the PRC in 1979.38 Although Tsai’s reelection was far from certain, several of the plausible outcomes of the 2020 presidential election in Taiwan seemed unlikely to upset Washington’s basic assessment of relations with Taiwan. So, too, Trump’s reelection or victory by any of the foreseeable Democratic Party presidential candidates appeared unlikely to herald significant change in perspective on the United States side (beyond what had already occurred under Trump). Still, the downsides are significant and likely enduring. Even impressively good US-Taiwan relations under Tsai and Trump are unlikely to surpass the halcyon days of the Ma and Obama administrations (and especially their first terms), when Washington was relieved to move past the troubled bilateral relations of the Chen years and generally welcomed a much-improved cross-Strait relationship. Trump-driven

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instability may unsettle positive elements in the US-shaped aspects of Taiwan’s external environment, and confidence in their stability. Some changes in US foreign policy that are potentially threatening to Taiwan’s security and stature may reflect trends for which Trump is not a possibly fleeting cause but rather a symptom of durable trends. Confidence among Taiwan and other US friends and allies in Washington’s reliability, once shaken, may not be so easily restored—especially absent concerted and sustained efforts to do so. Some of the changes most relevant to Taiwan occurred in the context of a US-China relationship that had for several years been trending toward greater friction and suspicion, and less cooperation and confidence. All of this took place against the backdrop of the relative decline of the United States in international power and influence (most significantly relative to China) and the related legacy of hegemonic overstretch (the reaction to which already was perceptible in the Obama administration’s more modest conception of US unilateral power, before it morphed into neo-isolationism and transactional foreign policy under Trump). In this newly difficult external setting, it became all the more important for Tsai’s government to tend assiduously to the alwaysfraught work of protecting and enhancing Taiwan’s international status and, in turn, its security. Like under its predecessors, Taiwan under Tsai took several distinct but related paths. The United Nations and Other Major International Organizations Participation in major, established international organizations long has been a key element in Taiwan’s pursuit of international status, and remained so under Tsai. A uniquely prominent target has been the United Nations (UN) and affiliated organizations. Because the UN remains the preeminent international organization and is often described (especially by Beijing) as a “states member only” institution, observer status or “meaningful participation” in the UN and its specialized organizations offers especially strong validation of Taiwan’s international status. The UN itself has been beyond reach. The KMT regime under Chiang Kai-shek suffered one of the biggest setbacks for Taiwan’s international stature when the UN General Assembly adopted Resolution 2758 in 1971, reassigning the “Chinese seat” at the UN from Taipei to Beijing. 39 Under Lee Teng-hui and Chen Shui-bian, Taiwan sought to regain a presence in the UN. This often took the form of resolutions, introduced by Taiwan’s diplomatic partners, calling for some form of representation. The most notorious effort was an unsuccessful

180 Jacques deLisle referendum, held in Taiwan in 2008, on the question of seeking UN membership under the name “Taiwan.” Doubtless recognizing the futility of resuming the long-failed and sometimes-costly targeting of the UN itself, Ma discontinued such efforts. Although seeking greater, if still peripheral, engagement, Tsai’s administration adopted a similar policy of not actively seeking UN membership, despite criticism from some traditional DPP supporters.40 UN Specialized Organizations

Taiwan under Tsai sought to preserve and advance the limited progress achieved under Ma in participating in UN-affiliated specialized organs and similar bodies. Tsai identified priorities that resembled her predecessor’s: the World Health Assembly (WHA), the International Civil Aviation Organization (ICAO), and the International Criminal Police Organization (Interpol, which, unlike the others, is not a UN specialized organ).41 Following China’s mishandling of the severe acute respiratory syndrome (SARS) crisis and the threats thereby posed to public health in Taiwan and around the world, Taiwan garnered sufficient international support to secure participation in the annual meeting of the WHA, the plenary body for the World Health Organization (WHO). From 2009 through 2016, Taiwan’s representatives received invitations to attend the annual gathering, albeit under limiting conditions: exclusion from formal participation in the functionally more significant WHO; attendance at the WHA on an ad hoc, annually renewable basis; and participation under the status-undermining name “Chinese Taipei” and under the shadow of a not-formally-released WHO internal memorandum that accepted a “one China” principle.42 Amid Beijing’s resurgent opposition, Taiwan’s eight-year run of participation in the WHA ended in 2017. Taiwan was able to participate in the first WHA session after Tsai took office. But the invitation had been sent, as protocol required, to the minister of health and welfare of the outgoing Ma administration, even though the WHA meeting would occur after Tsai’s inauguration and would be attended by the new government’s representatives. While Beijing thus could accept Taiwan’s participation without having to acquiesce in an invitation to Tsai’s government, the precariousness of Taiwan’s access was clear: the 2016 invitation came later than usual; in addition to retaining the “Chinese Taipei” nomenclature, it included specific references to UN General Assembly Resolution 2758 and the parallel WHO Resolution 25.1; and the WHO’s director-general issued an especially pointed affirmation of the “one China” principle. In seeking continued participation, Tsai’s government invoked arguments that evoked claims to statelike international stature, citing the

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WHO’s principle of nondiscrimination, casting Taiwan’s exclusion as a violation of the WHO’s constitution and Taiwan’s right to “equal treatment,” and characterizing Taiwan as an “integral part of the global disease prevention system.”43 Nonetheless, when time came for the 2017 WHA session, China’s opposition—anchored in Beijing’s insistence that Taiwan’s acceptance of the 1992 Consensus was a precondition for Taiwan’s attendance—meant that no invitation was forthcoming. Taiwan’s WHA participation showed little prospect for near-term revival despite support from Taiwan’s diplomatic partners and supportive major powers.44 Taiwan’s pursuit of engagement with another UN specialized organization, the ICAO, has followed a broadly similar, if less dramatic, arc. Amid Ma-era cross-Strait rapprochement in 2013, Beijing tolerated an invitation for Taiwan to attend the ICAO’s triennial assembly—the rough equivalent of the WHA in the WHO system. The terms of Taiwan’s participation were contingent and constrained: Taiwan was a “special guest” of the ICAO Council’s president and attended under the name “Chinese Taipei.”45 With Tsai in office, Taiwan’s invitation was not renewed in September 2016.46 In early 2018, Beijing took another step to squeeze Taiwan’s international space in civil aviation and underscore Taiwan’s weak position with the ICAO. Eschewing the bilateral negotiations that had preceded opening and revision of civilian air routes over the Strait during the preceding eight years, Beijing announced—in Taiwan’s assessment, in violation of ICAO consultation requirements—that it would initiate a northbound flight path that was closer to the median line, and to Taiwan’s security-sensitive airspace, than the bilaterally approved and already operational southbound path.47 Taiwan’s pursuit of engagement with the UN Framework Convention on Climate Change and its Conference of Parties—a topic specifically addressed in Tsai’s inaugural speech—made some very modest headway but was largely frustrated. Taiwan’s bids to participate in the conference drew support from Taiwan’s diplomatic allies and others but were rebuffed once they began in earnest early in the Ma administration. With the Paris Accords on climate change reached in late 2016, Taiwan’s prospective participation in the Conference of Parties process became more valuable—in terms of implications for Taiwan’s international stature—and Taiwan’s exclusion became correspondingly more damaging. Although Taiwan’s Environmental Protection Agency chiefs were denied access to Conference of Parties meetings, Taiwan maintained limited engagement into the Tsai era, for example by sending technical delegations to join in side events at the conference meetings each year.48 Tsai—like Ma before her—identified engagement with Interpol as a priority. But Interpol, too, remained closed amid rising stakes for Taiwan.

182 Jacques deLisle The ROC had been a member from 1964 until its ouster in connection with the PRC’s entry in 1984. In late 2016 and annually thereafter, Taiwan’s bid to attend the Interpol General Assembly was rejected despite support for Taiwan’s participation from diplomatic partners, the United States, and others.49 The expected snubs became more freighted with implications for Taiwan’s international stature because of other PRCdriven developments. Among Interpol’s key roles is to facilitate apprehension and return of fugitive criminal suspects abroad. During Tsai’s first two and a half years in office, several states—including Malaysia, Cambodia, Kenya, the Philippines, Armenia, and Spain—acceded to Beijing’s requests to repatriate to the PRC hundreds of Taiwanese accused of crimes. Therein lay an especially pointed, if implicit, rebuke to Taiwan’s claims to statelike status.50 International Economic Organizations

Under Tsai and the DPP, Taiwan continued to be relatively successful in preserving relatively high levels of participation in major international organizations focused on economic affairs. Taiwan’s place as a full member of the World Trade Organization (WTO)—achieved at the beginning of the 2000s as part of a package deal with the PRC’s entry— was particularly important, given the WTO’s status as the foremost institution of the international economic order. Taiwan’s place remained secure despite Beijing’s broadly mounting pressure on Taiwan’s international space and Taiwan’s having had to accept the unwieldy and statuscorrosive moniker “Separate Customs Territory of Taiwan, Jinmen, Penghu, and Matsu (Chinese Taipei).” Under Tsai, Taiwan took a step to enhance its stature at the WTO by giving up “developing economy” status and related benefits under international trade law, thereby underscoring Taiwan’s differentiation from the PRC and Taiwan’s commitment to play by the letter and spirit of WTO rules (which Beijing was widely accused of violating).51 Somewhat perversely, the stature-related benefits of WTO membership might have become more secure and significant because of Beijing’s hardened stance toward Tsai’s Taiwan. With progress on further Economic Cooperation Framework Agreement follow-on agreements stalled, a large portion of Taiwan’s trade and economic relations conducted with the mainland remained directly subject to the WTO’s rules and dispute resolution procedures, rather than bilateral cross-Strait arrangements that Beijing characterizes as not having a truly international legal character. The US opt-out from the Trans-Pacific Partnership and the pressure that Beijing exerted (with increased zeal after Tsai came to power) against regional states’ making free trade agreements

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with Taiwan further reinforced the central role of the WTO in Taiwan’s trade relations. During Tsai’s presidency, Taiwan has maintained its place in the Asian Development Bank (ADB) and the Asia Pacific Economic Cooperation (APEC) grouping. Here, too, however, Taiwan faced persistent limitations. At APEC (which Taiwan joined alongside China and Hong Kong in 1991), Taiwan’s president cannot attend and must send surrogates— usually former senior political leaders (and tech-sector magnate Morris Chang in 2018)—to represent “Chinese Taipei.” In the ADB (which the ROC joined as a founding member in 1966 and which the PRC entered in 1986), Taiwan retains membership but is required to use another international-status-challenging name, “Taipei, China.” The Beijing-led and Taiwan-excluding Asian Infrastructure Investment Bank may reduce the international importance of the ADB and, in turn, the stature-conferring benefits of ADB membership for Taiwan. Patterns of Participation

The period following Tsai’s and the DPP’s victory, and Beijing’s reaction to it, saw broad continuity in long-standing patterns of relative success and failure in Taiwan’s engaging major, established international institutions, but with significant setbacks in some areas. Taiwan continued to fare relatively well with institutions where membership is not limited to states (as in the WTO, APEC, or the ADB) or where Taiwan has held membership since before the PRC joined (as in the ADB and APEC) or where the subject-matter focus of the organization is relatively narrowly economic (and thus less redolent of issues of sovereignty, especially territorial sovereignty). During Tsai’s presidency, Beijing’s stiffening opposition has caused Taiwan to lose ground at institutions where it previously had participated in limited ways. Taiwan previously had gained footholds, or toeholds, in institutions where the subject matter was not “high politics” or closely sovereignty-related (for example, transportation safety in the ICAO, public health in the WHA, economic affairs in the WTO), or where Taiwan could argue persuasively that its inclusion was crucial to the regime’s effectiveness (for example, the ICAO, the WHA after SARS, and the WTO and regional economic organizations), or—less reliably—where Taiwan could assert convincingly that its vital interests would be especially imperiled by exclusion (for example, the WHA after SARS, the UN Framework Convention on Climate Change and, perhaps, the ICAO, as well as the WTO). Wherever Taiwan had not achieved—or earlier had lost—full membership, its modest gains proved more vulnerable to Beijing’s increased resistance and growing pressure.

184 Jacques deLisle Emerging International Regimes Under Tsai, Taiwan has continued prior efforts to gain membership in newly emerging international institutions that offered some prospect of stabilizing or strengthening Taiwan’s international stature. A few large-scale economic pacts were important foci. During her preelection trip to Washington, in her inaugural address, and in other contexts, Tsai identified joining the US-led Trans-Pacific Partnership as a goal to be pursued when the mega-regional trade-plus deal opened for a second round of accession. 52 Taiwan indicated possible interest in joining the PRC-led mega-regional agreement, the Regional Comprehensive Economic Partnership (RCEP). 53 Tsai continued Taiwan’s engagement with the APEC-centered, but still merely notional, Free Trade Area of the Asia-Pacific (FTAAP), which someday could dwarf and subsume the TPP and the RCEP.54 Access to these new entities was salient, and increasingly so, for Taiwan’s pursuit of international status. With the stalling of the Doha Round of WTO negotiations and the rise of regional and mega-regional trade and investment pacts, the WTO’s position as the predominant institution of the international economic order eroded and its value to Taiwan (in terms of international stature) declined correspondingly. As a bilateral accord that Beijing regards as not being international in nature, the Economic Cooperation Framework Agreement is problematic for Taiwan’s international standing, all the more so as Beijing’s policies toward Taiwan toughened and Taiwan’s concerns grew about the political consequences of accelerating economic dependence on China due to the agreement. In this context, the TPP, RCEP, and FTAAP could be useful means for safeguarding or advancing Taiwan’s international standing through participation in multilateral economic institutions. Here, too, however, Taiwan’s strategy faces limited prospects. The TPP, RCEP, and FTAAP are, for now, closed to Taiwan and, even if they were open, they are less robust as international organizations—and thus less potent as means to affirm or enhance Taiwan’s international status. The likelihood, and status-related value to Taiwan, of joining the TPP dropped considerably as the probability of US entry declined, first amid congressional opposition to the agreement that the Obama administration had negotiated, and then with Trump’s announcement that the United States would abandon the pact. Although Tsai’s government embraced the Comprehensive and Progressive Agreement for TransPacific Partnership (CPTPP) (which includes the original TPP members minus the United States), chances for Taiwan to join the smaller-scale (and thus less stature-boosting) accord are relatively dim, not least because of the absence of the United States as a participant and poten-

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tial supporter of Taiwan.55 Beijing, of course, is the gatekeeper for Taiwan’s entry into the RCEP, and the door therefore remains firmly shut, absent a broader thaw in Beijing’s policies toward Taiwan. Several related developments contributed to an unfavorable external context for Taiwan and its pursuit of international space-securing and statusenhancing engagement with international economic institutions. These include the rise of PRC-led institutions, including the Asian Infrastructure Investment Bank (AIIB) and the New Development Bank; Xi’s claiming for China the mantle of principal supporter of economic globalization (in the wake of the Trump-driven retreat of the United States); the Obama administration’s failed efforts to support the TPP and oppose the AIIB; and the Trump administration’s withdrawal of US support for economic multilateralism in favor of an “America First” policy and bilateral trade deals. Formal Diplomatic Relations Under Tsai, Taiwan has continued to strive to maintain formal ties with a small number of small states. Taipei’s diplomatic partners lack geopolitical and economic heft, and the relationships can be a financial burden, and occasional political embarrassment, for Taiwan. Nonetheless, preserving these ties matters for Taiwan’s international status and security because the capacity to engage in international relations—especially formal diplomatic relations with the governments of states—is a key criterion for statehood in international law and, in turn, stature in international relations.56 Tsai undertook traditional ROC presidential visits to the ROC’s remaining diplomatic partners. Just weeks into her presidency, Tsai went to Panama, which was an especially significant mission for Taiwan’s claim to international status in that Tsai joined several heads of state at ceremonies (to which Xi Jinping had been invited but did not attend) celebrating the expansion of the Panama Canal and signed a guest book as “President of Taiwan (ROC).” In early 2017, she traveled to Nicaragua, where she again joined heads of state at the inauguration of the host country’s president. Tsai also made more routine visits to other states that maintain formal relations with the ROC.57 Such presidential journeys present Taiwan and its president as normal and equal participants in international relations. The visits—along with foreign aid and economic missions—also seek to avoid further shrinkage of Taiwan’s dwindling cohort of diplomatic allies. Changes in Beijing’s policies made maintaining Taiwan’s formal ties more difficult once Tsai and the DPP took power. Throughout Ma’s presidency, the PRC had tacitly agreed to a “diplomatic truce.” With the

186 Jacques deLisle “truce” in place, none of the ROC’s then-remaining twenty-three partners established formal relations with the PRC.58 After Tsai’s election, however, Beijing began to encourage, or at least accept, realignments. Gambia, which had severed formal ties with Taipei in 2013, established diplomatic relations with Beijing in March 2016.59 In December 2016, São Tomé and Príncipe switched from Taipei to Beijing.60 In June 2017, Panama was the next loss, and a particularly significant one because of Panama’s relative size among Taiwan’s dwindling cohort of partners.61 In April 2018, the Dominican Republic became the next to go, dropping the number of countries maintaining formal relations with the ROC below twenty.62 Burkina Faso—Taiwan’s second-to-last partner in Africa—and El Salvador followed in May and August 2018.63 Concern grew that Beijing’s next target would be the Vatican, where China has leverage because millions of Chinese Catholics could benefit from improved bilateral relations. Pope Francis signaled interest in arrangements with Beijing that would address long-running discord over the roles of the Vatican and Chinese authorities in appointing bishops in China.64 Faced with these worries, Tsai’s government moved to shore up relations with the Holy See through vice presidential visits, official assurances that relations were strong, publicity for a new bilateral agreement (on money laundering), and an invitation to Pope Francis to visit Taiwan.65 Losing the Vatican would be an especially notable blow to the diplomatic relations–based element of Taiwan’s claim to international status. The pope’s role as spiritual leader of more than 1 billion Catholics gives the Vatican international political impact far beyond its tiny size. Taiwan’s formal ties with the Vatican also resonate with a significant component (religious liberty) of international human rights—an area where Taiwan’s accomplishments at home and advocacy abroad are important themes in Taiwan’s quest for international stature. Losing the Vatican also would cost Taiwan its last diplomatic partner in Europe and outside the developing world. Although relying on formal diplomatic relations to support Taiwan’s international standing thus became more challenging after Tsai took office, there may be limits to Beijing’s efforts to scuttle Taiwan’s remaining partnerships. Beijing’s moves to pressure or punish Tsai and Taiwan by inducing or allowing switches by a few to several more governments would be bad, but not disastrous, for Taiwan. On the one hand, despite recent losses, Taiwan is not at some “magic number”—some minimum tally—of governments maintaining formal relations with the ROC such that the loss of one, or even a few, more fatally undermines this element of Taiwan’s claim to statelike stature. On the other hand, Beijing should recognize that squeezing Taipei too hard—reducing its diplomatic partners to zero or near zero—could be counterproductive

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because it would be seen, plausibly and rightly, as a serious threat to Taiwan’s security in an international order where the capacity to engage in formal international relations matters, legally and politically. Thus cornered, Taiwan might push back in any of several ways that would not serve Beijing’s interests, including by simply switching to a strategy— one consistent with international law and international political reality— that drops a focus on diplomatic ties in favor of stressing Taiwan’s impressively broad and deep informal relations with many countries. Informal Bilateral Relations Sustaining and building strong informal relations—in the absence of formal diplomatic ties—with other states, especially major powers, is another venerable and valuable pursuit for Taiwan that Tsai’s government has continued. The capacity to engage in international relations that matters for state and statelike status in international law and politics extends to informal or de facto relations, an area where Taiwan has enjoyed significant success. More diffusely but more important, having wide-ranging and positive relationships with powerful states is, obviously, an important source of stature and security for an embattled and contested entity such as Taiwan. The United States

For Taiwan, the most important of these informal relationships is with the United States. US policy toward Taiwan and support for Taiwan have been relatively stable and strong for decades, with occasional if alarming exceptions triggered primarily by Taiwanese leaders’ moves at the end and near the middle of Chen’s presidency and, to a lesser extent, during the latter part of Lee’s presidency.66 Tsai inherited from Ma a notably positive relationship with Washington and sought to preserve it. Tsai’s stance on cross-Strait relations— emphasizing peace, stability, and continuity—was well received in Washington.67 Indeed, some critics in Taiwan argued that Tsai was placing too much emphasis on close ties with Washington, to the detriment of the cross-Strait relationship that Ma had cultivated.68 Tsai extended familiar strategies to foster positive US-Taiwan relations. She offered repeated assurances of stability in cross-Strait policy and promised to forego provocative moves. She touted Taiwan’s record of democracy and human rights in interviews with US media, playing to the values that have helped underpin bilateral relations following Taiwan’s transition to democracy in the late 1980s and 1990s.

188 Jacques deLisle Despite the challenging environment created by Trump-era policy, Taiwan achieved notable, stature-supporting successes in preserving or strengthening informal relations with the United States, which Tsai herself described as going from strength to strength.69 US senior diplomats and official statements regularly spoke positively of Tsai, Taiwan, and bilateral relations. For example, American Institute in Taiwan (AIT) chairman James Moriarty described Tsai as pragmatic and innovative in her approach to Beijing and placed the burden of improving cross-Strait relations on Beijing.70 When Panama shifted diplomatic relations, official US statements urged both Taipei and Beijing to pursue constructive dialogue and creative, flexible, and patient approaches.71 More strikingly, when El Salvador switched ties, the United States took the extraordinary step of recalling to Washington for consultations the US ambassadors to the three Latin American states that had most recently severed relations with Taipei.72 Sharing a platform with Tsai in Taipei, Deputy Assistant Secretary of State Alex Wong declared the US-Taiwan relationship to be “stable” and “secure.”73 The Trump administration continued to allow Tsai the long-customary transit stops in the United States, and the opportunities they provide for meeting with prominent US politicians and giving speeches to public audiences.74 New and much grander consolidated facilities in Taipei for the AIT echoed US embassy openings in major world capitals, and could be seen as confirmation of Taiwan’s standing with Washington. Washington also signaled support for Taiwan in response to more specific provocations by Beijing. Following Xi’s “Message to Taiwan Compatriots” remarks at the beginning of 2019, a White House official called on Beijing to “stop its coercion” and “resume dialog” with Taiwan.75 In March 2019, the US ambassador-equivalent in Taipei Brent Chirstensen and Taiwan’s foreign minster Jospeh Wu announced plans for “Indo-Pacific Democratic Governance Consultations”—widely seen as a values-resonant response to Beijing’s growing pressure on Taiwan.76 After Chinese fighter jets crossed the median line in the Taiwan Strait the same month, the State Department condemned “Beijing’s effort to unilaterally alter the status quo” (tellingly echoing a phrase President Bush had used to rebuke Chen Shui-bian).77 In security matters, too, Taiwan maintained relatively strong informal standing with Washington. At the Shangri-la dialogue in 2017 and 2018, Secretary of Defense James Mattis reiterated the commitment of the United States to “working with Taiwan,” providing Taiwan Relations Act–based arms sales, and insisting on peaceful resolution of cross-Strait issues in a manner acceptable to “the people on both sides” of the Strait.78 The Trump administration announced substantial arms sales offers and a policy of more regular and routinized arms sales decisions.79

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A senior State Department official visiting Taipei assured Tsai and a Taiwanese audience that the US commitment to “bolster Taiwan’s ability to defend its democracy” had “never been stronger.”80 The US Navy stepped up Taiwan-related freedom of navigation operations, including at least two passages through the Taiwan Strait in early 2019.81 Unlike in the recent past, after Tsai and Trump came to power, Congress enacted laws that bolstered Taiwan’s stature in relations with the United States, much to Beijing’s chagrin. The National Defense Authorization Act, passed near the end of 2017, called on the president to consider reciprocal port calls by the US and ROC navies.82 The Taiwan Travel Act, adopted in early 2018, called upon the president to allow higher-level officials (up to the secretary level on the US side) to meet with their Taiwan counterparts in either country.83 Passed at the end of 2018, the Asia Reassurance Initiative Act declared that US policy is to uphold existing US commitments to Taiwan (and specifically and unusually listed the Reaganera “Six Assurances” alongside the boilerplate recitation of the Taiwan Relations Act and the three US-PRC joint communiqués), called upon the president to undertake arms transfers to counter threats to Taiwan from the PRC, and urged the president to implement the Taiwan Travel Act’s provisions on high-level official visits.84 These developments departed from the long-standing pattern of bills to enhance Taiwan’s standing or ties with the United States foundering during the legislative process. Not everything has gone well for Taiwan on issues that matter for international status in informal relations with Washington during the era of Tsai and Trump. The seemingly stature-boosting telephone call between Tsai and Trump proved to be a hollow, even pyrrhic, victory— one soon followed by the Trump administration’s discomfiting adoption of procedures and language more acceptable to Beijing. The concerns in Taiwan about becoming a bargaining chip, or collateral damage, in newly unsettled and uncertain US-China relations illustrated, and exacerbated, Taiwanese (and others’) perceptions that Taiwan’s international standing and security faced new potential threats. Laws calling for enhanced military and diplomatic contacts may not help Taiwan much because the US executive branch can choose not to exercise the statutory authority or follow Congress’s expressed policy preferences, or because the costs imposed by Beijing’s reaction (and Washington’s response to Beijing’s reaction) may outweigh Taiwan’s gains with Washington. More fundamentally, Taiwan under Tsai could rely on enduring underpinnings of bilateral relations that persisted despite the turmoil created by Trump’s erratic and status quo–rattling policies and that underpinned Taiwan’s notable if modest and somewhat fragmentary recent gains in bilateral relations. Much that is vital to US-Taiwan relations and supportive of Taiwan’s international stature and security

190 Jacques deLisle remained firmly in place: the Taiwan Relations Act, the three joint communiqués, the “one China” policy of the United States, recurring arms sales, and Washington’s long-standing practice of, in effect, sitting in judgment on the question of which side is at fault for a downturn in cross-Strait relations and exerting counterpressure in favor of the party the United States deems not to be at fault. In the context of Beijing’s cold-shoulder response to Tsai, the US answer to the question of which side was at fault was Beijing. Japan

Tsai identified Taiwan-Japan relations as a priority, with closer ties potentially helping Taiwan’s pursuit of international standing and security. Tsai could draw on a reputation of friendliness toward Japan enjoyed by the DPP and Tsai’s mentor, former president Lee Teng-hui. Tsai made a high-profile preelection visit to Japan, included Japan among the handful of countries mentioned by name in her inaugural speech, appointed senior DPP figures to key posts for Japan-Taiwan relations, received unprecedented congratulations on her election from Japanese prime minister Shinzo Abe, welcomed higher-level visits from Japan (including a vice minister), and persuaded Japan to rename its representative office in Taipei the “Japan-Taiwan Exchange Association”—a nomenclature that, while still short of the ordinary name for an embassy to the government of a foreign state, did imply a higher stature than the former “Interchange Association.”85 Here, too, there were limits to Taiwan’s gains and potential gains. Relations with the PRC remained a priority for Japan. When tensions between Japan and China wane—as they did early in Tsai’s tenure—it typically reinforces Tokyo’s inclination not to risk ties with Beijing by enhancing relations with Taipei. Taipei’s positions on the fraught issues of maritime and territorial disputes in the East China Sea remained in principle close to Beijing’s and, thus, a weak point in Japan-Taiwan relations. And in November 2018, Taiwanese voters passed a referendum to retain a ban on food from areas affected by the Fukushima nuclear disaster (even though many countries had dropped such prohibitions), thereby straining bilateral relations.86 “As If” Participation in UN-Based Treaty Regimes Taiwan’s pursuit of international status under Tsai has included engaging major international regimes that Taiwan is unable formally to join by acting “as if” Taiwan were a member. 87 Here, too, Tsai’s govern-

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ment extended an approach from earlier periods and pursued the strategy across several substantive areas. The legal regimes associated with the UN specialized agencies addressed earlier in this chapter include elements of this “as if” approach. The most striking examples, however, are to be found in Taiwan’s engagement with a few major, UNcentered treaty regimes, including those governing the law of the sea, international human rights law, and the emerging international law on climate change. Law of the Sea

Two months after Tsai became president, an international arbitration panel constituted under the United Nations Convention on the Law of the Sea (UNCLOS) announced a sweeping victory for the Philippines in a case initiated against China concerning the South China Sea three years earlier. The tribunal rejected several key PRC positions, including ones asserting geographically and jurisdictionally expansive rights over landforms and waters that were closely aligned with, and often had their roots in, arguments initially developed by the ROC before 1949, and still supported, albeit in less radical form, by Taiwan.88 Given the similarity between the ROC and PRC territorial and maritime claims, the Tsai administration’s response to the ruling was, unsurprisingly, critical of the tribunal’s interpretation and application of substantive law of the sea rules.89 Yet in response to the ruling and afterward, Taiwan’s position moved further from Beijing’s, extending a trend that had begun under Ma, and bringing Taiwan’s perspective more into line with mainstream views of international law (which, like the tribunal’s, rejected Beijing’s claims that it had capacious historic waters and historic title, and that the infamous U-shaped line might signify more than a claim to territorial sovereignty over enclosed landforms and maritime rights that could be derived therefrom by application of ordinary UNCLOS rules).90 Taiwan’s approach to the arbitration process also focused on Taiwan’s relationship to the UNCLOS regime and did so in terms that implicitly asserted Taiwan’s claim to robust international status. An amicus curiae brief by several of Taiwan’s most prominent international lawyers addressing the status of Itu Aba/Taiping Island (the largest landform in the disputed area and long controlled by Taiwan) as a maritime zone–anchoring island, and a shorter position paper issued by the ROC government, resembled (in the case of the amicus brief) submissions that a state party might make in an UNCLOS arbitration, or (in the case of the position paper) documents that the PRC issued in lieu of formal submissions in the proceedings after it refused to participate.91

192 Jacques deLisle Official statements from Taiwan rejecting the panel’s decision made process-based arguments that entailed claims to state or statelike status. Taiwan argued that the award was not binding on Taiwan because Taiwan had not been allowed to participate in a case that affected its legal interests as a claimant in the South China Sea. Taiwan objected to the tribunal’s referring to the ROC government as the “Taiwan Authority of China.”92 The broader context of Taiwan’s approach to the arbitration decision aligned with an “as if” approach to UNCLOS. In her inaugural address, Tsai addressed the South China Sea (and East China Sea) disputes, tellingly appending them to the customary presidential pledge to “safeguard the sovereignty of the Republic of China.” After the panel’s judgment, Tsai reaffirmed this stance on sovereignty. Such assertions implied that Taiwan’s government was the government of a state with the capacity to have sovereignty over territory. Tsai reprised Taiwan’s long-standing exhortation to all parties to address the maritime and other disputes within the framework of international law, including UNCLOS.93 The Tsai government’s call for disputants to ensure freedom of navigation and overflight in the contested region invoked key provisions of UNCLOS and attendant rights and obligations of state members of the regime. Taiwan pledged that it would uphold those obligations and exercise its rights in the South China Sea area lawfully. These positions entailed assertions that Taiwan was acting, and would act, as if it were a party to UNCLOS (or, at least, a bearer of the customary international legal rights and obligations reflected in UNCLOS and applicable to states in the international system). Tsai’s government called for the ROC to be included in multilateral mechanisms for resolving the disputes peacefully in accordance with international law, promoting joint development, and addressing fishing rights—positions that implicitly asserted an international status for Taiwan on par with other states making claims in the South China Sea region. In much of this, Tsai built upon, and reinforced, an approach that Ma had set forth in formal form in his South China Sea Peace Initiative and East China Sea Peace Initiative.94 Taiwan’s approach here employed a familiar mode for addressing Taiwan’s marginalization in the international system by objecting to Taiwan’s exclusion from an important international regime, especially in a context where Taiwan has important interests at stake. In this respect, the reaction to the arbitral award resembled the Tsai administration’s (and its predecessors’) handling of exclusion from many high-profile international institutions (such as the WHA, the ICAO, Interpol, or the UN Framework Convention on Climate Change), but in a context—UNCLOS—where prospects for formal participation were weaker still.

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Taiwan embraced an especially rich “as if” approach to the treaty-based elements of the international legal regime for human rights. Here, too, Tsai’s government extended an approach begun under Ma, and with roots under Chen, by adopting measures similar to those that would be undertaken by a responsible party to the relevant UN-centered treaties. Under the auspices of a human rights consultative committee, the Ma government issued a first (in 2012) and a second (in 2016) systematic report on Taiwan’s human rights performance. These reports measured Taiwan’s laws and practices against a standard of compliance with the international legal obligations that Taiwan would bear if it were a party to the International Covenant on Civil and Political Rights (ICCPR) and the International Covenant on Economic, Social, and Cultural Rights (ICESCR)—two core treaties of the UN human rights regime for which Taiwan had submitted instruments of ratification, only to see them predictably rejected. Ma responded to that rejection with a pointedly “as if”–style retort: the UN’s rebuff “does not change the fact” that Taiwan’s government is “now subject to the binding legal force of the content of these two UN human rights covenants.”95 The two quadrennial documents resembled the reporting that a state party would be expected to provide under the two covenants (and paralleled aspects of universal periodic review before the UN Human Rights Council). Also in keeping with the practices expected of state parties to the covenants, Taiwan invited international experts (as well as nongovernmental organizations and domestic stakeholders) to participate in the process of shaping and reviewing the reports, and issued government responses to observations and recommendations by committees of international experts.96 Although the 2016 report was prepared before Tsai took office, leading legal experts in her orbit participated in the process. And the visiting international experts group issued its observations and recommendations in response to the 2016 report under Tsai’s watch. Tsai praised the group’s work, and Taiwan’s ICCPR and ICESCR review procedure more generally, in “as if” terms. She lauded the process as a means to “develop a method for Taiwan to participate in the UN’s human rights protection mechanism.” Tsai emphasized her government’s commitment to “advance human rights protection,” and to create a national human rights commission—a goal that had been set under Chen and that would mimic an approach adopted in some states that are parties to the covenants.97 Tsai promised to undertake reviews and reports of Taiwan’s performance of obligations under several additional UN human rights

194 Jacques deLisle conventions that Taiwan had pledged to follow. With Tsai in office, Taiwan issued its first reports on compliance with the UN Convention on the Rights of the Child and the UN Convention on the Rights of Persons with Disabilities. As with the ICCPR and ICESCR, these reports followed the format and arrangements for international experts’ review that would be used by parties to the conventions.98 Relevant treaty provisions had been brought into Taiwan’s domestic law through legislation adopted under Ma and praised by Tsai as implementing “major international human rights covenants,” including the ICCPR, the ICESCR, the Convention on the Rights of the Child, and the Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW).99 Such legislation is what state parties to those conventions often adopt, and thus indicated that Taiwan was acting as if it were a compliant member of the relevant treaty regimes. In 2018, Taiwan also pursued human rights consultations with the European Union and successfully bid to host international human rights conferences—both moves that paralleled the behavior of human rights–supporting states.100 Climate Change

In its approach to the UN Framework Convention on Climate Change, Tsai’s government again adopted an “as if” approach. Taiwan has adopted domestic environmental laws similar to those of other states that have sought to meet the requirements of international treaties. Tsai’s government (again, continuing earlier patterns) called for Taiwan’s participation in the UN Framework Convention on Climate Change and submitted an emissions control plan, paralleling the performance of an obligation owed by member states.101 In an inaugural address that devoted unprecedented attention to environmental issues, Tsai declared a commitment to set goals “in accordance with the agreement negotiated at the COP21 meeting in Paris.”102 Taiwan promised to follow the Paris Accords, echoing Taiwan’s long-standing undertaking to meet the standards of the Montreal Protocol (on ozonedepleting substances). The Paris Accords commitment affirmed—and asserted—that Taiwan accepted the same international responsibilities as every state in the world (except for the United States under Trump). Taiwan’s Challenges Taiwan’s pursuit of international status and security through engaging as fully as possible with international organizations, states, and international legal regimes is a long-running endeavor that has continued since

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Tsai and the DPP-led government came to power. While this project has always been ambitious and daunting, it once again became more challenging under Tsai. Beijing’s efforts to constrain Taiwan’s international space, undermine its stature, and negate its status have been a chronic problem that has fluctuated over several decades. The pressure increased anew with Beijing’s toughening line after Tsai won the presidency and continued to refuse to accept the 1992 Consensus and a “one China” principle. The indispensable support of the United States for Taiwan has been strained occasionally over the years, particularly when Washington has faced disruptive initiatives from Beijing or Taipei. This chronic risk has been compounded by long-emerging questions about the international clout of the United States and the solidity of its commitments abroad, and the Trump administration—despite several moves signaling strong support for Taiwan—has exacerbated those doubts and thereby increased the challenges facing Taiwan. Taiwan’s ability to achieve observer status or meaningful participation in significant international organizations, particularly those affiliated with the United Nations, has not been strong since the ROC’s recognition as the government of China began to erode rapidly during the 1970s, and relatively modest progress and apparent momentum achieved under Ma stalled or reversed under mounting pressure from Beijing beginning in 2016. Although Taiwan has held its own in key established international economic organizations, they have waned in importance and Taiwan has made little headway with emerging regimes. Taiwan’s long-small pool of diplomatic partners began to shrink rapidly with Beijing’s abandonment of the Ma-era “diplomatic truce.” China’s growing influence and willingness to deploy substantial resources to advance its foreign policy goals make it harder for Taipei to sustain formal ties with a few weak states that are increasingly economically linked to China. Taiwan under Tsai has scored victories in maintaining and in some respects strengthening informal ties with the United States, Japan, and others. But progress has been uneven and modest and faces possibly worsening structural constraints. Although other states’ wariness of a more assertive and status quo–challenging China reduces their proclivity to accommodate Beijing, the logic of great (and small) power politics persists: the rising costs of opposing a rising China can significantly limit Taiwan’s prospects for support. Full membership or participation in UN-centered treaty regimes remains beyond Taiwan’s reach. The value for Taiwan’s international standing of key areas of “as if” participation may be declining in areas most salient for Taiwan: human rights may be in retreat (at least for now)

196 Jacques deLisle as a factor in international relations and US foreign policy; the fallout of the Philippines-China arbitration case has deepened skepticism about the efficacy of the law of the sea regime, especially in regions important to Taiwan; and Beijing looms ever larger in the nascent international regime for addressing climate change, all the more so in the aftermath of the Trump administration’s rebuff to the Paris Accords. All of this gives reason for Taiwan to worry, but it is not a counsel of despair. Under Tsai, as under her predecessors and continuing after the DPP’s electoral setback in 2018, Taiwan has been playing a weak hand well, adopting a multifaceted strategy that focuses on international institutions (both established core organizations and newly emerging ones), international relations (formal diplomatic ties with a few small states, and informal but robust relations with larger powers), and “as if,” membership-imitating engagement with major UN-linked treaty-based regimes. Taiwan under Tsai wields the weapons of the weak, but that is a familiar plan of battle for Taiwan. That approach has served Taiwan relatively well it its quest for international status and security, and it may continue to do so during a period of heightened challenges and worsened odds. Notes 1. “Inaugural Address of ROC 14th-Term President Tsai Ing-wen,” http://english .president.gov.tw/Default.aspx?tabid=491&itemid=37416&rmid=2355. 2. “President Tsai Attends Opening of Symposium on 30 Years of Cross-Strait Exchanges and Prospects for the Future,” http://english.president.gov.tw/NEWS /5254; “President Tsai Vows to Protect Regional Stability amid China Tension,” China Post, October 10, 2017. 3. “President Tsai Issues Statement on China’s President Xi’s ‘Message to Compatriots in Taiwan,’” Office of the President, Republic of China (Taiwan), January 2, 2019, https://english.president.gov.tw/NEWS/5621. 4. “Full Text of Mainland’s Taiwan Affairs Authorities’ Statement on CrossStraits Relations,” May 20, 2016, http://news.xinhuanet.com/english/2016-05/20/c _135375950.htm. See also Taiwan Affairs Office of the State Council of the PRC, “Mainland Hopes Taiwan Makes Wise Decision on Cross-Strait Relations,” June 14, 2016, http://www.gwytb.gov.cn/en/SpokespersonRemarks/201706/t20170619_11803648.htm. 5. The use of the phrase dates to Taiwan’s 2015–2016 presidential campaign. See “General Secretary Xi Jinping Meets KMT Chairman Chu Li-luan,” Xinhua, May 4, 2015, http://news.xinhuanet.com/tw/2015-05/04/c_1115169416.htm. 6. Austin Ramzy, “Taiwan President Takes Cautious Line on China at Inauguration,” New York Times, May 21, 2016 (quoting Bonnie Glaser); Paul Lin, “‘Cold Peace’ a Likely Stable Future,” Taipei Times, May 28, 2016; Hsu Chih-wei and Evelyn Kao, “Taiwan-China Relations Cold, Confrontational: Ma Ying-jeou,” Focus Taiwan, May 11, 2017, http://focustaiwan.tw/news/acs/201705110022.aspx. 7. See, for example, J. Michael Cole, “Chinese Warns of ‘Soft’ and ‘Insidious’ Taiwan Independence Forces,” NewsLens, July 27, 2016, https://international .thenewslens.com/article/45216; Li Chong-wei, “TAO Website: The Tsai Administration’s ‘Cultural Independence 2.0’ Must Not Be Underestimated” (in Chinese),

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United Daily News, August 18, 2017, https://udn.com/news/story/7331/2649678; “Zhang Zhijun Signed Article: Guiding Direction, Firm Confidence, Moving Forward with Difficulty—Studying General Secretary Xi Jinping’s Important Speech at Meeting with Hung Hsiu-chu” (in Chinese), Xinhua, November 2, 2016, http://news.xinhuanet.com/tw/2016-11/02/c_129348190.htm. 8. “Yu Zhengsheng Delivers Important Speech at 2017 Taiwan Work Conference” (in Chinese), January 20, 2017, http://www.gov.cn/xinwen/2017-01/20/content _5161655.htm; “China Sees ‘Grim’ Situation in Relations with Taiwan This Year,” Reuters, January 20, 2017, http://www.reuters.com/article/us-china-taiwan-idUSKBN15503X. 9. Xi Jinping, “Secure a Decisive Victory in Building a Moderately Prosperous Society in All Respects and Strive for the Great Success of Socialism with Chinese Characteristics for a New Era: Speech Delivered at the 19th National Congress of the Chinese Communist Party,” October 18, 2017, http://www.xinhuanet.com/english /download/Xi_Jinping’s_report_at_19th_CPC_National_Congress.pdf; Anti-Secession Law of the People’s Republic of China (2005); Jacques deLisle, “Legislating the Cross-Strait Status Quo? China’s Anti-Secession Law, Taiwan’s Constitutional Reform, and the U.S.’s Taiwan Relations Act,” in Economic Integration, Democratization, and National Security in East Asia, edited by Peter C. Y. Chow (Cheltenham, UK: Edward Elgar, 2007), pp. 101–138. 10. Richard C. Bush, “What Xi Jinping Said About Taiwan at the 19th Party Congress,” October 19, 2017, https://www.brookings.edu/blog/order-from-chaos /2017/10/19/what-xi-jinping-said-about-taiwan-at-the-19th-party-congress. 11. Republic of China (Taiwan) Mainland Affairs Council, “Government Calls on CCP Authorities to Seek New Thinking for a Model of Cross-Strait Interaction” (in Chinese), October 18, 2017, https://www.mac.gov.tw/News_Content.aspx?n =05B73310C5C3A632&sms=1A40B00E4C745211&s=87F0E1954EDF68F2. 12. Minnie Chan, “Beijing Seeks to Build Ties with Taiwanese Cities After Ruling Party Suffers Election Defeat,” South China Morning Post, November 25, 2018. 13. “Highlights of Xi’s Speech at Gathering Marking 40th Anniversary of Message to Compatriots in Taiwan,” Xinhua, January 2, 2019, http://www.xinhuanet .com/english/2019-01/02/c_137715300.htm. 14. “President Tsai Issues Statement on China’s President Xi’s ‘Message to Compatriots in Taiwan.’” 15. See, for example, Xi Jinping’s speech at the nineteenth party congress. 16. See, for example, “Beijing Scholar: Mainland Not Opposed to a New CrossStrait Consensus So Long as It Embodies the Connotation of One China,” December 1, 2016, http://www1.kmt.org.tw/english/page.aspx?type=article&mnum=112&anum =18504; Jessica Drun and Yevgen Sautin, “Parsing Signals from the 2016 Academic Forum of Cross-Strait Think Tanks,” Global Taiwan Brief 2 no. 3 (2017), http:// globaltaiwan.org/2017/01/18-gtb-2-3. 17. Alan D. Romberg, “The Bull in the China Shop,” China Leadership Monitor, no. 52 (2016), p. 4, http://www.hoover.org/sites/default/files/research/docs/clm52ar .pdf; author interviews, Beijing and Shanghai 2016, 2017, 2018, and Xiamen 2019. 18. “Taiwan Blamed for Suspension of Cross-Straits Communication,” China Daily, June 29, 2016; Javier Hernández, “China Suspends Diplomatic Contact with Taiwan,” New York Times, June 25, 2016; Chen Junshuo, “Sun Yafu: No Acknowledgement of 92 Consensus [Means] Suspension of ECFA Discussions,” China Times, May 16, 2016. 19. “Chinese Visitors Down 33% Since May,” Taipei Times, February 14, 2017; “Mainland Chinese Visit Applications Drop Sharply in Apr., Says Gov’t Official,” China Post, April 12, 2016; “Chinese ‘Blue’ Tour Draws Mixed Response,” Taipei Times, October 3, 2016. 20. See, for example, Michael Forsythe and Chris Buckley, “Taiwan Responds After China Sends Carrier to Taiwan Strait,” New York Times, January 10, 2017;

198 Jacques deLisle “Chinese Aircraft Carrier Liaoning to Boost PLA Combat Capacity,” People’s Daily, January 9, 2018; “Jets Shadow Chinese Aircraft Carrier,” Taipei Times, July 3, 2017. 21. “Chinese Aircraft Circled Around Taiwan for First Time: MND,” Focus Taiwan, December 5, 2016, http://focustaiwan.tw/news/aipl/201612050016.aspx; “Chinese Bombers Pass Taiwan,” Taipei Times, July 25, 2017; “China Conducts ‘Island Encirclement’ Patrols Near Taiwan,” Reuters, December 11, 2017, https://www .reuters.com/article/us-china-taiwan/china-conducts-island-encirclement-patrols -near-taiwan-idUSKBN1E60BV. 22. “Taiwan Confirms China’s Deployment of DF-16 Missiles,” Focus Taiwan, March 20, 2017, http://focustaiwan.tw/news/acs/201703200015.aspx. 23. Foreign Press Liaison Office, Ministry of Foreign Affairs, Republic of China (Taiwan), “ROC Protests Unilateral Launch of Mainland China Flight Routes in Taiwan Strait, Urges Consultation,” January 8, 2018, https://www.mofa.gov.tw/en/News _Content.aspx?n=8157691CA2AA32F8&sms=4F8ED5441E33EA7B&s=F66994C5 329CCB5A; Ralph Jennings, “China-Taiwan Spat over Flight Path Takes Relations to New Low,” VOA News, January 10, 2018, https://www.voanews.com/a/china-taiwan -relations-worsen-over-flight-path-dispute/4201267.html. 24. Ministry of Foreign Affairs of the People’s Republic of China, “Foreign Ministry Spokesperson Geng Shuang’s Remarks on US President-Elect Trump’s Phone Call with Taiwan Leader Tsai Ing-wen,” December 3, 2016, http://www .fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/t1421132.shtml; “Mainland Reiterates One-China Principle After Trump’s Phone Talks with Tsai,” Xinhua, December 3, 2016, http://news.xinhuanet.com/english/2016-12/03/c_135878413.htm; Ministry of Foreign Affairs of the People’s Republic of China, “Foreign Ministry Spokesperson Hua Chunying’s Regular Press Conference,” January 16, 2017, http://www .fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/2511_665403/t1430903.shtml; “Trump Playing with Fire with His Taiwan Game,” China Daily, January 16, 2017. 25. Peter Graff, “Trump’s ‘America First’ Speech Alarms U.S. Allies,” Reuters, April 27, 2016, http://www.reuters.com/article/us-usa-election-trump-idUSKCN0XO10R; “Trump Rips U.S. Defense of Japan as One-Sided, Too Expensive,” Japan Times, August 6, 2016; Michael E. O’Hanlon, “Why a Trump Presidency Could Spell Big Trouble for Taiwan,” July 6, 2016, https://www.brookings.edu/blog/order-from-chaos /2016/07/06/why-a-trump-presidency-could-spell-big-trouble-for-taiwan. 26. Bruce Gilley, “Not So Dire Straits: How the Finlandization of Taiwan Benefits U.S. Security,” Foreign Affairs 89, no. 1 (January–February 2010), pp. 44–60; Charles Glaser, “Will China’s Rise Lead to War? Why Realism Does Not Mean Pessimism,” Foreign Affairs 90, no. 2 (March–April 2011), pp. 80–91; but see also Nancy Bernkopf Tucker and Bonnie Glaser, “Should the United States Abandon Taiwan?” Washington Quarterly 34, no. 4 (2011), pp. 23–37. 27. Donald J. Trump, Twitter post, December 4, 2016, https://www.facebook .com/DonaldTrump/posts/10158229642705725; Ros Krasny, “Trump Takes on China in Tweets on Currency, South China Sea,” December 5, 2016, https://www .bloomberg.com/news/articles/2016-12-04/trump-takes-on-china-in-tweets-about -currency-south-china-sea. 28. Caren Bohan and David Brunnstrom, “Trump Says U.S. Not Necessarily Bound by ‘One China’ Policy,” Reuters, December 11, 2016, http://www.reuters .com/article/us-usa-trump-china/trump-says-u-s-not-necessarily-bound-by-one -china-policy-idUSKBN1400TY; Elliot Smilowitz, “Trump on ‘One China’ Policy: Everything Is Under Negotiation,” The Hill, January 14, 2017. 29. White House, “Readout of the President’s Call with President Xi Jinping of China,” February 9, 2017, https://www.whitehouse.gov/the-press-office/2017/02/09 /readout-presidents-call-president-xi-jinping-china; Bonnie Glaser and Alexandra Viers, “US-China Relations: Trump and Xi Break the Ice at Mar-a-Lago,” Compar-

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ative Connections 19, no. 1 (May 2017), pp. 21–32, http://cc.csis.org/wp-content /uploads/2017/05/1701_us_china.pdf; Jeff Mason, Stephen J. Adler, and Steve Holland, “Exclusive: Trump Spurns Taiwan President’s Suggestion of Another Phone Call,” Reuters, April 27, 2017, http://www.reuters.com/article/us-usa-trump-taiwan -exclusive/exclusive-trump-spurns-taiwan-presidents-suggestion-of-another-phone -call-idUSKBN17U05I; Simon Denyer, “In China Debut, Tillerson Appears to Hand Beijing a Diplomatic Victory,” Washington Post, March 19, 2017; Ministry of Foreign Affairs of the People’s Republic of China, “Yang Jiechi Meets with US Secretary of State Rex Tillerson,” March 1, 2017, http://www.fmprc.gov.cn/mfa_eng /zxxx_662805/t1442579.shtml; Emily Rauhala, “Trump Reverses Course over Taiwan,” Washington Post, April 30, 2017. 30. Mark Lander, “Trump Suggests Using Bedrock China Policy as Bargaining Chip,” New York Times, December 11, 2016; Lawrence Chung, “Tsai Says Call with Trump Does Not Reflect US Policy Change,” South China Morning Post, December 6, 2016; Shannon Tiezzi, “Taiwan’s Message to Trump: We’re No ‘Bargaining Chip,’” The Diplomat, January 20, 2017, http://thediplomat.com/2017/01/taiwans -message-to-trump-were-no-bargaining-chip. 31. Nishant Dahiya, “Taiwan Watches Anxiously as President Trump Begins His China Visit,” NPR, November 8, 2017, https://www.npr.org/sections/parallels /2017/11/08/562758028/as-president-trump-begins-his-china-visit-taiwan-watches -anxiously; Adam Taylor, “With Trump in China, Taiwan Worries About Becoming a ‘Bargaining Chip,’” New York Times, November 9, 2017. 32. See “A Timeline of Trump’s and the Trump Campaign’s Actions, Statements, and Policies on China,” US-China Perception Monitor, March 13, 2017, https:// www.uscnpm.org/blog/2017/03/13/a-timeline-of-trumps-actions-statements-and-policies -on-china; Secretary of State Rex W. Tillerson, “Remarks with Chinese Foreign Minister Wang Yi at a Press Availability,” March 26, 2017, https://www.state.gov/secretary /remarks/2017/03/268518.htm; “Remarks by President Trump and President Xi of China in Joint Press Statement,” Beijing, November 9, 2017, https://china.usembassy -china.org.cn/selected-quotes-press-statement-president-trump-joint-press-conference -president-xi; “Remarks of President Trump at APEC CEO Summit,” Danang, Vietnam, November 10, 2017; National Security Strategy of the United States, December 2017, https://www.whitehouse.gov/wp-content/uploads/2017/12/NSS-Final-12-18 -2017-0905.pdf; David Shepardson, “Trump Praises Chinese President Extending Tenure ‘for Life,’” Reuters, March 3, 2018, https://www.reuters.com/article/us-trump -china/trump-praises-chinese-president-extending-tenure-for-life-idUSKCN1GG015; “What’s at Stake in the Looming US-China Trade War: The Full List,” Financial Times, April 17, 2018; David Dollar and Zhi Wang, “Why a Trade War with China Would Hurt the U.S. and Its Allies, Too,” April 4, 2018, https://www.brookings.edu /blog/order-from-chaos/2018/04/04/why-a-trade-war-with-china-would-hurt-the-u-s -and-its-allies-too; “Remarks by Vice President Pence on the Administration’s Policy Toward China,” October 4, 2018, https://www.whitehouse.gov/briefings-statements /remarks-vice-president-pence-administrations-policy-toward-china. 33. US Department of Defense, “Mattis Visits Japan and South Korea,” February 2017, https://www.defense.gov/News/Special-Reports/Travels-with-the-Secretary/0217 _mattis1; White House, “Vice President Mike Pence Arrives in Japan for More Productive Conversations with a Key Ally,” April 19, 2017, https://www.whitehouse .gov/blog/2017/04/19/vice-president-mike-pence-arrives-japan-more-productive -conversations-key-ally; Ankit Panda, “Tillerson Goes to Asia: What’s on the Agenda,” The Diplomat, March 14, 2017, http://thediplomat.com/2017/03/tillerson-goes-to -asia-whats-on-the-agenda. 34. For country-specific data, see: https://census.gov/foreign-trade/balance/c5880 .html.

200 Jacques deLisle 35. Rex. W. Tillerson, “Remarks to U.S. Department of State Employees,” May 3, 2017, https://www.state.gov/secretary/remarks/2017/05/270620.htm (values can be “obstacles” to US foreign policy); Josh Rogin, “State Department Considers Scrubbing Democracy Promotion from Its Mission,” Washington Post, August 1, 2017. 36. Concerning Tsai’s 2016 candidacy, see, for example, Douglas H. Paal, “China, the U.S., and the Coming Taiwan Transition,” December 29, 2015, http:// carnegieendowment.org/2015/12/29/china-u.s.-and-coming-taiwan-transition-pub -62372; Nadia Tsao, Chen Hui-ping, and Chen Wei-han, “DPP’s Tsai Visits White House, U.S. State Department,” Taipei Times, June 6, 2015; Jacques deLisle, “Taiwan’s 2016 Elections and Cross-Strait Relations,” February 2016, http://www.fpri .org/article/2016/02/taiwans-2016-elections-and-cross-strait-relations. Concerning her 2012 bid, see Anna Fifield and Kathrin Hille, “US Concerned About Taiwan Candidate,” Financial Times, September 15, 2011; Andrew Jacobs, “Former U.S. Diplomat Rattles Taiwan Before Election,” New York Times, January 13, 2012. 37. See, for example, US Department of State Bureau of East Asian and Pacific Affairs, “U.S. Relations with Taiwan,” September 13, 2016, https://www.state.gov/r /pa/ei/bgn/35855.htm; deLisle, “Taiwan’s 2016 Elections and Cross-Strait Relations”; Kristian McGuire, “Interview: Robert Sutter,” The Diplomat, May 4, 2016, http:// thediplomat.com/2016/05/interview-robert-sutter; Richard Bush, Taiwan’s January 2016 Elections and Their Implications for Relations with China and the United States (Washington, DC: Brookings Institution, 2016), pp. 10–12; Alan D. Romberg, “Tsai Ing-wen Takes Office: A New Era in Cross-Strait Relations,” China Leadership Monitor, July 19, 2016, https://www.hoover.org/sites/default/files/research/docs/clm50ar .pdf. These views remained prevalent with Tsai in office. See the discussion of TaiwanUS informal relations later in this chapter. 38. Mainland Affairs Council of the Republic of China, “President Ma’s Remarks at ROC (Taiwan)-US-Japan Trilateral Security Dialogue,” August 25, 2015, http://www.mac.gov.tw/en/News_Content.aspx?n=FE07F9DA122E29D4&sms =3A4E63FA5107487D&s=5D10CD252E3A6841; “Statement of Daniel R. Russel, Assistant Secretary for East Asian, Pacific Affairs,” US Senate Subcommittee on East Asian and Pacific Affairs, April 3, 2014, https://www.gpo.gov/fdsys/pkg/CHRG -113shrg91138/html/CHRG-113shrg91138.htm; “Relations with US at Their Best in 40 Years: Stanley Kao,” Taipei Times, January 3, 2019, http://www.taipeitimes.com /News/taiwan/archives/2019/01/03/2003707266. 39. Restoration of the Lawful Rights of the People’s Republic of China in the United Nations, UN General Assembly Resolution 2758, October 25, 1971, http:// www.un.org/ga/search/w_doc.asp?symbol=A/RES/2758(XXVI). 40. Stacy Hsu, “Government Not to Pursue Seat at UN,” Taipei Times, August 19, 2016; Chris Horton, “As U.N. Gathers, Taiwan, Frozen Out, Struggles to Get Noticed,” New York Times, September 21, 2018; Karoline Kan, “New Push for Taiwan’s Representation at the United Nations,” New York Times, September 8, 2016 (interviewing Michael Tsai, president of Taiwan United Nations Alliance and former DPP legislator). 41. See Tsai’s inaugural address; “Poll Identifies Key Challenges for Tsai’s Government,” Taiwan Today, March 29, 2016, http://www.taiwantoday.tw/ct.asp?xItem =243404&ctNode=2430; “Taiwan to Urge Greater UN Participation,” Taipei Times, September 12, 2017. 42. See Jacques deLisle, “Taiwan in the World Health Assembly: A Victory, with Limits,” 2009, http://www.brookings.edu/research/opinions/05/taiwan-delisle; Cheming Yang, “The Road to Observer Status in the World Health Assembly,” Asian Journal of WTO and International Health Law and Policy 5, no. 2 (2010), pp. 3311–3354. 43. Office of the President, Republic of China (Taiwan), “Office of the President’s Response to Taiwan’s Lack of Invitation to this Year’s WHA,” May 9, 2017,

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https://english.president.gov.tw/NEWS/5134; “Presidential Office, MAC Rail Against Beijing’s Political Interference,” Taiwan Today, May 23, 2017, https://taiwantoday .tw/news.php?unit=2&post=115742; Chris Horton, “Blocked by China, Taiwan Presses to Join U.N. Agency’s Meeting,” New York Times, May 8, 2017. 44. “PRC Pressure Stops WHA from Discussing Taiwan,” Agence France Presse, May 23, 2017; Horton, “Blocked by China, Taiwan Presses to Join U.N. Agency’s Meeting”; Ryan Drillsma, “Three Allies Rally for Taiwan Participation in WHO Alongside US, Japan,” Taiwan News, January 29, 2019, https://www.taiwannews.com.tw/en /news/3627805. 45. Ministry of Foreign Affairs, Republic of China (Taiwan), “Taiwan Invited to Attend ICAO Assembly,” September 13, 2013, http://www.mofa.gov.tw/en /News_Content.aspx?n=8157691CA2AA32F8&sms=4F8ED5441E33EA7B&s =BEFE2FFEF929541C; Shih Hsiu-chuan, “Taiwan Only ‘Guest’ Due to China: ICAO,” Taipei Times, September 26, 2013. 46. Ministry of Foreign Affairs, Republic of China (Taiwan), “ROC Regrets That It Has Not Been Invited to Once Again Take Part in the ICAO Assembly,” September 23, 2016, https://www.mofa.gov.tw/en/News_Content.aspx?n=539A9A50A5F8AF9E &sms=37B41539382B84BA&s=99D8FD9543717B55; Alison Hsiao, “Ministry Regrets Lack of ICAO Invitation,” Taipei Times, September 24, 2016. 47. Civil Aviation Administration of China, “M503 Northbound Route and Related Connecting Routes Launched on January 4,” February 2, 2018, http:// www.caac.gov.cn/en/XWZX/201802/t20180202_49070.html; Ministry of Foreign Affairs, Republic of China (Taiwan), “ROC Protests Unilateral Launch of Mainland China Flight Routes in Taiwan Strait, Urges Consultation,” January 8, 2018, https:// www.mofa.gov.tw/en/News_Content.aspx?n=8157691CA2AA32F8&sms=4F8ED54 41E33EA7B&s=F66994C5329CCB5A; “Taiwan Calls China’s New Aviation Routes in Taiwan Strait Irresponsible,” Reuters, January 8, 2018. 48. Ministry of Foreign Affairs, Republic of China (Taiwan), “The Case for Taiwan’s Participation in the UNFCCC,” n.d.; Ujunwa Ateuyi, “Taiwan Seeks Inclusion in UNFCCC,” The Guardian, January 20, 2017; Eric Kao, “China Blocks Taiwan EPA Head from Attending UNFCCC COP 23,” Taiwan News, November 13, 2017; “MOFA Touts Success of Taiwan’s UNFCCC Campaign,” Taiwan Today, December 12, 2018. 49. “Taiwan Barred from Interpol Assembly,” Taipei Times, November 6, 2016; “Taiwan Seeks to Join Interpol General Assembly in November,” CNA, October 15, 2018; “MOFA Thanks Allies, Like-Minded Partners for Supporting Taiwan’s Interpol Bid,” Taiwan Today, November 19, 2018, https://taiwantoday.tw/news.php?unit =2,6,10,15,18&post=145634. 50. Austin Ramzy, “Kenya Angers Taiwan by Deporting More Fraud Suspects to China,” New York Times, August 8, 2016; Hilary Whiteman, “Taiwan Objects as Malaysia Deports Taiwanese Citizens to China,” May 2, 2016, http://www.cnn.com /2016/05/02/asia/taiwan-malaysia-china-deportations; James Griffiths and Holly Yan, “Kenya Defends Forcing 45 Taiwanese onto a Plane to China,” April 14, 2016, http://www.cnn.com/2016/04/13/asia/taiwan-kenya-china-abducted; Nick Aspinwall, “‘Grave Concern’ as Cambodia Deports Taiwanese Alleged Scammers to China,” The Diplomat, December 15, 2018, https://thediplomat.com/2018/12/grave-concern -as-cambodia-deports-taiwanese-alleged-scammers-to-china. 51. “Change of WTO Status Will Be of Benefit: Minister,” Taipei Times, October 15, 2018. 52. Tsai’s inaugural address; Stacy Hsu, “President Reiterates Intent to Join TPP in Next Round,” Taipei Times, May 23, 2016; Tsai Ing-wen, “Taiwan Can Build on U.S. Ties,” Wall Street Journal, June 1, 2015; “Tsai Praises TPP Progress at APEC,” Taipei Times, November 14, 2017.

202 Jacques deLisle 53. Office of the President, Republic of China (Taiwan), “President Tsai’s Remarks at 2016 Taiwan Business Alliance Conference,” October 3, 2016, https:// english.president.gov.tw/NEWS/4992. 54. Office of the President, Republic of China (Taiwan), “President Tsai Meets ROC Delegation to 24th APEC Economic Leaders’ Week,” November 11, 2016, https://english.president.gov.tw/NEWS/5021. 55. Ministry of Foreign Affairs, Republic of China (Taiwan), “MOFA Applauds Completion of CPTPP Negotiations, Works to Prepare for Taiwan’s Future Participation,” January 24, 2018, https://www.mofa.gov.tw/en/News_Content.aspx?n =539A9A50A5F8AF9E&sms=37B41539382B84BA&s=6E2E060B31BC2124; Scott Morgan, “Taiwan Reaffirms Desire to Join CPTPP Trade Deal,” Taiwan News, December 30, 2018, https://www.taiwannews.com.tw/en/news/3607275. 56. Jacques deLisle, “The Chinese Puzzle of Taiwan’s Status,” Orbis 44, no. 1 (2000), pp. 35–62; Convention on the Rights and Duties of States (Montevideo Convention) (1933), art. 1. 57. Office of the President, Republic of China (Taiwan), “President Tsai Attends Ceremony for Panama Canal Expansion,” June 27, 2016, https://english.president .gov.tw/NEWS/4928; “Tsai Gets 72% Approval for Use of ‘President of Taiwan’ Title: Poll,” July 3, 2016, http://focustaiwan.tw/news/aipl/201607030006.aspx; Office of the President, Republic of China (Taiwan), “President Tsai Attends Inauguration of Nicaraguan President Ortega,” January 11, 2017, https://english.president.gov.tw /NEWS/5064; Elisabeth Malkin, “Taiwan Works to Keep Its Central American Friends (Among Its Few),” New York Times, January 13, 2017; “Taiwan President to Visit Allies in South Pacific,” Taiwan News, May 31, 2017, https://www.taiwannews .com.tw/en/news/3176510; Gerry Shih, “Taiwan’s Tsai Travels in Face of China Diplomatic Onslaught,” Associated Press, August 10, 2018, https://www.apnews .com/33ba1183edbc4b7a86ebb7f2d01ebded. 58. “Diplomatic Truce and the Reality of Cross-Strait Ties,” Taiwan Today, October 23, 2008, https://taiwantoday.tw/news.php?unit=10,23,45,10&post=15033; Kelly Her, “Viable Approach to Diplomacy,” Taiwan Today, April 1, 2016 (interview with Foreign Minister David Y. L. Lin), http://taiwantoday.tw/ct.asp”?xItem =243116&ctNode=2235&mp=9. 59. Ministry of Foreign Affairs, Republic of China (Taiwan), “The Government of the Republic of China Terminates Diplomatic Relations with the Republic of Gambia to Uphold National Dignity and Principles of Viable Diplomacy,” November 18, 2013, https://www.mofa.gov.tw/en/News_Content.aspx?n=0E7B91A8FBEC4A94 &sms=220E98D761D34A9A&s=77D0C7AEB20E8F24; Ministry of Foreign Affairs, People’s Republic of China, “Foreign Ministry Spokesperson Geng Shuang’s Regular Press Conference,” February 16, 2017, http://www.fmprc.gov.cn/mfa_eng/xwfw _665399/s2510_665401/t1439117.shtml (stating that China did not expect Gambia’s move); Richard Bush, “China’s Gambia Gambit and What It Means for Taiwan,” March 22, 2016, http://www.brookings.edu/blogs/from-chaos/posts/2016/03/22-china -gambia-cross-strait-relations-bush. 60. Ministry of Foreign Affairs, Republic of China (Taiwan), “ROC Terminates Diplomatic Ties with São Tomé and Príncipe,” December 21, 2016, https://www.mofa .gov.tw/en/News_Content.aspx?n=8157691CA2AA32F8&sms=4F8ED5441E33EA7B &s=1D2E6EF2CBA8140F; Ministry of Foreign Affairs, People’s Republic of China, “Foreign Ministry Spokesperson Hua Chunying’s Remarks on São Tomé and Príncipe Cutting Ties with Taiwan,” December 21, 2016, http://www.fmprc.gov.cn/mfa_eng /xwfw_665399/s2510_665401/t1425797.shtml. 61. “The ROC Government Has Terminated Diplomatic Relations with Panama with Immediate Effect to Uphold National Dignity,” June 13, 2017, http://www.mofa .gov.tw/en/News_Content.aspx?n=1EADDCFD4C6EC567&s=CF11CEBE98E46573;

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“China and Panama Establish Diplomatic Relations,” June 13, 2017, http://www .fmprc.gov.cn/mfa_eng/zxxx_662805/t1470841.shtml. 62. Ministry of Foreign Affairs, Republic of China (Taiwan), “Office of the President Expresses Regret on Termination of Dominican Republic Ties,” Taiwan Today, May 2, 2018, https://taiwantoday.tw/news.php?unit=2&post=133601; Austin Ramzy, “Taiwan’s Diplomatic Isolation Increases as Dominican Republic Recognizes China,” New York Times, May 1, 2008. 63. Office of the President, Republic of China (Taiwan), “President Tsai’s Statement on Termination of Diplomatic Relations with Burkina Faso,” May 24, 2018, https://english.president.gov.tw/News/5404; Office of the President, Republic of China (Taiwan), “President Tsai’s Statement on Termination of Diplomatic Relations with El Salvador,” August 21, 2018, https://english.president.gov.tw/News/5492. 64. Jason Horowitz and Elisabetta Povoledo, “Worries Rise as Pope and China Edge Closer to Deal on Bishops,” New York Times, February 9, 2018; Gary Sands, “What the China-Vatican Deal Means for Taiwan,” The Diplomat, September 21, 2018, https://thediplomat.com/2018/09/what-the-china-vatican-deal-means-for-taiwan. 65. “Vice President Chen Lauds Success of Vatican Trip,” Taiwan Today, September 8, 2016, http://taiwantoday.tw/news.php?unit=2,6,10,15,18&post=102371; “Taiwan Vice President Will Visit Vatican to ‘Deepen Ties,’” Associated Press, October 2, 2018, https://www.voanews.com/a/taiwan-vice-president-will-visit-vatican-to-deepen-ties -/4596251.html; “Financial Intelligence Agreement Signed by ROC, Holy See,” Taiwan Today, May 16, 2017, http://taiwantoday.tw/news.php?unit=2&post=115404; Duncan DeAeth, “President Tsai Invites Pope Francis to Taiwan in B-day Message,” Taiwan News, December 18, 2018, https://www.taiwannews.com.tw/en/news/3599157. 66. Thomas J. Christensen, “A Strong and Moderate Taiwan,” September 11, 2007, https://2001-2009.state.gov/p/eap/rls/rm/2007/91979.htm (concerning US reaction to the 2008 referendum on Taiwan’s UN entry, orchestrated by Chen Shuibian); White House, “President Bush and Premier Wen Jiabao Remarks to the Press,” December 9, 2003, https://georgewbush-whitehouse.archives.gov/news /releases/2003/12/20031209-2.html (characterizing Chen’s moves as endangering the cross-Strait status quo, changes the US opposed). 67. “PRC Pressure Stops WHA from Discussing Taiwan”; Horton, “Blocked by China, Taiwan Presses to Join U.N. Agency Meeting”; Drillsma, “Three Allies Rally for Taiwan Participation in WHO Alongside US, Japan.” 68. For examples of these views, see “Risks in Tsai Ing-wen’s Foreign Policy Path,” United Daily News, May 27, 2016, translation at http://www.taiwannpfnews .org.tw/english.aspx?type=article&mnum=113&anum=17646; Anthony Erlandson, “How Close to China Is Too Close?” U.S. News, October 29, 2013, http://www .usnews.com/opinion/blogs/world-report/2013/10/29/taiwan-should-be-wary-of -growing-too-close-to-china. 69. See, generally, Keith Bradsher, “As China Puts Pressure on Taiwan, Signs of a U.S. Pushback,” New York Times, February 22, 2018; “President Tsai Lauds Robust Taiwan-US Partnership,” Taiwan News, May 1, 2018, https://taiwantoday .tw/news.php?unit=2&post=133549. 70. Nadia Tsao and Jonathan Chin, “Moriarty Hails Tsai on Cross-Strait Links,” Taipei Times, October 6, 2017. 71. Heather Nauert, “Press Briefing by State Department Spokesperson,” June 13, 2017, https://www.state.gov/r/pa/prs/dpb/2017/06/271723.htm; “The US Calls on Taipei, Beijing to Settle Differences,” Taipei Times, 20 October 2017. 72. Edward Wong, “U.S. Recalls Top Diplomats from Latin America as Worries Rise over China’s Influence,” New York Times, September 8, 2018. 73. American Institute in Taiwan, “Remarks by Deputy Assistant Secretary of State Alex Wong at the American Chamber of Commerce in Taipei Hsieh Nien Fan,

204 Jacques deLisle Taipei, Taiwan,” March 21, 2018, https://www.ait.org.tw/remarks-deputy-assistant -secretary-state-alex-wong-american-chamber-commerce-taipei-hsieh-nien-fan. 74. Jermyn Chow, “Tsai Ing-wen’s Meetings During US Stopover Irk Beijing,” Straits Times (Singapore), January 10, 2017; Chris Horton, “Taiwan’s President Meets with Ted Cruz in the U.S., and China Objects,” New York Times, January 9, 2017. See also Bradsher, “As China Puts Pressure on Taiwan, Signs of a US Pushback” (describing US senators’ visits to Taiwan). 75. “White House Urges Beijing to End Coercion and Talk with Taipei,” CNA, January 8, 2019, http://focustaiwan.tw/news/aipl/201901080005.aspx; Duncan DeAeth, “AIT Reaffirms US Position: China Must Stop Threatening Taiwan,” Taiwan News, January 10, 2019, https://www.taiwannews.com.tw/en/news/3614218. 76. American Institute in Taiwan, “The United States and Taiwan to Launch IndoPacific Democratic Governance Consultations,” March 19, 2019, https://www.ait .org.tw/the-united-states-and-taiwan-to-launch-indo-pacific-democratic-governance -consultations/. 77. Lawrence Chung, “US National Security Adviser John Bolton Rebukes Beijing for Incursions into Taiwanese Airspace,” South China Morning Post, April 2, 2019. 78. US Department of Defense Press Operations, “Remarks by Secretary Mattis at Shangri-La Dialogue,” June 3, 2017, https://www.defense.gov/News/Transcripts /Transcript-View/Article/1201780/remarks-by-secretary-mattis-at-shangri-la-dialogue; US Department of Defense, “Remarks by Secretary Mattis at Plenary Session of the Shangri-La Dialogue,” June 2, 2018, https://dod.defense.gov/News/Transcripts /Transcript-View/Article/1538599/remarks-by-secretary-mattis-at-plenary-session -of-the-2018-shangri-la-dialogue. 79. Heather Nauert, “Press Briefing by State Department Spokesperson,” June 29, 2017, https://www.state.gov/r/pa/prs/dpb/2017/06/272265.htm; “September 24, 2018: U.S. Foreign Military Sales Order (FMSO) II to Taiwan,” https://www .ustaiwandefense.com/september-24-2018-us-foreign-military-sales-order-to-taiwan. 80. Remarks by Deputy Assistant Secretary of State Alex Wong. 81. Geoff Ziezulewicz, “Tit-for-Tat in the Taiwan Strait,” Navy Times, February 25, 2019, https://www.navytimes.com/news/your-navy/2019/02/26/tit-for-tat-in-the -taiwan-strait/. 82. H.R.2810, 115th Congress (2017–2018), National Defense Authorization Act for Fiscal Year 2018, sec. 1259(b)(7), https://www.congress.gov/bill/115th-congress /house-bill/2810. 83. H.R.535, 115th Congress (2017–2018), Taiwan Travel Act, https://www.congress .gov/bill/115th-congress/house-bill/535. 84. S.2736, 115th Congress (2017–2018), Asia Reassurance Initiative Act, https:// www.congress.gov/bill/115th-congress/senate-bill/2736. 85. “Tsai Ing-wen Begins ‘Taiwan-Japan Friendship Tour,’” Taipei Times, October 7, 2015; Stacy Hsu, “Taiwan-Japan Relations Are a Priority: President,” Taipei Times, March 21, 2017; Stephanie Chao, “Ex-Premier Hsieh to Accept Position to Be Envoy to Japanese Gov’t,” China Post, April 28, 2016; “Ex-NSC Secretary General to Lead Relations with Japan,” Taipei Times, May 28, 2016; Joseph Yeh, “Japanese Officials’ Congrats to Tsai Signify ‘Cordial Ties,’” China Post, January 22, 2016; Abraham Gerber, “Officials Celebrate Name Change for Japanese Office,” Taipei Times, May 18, 2017; “Most Senior Japanese Official in 45 Years Pays Visit to Taiwan,” Japan Times, March 25, 2017. 86. Ko Shu-ling, “Taipei Faces Tension in Ties with Tokyo After Taiwan Passes ‘Political’ Referendum to Maintain Food Ban,” Japan Times, November 26, 2018, https://www.japantimes.co.jp/news/2018/11/26/national/taiwan-passage-japanese -food-ban-referendum-affect-relations/#.XFdZslxKhPY. 87. Jacques deLisle, “Eroding, Not Attacking, the ‘One China Policy’: Participating in International Regimes Without State Membership, Choosing Symbolic

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Struggles with Substantive Content, and Getting Help from U.S. Law,” in Reshaping the Taiwan Strait, edited by John Tkacik Jr. (Washington, DC: Heritage Foundation, 2007), pp. 111–145. 88. In the Matter of the South China Sea Arbitration (Republic of the Philippines and the People’s Republic of China), PCA Case no. 2013-19, July 12, 2016. 89. Republic of China (Taiwan), Ministry of Foreign Affairs, “ROC Position on the South China Sea Arbitration,” July 12, 2016, http://www.mofa.gov.tw/en /News_Content.aspx?n=1EADDCFD4C6EC567&s=5B5A9134709EB875; “ROC Gives Strong Response over South China Sea Award,” Taiwan Today, July 13, 2016, http://www.taiwantoday.tw/ct.asp?xItem=246203&ctNode=2194&mp=9 (comments of Interior Minister Yeh Jiunn-rong concerning eleven-dash line). 90. See Lin Ting-hui, “Taiwan’s Policy Evolution After the South China Sea Arbitration,” March 22, 2018, https://www.nbr.org/publication/taiwans-policy-evolution -after-the-south-china-sea-arbitration. 91. Chinese (Taiwan) Society of International Law, Amicus Curiae Submission, PCA Case no. 2013-19 between the Republic of the Philippines and the People’s Republic of China, March 23, 2016, http://csil.org.tw/home/wp-content/uploads /2016/03/SCSTF-Amicus-Curiae-Brief-final.pdf; Ministry of Foreign Affairs, Republic of China (Taiwan), “Position Paper on ROC South China Sea Policy,” March 21, 2016, http://multilingual.mofa.gov.tw/web/web_UTF-8/South/Position%20Paper %20on%20ROC%20South%20China%20Sea%20Policy.pdf. Compare Ministry of Foreign Affairs, People’s Republic of China, “Position Paper of the Government of the People’s Republic of China on the Matter of Jurisdiction in the South China Sea Arbitration Initiated by the Republic of the Philippines,” December 7, 2014, http:// www.fmprc.gov.cn/mfa_eng/zxxx_662805/t1217147.shtml. 92. Republic of China (Taiwan), Ministry of Foreign Affairs, “ROC Position on the South China Sea Arbitration”; Stacy Hsu, “Government Rejects South China Sea Ruling,” Taipei Times, July 13, 2016; Kuanting Liu et al., “South China Sea Ruling Triggers Cross-Party Condemnation in Taiwan,” Focus Taiwan, July 12, 2016, http://focustaiwan.tw/news/aipl/201607120028.aspx. 93. “Taiwan Seeks Inclusion in South China Sea Talks,” ANN Asia News, May 9, 2017, http://globalnation.inquirer.net/156213/taiwan-seeks-inclusion-south-china -sea-talks; Ministry of Foreign Affairs, Republic of China (Taiwan), “Sustainable Governance and Enduring Peace in the South China Sea,” July 19, 2016, https:// www.mofa.gov.tw/en/theme.aspx?n=E5A0D5E2432C234D&s=83376F561B7165E6 &sms=BCDE19B435833080 (“four principles and five actions”); “South China Sea: Taiwan to Uphold Sovereignty in South China Sea—Tsai,” Taipei Times, December 10, 2016. 94. Ministry of Foreign Affairs, Republic of China (Taiwan), “East China Sea Peace Initiative,” http://www.mofa.gov.tw/en/theme.aspx?s=780E70E6D142B833; Ministry of Foreign Affairs, Republic of China (Taiwan), “South China Sea Peace Initiative,” http://www.mofa.gov.tw/en/theme.aspx?n=E5A0D5E2432C234D&s =83376F561B7165E6&sms=BCDE19B435833080. 95. Office of the President, Republic of China (Taiwan), “President Ma Holds Press Conference on the Release of Taiwan’s Second Human Rights Report,” April 25, 2016, http://english.president.gov.tw/NEWS/4887. 96. “Implementation of the International Covenant on Civil and Political Rights: Initial Report Submitted Under Article 40 of the Covenant, Republic of China (Taiwan),” 2012, http://www.humanrights.moj.gov.tw/ct.asp?xItem=385452&ctNode =40243&mp=205; “Implementation of the International Covenant on Economic, Social and Cultural Rights: Initial Report Submitted Under Articles 16 and 17 of the Covenant, Republic of China (Taiwan),” 2012, http://www.humanrights.moj.gov .tw/ct.asp?xItem=385452&ctNode=40243&mp=205; Office of the President, Republic of China (Taiwan), “President Ma Holds Press Conference on the Release of Taiwan’s

206 Jacques deLisle First Human Rights Report,” April 20, 2012, http://english.president.gov.tw /NEWS/3880; “Implementation of the International Covenant on Civil and Political Rights: Second Report Submitted Under Article 40 of the Covenant, Republic of China (Taiwan),” 2016; “Implementation of the International Covenant on Economic, Social, and Cultural Rights: Second Report Submitted Under Articles 16 and 17 of the Covenant, Republic of China (Taiwan),” 2016; “Response to the Concluding Observations and Recommendations Adopted by the International Group of Independent Experts on March 1, 2013, Republic of China (Taiwan),” http://www .humanrights.moj.gov.tw/lp.asp?ctNode=43063&CtUnit=16034&BaseDSD=7&mp =205; Ministry of Justice, Republic of China (Taiwan), “President Presided over the Second Report on ICCPR and ICESCR Press Conference,” 2016, http://www .humanrights.moj.gov.tw/ct.asp?xItem=431093&ctNode=40238&mp=205; United Nations Human Rights Office of the High Commissioner, “Universal Periodic Review,” http://www.ohchr.org/EN/HRBodies/UPR/Pages/UPRMain.aspx. 97. “Review of the Second Report of the Government of Taiwan on the Implementation of the International Human Rights Covenants: Concluding Observations and Recommendations Adopted by the International Review Committee,” 2017, http://www.humanrights.moj.gov.tw/lp.asp?ctNode=45412&CtUnit=18365&BaseDSD =7&mp=205; “President Tsai Hosts a Luncheon for Members of International Review Committee for Second National Reports of ICCPR and ICESCR,” January 20, 2017, http://english.president.gov.tw/NEWS/5085. 98. Executive Yuan, Republic of China (Taiwan), “Taiwan Dedicated to Protecting Rights of Children and Persons with Disabilities,” August 24, 2017, https://english .ey.gov.tw/News_Content2.aspx?n=8262ED7A25916ABF&s=962999F1E09C1670; “President Tsai Reiterates Government’s Determination to Safeguard Children’s Rights,” Taiwan Today, November 21, 2017, https://taiwantoday.tw/news.php?unit =2,6,10,15,18&post=125258; “International Experts Review Taiwan’s 1st State Report on CRC,” China Post, November 21, 2017; “Concluding Observations of the Initial Report of the Republic of China (Taiwan) on the Convention on the Rights of Persons with Disabilities (CRPD) Adopted by the International Review Committee (IRC) on 3 November 2017,” http://covenantswatch.org.tw/wp-content/uploads/2017 /07/2017_CRPD_Initial-Review_Concluding-Observations_1103.pdf. 99. Relevant legislation included the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social, and Cultural Rights Implementation Act; the Convention on the Elimination of All Forms of Discrimination Against Women Enforcement Act; the Convention on the Rights of the Child Implementation Act; and the Convention on the Rights of Persons with Disabilities Implementation Act. 100. “Taiwan and the European Union Hold 1st Human Rights Consultations,” joint press release, March 22, 2018, https://eeas.europa.eu/headquarters/headquarters -homepage/41905/joint-press-release-taiwan-and-european-union-hold-1st-human -rights-consultations_en. 101. Reinhard Biederman, “Taiwan’s Polycentric Strategy Within the Environmental Regime Complex on Climate Change,” ASIEN, no. 143 (April 2017), pp. 25–26; Republic of China (Taiwan), Greenhouse Gas Reduction and Management Act (2009); “Taiwan Is Willing to Help Combat Climate Change: President Tsai,” CNA, December 4, 2018, http://focustaiwan.tw/news/aipl/201812040022.aspx. 102. Tsai’s inaugural address (stressing importance of “responsibility to the environment” and “sustainability of development,” and listing “severe pollution” among the issues of intergenerational social justice); Iok-sin Loa, “Tsai Ing-wen Asks Environmentalists to Stand with Her,” Taipei Times, April 22, 2016.

11 Beyond Regime Consolidations Hans Stockton and Yao-Yuan Yeh

In the previous chapters, the authors reviewed and analyzed the remarkable political, economic, and social transitions of the Republic of China (ROC) during seven decades of domestic struggle, external threats, and precarious international context. We began with the ROC on the brink of catastrophe facing the kinds of challenges that brought about the demise of many of its developing world cohort during the Cold War. We end with Taiwan today, a stable, liberal, and wealthy society, albeit one increasingly isolated in the diplomatic arena. Regime Transitions and Consolidations In the first part of this volume, we presented the economic, social, and political developments and transitions of the ROC up to the return of the Democratic Progressive Party (DPP) to the presidency and first-time legislative majority. We showed how the ROC flourished from an impoverished, politically unstable, and autocratic state into a wealthy, stable, and liberal state, with a society in the process of reassessing and redressing its authoritarian legacy. An exemplar for the world during its development phase, will the ROC remain so in the years to come? As mentioned, Taiwan’s regime transitions did not occur simultaneously, but rather sequentially. First, the KMT government, which created heavily repressive political and social environments, adopted import-substitution and export-orientation industrialization strategies

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210 Hans Stockton and Yao-Yuan Yeh from 1950 to 1986, leading Taiwan through its first transition stage, that of economic transition. On the heels of this “economic miracle,” and upon becoming one of the four “Asian Tigers,” along with South Korea, Hong Kong, and Singapore, democratic transition began in full force with the 1986 formation and legalization of Taiwan’s first opposition party, the DPP. This was followed by the 1992 “renewal” election in which all seats were mandated to run for election or reelection. This allowed for major constitutional reforms and the first direct presidential election in 1996, signaling the end of democratic transition and the beginning of the consolidation phase. Meanwhile, the termination of martial law (1987) and the abolition of the temporary provisions effective during the national mobilization for suppression of the communist rebellion (1991) alleviated the suppression of civil society during the pre- and early social transition years. By elevating the citizens’ political liberties and civil rights and by removing the military from matters of domestic security, the Kuomintang (KMT) triggered a fairly comprehensive transformation of the social regime. For the first time since the massacre of February 29, 1947, a diversifying and increasingly independent civil society was empowered to channel opposition demands (not just supports) to the government without suffering automatic persecution. By then, the economy was entering its own new phase, shifting toward a high-tech, capitalintensive, and service-based orientation that would make Taiwan a leader in the era of globalization. After the first direct presidential election in 1996, the ROC experienced two peaceful alternations of ruling party, from the KMT with Lee Teng-hui, to the DPP with Chen Shui-bian, and back to the KMT with Ma Ying-jeou. Thus, by 2008 the ROC had satisfied one of the common criteria for democratic transition. During the same period of time, citizens increasingly exercised freedom of speech and assembly by forming an array of civil society groups with messages and demands that would have been severely punished only years earlier. Issues of social and economic fairness and equity, minority rights, education reform, and the KMT hold on various social institutions became important debates in Taiwanese society. The election of Tsai Ing-wen (DPP) in 2016 marked the third power alternation in the ROC’s history. Tsai’s administration, the focus of the second part of our volume, faced challenges from the moment of her inauguration. Tsai’s victory margin was due in part to the poor performance of the KMT, but also to her campaign capitalizing on the growing number of demands from the bulk of the electorate. Tsai was able to convince 55 percent of voters to delegate to her the

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task of solving a range of issues, such as economic prosperity and distribution of wealth, transitional justice, housing prices, food safety, education reform, and judicial reform, to name a few. As the public policy debates moved to the fore, the “ethnic identity” debate lost its dominance over Taiwan society. In addition, to reduce Taiwan’s dependence on China, Tsai launched the New Southbound Policy in 2016 to create more robust trade and investment opportunities with the emerging economies of South and Southeast Asia. The nature of cross-Strait relations between Taipei and Beijing is perhaps the most critical factor in determining the trajectory of the ROC’s international status, political cleavage, party lines, and economic progression. Barring a change in Beijing’s increasing pressure and vigorous international isolation of the ROC, Taiwan’s road to becoming a “normal state” is nearly quixotic. Although statements or actions that move Taiwan away from being a part of the Chinese state invite economic, diplomatic, and potentially military retaliation from Beijing, statements or actions that bring Taiwan into Beijing’s orbit hold significant domestic political costs, as the KMT discovered by the end of President Ma’s second term. Although becoming a “normal” state may not be a near-future scenario, the ROC must continue to be pragmatic and flexible with regard to how it can retain US support, join international governmental organizations, and retain its remaining diplomatic allies. The Next Phase for Economic Development As a vibrant, capitalist, market economy, the ROC has long passed the stage of industrialization and sectoral transitions. Innovation has always been a central tenet of its economic policy, but automation is set to become the primary mode of high- and low-tech production by the middle of the twenty-first century. Current and future administrations will have to embrace it while also creating new opportunities for displaced workers and the next generation of workers and entrepreneurs. As noted, reducing Taiwan’s trade and investment dependency on the mainland is a major task for Tsai and her successors. Since China’s market reforms in the 1980s, investment and trade flows across the Taiwan Strait have steadily increased. According to a report by the Congressional Research Service, exports to the People’s Republic of China (PRC) composed 40 percent of Taiwan’s total export volume in 2016.1 Without a resolution to Beijing’s demand to accept the 1992 Consensus, such dependency on a politically hostile trade partner will be a constant geopolitical risk.

212 Hans Stockton and Yao-Yuan Yeh Tsai Ing-wen and her government have promoted the New Southbound Policy as one path to diversify Taiwan’s trade partners and shares. The original Southbound Policy was initiated by President Lee Teng-hui in 1994 as the overall trade volume with the countries of the Association of Southeast Asian Nations (ASEAN) was increasing. When the region was hit by the 1997 Asian financial crisis, declining capital and trade capacity in Southeast Asia forced the Lee administration to abandon the policy. It was subsequently replaced, implicitly during Chen Shui-bian’s presidency and explicitly during Ma Ying-jeou’s presidency, with a “Westbound” policy of retrenching to the China market. Tsai’s New Southbound Policy does provide a new venue to divert the current cross-Strait economic tie, but whether it will actually function as designed is still contingent on various factors in the targeted countries, such as political instability, lack of infrastructure, and often opaque or arbitrary rule of law. More important, Tsai’s government assumes that, even though they are diplomatic allies and key trade partners with the PRC, the targeted countries will willingly open their markets. Taiwan must therefore not only provide competitive goods and services, but also avoid attracting Beijing’s interference. Indeed, the PRC may very well exert its hard-power influence to limit expansion of economic ties with Taiwan. During the first decade of the twenty-first century, China and ASEAN worked closely to form the ASEAN Plus Three (China, Japan, and South Korea) as a multilateral trade and investment platform. In addition, the ASEAN-China Free Trade Area (ACFTA) came into effect in 2010. These regional trade institutions are clear signals to Taipei that ASEAN is under a strong economic influence from the PRC. For example, in the run-up to a meeting between ministers of foreign affairs of the PRC and of other ASEAN countries, ASEAN members were prepared to issue a collective open statement in support of the recent Permanent Court of Arbitration ruling regarding the South China Sea dispute. However, the statement was not published and most ASEAN nations were hesitant to offer strong rebuttals to China’s rejection of the court’s jurisdiction, let alone ruling. This is just one illustration of how the PRC utilized its hard power to coerce ASEAN nations. Applying this logic to the New Southbound Policy, the PRC may exercise its influence over those targeted states, and force them to adopt a non-cooperative attitude toward Taipei. The Next Phase for Political Development Tsai Ing-wen’s May 2016 inauguration marked the third consecutive peaceful alternation of ruling party, a key indicator of the institutional-

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ization of democratic norms and processes needed for a consolidated democracy. In terms of quality and enfranchisement, Taiwan holds its own against even the oldest Western democracies. Although the periodic and enthusiastic activation of the country’s civil society groups presents the appearance of disruption, there are no major anti-regime elements seeking to drag Taiwan back to its autocratic past. A consolidated democratic state, the ROC still faces problems. China’s interference remains the biggest external challenge to Taiwan’s domestic environment. Along with acts of military and economic intimidation, Beijing is consistently and increasingly applying soft-power tactics to influence Taiwanese businesspeople and students in the mainland as well as using United Front supporters in Taiwan. For instance, Zhang Anle, also known as the “White Wolf,” was actively promoting the Chinese Unity Promotion Party, which was founded in 2004 during his exile in Shenzhen, PRC. Arrested in Taiwan in 2013 and released on bail, he believed that “the bottom line for resolving the Taiwan problem is the one China principle, which the Communists on the mainland and the KMT in Taiwan both agree on, despite their different interpretations.”2 In addition, Wang Ping-chung, the party spokesman of the New Party, which advocates for unification between the PRC and the ROC, was charged in June 2018 of spying for China. As is often the case, though, Beijing’s efforts to undermine Taiwan’s democratic polity tend to backfire and produce more antagonism between the people in Taiwan and those across the Strait. This was typified during the 1995–1996 missile crisis, when China’s effort to intimidate Taiwan’s electorate in the lead-up to the first direct presidential election in 1996 only helped secure Lee Teng-hui’s victory. Although Lee was the leader of the pro-reunification KMT, his less than enthusiastic support for unification was apparent by this point. Beijing may still continue to apply subterfuge, as well as economic and soft-power pressures, but Chinese leaders have yet to repeat such strong coercive tactics as they did in 1996. Interestingly, Taiwanese do differentiate between the level of hostility Beijing projects onto their government and that which it projects toward Taiwan’s people. An October 2017 survey published by the Mainland Affairs Council indicated that 60 percent of respondents felt that mainland China’s government was “unfriendly” to the government of the ROC. However, only 41 percent of respondents perceived an “unfriendly” attitude from Beijing. The same survey revealed that 65 percent of respondents did not identify with mainland China’s position for developing cross-Strait relations. 3 Beijing has yet to hit upon the most strategic point and path to influence Taiwan’s electorate, but has become increasingly more sophisticated in its approach.

214 Hans Stockton and Yao-Yuan Yeh Although Taiwan’s democratic regime is consolidated, there is still room for change in the political system. For example, as a result of the seventh constitutional amendment (2005), the single nontransferable vote (SNTV) system for legislators was changed to a mixed-member electoral system. After downsizing the legislature from 225 to 113 seats, the allocation was divided into seventy-three legislative seats elected through the single-member plurality system, six seats elected through the original SNTV system for indigenous people (with two electoral districts), and the remaining thirty-four seats assigned through a party-list vote and proportional allocation. Following Duverger’s Law, the current mixed-member electoral system strongly encourages a two-party system. As a result, the KMT and DPP have dominated the subsequent three legislative races. Only one of the former third parties in the legislature, the People First Party, has survived, with only three seats. The emergence of the New Power Party in 2015 from the student Sunflower Movement of 2014 and its capture of five seats in 2016 indicate that new third parties could break through the current institutional constraints on electoral outcomes. Of note is that, unlike past third parties, the New Power Party is not a splinter of one of the two main parties. What was once a very pluralistic parliament in Taiwan has now settled into a more traditional two-party system. With the decline of ethnic identity as a major differentiator in partisan politics, the most powerful political cleavage remains the future of Taiwan’s statehood and orientation toward the mainland. Although the crossStrait issue has retained its relative dominance over domestic politics, we believe that the 2016 election showed promise for the emergence of traditional left-right partisan politics on important socioeconomic issues. Such issues will increasingly come to the fore of Taiwan’s politics and change the face of party politics, campaigning, and voting behavior. In addition, as a democracy now aggressively and openly seeking to remove any remnants of “perverse elements” from its authoritarian past, official and informal corruption and rule of law are additional areas of ongoing reform. According to the 2016 Corruption Perceptions Index compiled by Transparency International, the ROC ranked 31st out of 176 countries included in the annual index.4 Countries with similar scores include Slovenia, Barbados, Botswana, and Saint Lucia. Such a cohort for Taiwan is odd, given the ROC’s advanced level of political and economic development, and signifies that there are still institutionalized barriers to greater transparency, prevention, and enforcement of anticorruption laws and policies. Numerous corruption cases, including the one involving former president Chen, undermine public trust in government and ruling parties. Lack of political trust reduces political and social capital and inhibits further deepening of democratic quality.

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Last, as the ROC addresses challenges related to democratic quality, we anticipate the country’s path toward a “strong democracy” will become the primary next evolutionary phase. Benjamin Barber argues that the long-term foundations of traditional representative democracy are too “thin.” The social glue of collective action helps offset the atomizing effects of individualism that undermine democratic representation. Such processes can disrupt consolidated democracies and open scenarios involving the regression of democratic norms and institutions.5 Therefore an active and vibrant civil society and public participation in political life are key checks to institutional and elite behavioral backsliding. In this regard, some political institutions have been designed and implemented to facilitate public deliberation in the policymaking process. For example, Taipei City government uses the i-Voting system, an online voting platform to encourage its residents to express their opinions regarding some forthcoming policy proposals.6 I-Voting provides a venue for citizens to participate directly in the decisionmaking process. The system is, however, advisory, and the government is under no obligation to subject itself to direct democracy in this regard. We anticipate more local governments as well as the central government to implement more deliberative and participatory i-venues and platforms in the future. The other avenue is unconventional political participation, including protest, demonstration, and strikes. The Wild Strawberries Movement in 2008 and the Sunflower Movement in 2014 were indicators of the rise of social movements in the ROC. As some social concerns and issues are incapable of being addressed through the legislative and executive branches of the government due to a concentrated two-party politics (KMT and DPP), more unconventional participation will naturally occur. For example, the first two years of the Tsai Ing-wen administration witnessed active protests on a multitude of issues, such as the revision of the labor standards act, rights for indigenous people, marriage equality, and the tax law. How Taiwan’s central and local governments respond to both the issues and the political behavior will be important for the evolution of Taiwanese politics. On the one hand, popular mobilization is necessary for democratic oversight and petition. On the other hand, such events in Taiwan can be disruptive to the daily administration of the state and localities, be subject to incredible hyperbole, and project an image of potential instability to outside observers. The Tsai administration came to office with the support of many of these movements that have now become impatient with the pace of reform or unhappy with the decisions her government has made. This is evident in the 2018 Taiwanese municipal and local elections, where the

216 Hans Stockton and Yao-Yuan Yeh DPP secured only six out of twenty-two special municipality majors and country magistrates. Managing popular demands and expectations and demonstrating patience with conventional and nonconventional political expressions will remain a challenge for Tsai’s administration as well as for the future leaders of the ROC. The Next Phase for Social Development How to properly channel and address social issues and design policy that can deliver outcomes that meet citizens’ expectations represents Taiwan’s next phase of regime development, one that is somewhat insulated from the influence that China plays on the economic and political regime dimensions. Given the embedded nature of the two-party system, social movements are largely limited to finding sympathetic ears in either the KMT or the DPP. The question for the near-term future is to what extent the cross-Strait issue will suppress the emergence of stronger social issue cleavages. Upon coming to power, the DPP faced the political and economic realities of running a country. During the 2016 campaign, the DPP branded itself as a labor-friendly, socially progressive, and relatively left-leaning party in comparison to the KMT. During the first two years of Tsai’s administration, the government aggressively pushed through several major social laws and policies, including holiday and labor law, pension reforms, long-term care for elders, allowing Taiwanese Plains indigenous people to change their Chinese names back to their original native-language names, seeking transitional justice by freezing or confiscating state properties possessed by the KMT during authoritarianism, and allowing marriage equality. These social policies were difficult to move forward under KMT rule, since they conflicted either with KMT’s own party interests, or with their supporters’ interests. Critics of the second major revision of the labor standards act responded with month-long protests prior to its vote and passage in early January 2018. The legislation was widely viewed as restricting hourly workers’ ability to earn overtime pay and favorable to business owners. Thus, by the end of their respective first years in office, Tsai and the DPP majority appeared to have turned away from their policy platform that claimed to be ideologically left-leaning. Progressive DPP supporters unhappy with the Tsai administration had no viable party alternative to turn to, however. The New Power Party had taken the partisan lead in opposing the legislation, but was too small to be an effective opposition or proponent.

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Similar to the setback of the revision of the labor standards act, progressive movements on marriage equality were dampened by the 2018 Taiwanese referendum. The majority of Taiwanese voters were against pro–marriage equality proposals, including the protection of same-sex marital rights in the civil code and the implementation of a gender equality act regarding education. The results of the referendum indicate that progressive issues such as marriage equality have not been accepted by the society at large. Given the majoritarian-leaning electoral system, majority formation in the two-part system will continue to ride on the most prominent partisan cleavage—the cross-Strait issue. This circumstance will continue to delay the ascendance of social issues and public policy at the national level. Not all KMT voters are “conservative” and not all DPP voters are “progressive.” But a more conservative DPP voter, tending toward Taiwan’s separation from the Chinese state, is highly unlikely to find sympathy in the KMT, just as a more progressive, unification-leaning KMT voter may not find sympathy in the DPP. Unless the electoral design allows for representation along the lines of a second cleavage, social and public policy will be limited in their systematic impact on party lines and legislation. It is likely that this plays into DPP calculations for social policy. Social pressures urging for reform will undoubtedly increase as Taiwanese society advances and voters become jaded by “politics as usual.” The freedom to agitate, platforms for doing so, and the willingness of civil society to activate are now all institutionalized elements of Taiwan’s consolidated democracy. What seem to be lacking now are political parties as viable, platform-consistent agents of executive and legislative change. Conclusion Furthering Taiwan’s social regime represents the final challenge toward the completion of regime consolidation involving the trifecta of economic, political, and social development of the ROC as a modern, comprehensively consolidated state. At that point, Taiwan will no longer be “developing,” “consolidating,” or “emerging.” On par with many member countries of the Organisation for Economic Co-operation and Development (OECD), the ROC’s regime maturation can finally be complete after seven decades on Taiwan. For future study will be the degree to which state, political, and societal forces can redirect energies to resolving domestic policy issues, and preserve the essence of a sovereign nation in the international community and fend off Beijing’s increasing pressure to succumb to its interpretation of the 1992 Consensus.

218 Hans Stockton and Yao-Yuan Yeh This volume has presented a sequential analysis of economic, political, and social transitions on Taiwan to explain the prosperity and progress of the Republic of China since 1949. We argue that the ROC is the archetype of sequenced regime transitions. Industrialization led to democratization, which then led to civil society’s freedom (at large) to mobilize. Although we consider Taiwan an archetype, its generalizability and application to other contexts is subject to testing. We have yet to ask, let alone answer, the next most important question as comparativists: Why Taiwan? Did sequencing achieve results because of Taiwan’s idiosyncrasies related to time, place, and personalities? Clearly conscious efforts and planning created the ebbs, flows, and transitions in regime, but to what extent would the same efforts and planning produce generally applicable results? For now, though, our analyses of the ROC on Taiwan and its regime sequencing provide a theoretical and analytical launching point to explore in future case-study and comparative research. Notes 1. Lawrence and Morrison, “Taiwan: Issues for Congress,” October 30, 2017, https://crsreports.congress.gov/product/pdf/R/R44996, p. 48. 2. Xia, “The White Wolf of Taiwan.” 3. See Mainland Affairs Council, “Public’s View on Current Cross-Strait Relations,” October 2017, https://www.mac.gov.tw/en/cp.aspx?n=99D22350AAAD61D9. 4. See “Corruption Perceptions Index 2016,” https://www.transparency.org/news /feature/corruption_perceptions_index_2016. 5. See Barber, Strong Democracy. 6. See https://ivoting.taipei.

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The Contributors

Su-Feng Cheng is a research fellow in the Election Study Center at National Chengchi University, Taiwan. She received her master’s degree in China Border Area Studies from National Chengchi University.

Cal Clark is professor emeritus in the Department of Political Science at Auburn University. He received his PhD in political science from the University of Illinois at Urbana-Champaign.

Jacques deLisle is Stephen A. Cozen professor of law, professor of political science, director of the Center for East Asian Studies, and deputy director of the Center for the Study of Contemporary China at the University of Pennsylvania Law School. He received his JD from Harvard Law School.

Dennis V. Hickey is James F. Morris endowed professor of political science, distinguished professor, and director of the Graduate Program in Global Studies at Missouri State University. He received his PhD in political science from the University of Texas at Austin.

Karl Ho is clinical associate professor in the School of Economic, Political, and Policy Sciences and director of Academic Computing at the University of Texas at Dallas. He received his PhD in political science from the University of North Texas.

Wei-Chin Lee is a professor in the Department of Politics and International Affairs at Wake Forest University. He received his PhD in political science from the University of Oregon. 231

232 The Contributors Chien-Pin Li is associate dean for curriculum and technology, College of Humanities and Social Sciences, and a professor in the School of Government and International Affairs at Kennesaw State University. He received his PhD in political science from the University of Iowa. Shelley Rigger is the Brown Professor of East Asian Politics and chair of Chinese Studies at Davidson College. She received her PhD in government from Harvard University.

Hans Stockton is the director of the Center for International Studies, founding director for Taiwan and East Asia Studies Program, and Cullen Trust for Higher Education Faye Sarofim Chair in International Studies at the University of St. Thomas. He received his PhD in political science from Texas A&M University.

Alexander C. Tan is professor of political science and head of the Department of Political Science and International Relations at the University of Canterbury, New Zealand, and university chair professor of the Department of Political Science, Taiwan Institute of Governance and Communication Research at National Chengchi University, Taiwan. He received his PhD in political science from Texas A&M University.

Kharis Templeman is a research scholar and program manager of the Taiwan Democracy Project at the Center on Democracy, Development, and the Rule of Law at the Freeman Spogli Institute for International Studies at Stanford University. He received his PhD in political science from the University of Michigan.

Ching-Hsing Wang is an assistant professor in the Department of Political Science at National Cheng Kung University. He received his PhD in political science from the University of Houston.

T. Y. Wang is the chair and a professor in the Department of Politics and Government at Illinois State University. He received his PhD in political science from State University of New York at Buffalo.

Dennis Lu-Chung Weng is an assistant professor in the Department of Political Science at Sam Houston State University. He received his PhD in political science from the University of Texas at Dallas.

Yao-Yuan Yeh is assistant professor of international studies and assistant coordinator of the Taiwan and East Asia Studies Program in the Center for International Studies at the University of St. Thomas. He received his PhD in political science from Texas A&M University.

Index

Abe Shinzo, 177–178, 190 accountability institutions, 83–85, 87–88, 92 Acheson, Dean, 50 “Active Opening” reforms, 140, 144 agriculture: land reform, 32–35; structural transformation in Taiwan’s economy, 135(fig.); transition to manufacturing, 27; Tsai’s fivefold plan to address social stability, 108; US officials’ role in policy development, 32 annuity reform, 100, 100(table), 105–106, 108–109 anti-secession law, 155, 173 Armitage, Richard, 59 arms sales, 57, 63(n71), 188 ASEAN Plus Three, 212 Asia Pacific Economic Cooperation (APEC) grouping, 183 Asia Reassurance Initiative Act (2018), 189 Asian Development Bank (ADB), 183 Asian financial crisis, 42 Asian Infrastructure Investment Bank (AIIB), 183, 185 Association for Relations Across the Taiwan Straits, 43, 150, 160, 165 Association of Southeast Asian Nations (ASEAN), 141, 142(table), 212 associational life, 3 authoritarian regime: economic development without political

liberalization, 12; economic planning for KMT legitimization, 2–3; entrenchment of, 5; gradual democratization, 67–68; low trust in the judiciary, 106–107; persistence of KMT’s structures and financial advantages, 90–91; regional and global deterioration of democratic transitions, 25–26; resilient authoritarianism, 11; trust in judges and prosecutors, 2010–1018, 106(fig.). See also Kuomintang; resilient authoritarianism

balance of payments, 34 banking and securities, 42 basic industries, 40 “Be Patient, Go Slow” policy, 154 biotechnology, 137 birth rate, decline in, 105, 113 Blair, Dennis, 60 Bowling Alone (Putnam), 114 Burghart, Raymond, 60 Bush, George W., 58–59 business environment, 44–45

Cairo Declaration (1945), 47 calculator era, 137 campaign strategy for the DPP in 2016, 161–162 Carter, Jimmy, 56, 57 Central Election Commission, 89

233

234 Index Central Intelligence Agency (CIA), 48 centralization of power, 68, 92 Chen Shui-bian, 88; “Active Opening” reforms, 140, 144; cross-Strait relations, 140, 151–155; democratic transition, 210; de-Sinicization efforts, 153–154; development of the Taiwancentered narrative, 120; economic relations with China, 42, 140; electoral reform, 83; KMT’s legislative majority despite DPP victory, 20; low legislative success rates, 75–76; proindependence stance, 173; prosecution for corruption, 84–85; Rectification Movement, 120, 132(n14); UN recognition for Taiwan, 179–180; USTaiwan relations, 21, 58–59, 61, 166–167 Chiang Ching-kuo: cross-Strait trade ban, 149; death of, 42, 57–58 Chiang Kai-shek: opposition to the UN’s “two-China” policy, 54; ROC-ROK relations, 52; surrender of Formosa to, 50; Truman’s animosity towards, 48; UN’s derecognition of Taiwan, 179– 180; US stance on the loss of China, 50–54; US-PRC negotiations, 55 China, People’s Republic of (PRC): Eisenhower’s reluctance to assist Taiwan in retaking, 51–52; generational characterization of identity, 123–125; generational preference for independence from, 127(fig.); generational willingness to resist an attack on Taiwan, 128(fig.); historical context of Taiwan’s political cleavage, 118–121; KMT as legitimate ruler of, 15; KMT’s flight to Taiwan in 1949, 30; lack of democratic transition, 26; percentage of Taiwan’s exports going to economic partners, 2018, 147(table); percentage of Taiwan’s exports going to New Southbound Policy partners, Hong Kong, and China 2010–2017, 146(table); percentage of Taiwan’s outbound investment, 145(table); preference for the KMT over the DPP, 21; pressure on ROC allies, 4–5; Rectification Movement, 120, 132(n14); relocation of high-tech industries to, 137–138; shared cultural heritage with Taiwan, 125,

126(fig.); as threat to KMT authority, 15–16; trade partnership, 143; US containment and isolation policy, 53; US prediction’s of Taiwan’s fall to, 47–49; US stance on Chiang’s loss of, 50–54; US Taiwan Relations Act, 57; US-Taiwan relations under Trump, 178. See also cross-Strait relations Christensen, Brent, 188 civil society, 1; decline in resilient authoritarianism, 17; democratic consolidation and legitimization, 3; DPP coalition as campaign strategy, 161; KMT use of corporatism and mobilizational authoritarianism, 14– 15; role in democratic deepening and strengthening, 215 civil war, political and economic impact of, 29–30 classical economic perspective, 28 climate change, 194 Clinton, Bill, 58 Clinton, Hillary, 61 coalition-building as DPP campaign strategy, 161 Cold War, 1 colonialism, 23–24, 29, 32–35 community care: Tsai’s fivefold plan to address social stability, 107–108 Company Law, 36 Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), 184 Congress, US, 53–54, 56, 189 constitutional amendment: shift towards majoritarianism, 73–74 Control Yuan: DPP’s failure to address reforms to, 87–88; oversight legislation, 79–80, 95(n46); shift towards majoritarianism, 73, 74; Tsai’s proposals to strengthen, 83–85 conveners (Legislative Yuan), 76–77, 94(n22) Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW), 194 corporatism, 14–15, 17, 22 corruption, 84–85; as area of reform, 214; challenging Chen’s political legitimacy, 155; Ma’s accusations of Wang’s improprieties, 157 Corruption Perceptions Index, 214 coups, 48

Index Cross-Party Negotiation Committee (CPNC), 77 cross-Strait relations: ASEAN Plus Three, 212; challenges to Taiwan’s political development, 213; challenges to Tsai’s presidency, 164–167; China blocking Taiwan’s entry into international regimes, 184–185; China’s response to Tsai’s 1992 Consensus stance, 163– 164; desire for expansion, by generation, 2004–2016, 129(fig.); deterioration under Lee Teng-hui, 149– 151; divisive power of the political cleavage and national identity, 130– 131; DPP’s New Southbound Policy, 133; DPP’s proposed institutional changes, 67–68; Economic Cooperation Framework Agreement, 113; economic relations, 43–44, 139–140; generational politics, 118, 126–128; importance of PRC-ROC partnership, 7; Interpol repatriation of Taiwanese to China, 182; Lee’s drive for independence, 58; Ma’s “three no’s” approach, 59–60; as most significant social cleavage, 217; opposition to Ma Ying-jeou’s policies, 156–161; policy successes of KMT and DPP, 22; public satisfaction with presidential performance, 2012–2018, 99(table); student protests over the Cross-Strait Service Trade Agreement, 158; Taiwan’s direct investment in China, 144–146, 145(table); Taiwan’s exports to China as percentage of all exports, 1991–2016, 141(table); Taiwan’s international status agenda, 171–175; Taiwan’s pursuit of international status, 194–196; Tsai’s 2016 campaign strategy, 161–164; Tsai’s institutional reform agenda addressing oversight of the presidential office and, 79–80; Tsai’s prioritization of social issues, 100, 100(table); US perspective of, 59–60. See also China, People’s Republic of (PRC) Cross-Strait Relations Act, 80–81 Cross-Strait Service Trade Agreement (CSSTA; 2013), 34, 69, 85, 157, 158– 159, 160, 175 currency appreciation, 41–42

Dangwai movement, 18–19. See also Democratic Progressive Party

235

deadlock, legislative, 77 defense pact, US-ROC, 51–52, 56, 57 defense spending, 30–31 Democratic Progressive Party (DPP): alternation of power with the KMT, 23–25; campaign strategy for 2016, 161–164; commitment to cross-Strait relations, 173; council seat share, 93(n13); cross-Strait engagement policy under Chen, 151–152; crossStrait issue as political cleavage, 217; economic integration with China, 140; establishment of, 41; failure to address electoral reform, 87; generational politics, 122, 126–127, 131; hostility toward Ma’s China policy, 156–157; institutional reform proposals mirroring KMT policies, 86–87; KMT’s hold on political power through the legislature, 20–22; midterm election defeats as response to Tsai’s cross-Strait policy, 164–165; nationalization of the party system, 70–72; New Southbound Policy, 133; occupation of the speaker’s podium, 78; oversight legislation, 79–80, 95(n46), 95(n49); party formation as democratic transition, 210; political reforms targeting KMT, 70, 90–91; potential form and scope of Tsai’s political reforms, 91–93; shifting to single-party majoritarian rule, 74–75; Tsai’s electoral victory ending KMT control, 67; Tsai’s policy response to social issues, 107–111; Tsai’s political reform agenda, 69–70; 2016 campaign strategy, 161–162; 2016 election victories as response to KMT performance, 97–98 democratization, 3–4; alternation in power between KMT and DPP, 23–25; changes to labor policies and rights, 112–113; deepening democratic quality as current challenge, 214–215; DPP formation as democratic transition, 210; economic development without political liberalization, 11–12; economic liberalization and, 41–42; external environments effecting change, 17–18; generational characteristics, 122–123; gradual evolution from single-party authoritarianism, 67–68; KMT’s

236 Index extended political dominance, 22; KMT’s friction with the ruling DPP, 20; KMT’s repression of political opposition, 15–16; Lee’s manipulation of identity politics, 150–151; regime transition and consolidation, 1950– 2018, 113(table); regional and global deterioration, 25–26; shaping Taiwan’s political development and political cleavage, 119–120; trajectory of Tsai’s political reforms, 92; US-China negotiations accelerating, 55 demographics, political cleavage and, 117–118 Deng Xiaoping, 43, 57 developmental-state theory, 28 diplomatic relations and status, 4–5; deterioration over Tsai’s 1992 Consensus stance, 164; economic liberalization and internationalization, 41–42; Lee’s “pragmatic diplomacy,” 58; Ma’s cross-Strait relations and, 159; PRC-US relations under Jimmy Carter, 56; public satisfaction with presidential performance, 2012–2018, 99(table); Taiwan’s formal diplomatic relations, 185–187; Tsai’s overture’s to the US, 164; US derecognition of Taiwan, 17–18 direct democracy, 69, 83, 88, 89, 215 disorderly conduct in the Legislative Yuan, 77–78 dual identity, 123–124, 124(fig.), 170(n36) Dulles, John Foster, 52, 53 dynamic nationalization, 71

economic aid, 51 Economic Cooperation Framework Agreement (ECFA, 2010), 81, 113, 144, 157, 160–161, 175, 182 economic development: deceleration since the 1990s, 42–43; decline of resilient authoritarianism, 16–18; driving democratic consolidation, 11– 12; effect of land reforms on, 34–35; future diversification under Tsai, 211– 212; impact of US aid in the 1950s, 31–32; under Japanese colonial rule, 29; miraculous economic transition, 5–6; New Southbound Policy activities, 143; public satisfaction with presidential performance, 2012–2018,

99(table); role of the market and state, 28; as side-effect of economic growth, 13–14; social issues and, 99–100, 112; Tsai’s prioritization of social issues, 100(table) economic growth: dissatisfaction with KMT policies and performance, 25; dynamics of economic maturation, 137(fig.); economic impact of Allied action on production, 29–30; economic maturity and lower growth rates, 136; economic miracle, 133–134; growth rates, 2001–2017, 139(table); income inequality and, 102, 104; increasing democratic expectations of government, 14; KMT’s hold on political power despite, 13–14; KMT’s massive wealth, 21; policy successes of KMT and DPP, 22; real wage growth and, 100–102, 101(fig.), 102(fig.); recent stagnation, 45; resulting from the New Southbound Policy, 146–147; stagnation following 1990s growth, 133–134; structural transformations, 134–136; Taiwan’s decline after growth and development, 133–134; transition from agrarian to manufacturing economies, 27 economic liberalization, 41–42 economic maturation, 136–138, 137(fig.) economic planning, 1–2; importsubstitution policies, 36–37; political legitimization of the KMT, 2–3; US and Taiwanese contributions to, 32 economic policy: Chen’s cross-Strait relations, 154; goals, alliances, and activities of the New Southbound Policy, 140–146; integration with China, 139–140; Ma’s cross-Strait relations, 159–160; PRC leverage, 7 economic recession (2001), 138 economic reforms: export-oriented industrialization, 37–39 economic regimes, 2–3, 8 economic stability, 3, 30–31 economic transformations, 134–135 education policy, 105; annuity reform, 105–106, 108–109; LIFT program attracting expatriate talent back to Taiwan, 110–111; mass education creating human capital, 134; mobilizational authoritarianism, 15; New Southbound Policy activities,

Index 143; nine-year compulsory education plan, 113; Taiwan-centered curricula, 120, 123–124; Tsai’s prioritization of social issues, 100, 100(table) Eisenhower, Dwight D., 51–55 El Salvador, 188 electoral competition, nationalization of, 6, 68, 70–72 electoral reform, 74, 82–83, 87 electoral system, 23–25, 214 electronics industry. See high-tech industries Electronics Research and Service Organization (ERSO), 40–41 employment rate: failure of Ma’s 633 Plan, 115(n1) energy policy: Tsai’s prioritization of social issues, 100(table) entrepreneurship, 13–14 exchange-rate adjustment, 41 executive power: KMT losing political control, 23–24; majorities without majoritarianism after 2008, 75–79; nationalization of the party system, 68; single-party majoritarian rule, 74– 75; strengthening accountability institutions, 84; Tsai’s proposal to strengthen oversight, 80–81 Executive Yuan, 76; institutional veto players, 73; Legislative Yuan’s powers over, 80; partisan objections to DPP’s institutional reform proposals, 86–87; power imbalance with the Legislative Yuan, 82 export processing zone (EPZ), 38–39 export-led strategy, 134, 135(fig.), 136 export-oriented industrialization, 37–39, 209–210 export-processing zones, structural transformation of, 135 exports: economic growth rates, 2001– 2017, 139(table); increase in Taiwan’s exports to China, 2007–2014, 158; New Southbound Policy activities, 143–144; percentage going to New Southbound Policy partners, China, and Hong Kong, 2010–2017, 146(table); percentage of Taiwan’s exports going to New Southbound Policy partners, Hong Kong, and China 2010–2017, 146(table); Taiwan’s exports to China as percentage of all exports, 1991–2016, 141(table)

237

external causes of social issues, 112, 114 external environments’ role in peaceful democratization, 17–18

Farglory Land Development Company, 84 filibuster, 78 financial crisis, 42 “Five No’s” policy, Chen’s, 151–152, 154–155 food safety, 105; land reform, 34–35; Tsai’s fivefold plan to address social stability, 107–108; Tsai’s prioritization of social issues, 100, 100(table) foreign direct investment (FDI): business environment and, 44–45; China’s growing relations with Taiwan, 43– 44; economic liberalization and regulation, 42; export processing zone, 38–39; export promotion policy to stimulate, 135; science-park projects, 40–41; Taiwan’s investment in the PRC, 144–146, 145(table) foreign exchange-rate system, 41 foreign policy: Chen’s cross-Strait relations, 154–155; US-Taiwan-China connectivity as challenge to Tsai’s presidency, 166–167. See also crossStrait relations foreign transfer receipts, 31 Formosa, 49–50 free trade agreements, 144–145, 182–183 Free Trade Area of the Asia-Pacific (FTAAP), 165

generational politics: cross-Strait relations, 126–129; defining characteristics of generation, 121–122; DPP leaders’ characterization, 126–127; dual identity by generation, 1994–2016, 124(fig.); political cleavages shaping, 117–118; shared culture, 126(fig.); “Taiwanese identity” by generation, 1994–2016, 124(fig.) Gini coefficient, 28, 102, 103(fig.), 104 “Go South” economic policy, 141, 154 gradualism: evolution from single-party authoritarianism, 67–68 Great Proletarian Cultural Revolution (China), 54 Great Recession (2008), 134, 138–139 gross domestic product (GDP): economic growth rates, 2001–2017, 139(table); economic periods, 140; income

238 Index inequality and GDP growth, 138–139; Taiwan’s economic growth, 14; Taiwan’s real GDP growth rate, 1951–2015, 142(fig.); trajectory from 1952 to 2010, 27 Guidelines for National Unification, 150, 151, 152–153

Hainan Island, 48 Han Kuo-yu, 45, 131 Hau Lung-bin, 84 heavy industries, 40 higher education: need for policy reform, 105; nine-year compulsory education plan, 113 high-tech industries: contribution to economic growth, 40–41; economic growth with equity, 136; effect on income equality, 138; information and communication technology, 27–28, 43–44; semiconductor technology, 137 Hong Kong: percentage of Taiwan’s exports going to economic partners, 2018, 147(table); percentage of Taiwan’s exports going to New Southbound Policy partners, Hong Kong, and China 2010–2017, 146(table); real wage growth, 101; Taiwan’s exports to China, 140; trade partnership, 143 housing prices, 104–105, 107–108 Hsieh, Frank, 71–72 Hsinchu Science-Based Industrial Park (HSIP), 40–41 Huang Kuo-chang, 88 Huang Shih-ming, 85, 95(n46) human capital, 113, 134, 136 human rights, 18, 195–196 human rights regime, international, 193– 194 hyperinflation, 30–31

identity, 170(n36); Chen’s “Five No’s” policy, 153; dividing Tsai and the DPP, 6–7; generational characterizations, 123–125; increasing self-identification as Taiwanese, 3–4; KMT elites shaping Taiwan’s, 118–119; Lee’s manipulation of identity politics, 150–151; political cleavages shaping generational politics, 118; Rectification Movement, 120,

132(n14); reduction in importance, 211; shared cultural heritage with China, 125; shifting identity affiliation among Taiwanese people threatening the KMT, 161 identity reconstruction, 167–168 ideologies and values: political cleavage, 117 immigration: New Southbound Policy activities, 143 impeachment proceedings, 84–85, 88, 95(n46) import-substitution policies: contribution to economic growth, 36–37; economic challenge, 135; economic transformation, 134; instigating KMT’s economic transition, 209–210 income distribution, 28; egalitarian distribution, 13–14; land reform, 32– 35; Tsai’s failure to address income inequality, 111 income inequality: economic growth and, 28; increase despite economic growth, 102–104; public perception of the growing gap between rich and poor, 2013–2016, 104(table); ratio of the highest 5 percent to lowest 5 percent of average income, 1998– 2014, 102, 103(fig.), 104; Tsai’s failure to address, 111 independence, Taiwan’s: Chen’s “Five No’s” policy, 151–152, 153; China’s antisecession law, 155; China’s suspicions of Lee’s unification agenda, 151; DPP-KMT friction over, 22–23; generational politics, 124– 125, 130–131; historical context of Taiwan’s political cleavage, 119; increased US-Taiwan tensions under Chen, 58–59; Lee’s advocacy for, 58; Ma’s cross-Strait relations, 161; as political cleavage, 214; Tsai’s status quo maintenance policy, 161–163 indigenization movement, 42, 153 Industrial Technology Research Institute (ITRI), 40–41 industrialization: export-oriented, 37–39; under Japanese colonial rule, 29; KMT’s hold on political power despite economic growth, 13–14; transition from agriculture to, 27; upgrading during the 1970s and 1980s, 39–42. See also manufacturing

Index inflation, 29–31, 39 information and communication technology, 27–28, 43–44 infrastructure projects: high-tech industries, 40–41; New Southbound Policy activities, 143 institutional continuity, 92–93 institutional reforms, 23–24 institutional veto players, 73 interest rates, 30 intergovernmental organizations, 60 internal causes of social issues, 112 International Cooperation Administration (ICA), 32 International Covenant on Civil and Political Rights (ICCPR), 193 International Covenant on Economic, Social, and Cultural Rights (ICESCR), 193 international organizations and regimes, participation in: climate change, 194; economic organizations, 182–183; emerging regimes, 184–185; human rights regime, 193–194; UN Convention on the Law of the Sea, 191–192; UN specialized organizations, 180–182; United Nations, 179–180 international status, Taiwan’s, 7–8; “as if” participation in UN treaty regimes, 190–194; China’s response to Tsai’s pursuit of, 171–175; forming global and regional diplomatic relations, 185–187; informal bilateral relations, 187–190; Nixon’s opposition to, 54– 55; participation in the UNCLOS, 191–192; uncertainty of US policy under Trump, 175–179; victories and setbacks in pursuing, 194–196. See also international organizations and regimes, participation in inter-party caucus mechanism, 77 Interpol, 181–182

Japan: colonial rule, 29; informal bilateral relations, 190; Taiwan’s exclusion from treaty negotiations, 50; Taiwan’s relations under Ma, 159; US relations under Trump, 177 Jiang Yi-huah, 68 Johnson, Lyndon B., 53 Joint Commission on Rural Reconstruction (JCRR), 32, 33

239

judicial reform, 83–85, 87–88, 91, 100, 100(table), 106–107, 111 Judicial Yuan: perceptions about court cases receiving media attention, 2017, 107(fig.); public trust, 106–107; shift towards majoritarianism, 74; Tsai’s proposals to strengthen, 83–85

Kennedy, John F., 53 Ker Chien-ming, 85 Kissinger, Henry, 54–55 Ko Wen-je, 84 Koo, Chen-fu, 150 Korean peninsula, 52 Korean War, 1, 31, 49, 50, 51 Kuomintang (KMT): alternation of power with the DPP, 23–25; corporatism and mobilizational authoritarianism, 14– 15; council seat share, 93(n13); cross-Strait issue as political cleavage, 217; Dangwai movement, 18–19; decline in government performance, 97–98; DPP election overturn, 42; DPP political reform agenda targeting, 70, 90–91; DPP’s portrayal of KMT as alien regime, 168x; DPP’s social development issues, 216; economic integration with China, 140; economic transition, 209–210; failing to address social issues, 98–99; friction with the ruling DPP, 20; generational politics, 122, 131; historical context of Taiwan’s political cleavage, 118–119; hold on political power during economic growth, 13–14; internal legitimization, 2–3; intra-party polarization over Ma’s China policy, 156–157; land reform, 32–35; legislative deadlock, 77–78; losing control of the legislature, 23–24; loss of political control to the DPP, 67; Ma’s China policy threatening KMT electoral potential, 161; nationalization of the party system, 70–72; occupation of the speaker’s podium, 78; polarization over Ma’s China policy, 157–159; political decline, 16–17, 19– 20; retention of power through legislative majority, 20–22; retreat to Taiwan in 1949, 47; shifting identity affiliation among Taiwanese people, 122, 161; single-party majoritarian rule, 74–75

240 Index labor force: annuity reform, 100, 100(table), 105–106, 108–109; decentralized industrial development, 39; declining quality of, 113; impact of the KMT’s martial law, 112–113; labor standards reform, 216–217; SME growth, 13; transition from agriculture to industry, 27 Lai Ching-te, 86 land reform, 32–35, 112, 134 land tenure, 33–34 Land-to-the-Tiller program, 32–33 language: Chen’s Taiwan-centered identity initiatives, 153 Leach, James, 59 Leaders in Future Trends (LIFT), 110 Lee Teng-hui: Chiang’s death, 57–58; cross-Strait relations, 1988–2000, 149–151; democratic reform, 19–20; democratic transition, 210; economic policies targeting outflow to China, 139–140; economic relations with China, 42, 139–140; informal bilateral relations with Japan, 190; southward economic policy, 141, 165; UN recognition for Taiwan, 179–180; US-ROC relations, 61 Legislative Yuan: annuity reform, 108– 109; blunting presidential power, 69; cross-Strait relations oversight, 80–81; divisiveness over Ma’s China policy, 157–158; DPP majority with Tsai’s electoral victory, 74; DPP targeting KMT assets, 90–91; DPP’s party unity, 163; institutional veto players, 73; KMT’s retention of power through, 20–22; low presidential legislation success rates, 75–76; nationalization of the party system, 68, 71; partisan objections to DPP’s institutional reform proposals, 86–87; permanent committees, 94(n21); political system changes, 214; rules and organization for bill proposals, 76–78; shift toward majoritarianism, 73–75; SNTV voting system, 23–25, 74, 79 LGBT community, 89, 217; social issues and protection of rights, 115 liberalization, political: economic development without, 12 Lin Chuan, 86 Lin Yi-shih, 84 linguistic identity, 6–7, 153

Liu Cheng-chi, 84 livelihood issues, 98–105 living-at-ease program, 107–108 Lo Ying-shay, 94(n35) local elections, 215–216; nationalization of party politics, 71–72

Ma Ying-jeou, 42; backlash over CSSTA legislation, 69; corruption prosecution, 84; cross-Strait relations, 156–161; democratic consolidation, 3–4; democratic transition, 210; DPP political reform agenda, 69–70; ECFA negotiations, 81; economic integration with China, 7, 139, 140, 144; establishing formal diplomatic relations, 185–186; factors in the KMT downturn, 71–72; failure of the 633 Plan, 115(n1); free trade pact with Singapore, 144–145; generational characterizations among Taiwanese, 123; human rights performance, 193; identity affiliation among Taiwanese, 161; KMT’s decline in government performance, 97–98; KMT’s legislative majority under, 20; lack of solutions for social issues, 98–99; low legislative success rates, 75–76; occupation of the speaker’s podium, 78; “one China” policy, 165, 173; opening of USTaiwan relations, 60; presidential authority, 68; public satisfaction with presidential performance, 2012–2018, 99(table); rapprochement toward China, 120–121; Taiwan’s investment in the PRC, 144; “three no’s” approach to cross-Strait relations, 59–60; trajectory of Tsai’s political reforms, 92; UN recognition for Taiwan, 179– 180; US rebuke over cross-Strait challenges, 167. See also Kuomintang MacArthur, Douglas, 48, 50 Mainland Affairs Council (MAC), 80–81, 86, 150, 173–174, 213 majoritarianism, 75–79, 92 Mannheim, Karl, 121–122 manufacturing: basic and heavy industries, 40; economic growth rates, 2001–2017, 139(table); effect of currency appreciation, 41–42; export industrialization, 39; high-tech industries, 40–41; import-substitution policies, 36–37; increasing investment

Index in China, 43–44; KMT’s hold on political power despite economic growth, 13–14; oil-induced changes, 40; product structure changes, 27; rising prosperity increasing costs of, 136; upgrading during the 1970s and 1980s, 39–42. See also industrialization Mao era, 16 maritime law, 191–192 market economy, 28, 35–36 martial law, 19; economic development without political liberalization, 12; impact on the work force, 112–113 Mattis, James, 177, 188–189 McCarthy, Joseph, 50 military: annuity reform, 105–106, 108– 109; China’s increasingly bold posture against Taiwan, 164, 175; China’s response to Lee’s US visit, 151; food security, 34–35; generational preference for engagement with China, 126–129, 128(fig.), 130–131; removal of US troops from Taiwan, 56; social transition through removing from domestic security, 210; Taiwan Relations Act provision, 57; Taiwan’s militarization, 16; US deployment in Vietnam, 53; US policy shift during the Korean war, 49, 50–51; US tacit alliance with Taiwan, 49–50 military aid, 31–32 Military Assistance Advisory Group (MAAG), 32, 50 minimum wage, 109–110 mobilizational authoritarianism, 14–15, 17; KMT political support base, 21 monetary reform, 30 Montreal Protocol, 194 Moriarty, James, 188 Mutual Defense Treaty (1954), 51–52, 56, 57 Mutual Security Mission to China, 31–32

National Defense Authorization Act (US; 2017), 189 National Security Council (NSC), 80–81, 86 National Unification Council, 58, 151, 152–153, 155 nationalization of political competition, 6, 68, 70–72 neoclassical economic perspective, 28

241

New Development Bank, 185 New Power Party, 158, 214, 216 New Southbound Policy, 7, 165; economic diversification, 211–212; economic vision, 133; goals, alliances, and activities, 140–146; nations included in, 142(table); percentage of Taiwan’s exports going to economic partners, 2018, 147(table); percentage of Taiwan’s exports going to New Southbound Policy partners, Hong Kong, and China 2010–2017, 146(table); political and economic implications, 146–147 Nicaragua, 185 1992 Consensus: creation of, 150; DPP rejection of, 153; generational politics, 127–128, 129(fig.); Ma’s policy with China, 156; Tsai’s commitment to international legitimacy, 172; Tsai’s status quo maintenance policy, 4, 163–165 Nixon, Richard M., 51, 54–55 “No Haste, Be Patient” trade policy, 151 North Korea, 177–178 notebook-computer era, 137 nuclear programs, 57

Obama, Barack, 60, 185 oil crisis, 40 “one China, different interpretations” principle, 153, 173. See also 1992 Consensus “one China” principle: Chen’s “Five No’s” policy, 152; China’s response to Tsai’s status quo policy, 172–175; DPP rejection of, 154–155; Lee’s commitment to, 57; Sinicization, 118–121, 122; Tsai’s status quo maintenance policy, 163–165, 172– 175; US policy under Bush, 59; US relations under Trump, 176. See also 1992 Consensus; unification of Taiwan and China one-party authoritarian rule, 1 opposition, political: Dangwai’s goal of ending KMT power, 18–19; KMT repression, 15; legalization of, 3 original equipment manufacturing (OEM), 44 oversight legislation, 86, 95(n46), 95(n49); Tsai’s institutional reform agenda, 79–82

242 Index Panama, 188 Paris Accords, 194 party chair as majority party weakness, 78 patronage: KMT political support base, 21 Pence, Mike, 177 pensions. See annuity reform People First Party (PFP), 74, 214 Philippines, 14, 191, 196 piracy, 150 political cleavage: emergence of the younger generation, 130–131; origin and transformation of, 118–121; statehood as remaining cleavage, 214 political development: effect of land reforms on, 34; external challenges to domestic development, 213–214. See also democratization political participation, democratic deepening and, 215–216 political reforms: allowing KMT’s continued hold on power, 22; DPP institutional reform proposals mirroring KMT policies, 86–87; DPP reforms targeting KMT assets, 70, 90–91; DPP’s proposed institutional changes, 67–68; strengthening accountability institutions, 83–85; Tsai’s proposed electoral reform, 82–83 political regimes, 2–3, 8 political transition, economic stabilization during, 30–31 Powell, Colin, 59 pragmatic diplomacy, Lee’s, 58 presidential power: institutional veto players, 73; majorities without majoritarianism after 2008, 75–79; nationalization of the party system, 68; partisan objections to DPP’s institutional reform proposals, 86–87; Tsai’s institutional reform agenda addressing oversight of cross-Strait relations and, 79–82. See also Executive Yuan Procedure Committee (Legislative Yuan), 77 prosecutorial offices, Tsai’s proposals to strengthen, 83–85, 87–88 Prosper Again economic program, 140 Putnam, Robert, 114

Reagan, Ronald, 57 real wages, 100–101, 101(fig.), 109–110 recall of unpopular officials, 88

Rectification Movement, 120, 132(n14) referendum act, 83, 88–89 refugees: economic impact of Chinese flight to Taiwan, 30; KMT retreat to Taiwan in 1949, 47 regime transitions and consolidations, 1– 2, 2(table), 3; economic development, 211–212; increasing democratic quality, 212–216; social development, 216–217. See also democratization Regional Comprehensive Economic Partnership (RCEP), 165, 184 regional economic community, 141, 143 rent reduction program, agricultural, 33 resilient authoritarianism, 11, 12–18, 26 resource creation and allocation, 2–3, 13–14, 134, 135–136 Rhee, Syngman, 52 rice purchase system, 34–35 riots, anti-American, 56, 63(n51) ruling-opposition negotiation mechanism, 77

salaries and wages, 100–101, 109–110 same-sex marriage, 89, 217 security: Eisenhower’s mutual defense pact, 51; Taiwan Relations Act provision, 57; Taiwan’s strategic placement during the Korean War, 49; Taiwan’s strong relationship with the US, 188–189; US-ROC security pact, 52, 61 “The Security Dilemma in Alliance Politics” (Snyder), 49 semiconductor technology, 137 service sector, 138, 139(table) Shangri-la dialog, 188–189 simple majority rule, 6, 68 Singapore: free trade pact, 144–145; real wage growth, 101 single nontransferable vote (SNTV), 23– 25, 74, 79, 214 single-party majority rule, 70–75. See also authoritarian regime Sinicization/de-Sinicization measures, 118–119, 120, 121, 124, 154, 173 skilled labor, contributions of China’s refugees to, 30 small and medium enterprises (SMEs), 13; export industrialization, 39; hightech industries, 40–41; loss of technology industries, 137–138 smuggling, 150

Index Snyder, Glen, 49 social capital: decline in interpersonal ties, 114 social class: political cleavages shaping generational politics, 117–118 Social Democratic Party, 158 social development, 216–217 social issues, 216; annuity reform, 100, 100(table), 105–106, 108–109; defining, 98; DPP coalition as campaign strategy, 161; education policy, 105; judicial reform, 106–107; livelihood issues, 100–105; policy response by Tsai and the DPP, 107– 111; political cleavage, 117–118; prioritizing, 100(table); public satisfaction with presidential performance, 2012–2018, 99(table) social movements, 215 social policy: challenges and obstacles to Tsai’s reforms, 112–114; KMT’s decline in government performance, 97–98 social regimes, 2–3, 8 social stability: Tsai’s plan for, 107–111 social transition, 210 Soong, James, 155 South China Sea, 159, 164, 167, 177, 192 South Korea: foreign direct investment, 44–45; real wage growth, 101; US relations under Trump, 177–178 speaker’s podium, occupation of, 78 Special Investigative Division, 84–85 split-ticket voting, 70, 93(n3) state: control over monopoly enterprises, 36; role in economic development, 28 state-owned enterprises (SOEs), 35–36 statist economic perspective, 28 status quo policy towards China, 132(n26), 155, 156, 161–164 Stevenson, Adlai, 51 Straits Exchange Foundation, 81, 86, 150, 160 structural transformations, 134, 135(fig.) student-led protests, 34, 69, 118, 158–159 Su Jia-chyuan, 87 Sunflower Movement, 34, 69, 82–83, 158–159, 175, 214 super-presidency, 68, 79–80 Survey of Global Competitiveness Index, 44

tacit alliance, 49–50, 55–60, 61

243

Taipei Dome construction, 84 Taiwan Enabling Act, 56 Taiwan Provincial Assembly, 73 Taiwan Relations Act, 56–57, 59, 61 Taiwan Semiconductor Manufacturing Corporation, 137 Taiwan Solidarity Union (TSU), 74 Taiwan Strait, neutralization of, 51–52 Taiwan Travel Act (2018), 189 talent exchanges: New Southbound Policy activities, 143 taxation: economic stabilization during the political transition, 30–31; exportoriented industrialization, 38; rice-for-fertilizer system, 35 technocrats, 135–136 technology industry: economic growth with equity, 136–138; economic integration with China, 139–140; LIFT program attracting expatriate talent back to Taiwan, 110–111; New Southbound Policy supply chains, 143–144; Taiwan’s competitive labor force in the global economy, 113 television era, 137 term limits, judicial, 74 textile industry, 36–37, 39 tourism from China, 175 trade relations: China’s growing relations with Taiwan, 43–44; export-oriented industrialization, 37–39; importance of PRC-ROC partnership, 7; importsubstitution policies, 36–37; Lee’s China policy, 151; Ma’s cross-Strait relations, 159–161; New Southbound Policy data, 144–145, 145(table); Taiwan’s membership in international economic organizations, 182–183; Trump administration’s hostility, 178; Tsai’s New Southbound Policy to reduce dependence on China, 165– 166; US embargo to China, 53. See also exports trade structure: transition from agriculture to industry, 27 transitional justice: Tsai’s prioritization of social issues, 100(table) Trans-Pacific Partnership (TPP), 164, 165, 178, 182–183, 184 Transparency International, 214 travel ban, 53 Truman, Harry, 47–50, 51 Trump, Donald, 62, 164, 175–179, 189–190

244 Index trustworthiness of the government and parties, 114x, 116(n25) Tsai, Alex, 84 Tsai Ing-wen: accountability reform, 88; challenges for social reform, 112–114; challenging China’s unification plans, 167–168; DPP’s New Southbound Policy, 133; economic diversification through the New Southbound Policy, 211–212; election victory as response to KMT performance, 97–98; electoral reform proposal, 82–83; electoral victory ending KMT control, 67; factors in the DPP rout, 72; forming global and regional diplomatic relations, 185–187; generational cleavages, 131; goals, alliances, and activities of the New Southbound Policy, 140–146; implications of the New Southbound Policy, 146–147; institutional reform proposals mirroring KMT policies, 86–87; international human rights regime, 193–194; issues affecting the administration, 4–5; legislative oversight of the presidential office and cross-Strait relations, 79–82; low legislative success rates, 75–76; majority without majoritarianism, 78– 79; midterm election defeats as response to cross-Strait policy, 164– 165; nationalization of the party system, 70–72; participation in international economic organizations, 182–183; participation in UN specialized organizations, 180–181; political challenges, 210–211; political reform agenda and challenges, 69–70, 79–85; preserving the US-Taiwan relations, 187–190; prioritizing social issues, 100(table); public dissatisfaction with social reforms, 115; public satisfaction with presidential performance, 2012–2018, 99(table); response to social issues, 107–111; scope and form of political reforms, 91–93; strengthening accountability institutions, 83–85; Taiwan’s international status, 7–8; Taiwan’s international status agenda, 171–172; Taiwan’s participation in the UNCLOS, 191–192; US relations under Trump, 175–179 “two Chinas” solution, 53–54, 152

UN Convention on the Law of the Sea (UNCLOS), 191–192, 196 UN Convention on the Rights of Persons with Disabilities, 194 UN Convention on the Rights of the Child, 194 UN Framework Convention on Climate Change and its Conference of Parties, 181, 194 unification of Taiwan and China: Chen’s “Five No’s” policy, 152; China’s 2016 moves and Tsai’s countermoves, 167– 168; cross-Strait relations under Lee, 149–150; generational differences in support of, 130–131; growing consensus against, 3; increased USTaiwan tensions under Chen, 58–59; KMT’s repression of political opposition, 15–16; Ma’s cross-Strait relations, 161; Nixon’s “China game” as threat to ROC, 55; as political cleavage, 6–7, 118–119; Taiwan’s loss of international support over, 18. See also “one China” principle United Nations: derecognition of Taiwan, 18, 179–180; diplomatic recognition of ROC, 2; effect on Taiwan’s political legitimacy, 119; human rights regime, 193–194; Taiwan’s international status, 50, 179–180; Taiwan’s participation in UNspecialized organizations, 180–182; “two Chinas” solution, 53–54 United States-Taiwan relations: Chen’s cross-Strait relations, 154–155; China’s response to Lee’s visit, 151; concerns over Ma’s China policy, 160; cycle of abandonment and alliance, 61–62; deterioration during the 1990s, 58–59; economic aid during the transition, 31–32; endorsement of Tsai’s candidacies, 162; export domination, 143; export-oriented industrialization, 37–39; formal alliance partnership, 50–54; informal bilateral relations contributing to international status, 187–190; Ma’s “three no’s” approach, 59–60; preference for the KMT over the DPP, 21; recognition and derecognition of Taiwan, 2, 17–18, 41; ROC response to US abandonment, 54–55; shifting aid from military to development, 37;

Index strained diplomatic relations with ROC, 4–5; tacit alliance, 49–50, 55– 60; Taiwan Relations Act, 56–57; Taiwan’s entry into international regimes, 185; as threat to KMT authority, 15–16; Trans-Pacific Partnership, 164, 165, 178, 182–183, 184; Tsai’s policies challenging USTaiwan security support, 166–167; uncertainty under Trump, 175–179; US predictions of Taiwan’s fall to the PRC, 47–49 US Agency for International Development (USAID), 32, 37

Vatican, diplomatic relations with, 186 veto players, 68, 72–73 Vietnam conflict: US military deployment, 53 vocational training: nine-year compulsory education plan, 113

wage stagnation, 100–101 Wang, Tao-han, 150 Wang Jin-Pyng, 77, 85, 87, 157 Wego, Chiang, 55

245

Wild Strawberries Movement, 215 Wilder, Dennis, 59 Winckler, Edwin, 16 Wong, Alex, 188 World Bank, 44 World Economic Forum (WEF), 44 World Health Assembly (WHA), 159, 180–181 World Health Organization (WHO), 60 World Trade Organization (WTO), 42, 182, 184 World War II: economic impact of Allied action, 29–30 Wu, Joseph, 188 Xi Jinping, 167, 171, 173, 174, 185, 188 Yeh, George, 48, 50 Yin, K.Y., 35 Yu Zhengsheng, 173

Zhan, Lian, 155 Zhou Enlai, 55 zirandu (naturally independent) generation, 125

About the Book

How did Taiwan transform itself from a “least developed country” into an Asian Tiger? How did it become a successful, multiparty democracy after years of authoritarian rule? Why do its relations with China and the US remain critical? The authors address these questions as they assess Taiwan’s trajectory since 1949 in the political, economic, and social spheres. They also consider the challenges the country faces as it seeks to maintain its status and sustain growth despite internal struggles, rising tensions with Beijing, and declining international diplomatic recognition.

Hans Stockton is director of the Center for International Studies, founding director for the Taiwan and East Asia Studies Program, and Cullen Trust for Higher Education Faye Sarofim Chair in International Studies at the University of St. Thomas. Yao-Yuan Yeh is assistant professor of international studies and assistant coordinator of the Taiwan and East Asia Studies Program in the Center for International Studies at the University of St. Thomas.

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