The Changing Dynamics of the Relations among China, Taiwan, and the United States [1 ed.] 9781443827836, 9781443826815

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The Changing Dynamics of the Relations among China, Taiwan, and the United States

The Changing Dynamics of the Relations among China, Taiwan, and the United States

Edited by

Cal Clark

The Changing Dynamics of the Relations among China, Taiwan, and the United States, Edited by Cal Clark This book first published 2011 Cambridge Scholars Publishing 12 Back Chapman Street, Newcastle upon Tyne, NE6 2XX, UK British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Copyright © 2011 by Cal Clark and contributors All rights for this book reserved. No part of this book may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the copyright owner. ISBN (10): 1-4438-2681-2, ISBN (13): 978-1-4438-2681-5

TABLE OF CONTENTS

Chapter One................................................................................................. 1 The Changing Dynamics of Relations among China, Taiwan, and the United States Cal Clark Chapter Two .............................................................................................. 10 Washington between Beijing and Taipei: A Triangular Analysis Lowell Dittmer Chapter Three ............................................................................................ 30 Strategic Triangle, Change of Guard, and Ma’s New Course Yu-Shan Wu Chapter Four .............................................................................................. 62 The Strengths and Weaknesses of the Taiwan Relations Act: Enduring Framework or Accidental Success? Vincent Wei-cheng Wang Chapter Five .............................................................................................. 78 Strawberry Jam: National Identity, Cross-Strait Relations, and Taiwan’s Youth Shelley Rigger Chapter Six ................................................................................................ 96 Hu Jintao’s Pro-Status Quo Approach in Cross-Strait Relations: Building up an One-China Framework for Eventual Reunification Jing Huang Chapter Seven.......................................................................................... 155 China Debates the Way Forward for Cross-Strait Relations Elizabeth Hague

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Table of Contents

Chapter Eight........................................................................................... 175 Renting Allies and Selling Sovereignty: Taiwan's Struggle for Diplomatic Recognition Timothy S. Rich Chapter Nine............................................................................................ 191 The Colour of Taiwanese Businesses in China: Blue, Green, or Red? Chun-Yi Lee Chapter Ten ............................................................................................. 214 The Impact of Trade Liberalization across the Taiwan Strait: Empirical Evidence and Policy Implications Kun-Ming Chen, Ji Chou, and Chia-Ching Lin Chapter Eleven ........................................................................................ 240 ECFA: The Emerging Crisis Facing Taiwan Chung-Hsin Hsu Chapter Twelve ....................................................................................... 255 The Emerging Trade Bloc Across the Taiwan Strait: The Implications of ECFA and its Aftermath for U.S. Economic and Strategic Interests in East Asia Peter C.Y. Chow Contributors............................................................................................. 277

CHAPTER ONE THE CHANGING DYNAMICS OF RELATIONS AMONG CHINA, TAIWAN, AND THE UNITED STATES CAL CLARK

Ever since Chiang Kai-shek and his Kuomintang evacuated to Taiwan at the end of the Chinese Civil War in 1949, China and Taiwan have been divided by a fundamental and irreconcilable sovereignty dispute. For most of the postwar era, this concerned the rival claims of Beijing and Taipei to be the sole legitimate government of a united China that included Taiwan. In the early 1990s, though, the central issue was transformed to the question of whether Taiwan was an inalienable part of China or whether it was a separate country whose international status should be determined by its own citizens. Throughout the past sixty years, in addition, the United States has played a central role in the rivalry between Taiwan and China, making it almost impossible to understand cross-Strait relations without reference to American policy. Despite the immutable nature of the sovereignty dispute between China and Taiwan, the triangular relations among Beijing, Taipei, and Washington have changed quite considerably over time. As summarized in Figure 1.1, three distinct periods can be charted in the relations between Taiwan and China, with a fourth one emerging in 2008. From the 1950s through the beginning of the 1980s, there was almost unmitigated hostility between the two rival regimes, although the threat of war had faded by the mid-1960s. In sharp contrast, the early 1980s through the mid-1990s saw fairly tranquil (non)relations between Beijing and Taipei as they seemingly reached a tacit agreement that Taiwan would not challenge China’s de jure claims of sovereignty over Taiwan, while China would not challenge Taipei’s de facto exercise of sovereignty. These good relations broke down in 1995 ushering in a period of conflict and periodic crises that were provoked first by one side and then the other over Taiwan’s



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Chapter One

ambiguous international status. Finally, the election of a new Taiwanese government in 2008 led to a more conciliatory policy toward China and a return to amity in cross-Strait relations. The dynamics in the economic realm were quite different, though. There were almost no interactions until the late 1980s. However, explosive growth in trade and investment between China and Taiwan commenced in the early 1990s and has continued unabated since then, seemingly impervious to the ups and downs of political relations. Figure 1.1: Eras in China-Taiwan Relations PERIOD

ERA

INITIATING EVENT

1949-1981

Cold War hostility

1981-1995

Tacit agreement for “peaceful coexistence” Sovereignty dispute much more conflictual Rapprochement

KMT evacuates to Taiwan after losing Chinese Civil War Ye Jianying’s Nine-Point proposal Taiwan Strait Crisis

1995-2008 2008-

Ma Ying-jeou’s election as Taiwan’s President

America’s relations with China and Taiwan followed a somewhat similar pattern, although the exact years of the periods do not fully coincide. As sketched in Figure 1.2, the United States and the People’s Republic of China were bitter Cold War enemies until President Nixon’s dramatic visit to China in 1972 ushered in a détente fueled by common rivalry with the Soviet Union. Subsequently, Washington sought to have good relations with both Beijing and Taipei and came to play the role of a balancer between them, seeking to contain their hostilities toward each other and to maintain peace and stability in the Taiwan Strait area. However, America’s relations with China over the last four decades can be divided into two distinct periods. In particular, at the turn of the 1990s the end of the Cold War and Tiananmen Square ushered in a more complex and volatile era of Sino-American relations in which common diplomatic and economic interests vied with tensions over the U.S.’s response to the “rising China,” differences in values about human rights and democracy, Chinese resentments over American “lectures,” trade frictions, and the Taiwan question.



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Figure 1.2: Eras in China-U.S. Relations PERIOD

ERA

INITIATING EVENT/s

1949-1972 1972-1989 1989-

Cold War hostility Anti-Soviet detente More volatile with both common and conflictual interest

CCP wins Chinese Civil War Nixon visit to China End of Cold War and Tiananmen Square

Throughout the postwar era, the United States remained Taiwan’s central ally and security guarantor. Still, as summarized in Figure 1.3, several distinct eras can clearly be discerned: 1) a formal alliance from 1950 through 1979; 2) an informal alliance after Washington switched diplomatic recognition to Beijing from 1979 to 1999; 3) more strained relations between 1999 and 2008 when the U.S. felt that Presidents Lee Teng-hui and Chen Shui-bian were unduly provocative toward the PRC; and 4) the return to an informal alliance in 2008 that accompanied the China-Taiwan rapprochement. In the economic realm, the U.S. and Taiwan became strongly interconnected in the 1970s, although Taiwan’s large trade surpluses in the 1980s brought some tensions to the relationship. Similarly, China’s export-led development strategy of the 1990s made the PRC much more economically important to America and introduced some strains into Sino-American Relations. Figure 1.3: Eras in Taiwan-U.S. Relations PERIOD

ERA

INITIATING EVENT

1950-1979

Formal alliance

1979-1999

Informal alliance

1999-2008

Strains when U.S. views Taiwan as too provocative

2008-

Return to informal alliance

Invasion of South Korea brings strong U.S. commitment to Taiwan U.S. switches recognition from Taipei to Beijing Lee Teng-hui’s “special state-to-state relations” theory Ma Ying-jeou’s election as Taiwan’s President

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Chapter One

This edited volume seeks to understand and analyze the relations among China, Taiwan, and the United States in the early twenty-first century. While the changes are not totally synchronous, Figures 1.1 to 1.3 indicate an evolution in the relations among these three nations. The Cold War alliance between the U.S. and Taiwan against China from the 1950s through the 1970s was transformed to fairly amicable relations among all three during the 1980s. Over the last two decades, in contrast, all these relations became less stable and more strained, although Ma Ying-jeou’s election as Taiwan’s President in 2008 has brought considerably greater tranquility to the Taiwan Strait. This sequence raises the questions of what causes change in the relations among Beijing, Taipei, and Washington and of how stable the new era is likely to be. Consequently, especial emphasis in this book is placed on the factors promoting change or stability in the interactions among these three countries and upon the policy choices facing the three governments. In Chapter 2 on “Washington between Beijing and Taipei: A Triangular Analysis,” Lowell Dittmer applies the theory of strategic triangles to conceptualize the relations among the United States, China, and Taiwan and to provide an analytic overview of their evolution over the postwar era. He argues that American policy toward China and Taiwan during this time has been influenced by two very different types of factors: strategic and economic interests on the one hand and values, such as anticommunism, human rights, democracy, and free-market economics, on the other. Through the end of the Cold War, American policy was primarily determined by strategic interests that were created by the changing nature of the Great Power Strategic Triangle among the United States, Soviet Union, and People’s Republic of China. For example, the Nixon-Kissinger rapprochement with China clearly sacrificed anti-communism to the logic of real politick. After the Cold War, the U.S. first tilted toward Taiwan during a period of relaxed cross-Strait relations (1991-95) based on values (human rights and democracy) and then had to play a more active balancing role during the tense era of 1995-2008 with the tilt toward Beijing or Taipei primarily being the result of strategic interests. Yu-Shan Wu analyzes the “Strategic Triangle, Change of Guard, and Ma’s New Course” in Chapter 3. He argues that cross-Strait relations have been radically restructured by the more conciliatory policies of Ma Ying-jeou since his election as Taiwan’s President in 2008 and that what is now happening between Taipei and Beijing is simply unprecedented. He then develops an innovative “sequential model” to explain what occurred. According to this model, the Kuomintang or KMT faces very different environments depending upon the stage of the electoral cycle. During



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presidential election campaigns, the KMT has strong incentives to appeal to the median voter. Between elections, in contrast, governments are more apt to develop policies toward the U.S. and PRC that are consistent with Taiwan’s place in the strategic triangle among them. At least at the end of this decade, both the attitudes of the median voter whom the KMT courts and Taiwan’s strategic interests point toward more amicable relations with China, creating a more stable environment than faced Ma’s predecessor, Chen Shui-bian, who was pushed toward provocative policies by the DPP base. In Chapter 4, Vincent Wei-cheng Wang evaluates “The Strengths and Weaknesses of the Taiwan Relations Act: Enduring Framework or Accidental Success?” The TRA was passed by the U.S. Congress in 1979 to ensure that the Carter administration’s switch in diplomatic recognition from Taipei to Beijing did not unduly harm Taiwan. It created the mechanisms for conducting “informal relations” between the two countries and indicated what types of support America would continue to extend. He concludes that the TRA was clearly valuable to Taiwan. In several (but not all) important respects it treated Taiwan as a sovereign nation; and, in terms of security relations, it indicated that threats to Taiwan were of grave concern to the United States and supported a long series of arms sales that continue today. In addition, commercial relations between the two countries were protected and then rapidly expanded; and the TRA promoted human rights and democracy in Taiwan. In contrast, the Act hurt Taiwan in several important ways as well. In particular, it did not increase or support Taiwan’s dignity because there was no commitment to protecting Taiwan’s “international space” (i.e., official participation in international affairs), consequently making Taipei more vulnerable to harassment by Beijing. Shelley Rigger discusses a fundamental conundrum that Taiwan’s domestic politics creates for cross-Strait relations in Chapter 5 on “Strawberry Jam: National Identity, Cross-Strait Relations, and Taiwan’s Youth.” Taiwan’s major parties, the DPP and KMT, are polarized over the “national identity issue” that “seem to require citizens to choose between ‘Taiwan’ and ‘China.’” Such polarization obviously makes it much more difficult to manage the challenge that China presents to Taiwan’s sovereignty because almost any policy initiative is championed by one side and decried by the other as saving or destroying the country. She argues that Taiwan’s youth who are often denigrated as “the Strawberry tribe” for their lack of commitment to political ideals and parties or to their jobs may actually hold the key to a more productive Taiwan politics. The Strawberry Tribe rejects the stark alternatives of the

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Chapter One

current polarization. For example, individuals may want Taiwan to be an independent nation but may also want to pursue job opportunities in China. Consequently, while Taiwan’s youth are deeply alienated from the current debate over national identity and cross-Strait relations, their views and values are most relevant for resolving it. The election of Ma Ying-jeou as Taiwan’s President in 2008 is widely viewed as the event that precipitated the recent rapprochement between China and Taiwan. Yet, Jing Huang persuasively argues that this major change in cross-Strait relations is built upon an earlier fundamental change in China’s Taiwan policy in Chapter 6 on “Hu Jintao’s Pro-Status Quo Approach in Cross-Strait Relations: Building up an One-China Framework for Eventual Reunification.” In 2003-04, Hu Jintao and the new Chinese leadership reformulated their policy toward Taiwan to bring it into line with the PRC’s overall grand strategy of “peaceful development,” despite the increasingly aggressive policy of the Chen Shui-bian administration in Taiwan. China’s central policy goal shifted from “early reunification” to preventing a formal declaration of Taiwan Independence, in essence accepting and promoting the status quo in cross-Strait relations. In the short term, this policy has been quite efficacious in defusing tensions with both Washington and Taipei; and it appears to be a long-term strategy rather than a temporary expedient. Yet, the PRC’s assumption that Taiwan will inevitably be pulled into China’s orbit and unyielding adherence to the “one China” principle raise questions about its ultimate viability. Elizabeth Hague examines “China Debates the Way Forward for Cross-Strait Relations” in Chapter 7. Her analysis is based on the discussions of Chinese scholars after the advent of Ma’s more conciliatory policy, which presumably reflect higher level debate to some extent. While there was no change in such basic principles as a commitment to ultimate Reunification or little willingness to consider Taiwan’s demands for more international space, several of the PRC’s more provocative positions (the “One Country, Two Systems” model and military threats) were clearly de-emphasized. Instead, the “peaceful development” of cross-Strait relations appeared to be the primary goal; and there appeared to be considerably more flexibility as well in an acceptance that the growing Taiwanese identity on the island did not necessarily mean support for Taiwan Independence. Over time during 2008-09, the Chinese scholars moved from advocating a stress on economic issues to limit conflict to believing that broader political agreements might be possible as well. This creates something of an ambiguous situation, though. On the one hand, China has become considerably more conciliatory toward Taiwan; on the other, it has shown little sign of altering its position on



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Taiwan’s sovereignty which is clearly unacceptable to the vast majority of Taiwan’s citizens. Timothy S. Rich discusses “Renting Allies and Selling Sovereignty: Taiwan’s Struggle for Diplomatic Recognition” in Chapter 8. After World War II, Taipei and Beijing both claimed to be the sole legitimate government of China. Accordingly, a country could not successfully maintain diplomatic recognition with both governments. Initially, Taiwan had the advantage in diplomatic recognitions based on its Cold War alliance with the United States. However, its position unraveled after the Sino-American rapprochement and the seating of the PRC in the United Nations; and by the end of the 1970s China had established a huge preponderance in official diplomatic recognition and participation in international organizations. Over the last thirty years, therefore, Taiwan’s competition with China for diplomatic recognitions has been a centerpiece of its attempts to maintain its “international space.” This quest of Taiwan’s for international legitimacy differs in two fundamental ways from normal controversies over diplomatic recognition. First, instead of major world powers granting or withholding formal recognition, the competition between Beijing and Taipei focuses on small and poor states. Second, economic, not ideological, factors now drive the recognition decisions. In Chapter 9 on “The Political Views of Chinese Businesses in China: Blue, Green, or Red?”, Chun-Yi Lee examines the political consequences of growing economic integration across the Taiwan Strait. Political issues have always been quite sensitive for Taiwanese business people (Taishangs) in China. Their most popular saying is, “A businessman only talks about business.” However, many Taishangs are inevitably drawn into politics in both China and Taiwan, making the question of whether they identify with the KMT (the Blues), the DPP (the Greens), or the CCP (the Reds) very significant politically. Interview data from field trips to China in 2005 and 2009 indicate that most Taishangs do not have a strong political identity. However, they are far from politically indifferent and only interested in talking about business. Rather, they are keen to support any political party whose policies are beneficial to their investments in China. Recent changes in cross-Strait relations have had ambiguous results for these Taiwanese business people. The political hostility across the Taiwan Strait during the Chen Shui-bian presidency increased the importance of the Taishangs to both Beijing and Taipei as they assumed the role of a “bridge” between the two regimes. However, the marked improvement of cross-Strait relations in 2008 (which they strongly

8

Chapter One

supported) actually marginalized them and led to significantly worse treatment at the hands of the Chinese authorities. Kun-Meng Chen, Ji Chou, and Chia-Ching Lin evaluate “The Impact of Trade Liberalization across the Taiwan Strait: Empirical Evidence and Policy Implications” in Chapter 10. Taiwan has recently removed its ban on direct economic linkages with China; and several trade liberalization measures are also under consideration. Most importantly, a cross-Strait Economic Cooperation Framework Agreement (ECFA) was signed in June 2010. These efforts are especially important because Taiwan’s economic position could well deteriorate if it is excluded from the rapidly growing number of Free Trade Agreements (FTAs) in East Asia. The authors apply a computable general equilibrium model and find that cross-Strait trade liberalization will have significant positive impacts on exports and GDP growth for both Taiwan and China and that Taiwan would face significant economic losses if it is excluded from East Asians FTAs in which China participates. Furthermore, the impact of a free trade agreement between the two countries on Hong Kong and other economies seems to be fairly small. These results suggest that trade liberalization is very likely to bring about a win-win situation for Taiwan and China, as well as an improvement in world welfare. They also have important policy implications for their major trade partners in general and the United States in particular. The Economic Cooperation Framework Agreement (ECFA) is highly controversial in Taiwan. In Chapter 11 on “ECFA: The Emerging Crisis Facing Taiwan,” Chung-Hsin Hsu develops several arguments about why ECFA presents a major threat. He begins with a synopsis of Taiwan’s trade history which shows that the country has benefitted much more from North-South trade than from East-West trade dominated by China. Key industries in Taiwan are threatened by ECFA which puts the nation’s longterm development and prosperity into question; and the ECFA mechanisms are inadequate to protect Taiwan from a variety of economic dangers. More broadly and ominously, ECFA will give China considerable economic leverage over Taiwan, which may well be used to erode the nation’s sovereignty and even absorb it into China. While ECFA represents serious threats to Taiwan, there are other viable economic strategies and models that should allow the country to survive and thrive. For example, Germany’s industrialization was successful precisely because it minimized trade with and dependence on rival England; and WTO rules have created a adequate framework for Taiwan’s future economic interactions and development. Indeed, Switzerland provides an attractive model of how Taiwan could play a central role in East Asia.



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In Chapter 12, Peter C.Y. Chow analyzes “The Emerging Trade Bloc Across the Taiwan Strait: The Implications of ECFA and its Aftermath for U.S. Economic and Strategic Interests in East Asia.” Since the mid-1980s there has been a phenomenal growth of economic interactions across the Taiwan Strait, creating a nexus of trade and investment based on an integrated supply chain in several key industries, such as informationcomputer products. These trends will be accelerated by the ECFA which is creating a “Greater China Economic Zone” that ultimately threatens Taiwan’s sovereignty and long-term economic prospects. Such links are especially important given the growing economic integration in East Asia which seemingly presents Taiwan with making a choice between joining either a China-centric or Japan-centric hub. The wrong choice could be quite harmful to Taiwan and undermine America’s economic and strategic interests in the region. Consequently, he contends that the United States should take a much more proactive role in East Asian integration and seek to become an active participant and “super-hub.” Whether or not American can assume such a role will very probably determine the continued autonomy and wellbeing of Taiwan, as well as the U.S.’s long-term leadership in East Asia.



CHAPTER TWO WASHINGTON BETWEEN BEIJING AND TAIPEI: A TRIANGULAR ANALYSIS1 LOWELL DITTMER

The concept of the “strategic triangle,” though conventionally applied to the relationship between the United States, the Soviet Union, and the People's Republic of China (PRC) during the latter phases of the Cold War, is not geographically restricted to a particular culture or area but is rather an exercise in political geometry.2 The logic of triangularity should hence apply to any international situation meeting certain defining criteria: viz., (a) it circumscribes the relationship among three rational, autonomous actors, (b) in which the bilateral relationship among any two of them is contingent on their relationship with the third, and (c) each actor seeks to cooperate with one or both of the others to optimize its own interests (and prevent their hostile collusion). The relationship among the United States, China, and Taiwan appears to meet these criteria, criterion two in particular: Taipei needs US support to avoid falling into Beijing's orbit, Beijing needs at least passive US acquiescence in order to prevent Taiwan from declaring independence; and Washington (for somewhat different reasons, to be explored below) has consistently wanted good relations with both “Chinas,” despite the occasional insistence by one or both to exclude that (i.e., good relations with us presupposes bad relations with them). At the same time, there are of course several important qualifications. For one thing, although the balance of capabilities among them has shifted 1 I wish to thank the Center for Chinese Studies for the financial support permitting me to undertake this research. 2 Michel Tatu, The Great Power Triangle: Washington-Moscow-Paris (Paris: Atlantic Institute, 1970); Thomas M. Gottlieb, Chinese Foreign Policy Factionalism and the Origins of the Strategic Triangle (Santa Monica: RAND Corp, 1977); Lowell Dittmer, “The Strategic Triangle: An Elementary GameTheoretical Analysis,” World Politics Vol. 33 (1981) pp. 485-516.

Washington between Beijing and Taipei: A Triangular Analysis

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quite dramatically since the advent of the triangle in 1949, the three actors are not now and have never been equal. Despite the recent dramatic rise of China, the United States is clearly at this time the heavyweight of this triangle, on the one hand due to its disproportionate military capabilities and on the other because of its economic preeminence and specifically its role as the world’s largest and most lucrative consumer market. Throughout the post-WW II period, Washington has been the principal if not the sole guarantor of Taiwan's security; and during much of that time it has also been the main threat to PRC security (and even more consistently, the chief impediment to Beijing’s attempt to achieve cross-Strait “reunification”). It is also increasingly obvious that the PRC is a far more important global strategic actor than Taiwan. Second, although both the US and the PRC are now world powers, the China-US-Taiwan triangle is somewhat more limited in its strategic ramifications than the great strategic triangle. Beijing has sought to isolate the issue from world politics by diplomatically defining the issue as a purely “domestic” dispute between Beijing and Taipei in which no other state may interfere, although they have altered their stance in the past decade by attempting to take advantage of their own growing (and Taipei’s diminished) diplomatic leverage. Third, in contrast to the “great” (PRC-USSR-USA) strategic triangle, in which each actor’s motives could reasonably be reduced to the enhancement of national interest at the expense of one or both of the other two participants, the three actors in the Taiwan triangle are driven by qualitatively different strategic motives: Beijing seeks to incorporate Taiwan into the PRC, and in order to do so without prohibitive costs it needs Washington’s benign neutrality; Taipei seeks Washington's support not to “recover the mainland” (a goal it forswore in 1991) but to preserve and, if possible, enhance its autonomy; and Washington wishes only to improve its commercial and security relations with each player without upsetting the other.3 Of course, there are also domestic splits within each over differing views of what the national interest really is. While these qualifications undoubtedly complicate the relationship, it would be premature to discard the triangular framework before investigating its possible analytical utility. After all, the relationships within the Great Strategic Triangle were also quite unequal, and yet the weakest player (China) was able turn the triangle — power is not necessarily trump. And the relationship still involves three of the most important actors in the Asian region. Although Taiwan does not have full sovereignty (in the 3 On Washington’s motives, see Andrew J. Nathan, “What’s Wrong with American Taiwan Policy?” Washington Quarterly, Vol. 22,2 (2000) pp. 93 ff.

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Chapter Two

sense of complete freedom of action), China’s claim of sovereign jurisdiction over Taiwan is also largely rhetorical. Any attempt to change that forcibly would have wide-ranging strategic ramifications even if no country beyond the three now engaged in the issue were to become involved (Japan might well be drawn in). This chapter consists of three parts. In the first, we analyze the bilateral relationships of the US, at “pivot,” with China and Taiwan, the two “wing” players, since the early 1970s, when the US abandoned its unequivocal defense of Taiwan and stepped into the pivot position. In the second section, the dynamic relationship among the three is analyzed as the configuration has shifted over time. In the conclusion, we discuss the relationship of the “small triangle” to the great strategic triangle and speculate about the prospects of the former in the light of the current cross-Strait “thaw.”

Beijing and Taipei in the Balance Washington has since China’s 1949 “Liberation” and the establishment of the ROC Government in Taiwan attempted to balance its commitments in the cross-Strait embroilment based on two different criteria: interests and values. This entails a hybrid analysis, for while interests are most commonly measured in terms of strategic and political-economic threat potential (based on a “realist” approach), values can only be assessed in relation to the national identity defining those values (calling for a “constructivist” analysis). And empirically, the conceptual distinction is by no means airtight — interests may reach a threshold level at which point they affect valuations, and interests can undergo quite paradoxical transmutations (e.g., Taiwan’s economy now has a very considerable interest in the continued prosperity of its main security threat). Interests may be further subdivided into “strategic” and “economic” ones as well.

Interests American strategic interest in China may be said to have been crested during the heyday of the great strategic triangle in the 1970s and 1980s, when the PRC was deemed an essential counterweight to the overweening Soviet threat. Washington’s strategic interest in Taiwan waned as its interest in the Chinese mainland waxed, simply because the PRC’s size and military heft more effectively checked that of the USSR (and its client Vietnam) than Taiwan. For somewhat different reasons having to do with China’s ardent diplomatic courtship of the Third World, Beijing’s bid for

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world-wide diplomatic recognition beginning in the early 1970s steadily degraded Taiwan’s international leverage (to which it must be said that Washington’s rapprochement with Beijing - and the Taiwan clause of the Three Communiqués - also contributed). By January 1979, the terms of Sino-American normalization (viz., termination of the bilateral defense alliance, withdrawal of all US forces) had essentially eliminated Taiwan's strategic utility as a counterweight to potential US adversaries in the Pacific. This decline is reflected in the syntax of the first two communiqués: whereas the Shanghai communiqué (February 27, 1972) states: “The United States acknowledges that all Chinese on either side of the Taiwan Strait maintain there is one China and that Taiwan is part of China,” the normalization communiqué (December 15, 1978) goes beyond that to say: “The Government of the United States acknowledges the Chinese position that there is but one China and that Taiwan is part of China.” If the terms of normalization enhanced the strategic value of the PRC at the expense of Taiwan, the end of the Cold War about a decade later reduced the strategic utility of the PRC - without however greatly enhancing that of Taiwan.4 The decline in the PRC’s strategic use-value was of course precipitated by the disintegration of the Soviet Union at the end of the Cold War. Yet, the strategic importance of the China “card” was eclipsed more in public opinion than among foreign policy elites, as testified by the visits of Henry Kissinger and NSC Advisor Brent Scowcroft in the face of strong popular disapproval in the wake of Tiananmen. China’s strategic utility probably reached its nadir during the early Clinton years, when Beijing was seen to be a contributor to WMD proliferation, but China’s plunge into the international market and ensuing GDP growth surge then fortuitously enabled Beijing to shift its core appeal from strategic to economic interests as an attractive source of cheap imports and a lucrative FDI host. Furthermore, China’s continuing strategic relevance resurged when the threat of North Korean nuclear proliferation appeared in 1993-1994: Beijing, as Pyongyang’s sole remaining ally and (at that time) supporter, played a pivotal role in a puzzle to which Washington could find few other clues. China was also instrumental in persuading the Khmer Rouge to cooperate in the new Cambodian tripartite coalition following the withdrawal of Vietnamese forces in the early 1990s. While Taiwan’s strategic relevance to the US declined sharply with the abrogation of the mutual defense agreement in accord with the terms of normalization in 4

Except of course in the sense that the US could now more frankly plan for the defense of Taiwan without so much concern about upsetting the PRC, whose strategic leverage against the USSR no longer came into play.

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1979, its economic importance also declined more gradually as China’s growth rate, which had trailed that of Taiwan throughout the 1960s and 1970s, surpassed it in the 1980s and beyond. Mutual strategic discussions and arms sales to Taiwan have continued, but these have been exclusively oriented to the island’s security and not addressed to any prospective utility the island might play in broader regional defense arrangements. The institutional mainstay of the high US assessment of China’s continuing strategic utility has been the executive branch and the State Department, with Congress and the Department of Defense more apt to play more skeptical roles. Throughout the Bush, Clinton, and GW Bush administrations, with the exception of the Tiananmen period and the unsuccessful 1993-1994 effort to impose Western human rights norms on Beijing, the executive branch pursued a policy of “constructive engagement” that assumed China's vital strategic impact on global and regional issues. Since Tiananmen and the end of the Cold War, the foundation of American interests in China has undergone a major shift from the strategic to the economic realm. Particularly after Deng Xiaoping’s 1992 “voyage to the south,” which greatly accelerated both foreign direct investment (FDI) and overall GDP growth, China’s market size and growth potential made an enormous impression on Western business elites. According to the purchasing power parity measurement technique widely adopted in the early 1990s, China's economy became the third largest in the world, ranking behind only the US and Japan, and by mid-2010 was projected to become the world's largest (in aggregate but not per capita terms) within the next several decades. Yet sheer volume of trade and investment do not translate simply into improved relations: the US trade deficit (and its related capital surplus) with China have grown rapidly since 2000, displacing Japan to become the largest single source of the American current account imbalance.5 China’s lax IPR enforcement efforts as well as the issue of a “level playing field” for imports and foreign-invested enterprises also remain issues. Taiwan, though no longer a significant part of the regional security equation for the US, is increasingly deemed by Beijing an indispensable asset to its future security. The modernization of China’s defense forces 5

Thus while the growth of trade with China has been second most rapid among US trade partners, China was only the US’s 5th largest export market as of 2005, while US imports from China continued their explosive rise, importing more only from Canada, so that the PRC became by far the biggest contributor to the trade deficit (around US$256 billion as of 2007). Exports to China have grown, however — China was only 13th largest export market in 1993, 5th in 2005, 3rd by 2007, while Taiwan has remained 10th largest export market.

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has since the 1980s focused on maritime force projection, under the patronage of Admiral Liu Huaqing, entailing the transformation of the existing strategy of “offshore active defense.” Originally referring only to the defense of coastal waters, this now envisages an extended defense-indepth encompassing the entire ocean space within the “first island chain” running from the Kuriles through Japan, the Ryukyus, Taiwan, and the Philippines to the Indonesian archipelago (thus including the entire expanse of the South and East China Seas). Liu has also used “offshore” to include waters within the “second island chain” (stretching from the Bonins through the Marianas and Guam to the Palau island group).6 This is in turn linked to the evolution of the defense doctrine of “people's war under modern conditions” during the Deng era - a doctrine that even in the late 1970s envisaged a major expansion of China’s maritime capabilities, producing by the late 1980s substantial (if not by the standards of oceangoing navies) improvements in China's naval force structure. The further evolution of post-Deng military doctrine to “modern war under high-tech conditions” places even greater emphasis upon defensive depth. Contemporary doctrine requires the projection of power for offensive operations at ever greater distances from the mainland in order to defend not only the Chinese coast but also its maritime territorial claims and interests. Whereas Taiwan’s western coastline is quite shallow, the eastern coast plunges to great depth, making it ideal as a prospective submarine base. Whether it would be so utilized in the event of reunification is unclear: the Chinese terms for the “Taiwan Special Administrative Region” in the “one country, two systems” formula promised Taiwan even greater autonomy than Hong Kong in that no PLA forces would be stationed on the island, but these assurances have not been spelled out in any detail; and the subsequent military publications envisaging Taiwan’s vital strategic role in Chinese defense throw them into question. Taiwan’s economy, still the fourth largest in East Asia, has also become asymmetrically valued. Certainly Taiwan has established a strong and well-cultivated economic relationship with the United States. Efforts to regulate industries and strengthen laws protecting IPR have all borne fruit in recent years. Tariff and non-tariff barriers were phased out to qualify for 2001 WTO accession, and trade frictions are settled smoothly. With 45.6% of the 1993 GDP coming from consumer spending (versus 6 Jun Zhan, "China Goes to the Blue Waters: The Navy, Seapower Mentality and the South China Sea," Journal of Strategic Studies Vol. 17 (1994) pp. 189-190; You Ji, The Armed Forces of China (New York: I.B. Tauris, 1999) pp. 166-167; Alan Wachman, Why Taiwan? Geostrategic Rationales for China’s Territorial Integrity (Stanford: Stanford University Press, 2007).

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40.4% from industrial production), Taiwan provides a major market for US industry.7 In terms of brute GDP measurements Taiwan's economy is however a wasting asset, relatively speaking, shrinking due to differential growth rates from half the size of the mainland's in 1978 to about a sixth in the past decade. As China opened up, both Taiwan and Hong Kong became less essential to foreign trade and investment, which can now go directly to Shanghai and Dalian which boast containerized ports and spacious modern airports. But although Taiwan has been eclipsed by China from an American perspective, from a Chinese perspective it has retained considerable value. Taiwan is one of China’s largest sources of FDI (and embedded technology transfer), a high-tech island that has sought to retain management, research and IPR monopoly control at home while outsourcing relatively low-tech downstream assembly operations on the mainland. But since the turn of the millennium, Taiwanese FDI has climbed the value pyramid, driven by the global high-tech recession. If China were to gain control of these upstream assets through reunification that would enable the mainland to leapfrog to a leading position in the IT industry. Though notoriously bereft of natural resources, Taiwan would also be an attractive acquisition target in other respects. The mainland has had a chronic large trade deficit with Taiwan which reunification would perhaps quickly erase, as political leverage would shift to the Chinese side. It might also help alleviate China’s politically sensitive trade surplus with the US: as Taiwan’s per capita income has risen, so have its consumer imports, a large proportion of which consistently come from the US, making Taiwan the 5th largest importer of US agricultural products and consistently among the top ten importers of all US exports.8 Of course this would not neutralize the regional trade surplus with the US, which has remained high even as the bilateral trade imbalance with the East Asian “small tigers” has declined (the latter simply downloaded their surpluses to the mainland by shifting their export industries to China):9 according to 7

Ibid. Country Commercial Guides (CHINA), published by the US Department of Commerce, International Trade Administration, January 31, 1995. 9 “Taiwan and the United Nations” (statement by Deputy Assistant Secretary of State Kent Wiedemann), US Department of State Dispatch, vol. 6, no. 34 (August 21, 1995), pp. 653-656. By the early 1990s Taiwan had already “shifted” ca. US$1.8 billion of exports from its own trade account onto that of the PRC as a result of $754 million investment in China. If the total of $3.49 billion of investment contracts signed by the end of 1991 were all realized and the same 8

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17

reports from the US Commerce Department and the US-China Business Council, the total US trade deficit with Taiwan, Singapore, and South Korea fell from $34 billion in 1987 to $7.8 billion in 1995, during which time the trade deficit with the PRC increased from $2.8 billion to $33.8 billion.10 In any case, the general picture is one of Taiwan’s relative decline in its appeal to US interests, whether strategic or economic, as the appeal of the PRC has outpaced it. At the same time, Taiwan’s appeal to PRC interests - both strategic and economic - has steadily increased. Of even more relevance than Taiwan’s value as an economic asset is the political fungibility of cross-Strait economic integration: China has been quite frank about its strategy of using economic spillover to promote political integration. For many years this strategy seems to have been an utter failure. Beijing has found that its concessions to Taiwanese businesses have succeeded in stimulating increasing economic and social integration via the “three indirect links,” but the PRC has also found it more difficult to find an efficient linkage to translate this into political capital. Indeed, to some it seemed that there was an inverse correlation between economic and political integration, as if the former only gave politicians a bigger target for their rhetorical fulminations.11 In 2004 Beijing improved its efficacy by focusing selectively on high-profile cases, such as Xu Wenlong, a businessman with heavy financial commitments to the mainland who was induced to renounce his erstwhile support for Taiwan independence. This probably had deterrent effect on other members of the business community (or at least on their public political stances), but whether it had any positive electoral spinoff has been harder to detect. There is also the possibility that this tactic may have an unintended backlash on the value scale. Although the 2008 KMT electoral landslide is usually attributed to corruption and DPP disarray, to the extent that cross-Strait policy remained an issue it may point to a need to reassess this verdict, however. Although the national identity of the majority remains “Taiwanese,” Ma’s relatively frank support for the traditional KMT reunification policy, however eventual and conditional, seems not to industrial distribution persisted, the potential export shift would amount to $8 billion. Chung Hsin, “Taiwan's Direct Foreign Investment in Mainland China: Impact on the Domestic and Host Economies,” pp. 215-242 in Thomas Lyons and Victor Nee, Eds., The Economic Transformation in South China: Reform and Development in the Post-Mao Era (Ithaca: Cornell East Asia Program, 1994). 10 As cited in Chen-yuan Tung, “Trilateral Economic Relations among Taiwan, China, and the United States,” Asian Affairs, Vol. 25 (1999) pp. 220 ff. 11 Murray Scot Tanner, Chinese Economic Coercion against Taiwan: A Tricky Weapon to Use (Santa Monica, CA: RAND Corp, 2007).

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have fatally damaged his electoral chances. This picture of declining US interest and growing PRC strategic and economic interest in Taiwan must be kept in perspective. China must balance any interest in acquiring Taiwan too precipitously against its interest in the US. China has acquired a very large economic stake in the US, which is China’s second largest national trading partner and market for Chinese exports (the 27-member EU has surpassed the US as a trading bloc). This relationship would surely be jeopardized should Beijing opt to use force to achieve reunification (leaving aside for the moment whether the use of force would succeed). Disruption of that economic relationship would be painful for both partners, but particularly for the PRC. Strategically considered Beijing also has a major “negative interest” in the US, in the sense that the PLA must plan for the possibility of Sino-US war — a war which, given the current balance of forces, China would probably lose. Thus Beijing must balance its high and growing interest in reunification against its also high economic and negative strategic interest in its relationship with the US.

Values The flip side of US policy-making regarding China and Taiwan has been the role of values. Until the advent of “constructivism” the value dimension had been neglected in foreign policy analysis, but this is a serious mistake: momentous foreign policy turning points are consistently rationalized in value terms and legitimated (in democracies) by such measurements of popular value preference as public opinion polls and elections - for that matter, even authoritarian systems do not underwrite major new foreign policy commitments without some sort of value rationale to mobilize mass support (e.g., the Mukden and Marco Polo Bridge incidents contrived by the Japanese army to justify its invasion of China, or the Nazi concoction of a Polish casus belli to justify their September 1, 1939 “counterattack” against Poland). The value dimension is a necessary (though not necessarily sufficient) component of foreign policy agenda setting. Foreign policy values beg the question of national identity: a nation projects values based on the identity it chooses to stand for.12 According to Morgenthau, freedom and equality have always been the core values in 12

Erik Ringmar, Ideology, Interest and Action: A Cultural Explanation of Sweden’s Intervention in the Thirty Years’ War (New York: Cambridge University Press, 1996).

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US foreign policy.13 Although this may seem inconsistent with the onesided American defense of a Taiwan that was neither free nor equal from 1950 to 1971, this can be explained by two qualifications: first, values are only one criterion for foreign policy preferences; and, second, the value choice was not from Washington’s perspective between black and white but between two shades of grey. American foreign policy decisionmaking elites were quite aware of the KMT regime’s democratic deficits and the potentially superior strategic utility of China and had indeed planned to abandon Taiwan as “part of China,” (i.e., among the spoils of the civil war the CCP had won), calculating that nationalism would eventually lead to a Sino-Soviet rift. Not until North Korea invaded South Korea, as part of what Washington viewed at the time as a coordinated, Moscow-led international offensive, did the US dispatch the 7th Fleet to the Taiwan Strait.14 Inasmuch as China’s decision to “lean to one side” now had strategic credibility, the choice was no longer between communist and bourgeois dictatorships or between China and Taiwan, but between losing one small Asian ally and losing two (Korea plus Taiwan). And throughout the 1950s and 1960s, US antagonism to China remained even more intense than toward the USSR, partly no doubt as an aftermath of that bloody confrontation, partly as a differential strategic maneuver to split the two allies. From Nixon’s inauguration of the process of Sino-American normalization in 1971 until Tiananmen the value climate toward the PRC became increasingly benign, though the main driver of the rapprochement remained strategic and the value dimension remained relatively shallow, attached not to Communism (of course) but to “Chinese characteristics” as depicted by the media (thrift, team spirit, pragmatism). The election of Ronald Reagan momentarily jeopardized the continuity of what had become a bipartisan China policy, but while the China Bloc (Taiwan's supporters) in Congress demonstrated some early traction, (i.e., gaining passage of the Taiwan Relations Act), their influence tended to 13 Hans J. Morgenthau, The Purpose of American Politics (New York: Alfred A. Knopf, 1965) p. 8. 14 The CIA assumption at the time was that Taiwan would fall by the end of the year (as Hainan Island had fallen before); and on June 23, just two days before this decision was reversed, Secretary of State Acheson declared that the US had no intention of reversing its non-intervention policy toward Taiwan and the Chinese civil war. See, Thomas J. Christensen, Useful Adversaries: Grand Strategy, Domestic Mobilization, and Sino-American Conflict, 1947-1958 (Princeton: Princeton University Press, 1996) pp. 131-132; see also Oystein Tunsjo, US Taiwan Policy: Constructing the Triangle (New York: Routledge, 2008) pp. 22-37.

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diminish over time in the face of perceived strategic imperatives. With the Reagan Administration committed to a crusade against an “evil empire” whose force projection capabilities were at the time considerably exaggerated, GOP anti-Communist impulses in Congress were forced into line with the White House and State Department position, channeling their value commitments against an exclusively Soviet red menace. While Taiwan’s security needs were never ignored, Sino-US relations existed more or less exclusively on the plane of overlapping security interests (hence the odd alignment of staunch Republican conservatives with a foreign policy supporting a radical Maoist regime). Any sense of value incongruence was mitigated by the fact that Taiwan, despite remarkable economic progress, remained a political dictatorship under a martial law regime, equipped with a powerful intelligence agency capable of conducting political assassinations on foreign soil. Opposition parties were still banned, their leaders arrested, and the media censored. Thus, the impetus for an American reevaluation of China policy was limited in scope given the perceived strategic importance of the “China card” in the Cold War era. Though the China Bloc continued to voice disapproval, US policy, as prescribed by the executive branch, continued to lean toward China through the 1980s.15 Since Tiananmen, there has been a widening cleavage in the American government with regard to US-PRC-Taiwan relations. The executive branch (including the State Department) has sought to maintain special ties with the PRC despite the new strategic realities of the post-Cold War era. Although China's strategic utility diminished with the collapse of the Soviet Union, this was not immediately clear to US security analysts still suspicious of the new Russian Federation. Moreover, no immediate overriding strategic imperative to leap to the defense of Taiwan manifested itself - to the contrary, China paired its diplomatic normalization with the US with a new soft line on Taiwan, promising peaceful reunification with a high level of political and economic autonomy (“one country two systems,” etc). This precipitated a temporary cross-Strait “China fever” only a few years after Tiananmen, as nostalgic veterans and profit-seeking small businesses moved avidly to fill the post-Tiananmen vacuum left by 15

During this period, the U.S. Congress held multiple hearings on U.S.-China relations. In particular, there was a major dispute between the two branches (Executive and Legislative) over the Third (August 1982) Communiqué and the language of the Taiwan Relations Act. Congress maintained that the Communiqué violated the Act, while the White House asserted that no breach had been made. At the same time, China protested any significant US-Taiwan interaction as a violation of its internal affairs.

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Western capital flight. Tiananmen, however, cast a more lasting pall on US public opinion, which in due course manifested itself via the electoral mechanism. Congress responded with a reevaluation of US policies, now questioning the strategic interests that so long dominated discussion of China policy. But Congress as a foreign policy actor is constitutionally limited, empowered to hold hearings on specific issues but unable to formulate a consistent policy position because it lacks a foreign affairs bureaucracy. The legislative process is in this sense zero-sum, tending to favor sharply formulated propositions with little room for flexibility over time. This moral rigidity was exacerbated by the rise of “human rights” as a de facto ideological replacement of a now irrelevant anti-communism in the American foreign policy value arsenal. Without launching a detailed chronological review of the BushClinton-Bush years, suffice it to say that a yawning gap has emerged between value and strategic criteria on the Taiwan Strait issue: China became for the time being a value pariah, only partially regaining American respect in the light of its vigorous economic revival in the 1990s, while its pivotal strategic importance was also derogated by the disappearance of the menace of world communism and made a comeback only gradually as other issues pointed to China’s continuing (indeed, growing) pivotal role in the region. After two decades of frozen strategic relevance and growing diplomatic isolation, Taiwan made a strong comeback by simultaneously introducing multi-party electoral democracy and a more flexible and pragmatic foreign policy in the 1988-1992 period, which substantially boosted its ranking on the value scale without however greatly enhancing its perceived strategic relevance (as compared with China, which simultaneously launched its new foreign policy of allazimuth friendly relations). By enhancing its value to the US, democratization however sharply reduced Taiwan’s value to the PRC (also reducing, I would argue, the value of democracy per se), largely due to the political awakening of the Taiwanese subethnic majority which became the mainstay of the DPP. At the end of the Cold War the two “Chinas,” thus, seemed suddenly more equal in this balancing of interests and values — yet this equilibrium was not to last. China’s sleeping asset was its booming economy, the overwhelming promise of which tipped the scales against both growing but ambiguous strategic interest and consistently negative value measurements. Although that relationship has become more lopsided with the rise of the current account and trade deficits and China’s emergence as the largest holder of US treasury securities, growing mutual economic

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dependency has enhanced the bilateral relationship’s importance for both sides.

Evolution of the Taiwan Triangle Since World War II, Washington's relationship to Beijing and Taipei went through three stages: first, a “lean-to-one-side” policy (i.e., proTaipei), lasting from the KMT’s post-war flight to the island to the Nixon visit (1949-1972); second, a “lean-to-the-other-side” policy (i.e., proBeijing), from the Nixon detente until Tiananmen (1972-1989); and third, from the collapse of the Cold War to the present, a more complex, “balancing” role in a “romantic triangle.” Throughout the Cold War (that is, during the first two phases), the triangle was a function of the great strategic triangle, in the sense that Washington’s relationship to Taiwan was consistently the obverse of Washington’s relationship to Beijing: when Sino-US relations were bad, as they generally were from 1949 to 1971, US-Taiwan relations were good; when Sino-US relations were good, on the other hand, as they were (more or less) from 1971 to 1989, US relations with Taiwan deteriorated concomitantly. During the third phase, in contrast, the triangle was spun off as an autonomous, self-regulating complex, with the US at “pivot” and both “Chinas” in dependent wing positions. While Washington has consistently held the triangle’s most strategically advantageous position, able to communicate with each of the “wings” more effectively than they could with each other, the United States has since the collapse of its customary adversary lacked clear strategic direction, allowing the triangle to drift. About its own ultimate commitments Washington maintained a veil of uncertainty, thereby deepening the mystery. This policy of “strategic ambiguity” was designed partly to avoid offending either “wing,” partly to deter certain “moves” without foreclosing its own options. This seems to have aroused feelings of both suspicion and false confidence in the two wings. Thus, the end of the Cold War represented a new dawn for the old Taiwan issue, as new options thawed out of the bipolar deep freeze. Three possible resolutions of Taiwan’s national identity dilemma suddenly seemed realistically feasible: 1) independence, 2) reunification, and 3) the status quo. Yet the three participants disagreed in their preferences. The preference rankings of the three, caeteris paribus, could be characterized roughly as follows: Taiwan: 1, 3, 2; China: 2, 3, 1, and the US: 3, 1, 2.16 16

The caeteris paribus proviso (that other things remain equal) entails

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Although all three players had different first preferences and only the US unequivocally preferred the status quo, fairly stable cooperation became possible because the pivot’s 1st preference coincided with the 2nd preference of both wings. Yet because neither wing was entirely satisfied with second best, each would opportunistically press to realize its top option. The US, lacking any external adversary and prizing its relationship to each wing (for quite different reasons), has endeavored to maintain a subtle balance, tilting first one way then the other, justifying its position rhetorically by reference to “stability.” This has maintained both the “romantic” triangular configuration and a fragile peace. With the US now entrenched in support of balance and the status quo, the triangular dynamic is now basically defined by the moves of the two wings to realize their top preferences (and by the US response to these moves). Since Tiananmen, this dynamic has evolved through three triangular sub-phases: a) from 1989-1995, cross-Strait “thaw;” b) from 1996-2005, cross-Strait “freeze;” and c) from 2008-present, the second cross-Strait “re-thaw.” The US response to counterbalance these shifting inter-wing relations is worth careful analysis to see if any clear pattern emerges with implications for the future of the triangle. We see several paradoxes. During the 1989-1995 thaw, the US “tilted” toward Taipei, although Taiwan was now less threatened than ever before; during the 1996-2005 freeze, after initially strongly backing Taipei, Washington “tilted” to Beijing, although Beijing revived its threats against Taiwan; during the ongoing post-2008 re-thaw, though it is perhaps too early to characterize the new administration’s position, the tilt seems to be toward Beijing. Can these paradoxes be explained by extra-parametric variables, or is a new triangular logic in play that will decide Taiwan’s future? The first step in the 1989-1995 thaw was initiated by the Deng Xiaoping reform regime’s introduction of the “three direct links” and “one country, two systems” options on the heels of Sino-American normalization. As Beijing’s first plausible reunification offer to feature peaceful transition to a Special Administrative Region with “considerable autonomy,” it had substantial (if quiet) US support. Taipei’s initial response was however the “three nos,” which remained officially in effect through the end of the decade. The thaw could not commence until Beijing’s opening move was reciprocated by Taipei, which came only upon the death of Chiang Chingkuo and the inauguration of Taiwanese President Lee Teng-hui. Taipei’s response was to issue the Reunification Guidelines and set up a cabinetindependence only if Taiwan politics can go on without external blockade or invasion and reunification can occur only if Taiwan’s democratic capitalism can continue to function without external interference or manipulation.

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level Reunification Council, which outlined a schedule for eventual, conditional reunification, and then to establish a Mainland Affairs Council and beneath that an allegedly private Straits Exchange Foundation to undertake negotiations. Beijing reciprocated with its own Association for Relations Across the Straits (ARATS) under the State Council Taiwan Affairs Office, and the two sides began to talk. These talks, held initially in Hong Kong and then in Singapore under the auspices of a (flexibly interpreted) “one China principle,” succeeded in crafting over a dozen technical agreements and arranging a summit meeting between the SEF Chair Koo Cheng-fu and his mainland (ARATS) counterpart, Wang Daohan. Washington’s “tilt” can be explained by a number of mostly extraneous factors: first and foremost, this was after all still in the aftermath of Tiananmen; second, Taiwan’s new KMT regime had embraced democracy; and third, Taipei was finally responding positively to Beijing’s peace initiative. The 1996-2005 “freeze” began with the famous 1995-1996 missile crisis, when Beijing reacted adversely to Lee Teng-hui’s “alumni diplomacy” at Cornell University with missile “tests” off the shoreline of Kaohsiung and Keelung harbors and amphibious assault exercises along the Fujian coast, apparently designed to vent its ire and to warn Taiwan’s electorate not to vote for Lee Teng-hui (which a majority did anyway). This effectively froze cross-Strait relations for the next ten years, despite the 1998 Koo Cheng-fu visit designed to rethaw them. Washington’s response, after several months of very mild protest, was to send two carrier fleets to the Strait region in March 1996, which finally arrested Beijing’s foray into coercive diplomacy. This pro-Taipei tilt proved surprisingly ephemeral, however. Washington then launched its own thaw with Beijing, inviting Jiang Zemin to Washington in 1997 and reciprocating with Bill Clinton’s first trip to China (where he for the first time publicly embraced his own “three nos”17) the following year. When Lee Teng-hui, in a 1999 interview with a German radio network, articulated his “two nation theory” (liang guo lun), Washington echoed Beijing’s reproach, as it also did in response to Chen Shui-bian’s resort to a “national defense referendum” against China’s missile emplacements in 2003. After a hiatus of Sino-American friction in the spring of 2001 (EP3, etc.), the pro-Beijing tilt survived a partisan turnover in Washington and was only mildly shaken by the 2005 Anti-Secession Law (Condoleezza Rice called it “not helpful”). Yet the PRC’s military budgets have continued to grow more 17

Viz., No Taiwan independence, no two Chinas or one China one Taiwan, and no admission of Taiwan into any international organizations for which statehood is required.

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rapidly than its GDP since 1989, overtaking those of Russia and Japan to rank (a distant) 2nd in the world. Moreover, the cream of its offensive capability was deployed against Taiwan, where it has continued to conduct (somewhat lower profile) military exercises and to build missile launching sites at the rate of around 100 per year. If the logic of the triangle is to protect the wing most threatened, how can Washington’s Beijing tilt be explained? My preliminary, tentative hypothesis is that in the light of China’s growing (and Taiwan’s proportionately declining) strategic and economic weight (and the absence of high-profile value infractions), Washington decided that although Beijing was making the threats, Taipei was provoking them with its salami-slicing approach toward a formal declaration of independence. The assumption seems to have been that the 1996 US intervention had so damaged the credibility of Beijing’s threats that Taipei was now publicly flouting them, with the risk that Beijing would eventually need to restore threat credibility by acting on them. Thus to prevent the outbreak of war it would be easier and less risky to deter Taipei’s provocations than Beijing’s threats. Washington’s pro-China tilt (and shift from ambiguity to anti-Taiwan independence) seems to have assuaged Beijing, which gradually reduced its public threat level from 2004-2008. The 2008 re-thaw was ironically inaugurated in the immediate aftermath of the Anti-Secession Law, by Beijing’s invitations to opposition politicians Lien Chan and James Soong to visit the mainland in the spring of 2005. This was the “soft” part of Hu Jintao’s new policy of “a harder hard and a softer soft,” coupling legalized deterrence with diplomatic and popular overtures to the island. Though a number of agreements were reached during these visits, they were not subsequently endorsed by the DPP administration; and so the full thaw did not commence until the inauguration of Ma Ying-jeou in early 2008, at which point it unfolded with stunning swiftness. Cross-Strait exchange meetings (based once again on a flexibly interpreted one China principle, the “1992 Consensus”) between SEF and ARATS resumed; the “three direct links” (along with burgeoning tourist trade) were realized on December 15, 2008; and exchanges of all sorts proliferated, including the prospect of incoming mainland students and (selected) mainland investment. International diplomatic competition (which Taipei was losing) has been superseded by a “truce,” Taipei was permitted to join the World Health Assembly, and in June 2010 the two sides signed an Economic Cooperation Framework Agreement (ECFA), a sort of preliminary FTA designed to facilitate economic cooperation and hopefully open other regional economic portals to Taiwan.

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What are the political implications of this new cross-Strait dynamic? The political thrust of Beijing’s soft power initiative has remained crystal clear, though whether the means are sufficient not merely to elicit agreements in the short-term interest of both sides but to induce an eventual forfeiture of Taiwan’s sovereignty remains unclear. Taipei, after shocking its electorate with the pace of its cross-Strait initiatives, has become resolutely mute and noncommittal about their political implications, evoking the image of a train driving full speed toward an undefined destination. Washington, still militarily overcommitted in Iraq and Afghanistan and diplomatically preoccupied with North Korea and Iran, has quietly endorsed this new cross-Strait dynamic, opting for a procedural over a substantive definition of the status quo (i.e., it means “peaceful and consensual” relations). Washington seems uneasily aware of the possibility that Beijing may have found a way to exploit this definition to its own advantage and that its policies are hence leading to its least favored substantive outcome.18 It is too early to say how these diverging agendas will add up. My tentative conclusion in the light of an admittedly ambiguous empirical reality is that the logic of the triangle has basically shifted since the Cold War. During the Cold War the Taiwan triangle was a function of the Great Strategic Triangle, and more importantly it was essentially interest-based and balance of power: If Sino-US relations were bad, Taiwan-US relations were good; and if Sino-US relations were good, Taiwan-US relations deteriorated. This no longer seems to be true. There are three subphases in the post-Cold War evolution of the triangle, so let us examine the decision-making nexus preceding each subphase. The first subphase, in which Washington tilted toward Taiwan and against Beijing, defies triangular logic because Taiwan at the time was not being threatened. True, Beijing did not renounce its sovereign right to use force, but it did suspend its artillery bombardments of the offshore islands and for the first time offered a plausible peaceful route to unification. Why then the cold shoulder? These concessions, though welcome, had already been made ten years ago, so Beijing no longer got credit for them; more recently, the Tiananmen “incident” had occurred, Taiwan had embraced democracy, and the new KMT regime made a cautious but positive response to China’s overture. In sum, in the wake of Beijing’s conspicuous recent violation of canonic American values and Taiwan’s embrace of those values, value trumped interest. 18

See Robert Sutter’s provocative commentary, “Cross-Strait Moderation and the United States—Policy Adjustments Needed,” Honolulu, Pacific Forum CSIS, March 5, 2009.

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The second subphase, the 1995-2005 freeze, began with a strong US pro-Taiwan tilt in response to Beijing’s resort to diplomatic coercion; but what is noteworthy is Washington’s sustained subsequent shift to a proBeijing stance even as PRC attempts at intimidation continued. Washington’s explanation for this tilt was that Beijing, having drawn its redlines prohibiting any move toward independence, was then continually provoked by Taiwan’s defiant straddling of those redlines - so Taiwan was at fault. Underlying this decision was a deepening US involvement in Iraq and Afghanistan and diplomatic concern with North Korea and Iran, where Beijing might prove useful (certainly more useful than Taipei). In sum, interest trumped value. The 3rd phase and 2nd thaw in which Beijing and Taipei are still engaged has been met with cautious American approval. This is consistent with the US commitment to the status quo procedurally defined with possible sacrifice of its substantive stake. That is, given the PRC’s asymmetrical superiority in terms of interest, both to the US and to Taiwan, a synergetic dynamic could be set in motion that risks the eventual “loss” of Taiwan. Interest, whether strategically or economically defined, again trumps value, which is not immediately at stake. In sum, with the important proviso that certain procedural norms are respected (otherwise, cf. phase 1), the basic dynamic of the triangle seems to have shifted from balancing to bandwagoning.

Conclusions Throughout the Cold War, the China triangle was functionally dependent on the dynamics of the great strategic triangle. This “dependency” was not to all three participants in this larger configuration, as was the case with, say, Vietnam.19 Taipei was dependent on the relationship between only two actors: China and the US. The dependency was inverse in the sense that whenever Sino-Soviet relations were positive, this resulted in deteriorating Sino-American relations, which was conducive to positive Taiwan-American relations in the small triangle, as the US reached out for support to counter the Sino-Soviet bloc. If Sino-American relations improved, on the other hand, as they did in the early 1970s because of deteriorating Sino-Soviet relations, Taiwan-American relations could be neglected as they were no longer strategically “needed.” Thus throughout the Cold War, the China triangle evolved in tandem 19 Min Chen, The Strategic Triangle and Regional Conflicts: Lessons from the Indochina Wars (Boulder, CO: Lynne Rienner, 1992) pp. 2-14.

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with the Great Strategic Triangle. These two linked triangles went through five permutations (dates approximate): Sino-Soviet “marriage” against a US “pariah,” 1949-59; a “unit-veto” triangle, 1959-1970; the NixonKissinger “romantic” triangle, 1971-78; a Sino-American quasi-marriage, 1978-82; a Sinocentric romantic triangle, 1982-87, and a ménage a trois, 1987-91. From Taiwan's perspective, the decisive watershed was 1971, which marked a shift of the Sino-American “wing” from negative to positive. Taiwan-American relations were consistently positive during the permutations characterized by negative Sino-American relations in the 1950s and 1960s, while their deterioration coincides neatly with the period of Sino-American detente in the 1970s and 1980s. The end of the Cold War marked a second, even more decisive structural watershed. The collapse of the Great Strategic Triangle (as illustrated inter alia by Washington's indifference to the Sino-Russian “strategic partnership”) delinked the small triangle from the global balance of power, setting it free to evolve based on its own internal dynamics. Within the triangle each of the actors underwent changes, affecting their bilateral relationships. The cross-Strait balance has grown increasingly asymmetrical, in terms of both military and economic power. The rise of nationalism in China and in Taiwan has imparted a dangerous intensity to the forces striving for triangular resolution, while US involvement in Middle East wars has forced it into a more passive role. And the triangle has continued to evolve, making two discernible shifts: the period of the first cross-Strait “thaw” from 1989-1995, the period of cross-Strait “freeze” from 1995-2005, and the second cross-Strait “thaw” from 2008 to the present. The US has remained at pivot throughout, maintaining better relations with each wing than they have with each other and using uncertainty about its preferences to deter any departure from the status quo. From the perspective of American foreign policy in the Asian Pacific, this has proved a useful way of balancing its relations with two chronic adversaries, with each of whom the US has both interests and values at stake, helping perhaps to facilitate relations between them when they become too inflamed (while promising not to assume the position of arbiter). Despite some close calls, it has kept the peace. Yet, it must be conceded that the cross-Strait relationship has been anything but stable since the Cold War. While new policy initiatives have introduced new opportunities for cooperation they have also raised the stakes. For example, the Strait has become one of the most lucrative economic thoroughfares in the world. Taiwan has also been a chronic security flashpoint, at times lurching to the brink of war. Chinese analysts sometimes voice the suspicion that the US has utilized the triangle as a

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form of leverage to manipulate Sino-US relations, just as the old Great Strategic triangle was used to manage the Soviet threat. That is far from US intentions: the top US priority has been cross-Strait stability, meaning either friendly relations or at least credible deterrence via a stable power balance (or both). Yet there may be some truth in this. The policy of “strategic ambiguity” maintained a deliberate veil over US intentions under relevant cross-Strait contingencies; and this policy of nondisclosure may have inadvertently lured the PRC into testing US intentions by threatening Taiwan, only to discover the limits of US tolerance. Similarly, it may also have tempted Chen Shui-bian to plan to amend the ROC constitution despite Beijing’s strong opposition on the premise that US deterrence would not flag. Thus under GW Bush, US policy shifted from “strategic ambiguity” to “strategic clarity with tactical ambiguity,” making clear the US opposed invasion on the one hand and independence on the other but leaving unclear exactly how the US would respond to either contingency. Whether this will more effectively stabilize the triangle is uncertain — a resurgence of nationalism on either side could still conceivably precipitate high-risk policy choices on either side. And there are many other potential stumbling blocks as well. Nevertheless, if our preliminary inferences are correct, a new dynamic has now infused the triangle, a bandwagoning dynamic trending toward a potential ménage a trois. This would involve two tacit limits on rising nationalism: Taipei would forfeit formal independence while Beijing would forfeit conquest, both hoping future political-economic development will bring them closer to their ultimate goals. Can the limits on which this quasi-truce has been based establish path-dependency, or will they be politically derailed as so often before? If the current thaw’s full potential can be realized, all the old assumptions on which the triangular relationships of interest and value had previously been premised will need to be reassessed.

CHAPTER THREE STRATEGIC TRIANGLE, CHANGE OF GUARD, AND MA’S NEW COURSE YU-SHAN WU

Since the inauguration of Ma Ying-jeou as the twelfth president of the Republic of China in May 2008, cross-Strait relations have experienced unprecedented changes that one could hardly imagine before the power transition. In sharp contrast with the pro-independence Chen Shui-bian of the Democratic Progressive Party (DPP) who ruled Taiwan from 2000 to 2008, Ma and the newly installed Kuomintang government unleashed a peace offensive aimed at reaching a modus vivendi with the Communist government on mainland China. Ma’s new course is significantly different not only from the policy pursued by the outgoing DPP government, but it is also a far cry from the pro-unification and yet highly conservative mainland policy of the old KMT governments under Chiang Kai-shek and Chiang Ching-kuo. In short, Ma has been advocating a mainland policy that one has never seen in Taiwan before. Such policy has brought about rapid and generous reciprocity from Beijing which is also unprecedented. How can we make sense of this dramatic turnabout? How is it that the advocacy of the new course during the campaign was actually followed by swift execution, unlike the pattern under the DPP when pre-election promises oftentimes failed to be honored after the election was over? What are the conditions that led to the KMT’s new course? Will those conditions last? These are the questions that this chapter seeks to answer. There has been an abundance of theoretical frameworks that profess to explain cross-Strait relations.1 Some of these theories concentrate on the 1 Three edited volumes specifically address the theoretical development in crossStrait studies: Tzong-Ho Bau and Yu-Shan Wu, Eds., Zhengbian Zhong De Liang’an Guanxi Lilun (Contending Theories in the Study of Cross-Strait Relations) (Taipei: Wu-nan, 1999); Tzong-Ho Bau and Yu-Shan Wu, Eds., Chongxin Jianshi Zhengbian Zhong De Liang’an Guanxi Lilun (Revisiting Theories on

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interactions between Taiwan and the Chinese mainland.2 Some stress the importance of domestic political factors on both sides.3 Some argue Cross-Strait Relations) (Taipei: Wu-nan, 2009); Tun-jen Cheng, Chi Huang, and Samuel S.G. Wu, Eds., Inherited Rivalry: Conflict Across the Taiwan Straits (Boulder, CO: Lynne Rienner, 1995). For a summary of the different approaches, see Yu-Shan Wu, “Theorizing on Relations across the Taiwan Strait: Nine Contending Approaches,” Journal of Contemporary China Vol. 9 (2000) pp. 407-428. Also see Nancy Bernkopf Tucker, Ed., Dangerous Strait: The U.S.-Taiwan-China Crisis (New York: Columbia University Press, 2005) for a compendium of different approaches to cross-Strait relations without an emphasis on theoretical models. 2 Such as integration theory in Lang Kao, “Cong Zhenghe Lilun Tansuo Liang’an Zhenghe De Tiaojian Yu Kunjing” (“Exploring the Conditions and Dilemma of Cross-Strait Integration in the Perspective of Integration Theory”), in Tzong-Ho Bau and Yu-Shan Wu, Eds., Zhengbian Zhong De Liang’an Guanxi Lilun (Contending Theories in the Study of Cross-Strait Relations) (Taipei: Wu-nan, 2004); power asymmetry theory in Yu-Shan Wu, Kangheng Huo Hucong: Liang’an Guanxi Xinquan (Balancing or Bandwagoning: Cross-Strait Relations Revisited) (Taipei: Cheng-chung, 1997) and Yu-Shan Wu, “Quanli Bu Duicheng Yu Liang’an Guanxi” (“Power Asymmetry and Cross-Strait Relations”), in TzongHo Bau and Yu-Shan Wu, Eds., Chongxin Jianshi Zhengbian Zhong De Liang’an Guanxi Lilun (Revisiting Theories on Cross-Strait Relations) (Taipei: Wu-nan, 2009); game theory in Jih-wen Lin, “Liang’an Tanpan De Shuangceng Saiju Fenxi” (“A Two-Level Game Theoretical Analysis of Cross-Strait Negotiations”), in Tzong-Ho Bau and Yu-Shan Wu, Eds., Chongxin Jianshi Zhengbian Zhong De Liang’an Guanxi Lilun (Revisiting Theories on Cross-Strait Relations) (Taipei: Wu-nan, 2009) and Jih-wen Lin and Chih-cheng Lo, “Between Sovereignty and Security: A Mixed Strategy Analysis of Current Cross-Strait Interactions,” Issues & Studies Vol. 31,3 (1995) pp. 64-91; and divided nation theory in Ya-chung Chang, “Liang’an Guanxi De Guifanxing Yanjiu: Dingwei Yu Zouxiang” (“Normative Analysis of Cross-Strait Relations: Orientation and Trend”), in TzongHo Bau and Yu-Shan Wu, Eds., Chongxin Jianshi Zhengbian Zhong De Liang’an Guanxi Lilun (Revisiting Theories on Cross-Strait Relations) (Taipei: Wu-nan, 2009). 3 Such as the political competition model in John Fuh-sheng Hsieh, “Chiefs, Staffs, Indians, and Others: How was Taiwan’s Mainland China Policy Made?” in Tun-jen Cheng, Chi Huang, Samuel S.G. Wu, Eds., Inherited Rivalry: Conflict Across the Taiwan Straits (Boulder, CO: Lynne Rienner, 1995); Yu-Shan Wu, “Does Chen’s Election Make Any Difference? Domestic and International Constraints on Taipei, Washington, and Beijing,” in Muthiah Alagappa, Ed., Taiwan’s Democratic Politics: Democratization and Cross-strait Relations in the 21st Century (Armonk, NY: M.E. Sharpe, 2001), and Yu-Shan Wu, “Taiwan’s Domestic Politics and Cross-Strait Relations,” The China Journal Vol 53 (2005) pp. 35-60; the statesociety approach in Tse-Kang Leng, The Taiwan-China Connection: Democracy and Development across the Taiwan Straits (Boulder, CO: Westview, 1996), TseKang Leng, “Dalu Jingmao Zhengce De Genyuan: Guojia Yu Shehui De Hudong” (“The Source of Taiwan’s Economic Policy toward Mainland China: The

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international forces are behind the permutations of cross-Strait relations.4 Various synthetic theories have also been advanced to claim a higher

Interaction Between the State and Society”), in Tzong-Ho Bau and Yu-Shan Wu, Eds., Zhengbian Zhong De Liang’an Guanxi Lilun (Contending Theories in the Study of Cross-Strait Relations) (Taipei: Wu-nan, 1999), and Tse-Kang Leng, “Guojia, Quanqiuhua Yu Liang’an Guanxi” (“State, Globalization and Cross-Strait Relations”), in Tzong-Ho Bau and Yu-Shan Wu, Eds., Chongxin Jianshi Zhengbian Zhong De Lliang’an Guanxi Lilun (Revisiting Theories on Cross-Strait Relations) (Taipei: Wu-nan, 2009); and political psychology theory in Chih-yu Shih, “Zhima! Kaimen Xinli Fenxi Yinling Liangan Zhengce Yanjiu Jinru Xinjingjie” (“Sesame! Open the Door: Psychoanalysis Leads the Study on Cross-Strait Policy to a New Frontier”), in Tzong-Ho Bau and Yu-Shan Wu, Eds., Zhengbian Zhong De Liang’an Guanxi Lilun (Contending Theories in the Study of Cross-Strait Relations) (Taipei: Wu-nan, 1999), T.Y. Wang and I-Chou Liu, “Contending Identities in Taiwan: Implications for Cross-Strait Relations,” Asian Survey Vol. 44 (2004) pp. 568-590, and Yu-Shan Wu, “Taiwanese Nationalism and Its Implications: Testing the Worst-Case Scenario,” Asian Survey Vol. 44 (2004) pp. 614-625. 4 Such as systems theory in Chu-cheng Ming, “Guoji Tixi Lilun Yu Liangan Guanxi” (“International Systems Theory and Cross-Strait Relations”), in TzongHo Bau and Yu-Shan Wu, Eds., Zhengbian Zhong De Liang’an Guanxi Lilun (Contending Theories in the Study of Cross-Strait Relations) (Taipei: Wu-nan, 1999) and Chu-cheng Ming, “Guoji Tixi Cengci Lilun Yu Liang’an Guanxi: Jianshi Yu Huigu” (“International System-level Theory and Cross-Strait Relations: A Review in Retrospect”), in Tzong-Ho Bau and Yu-Shan Wu, Eds., Chongxin Jianshi Zhengbian Zhong De Liang’an Guanxi Lilun (Revisiting Theories on Cross-Strait Relations) (Taipei: Wu-nan, 2009); the strategic triangle model in Tzong-Ho Bau, “Zhanlue Sanjiao Getilun Jianshi Yu Zongtilun Jiangou Ji Qi Dui Xianshi Zhuyi De Chongji” (“Review of the Micro Theory of Strategic Triangles and Construction of the Macro Theory: Impact on Realism”), in Tzong-Ho Bau and Yu-Shan Wu, Eds., Chongxin Jianshi Zhengbian Zhong De Liang’an Guanxi Lilun (Revisiting Theories on Cross-Strait Relations) (Taipei: Wu-nan, 2009) and Yu-Shan Wu, “From Romantic Triangle to Marriage? Washington-Beijing-Taipei Relations in Historical Comparison,” Issues & Studies Vol. 4,1 (2005) pp. 113159; and constructivist exposition in Yi Yuan, “Anquan Dianze Yu Mei ‘Zhong’ Guanxi: Yige Renzhishequnlun De Fenxi Jiagou” (“The Security Regime and U.S.-PRC Relations: An Analytical Framework of Perception Community”) in Tzong-Ho Bau and Yu-Shan Wu, Eds., Zhengbian Zhong De Liang’an Guanxi Lilun (Contending Theories in the Study of Cross-Strait Relations) (Taipei: Wunan, 1999) and Yi Yuan, “Guifan Jiangou Zhuyi Yu Liang’an Guanxi: Lilun Yu Shijian” (“Normative Constructivism and Cross-Strait Relations: Theory and Practice”), in Tzong-Ho Bau and Yu-Shan Wu, Eds., Chongxin Jianshi Zhengbian Zhong De Liang’an Guanxi Lilun (Revisiting Theories on Cross-Strait Relations) (Taipei: Wu-nan, 2009).

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degree of explanatory power than the “pure” theories.5 Typically, synthetic models integrate domestic and international factors in an analytical framework. The way the factors are selected and integrated determines how coherent and effective the model is.6 In the following pages, we shall use a particular synthetic model (the sequential model) to explain the launch of the new course in 2008 and its sustainability. The model emphasizes the importance of elections and postulates how electoral cycles integrate domestic politics and international relations. The advocacy and launch of the new course demonstrate how the KMT’s electoral support base is in line with the party’s international strategic thinking. We shall see how a convergence of domestic and international factors pushes for a dramatic shift of Taiwan’s mainland

5

Such as the one that combines power asymmetry theory and the political competition model in Yu-Shan Wu, “Taiwan De Dalu Zhengce: Jiegou Yu Lixing” (“Taiwan’s Mainland Policy: Structure and Reason”), in Tzong-Ho Bau and YuShan Wu, Eds., Zhengbian Zhong De Liang’an Guanxi Lilun (Contending Theories in the Study of Cross-Strait Relations) (Taipei: Wu-nan, 1999); and the one that put together integration theory and divided nation theory in Yung Wei, “From ‘Multi-System Nations’ to ‘Linkage Communities:’ A New Conceptual Scheme for the Integration of Divided Nations” Issues & Studies Vol. 33,10 (1997) pp. 1-19 and Yung Wei, “Recognition of Divided States: Implication and Application of Concepts of ‘Multi-System Nations,’ ‘Political Entities,’ and ‘IntraNational Commonwealth,” The International Lawyer Vol. 34 (2000) pp. 997-1011. 6 There has been a long tradition in international relations and foreign policy theories that address the integration of international and domestic factors. The most famous model is two-level game. See for example, Christopher H. Achen, “Two-Level Games and Unitary Rational Actors.” in Yung-ming Hsu and Huang Chi, Eds., Zhengzhi Fenxi De Cengci (Level-of-Analysis Effects in Political Research) (Taipei: Weber, 2000); Peter Evans, Harold K. Jacobson, and Robert Putnam, Eds., Double-Edged Diplomacy: International Bargaining and Domestic Politics (Berkeley, CA: University of California Press, 1993); Keisuke Iida, “When and How Do Domestic Constraints Matter? Two-Level Games with Uncertainty,” Journal of Conflict Resolution Vol. 37 (2003) pp. 403-426; Jongryn Mo, “The Logic of Two-Level Games with Endogenous Domestic Coalitions,” Journal of Conflict Resolution Vol. 38 (1994) pp. 402-422; Jongryn Mo, “Domestic Institutions and International Bargaining: The Role of Agent Veto in Two-Level Games,” American Political Science Review Vol. 89 (1995) pp. 914924; Robert D. Putnam, “Diplomatic and Domestic Politics: The Logic of TwoLevel Games,” International Organization Vol. 42 (1998) pp. 427-460. For an application of the two-level game perspective to cross-Strait relations, see Jih-wen Lin, “Two-Level Games Between Rival Regimes: Domestic Politics and the Remaking of Cross-Strait Relations.” Issues & Studies Vol. 36,6 (2000) pp. 1-26.

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policy. The sustainability of the new course is in turn determined by the tenacity of the duet of domestic and international factors.

The Sequential Model Among the theories that emphasize domestic factors in determining a country’s external behavior, the “vote maximization model” is of particular relevance to how Taiwan made its mainland policy. Basically, this model postulates that a country’s external policy towards a specific foreign country is influenced by how that policy is likely to garner votes in the upcoming election. Policies that are likely to attract votes will be adopted. Those that are highly unpopular will be abandoned. The ideal position of the political parties is likely to be determined by the median voter, but electoral systems and the elite’s strategic calculations also play a role. The policies of both the incumbent and the opposition parties are determined with an eye to capturing the maximum votes in the upcoming election. In the case of Taiwan, both the KMT and the DPP gear their policies towards mainland China with their impact on domestic political competition in mind. However, foreign policies are not primarily shaped by domestic politics. International relations play a greater role here. When it comes to the international factors that affect Taiwan’s mainland policy, the strategic triangular relations among Washington, Beijing and Taiwan come to the fore. Here our focus is on how Taiwan conducts itself in the triangle to maximize its interests. It plays a specific role that entails specific relations with the U.S. and the PRC. Now it is natural that policy prescriptions derived from domestic political competition and international strategic role playing may not coincide. For example, it may be expedient to take a harsh stance towards Beijing in order to mobilize one’s power base in electoral campaign. On the other hand, such a position may prove untenable in the international arena. The balance of power in the strategic triangle may dictate that Taipei take a more conciliatory position towards Beijing. So how shall the policy-maker in Taipei reconcile the two opposing prescriptions? As intense electoral competition focuses decision-makers’ attention to the domestic impact of foreign policy, the necessary dilution of competition in the post-electoral period tends to redirect attention to realpolitik, or strategic triangular relations. This means there is a sequential alternation between domestic and international games following Taiwan’s political cycles.7 When elections draw near, Taiwan’s mainland policy reflects 7

For an exposition of this theme, see Wu, “Does Chen’s Election Make Any

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domestic politics and the campaign strategies of the political competitors.8 When elections are over and the leadership’s position has been secured, then the elite’s actions can be explained in terms of international realism. This is the sequential model, a particular synthetic theory that combines domestic and international factors to account for the vicissitudes of Taipei’s mainland policy. The integrating mechanism is electoral cycles. A contrast can be made between the radical shifts of policy by Chen Shui-bian in 2003 and 2004 and the consistency of Ma’s new course in 2007 and 2008, using the sequential model. Chen’s policy shift had to do with the diametrically opposite forces that he encountered when he ran for reelection. In order to mobilize domestic support when his government’s performance was widely deemed poor, Chen concentrated on the DPP’s base, the ideologically-driven dark Greens. He was deliberately provocative when he championed referenda on Taiwan’s status and rewriting the constitution. Negative responses from Beijing and Washington came with a vengeance. Even though Chen was forced to tone down his rhetoric a bit after Taipei received mounting pressure from overseas, the tone of his campaign was clearly one of fundamentalism and ethnic mobilization. However, right after he won reelection in March 2004, Chen regained his sobriety. As his Inaugural Address showed, Chen began to approach the world in a realistic manner, leaving many of his dark Green supporters in utter disappointment. The next serious move towards independence was taken no earlier than January 2006, when Chen abruptly abolished the Council for National Unification, 20 months after he was reelected. That move was geared towards the 2007 and 2008 elections. In contrast to Chen’s shift of policy before and after the presidential election, Ma was able to demonstrate policy consistency across the election cycle. The motif of Ma’s presidential campaign was the economy. The KMT argued that only with experienced hands at the helm would Taiwan be able to weather adverse tides in the international economy. The DPP was criticized for poorly managing Taiwan’s economy and causing the island to slide to the rear of the Asian dragons. To this dismal picture Ma offered a prescription: improving ties with the Chinese mainland to give a badly-needed boost to the economy. This policy was not just geared towards the KMT’s power base, but also the median voter’s preferences. In order to reach a rapprochement with Beijing, Ma insisted that the pro-independence policies of the DPP be scrapped. The magic

Difference?”; Wu, “Taiwan’s Domestic Politics and Cross-Strait Relations.” 8 Yu-Shan Wu, “Taiwanese Elections and Cross-Strait Relations: Mainland Policy in Flux,” Asian Survey Vol. 39 (1999) pp. 565-587.

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formula that would mend fences with China was the 1992 Consensus, one that contains different elements for the two sides to emphasize. Ma’s conciliatory stance was highly welcomed by Beijing. After Ma won the presidential election in March 2008, the KMT and the CCP entered into serious negotiations over the “three links” and a comprehensive framework for economic cooperation. The momentum was built up for a major breakthrough in cross-Strait relations. From that time on, one witnessed incessant exchanges of visits by business and political leaders from both sides. Deals were made and contracts signed to purchase large amounts of products from Taiwan, signs of good will from the mainland at a time of extreme economic difficulties. The very reason for the KMT to demonstrate policy consistency is to be found in the coincidence of the preferences of the party’s supporters and its realistic appraisal of Taiwan’s position in the Washington-Beijing-Taipei (WBT) triangle and in the world. Both tilt the new government towards reconciliation with the Chinese mainland. The sequential model is thus capable of explaining the different policy process of the DPP under Chen and the KMT under Ma. The former needed to make a turnabout when it won the presidential election of 2004 for the domestic and international imperatives pointed to diametrically opposite directions for the party’s China policy. The KMT, however, has been facing a reinforcing incentive structure. Its domestic base and international forces all favor a rapprochement with the Chinese mainland. In the following discussion, we shall dwell on both the international and domestic aspects of the KMT’s new course in order to assess its sustainability.

Asymmetrical Strategic Triangle The United States, China and Taiwan form a strategic triangle in the sense that the three strategic relationships bear on each other.9 Among the 9 For the literature on strategic triangles, see Victor D. Cha, Alignment despite Antagonism: The United States-Korea-Japan Security Triangle (Stanford: Stanford University Press, 1999); Aaron L. Friedberg, “The Collapsing Triangle: U.S. and Soviet Policies toward China, 1969-1980,” Contemporary Strategy Vol. 4 (1983) pp. 113-146; Joshua S. Goldstein and John R. Freeman, “U.S.-Soviet-Chinese Relations: Routine, Reciprocity, or Rational Expectations?” American Political Science Review Vol. 85 (1991) pp. 17-35; James C. Hsiung, “The Strategic Triangle: Dynamics between China, Russia, and the United States,” Harvard International Review Vol. 26,1 (2004) pp. 14-17; Go Ito, Alliance in Anxiety: Détente and the Sino-American-Japanese Triangle (New York: Routledge, 2003);

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three, Taiwan is the most keenly aware of the structure, as it bears much stronger impact from the actions of the other two players than its actions bear on them. The reason is the highly asymmetrical structure of the triangle. Taiwan is the weakest one and the most threatened one. It also depends on both mainland China and the US for its continued economic growth, as well as depending on the US for deterring an attack from the mainland. There is also asymmetry between the US and the PRC, although the latter is rapidly growing into a position to compete with the hegemon in an increasingly larger number of fields. The Washington-Beijing-Taipei triangle is thus an asymmetrical strategic triangle. As such it contains all the fundamental features of a strategic triangle, and yet it also demonstrates those features that one can find only in highly asymmetrical international relations. In the literature on strategic triangles, it is assumed that the players carry more or less the same weight, and the triangle is equilateral. This assumption obviously cannot accommodate the WBT triangle case. On the other hand, power asymmetry theory typically deals with a pair of asymmetrical actors. Although the interactive mode is investigated, such theory does not involve a third party as an integral player. How to formulate an analytical framework that effectively integrates power asymmetry and strategic triangles is a theoretical challenge, one that has to be tackled when investigating the WBTT case.10

Ilpyong J. Kim, Ed., The Strategic Triangle: China, the United States, and the Soviet Union (New York: Paragon House, 1987); Gerald Segal, The Great Power Triangle (New York: St. Martin’s, 1982); David Shambaugh, “The MilitaryPolitical Dimension in the U.S.-China-Taiwan Triangle” (Capitol Hill, Washington, DC: Paper presented at the Conference on “Taiwan and U.S. Policy: Toward Stability or Crisis?”, 2002); Thomas L. Wilborn, International Politics in Northeast Asia: The China-Japan-United States Strategic Triangle (Carlisle, PA: Strategic Studies Institute, U.S. Army War College, 1996); Ming Zhang and Ronald N. Montaperto, A Triad of Another Kind: The United States, China, and Japan (New York: Palgrave Macmillan, 1999). 10 For initial attempts to combine these two dimensions, see Kai-lu Chi, Guoli Buduideng Zhanlue Sanjiao Hudong Moshi Zhi Yanjiu—yi Lengzhan Shiqi Meizhongsu Sanjiao Yu Houlengzhan Shiqi Meizhongtai Sanjiao Weili (An Analysis of Strategic Interaction under Power Disparity: The Case of the U.S.USSR-PRC Triangle During the Cold War and the U.S.-PRC-ROC Triangle) (Taipei: MA Thesis, National Taiwan University, 2005); Brantly Womack and YuShan Wu, “Asymmetric Triangles and the Washington-Beijing-Taipei Relationship” (Denver: Paper presented at the 36th Taiwan-U.S. Conference on Contemporary China, 2007).

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We shall start with the basic assumptions of the strategic triangle theory. In Lowell Dittmer’s classical typology, there are four STs: ménage à trois (three amities), marriage (two enmities and one amity), romantic triangle (two amities and one enmity), and unit veto (three enmities).11 In ménage à trois, all three players are “friends.” In marriage, two “partners” act against an “outcast.” In a romantic triangle, two “wings” court a “pivot.” In unit veto, the players are all “foes” to one another. With the four ideal types of ST (ménage à trois, marriage, romantic triangle, unit veto), and six roles (friend, partner, outcast, wing, pivot, foe), one can set about analyzing any triangular situation, using the ST types and roles to describe objectively the structure of the triangular game as sketched in Figure 3.1. ST analysis goes beyond the pure description of types. We can add payoffs to the structure. From any player’s point of view, amity is considered inherently better than enmity for its relation with the other two players, but enmity between the other two players is good for this player who is afraid of collusion by the other two. If we assign 1 point to any amity with any other player, –1 to any enmity, and 1 to enmity between the other two players, -1 to amity between them, then we get pivot being the most advantageous role in an ST (scoring 3), followed by friend (1) and partner (1), wing (-1) and foe (-1), and outcast (-3). This is a natural ranking of preference for the six ST roles.12 With this preference ordering, we can discuss the ups and downs of specific countries in ST games, and explore the reasons behind the vicissitudes. Up to this point, we are still describing the ST structure and the payoffs of different actors. However, we can develop ST analysis still

11

For the seminal exposition of the triangular relations and modes, see Lowell Dittmer, “The Strategic Triangle: An Elementary Game-Theoretical Analysis,” World Politics Vol. 33 (1981) pp. 485-516. 12 For the ways to rank the triangular roles, see Tzong-Ho Bau, “Zhanlue Sanjiao Jiaose Zhuanbian Yu Leixing Bianhua Fenxi—yi Meiguo Han Taihai Liang’an Sanjiao Hudong Weili” (“An Analysis of Role Transition and Type Change in a Strategic Triangle: The Case of Triangular Interaction between the U.S. and the Two Sides of the Taiwan Strait”), in Tzong-Ho Bau and Yu-Shan Wu, Eds., Zhengbian Zhong De Liang’an Guanxi Lilun (Contending Theories in the Study of Cross-Strait Relations) (Taipei: Wu-nan, 1999); Wu, Kangheng Huo Hucong. The pivot’s role is sometimes controversial, as a country may find itself in an “unwilling pivot” position, being courted (and sometimes pressured) by the other two triangular actors who oppose each other. An unwilling pivot may want to exit its role in the game. For a discussion of the “willing” and “unwilling” pivot, see Wu, “From Romantic Triangle to Marriage.”

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Figure 3.1: Strategic Triangles and Roles

further. Given that each ST role has a payoff, it is reasonable to assume that, other things being equal, any country that finds itself in an ST game would aspire to “elevate” its role in that game, thus raising its payoff. The elevation of role may take the form of turning enmity to amity in a player’s relation with either or both of the other two players, or by turning the relation between the other two from amity to enmity, or both. When this is done, the strategic triangle in which the player finds itself will be transformed into another type of ST, one that renders a better position to

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the player initiating the move. However, as changing bilateral relations may prove difficult, a player with a low payoff may find itself stuck in its current condition, its intent to elevate ST role notwithstanding. We have assumed so far that the strategic triangle we are investigating is equilateral. However, in the real world countries always weigh and treat each other in terms of their relative power. Superpowers and mini-states are not in the same category. This fact reveals an inherent deficiency of the ST model in approaching the real world. The theory obviously needs to be modified to bring in varying state capabilities. Logically, there could only be four ways in which three triangular actors are ordered in power terms: X=Y=Z, X>Y=Z, X=Y>Z, and X>Y>Z. We shall designate them as “symmetrical triangle” (X=Y=Z), “single-head dual asymmetrical triangle” (X>Y=Z), “twin-head dual asymmetrical triangle” (X=Y>Z), and “triple asymmetrical triangle” (X>Y>Z) respectively. As exact power parity is rare in the real world, the most common ST is the triple asymmetrical triangle. In the following discussion, we shall concentrate on this particular type of ST, knowing that there exist other possibilities. Power disparity enters the ST calculus in the following way. It is reasonable to expect that a positive relation with a strong nation to be worth more than a positive relation with a weak nation, with the utilities derived from the two amities in direct proportion to the capabilities of the two countries in question. Hence, from X’s point of view, if Y is two times stronger than Z, then amity with Y is worth two times amity with Z. By the same token, enmity with Y will cost X twice as much as enmity with Z would cost. Similarly, the utility for a player derived from the relation between the other two players shall be weighted with the average of those players’ national powers. Let Fx be the total utility of X as derived from X’s position in the triangle, Yi and Zi the national power of Y and Z relative to X, and YX, ZX, YZ the relation between X and Y, Z and X, and Y and Z respectively, then we have: Fx= YX *Yi + ZX*Zi +(-YZ)*[(Yi+Zi)/2] Unlike the traditional strategic triangle in which each relationship is artificially given the same weight, in the refined model we have here each relationship is given the weight derived from the relative capabilities of the nations concerned. In the above formulation, XY, XZ and YZ are bivariate. They are either 1 (for amity) or -1 (for enmity). Xi, Yi and Zi are calculated in terms of the average of two ratios: one is the ratio of GDP and the other one is the ratio of military expenditures. Thus we have:

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Fx=[YX*(Gy/Gx+My/Mx)/2]+[ZX*(Gz/Gx+Mz/Mx)/2]+(YZ)*[(Gy/Gx+Gz/Gx)/2+(My/Mx+Mz/Mx)/2]/2 (where Gx stands for X’s GDP, and Mx stands for X’s military expenditures) Applied to Taiwan in the WBT triangle, then we have Ft=[UT*(Gu/Gt+Mu/Mt)/2]+[CT*(Gc/Gt+Mc/Mt)/2]+(UC)*[(Gu/Gt+Gc/Gt)/2+(Mu/Mt+Mc/Mt)/2]/2 (where t stands for Taiwan, u for the US, and c for mainland China) Given the above formulation, we can now begin calculating the payoff for Taiwan (Ft) in the WBTT and assess its performance over time prior to the launch of Ma’s new course.

Taiwan’s Performance During 1990-2008 The payoff of any triangular player hinges on the relative capabilities of the three players and the relations among them. Any player would aspire to have a positive relation with the other two players, while hoping that relations between the other two are strained. The greater the capability of other players relative to oneself, the more important the relationship is. For a weak player, it is advisable to have good relations with the other two stronger players, while unwise to antagonize either of them. It is also ominous when the two stronger players are colluding, although the weak party may have no influence whatsoever over that relationship. Now let’s take a look at the historical performance of Taiwan in the 1990-2008 period. In 1990 and 1991, despite Tiananmen and Taiwan’s democratization, the US kept a highly pro-Beijing policy stance under President George Bush, Sr. At the same time, Taiwan began softening its attitude towards mainland China and exploring the possibility of a new relationship under President Lee Teng-hui. The situation changed when the American presidential election campaign gained momentum, and Bush was willing to sell F-16 fighters to Taiwan in 1992. One finds a brief ménage à trois here. With the inauguration of Bill Clinton as the American president, Sino-US relations became strained over the human rights issue, but that proved a temporary phenomenon. When China’s MFN status was decoupled from its human rights performance in 1994, the WBTT was back to ménage à trois. In the following two years, the war scare in the Taiwan Strait put the US firmly on Taiwan’s side, leaving

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the PRC high and dry. Then Washington began mending fences with Beijing, acting as pivot in a romantic triangle. In 1999, the bombing of the PRC’s Belgrade embassy and the “twostate” theory (⏸⦚嵥) announced by Lee poisoned all three pairs of relationships, turning the WBTT into a unit veto triangle. Although Taiwan was reprimanded in the aftermath of Lee’s provocative remarks, the election of George W. Bush, Jr. and his pledge to do whatever it took for Taiwan’s defense turned the tables. Taiwan was in a comfortable virtual partnership with the US. However, 9-11 changed the picture, and Bush, Jr. adjusted his China policy accordingly. From 2003 to 2008, Taiwan found its position rapidly deteriorating in the WBTT. During this period of time President Chen Shui-bian tilted Taiwan dangerously close to a formal declaration of independence, while Beijing consulted Washington about an appropriate responses and “co-managing” the crisis. Taiwan played the least desirable role of an outcast. Table 3.1 shows the development of the WBTT between 1990 and 2009, and the role played by the three vertexes in the changing strategic triangle. However, we cannot fully grasp Taiwan’s payoff in the game simply by knowing the permutations of the triangle and the role assignments in it. What is missing in this picture is the weight of relationships. For this we turn to the national capabilities of the triangular players. Table 3.2 shows the GDP numbers and military expenditures of the three players during the 1990-2009 period. The asymmetry of the triangle is evident here. The development over time added to the asymmetry and changed the distribution pattern among the three vertexes. Whereas at the beginning of the time period the GDP ratio of the trio was 35:2:1, with the US way ahead of mainland China and Taiwan, the ratio shifted to 42:15:1 at the end of the period. Taiwan has been lagging increasingly behind the US and the PRC, whereas at the same time the PRC has been moving much closer to the US (from roughly 15:1 to 3:1). The same can be seen on the military expenditures side, although the redistribution pattern was less obvious as the US remained the predominant spender among the trio. There the ratio shifted from 50:1:1 to 58:7:1. The expanding and shifting asymmetry within the triangle obviously would have great impact on the interactions among the trio.

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Table 3.1: Washington-Beijing-Taipei Strategic Triangle Year

US

China

Taiwan

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Wing Wing Friend Wing Friend Partner Partner Pivot Pivot Foe Foe Partner Pivot Partner Partner Partner Partner Partner Partner Friend

Pivot Pivot Friend Wing Friend Outcast Outcast Wing Wing Foe Foe Outcast Wing Partner Partner Partner Partner Partner Partner Friend

Wing Wing Friend Pivot Friend Partner Partner Wing Wing Foe Foe Partner Wing Outcast Outcast Outcast Outcast Outcast Outcast Friend



Triangular Type Romantic Romantic ménage à trios Romantic ménage à trios Marriage Marriage Romantic Romantic Unit Veto Unit Veto Marriage Romantic Marriage Marriage Marriage Marriage Marriage Marriage ménage à trois

UT

CT

UC

-1 -1 1 1 1 1 1 1 1 -1 -1 1 1 -1 -1 -1 -1 -1 -1 1

1 1 1 1 1 -1 -1 -1 -1 -1 -1 -1 -1 -1 -1 -1 -1 -1 -1 1

1 1 1 -1 1 -1 -1 1 1 -1 -1 -1 1 1 1 1 1 1 1 1

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Table 3.2: GDP and Military Expendituresa in WBTT (million USD) Year Gu 1990 5,803,075 1991 5,995,925 1992 6,337,750 1993 6,657,400 1994 7,072,225 1995 7,397,650 1996 7,816,825 1997 8,304,325 1998 8,746,975 1999 9,268,425 2000 9,816,975 2001 10,127,950 2002 10,469,600 2003 10,960,750 2004 11,685,925 2005 12,421,875 2006 13,178,350 2007 13,807,550 2008 14,264,600 2009 14,002,739b

Gc 390,278 409,165 488,222 613,223 559,225 727,946 856,002 952,649 1,019,481 1,083,285 1,198,478 1,324,814 1,453,833 1,640,963 1,931,646 2,235,750 2,657,842 3,382,445 4,401,614 4,832,992b

Gt 164,789 184,371 218,694 231,034 252,283 274,022 289,341 300,818 276,321 298,825 321,374 291,889 297,741 305,441 331,130 356,227 366,364 384,772 392,552 333,907b

Mu 457,641 401,943 424,699 402,369 377,961 357,376 337,941 336,179 328,605 329,416 342,167 344,927 387,297 440,806 480,444 503,353 511,171 524,591 548,531 548,531c

Mc 13,147 13,691 16,543 15,331 14,607 14,987 16,606 16,799 19,263 21,626 23,767 28,515 33,436 36,405 40,631 44,911 52,199 57,861 63,643 63,643c

Mt 9,091 9,342 9,448 10,712 10,592 9,574 9,656 10,024 9,770 8,412 7,807 7,965 7,256 7,357 7,923 7,725 7,323 7,791 9,498 9,498c

Sources: International Monetary Fund, World Economic Outlook Database, http://imf.org/ external/ns/cs.aspx?id=28, accessed September 26, 2009; Stockholm International Peace Research Institute, http://milexdata.sipri.org/result. php4, accessed September 26, 2009. a

Military expenditures are in 2005 constant dollars. Predictions based on the IMF estimates. c Figures not yet available at the time of writing. The 2008 figures are used as surrogates. As ratios of military expenditures are primary concerns here, substitution of 2008 figures for 2009 ones is considered tolerable. b

Table 3.3 calculates the average relative capabilities of the trio over time. These ratios are to serve as weights of the three relations, so that we can come up with Taiwan’s overall payoff in the game (Ft). In our formulation, relations and capabilities combine to determine a vertex’s payoff. Relations are weighted by the power ratios which have both economic and military components. Relations are more important than capabilities, because amity (assigned the value of 1) or enmity (assigned -

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1) determines in which direction the weight of the relation shall bear on the receiving vertex. Since Taiwan’s relative capabilities have been lagging further behind both the US and mainland China in the past two decades, the direction of the relations is more important for Taiwan than for the other two players. With little capabilities to buttress adverse change of relations, Taiwan has to be highly vigilant against such changes, let alone precipitating one. Table 3.3: Taiwan’s Overall Payoff (Gu/Gt+ (G /G +G /G +Mu/Mt+Mc/ UT (Gc/Gt+Mc/Mt)/2 CT u t c t UC Mu/Mt)/2 Mt)/4 1990 42.78 -1 1.91 1 22.34 1 1991 37.77 -1 1.84 1 19.81 1 1992 36.97 1 1.99 1 19.48 1 1993 33.19 1 2.04 1 17.62 -1 1994 31.86 1 1.80 1 16.83 1 1995 32.16 1 2.11 -1 17.14 -1 1996 31.01 1 2.34 -1 16.67 -1 1997 30.58 1 2.42 -1 16.50 1 1998 32.64 1 2.83 -1 17.74 1 1999 35.09 -1 3.10 -1 19.09 -1 2000 37.19 -1 3.39 -1 20.29 -1 2001 39.00 1 4.06 -1 21.53 -1 2002 44.27 1 4.75 -1 24.51 1 2003 47.90 -1 5.16 -1 26.53 1 2004 47.97 -1 5.48 -1 26.72 1 2005 50.01 -1 6.04 -1 28.03 1 2006 52.89 -1 7.19 -1 30.04 1 2007 51.61 -1 8.11 -1 29.86 1 2008 47.05 -1 8.96 -1 28.00 1 2009 49.84 1 10.59 1 30.22 1 Sources: Calculated from the sources of Table 3.2.

Year

Ft -63.2 -55.7 19.48 52.85 16.83 47.19 45.34 11.65 12.08 -19.1 -20.3 56.47 15.02 -79.6 -80.2 -84.1 -90.1 -89.6 -84.0 30.22

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The ups and downs of the Ft curve in Figure 3.2 reflect the changing relations and capabilities among the vertexes of the WBTT. Taiwan’s starting point was low as the Bush Administration always kept a strong tilt towards Beijing and distanced itself from Taipei. As the US was the dominant player, Washington’s attitude pretty much determined Taiwan’s low profile in the game. The surge of Ft in 1992 reflects the change of Washington’s policy around the presidential election.13 Clinton’s initial emphasis on human rights and revulsion against the Tiananmen crackdown meant Taiwan could benefit from the increase in tensions between Washington and Beijing. Hence, the height of Ft rose dramatically in 1993. In 1994 a ménage à trios reappeared and Taiwan’s position declined a bit. The missile scare of 1995-96 poisoned cross-Strait relations, and yet placed the US firmly on Taiwan’s side. Ft again surged, but only to decline in the next two years as Washington and Beijing reached a compromise. Lee’s “two-state” theory plunged Taiwan into the abyss in 1999, as his rearguard action against US-PRC rapprochement backfired. However, the US electoral cycle kicked in, and the new Bush Administration demonstrated unprecedented support for Taiwan. It also showed great suspicion to Beijing, if for no other reason than a revulsion against the policy of the outgoing Democratic Administration. Taiwan enjoyed a surge in its Ft score in 2001. Then from 2003 to 2008, Chen completely alienated Washington by his reckless moves toward independence that were clearly geared to domestic politics. At the same time, Beijing approached Washington in an attempt to reach a modus vivendi of “co-management.” Taiwan’s position plummeted to a nadir. The weakest player in the triangular game antagonized the other two players to its own disadvantage. This is the international background of Ma’s new course.

13

For the relationship between electoral cycles and Washington’s China policy, see Yu-Shan Wu, “Domestic Political Competition and Triangular Interactions Among Washington, Beijing and Taipei: The U.S. China Policy,” Issues & Studies Vol. 42,1 (2006) pp. 1-46.

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Figure 3.2: Taiwan’s Overall Payoff

What does the trend in the past inform us about Taiwan’s triangular position and its Ft score?14 By looking at the curve and the numbers, it is quite obvious that there are five categories of Ft scores that are closely associated with Taiwan’s role in the WBTT. Taiwan’s position is most secure (45