Outlook for Continued Stability in the Taiwan Strait

Jeffrey A. Bader

The apparent election on March 20 of pro-independence candidate Chen Shui-bian to a second term as President of Taiwan raises serious questions about the future of cross-Strait peace and stability.

Chen’s election came a day after an attack upon him by an unknown perpetrator for unknown reasons that almost certainly produced his slim margin of victory. Though his election is under challenge, it is unlikely that his razor-thin triumph will be reversed by recount. The current post-election turbulence in Taiwan, marked by opposition party demonstrations and legal maneuvering reminiscent of Florida in 2000, is troubling and an escalation of tensions could continue for some time, but it is not likely to lead to extra-legal solutions. So for the next four years, we probably will see a leadership in Taiwan whose views are in fundamental conflict with the Government of the People’s Republic of China and whose stated intentions are to move in directions to which the PRC has said it will respond militarily.

The principal risk on the horizon at the moment lies in a possible PRC-Taiwan confrontation over plans to amend or replace Taiwan’s Constitution. Taiwan’s current Constitution is the one that the Republic of China —China’s Government before 1949 — adopted in 1947. It needs updating to reflect the differing requirements of a multiparty democratic system. In addition, constitutional revision could include more sweeping changes to include the country’s name, area of jurisdiction, and other matters that would make clear the juridical status of Taiwan as an independent country untied to the Chinese mainland. While the constitution could be amended to achieve limited goals, Chen’s preferred approach is a referendum on a wholly new constitution for Taiwan in 2006, which would become effective in 2008. This would enrage Beijing, as the resulting document would, in its view, represent a sovereign act by the people of Taiwan, totally separate from the mainland. The PRC sees an entirely new constitution as indicating the creation of a new independent state and has condemned with unusual clarity the prospect of a referendum on one as unacceptable.

Its criticism contains the implicit threat of use of force should Taiwan enact such a constitution. Since the late 1990’s, Beijing seems to have judged that the growing economic and people-to-people ties between the two sides of the Taiwan Strait, combined with its growing strength vis-à-vis Taiwan, mean that time is on the side of eventual reunification. Beijing has viewed with anxiety the Presidencies of Lee Teng-hui and Chen Shui-bian, but has so far pursued a policy of nongovernmental bridge-building combined with military deterrence to prevent movement toward independence. It has rejected the alternative poles of engagement with the Chen Government or use of force to achieve reunification.

Beijing obviously hoped for a victory by the Kuomintang-led ticket of Lien Chan, and it tried hard to avoid itself becoming an issue in this year’s campaign, in contrast to 1996 and 2000 when its belligerence swelled pro-independence vote totals. Its strategy this time would have succeeded were it not for the unpredictable assassination attempt the day before the election. The apparent outcome of the Presidential election, nonetheless, could cause reflection in Beijing as to whether it has been too passive. The new leadership team of

President Hu Jintao and Premier Wen Jiabao is inexperienced in foreign policy and subject to second-guessing by Jiang Zemin, who remains Chairman of the Central Military Commission, and by his acolytes in the Politburo. All this might suggest that we can look for a ramp-up in cross-Strait tensions in a second Chen term.

In reality, though, Beijing is still studying the surprising results of the elections and deciding on its future course.

The risks are real. In Taiwan, support for reunification with China is no longer a viable political position for candidates. There is a growing sense among Taiwanese of their separate identity from China, and politicians must take this into account to survive. In addition, conflicting statements from Bush Administration officials below the President may have left Chen with the impression that he has a blank check and thus protection in all contingencies against Beijing. On the other side of the Strait, a younger generation appears more nationalistic and determined to reclaim Taiwan. The PRC’s growing economic and military strength and international stature give it leverage it can be expected to use to help resolve its highest priority international demand.

There also is the risk of miscalculation. Some in Taiwan seem to think the 2008 Beijing Olympic Games provides Taiwan temporary immunity from PRC aggressiveness. If Chen’s government uses this presumed

firewall as a shield to move toward independence, they are likely to be surprised by Beijing’s strong, hostile response. On the other hand, China does not seem to understand the depth of feeling in Taiwan favoring a distinct international identity, viewing it rather as an attitude manipulated by the leadership. And the PRC could misjudge the willingness of the United States, seemingly preoccupied by a war on terrorism, to stand by Taiwan.

On balance, however, the outcome of the elections provides reason for guarded optimism that tensions will be manageable. Why?

With a margin of less than 0.2% and a victory owing to sympathy votes in the immediate wake of an assassination attempt, Chen does not have a mandate for change. Arguably, his reelection was a freak of circumstances, and his adversaries thus will have little hesitancy in opposing his riskier plans. Taiwan will hold legislative elections in December. Whether the Kuomintang (KMT) and its allies will retain a majority is unclear, but with a deeply divided electorate and a base energized by what it sees as a stolen election, the KMT-led coalition can expect to remain a formidable legislative force.

The electorate rejected the referendum proposed by Chen that would have called for acquisition of a missile defense system. This referendum was seen by both Chen’s supporters and by Beijing as a trial balloon for an eventual referendum on Taiwan’s status. The results suggest that Chen cannot count on automatic endorsement of a future constitution in a referendum.

To produce a new constitution, Chen will need action by the legislature, either in the form a 75% vote by both houses or a new referendum law. Whatever means is chosen and passes legal muster, it seems highly unlikely that a 50% plus one level of support will be judged acceptable for changes fraught with potentially grave consequences.

Accordingly, the most likely scenario for the next four years is stalemate on the cross-Strait issue, and continuation of the current wary cold peace. Beijing most likely will calculate that continued growth in trade and investment is not only in its economic interest, but builds bridges for people-to-people reconciliation without providing recognition to Chen. The outlook for direct aviation and transportation links, which doubtless would have developed in the event of a Kuomintang victory, appears cloudier, however. It would not be hard to overcome the formal obstacle, namely disagreement between the two sides on the role of governments in negotiations to arrange direct links, but the political incentive for either side to show flexibility is not obvious.

Jeffrey A. Bader is a Senior Vice President of Stonebridge International, a global strategy firm based in Washington, DC.

Stonebridge International LLC is a Washington-based global business strategy firm, helping U.S. and multinational companies shape and execute results-oriented strategies to solve problems and seize business opportunities worldwide. Stonebridge Chairman Samuel R. Berger, former U.S. National Security Advisor, has assembled leading regional and country experts to create winning business strategies. For more information, visit www.Stonebridge-international.com