China-Taiwan relations hit low point. 'Same bed, different dreams'?

After spending lavishly on Taiwan incentives, China is worried the island isn't moving swiftly enough towards unification. Democratic Taiwan didn't like China's attitude toward Hong Kong student protests for universal suffrage. 

Kim Kyung-Hoon/Reuters
Taiwan's envoy to the Asia Pacific Economic Cooperation forum Vincent Siew (l.) shakes hands with China's President Xi Jinping during a welcoming ceremony at the International Convention Center at Yanqi Lake, in Beijing, Nov. 11, 2014.

Taiwan and China have hit a rough patch, marking the lowest point since the two shifted from openly hostile to cordial relations six years ago.

Causes for the trouble run deep, ranging from jitters in Taiwan over Beijing’s hard-line views of the student "Umbrella" democracy protests in Hong Kong to an anxious feeling in China that the island it claims is not moving swiftly enough toward unification after a host of lucrative economic deals.

China and Taiwan have signed 21 trade, transit, and investment deals since Taiwanese President Ma Ying-jeou took office in 2008 and agreed to build trust for the first time. But Taiwan’s lack of desire to march as fast toward unity as China would like may bring a drag on a Taiwanese economy that has depended largely on the mainland for economic buoyancy. The low point takes place as Taiwan, sometimes referred to as Asia’s most vibrant democracy, prepares for Nov. 29 by-elections that, China worries, could bring more opponents of unification into office. 

“The initial momentum is spent. The Chinese have not gained as much ground as they hoped to by now and the resistance to political unification seems as strong as ever,” says Denny Roy, a senior fellow at the East-West Center in Honolulu. “On top of this is the spectacle of hardening authoritarianism in China and the crisis in Hong Kong, which Taiwan's people are watching closely.” 

A significant dip in relations with China dates to last March, when university students in Taipei led a 24-day occupation of the parliament building. The so-called Sunflower student movement protested a host of agreements with China that students said were never explicitly understood by the Taiwanese people and that could put the country in hock.

They said that pending deals with China undercut Taiwan’s self-rule and were troubling since China had for decades threatened to take the island by force if needed.

“The young people are awakening,” says Joseph Wu, general-secretary of Taiwan’s opposition Democratic Progressive Party. “They’re seeing that the current government is too close to China.”

China has claimed sovereignty over Taiwan since Mao Zedong’s Communists won the Chinese civil war in the mid-20th  century, leading the Nationalist forces of Chiang Kai-shek to flee to Taiwan, some 99 miles off the coast of China’s Fujian Province.

Since the Sunflower protests, Taiwanese lawmakers have delayed indefinitely the ratification of a huge multi-layered agreement with China that would liberalize some 144 service trade sectors. The service deals are increasingly being viewed on the island as a lure by China to unify based on economic incentives.

Expectations are also low for any breakthroughs on a different deal now being negotiated to slash thousands of import tariffs.

No political talk, please

Taiwan officials wanted to lift their slow-growing, half-trillion-dollar economy through more trade and investment links with China, which has a GDP of about $10 trillion. But Ma says he is not ready to talk to China about political issues.

Cross-strait relations “have definitely hit a trough … because the major [service trade] achievement was not implemented, so why offer anything else to …Taiwan?” asks Ross Feingold, Taipei-based senior adviser with American political risk manager DC International Advisory. 

In August, a deputy minister in Taiwan's Mainland Affairs Council in Taipei quit amid suspicions he had leaked secrets to China, renewing fears in Taiwan that the two governments had become too close.

An even bigger storm came with protests in Hong Kong that started in September and are ongoing. Shortly before tens of thousands occupied the streets there to demand universal suffrage and to protest against Beijing’s offer of an “Iranian style election,” as some in Hong Kong call it, Chinese President Xi Jinping suggested Taiwan unify with China on the terms of Hong Kong. Those terms are known as “one country, two systems,” meaning controlled by Beijing but with a degree of autonomy.

Changing the terms?

But after China issued a White Paper on Hong Kong that appeared to change the terms of the agreement, many Taiwanese, who have enjoyed more democracy than in Hong Kong, worried about losing freedoms. Polls showed 70 percent of voters opposed Xi’s formula. Ma told Chinese authorities in October it should allow democracy in Hong Kong despite Beijing’s refusal to consider it, a comment  a Chinese spokesman called “irresponsible.”

“A negative political trend is growing due to the universal suffrage issue in Hong Kong and mainland China’s demand for one country, two systems,” says Charles Chen, spokesman for Taiwan’s ruling Nationalist Party.

This month, both sides are showing signs of restoring relations. When meeting Taiwan’s delegation last week at the annual Asia Pacific Economic Cooperation summit, hosted this year in Beijing, Xi for the first time acknowledged “new problems” and suggested finding solutions.

The developments of the past year “soured relations and a lot of discussions have stopped mid-way,” says Joanna Lei, chief executive officer of the Chunghua 21st Century Think Tank in Taiwan. “So there was a very strong effort on both sides at APEC this year to rebuild the relationship and rekindle trust.”

China is also focused on locking in strong ties with Taiwan in case the island's feisty opposition DPP party wins the presidency in 2016. Ma steps down in 2016 due to term limits. The DPP takes a more guarded approach to China than Ma’s Nationalists. The DPP was in power from 2000 to 2008 and angered China by rejecting its goal of unification.

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