Taiwan and Beijing: Part 2


2013-01-30 By Richard Weitz

In his inaugural address, Ma stated that there would be “no reunification, no independence, and no use of force.”

During the campaign, Ma emphasized the need to revive the Taiwanese economy and advocated expanding social and economic ties with the Chinese mainland, including restoring direct communications, postal, and other commercial links that had atrophied under Chen. Although Ma had expressed willingness to sign a formal treaty with the mainland, Ma has declined to embrace Beijing’s version of the One China principle, urging instead that both nations set aside ideological issues and concentrate on economic cooperation.

After a nine-year hiatus, the ARATS and the SEF resumed formal talks on June 13, 2008. Four months later, ARATS Chairman Chen Yunlin and SEF Chairman Chiang Pin-kun signed agreements that included the “Three Directs” of direct flights, direct shipping, and direct postal services, replacing circuitous routes that often had to go through Hong Kong.

The Chinese military modernization drive continues to shift the military balance further in Beijing’s favor. Is the modernization of Taiwanese defenses part of the Pivot to the Pacific? Credit Image: Bigstock

In December 2008, at the 4th Cross-Strait Economic, Trade and Cultural Forum, the PRC announced ten measures towards Taiwan designed to enhance economic cooperation. The third round of ARATS-SEF talks took place in April 2009 in Nanjing.

Three agreements were signed, which dealt with regular passage/cargo direct flights, financial cooperation, and countering crime. The two countries signed their most important accord, the Economic Cooperation Framework Agreement (ECFA), in June 2010. The ECFA provides for tariff reductions and greater commerce between Taiwan and the mainland.

After it took effect in September 2010, both sides made reciprocal tariff reductions, which reduced the costs to businesses and customers on both sides of the Strait. The agreement has also made Taiwan a more attractive place for foreign investors, since they can export some of their goods into China duty free. Its Taiwanese opponents protested that the Chinese sought to entice Taiwan into becoming economically dependent on the mainland.

Ma and the KMT won reelection in 2012, though with a decreased margin of victory in both the presidential and legislative elections.

At present, political and commercial relations between Taiwan and the PRC have never been better.

There is no immediate threat of war and considerable economic, cultural, and quasi-governmental cross-Strait exchanges and ties.

Taiwan-RPC bilateral trade now amounts to more than $150 billion annually.

There are hundreds of direct flights each day bringing more than 100,000 mainland tourists each month to Taiwan and many Taiwanese business managers to the PRC. Taiwanese businesses have invested more than $100 billion in China, taking advantage of the lower costs of production and the common languages. Cultural exchanges regularly occur.

Although the parties have yet to negotiate political or security agreements, some of the more than dozen bilateral agreements in effect invariably touch on political issues, with PRC and ROC officials now routinely consulting on noncontroversial questions of implementation rather than relying on the less efficient process of working exclusively through the quasi-governmental associations.

The main Taiwanese complaint at present is that the PRC needs to implement some of the cultural agreements more equably — such as letting in more Taiwanese films, books, etc.

Nonetheless, Ma sees a “virtuous circle” at work in which Taiwan’s improving ties with the mainland enhance Taiwan’s foreign relations, such as with the United States, while deeper international ties make the Taiwanese people more confident about dealing with the PRC.

Before the ECFA, only North Korea joined Taiwan in not being well integrated with the network of free trade agreements that linked northeast Asia.

Now the deal and better PRC-ROC ties have made other countries more comfortable reaching economic agreements with Taiwan without worrying about Beijing’s reaction. Singapore is actively negotiating a free trade agreement with Taiwan, whose trade with many other countries besides China has already increased considerably in recent years.

The rhetoric coming from Beijing is of peaceful reunification, not armed liberation. The Taiwanese government no longer engages in provocative actions.

Despite the change of government in Taipei, the PLA is still seeking through its military buildup to deter Taiwan from declaring independence as well as to acquire the means to coerce Taipei to accept Beijing’s terms for the resolution of any cross-Strait dispute.

The PLA now has approximately 500 warplanes and more than one thousand ballistic missiles and hundreds of cruise missiles stationed within range of Taiwan. Besides this quantitative dimension, the PLA inventory facing Taiwan is being modernized.

Its extended-range, anti-access/area denial capabilities are also growing and could degrade the U.S. military’s ability to rapidly move forces into the western Pacific if the need arose.

To this end, the PLA is pursuing capabilities to both defeat Taiwan in any military confrontation and to deter, delay, or deny potential U.S. military intervention on Taipei’s behalf.

DPP leaders cite this buildup in arguing that the Nationalist government is embracing the PRC too soon, too fast, and too much. They argue that Taiwanese businesses and workers suffer from competition from lower cost PRC competitors. They also correctly observe that China is promoting economic integration as a means towards Taiwan’s eventual political integration. Even so, compared with the 2008 elections, in 2012 when the candidates argued over the relative costs and benefits of various policies rather than over existential questions such as Taiwan’s national identity.

Taiwan has continued to develop its military strength within the limits of what it can acquire abroad.

In 2012, the most notable of these were the Han Kuang Military Exercises in April, the Lien Yung Exercises in June, and the Live-Fire Missile Exercises in early July.

Taiwan has also moved forward with its acquisition and deployment of new technologies. Taiwan plans to upgrade 56 F–CK–1 Indigenous Defense Fighters between 2014 and 2017. It has also received U.S. approval to retrofit all the 145 F-16A/B fighters in its fleet with advanced electronic warfare suites, radar capabilities, and other upgrades.

Taiwan would like to receive the more advanced F–16 C/Ds, and ideally the F-35B.

Taiwan has recently deployed land attack cruise missiles capable of striking military bases in China and has also developed Hsin-Hai Missile Corvettes, a 12,500-ton platform equipped with eight anti-ship cruise missiles. This warship is expected to be delivered in 2014, with a life-span of 25 years.

Furthermore, Taiwan is planning to build its own submarines through an Indigenous Submarine Development Project. Finally, Taiwan is upgrading its air and missile defense systems to at the Patriot Advanced Capability–3 configuration.

Nonetheless, the Pentagon believes that the PLA’s modernization drive continues to shift the military balance further in Beijing’s favor.

Taiwan’s defense budget has at times fallen below the 3 percent of GDP floor the government has established as its preferred spending level. During the 2000-11 period, Taiwan’s defense budget increased by less than 2 percent annually, on an inflation-adjusted basis, from $8.3 billion in 2000 to $10.1 billion in 2011 (which actually was a decrease from the peak year of 2008, when Taiwan’s spending amounted to $10.8 billion, a 17.7 percent increase over the previous year).

But since Taiwan’s active-duty force decreased 370,000 to 290,000 during this period (a 21.6 percent reduction in troop numbers), its per-soldier defense spending rose more than twice as fast, over 4 percent each year. This trend toward a smaller but higher quality force should continue as Taiwan phases out conscription in favor of an all-volunteer professional force.

But Taiwan also must spend considerable funds to replace its aging Mirage 2000 and F-5 fighters.

Chinese policy makers try to reinforce their advantage by denying Taiwan access to foreign arms supplies.

The PRC again froze U.S.-Chinese defense relations after the Bush administration notified Congress in 2008 of plans to sell Taiwan $6.5 billion in military equipment. Ties only resumed in earnest when Barack Obama became president.

On January 29, 2010, the Obama administration unveiled a $6.4 billion arms deal with Taiwan. The deal included 60 UH-60M Blackhawk helicopters, 114 PAC-3 missiles and their accompanying radar systems, two Osprey-class mine-hunting ships, 12 Harpoon anti-ship missiles, and an array of advanced communications equipment. Absent from the deal were F-16C/D fighter jets and diesel-fueled submarines, two items of special interest to Taipei, and of special concern to Beijing. In response to the arms deal, the PRC Foreign Ministry said that, “The U.S. move pose[s] grave danger to China’s core interests and hurts bilateral ties seriously, which will inevitably affect bilateral cooperation on some major regional and international issues,”  though thus far the damage was limited due to U.S. restraint in providing the most sensitive systems and, perhaps, the improvement in cross-Strait ties.

The United States continues its policy of strategic ambiguity.

The US is not taking sides on what Taiwan’s ultimate fate should be, but insisting that Beijing-Taipei differences should be settled by peaceful means and implying that the United States might take military action to help defend Taiwan.

Some analysts argue that the United States should decrease its security ties with Taiwan in coming years now that mainland China has become much more important for U.S. security and economic health.

But other analysts believe this distancing would be counterproductive.

Taiwan contributes to U.S. security in multiple ways, from serving as a key trip-wire of how China will use its growing power, to helping reinforce the credibility of other U.S. alliances in the Asia-Pacific region, to serving as a key element of the all-important East Asian security architecture that has provided such peace and prosperity to the Asia-Pacific region, including the United States.

Proponents of continuing arms sales maintain that they help provide the reassurance the Taiwanese need to engage with the PRC.

They hope that over time PRC policy makers will understand this, along with acknowledging that the best way to entice Taiwan into a greater China is to make more comprehensive economic and political reforms and reducing its military threat to Taiwan.

Editor’s Note: Taiwan could be included in a strategic re-think in operational terms, as the USN-USMC team looks to islands, rather than amphibs and carriers to operate with its aviation assets. 

And the introduction of the F-35 in the region, could allow the US to shape a more innovative approach to the defense of Taiwan as well.





And what would the impact of a hard Chinese economic landing be on Taiwan?