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Taiwan Strait IV: How an Ultimate Political Settlement Might Look
Taiwan Strait IV: How an Ultimate Political Settlement Might Look
Table of Contents
  1. Executive Summary
Taiwan Strait II: The Risk of War
Taiwan Strait II: The Risk of War
Table of Contents
  1. Executive Summary
Report 75 / Asia

Taiwan Strait IV: How an Ultimate Political Settlement Might Look

Each side’s most preferred solution for resolving the continuing Taiwan Strait issue – in the case of Taipei, widely recognised de jure independence; and in the case of Beijing, reunification of China on the same ‘one country, two systems’ basis as Hong Kong – are both non-starters.

Executive Summary

Each side’s most preferred solution for resolving the continuing Taiwan Strait issue – in the case of Taipei, widely recognised de jure independence; and in the case of Beijing, reunification of China on the same ‘one country, two systems’ basis as Hong Kong – are both non-starters. Neither society is likely to accommodate the other or change to the degree necessary to make either option realistically achievable, even ten or fifteen years down the road. If the risk of conflict across the Taiwan Strait – too serious to be accepted with equanimity, as the tensions of the last few months have shown – is to be reduced, then there has to be new thinking about what an ultimate political settlement might look like, and how to get there.

This report follows three earlier ones, published together in June 2003,[fn]ICG Asia Reports N°53-55, Taiwan Strait I: What’s Left of ‘One China’?; Taiwan Strait II: The Risk of War; and Taiwan Strait III: The Chance of Peace, 6 June 2003.Hide Footnote which demonstrated that for all practical purposes the ‘One China’ approach that has helped stabilise the region for three decades is dead; argued that the risk of war – while not great – was still real; and suggested a number of strategies for maintaining peace in the short to medium term. While noting the turbulent state of the current debate, heightened as it has been by the campaign for the 20 March 2004 presidential election, this report seeks to stand back from current events and focus on what it would take to produce a longer term solution that both sides could live with.

Four different reunification or reintegration models are considered:

  • China’s preferred ‘one country, two systems’ federal model, a refinement of that applied to Hong Kong. But the degree of subservience to central authority still implied continues to have no attraction for Taiwan.
  • An asymmetric ‘federacy’ linking an autonomous entity to a larger state, offering Taiwan a stronger separate identity and more actual autonomy, as well as demilitarisation and international security guarantees. But even a very ‘thin’ federal model would remain hard for Taiwan to accept and the last two elements would be particularly difficult to achieve.
  • A ‘confederation’ yoking China and Taiwan as sovereign equals in a state that retained full reunification as its ultimate goal. Originally put forward by the Kuomintang party (KMT), this has lingering support in Taiwan but not in Beijing, which continues to find antithetical any notion of sovereign equality.
  • The idea of a ‘Greater Chinese Union’, somewhere between a confederation and the ‘thinnest’ possible federation, for which no existing terminology is quite suitable: both sides would recognise a larger common identity, but Beijing would allow Taiwan not only to maintain its political system and way of life but also to have considerable international space, including membership of many international organisations. In its most extreme form – probably not realisable in any foreseeable future – it could be contemplated that Taiwan, while part of a greater sovereign entity, would nonetheless occupy its own UN seat.

Clearly a number of developments will have to take place over many years on both sides of the Strait before any such settlement is achievable. The prerequisites include:

  • Emergence of forward looking leaderships. This will probably involve political generations not yet on the scene.
  • Evolution of political systems. Substantial political liberalisation in China is a precondition for progress, but the path toward more pluralism is likely to involve many interruptions and detours, some quite severe.
  • Economic integration. Commercial relations have never been better and such integration is likely to deepen. Taiwan’s economic performance will impact on its willingness to consider a new political arrangement. If its technological and economic lead is eroded, there is likely to be greater willingness; if its economy flourishes, the desire for political integration may be less.
  • The emergence, or re-emergence, of a stronger sense of common identity, particularly in Taiwan. The evolution of a more tolerant and pluralistic China will likely weaken the search for a wholly separate Taiwanese identity.
  • International attitudes. Maintenance of a steady course, particularly by the U.S., will be crucial, with strong discouragement being given both to any use of force and to any unilateral attempt to change the sovereignty status quo. The wider international community can foster progress by encouraging further political liberalisation in China, refraining from de jure recognition of Taiwan but at the same time opening further international space for it, and doing everything possible to encourage links between the two societies.

A successful ultimate settlement will draw on the uniqueness of Chinese history and culture – including a centuries old tradition of indirect imperial governance, with more weight on ceremony than substance, in areas where circumstances made direct administration difficult – and an elastic interpretation of “what it means to be Chinese”. It will respond to the highly distinctive situation in the Strait, and not be a pattern copied from political science or international law text books.

Some variation on the theme of a ‘Greater Chinese Union’ seems the most attractive option. Its loose and flexible form would allow Taiwan to keep its distinct political, economic and social identity and satisfy much of its desire to be treated with more respect internationally, while allowing China to plausibly claim that reunification is a reality.

Beijing/Taipei/Washington/Brussels, 26 February 2004

Report 54 / Asia

Taiwan Strait II: The Risk of War

China's underlying position on its cross-Strait relations, however strong its current commitment to peaceful diplomacy, is that Taiwan must make sustained, visible progress toward a peaceful settlement or risk a resort to armed hostilities.

Executive Summary

China’s underlying position on its cross-Strait relations, however strong its current commitment to peaceful diplomacy, is that Taiwan must make sustained, visible progress toward a peaceful settlement or risk a resort to armed hostilities. It has also indicated that any move by Taiwan that might demonstrate its substantive rejection of this new demand could well be the last straw.

But while military measures have had a significantly higher profile since 1995, and there is real concern at the extent to which Taiwan’s move away from the ‘one China’ principle has challenged Beijing, closer examination suggests that there is still some way to go before China would feel itself ready to launch a major military assault. China is operating very much at the psychological or political, rather than military, level of conflict.

An invasion of Taiwan by China cannot be rationally related to two of Beijing’s most important objectives: reunification and sustained national economic development. If China did launch an invasion it might well, whatever its ballistic missile capability, lack the military capability to succeed, particularly if the U.S. intervened, and even in its best case scenario, would not be able to subjugate Taiwan without large scale loss of life. Such use of force could certainly be expected to lead to recognition of Taiwan, even an occupied Taiwan, as an independent sovereign country by major powers such as the U.S. and the EU. The subsequent domestic repression in Taiwan over a protracted period under a China-installed regime would ensure a total breach between China and the developed world. Such a breach would bring a near total end to China's substantial exports to the developed world and produce massive unemployment in its coastal cities at a time when domestic political stability is under severe strains.

China also faces severe constraints for lower level military options. During the present decade, it will not be able to field a force large enough or capable enough to conduct an effective blockade if Taiwan chooses to resist. Nor could it count on being able to do so at any later time, except perhaps in the unlikely event that Russia or some other highly developed military power were willing to supply it with massive numbers of modern weapons systems and platforms. Indeed, on the basis of current trends, it is unlikely to be able to acquire air superiority needed to execute even a partial blockade. Its entire fleet of modern submarines, even if it rises to 40 boats or so in around seven years time, would probably not be able to execute the naval component of such an action, and the acquisition of major surface combatants is likely to continue on a replacement basis for older vessels rather than be directed at an increase in numbers.

For these reasons, if China should feel the need to escalate the ‘war’ with Taiwan, it will seek to exhaust a variety of non-lethal levers it has at its disposal before it will even consider combat hostilities seriously. These include information warfare, covert operations and unconventional provocations designed to create political divisions in Taiwan. These measures, though non-lethal, would carry a risk of escalation that cannot be dismissed.

The validity of these assessments about China operating at the political rather than military level of conflict is borne out to a considerable degree by Taiwan's own policies and military posture. In 1991, Taiwan formally dropped its policy of armed confrontation with China, and it has continued to lower its defence burden accordingly. Even though the military threat from China resurfaced prominently in 1995, Taiwan has not made the sort of massive new investment in defence capability and defence mobilisation that this might have suggested. It has been satisfied since 1995, as it was before, to use the robustness of its defence posture essentially for political purposes, to underpin its distancing from the ‘one China’ principle and as a means of winning international political support for an independence strategy, especially in the U.S. The national defence posture premised on a politico-military threat from China (rather than a threat of invasion) also supports building a new Taiwan identity and provides a basis for claims to de jure independence, without seriously disturbing the otherwise peaceful development of Taiwan's economy.

All that said, the risk of war in the Taiwan Strait must continue to be taken seriously. Neither principal is likely to embark consciously on a war but there is a significant possibility that the calibrations made in policies of threat of force or employment of non-lethal measures by Beijing, or in response by Taiwan or the U.S., may not be exact. A cycle of escalation and counter-escalation is quite conceivable, at each stage of which the political difficulties and costs of disengagement would be greater. There is need, therefore, for the parties themselves and the U.S. to undertake, both unilaterally and between each other, confidence building and transparency steps to lower the risk of miscalculation and misunderstanding that could otherwise lead to serious military consequences.

Many of the elements needed for reducing military tensions in the Taiwan Strait and military confidence building are in place (such as mutual observance of a tacit military separation zone in the middle of the Strait). But there is considerable room for improvement, especially in some areas of military readiness (such as a reduction in China’s missile deployments). Apart from removing these missiles, not much can actually be achieved in changing military deployments. The bigger issues are transparency and managing the perceptions of the military situation in the Strait. Both sides are too willing to use point scoring about military deployments, and this overshadows the visible progress in civil cooperation, especially the prospect for establishing comprehensive direct links and joint oil exploration in the middle of the Strait.

In this environment, the responses of the U.S. have carried both positive and negative consequences. Washington’s determination to oppose Chinese intimidation and possible use of force is clearly the right policy. But there has to be some doubt whether its armed forces are the best instrument to which to give priority in conducting that policy. China is far more responsive to incentive-based policies, related to investment and technology transfer, than it is to threat-based sanctions or attempts at deterrence. One thing is certain: the information dominance of the U.S., based on its far superior and near real-time intelligence capabilities, gives it capacities for crisis management and leadership that neither Taiwan nor China can match. This strength of the U.S. needs to be brought into play more effectively in the interests of peace in the Taiwan Strait.

Beijing/Taipei/Washington/Brussels,6 June 2003