Magazine of Socialist Action in Australia

What's behind Beijing's charm offensive on Taiwan?

Reading Time: 6 minutes

In a move clearly timed to strengthen his hand before this week?s meeting with US president George Bush, China?s president Hu Jintao hosted a second high profile meeting with leaders of Taiwan?s opposition Kuomintang (Nationalist) party over Easter weekend.
By Vincent Kolo, CWI, Hong Kong Joining the Kuomintang?s honorary president, Lien Chan, at the mainland conclave was an army of 400 industry chiefs, politicians and academics. Lien, who handed over the Kuomintang chairmanship to Taipei mayor, Ma Ying-jeou, shortly after last year?s ?historic? meeting with China?s ?communist? leaders, has been chosen to front what are the first face-to-face meetings between the two former adversaries since the end of the Chinese civil war in 1949. At this gathering, as at the 2005 meeting, the mainland government unveiled a package of economic sweeteners designed to win support in Taiwan (which they regard as a breakaway Chinese province) and to further undermine the shaky position of its president, Chen Shui-bian, and his formally pro-independence Democratic Progressive Party (DPP). The latest package of concessions includes opening the mainland market to more Taiwanese farm imports (calculated to win over Chen?s rural support base), joint-venture hospitals with Taiwanese companies allowed to own stakes of 70 percent, and recognition of diplomas from Taiwan universities (raising fears in Taiwan of a ?brain drain?).

DPP in crisis

Beijing refuses official contacts with Taiwan?s government, insisting the DPP first renounce the goal of independence. In reality, under US pressure not to rock the boat in the cross-strait conflict, which could risk an armed conflict between the US and China, Chen?s administration has, despite periodic stunts, taken no real steps towards formal independence. One factor that has strengthened Beijing?s hand in the recent period is the deepening crisis within the DPP. Chen?s support has fallen to 18 percent, thanks to a spate of corruption scandals and rancorous divisions inside the party. There is also widespread dissatisfaction with the right-wing neo-liberal economic course started under the previous Kuomintang administration, but which the DPP has continued and deepened. Polls point to a victory for Ma, the Kuomintang?s presidential hopeful, in 2008, which would represent one of the most dramatic political comebacks in modern times. When the Kuomintang lost power in 2000 it was roughly in the same place the DPP finds itself today: split and plagued by scandals. Few observers gave it much chance of survival as a serious force. Today, with little else to offer, Chen has responded to his plummeting ratings with a new bout of pro-independence rhetoric and stunts that in practise mean very little. Last month, Chen abolished a purely symbolic advisory council set up under his predecessors to discuss ?unification?, prompting a predictable rebuke from Beijing that this was a ?serious provocation?.
By past standards, however, the mainland government?s response was muted. The Economist noted that Beijing has ?become remarkably pragmatic? in its dealings with Taiwan. What lies behind these shifts, and does it hold out the prospect of a more stable phase of cross-strait relations or even a solution to the half-century old conflict?

Marriage of convenience

The main factor benefiting the Chinese regime at present is an outbreak of ?mainland fever? among Taiwan?s capitalist class. One of the features in the new cross-strait environment is the marriage of convenience between the historical enemies of the Kuomintang and the Chinese Communist Party (CCP). The latter have begun promoting the Kuomintang in the mainland media as a ?patriotic force?, even revising their own history and for the first time paying public tribute to the role of Kuomintang generals in the struggle against the Japanese occupation (1931-45).

In today?s Kuomintang, the Beijing regime has found a cheerleader for its agenda of faster economic integration with the mainland while firmly opposing DPP ?separatism? which, they stress, is ?bad for business?. For its part, the Kuomintang?s new pro-CCP strategy reflects the desire of the Taiwanese capitalist class to safeguard its huge stake in the mainland economy, and its acceptance of the fact that the Beijing regime is ?good for business?. Taiwanese capitalism has already reached an extraordinary degree of integration with the mainland. In effect, almost the entire assembly base for its now globally dominant computer industry has been relocated to the mainland, where wages are a fraction of those in Taiwan. While exact figures are impossible to come by because a lot of capital is re-routed to circumvent Taiwanese investment laws, Taiwanese capitalists are believed to have invested over US$100bn on the mainland. According to a World Trade Organization report, ?intra-industry? trade across the Taiwan Strait was equivalent to more than half of China?s trade with the rest of the world last year.

Many ordinary Taiwanese are disillusioned with Chen?s empty theatrics over ?independence?, and would welcome a thaw in the ? at times ? dangerous atmosphere of threats that have characterised relations between the two governments. There is also a feeling among many that closer ties with China are inevitable. This has benefited the Kuomintang, as the party that has captured Beijing?s ear, over the ?ex-communicated? DPP. But this situation is highly unstable. Opposition to closer links with the mainland, and support for formal independence for Taiwan could rise again in the future, on the basis of big events ? economic shocks and social upheavals ? which are likely on both sides of the Strait in the coming period. This is not least because, as with capitalist globalisation in general, it will be the working class of Taiwan and China that pay for ?economic integration? ? with lower real wages, longer hours and more ?flexible? jobs ? if the capitalists and their politicians are the ones who decide the terms. There can be no lasting solution to the cross-strait issue on the basis of capitalism, which especially in a crisis will see rival elites on both sides of the Strait and within Taiwan?s sharply polarised political system, engage in fresh attempts to whip up nationalism in order to shore up their own positions. Only the working class on both sides of the Strait, by building an independent socialist alternative, can offer a permanent, peaceful and democratic solution to the conflict.

Who?s Who?

The attendance list at the CCP-Kuomintang gathering read like a ?Who?s Who?? of Taiwan?s business elite. The assembled executives represented companies controlling nearly half the value of the island?s industry. Even prominent figures associated with Chen?s camp took part, ignoring the president?s warnings they were supporting a ?deception?. Like rats leaving a sinking DPP ship, some former allies of the president ?may want to build up their connections with the future ruling party [i.e. Kuomintang],? observed one participant.

These summits are part of an overall strategy by the Beijing regime, identical to that used in Hong Kong, to coax the business elite to its side and ?influence politics through business?. In other words: a no-frills appeal to the greed of the capitalist class for more profits from the super-exploitation of mainland labour, not to mention the generous tax reductions and other concessions Beijing doles out to foreign investors. For Taiwan?s capitalists president Chen, with his resistance to faster integration for populist reasons, has become an increasingly expensive obstacle.
But this strategy also reflects another subterranean shift in Beijing?s approach to the Taiwan problem. As the Economist pointed out, ?President Hu has apparently decided that unification with Taiwan is simply not feasible during his term in office.? [Economist Survey on China, 25th March].
Increasing economic ties and a ?guarantee? that Taiwan will not push for formal independence, in the form of a Kuomintang victory in the 2008 election, is today the most realistic and favoured option for the CCP regime.

?One nation, two systems?
In the public domain the Beijing regime is more and more dependent on nationalism and has been forced to play the Taiwan card from time to time, both to divert attention from domestic problems and to hold its more restive provinces in check. But the top leadership are also desperate not to worsen increasingly shaky relations with US imperialism, upon which China?s growing economy is dependent. In reality, under the Bush administration, a tacit agreement has existed whereby the US has contained Chen and the DPP, while China in return has limited its goal of ?reunification? to the realm of propaganda. This ?pact? is unlikely to change in the short-term, but could in the future under conditions of open rivalry between the US and a stronger China. In this case, the most hawkish wing of the US imperialists that favours outright independence for Taiwan, not because of any ?democratic? niceties, but in order to check China?s rise, could gain the upper hand.

Today, while the CCP leaders would never formally abandon the goal of ?reunification of the motherland?, they have mixed feelings about the reality of trying to incorporate 23 million Taiwanese into the Chinese state, given the island?s recent history of extreme political volatility and polarisation. The problems of managing this process could easily outweigh the benefits of formal reunification for the Chinese regime, in terms of enhanced prestige and heightened patriotic fervour. This is especially the case if, on the economic plain, ?reunification? has already largely been accomplished. Currently, Beijing has its hands full trying to staunch growing demands for universal suffrage from the workers and middle class of Hong Kong, which they fear at some point can inspire the masses on the mainland to stage ?copycat? protests. Even if, as Beijing proposes, Taiwan is incorporated under a Hong Kong-style ?one nation, two systems? arrangement (under which it would maintain a separate currency, legal and political system) this would still create enormous problems for the central government. Taiwan?s political volatility and the existence of a sizeable population opposed to rule from Beijing, could inject even more instability into China?s social fabric at a time of burgeoning mass protests and growing questioning of the regime. Privately, therefore, top CCP leaders may be regarding the 160km Taiwan Strait as a welcome buffer, which after all was the traditional position of China?s imperial dynasties until the 1800s, when other powers began to covet the island.


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