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by Jean-Marc F. Blanchard, Ph.D. Senior Consultant

SAN FRANCISCO (KWR) China-Taiwan relations started the year auspiciously with an agreement this month for cross-Strait charter flights, the first direct air services between the two antagonists since 1949. Many have heralded this accord as evidence that China is now willing to adopt a more moderate stance towards Taiwan. The agreement came in the wake of the positive outcome, at least from the perspective of China-Taiwan relations, of Taiwan’s December 2004 legislative elections. This election gave a majority of seats in Taiwan’s parliament to the Guomindang and its allies while handing a defeat to Taiwanese President Chen Shui-bian’s independence minded Democratic Progressive Party (DPP) and its allies. Pundits forecast that the composition of the new parliament will, at a minimum, restrain President Chen from moves towards Taiwanese independence such as the pursuit of a new constitution.

One should not exaggerate, however, the implications of the DPP’s electoral loss. First, the DPP actually gained seats and maintained its position as the largest party in the legislature. Second, demographic trends in Taiwan will continue to bolster the number of ethnic Taiwanese relative to the number of ethnic Chinese. Third, Taiwanese policymakers have grown increasingly comfortable advancing political proposals that would further separate China and Taiwan from one another. These proposals include the renaming of Taiwan, its state-owned enterprises and overseas offices, as well as a public campaign to get the U.S. to abandon its one-China policy.

To the north, existing trends also are problematic. For its part, China seems increasingly keen to assert its right to Taiwan. To illustrate, in late December 2004, the Standing Committee of China’s National People’s Congress approved a draft anti-secession law directed at Taiwan while China’s military released a white paper stating that it has a “sacred responsibility” to crush Taiwanese moves towards independence “whatever the cost.” Furthermore, China’s military build-up, which entails the acquisition of military capabilities that enhance its ability to coerce Taiwan, will continue unabated. Finally, the Chinese regime faces daunting political, economic, and social issues that will challenge its ability to maintain domestic political stability. This is consequential because it gives Chinese policymakers incentives to act aggressively to bolster their domestic standing.

Many assume that economic interdependence between China and Taiwan and between China and the rest of the world will guarantee peaceful cross-Strait relations. These “commercial liberals” reason that Chinese leaders, who deeply want to sustain economic growth to provide legitimacy for the Chinese Communist Party (CCP), employment for China’s huge labor pools, and funds for China’s military development, would be averse to taking action against Taiwan because it would endanger China’s external economic linkages. They further argue that economic interdependence eventually will synchronize Chinese and Taiwanese identities and interests.

One should not place great faith in commercial liberal thinking, however. First, the work of international relations specialists demonstrates that economic linkages have little power to deter policymakers from waging war where the highest national interests (e.g., territorial integrity) are involved. Second, extensive economic intercourse does not automatically synchronize national identities or interests. Even now, many Europeans still see themselves as French, Italian, or Polish rather than European.

Ultimately, the course of China-Taiwan relations in 2005 will depend greatly upon domestic political developments in China. Recent reports suggest that Chinese President Hu Jintao has consolidated his position in the CCP’s political hierarchy. Not only has he assumed control of the powerful Central Military Commission, but he also has put his allies into key political and military positions. If true, these developments are a positive for cross-Strait relations because external Chinese aggressiveness historically has occurred in concert with the country’s domestic political problems or the leadership’s domestic political woes. If, however, domestic political competition threatens Hu or domestic problems threaten the regime, then 2005 could be a very rocky year indeed for China-Taiwan relations.

Shifting outside China, it is clear that American policies will exert a tremendous effect on the cross-Strait dynamic. On the bright side, there are those in the Bush Administration who seek to preserve the status quo. On the other hand, there are many in the Administration and in Congress who champion greater support for Taiwan. If the balance of power swings in favor of the moderate camp, then the U.S. likely will exert a dampening influence on China-Taiwan frictions in 2005. Conversely, if the balance of power swings in favor of the latter camp, then the U.S. likely will fan cross-Strait tensions.

Japan also is critical to China-Taiwan relations. One reason is that Japanese forces are part of the implicit deterrent against Chinese military action against Taiwan. Another reason is that Sino-Japanese economic ties must enter into the calculations of Chinese leaders contemplating aggressive action against Taiwan, although they are no guarantee of restraint. A final reason is that Japan’s growing efforts to assert itself internationally, manifested by its increasing role in UN peacekeeping operations and adoption of a more realpolitik stance towards China and China’s allies, will exacerbate Chinese sensitivities about Taiwan. This is so because a more “normal” Japan is likely to take a more independent stance with respect to Taiwan. As well, a more “normal” Japan places pressure on Chinese leaders not to back down on Taiwan lest they seem weak in Japanese eyes.

According to the Chinese calendar, 2005 is the Year of the Green Wooden Rooster. Chinese astrologers note that roosters are blunt, flamboyant, and self-assured and that the Year of the Green Wooden Rooster is expected to entail conflict. For the reasons discussed above, China-Taiwan relations will manifest a number of Rooster and Rooster-year characteristics in 2005. These frictions should not explode into military conflict, provided that the domestic political situation in China remains stable, the U.S. ameliorates rather than accentuates conflict between the two protagonists, and China-Japan relations do not dramatically deteriorate. Unfortunately, uncertainties in each of these areas make it difficult to predict with any confidence whether relations between China and Taiwan will end the year on as positive a note as they began it.