Trade ties Taiwan to China's leash

Taiwan's President Chen Shui-bian

By Willy Wo-Lap Lam
Senior China Analyst

(CNN) -- Some insiders label it the Canada analogy -- and it says much about the new and relatively moderate phase of China's Taiwan policy.

Since early 2001, President Jiang Zemin has asked his key advisers on Taiwan to come up with "fresh approaches" on how to speed up reunification, or at least curb the pro-independence proclivities of Taiwan President Chen Shui-bian.

After a series of brainstorming sessions, Jiang and his aides have come to the conclusion that as long as China can wield the economics card effectively, it would be difficult for Taipei to travel further down the separatist road.

"Some Jiang advisers have cited the case of the U.S. and Canada," said a Beijing source close to the Taiwan policymaking establishment.

"Despite Canada's proud traditions, its lopsided economic dependence on the U.S. means Ottawa can't pursue a foreign or defense policy that is much different from that of America."

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Last week's surprise announcement by Vice-Premier Qian Qichen allowing certain categories of members of Chen's Democratic Progressive Party (DPP) to visit the mainland indicates Jiang has moved on to a novel phase of Taiwan policy.

No official contact

When Chen was elected president in March 2000, Beijing said it would adopt a wait and see attitude.

Now this wait-and-watch mode is coming to an end. And Jiang has settled on a strategy that consists largely of wielding the economic card and putting more pressure on the U.S. - while all along withholding full recognition to the DPP.

A day after Vice-Premier Qian indicated DPP members with the "appropriate status" could visit the mainland, a senior cadre told Hong Kong's China-run paper, Wen Wei Po, that only DPP members outside leadership circles could go - and that in a private capacity.

The cadre also reiterated that Beijing would continue to have no official contact with the DPP.

However, the Jiang leadership is readying a package of goodies to entice Taiwan businessmen as well as politicians - most of whom have close links to big corporations.

For example, Taiwan may be offered something akin to what is being discussed between Beijing and Hong Kong: a free trade pact with the mainland.

And as far as the new arrangement is compatible with World Trade Organization regulations, Taiwan enterprises and professionals will be granted fuller access to the mainland market.

Trade balance holds key

The business card is allied to Beijng's time-honored united front tactics, defined as "isolating your enemy while making as many friends as you can."

Apart from inviting more members of the opposition Kuomintang (KMT) and People's First Party (PCP) to go to Taiwan, Beijing will try to work the magic on second-tier DPP members - particularly those who have investments in the mainland or who have ties with Taiwan businesses.

Then there is the more pro-active policy toward the U.S., in which economics will also figure prominently.

The gist of Beijing's gameplan is to convince the U.S. it is to Washington's own benefit to rein in Chen.

While hosting President George W. Bush in Beijing next month, Jiang will argue that Chen's "incremental separatist moves" would raise tension in the Taiwan Strait, jeopardize regional safety, and hurt American interests.

A key to Beijing's strategy is the perception that by the end of this decade or thereabouts, China and the U.S. will reach a state of mutual economic interdependence.

Monkey King

It is interesting that at a recent internal discussion on Taiwan, Jiang compared the DPP - and Chen - to the Monkey King, the often subversive prankster in the famous novel Journey to the West.

Despite Monkey King's magical powers to make mischief, he was no match for the all-encompassing prowess of Rulai, or the Buddha.

"How can the Monkey King get out of the fingers of Rulai?" Jiang reportedly said with reference to Chen.

It is improbable that Taipei will make a response to the Qian overture that is deemed positive enough for Beijing to lift its ban on official contacts with the DPP.

A major goal of Chen and his aides in the coming year or so would be to prepare for the presidential polls of early 2004, and Chen, dubbed an "election machine," would weigh all his words and deeds in light of how they will impact on the ballot box.

Thus it is unlikely that the DPP leader will come close to saying "I accept one China" unless there is a clear-cut mandate from the voters.

Analysts say, however, that in line with Beijing's moderate approach, it is possible the Jiang administration will in the foreseeable future follow up on last week's olive branch by dangling more blandishments.

Hong Kong comparisons

For example, there may be substantiation of the promise that the terms offered Taiwan would be more generous than those made available under late patriarch Deng Xiaoping's "one country, two systems" formulation.

In effect, some mainland scholars have called a possible new dispensation "one country, many systems," even a package "just short of a confederation model."

For example, unlike Hong Kong, Taiwan will be allowed to maintain a significant say in foreign affairs. This is in addition to the earlier pledge that Taipei can retain its existing defense forces.

It is significant that while Qian was reading out his speech welcoming DPP members to visit China, Vice-President Hu Jintao was on hand - and the likely successor of Jiang appeared on CCTV's footage of the event wearing a somewhat benign expression.

This may be indicative of Jiang's recognition that much as he wants to do to Taiwan what Deng did to Hong Kong, the president has come to realize reunification is unattainable within his lifetime.

The CCP leadership now hopes substantial progress on the Taiwan front may be made within the tenure of Hu, who is expected to become party General Secretary this October - and remain in that position until 2012.