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Last Updated: Monday, 14 March, 2005, 08:39 GMT
China's Taiwanese tribulations
By Tim Luard

Chinese army
The threat of force remains a key element of China's Taiwan policy
China has one last major problem to resolve as it re-emerges onto the world stage: what to do about Taiwan.

The reclaiming of the large island off the country's south-eastern coast has been a central creed of the Communist Party ever since it fought its way to power in 1949, driving its Nationalist opponents to seek refuge there.

Almost every other policy has since been turned on its head. But the threat to use force to win back China's "renegade province" remains.

An attack on a prosperous democracy of 23 million people would hardly tally with the communist mainland's plan for a "peaceful rise" to great power status.

Indeed, it would undermine all that's been achieved in recent years in terms of national development and global acceptance, say observers.

Yet ask any Chinese if it is a sacrifice worth making and you get the same answer.

"After all the humiliations of the past, it is time for China to stand up again in the world," said Liang Yan, a Beijing office-worker.

"We must realise this dream of being reunited."

Stomachs first?

Many on Taiwan - chiefly those from the mainland - share the dream of One China, even if they do not want to live under communist rule.

President Chen wants a new constitution by 2008
Aims to modernise political institutions, increase efficiency, enshrine human rights and review role of National Assembly
China says plan is the 'biggest threat to peace and stability across the Taiwan Strait'
But Mr Chen insists the changes will not touch sovereignty issues

Taiwan's government still calls itself the Republic of China.

But in recent years the Taiwanese majority have elected leaders committed to constitutional change that would formalise the island's separate identity.

President Chen Shui-bian wants a new constitution by 2008.

That, says Beijing, could force it to attack.

"About 50% of the population want independence - especially the young, who hope that one day they'll be free," said Tony Chang, a Taiwan-based businessman whose company has factories on the mainland.

But he believes Taiwan's growing economic reliance on China will stop the constitutional changes from going ahead.

"We Chinese always believe first in our stomachs," he said.

Formal political talks may be frozen, but there has been a huge growth in other contacts.

More than a million people from Taiwan now live on the mainland and Taiwan is China's biggest single investor. Direct charter flights were launched this year, raising hopes for permanent air links.

Business leaders from Taiwan meet Beijing's top leaders on a regular basis, according to James Lilley, a former US envoy to both Taiwan and China.

"The businessmen want security guarantees for their contracts...and I guess they get them," he said.

"But that doesn't mean we can all breathe more easily," he added, pointing to China's rapid arms build-up.

Keeping vague

The CIA has warned that the military balance is shifting away from Taiwan - a trend that will be accelerated, says the US, if the EU goes ahead with lifting its embargo on arms sales to China.

I see no solution, given that both sides insist on their positions
Andrew Yang
According to Mr Lilley, China's military muscle-flexing is part real and part Chinese Opera.

"With all the gong-bashing and missile-testing, no one has died in the Taiwan Strait since 1958. But we've got to be prepared," he adds, "to make the cost of war so high it becomes a lousy game for them."

The US is committed to helping Taiwan if it comes under attack but has remained deliberately vague about how far this help would go.

China chooses to be equally ambiguous about the exact point at which Taiwan's moves towards independence would goad it into action.

Its current policy comprises three main strands, according to Jin Canrong of the People's University of China.

One is to rely on American and other international pressure on Taiwan.

Another is for China to try to "win the hearts and minds of Taiwanese" through flights, favourable tariffs and other means.

But the problem could not be solved through economic integration alone, said Mr Jin. He made it clear that the most important element in Beijing's strategy remained the threat of force.

"China will speed up military modernisation to make deterrence more credible," he said.

The army and other hardline factions could easily push more moderate leaders into a corner on something as important as Taiwan, say foreign observers.

The army has a vested interest in keeping the issue alive, since it is the Taiwan issue that justifies its claims on the budget, according to Michael Yahuda, a British specialist now based in the United States.

But the Party leadership has only itself to blame, he said.

"Raising unrealistic expectations of unification has roused nationalist feelings to such an extent that when people see their leaders can't get their way on Taiwan they could turn against them."

Olympic pressure

On Monday, China passed a new measure called the anti-secession law, which is seen as a way for Beijing to stop Taiwan from formally declaring independence.

Taiwan's president may not in fact secure constitutional changes
"The new law is not helpful. It merely creates more tension, rather than making either side more ready to return to the negotiating table," said Jean-Pierre Cabestan of the French Research Centre on Contemporary China.

Traditionally, Chinese leaders take a hard line on Taiwan.

But some analysts have speculated that now Mr Hu has consolidated his power, he may risk trying out the more flexible policies now being aired by some Chinese academics.

These include moves to allow Taiwan more scope for having its own international identity.

In the diplomatically sensitive run-up to the Beijing Olympics, China does not want a show-down on Taiwan any time soon.

But Andrew Yang, a leading strategist in Taiwan who makes regular visits to China, is pessimistic.

He believes the trend towards separatism and independence in Taiwan is irreversible, and predicts no change in China's fundamental determination to defend what it sees as its territorial integrity.

"I see no solution, given that both sides insist on their positions," he said.

"If Taiwan continues to push for independence...China's leaders will have no options but to consider extreme measures. And their final option is to use force."


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