As U.S. ‘pivots’ to East Asia, Taiwan is drifting into Beijing’s orbit

Sol W. Sanders  

TAIPEI – The U.S.’ 50-year-old alliance with [Formosa] Taiwan is eroding slowly but surely in the face of Beijing’s siren call and growing indifference of the Obama administration.

Yet at a moment when U.S. strategy ostensibly calls for a “pivot” toward Asia, the de facto alliance could never have been more critical. Should Beijing manage to pull off a political union with Taiwan, the possibility of the People’s Liberation Army operating from the Island’s bases would be a ‘break out’. It would open the First Island Chain of the Continent for China’s access to the Pacific, endanger Japan which has always considered Taiwan essential to its security, and infinitely complicate American efforts to maintain freedom of the seas in what is becoming the world’s most important commercial artery.
That is still a long way from happening, given the 23-million Taiwanese’s hard-fought liberal democracy where a vast majority favors the current de facto independence from its 1.3-billion population Mainland neighbor. Still, at least for the moment with Beijing having learned sweet talk works better than threats, the undercurrent is strong from across the 100-mile-wide Taiwan Strait. That pull is more economic for Taiwanese than cultural – including for the offspring of the two-million Mainlanders who fled to the Island with defeated Nationalist Kuomintang Generalissimo Chiang Kai-shek in 1949.

In fact, since Maximum Leader Deng Hsiao-ping opened the Mainland to foreign investors and technology exporting to third markets, there has been a reverse invasion. With its sophisticated economy based on the 50-year Japanese Occupation and more than $1.6 billion in American economic aid [and another $2.5 billion in military], the Taiwanese have taken on a panache of modernity for Mainlanders. A million Taiwanese managers and workers oversee a billion dollars in their own investment on the Mainland and often supply the essential cutting edge of other foreign multinationals’ operations.

But now new forces are at work. Increasing labor and energy costs are forcing Taiwan Mainland manufacturing out of China to Southeast Asia and other low-wage countries as far as afield as Mexico, Brazil and South Africa. As the Mainland struggles to move into higher technological products, Taiwan’s historic transferring role is imperiled by a drop in direct foreign investment in the Island brought on by competition from the Mainland itself and other export-oriented economies. There has also been a lethargic response by government in cutting regulation – some of it inherited as baggage of bitter memories of inflation and economic warfare which played a principal role in the Nationalists’ defeat in their last years on the Mainland. That’s true despite Taiwan’s almost too slick media campaign to welcome foreigners.

President Ma Ying-jeou, now serving a second and last permitted term after his Kuomintang [KMT] Party returned to power, is being blamed in some quarters. His typically KMT statist approach followed the opposition Democratic People’s Party’s previous freewheeling if scandal-plagued eight-year pro-business environment. Ma, who has backed off his unpopular proposal to reach some sort of political arrangement with Beijing, has dived in popularity. But it was not before the two political parties, his KMT and the Mainland Communists, had met to reinforce the “one China” policy. And it was not before he initiated agreements which brought new integration for the Taiwan and Mainland economies.

Ma argued his new arrangements, strongly urged by the multinationals, were necessary to open Southeast Asian markets to Taiwan exports. Only closer relations with the Mainland would prevent Beijing threatening those dealing with Taiwan with curtailment in dealings with the Mainland. Ma also claimed the new more direct communications with the Mainland would help the domestic economic scene. GDP is dipping and by Taiwan standards unemployment is high, especially for its large crop of highly educated young.

But with Taiwan’s trade already 40 percent with the Mainland, the implications become increasingly plain – especially since some insist Ma got taken in the negotiations. There has been no significant improvement in the Taiwan economy. And Ma’s program of continuing subsidies has boosted the debt ten times since he took office. Rising prices are also bringing new complaints.

Furthermore, despite holding tourism to 7,000 a day – to prevent an illegal problem with some 50 million Mainlanders who have expressed a desire to visit – the opposition claims Ma has opened the door to infiltration and manipulation. There are signs pro-Communist investors have moved into the media through front investors.

It’s still a long way to the 2016 presidential elections but a wide field of DPP opposition candidates is hopeful. Significantly, a Taiwan expert in a Beijing university think tank was emphatic in warning a DPP victory might end the current low priority he said Beijing gives “the Taiwan problem.”

Meanwhile, the Obama administration – having moved quickly in its first few months to transfer longstanding promised arms to Taiwan – has continued Washington’s policy of holding back on state-of-the-art fighters although approving a long-standing promise to upgrade F16s. Island strategists have always seen control of the air over the Strait as their first line of defense. Frequent and loud Beijing complaints about U.S. arms transfers have usually been enough to slow or block them.
Now, of course, there are budget restraints in both Taiwan and the U.S.

American policy on Taiwan has fluctuated violently during the 50 years of the alliance with little regard to party lines. In the early years, the U.S. half-heartedly supported Chiang’s threat to retake the Mainland – even to black operations in northern Thailand and Mustang in the Himalayas with remnant KMT military. Then came a period of leashing Chiang, only to be followed by the Taiwan Strait Crisis of 1958 when Washington hinted at nuclear weapons if Beijing tried to take the Strait islands closer to the Mainland than Taiwan. Then came President Richard Nixon and Henry Kissinger’s “opening to China” with only the leadership of Sen. Richard Stone [D., FL] and the Congress’ Taiwan Relations Act turning back President Jimmy Carter’s implicit threat to dump Taiwan altogether.

In 1996, when China conducted provocative missile tests to try to influence Taiwan’s first direct presidential election, President Bill Clinton ordered two carriers to the Strait as a clear message to Beijing.

With the Obama administration’s ostensible “pivot” in U.S. strategy toward Asia and particularly northeast Asia, Taiwan’s strategic importance takes on new dimensions.

Haunted by the history of the 1930s with Nazi Germany and the Japanese militarists, the argument Washington needs an enemy or that by taking counter measures it may be creating an enemy ring hollow.

Despite China’s complaints of attempts to block its emergence as a world power, any strategy to counter Beijing’s mushrooming military expenditures against an unseen enemy, bellicosity of senior officers and its obviously enlarging space and potential and active cyber warfare, maintaining Taiwan’s de facto independence as well as more effective multilateral cooperation among U.S. bilateral allies in the region becomes a high Washington priority. Given current trends on the Island, that may become increasingly difficult.

Sol W. Sanders, (,  is  a contributing editor for and and blogs at .

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