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Taiwan: the One-China final frontier

China’s tactical nous in using deflection and obfuscation to divert attention is well known. China observers need to constantly review current activity within the context of China’s return to Maoist thought. Understanding the Maoist perspective of “surrounding the cities from the countryside” gives context to their activities in pursuing the Chinese Dream.   

Covid-19 and the One-China policy ambition

The pandemic has given cause for a re-evaluation of China, particularly the nuances used through the Belt and Road Initiative (BRI) and the One-China policy. Current retaliatory actions are severely undermining China’s progress towards full global integration. Fundamentally it has led to a greater understanding of the central role played by the Communist Party of China (CPC) under Xi Jinping leadership and thought. Xi Jinping’s speech in 2017 at the 19th Party Congress confirms the CPC status when he declared that the “party rules everything”. This thought gained traction in 2018 when several government organs were dissolved and merged into the Party – such as the military.

Of concern is the view that the Party speaks for all Chinese – both local and abroad. The basis for this claim is the 91 million members it has. Whilst the Party is large in number, it falls well short of the membership of the ruling party in India that sustains its membership within a democracy of a similar sized population. This explains the underlying narrative of China’s “One Country, Two Systems”. China is quick to claim sees no wrong with its National Security Law recently enacted in Hong Kong as the Party is central to everything Chinese. Such claims are made with regards to Taiwan. This suggests that the intent is not a One China – Two Systems outcome, but rather a single China with special government zones being subject to centralised control from Beijing.

 Xi Jinping’s thought has taken this further with the publication of Document 9, in April 2013, that essentially banned “false ideological trends”. These “trends” include constitutional democracy, universal values, historical nihilism and neo-liberalism. Document 9 is perhaps the first signs that China was changing the open society formulated by Deng Xiaoping with a return to Maoism. The BRI has been an effective tool to deflect international focus by the promised economic miracle.

There has been a coordinated approach in the infiltration of Xi Jinping’s thought into western institutions. A failure by business and academic institutions in recognising their role in the “surrounding the cities” strategy are increasingly mouthpieces supporting China. These influential institutions apply pressure on governments to conform to the One-China narrative. Taiwan is an example of how this has been used to sideline it from international forums.

The United Front Work Department (UFWD), better known as the Propaganda Department International Liaison Department within China, plays a coordinating role. The UFWD facilitates and encourages leading business figures to serve as megaphones for Beijing’s message. Could the Chairman of FMG in Australia be such a voice?  Do they understand that the CPC sees friendship to neutralise its opposition?

Using cognisant dissonance practices, coupled with warnings of dire economic consequences should a country damage the relationship with Beijing, are effective. This Mao thought of Firmness of Principles but Flexibility in Strategy (“yi shang bi zheng”) uses business to pressure their governments. This is pursued through various Chinese Business Chambers of Commerce, all of which fall under the guidance of the UFWD and within Mao’s thought of “surrounding the cities from the countryside”. What businesses and governments should really be asking is: “Who am I truly engaging with through these business bodies?”

China’s shared common human destiny that provided benefits under the BRI has morphed into a form of retributive aggression. Covid-19 has been the catalyst to bring greater clarity on China’s ambitions. Actions such as those seen in Hong Kong suggest that China is placing the One-China policy as a cornerstone to its geopolitical ambitions. It is not only seeking a unified China under a single authority acting in unison under the umbrella of national security, it also wants the world to embrace Xi Jinping’s thought. However this exposes a soft underbelly that is capable of being exploited by the West to derail China’s ambitions.

Taiwan’s role in this debate

Deng Xiaoping’s opening up of China in the late 1970s gave the world a sense of security that the One China – Two Systems approach could work. After all, China was pursuing the goal of integration within an evolving globalised and connected economy. This understanding was instrumental in the USA establishing diplomatic relations with Beijing in 1979 and to accept the One-China position. It signalled acceptance of Deng Xiaoping’s concept of “one country, two systems” to manage the complex reality of Taiwan, particularly its autonomous status. Whilst claiming China’s state sovereignty, it considers the unique conditions of Taiwan, allowing two systems to be practiced within the People’s Republic of China. The mainland will practice socialism whilst the existing economic system and way of life in Taiwan will remain unchanged.

Many saw this to bring China under the rules of the international law, suiting a China containment agenda. However, by stripping recognition of the Taiwan-based Republic of China (ROC) in favour of the mainland People’s Republic of China (PRC), there was a failure to fully appreciate that the question still remains as to who “truly” represented the Chinese people? Yet to be resolved within the international debate, this has been partially resolved within Taiwan. Most Chinese people in Taiwan identify as Taiwanese and not as Chinese – a trend that is contrary to the One-China policy position.

Taiwan’s history opposes China claims

China’s recent assertiveness over territorial claims has sparked a discussion around the efficacy of a One-China policy as well as what “One China” means. Events in the Philippines and Vietnam started this process when confronted by China’s 9 dash line in the South China Sea. Questioning the understanding of a One China was endorsed by the international court ruling that gave China no sovereign rights over the Spratleys or the Paracel Islands. This has not stopped China from pursuing its claims, currently encroaching on Indonesian and Malaysian territorial waters. Both Indonesia and Malaysia have refused to negotiate with China with regards to access to these waters, citing UNCLOS 1982, stating that China has no rightful claim.

Adding to the debate is the military confrontation in India’s Galwan Valley. These issues turn on what is understood as One China as well as the efficacy of the One Country – Two Systems approach.  Previous acceptance of a One China was based on the principles of reciprocity in respecting sovereign borders. Unfortunately, current events suggest that China has not reciprocated in acceptance of sovereign borders. This has led many to critically review the substance of their relationship with China, and that of Taiwan.

Taiwan, the final piece in the PRC’s One-China consolidation

The 1992 Consensus between the CPC and Kuomintang (KMT) of Taiwan is the new flashpoint for the One China – Two Systems narrative. It is China’s final frontier to argue that all Chinese people belong to China, hence under the rule of the CPC. Unfortunately, a closer reading of the consensus documents reveals that there is no substantive agreement as to who truly represents the Chinese people, with both parties seeing themselves as the true representatives of the people. There is no substantive agreement as to which entity constitutes the legitimate governing body.

The PRC rely on early settlement during the Qing dynasty period to justify its claims to sovereignty over Taiwan. History shows that Taiwan (Formosa) was not originally part of mainland China. The original inhabitants were from Malaysia, Polynesia, and Aboriginal tribes. Records show that the Chinese started occupying Taiwan from the 3rd century CE, culminating in the Qing dynasty annexing Taiwan in 1683. It was only in the 17th Century that the Han Chinese became the majority.   

Following a troubled history, Taiwan was formally handed over to Japan as part of the peace treaty with the Qing empire in 1895. Japan relinquished control of Taiwan after World War II but never formally handed it to any country. As such, the international status of Taiwan is unclear but also points to Taiwan as an independent sovereign country.

China’s economic pressure for reunification of Taiwan

The emergence of a Taiwanese identity took root in February 1947 following the 2/28 incident. Note that this took place prior to Mao’s communist 1949 uprising. It was an early sign of Taiwan’s separation from mainland China. This growing Taiwanese identity saw the level of co-operation between the CPC and the ruling KMT come to an end in 2014. The election result showed the growing dissatisfaction with the PRC influence over the KMT. The signing of 20 pacts by the KMT was seen as China’s pursuit of economic leverage as a weapon to force the reunification of the One China.

Under the KMT government, China became the top destination for Taiwan’s exports and outbound investment. Materially, more than 100,000 Taiwanese manufacturing facilities relocated to China. This stripped Taiwan of its local manufacturing capability as well as tying up its investment and expertise. The Economic Cooperation Framework Agreement (ECFA) was formalised in 2010 in a step to cement Taiwan’s economic reliance. The ECFA incorporated investment cooperation, customs arrangements, tariff reductions for 235 products and encouragement of Taiwanese – Chinese partnerships for service industries (accounting, IT, maintenance).

Fear of Taiwan reliance on China resulted in the KMT losing the election in 2014. The China / Taiwan discussion changed from reunification to the pursuit of economic retaliatory measures. This opened the old scars of the One-China policy by highlighting the financial and economic dependency strategy of the CPC to force a reunification.

This “trade symbiosis” was recognised as a weakness by the newly elected DPP, resulting in the launch of the New Southbound Policy (NSP) in 2016. Primarily a counter measure to neutralise Chinese economic weapons as a tool for reunification, the NSP is a 3-year reshoring plan to attract companies back to Taiwan. To date, $33bn has been pledged to reshoring activity. It helped Taiwan’s GDP growth, enabling an increase of 2.73% in 2019.  It also boosted trade and investment in 18 Asian countries. Trade with these countries has grown from $95bn in 2016 to $111bn in 2019. Outward investment grew by 16 % in 2019 as opposed to a 51% drop into China.

However, China (including Hong Kong) still accounts for 40% of Taiwan’s exports, with NSP countries only accounting for 20%. Whilst the NSP strategy still has a way to go, the fallout around Covid-19 presents Taiwan with immediate opportunities as countries seek alternatives to China trade. Industries such as pharmaceuticals, micro-processor technology and tourism are attractive options.

Despite this economic coercion by China since 2014, Taiwan re- elected the DPP in 2020. At the local level, the debate does not take place within the USA-China nexus. It is seen within the context of what a democratic China could look like, a bastion of respect and integration of Chinese culture and traditions within open free markets. This challenges the CPC notion of what and who the Chinese are and a call for an end to claims of ruling over all ethnically Chinese people.


China’s complex government structure pursues China’s ambitions through adherence to Xi Jinping Xin Shidai Zhongguo Tese Shehui Zhuyi Sixiang, translated as Xi Jinping Thought.  Covid-19 has exposed this thought as being a reframing of the China narrative in Maoist terms that business and governments need to understand, particularly the nuances associated with engaging through the various friendship framed associations. In terms of the legal and regulatory form of Government, one needs to ask critically: When dealing with China, who am I really dealing with – the people or the party?

Taiwan is the final domestic frontier to a One China. Whilst effectively addressing the economic stranglehold used by China to force reunification, this has been enabled by Covid-19 due to an international strategic re-alignment around China.

This re-alignment needs to be made rationally and within the international rule of law that respects national sovereignty and territorial boundaries, and not only China’s prescriptions for going forward. It should not be at the cost of Taiwan’s diplomatic isolation. Taiwan will be the true test of China’s claims for a shared human destiny and presents the final frontier for China to showcase its willingness to be a part of the new world order.

Picture credits: ABC News

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