Taiwan Sees Risks, Rewards In China's Embrace

November 17, 2009

Taiwan and China are enjoying their warmest relations in years, with stronger economic ties that have been welcomed by the business community.

But some on the island nation worry that Taiwan will pay a price for the closer ties. And as President Obama visits China for the first time, they say Americans need to understand the risks to the democratic principles the U.S. and Taiwan value.

China has viewed Taiwan as a renegade province since the days of the Chinese civil war. In the mid-1990s, Beijing was so angry with Taiwan for flirting with formal independence that it fired missiles toward the island during an election campaign. Taiwanese voters responded by giving the pro-independence candidate a clear majority.

But since then, Taiwan's economy has struggled and the country has lost much of its swagger. Now Taiwanese President Ma Ying-jeou says he has had no choice but to increase economic ties with China.

"As mainland China is rapidly becoming the second largest economy in the world, obviously, we cannot avoid doing business with the mainland," Ma said in an interview with American journalists.

Direct Flights To China

Last year, Ma approved direct flights to the mainland for the first time. His government is also working on agreements that would cut tariffs for Taiwanese products and could open the door to more Chinese investment.

Ma insists none of this will affect Taiwan's status as a de facto independent country.

"There have always been risks in dealing with mainland China, but there have always been opportunities as well," Ma said. "So, my job as president of this country is [to] maximize opportunity and minimize risk."

Political Opposition

But Taiwan's opposition politicians are skeptical.

"If Taiwan cannot separate itself from the Chinese economy, talking about political separation is going to be hard," says Joseph Wu, who served as the island's unofficial ambassador to the U.S. in 2007.

The United States has protected Taiwan for decades, and Americans have a vested interest in the island's fate, says Wu, a member of Taiwan's Democratic Progressive Party, which opposes the new policies.

"We hold the same value of freedom and human rights and democracy with the Americans," Wu says. "Any damage to Taiwan's democracy or that Taiwan is to be sucked into that authoritarian country, the United States should be concerned about that."

Such arguments seem to hold little sway with Taiwanese business people, most of whom applaud the opening to China and see it as long overdue.

The Friendly Skies

Until last year, flying between Taiwan and Shanghai took an entire day, because the Taiwanese government forced travelers to transfer in Hong Kong, says Yancey Hai, chief executive officer of Delta Electronics, which makes everything from cooling fans to digital projectors.

Now, travel is much easier.

"When I fly to Shanghai, it takes me about 90 minutes," Hai says. "So I can fly to Shanghai in the morning and come back in the evening."

Hai says warmer economic relations are also creating business opportunities.

"One of their biggest appliance companies came to us from China yesterday and, in the past, we [had] never talked about business," Hai says.

Some young people also support the new policies because they see their future in China — not Taiwan.

"Shanghai is the financial center of China," says Wang Junhong, a finance major at Taiwan's National Politics University. "So I guess there would be much more opportunity to get a good job or get a higher wage."

Taiwan's government has just signed a banking agreement with China and Wang hopes that will make it easier for him to find work at a bank in Shanghai.

But where Wang sees opportunity, Anya Liu, another student, sees threats. The president's opening to China will usher in a flood of mainlanders who will take the best jobs, she says.

China's "population is just too big and they're too capable," Liu says. "There's nothing we can do about it."

She adds: "The Ma government is too close to China. So in the end all our political sovereignty will be obliterated."

Impact On The Media

China's economic influence is also affecting the Taiwanese media, says Leticia Fang, who teaches journalism at National Politics University.

When a Taiwanese TV anchor appeared recently as a guest on China's state-run television, she criticized the Dalai Lama, whom Beijing considers to be a separatist.

A few years ago, that would have never happened, Fang says.

"Some media people, they are just sucking up," she says. Fang adds that here greatest fear is that more Taiwanese journalists wil become advocates for China.

Economic Repercussions

Beijing flexed its muscles earlier this fall after the Dalai Lama came to Taiwan to pray for victims of a typhoon. China criticized Taiwan for giving him a visa.

After officials in the southern Taiwanese city of Kaohsiung welcomed the Dalai Lama, the Chinese government prohibited government tour groups from spending the night there.

The ban cost Kaohsiung's Hotel Kingdom 1,200 room bookings, says assistant general manager C.S. Chung.

"I really hope the government won't do anything that will infuriate the mainland and cause it to boycott our tourism," Chung says.

President Ma insists his efforts to forge economic ties to China won't affect Taiwan's autonomy.

"We are very much concerned about our sovereignty and our identity," Ma said. "So, in every agreement we sign with the Chinese mainland, you can read between the lines: there's no political words in that."

But as the Dalai Lama's visit shows, separating politics from economics across the Taiwan Strait is getting harder and harder.