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Trade Trumps Missiles as China-Taiwan Talks Show Warmed Ties

Photographer: Sam Yeh/AFP/Getty Images

Wang Yu-chi, Taiwan's minister of Mainland Affairs Council, speaks during a press conference in Taipei on Jan. 28, 2014. Close

Wang Yu-chi, Taiwan's minister of Mainland Affairs Council, speaks during a press... Read More

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Photographer: Sam Yeh/AFP/Getty Images

Wang Yu-chi, Taiwan's minister of Mainland Affairs Council, speaks during a press conference in Taipei on Jan. 28, 2014.

Less than two decades after China fired missiles into the sea off Taiwan, the first formal meeting between the two sides’ governments may pave the way for discussion of political ties after 65 years of division.

Wang Yu-chi, Taiwan’s minister of mainland affairs, said yesterday he will meet with his mainland counterpart Zhang Zhijun in the Chinese city of Nanjing on Feb. 11. The talks follow public recognition by President Xi Jinping and Taiwanese President Ma Ying-jeou that closer economic links must be backed by moves to resolve a standoff over deeper differences that once threatened to spark war in East Asia.

The meetings reflect a changed atmosphere in the years since Ma’s election in 2008 moved Taiwan away from independence-leaning policies and paved the way for more tourism and trade with China. All the while, the Chinese military has kept more than 1,000 missiles pointed at Taiwan, demonstrating its determination to thwart moves toward nationhood for an island it regards as part of its territory.

“I’d call it creeping normalization,” Jean-Pierre Cabestan, a political science professor at Hong Kong Baptist University, said in a telephone interview. “China doesn’t want to recognize the Republic of China but they are more and more ready to have contact with the Taipei government,” Cabestan said, using Taiwan’s official name for itself.

In 1996, the mainland fired missiles into the stretch of water between them before Taiwan’s first democratic presidential election. Two-way trade reached $197.2 billion in 2013, almost double from five years earlier.

Fire Missiles

Speaking at an October Asia-Pacific Economic Cooperation summit, Xi said China is willing to hold talks with Taiwan on an equal basis under the “One China” principle, and problems caused by the impasse should not be handed down to future generations.

Holding the meeting in Nanjing is poignant because the eastern Chinese city was China’s capital before 1949, the year Chiang Kai-shek’s Kuomintang Party fled to Taiwan and ceded power to Mao Zedong’s Communists after years of civil war. The island’s constitution retained the Republic of China’s name and territorial claims.

Expectations for moves toward a political resolution should be limited, though “there is a lot of symbolism” to the talks, according to Dong Wang, director of the Center for Northeast Asian Strategic Studies at Peking University in Beijing.

Political Realm

“As we move from the economic realm to the political realm, it becomes increasingly more sensitive as there is a larger gap in terms of positions on both sides,” Wang said. “I see the mainland side agreeing to those meetings to test the waters to see how they can proceed.”

The meeting is an “important move” to promote relations and deepen trust, China’s official Xinhua News Agency reported, citing Taiwan Affairs Office spokesman Ma Xiaoguang.

One important part of the meeting will be the way China’s Zhang addresses Taiwan’s Wang. If Zhang calls him minister, as Wang yesterday said he “expects,” it could frame future talks as discussions between governments of equal standing. That’s likely to overshadow any agreements they reach.

Zhang addressed Wang by his official title in October when they spoke briefly in a hotel lobby at the APEC summit, the Taipei Times reported afterward.

Inevitable Step

President Ma, speaking on an official visit to Honduras, said the meeting is an “inevitable” step in cross-strait relations, the Central News Agency reported Jan. 26. It followed his remarks in a New Year’s address the government needs to end its political stalemate with China to spur economic growth.

About 40 percent of Taiwan’s exports are bound for mainland China, according to government statistics. Taiwan’s economy grew 2.92 percent, more than estimated, in the fourth quarter of 2013, the government said yesterday, after a recovery in the U.S. and Europe boosted demand for its exports.

Since taking office, Ma has opened up direct flights with China and oversaw the signing of an economic cooperation framework, with a trade agreement to be debated by the island’s legislature as early as March.

While non-government representatives from Taiwan, such as former Kuomintang Chairman Lien Chan, have met with Chinese presidents, no formal political talks have been held. The Communist Party and the Kuomintang have never reached a peace agreement ending their conflict.

Very Cautious

“It’s going to be too early to gauge whether the meeting will contribute to better cross-straight relations,” said Alexander Huang, a professor of strategy and war-gaming at Taipei-based Tamkang University. “Both sides will be very cautious.”

The political standoff has resulted in neither side recognizing the other’s passport, one of many obstacles that need to be overcome if ties between the two sides are to be normalized.

Taiwan’s National Immigration Agency says on its website that Chinese nationals entering its borders should obtain a special travel document, while China’s public security authority says inbound Taiwanese should carry a “Mainland Travel Permit for Taiwan Residents.”

Pressure from China has led to Taiwan athletes competing at the Olympic Games under the flag of Chinese Taipei and joining the World Trade Organization as Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (Chinese Taipei). Meanwhile, Taiwan’s Ma referred to the People’s Republic of China as “the mainland” in his Jan. 1 new year’s address.

Presidential Election

Ma, who has battled approval ratings of less than 15 percent, must also take into account the views of the Taiwanese public. An opinion poll released Jan. 14 found that 54.8 percent of Taiwanese felt China has benefited more than Taiwan from cross-straight engagement and Taiwanese investment, the Taipei Times reported the next day.

Ma’s Kuomintang Party will face a presidential election in 2016, when he finishes his second and final four-year term.

Should the February talks prove successful, they may create momentum that would enable Ma and Xi to meet, the first such presidential-level interaction, according to Wang of Peking University.

“If it happens it will be of historic significance,” Wang said in a telephone interview. “You could even argue the two of them should be awarded the Nobel peace prize. They need to sign a peace treaty or a peace agreement or declaration.”

To contact the reporters on this story: Chinmei Sung in Taipei at csung4@bloomberg.net; Adela Lin in Taipei at alin95@bloomberg.net

To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net

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