Tight Lips on Taipei

Taiwan may want and deserve independence, but who -- least of all the U.S. -- can afford to vex the powerhouse that is mainland China?

By Joyce Barnathan

There's always a mix of emotions when you sit down with leaders from Taiwan, as I did the other day. On one level, they're delightfully outspoken. Many have studied or worked in the U.S., then carried American values back home and embraced them personally. They're especially proud of freedoms on their democratic island.

On another, it's truly sad to hear them talk about U.S. policy on Taiwan. For geopolitical reasons, the Bush Administration (one that has made its new mission the export of democracy) implores the Taiwanese not to speak out too loudly. The U.S. maintains that Taiwan is a part of China, and recognizes that China would go to war if that tenet were shaken.


  In other words, democracy is great for Iraq, but a big nuisance -- and arguably dangerous -- when it comes to Taiwan. No referendum on reunification is necessary in Taiwan, thank you. And no comment from the U.S. when China talks of passing a highly inflammable antisecessionist law (translation: go-independent-and-we'll-go-to-war law).

I can't say I fully disagree with U.S. policy. After all, China is the 800-pound gorilla in the region, and living with the fiction that Taiwan and China are really one country is a small concession to make for peace in the Straits. The goal is to co-exist with this ambiguity long enough for some sort of natural convergence to take place. With communists firmly in power in China, we're most likely talking decades.

In the meantime, Taiwan's hand weakens even among trusted friends as Beijing's role in the global economy inexorably rises. "When Beijing speaks, everybody listens, including President Bush -- and listens too much," laments Parris Chang, deputy secretary-general of the National Security Council in Taipei, and someone I've known since the mid-1980s.


  Of course, the Taiwanese have a hand in their own predicament. Though the government in Taiwan has been urging its business leaders for at least a decade to invest in places other than China, the big money is still flowing there. Last year, Taiwan approved nearly $7 billion -- a 51% increase over a year earlier -- in investment projects in the mainland.

"China is hostile to Taiwan -- so we should not concentrate investment with one country," says Li-Pei Wu, senior adviser to Taiwan's President. But others try bravely to see this investment as a blessing. "This investment constrains what China can do," says Chang. His argument: If China takes military action against Taiwan, this investment would dry up, hurting China's economy and depriving it of sorely needed jobs.

Reunification, Hong Kong-style, seems even less palatable to the Taiwanese. Keep in mind that in 1997 Beijing knew full well that it had to handle its takeover of Hong Kong deftly or risk completely alienating Taiwan. China's gentle touch, it turns out, is perceived as a heavy hand in Taiwan. "It's a total failure," says Wu. "Hong Kong's economy is marginal, and political freedoms are taken away."


  Of late, there has been a slight thaw between the two adversaries. Direct flights are starting, and China appears willing to reach out to the government of Taiwanese President Chen Shui-bian, an independence advocate. When asked what Chen would say to Chinese President Hu Jintao in the unlikely event of a summit, one candid Taiwanese official at our gathering said simply: "Let us go."

Uh oh. Censor that. On second thought, another official came up with the 3 C's: coexistence, cooperation, and co-prosperity. That's more like it. We'll save freedom of speech and democracy for Iraq.

Barnathan is an assistant managing editor for BusinessWeek in New York

Edited by Frank Comes

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