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Trump and China: The “Madman” Strategy

“When two elephants fight against each other, the grass always suffers,” said Yu-Fang Lin of the National Policy Foundation, a Taiwan-based think tank, in an interview with the Washington Times. He was talking about the famous phone call between Taiwan’s President Tsai Ing-wen and Donald Trump on 2 December. If the US and China get into a military confrontation, Lin suggested, it is Taiwan that will be crushed.

The Chinese Communist regime was outraged by that phone call, the first direct conversation between an official of the Taiwan government and an American president or president-elect in almost four decades, but it kept its fury in check.

Beijing made an official complaint to Washington, but China’s Foreign Minister Wang Yi dismissed the call as a “petty trick” by Taiwan. The Chinese leaders, as puzzled as everybody else by the Trump phenomenon, were soft-pedaling the issue and hoping against hope that the president-elect wasn’t looking for a fight.

The alternative was just too frightening to contemplate. Yu-Fang Lin called it the “madman” strategy: Trump making himself “appear to be very dangerous and hostile and very unpredictable to scare the (Chinese) leaders” into concessions on various issues. Within days, however, Trump gave Lin’s theory wings.

In an interview on Fox News last Sunday, the president-elect threatened to destroy the entire foundation on which US-Chinese relations have been based since 1979. “I don’t see why we have to be bound by a One China policy unless we make a deal with China having to do with other things, including trade.”

The rabidly nationalist Global Times, a tabloid attack dog linked to the Chinese Communist Party, said Trump was “as ignorant as a child.” The official response was more polite, but equally severe.

“The Taiwan issue concerns China’s sovereignty and territorial integrity, and involves China’s core interests,” said Foreign Ministry spokesman Geng Shuang. “If (the ‘One China’ principle) is interfered with or damaged, then the healthy development of China-US relations and bilateral co-operation in important areas is out of the question.”

The key phrase here is “out of the question.” If Trump is going to play the “madman” card, then China will not negotiate anything. And if he urges Taiwan along the road to formal independence, then (as the Global Times put it) China may have to consider arming America’s enemies or taking back Taiwan by force.

The “One China” policy dates back to 1979, when the United States broke its formal diplomatic relations with Taiwan and transferred them to the People’s Republic of China. It was an “agreeable fiction” that allowed Washington to have its cake and eat it too.

In terms of both trade and military strategy, it was far more important for Washington to have diplomatic relations with China (current population 1.3 billion) than with Taiwan (22 million). However, it was politically impossible for the US to just abandon the Taiwan regime, which it had backed in the Chinese civil war and continued to support after that regime lost the war and retreated to the island of Taiwan in 1949.

And so the “One China” policy. Everybody agreed that China could not be divided, but Taiwan could keep its de facto independence so long as it accepted that China must one day be reunited. The United States would break diplomatic relations with Taiwan, but could go on trading with it and even selling it arms. And everybody lived happily ever after, more or less.

China bent over backwards to get this deal, because at the time it was still a very poor country trying to open up trade ties with the West, and it was also mired in a military confrontation with the old Soviet Union. That confrontation is long over and China is no longer poor, but it has meticulously observed the terms of the deal for 37 years. Now Trump is threatening to cancel the deal if he cannot get better terms from Beijing.

What Trump wants, he says, is for China to stop devaluing its currency, cut tariffs, stop building a “massive fortress” in the South China Sea, and help to curb North Korea’s nuclear ambitions. He has also promised to “bring American jobs back from China,” perhaps by imposing a huge tariff (45 percent) on Chinese exports to the United States.

This is totally unrealistic. China stopped deliberately devaluing its currency years ago, and is now actually selling dollars in an attempt to stop its decline. And those “American jobs” are never coming back. Instead they are disappearing in China, where automation is predicted to eliminate 77 percent of jobs in the next 20 years. Does he actually understand this? Who knows?

Threatening to cancel a deal if he can’t get better terms may have worked for Trump in business, but it’s not just money at stake here. It’s Chinese territory, the very notion of national unity, “core interests”, as Beijing puts it. The Chinese regime won’t yield on this because it can’t, and if Trump pursues his “madman” strategy we are all in for a rough time.
To shorten to 725 words, omit paragraphs 13 and 14. (“What…knows”)

Taiwan: Waiting for China

15 January 2012

Taiwan: Waiting for China

By Gwynne Dyer

The most important thing in Taiwanese politics is always left unsaid. When I interviewed Ma Ying-jeou in 2008, just before he won the presidency for the first time, he was happy to talk about the details of his plans for better relations with the People’s Republic of China: direct flights, more trade, and the like. But ask him about the long-term future, and all you got was platitudes.

Ma has just been re-elected for a second term as president (14 January). “We’ve won,” he told jubilant supporters. “In the next four years, ties with China will be more harmonious and there will be more mutual trust and the chance of conflict is slimmer.” All true, but it still does not address the question of where all this harmony is taking Taiwan.

In his first term, Ma did everything he promised. Direct flights to the PRC resumed in late 2008, a 2009 agreement between Taipei and Beijing facilitated investment flows between the two countries, and a comprehensive trade deal was signed in June 2010.

Ma’s victory this time was smaller than in 2008: then he had a lead of seventeen percentage points; now he’s down to six. But that’s probably due mostly to the country’s slow economic growth and the widening income gap between rich and poor in recent years. There is no evidence to suggest that he lost votes because he was getting too close to China.

So here’s the question. If Ma, like almost everybody else in Taiwan, has no desire to live under Communist rule, then why is there majority support for closer ties with a giant neighbour (about 65 times as many people) that refuses to recognise the legitimacy of Taiwan’s government? Beijing even threatens to attack Taiwan if it ever declares independence from China. What can the Taiwanese be thinking?

This is where it all goes silent, except for the platitudes. But with a little thought you can figure out the logic behind the position of Ma and his supporters in the Kuomintang Party.

They know that Beijing could do terrible damage to Taiwan if it attacked, but they also know that it won’t actually do that unless Taiwan formally declares independence from China. Beijing is willing to live with the present ambiguous relationship for a long time to come, if necessary.

Meanwhile, Taiwan has to make a living, and it has been losing market share to China’s cheaper exports for two decades now. The favoured solution is to invest in mainland industries and subsidise Taiwan’s much higher living standard with the profits. Mainland Chinese investment in Taiwan’s hi-tech sector would not hurt, either. Time for better relations with the mainland, then – but what about the future?

The thinking goes like this. We can cozy up to China now because it serves the interests of a great many people on both sides, and it doesn’t really endanger our de facto independence. Taiwan is not disarming, and China still can’t move an army across the 180-km (110-mile) Strait of Taiwan; its navy isn’t strong enough. As for the long run, it will take care of itself, because the Communist regime in Beijing will not last forever.

Nobody knows when it will end, but most politicians in Taiwan have a fair idea of how it will end. Sooner or later the Chinese economy will stumble into a recession – the enormous housing bubble in China is currently the most likely cause – and unemployment will soar. People’s mortgages will be underwater, banks will fail, and the regime’s credit will run out.

Ideology is dead in the People’s Republic. The regime insists that it gives the people “socialism with Chinese characteristics,” but in fact it gives them “unbridled capitalism with Chinese characteristics” – including a plague of corruption that mainly benefits Communist Party members. All this is tolerable while everybody’s income is rising; it is no longer acceptable when incomes are falling.

China is a capitalist country, and it has not been granted some special exemption from the business cycle. Every once in a while, in capitalist economies, a major recession comes along. This is hard enough to manage in a democracy. It is potentially lethal for a dictatorial regime whose only remaining credibility is its reputation as an economic miracle-maker.

So Taiwan’s best strategy is just to wait. Make deals on trade and investment, keep talking to Beijing to reduce the risk that some hothead will launch missiles at Taiwan, but don’t get into talks about reunification with a Communist-ruled China. It’s not hard to avoid such talks, since Beijing doesn’t recognise the Taipei government as a legitimate negotiating partner.

And wait. The wheel will turn, and eventually there will be a different, democratic China that Taiwan can safely rejoin (though it will certainly still insist on retaining a lot of autonomy). Meanwhile keep the mainland regime sweet, and make some money.

The United States government, by the way, completely agrees with this unspoken strategy. The last thing Washington wants is to be dragged into a war with China by its defence guarantee to Taiwan, and it was quietly delighted to see Ma win the election. So was Beijing. No crisis here.


To shorten to 725 words, omit paragraphs 3, 10 and 15. (“In his…2010”; “Nobody…out”; and “The United…here”).



Taiwan-China: Porcupines On A First Date

4 November 2008

Taiwan-China: Porcupines On A First Date

 By Gwynne Dyer

Mating is a notoriously tricky business for porcupines, but even the first date is an awkward transaction. Likewise for prickly customers like China and Taiwan: when a high-level Chinese delegation arrived in Taiwan on Monday for landmark talks on closer relations, the Taiwan police even prevented people on the roads into Taipei from waving Taiwan flags in order not to hurt the visitors’ feelings.

The two countries (or one country, if you prefer) broke apart almost sixty years ago, and until this week it was not even possible to travel directly between them: Taiwan-China flights had to go through Hong Kong, and ships had to stop off en route at the Japanese island of Okinawa. The 180-km-wide (110-mile-wide) Taiwan Strait remains one of the most heavily militarised regions in the world, with an estimated 1,300 Chinese missiles pointing at the island of Taiwan.

Even under the new government of President Ma Ying-jeou, which is committed to improving relations with the mainland, Taiwan keeps its defences up. Taipei recently signed its largest-ever arms deal with the US, agreeing on a $6.5 billion package of guided missiles, attack helicopters and other advanced weaponry. Beijing retaliated by cancelling a series of scheduled meetings between Chinese and US generals — but it did not cancel the visit of Chen Yunlin, the most senior Communist official ever to set foot in Taiwan.

Chen is not formally a member of the Chinese government, because Beijing sees Taiwan as a renegade province, not a legitimate state. He is officially the head of a non-governmental organisation called the Association for Relations across the Taiwan Strait, and his host, Chiang Pin-kung, is the chairman of a similar Taiwanese NGO, the Straits Exchange Foundation. But that is just a charade to save everybody’s face: this is really a serious encounter between two governments.

The first results of the encounter are already known: in future, cargo ships will be allowed to sail directly between Taiwanese and Chinese ports, and there will be over a hundred direct flights a week between cities in Taiwan and China. There are hopes, especially in Taiwan, that this will lead to greatly increased trade between the two sides, and the next round of talks (which will be held every six months) will focus on closer financial ties as well.

But where is all this leading? Reunification? The opposition Democratic Progressive Party (DPP) in Taiwan fears so, and a million of its supporters demonstrated against the meeting across Taiwan last week, but President Ma swears that he will make no moves that compromise Taiwan’s sovereignty.

Well, then, could there be a permanent two-state solution in which Beijing and Taipei recognise each other as legitimate governments of independent countries? Beijing’s leaders would rather die in a ditch, and so would many ordinary Chinese for whom the unity of the motherland is sacred. The truth is that neither side really knows the destination of this voyage, but they are nevertheless setting out together.

There have been great changes in China, where prosperity has soared and the ruling Communist Party has scrapped most of its ideology over the past quarter-century, but Taiwan has changed even more. Sixty years ago, after all, the Nationalist Party that ruled the island for so long was almost identical to the Communist Party in its structure, its nationalism, and its authoritarian style.

Both parties were formed in the wave of nationalist fervour that swept China after the 1911 revolution overthrew the monarchy, and Chiang Kai-shek, who led the Nationalist Party for fifty years until his death in 1975, was just as autocratic as his great rival Mao Zedong, the leader of the Communist Party. But the Nationalists lost the civil war in 1949 and withdrew to Taiwan, where American sea-power prevented the Communists from following, and so Taipei became the seat of the government-in-exile of the Republic of China.

That, at least, was how Chiang saw it, and he harshly suppressed any expressions of Taiwan separatism. His dream was to return to Beijing in triumph as the leader of a reunited China. But in the quarter-century after Chiang’s death the Nationalist Party in Taiwan, while remaining dedicated to a united China in principle, gradually moved towards a fully democratic system — and so lost power in 2000 to a separatist party that wanted to declare an independent Taiwan.

There was genuine support for that goal in Taiwan, especially in the south, but it was never a real possibility: Beijing made it clear that a declaration of independence would trigger an invasion. So after eight years of economic stagnation and growing corruption, the separatist DPP lost power in last March’s elections, and the Nationalists returned to power under Ma. They remain committed in principle to the reunification of China, but not under a Communist dictatorship.

Improving trade with China is very important to Taiwan, which has not done well economically in recent years: the average Taiwanese still earns about five times as much as the average mainland Chinese, but the gap is narrowing fast. However, closer political ties are more problematic, and the military still stand ready on both sides of the straits. The two governments may be setting off on a voyage to nowhere, but at least it has started well.


To shorten to 725 words, omit paragraphs 4 and 7. (“Chen…governments”; and “Well…together”)

Taiwan’s Sleeper Crisis

26 December 2007

Taiwan’s Sleeper Crisis

By Gwynne Dyer

US Secretary of State Condoleezza Rice didn’t go into much detail in her year-end message, but on one topic she was very clear: “We think that Taiwan’s referendum to apply to the United Nations under the name Taiwan is a provocative policy. It unnecessarily raises tension in the Taiwan Strait, and it promises no real benefits for the people of Taiwan on the international stage.”

But then, the referendum is not meant to benefit the people of Taiwan so much as the Democratic Progressive Party, which is not precisely the same thing. The DPP, which draw its support mainly from those who would like the island of Taiwan to be an entirely separate country from China, has held the presidency for the last eight years. However, it won the 2004 election by a majority of only 0.22 percent, and things look even grimmer for next March’s election, so it desperately needs a gimmick.

The referendum is the gimmick. The DPP has never dared to declare Taiwan’s independence from China, because the Communist regime in Beijing vows to use “non-peaceful measures” to thwart any attempt to divide the motherland permanently. So the DPP always looks for substitute gestures that will signal to its supporters that it still means business. A referendum on changing the country’s official name from the Republic of China to “Taiwan”, held at the same time as the election, might just work.

Well, not change the official name, exactly, because the Chinese People’s Republic has already said that’s a red line that Taipei must not cross. The referendum just proposes that the government applies for UN membership as “Taiwan”. The UN said no the last twelve times, when the government in Taipei applied under the name of “Republic of China”, but maybe it will say yes if they call the country “Taiwan” this time. They’re not very bright at the UN.

Changing the name is not going to change Taiwan’s reception at the UN, and Chen Shui-Bian, the outgoing DPP president, knows it very well. Taiwan lost its UN seat to the People’s Republic of China in 1971, twenty-two years after the Nationalists lost the civil war to the Communists and fled from the mainland. It lost its seat, basically, because the regime in Beijing ruled more than 98 percent of the Chinese population.

It still does, and few UN members are going to risk losing the trade of such a huge country just to make 22 million Taiwanese happy. True, Taiwan is now a democratic country where even the old Nationalist Party, though still devoted to the concept of One China ruled by non-Communists, has accepted the democratic rules. But having a nicer political system doesn’t win you a lot of points in international politics.

The whole notion of applying for a UN seat under a different name is a pure charade. It is the DPP’s way of justifying a referendum that sort of involves changing the country’s name to Taiwan (though not officially, because that might start a war), so that disheartened DPP voters will show up at the polls one more time. Once there, they might vote for the DPP’s presidential candidate, too, and the party might squeak back into power once more.

It is a gambit that is almost bound to fail domestically. Taiwan’s economic growth has slowed since the DPP took power, and the word in Taipei is that half the corporate headquarters that still remain in the island will decamp to the mainland if the DPP wins the 2008 election. So no problem: the DPP will lose the election, and even if the referendum passes the new government won’t act on it, and the UN would never accept Taiwan’s application anyway. Unfortunately, it’s not that simple.

The Taiwan government calculates that it can get away with this stunt because Beijing is hosting the Olympics next summer, and wouldn’t dream of spoiling the party by confronting Taiwan over a referendum on the (fake) name change on 22 March. The Taiwan government is probably wrong.

Its assumption is that the Beijing regime, being a tyranny, can turn public opinion on and off like a tap. If it wants the Chinese public to be outraged about Taiwan’s “splittism”, the protestors will come out on the streets. If it doesn’t want a crisis, they will obediently stay home. Chinese nationalism, which has always been obsessed with preserving the unity of the motherland, is reduced in this paradigm to a mere propaganda tool of the current regime.

Nonsense. The Communist regime knows that its ideology is dead. It knows that its claim to power depends on producing rapid economic growth and defending the national interest, so it regularly plays the nationalist card, especially over Taiwan. But popular hostility to Taiwan’s independence is real on the mainland, and the regime in Beijing cannot just ignore it.

This is a marginal case, for Taiwan will not be declaring independence in March, or even formally changing its name. But this is an event that falls on the borderline of the tolerable for Beijing, and its response, even in the Olympic year, will depend on whether it thinks it can manage the news of the referendum. If it thinks that it will be blamed by the public for failing to defend Chinese unity, then stand by for the mother of all crises to erupt in the Taiwan Strait in early March.


To shorten to 725 words, omit paragraphs 7 and 8. (“The whole…simple”)