A regular feature of Taiwan Sentinel, ChinaWatch examines developments in China in the areas of internal politics, economics and trade, geopolitics and Taiwan engagement and analyzes their advantages or disadvantages for Taiwan’s standing in the region and the world. This feature is based on the premise that what happens in China has direct relevance for the durability of Taiwan’s de facto independence. ChinaWatch is updated monthly.
Geopolitics
China Eases Pressure on South Korea in Blow to Beijing Bullying Efforts
After more than a year of applying almost non-stop economic and political pressure on South Korea to try to get it to stop deploying a U.S.-made anti-missile system, China has given up on the effort, in what appears to be an object lesson in the limitations of geopolitical bullying.
In late October Chinese President Xi Jinping made it clear that Beijing was dropping its campaign for Chinese citizens to boycott South Korean products, despite South Korea’s continuing refusal to back down on its deployment of the Thaad anti-missile system. The system, aimed at helping South Korea defend itself against a possible North Korean attack, is strongly opposed by China, not only because it sees it as a threat to its North Korean ally, but also because of its negative implications for its own military and industrial assets in Manchuria and in several adjacent areas.
China’s climb down on the Thaad system deployment is an important development not only for South Korea’s anti-missile capabilities, but also for the durability of its longstanding alliance with the United States. Over the past several years China has been doing its utmost to push back against the robust American military presence in northeast Asia and the western Pacific in general. It saw its anti-Thaad pressure on South Korea as a litmus test for all its efforts in this regard.
Taiwan is an indirect beneficiary of the failed anti-Thaad campaign, because it shows that successful push-back against Chinese bullying is not necessarily a fool’s errand.
Taiwan is an indirect beneficiary of the failed anti-Thaad campaign, because it shows that successful push-back against Chinese bullying is not necessarily a fool’s errand.
South Korea’s deployment of the Thaad system began in early March of 2017.
According to the reports from Seoul, China began taking punitive measures against large South Korean companies even before then amid concentrated efforts to force Chinese consumers to eschew South Korean products ranging from cosmetics to sophisticated electronics goods. These efforts included organized boycotts of South Korean chain stores in China and mass cancellations of Chinese package tours to South Korea.
South Korea’s apparent vulnerability to the Chinese actions was clearly reflected in the country’s large-scale dependence on the Chinese export market. In 2016, South Korea sold China US$124.4 billion worth of goods, accounting for 25.1 percent of its export total — easily making China South Korea’s largest export outlet.
Ominously for South Korea, the 2016 export figures for China represented a 9.3 percent decline on the previous year. While some of this decline undoubtedly reflected China’s rising ability to supply itself with an array of goods it had previously purchased from Seoul — high quality cellular telephones for example — analysts said it was also the result of a deliberate Chinese campaign to punish South Korea for its agreement to go ahead with the Thaad deployment on its territory.
Trump in China: The Professionals Are Back
There appears to be a lot going on in the U.S.-China relationship, little of it good for Taiwan. In stark contrast to the strident anti-China rhetoric candidate Donald Trump employed before his election a year ago, Trump as president has pivoted sharply in the direction of Beijing, not only dropping his strident complaints about its mercantile trade practices, but also ignoring China’s assertive military posture in the South China Sea and elsewhere in the region. The latest example of his pro-China tilt came during his recently completed trip to Beijing, when Trump said that he didn’t really blame China for running up such a significant trade surplus with the United States, because to do so would be to ignore China’s legitimate pursuit of its own self-interest.
The reason for Trump’s continuing bromace with Xi Jinping and the Chinese regime in general is not difficult to discern. It is based first and foremost on Trump’s assumption that China can pressure North Korea to rein in its rapidly developing nuclear weapons and intercontinental missile programs. Unable to countenance the possibility that Pyongyang will soon be able to threaten the United States with nuclear annihilation, Trump is counting on China to turn the screws on its erstwhile ally, both by cutting off the oil supplies the Pyongyang regime desperately needs, and pressuring its leadership to either halt its nuclear program temporarily, or end it entirely.
This latter goal in particular is almost certainly a forlorn hope. For one thing, Pyongyang knows full well that without a credible nuclear threat, it exposes itself to a potentially destabilizing American attack. For another, there is almost no chance that China would lend itself to a strategy that both raised the specter of American control of the entire Korean peninsula and flooded its territory with millions of unwanted North Korean refugees.
A clear beneficiary of this trend is Taiwan, which sees a strong strategic bond between Tokyo and Washington as a necessary counterweight to rising Chinese influence in the region.
Trump himself still seems to be in the clouds on this, which is clearly not a healthy situation. Fortunately however, the people actually running American foreign policy have a much more realistic take on things. These people are not, it should be pointed out, the Jared Kushners and Ivanka Trumps of this world, whose previous attempts to use American China policy to further their own commercial interests have now been unceremoniously cast aside. Rather, they are the much despised minions of the American “deep state,” who care deeply about continuing a robust American military presence in East Asia, and see China not so much as a commercial ally, but rather as a strategic competitor whose bid for regional hegemony must be resisted as a matter of political principle.
Probably the clearest indication of their power has been their ability to add new impetus to the U.S.-Japanese relationship, which at the end of the day is the best guarantor of continuing American hegemony in the western Pacific. Trump himself has clearly acquiesced to this development, cultivating his relationship with Japanese Prime Minister Shinzo Abe with special gusto — even if he may not be fully aware of the real significance of what he is doing.
A clear beneficiary of this trend is Taiwan, which sees a strong strategic bond between Tokyo and Washington as a necessary counterweight to rising Chinese influence in the region. It is the development of this bond that Taiwan and its friends should be most interested in, rather than the Trump-Xi bromance. Even if the U.S. insists on ceding ground to China in the commercial realm (please see below in the Economics section for more on this subject), its strategic intentions ultimately matter more.
Taiwan Engagement
Xi on Taiwan: No to Taiwanese Views, Yes to Unification Deadline
The Taiwan section of Chinese President Xi Jinping’s eagerly awaited work report to the recently concluded 19th Congress of the Chinese Communist Party contained few if any surprises, though it did appear to break some new ground in at least two important areas. To begin with Xi conspicuously dropped a reference from the three preceding congresses (in 2002, 2007 and 2012) that advocated using the Taiwanese people as a force to promote unification with China. At the same time he also made it clear that he expected unification to be completed by the time his much touted “national rejuvenation” project is meant to be accomplished — that is, by 2049. This appears to be the first instance of any Chinese leader putting a specific deadline on bringing Taiwan under communist control.
Xi’s decision to drop previous references to either using the Taiwanese people as a force to promote unification or alternatively, respecting the views of the Taiwanese people in addressing the unification project, is probably best understood within the context of prevailing Taiwanese political trends. Up until recently, Chinese authorities could reasonably make a case that their Taiwanese counterparts would eventually sign on to handing over control of Taiwan to Beijing on their own volition. Even during the independence-leaning administration of Taiwanese President Chen Shui-bian (2000-2008) the Chinese leadership firmly believed in the early return of the Nationalist Party to power in Taipei, and its eventual willingness to work out a deal on political integration with China. This optimism became particularly pronounced during the first term of Ma Ying-jeou (2008-2012), whose entire administration was predicated on developing ever closer economic and political bonds between Beijing and Taipei.
By Ma’s second term however, Beijing’s optimism was in full retreat, reflecting Ma’s inability to deliver on his China-friendly agenda, amid growing indications that Taiwanese public opinion was strongly opposed to ceding political sovereignty to China. The landslide electoral victory of Taiwanese President Tsai Ing-wen in 2016, and the loss of Nationalist control over the Taiwanese legislature constituted the final nail in the coffin for Beijing’s hopes that the Taiwanese people themselves would play an active role in promoting unification with the communists. On the contrary they made it clear to the Chinese leadership that at least in terms of Taiwanese political opinion, things were moving in a different direction entirely.
In addition to convincing Xi to drop the “Taiwan cooperation” reference from his report to the 19th CCP Congress, the growing Chinese realization that the vast majority of Taiwanese want nothing to do with China politically may also have prompted Xi to break with the recent past and put a final deadline on the Taiwan unification project. He did this by stating in his work report that completing national unification is a fixed requirement for bringing about the great rejuvenation of the Chinese people. As the deadline for this rejuvenation goal is the 100th anniversary of the founding of the People’s Republic of China in 2049, the obvious conclusion is that Taiwan must also be brought under Chinese control by this same date. Xi did not make this link explicit in his report, but particularly in combination with his 2013 statement on the political impossibility of delaying Taiwan unification indefinitely, few could have left the Congress hall thinking his meaning was different.
No Political Content to Xi-Soong Talk in Danang
Taiwan’s envoy to the Asia-Pacific Economic Cooperation summit in the central Vietnamese city of Danang said that politics did not come up during a brief interchange he had at the meeting with Xi Jinping, underscoring China’s continuing unwillingness to break the freeze on diplomatic exchanges it imposed on Taipei following Tsai Ing-wen’s accession to the Taiwanese presidency 18 months ago.
James Soong, head of the People’s First Party (PFP), characterized his exchange with Xi as “natural and friendly,” but added that now “isn’t the occasion for cross-Strait political talks.” His remarks ended any possible suspense there may have been on whether Xi would use the APEC meeting to change his mind on dealing with Taiwan.
China imposed its freeze on formal exchanges with Taiwan to protest President Tsai’s refusal to accept the “one China” principle,” which holds that Taiwan is part of Chinese territory. Ma Ying-jeou, her Nationalist Party predecessor, did accept “one China” (with different interpretations), and used it to promote his signature policy of trying to draw Taiwan and China ever closer both economically and politically.
James Soong, Taiwan’s envoy to the APEC summit in Danang, Vietnam, exchanges a few words with U.S. President Donald Trump.
Soong is well-known and generally well-liked in China. His Beijing visit in May of 2005 received intense media coverage, including the publication of a laudatory book on Soong’s career. Soong was born in Hunan Province in 1942 and is the scion of a Chinese Nationalist military family.
In addition to Xi, Soong also met briefly with Japanese Prime Minister Shinzo Abe, U.S. President Donald Trump and U.S. Secretary of State Rex Tillerson during the course of the APEC meetings. He declined to characterize the tenor of his exchanges with the two American leaders beyond describing them as “good.”
Economics and Trade
TPP Revived Even as Trump Preaches ‘America First’
Eleven Pacific Rim nations have taken a major step in resuscitating an anti-China trade pact, despite the continuing refusal of the United States to sign onto it.
Meeting on the margins of the Asia-Pacific Economic Cooperation (APEC) summit in Danang, Vietnam, in early November, leaders of the countries agreed on the core elements of the Trans-Pacific Partnership (it will now be called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership), which seeks to push back against rising Chinese political and economic influence in the region. While Canada in particular still needs to be reassured that implementation of the pact will not have negative implications for its agricultural and industrial sectors, it is probably on course for approval within a year. That would represent a major political achievement, particularly given President Donald Trump’s February announcement that the U.S. would not participate.
The TPP has a long and complicated history. It was the jewel in the crown of then President Barack Obama’s highly touted pivot to Asia, which was introduced in 2011 largely to underscore the U.S. commitment to aiding China-wary countries in the region. Japan in particular was looking for American assurance that it would not be hung out to dry amid fears of possible Chinese domination of the Pacific Rim. Other countries in the original grouping (aside from Canada and Japan) were Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Mexico, Chile and Peru.
While Taiwan was not a member of the original grouping, it continued to see itself as a future participant, both for reasons of commercial advantage, and in order to identify with the China-wary attitudes of its members.
In announcing the TPP’s provisional resuscitation, the pact’s backers insisted that the U.S. will still be welcome to join whenever it wishes to do so. For the time being however that seems a forlorn hope. In a major address at the Danang summit, President Trump once again expressed his fealty to the “America First” concept, which at least in the commercial sphere, is predicated on a profound distrust of multi-lateral trade deals. His remarks were in sharp contrast to those by Xi Jinping, who much as he has done over the past year reaffirmed China’s strong commitment to expanding global trade under Chinese leadership. Xi’s ambitious “One Belt One Road,” a 60-nation, multi-trillion dollar project, is his preferred vehicle for pursuing this goal.
TPP was first envisioned some 10 years ago. It proposes cutting tariffs on some 18,000 industrial and agricultural items and ushering in a new era of cooperation in the fields of workers’ rights, intellectual property rights and trade policies. Analyses of its impact on individual countries’ growth prospects have varied, but some estimates say it could add as much as one percent annually to the GDP of the countries involved. Critics have contended it could also undermine employment prospects in the U.S., but that contention has never been proven conclusively.
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