If Taiwan Chooses Unification, Should the United States Care?

If Taiwan chooses unification with China, are U.S. interests jeopardized? Until now, U.S. policy has assumed that unification would occur only through forcible action on Beijing's part. U.S. officials, not anticipating a day when peaceful negotiations could bridge the huge gulf between the two parties, have not planned for that possibility. Confronted with the danger that cross-strait antagonism could burst into war, U.S. diplomats, statesmen, and scholars have been the loudest and most consistent supporters of dialogue across the Taiwan Strait, asserting that, as long as the process is peaceful, Washington is indifferent to the outcome.

Yet, conditions across the strait have been changing. A growing tide of Taiwan investment in China has raised questions about its political consequences, suggesting that some version of unification actually could materialize—not immediately, but not too far off either. For Washington, this development would mean an entirely new array of economic, political, and strategic forces in East Asia, as Taiwan and China, as well as Japan, adjust to a different reality. The agnosticism of U.S. policy has been in large part a result of not examining a future that appeared infinitely remote. Now that circumstances are changing, can Washington's detachment be sustained? Should it?

What Has Changed in Taiwan

Developments in Taiwan during the last decade have produced radically contradictory impulses that are pulling Taiwan and China apart at the same time as they are being drawn irresistibly together. How this dilemma will be resolved—whether through the prolongation of an uneasy and fluid status quo, a creative compromise, or capitulation to one set of priorities—worries those with interests in the island's future.

The surging level of Taiwan investment in China is the single most compelling sign that unification might occur without war. This "mainland fever" threatens to drain the island of capital and jobs while making Taiwan's prosperity contingent on the political relationship between Beijing and Taipei. As Taiwan businesspeople become increasingly committed to their mainland operations, they exert pressure on Taiwan's government to facilitate their ventures. This means calls for loosening financial restrictions; expediting the three links of direct transportation, communication, and trade; or even agitating for unification with China on China's terms.

The economic ties between China and Taiwan have been strengthening for more than a decade, but recently have multiplied and deepened. According to Taiwan's Ministry of Economic Affairs, more than three-quarters of Taiwan's companies have an investment on the mainland, reaching some $60 billion in more than 50,000 ventures. Taiwan increasingly exploits mainland factories to supply both China's domestic market and Taiwan's international customers. ¹

Beijing hopes the lure of China's great economic expansion will be an irresistible magnet for repossessing Taiwan. One exuberant mainland official interviewed in early 2002 declared, "Our economy is our best weapon. We won't attack them. We will buy them. It's very Chinese." ² Indeed, in 2001, with the U.S. economy weak, Japan mired in long-term stagnation, and only modest domestic reform, Taiwan's economy contracted for the first time in 50 years. Yet, even as the United States and the world recover from recession, opportunities in China will remain enticing.

In fact, Taiwan president Chen Shui-bian's administration convened an Economic Development Advisory Council in late August 2001 to propose ways to reinvigorate internal development and exploit cross-strait contacts. Chen also jettisoned the "go slow, be patient" policy designed to limit Taiwan's exposure to China and avoid strengthening the enemy. Beginning last November, businesses have been urged to pursue "active opening, effective management" across the strait, even if the result is taking more money and jobs to the mainland. Tsai Ing-wen, chairwoman of the Mainland Affairs Council, observed, "Mainland investment should be an integral part of our global expansion plan." This approach requires Taiwan to keep ahead of [End Page...