China's Dilemma: The Taiwan Issue

4. China's US Policy: To Avoid a Head-on Collision

61 China’s U.S. Policy: To Avoid a Head-on Collision© 2001 Institute of Southeast Asian Studies, Singapore 4 China’s U.S. Policy: To Avoid a Head-on Collision Taiwan in China’s Overall Development Strategy To understand why Beijing felt so slighted by Lee Teng-hui’s United States visit in 1995, we should first of all examine the importance of the Taiwan issue in China’s overall development strategy. In my view, China’s basic overall development strategy since 1978 has been to build a booming coastal economy in the south first, i.e. Shenzhen, Xiamen and other special economic zones in the south. This southern coastal economy would be positioned to obtain foreign capital and high-technology from the world market, while at the same time its influence would extend inward to other coastal regions in the north as well as middle and far-flung regions to bring about a nation-wide, mutually supplementary and wave-like economic development. The purpose of this would be to build strong, comprehensive and well co-ordinated industrial, scientific and agricultural bases for China’s sustained development into the next century. In order to extend outward, China needs a strong “small triangle” made up of the southern coastal economy as well as Hong Kong and Taiwan. Developments in Hong Kong and Taiwan will make or break China’s future development. Initially they will serve as two pillars in the “small triangle”. And, post-reunification, they will form a bigger “nucleus” which will greatly boost China’s economy and status in the world. In a talk on 23 October 1993, Chinese President Jiang Zemin called for the reunification of Taiwan’s economy and the mainland’s “solid industrial technologies”, saying that if Taiwan joined hands with the P.R.C., “none in the world could bully us”.1 By the end of 1995, the combined foreign currency savings of Taiwan, China and Hong Kong topped US$210 billion, overtaking Japan as the largest.2 The combined amount of foreign trade registered by Taiwan, Hong Kong and China in 1996 totalled US$890 billion, coming in third after ISEAS D OCUMENT DELIVER Y SERVICE . No reproduction without permission of the publisher: Institute of Southeast Asian Studies, 30 Heng Mui Keng Terrace, SINGAPORE 119614. FAX: (65)7756259; TEL: (65) 8702447; E-MAIL: publish@iseas.edu.sg 62 Part II: China vs. the United States over Taiwan© 2001 Institute of Southeast Asian Studies, Singapore the United States and Germany, with aggregate exports and imports reaching US$450 billion and US$440 billion respectively, both at the third-highest levels.3 Since the late 1970s, China has been trying to tap fully Hong Kong and Taiwan’s resources for its economic modernization. According to official Chinese sources, by 1995, the investment by businessmen from Hong Kong, Taiwan and Macao comprised about 70 per cent of total foreign investment in China,4 with much going unreported. Hong Kong and Taiwan are viewed as two the “feet” of the “China bird” which will allow it to take off (China’s geographical shape resembles a bird). China does not want to see its modernization “hopping” along on only one foot ( Hong Kong): it wants the use of both feet. China’s deep suspicions of the U.S. Taiwan policy stem from its belief that this policy aims to prevent the “China bird” from flying high by holding one of its feet. Similarly the last British Governor of Hong Kong, Chris Patten’s political reform there was perceived by Beijing as an attempt to hold down its other foot in order to sabotage China’s rise. The Chinese Reading of U.S. Motivation Given Taiwan’s strategic importance and the deep suspicion that exists between Beijing and Washington, many Chinese do not believe the decision to grant a U.S. visa to Lee was a misstep by the U.S. administration under congressional pressure. Rather, they see it as a reflection of a broader U.S. strategy to contain China after the Cold War. Since the early 1990s, the United States has allowed visits by the Dalai Lama and Taiwan’s president, upgraded its relations with Taiwan, mended relations with Vietnam and stiffened the resolve of some Southeast Asian countries in their dispute with China over the Spratly islands. It has roared like a lion over human rights violations in China, but squeaked like a mouse about Russian attacks on Chechnya and human rights violations by some its...