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Beijing's ominous new threat on Taiwan
By Macabe Keliher

SHENZHEN, China - Taiwanese investors on the southeast coast of China got a shock recently when officials from the Chinese Communist Party (CPP) showed up and delivered an ominous message that, this time, the threat of military action against Taiwan could be more than mere rhetoric. And this was not the only sign that a real shooting war may be in the offing.

The visit itself early last week was no surprise. The CCP officials came, just as they have during previous cross-Strait crises, to explain the internal party line to the country's most important investors. But the message this time had a decidedly different tone.

"We are willing to sacrifice the past 10 years of economic growth and development in order to reunite the motherland," a provincial official somberly told a senior manager at one of the south's largest Taiwanese-invested companies. "It was a chilling threat, one that made my hair stand on end," the manager recalled.

Such threats came in stark contrast to the ameliorating diplomacy conducted by the Taiwan Affairs Office (TAO) the last time Beijing warned Taipei about moving too far toward independence. It represents a shift from public military maneuvers directed at Taiwan accompanied by private conciliatory remarks for Taiwanese investors, to public messages of peace and stability accompanied by private warnings of war - a clear indication that Beijing's Taiwan strategy has evolved. Having witnessed the failure of a hostile public relations strategy, Beijing is now walking the path of a responsible power, gaining international support for its cause while reminding those who need reminding that it will use force. "More cunning but just as deadly," said the head of a branch of a Guangdong Taiwanese Investors Association.

Asia Times Online has previously noted that Beijing's cross-Strait strategy has changed in the past few years (see US-China-Taiwan: Missile diplomacy, December 12, 2002). While developments in China over the past few weeks concerning Taipei's plans for a referendum are consistent with evolving shifts in strategy, to see them played out on an international scale where the People's Liberation Army (PLA) and Taiwan policymakers appear to have an upper hand over the cool rationality of economic development presents a disturbing prospect not only for Taiwan but for peace in the region.

Things appeared to be different the last time TAO made the trip south. In the mid- to late-1990s, Taiwanese investors were left with a feeling of assurance and security even though the PLA was conducting invasion exercises near the Taiwan Strait. In an attempt to influence elections on Taiwan in 1996, and again in 1999, to show its displeasure with then-president Lee Tung-hui's remarks about "state-to-state relations", Beijing held military exercises off the coast, and in 1995-96 even launched missiles into Taiwan's shipping lanes. Although war appeared imminent, Taiwanese investors were assured it was not. Concerned about economic stability, TAO deputy director Chen Yunlin called on Taiwanese investors and associations to declare that "no matter what will happen across the Strait, all investment benefits of Taiwanese on the motherland will not be harmed".

This two-handed approach failed. If word did not get back to Taipei of the soothing speeches from TAO officials, then Beijing's bullying pushed voters further toward Taiwan independence. In 1996, Lee Tung-hui was elected president by overwhelming margins, and in 2000 Chen Shui-bian was elected president on a pro-independence ticket, as voters scoffed at Beijing's war rhetoric.

Since Chen's election, Beijing has kept military threats from the headlines and not conducted any of the "routine" military maneuvers off the coast. Many pundits expected strong words from the Chinese leadership over Chen's "one country on either side" statement last year and the passage of a referendum bill in Taipei this year, but instead got the soft-spoken Chinese Premier Wen Jiabao, who said, "We sincerely hope to see a peaceful settlement of the Taiwan question ... however, our endeavor for peace has time and again been challenged by the separatist forces in Taiwan."

Although the PLA let Luo Yuan, a senior colonel with the Chinese Academy of Military Sciences, remind the world about the likelihood of war ("If they refuse to come to their senses and continue to use referenda as an excuse to seek Taiwan independence, they will push Taiwan compatriots into the abyss of war"), Beijing has moved to garner support from the international community rather than upset it and Taiwanese voters by blaming Taipei for Beijing's need of a military option. Wen's visit to the United States, absent talk about the "fires of war" that his predecessor Zhu Rongji prophesied, won US support for China's cause, with President George W Bush granting the desired opposition to Taiwanese independence while referring to President Chen informally, as do the mainland Chinese, as "the leader of Taiwan".

All this has been well and good, giving the appearance of stability and Beijing's commitment to its growing role in the international community and comity of nations. But just as in years past, Beijing is playing a two-handed strategy. Behind-the-scenes preparations for war are being made.

Recent remarks from the PLA and party officials from Beijing to the provinces indicate that the CCP is preparing itself for the attainment of its political goals at the cost of its economy. Although cross-Strait economic integration has been viewed as a brake on Beijing's military adventures against Taiwan (see Two bulls, one China shop,  November 21), even those with the most to lose - local officials - are getting indoctrinated. "It is a sacrifice we are willing to make," the provincial official said when the senior manager raised the prospect of him taking his operations and tens of thousands of jobs back to Taiwan.

Such remarks are believed by sources in China to be a reflection of conditioning occurring within the party and are not just meant for consumption by Taiwanese investors. With Taipei veering further away from the path of unification, Beijing is viewing the possibility of military confrontation as very real (see China and Taiwan: Whose status quo?, December 16).

Military preparations are being made. While the 3 percent consumer inflation in recent months is being blamed on everything from US hostility to food shortages, rumors here say that the military is stocking up and readying the country for war. A personnel and accounting manager at a listed Taiwanese company in Guangdong has noticed petroleum shortages in the past month. "This is the first time in my 15 years of working in China that we have ever had fuel shortages," he said. "Our backup energy supply, which is usually maintained at around four to six weeks, has dwindled to seven days, and we can't get filled up more that that."

Food prices have also skyrocketed. In charge of feeding tens of thousands of workers, the manager said the price of cooking oil increased twice in October for a total rise of 26.5 percent. In fact, total price increases for staple cooking supplies rose 17.88 percent in October. "I have never seen price rises like this, not even during the 1996 floods," he said. Indeed, the last time China experienced serious inflation was when the Kuomintang (KMT) printed money and bought up supplies during the civil war.

Beijing is not printing money, to be sure, but the situation is eerie all the same, enough to keep anyone from speaking on record.

If Taiwan's referendum goes ahead as planned, and if Chen gets re-elected next year and presses for a new Taiwan constitution, Beijing will find cross-Strait relations in a state it believes inopportune. "Those [in Beijing] arguing for a tougher approach will have a strong argument," said Denny Roy, senior research fellow at the Asia-Pacific Center for Security Studies. And all the elements for war could be in place by that time.

(Copyright 2003 Asia Times Online Co, Ltd. All rights reserved. Please contact for information on our sales and syndication policies.)
Dec 18, 2003

Strait talk on foreign investment in China
(Dec 17, '03)


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