China keeps a close watch
By Adam Wolfe

Taiwan will hold legislative elections on Saturday that by all accounts will help to determine the island's policy toward mainland China. In campaigning for his Democratic Progressive Party (DPP), President Chen Shui-bian focused primarily on cross-strait relations with the mainland. His rhetoric was sometimes inflammatory and other times conciliatory, depending on which audience he was targeting at the time - but exactly how he will approach Beijing depends largely on Saturday's election results.

The elections come at an important time for the region, as they follow Jiang Zemin's departure from his last official post as China's chairman of the the Chinese Communist Party's Central Military Commission (CMC) in September. The resulting ascension of Chinese President Hu Jintao to full control of China's foreign policy, including the military, caused speculation that a softening of Beijing's Taiwan policy would follow. But any significant change is unlikely, as Hu remains focused on reform issues related to the domestic economy; Hu still faces bureaucratic battles with Jiang supporters over economic issues as well, and he is unlikely to open a new front in the bureaucratic power structure over Taiwan.

Nevertheless, should the pro-independence party, the Taiwan Solidarity Union (TSU), gain more seats for President Chen's coalition government, there is a distinct possibility that tensions in the Taiwan Strait could boil over - and it is not clear how either the Taipei or Beijing government would react to such an outcome.

President Chen used his October 10 National Day address to discuss resuming talks with Beijing based on a 1992 agreement that allowed each party to interpret the meaning of "one China" on its own terms. These talks broke down in 1999 after China rebuffed then-president Lee Teng-hui's definition of ties as "special state-to-state" relations. After Lee's redefinition raised the possibility of an independent Taiwan, China's then-president Jiang Zemin halted the talks. Chen's National Day speech is perhaps the most important speech the president has made in regard to the elections and cross-straight issues, because it demonstrates Chen's conflicting approach toward Beijing.

Even while calling for a new engagement with the mainland, Chen was careful to triangulate the issue in his speech by peppering it with references to the separateness of the island and saying "the sovereignty rests with the people". The tensions within his speech, between engaging Beijing and endorsing the sovereignty of the island, are the same tensions that exist within Chen's parliamentary coalition.

Chen's DPP party holds the largest number of seats in parliament, but the Nationalist Party (Kuomintang, or KMT) is able to control the majority through a coalition with the People First Party (PFP) - the pan-blue coalition (blue after the color of the KMT emblem). The pan-blues support an agenda that would engage mainland China and lead to eventual realignment. In order to push forward Chen's agenda, the DPP has formed a coalition with small independence parties, the TSU and the Taiwan Independence Party (TAIP) - the pan-green coalition (green after the color of the DPP emblem). The pan-green's holds 110 seats to the pan-blue's 113. The election is expected to be very close, but some polls indicate that the pan-greens may be able to gain a majority coalition based on the gains of TSU and TAIP. If this does happen, it would force Chen to adopt a more independence-focused agenda.

Until now, Chen largely has focused on symbolic issues to gain better standing with pro-independence voters, while taking a pragmatic approach to more substantive issues. In the parliamentary campaign, Chen pledged to replace "China" with "Taiwan" on the Taiwanese passport as well as the names of state-owned businesses (Taiwan's official name is the "Republic of China"), which would be seen as a declaration of independence by the mainland - and a potential cause for war. On cross-strait trade and travel issues, however, Chen was much less confrontational. He pushed for the resumption of direct flights between Taiwan and China by labeling them "special cross-strait routes" and avoided calling them domestic or international, something both parties may be able to accept.

What path Chen would pursue if the pan-greens secure a majority is not clear, especially if it results from gains by the TSU and TAIP. At the urging of TSU leaders, Chen has said he would like to rewrite the constitution, which was originally drafted in 1946 in China. But economic issues will most likely force him to maintain the current status quo. Recently, Standard & Poor's lowered its outlook for Taiwan's double A-minus credit rating from "stable" to "negative", citing political concerns surrounding the elections. Should pro-independence legislators gain a majority in Saturday's elections, Taiwan's business community will press hard for a more conciliatory approach to China.

On the other side of the strait, Beijing is hoping that the pan-blues can hold on to its majority, but a new position on Taiwan may be starting to take hold within the Communist Party.

Since Chen was first elected in 2000, Beijing has refused to accept the Taiwanese president as a serious interlocutor on cross-strait issues - China did not believe that Chen was politically able to pursue his independence agenda. In the presidential elections in April, Chen was declared the winner by the slimmest of margins and only after a court-ordered recount. The election also saw the defeat, due to a lack of a quorum, of a two-part referendum on increasing Taiwan's military spending and setting up a framework for direct talks with Beijing. This was seen by Beijing as evidence that it could maintain the status quo with Chen as president until 2008, because, in China's eyes, the population of Taiwan does not support his agenda with the mainland. However, if the pan-green coalition gains a majority in parliament, particularly if it is through TSU gains, Beijing will be forced to engage Chen on cross-strait issues.

The recent consolidation of power over the military by President Hu may also move China to shift tracks on its policy toward Taiwan. When Jiang Zemin stepped down at the annual meeting of the Central Committee of the Communist Party as the chairman of the CMC, Hu officially took full control of Beijing's Taiwan policy. Hu already held the positions of party chief and president, now his influence officially extends to the military.

There are many reasons to believe that Hu will pursue a less nationalistic foreign policy than Jiang, but there is little evidence that he will be the great reformer that many Western governments and businesses were hoping for. The consensus opinion on Hu's foreign policy is that it is less hawkish than that of Jiang's, but it is also the area about which Hu has been most tight-lipped. Hu has been willing to use his political clout on issues of domestic reform, in particular on confronting corruption within the party, but he has been less willing to confront the basic tenets of China's foreign and Taiwan policy.

When Hu has spoken publicly on foreign policy, it has appeared to differ from Jiang's positions. But as with most issues within China's government, it is not clear how much this rhetorical difference might translate into a difference of policy. Hu's policy framework for the economic and geopolitical rise of China was labeled the "peaceful rise" policy, a slogan that Jiang dismissed as being too soft because it undercut the threat of military force pointed at Taiwan. Recently, Hu has taken to calling his policy "peaceful development", but has not changed any of its core assertions. The dispute over the slogan has been the most public airing of any foreign policy differences between the two leaders, and can be seen as evidence that Hu will not deviate far from Jiang's Taiwan policy.

Some observers believe that Hu's silence on the Taiwan Strait issue helped push Beijing toward a more hawkish policy before Jiang's departure. With Jiang encouraging a more nationalistic dialogue, and Hu remaining quiet, party officials may have felt pressured to pursue policies more in line with Jiang's thinking - sometimes even positioning themselves to the right of Jiang out of fear of having their nationalistic credentials questioned.

It was widely expected that Jiang would resign at this year's meeting only after he was able to secure leadership roles for his allies. Although several members of the nine-party Standing Committee are Jiang loyalists, Hu was able to appoint his own candidate for vice chairman of the CMC, Xu Caihou. Xu was reported to be opposed to Jiang's resignation, but, according to sources in The New York Times, Zeng Qinghong was Jiang's favored candidate for the position. That Hu was able to place his own candidate in the vice chairmanship is a sign that his control of the military is firmer than many analysts had predicted. Some observers in Taiwan are hopeful that Hu will use cross-strait tensions as a means to further consolidate his power within the Chinese bureaucracy, but this seems unlikely as Hu is seeking to layout a revised vision of how the domestic economy should expand.

Should pro-independence legislators gain a majority in Taiwan's elections on Saturday, tensions will certainly rise in the Taiwan Strait. However, it seems likely that the tensions will be containable for the short term. Chen leaned toward a more pro-independence policy during the election, but he will likely pursue a pragmatic, business-oriented agenda after they are finished. The danger for China-Taiwan relations is that this election cycle may show evidence that demographic shifts in Taiwan are leading the country toward declaring independence.

Chen was elected in 2000 not because he supported an independence agenda, but because he was widely seen as a reformer. His DPP party has focused on economic issues while also defending the so-called "Taiwan Identity". However, in this election cycle Chen's coalition's gains are likely to come from candidates that are running mainly on an independence agenda. The elections could show that Taiwanese independence is gaining popularity in Taiwan - something neither the Taiwanese or the Chinese government seems prepared to deal with.

Published with permission of the Power and Interest News Report, an analysis-based publication that seeks to provide insight into various conflicts, regions and points of interest around the globe. All comments should be directed to content@pinr.com.