Asia Times: China


	May 25, 2002	atimes.com

China

Suddenly, 'one China' takes back seat to Big Business
By Laurence Eyton

TAIPEI - Three weeks ago the chances of any significant change in the standoff between Taiwan and China over lifting the ban on direct trade, transportation and communication links between the two seemed remote.

China's government would not talk to Taiwan until it acknowledged the "one China" principle, and Taiwan was not prepared to do that, if only because Beijing's strictest interpretation of the "one China" principle means a complete surrender of sovereignty by Taiwan, something that it will not do voluntarily. With the two governments not talking to each other it was hard to see how the mechanisms of cross-strait links were to be set up.

Then, two weeks ago, Taiwan's President Chen Shui-bian told reporters that the island's air agreement with Hong Kong might be a model for negotiations on opening direct links.

The agreement is negotiated not between the governments of Taiwan and the Special Autonomous Region but between associations of airlines set up by the carriers of both sides, Dragon Airlines and Cathay Pacific for Hong Kong and China Airlines and EVA Air for Taiwan.

While at first Taiwan's Mainland Affairs Council (MAC), the island's top China policy maker, tried to downplay the president's remarks, saying that private or commercial organizations would have an advisory role only, it now looks as if the president has asserted himself and the MAC is singing a very different tune.

China's reaction so far has been mischievous rather than helpful, but the fact that it has even taken notice of the shift in Taiwan's position augers well.

At first Beijing officials gave their standard mantra-like response about "one China". But on Tuesday this week, in an interview later published in official newspapers, Chen Yunlin, director of the Chinese cabinet's Taiwan Affairs Office, said that he was willing to discuss the direct links issue with two representatives from Taiwan's private sector, Wang Yung-ching, the chairman of Formosa Plastics Group, Taiwan's biggest private business conglomerate, and Kao Ching-yen, CEO of foodstuffs giant Uni-President Enterprises Corp.

Wang and Kao's companies are probably the most heavily invested Taiwan companies in China today. But it is not merely the size of their investments, however, that makes Kao and Wang acceptable to Beijing. It is also their line on the political issue of reunification with China.

Kao is a hardline senior member of the reunificationist Kuomintang (KMT) party, as well as a former head of the Chinese National Federation of Industries. Wang has steadily gravitated toward the reunificationist camp as his interests in China have mushroomed.

In the past five years Wang - known in Taiwan as the "god of management" for his entrepreneurial ability - has become one of the most bitter and powerful critics of the direct links ban. In May last year he pulled out of funding the Taiwan Daily News, a newspaper he founded in 1996; it is widely believed this was a concession to China because of the newspaper's pro-independence sympathies.

Wang's desire for massive investment in China has been a thorn in the side of Taiwan's government for almost a decade. In the early 1990s he was forced to abandon plans to build a multi-billion dollar petrochemical complex in Haicang in Fujian Province by Taiwan's government. In the later '90s he went ahead in the teeth of Taipei's opposition with an investment in a US$3.2 billion power plant in Zhangzhou, also in Fujian, while also breaking the Haicang project into smaller elements and dispersing construction around the country.

Wang's latest venture in China is hospital care. Already operating a string of Chang Geng private hospitals in Taiwan, widely regarded as among the best in the country, Wang wants to break into China's healthcare sector.

It is hard to believe that either Wang or Kao will, in the end, be trusted to act on behalf of Taiwan in any negotiations. Kao is simply too close to the political opposition - he is a member of the KMT's Central Standing Committee - while Wang is considered too suspect in his loyalties, being commonly perceived as putting his company a long way first and the national interest a distant afterthought.

Perhaps more importantly, Wang, through his opposition to the government's direct links ban, has incurred the displeasure of ex-president Lee Teng-hui. Lee's Taiwan Solidarity Union party is an important ally of the government in the legislature where the ruling Democratic Progressive Party (DPP) lacks a majority, and Lee's displeasure is something the government has shown itself unwilling to risk.

Nevertheless, Taiwan's reaction to China's was cautious, trying to walk a fine line between saying that Beijing's suggestion was preposterous and yet not slamming the door shut so hard that it might not get opened again. Taiwan's obvious problem with Beijing's suggestion is just that: that Beijing should have the effrontery to name with whom it will deal.

"The mainland is not really interested in talking. The overtures are tactical," Shi Hwei-yow, secretary-general of the Straits Exchange Foundation, which handles the island's semi-official ties with China, told Reuters. "The mainland can choose its envoys. We are perfectly capable of choosing our own. They should show mutual respect."

Shi, however, is hardly a disinterested party. His organization exists as a "private" intermediary between Taipei and Beijing, along with its Chinese counterpart, the Association for Relation Across the Taiwan Strait, and the vehemence of his reaction has been dismissed by some editorialists as that of a man having to defend his turf; after all, if private individuals or groups can negotiate on Taiwan's behalf, what role will Shi's organization serve?

More nuanced was the reaction of MAC head Tsai Ing-wen who, while also stressing that who represented Taiwan was very much Taipei's choice, said that it was possible that Kao and Wang, as senior captains of industry, might nevertheless lead non-governmental organizations tasked with opening talks on direct links.

The government would vastly prefer business leaders closer to it to play a leading role. Obvious choices would be Liu Tai-ying, chairman of China Development Financial Holding Corp, a leading financier, and Chang Jung-fa, chairman of the Evergreen group, which comprises EVA Air and the enormous Evergreen Marine.

Chang would make perhaps the prefect compromise candidate, not only because transportation is the very core of his business, but also because he is very close to President Chen Shui-bian - a retainer from Evergreen helped former maritime lawyer Chen through is lean years as an opposition firebrand - while also having become a noisy advocate of opening direct links and distancing himself, like his erstwhile lawyer, from a former pro-Taiwan independence stance.

The main value of China's response this week has, however, been to push Taiwan into thinking some more about just how President Chen's suggestion might come about, rather than letting it languish as a good idea never capitalized upon.

The MAC's Tsai, for example, on Thursday, described four key factors which she said would be used to select groups, and probably, though Tsai did not specifically say this, the members of those groups, to represent Taiwan in negotiations on direct links. These were "credibility, reliability, professionalism and experience".

These sound anodyne enough but they are, in effect, codewords for what the government will or will not tolerate.

"Credibility", for example, means that a group must be truly representative of the industry or sector it represents: small fry, or a group distorted by an obvious political leaning - many business groups in Taiwan are little more than fronts for KMT-affiliated cronies - will not have such credibility.

"Reliability" means keeping the national interest in mind during negotiations, something which, in the public eye at least, would fail Wang Yung-ching as leader of a delegation.

"Professionalism" is another codeword for remembering the limits of a brief, ie, the negotiating group should bear in mind the limits of its power and that in the end it is its MAC "advisers" and through them the cabinet itself, which will have final approval of any deal hammered out.

"Experience" suggests the government prefers to go through groups that already exist if it can. Such a group in the issue of direct air links, for example, would be the Taiwan Airlines Association, which has already negotiated air links with Hong Kong and Macau.

Already business leaders like Liu Tai-ying are jockeying for senior positions on any team that is assembled. More importantly, talking shops are being formed to pool knowledge on how to thrash out a deal, or rather deals, since there are a large number of different issues involved and certainly more than one negotiating team.

The private sector now has the bit firmly between its teeth, which in Taiwan usually means that change cannot be far away. As Chung Hsiao-chang, a businessman with extensive China connections said: "It took the government 50 years to negotiate an agreement with the communists just on registered mail. In that time we built this country from nothing, and large parts of several others. Let us solve this problem."

Even the relatively conservative MAC is talking of direct transportation links by 2004. Though there might be many a slip between the best of intentions and a done deal, a month ago such optimism was barely to be imagined.

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