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Sino-US Relations and the Taiwan Issue
Charles W. Freeman
April 23, 2004

Ambassador Chas W. Freeman, Jr., a renowned American expert on Chinese and diplomatic affairs, delivered a speech entitled "Sino-American Relations and the Taiwan Issue" at the meeting of U. S. - China Peoples Friendship Association held on April 22, 2004 in Washington, DC.

Following is the full text of Mr. Freeman's speech.

I have been asked to speak about cross-Strait relations. I do not think this subject can be addressed apart from the prospects for American friendship or enmity with it over the course of this century. Allow me to begin, then, with a few remarks about Sino-American relations in their global context. I will be as direct and brief as I can be.

As the century began, we Americans were still suffering from enemy deprivation syndrome -- the sick feeling of disorientation one feels when one has lost a powerful enemy and isn't quite sure how to justify continued high levels of defense spending. For a time, China seemed to be in line to fill in behind the late, unlamented USSR. But on September 11, 2001 America was cruelly assaulted by real, not imaginary enemies. Only the lunatic fringe and a few of its fellow travelers inside the Beltway now seek to appoint China as enemy-in-chief of the United States. The two countries have found an increasing range of issues to work together on, and the atmosphere of our relations has steadily improved.

Nevertheless there is something approaching an American consensus that the rise of China presents the most important long-term challenge to America's currently preeminent wealth and power. In this view, the kind of relationship the United States and China work out is likely to be the decisive factor affecting prospects for the century. I agree.

China is already emerging as the center of economic gravity in the Asia-Pacific region. China's East Asian neighbors, including Japan, are reorienting their economic policies to take advantage of this new reality. Increasingly, all supply chains tie the global economy to China. According to the WTO, the growth in China's foreign trade -- imports up 40 percent, exports up 35 percent --accounted for most of the growth in world trade last year. Nevertheless, China's growth is mainly driven by the size and dynamism of its domestic market. It has proven relatively immune to global economic cycles. Astonishing changes are occurring in China's place in the world. A few examples:

Last year, the United States produced about 90 million tons of steel; Japan about 100 million. In that same year, China produced 220 million tons of steel and imported another 37.5 million, overtaking the United States as the world's largest importer. By 2010, some projections suggest that China may be producing 500 million tons of steel, more than the entire world did in the year 2000. We may, in fact, now be entering an age of rising commodity costs, reversing the trends of the past hundred years, as Chinese demand for energy and raw materials pulls prices up.

China is also likely to become a major center of global technological innovation, as it joins Japan as a scientific and technological power. The United States graduates about 60,000 engineers each year; Japan 70,000. China is now graduating about 325,000 engineers annually. The marriage of Chinese genius to science and technology that is now occurring will enable China once again to become a major net contributor to global culture. The flow of technology between China and the world, including the United States, will increasingly be in both directions.

There will be many other ways in which China's return to wealth affects the world and the United States. Already Chinese tourists are a key clientele for Southeast Asia's tourist industry. Increasingly, one sees them in Europe. They would be here as well if we had sensible visa policies (but, of course, we don't). In the future, hundreds of millions of Chinese will have the money and the passports to venture abroad.

To deal with Japanese businessmen and tourists, Americans learned to prepare sushi and sashimi. Then we learned to eat seaweed-wrapped sticky rice and raw fish ourselves. What cultural transformations will our future interactions with Chinese bring about! Not, I trust, a passion for CantoPop, sea slugs or dog meat baozi. But you never know. Who would have predicted an American infatuation with pokemon, manga, or instant ramen?

I cite these things simply to suggest the extent to which China is becoming a force in the world. It is on its way to overtaking Japan as the preeminent economy in East Asia. Within a generation or a generation and a half, in fifteen, twenty, or twenty-five years (pick your economist), China's economy will be larger than ours. East Asia will then again be, as it was for most of recorded history, the dominant region in the global economy. Business activity by business activity, one can chart these trends. In economic terms, China is becoming a world power. There are now very few, if any, global economic problems that can be solved without the participation or acquiescence of China. Before long, there will essentially be none.

This is why the failure to include China in the G-7 (or G-8, as it is sometimes called) reduces the relevance of that gathering without addressing the problem of China's increasing connectedness to the issues it is discussing. Asia's prosperity is now inextricably linked to that of China. Without many remarking it, China's and America's economies are also becoming more interdependent. As our reliance on Japan and China to finance our mounting national debt illustrates, our prosperity increasingly depends on that of others. And China is playing an ever-larger role in this regard.

Americans are already concerned about the value of the Renminbi yuan in relation to the dollar. Given the extent to which the economies of the three parts of so-called "greater China - the China mainland, Hong Kong, and Taiwan - are now interconnected, linking their currencies in some form of monetary union would even now make economic sense. In time, political circumstances may permit this. But whether or not this happens, the size of the Chinese economy and its role in foreign trade means that, as the yuan becomes a hard currency, it is likely to join the euro and the yen as an alternative reserve currency to the dollar. We are destined to become far more interested in Chinese fiscal and monetary policies than we have been.

Of course, as the example of Japan in the last half of the past century reminds us, economic power does not necessarily equate to political influence. Without political reform, China cannot hope to match the international influence of the West, including its most prominent exemplar: the United States. No one now seeks to emulate the Chinese way of governance or to learn the political arts from China. Without political as well as economic modernization, China will continue to have severely limited attractive power, even in its own region, for a very long time to come. The prospects for such political reform are closely linked to the Taiwan issue and thus, at best, uncertain. The odds at present are that China's political influence will thus remain distinctly inferior to that of many other countries much smaller than it is.

China's capacity to overawe and coerce its neighbors militarily could, of course, be a different matter. As China's economy grows, Beijing will be able without strain to support an ever larger defense budget. In the first third of this century, China could emerge as the preeminent military power in Asia. As the century proceeds, if it chooses or is stimulated by others to do so, it could develop military capabilities that begin to rival those of the United States. There is a real risk that the United States and China could be drawn into a series of arms races as military balances shift to reflect China's growing military prowess.

But there is nothing inevitable about the choices China will make, just as there is nothing inevitable about conflict or rivalry with China as a rising power. The analogies that are sometimes drawn to the rise of Russia, Germany, Japan, and the United States do not ring true. China has articulated no ideologies of imperialism, colonialism, mercantilism, militarism, manifest destiny, territorial aggrandizement, or mission civilisatrice. It has instead, to the surprise of many, stressed the equality of nations, the inviolability of national sovereignty, and the supremacy of the United Nations Charter.

There has been no hint of a Chinese "Monroe Doctrine" for Asia; China has not sought to displace the United States or our forces from the region or to fill the vacuums our inattention has sometimes created. The Chinese did not take Hong Kong or Macao by force, though they could have. When they recovered these territories they were respectful of the status quo in them; they did not seek to impose their own system there, though they have been less hospitable to post-colonial democratic reforms than they should have been. Similarly, China has now settled all of its land borders with Russia, the newly independent Central Asian states, and Vietnam through negotiations in which it gave as much or more than it got. It says it is prepared to do the same for its maritime boundaries.

All the evidence to date suggests that China is not a new power seeking to stake out an unprecedented status for itself at the expense of the existing regional or international order. The Chinese are a nation returning to an historically preeminent role in Asia. They aspire to resume their traditional status as proud leaders of global civilization after a century and a half of eclipse. As Chinese do this, they are finally putting the trauma of their earlier weakness, impoverishment, and victimization by foreign powers behind them.

China is thus regaining a welcome measure of poise and self-confidence. Beijing's response to the Asian financial crisis of a few years ago, its recent skillful diplomacy in Korea, its proposals for a northeast Asian security dialogue, its embrace of non-proliferation policies paralleling our own, and its increasingly active role in UN peacekeeping operations all illustrate the return of China as an increasingly mature and responsible international actor. China is, like Japan, becoming a more normal country. It wants to be accepted as such.

All things being equal, China looks to be a force for global and regional stability, not a challenger of the current world order. With a bit of work by both sides, Sino-American relations should therefore be marked by much more cooperation than contention and China should be our friend, not our enemy. If that is so, the prospects for a century of expanded peace, prosperity, and democracy are good.

Unfortunately, all things do not now seem likely to be equal. There is a real possibility that, before the end of the decade, the United States may find ourselves at war with China over Taiwan.

Two Chinese revolutions in the last century, one in 1911 and one in 1949, were fired by the nation's will to erase the imprint of foreign imperialism on China's body and soul, eliminate foreign spheres of influence on Chinese territory, end the capacity of foreign powers to intervene in China's internal affairs, and restore China's national unity along with its wealth and power. As other ideologies have fallen away, the explosive underpinning of Chinese nationalism is all that is left. Taiwan's separation from the rest of China is a monument to all the humiliations both the Kuomintang and Communist revolutions were conceived to overcome. Reunification is a central imperative of the Chinese state.

Remarkably, given the centrality of the Taiwan issue to Chinese nationalism, skillful American diplomacy in the 1970s and '80s persuaded Beijing that Taiwan's status could, like the Hong Kong and Macao issues, be resolved by peaceful means, that is, by negotiation. But, as our friends in Taiwan never tire of pointing out, there are fundamental differences between the circumstances of those colonies and that of Taiwan, which is self-administering and under no foreign sovereignty. No foreign power can cut a deal with Beijing about Taiwan; that can only be done by the Taiwan authorities.

Those authorities were for long Chinese nationalists as committed as their communist rivals to the unity of China. The cross-Strait consensus that there was only one China enabled both sides to finesse sensitive issues like sovereignty while seeking practical means of mutual accommodation. This consensus enabled Beijing to accept the notion of two systems coexisting within one country. It led to proposals for talks about reunification that would guarantee rather than change Taiwan's political, economic, cultural, and military autonomy. These proposals implicitly addressed Japanese and American strategic interests by affirming that there would be no People's Liberation Army forces stationed in Taiwan, thus leaving the military balance in northeast Asia unaltered. China's position has not changed.

But, over the past few years, Taiwan's position has. The Taiwan authorities have repudiated the idea of one China. The current president, Mr. Chen Shui-bian asserts that the two sides of the Taiwan Strait are separate countries. He says that, since - in his view - Taiwan is already independent, independence is the status quo and there is no need to declare it. He has proposed an island-wide referendum on a new constitution that would, among other things, legally consolidate such independence.

The constitution now in force in Taiwan vests sovereignty in the people of China, who approved it in a nationwide vote in 1947. The new constitution would be created in 2006 by a sovereign act of the people of Taiwan without regard to the views of other Chinese. It would go into effect in 2008. By any legal standard, this would constitute an act of self-determination. Mr. Chen has offered to talk with Beijing in the meantime but only on terms that explicitly or implicitly reaffirm his view of Taiwan as an independent state.

The Bush Administration has cautioned Mr. Chen against any effort to change the one-China status quo in the Taiwan Strait by such unilateral acts. Mr. Chen has rejected this advice. Instead he denies that the status quo is one China and affirms that the United States, as a democracy, is bound to support the democratically expressed will of the people of Taiwan to enjoy their own separate state, regardless of the views of Chinese across the Strait.

But no nation achieves independence without the agreement of the country from which it is separating. Very often, as in our own case and many others, the grant of independence is gained only after years of bloodshed. More often still, as the examples of American Southerners, Basques, Biafrans, Kurds, Palestinians, Sri Lankan Tamils, Chechens, southern Sudanese, and others attest, despite great carnage and human suffering, attempts at separation fail. Rarely, as in the case of the Czech Republic and Slovakia, separation is peacefully agreed between the parties.

But the positions of both sides on the Taiwan question are now non-negotiable. Mr. Chen insists on independence and has declared a firm, unilateral timetable for making it final. Beijing is prepared to tolerate the current situation of de facto separation only if it will lead to negotiations that can produce cross-Strait agreement on some form of reunification. Neither is prepared to address the aspirations of the other, still less to accept them.

In response to the Taiwan authorities' statements and actions China has raised defense spending and greatly stepped up military preparations to prevent secession by Taiwan. The Chinese say that Mr. Chen's actions are leaving them no choice but to use force against the island. Coincidentally, their preparations to do so will be complete on more or less the same schedule that Mr. Chen has proposed for his referenda consolidating the island's self-proclaimed independence.

Mr. Chen says that Beijing is a paper tiger. As if to underscore this judgment, he has reduced rather than increased Taiwan's defense spending while delaying decisions on American recommendations for upgrading Taiwan's self-defense capabilities. Asked how he would defend Taiwan if, as many outside Taiwan fear, Beijing attacks the island in response to his unilateral actions, Mr. Chen expresses confidence that US forces would feel obliged by the Taiwan Relations Act and pro-Taiwan sentiment in Congress to come to Taiwan's defense. He and his followers seem certain that the result of a war between the United States and China would be an independent Taiwan.

Maybe so. But at what cost to the United States, China, and Taiwan itself? And why should Americans feel obliged to go to war with China to save Taiwan from the consequences of actions it is taking over our objections? With Taiwan's leaders apparently determined to risk a bloody rendezvous with Chinese nationalism, it is time to think and speak clearly about what a Sino-American war over Taiwan would mean.

In the 1950s, the United States several times threatened nuclear attack on China over crises related to the defense of Taiwan. We can no longer do so without risking nuclear counterattack by China. The good news, therefore, is that neither side is likely to risk a nuclear exchange over Taiwan.

But a US-China war over Taiwan would not be fought in a third country or by proxy, as was the case in Korea and Vietnam. In those wars, the United States scrupulously avoided attacking the Chinese homeland. But the defense of Taiwan would require counterattacking the bases and facilities on the Chinese mainland from which Taiwan was being attacked. China has long indicated that it would reply to attacks on its homeland with counterattacks in kind on the United States, including our homeland and our bases overseas. The danger that the conflict could rapidly escalate to the global level is real - all the more so because neither side has done anything to develop a strategy for escalation control and - as a result of reckless decisions in our Defense Department -there is now far less communication with the People's Liberation Army than there was with Soviet forces during the Cold War. There is, in fact, far less communication with the PLA that there was when war with China was not a possibility.

China regards Taiwan as part of China and the world, including the United States, acknowledges this Chinese position. In a fight with China over Taiwan, we would have few, if any, allies, though -- given our bases on its territory -- Japan would probably find it impossible not to support us.

Such a war would divide Asia and usher in a century dominated by global contention and mutual hostility between China and the United States. This could be even more dangerous and require vastly larger sacrifices of Americans than the Cold War did. China, unlike the Soviet Union, is unhampered by a dysfunctional ideology and economic system. It is unlikely to oblige us by collapsing. The issue between us is not Chinese behavior on the world scene or toward US allies. It is how the Chinese civil war should end.

China would, of course, be severely damaged by war with the United States. I believe that our armed forces could and would rapidly destroy most of China's navy and air force as well as its missile bases. Areas along the coast, where economic development is most advanced, might suffer especially heavy war damage. (I will not speculate about which parts of the United States are most likely to suffer Chinese retaliatory strikes.) An enormous effort would be required to rebuild China's industrial infrastructure and armed forces after the fighting ended.

If China had not succeeded in taking Taiwan, Chinese nationalism would compel it to prepare to try again. The war would thus continue on an intermittent basis until one side or the other gave up. Every aspect of China's modernization would be seriously set back. The country's opening to the outside world would be blighted and the political loosening of recent years replaced with the stringencies of martial law. The position of Chinese minorities abroad, especially in the United States, could become very uncomfortable.

But Taiwan would be the main battleground in any such war. Even if there were only one round of warfare, the island would, in all likelihood, emerge with its infrastructure devastated, its prosperity destroyed, and its democracy traumatized, if not suspended. If the result of the fighting were to incorporate Taiwan into China, the PLA would find itself pacifying a sullenly hostile populace. Neither domestic nor foreign investors would want to help the Chinese occupation. China would not gain much of an economic prize if it took Taiwan by force.

If the result were Taiwan's continued de facto separation from China, the Taiwan authorities would face the constant threat of renewed Chinese attack. Few investors would wish to risk their money on an island under the Chinese gun. As China reconstituted its armed forces for another try at subduing the island, Taiwan's lamed economy might be unable to afford the weaponry necessary to defend itself. Taiwan might once again, as it did in the 1950s, have to rely on US subsidies to survive. Meanwhile, US and Chinese forces would continue to face off over the island.

The fact is that no one can "win" a war over Taiwan. All will lose. Therefore we must make sure that we avoid such a war. Chinese nationalists will, of course, respond that the obvious way to avoid war is for Taiwan to abandon its dreams of independence. Taiwanese separatists will argue that Chinese across the Strait simply need to respect Taiwan's right of self-determination. Each will find many supporters for its view in the United States but few on the other side of the Taiwan Strait.

In the short term such contradictions are irreconcilable. But so long as neither side actually does anything to challenge the other, there need be no war. And, with the passage of time and the growth of mutual understanding and goodwill, mutually acceptable compromises may emerge. That is especially the case, given the speed of change in China, much of it catalyzed by cross-Strait interaction and the attractiveness of Taiwan's politico-economic model. Given time, differences between the two sides that are problems now may well blur and fade away. Gaining time for such convergence is a worthy objective in itself.

It has long been in the American interest - as well as that of the parties and the world - for this issue to be resolved peacefully, by mutual agreement, through negotiations, not unilaterally and not through war. Beijing knows that we are serious about this and has so far acted with appropriate caution. Taipei, however, now clearly needs to be convinced that if it acts on its own, it may well end up on its own. In short, Beijing needs to continue to avoid acting rashly but Taipei needs to stop doing so. As for Americans, we should explicitly reserve the right not to go to war with China to save Taiwanese from the consequences of their acting against US interests and advice. We should not entrust decisions about war and peace with China to the Taiwan authorities. Such decisions are rightly for us alone to make.

Beijing is currently under mounting domestic pressure to show Taipei that it can bite as well as growl. Mr. Chen's dismissal of the risks he has been taking and his disregard of the consequences for Americans of his provocative behavior vis-a-vis China have alarmed the Bush Administration. Neither China nor the United States wants to be forced into another confrontation, still less a war over Taiwan. The obvious answer is for the United States and China to sit down together and figure out how to deter Taipei from provoking such confrontation and how to avoid creating it on our own. But our dialogue about Taiwan is basically a dialogue of the deaf that never reaches the operative issues.

It is in our interest to convince Taipei that it is both playing with fire and becoming dangerously distant from its sole protector, the United States. It is not in our interest for Beijing to accomplish this for us by upping the military threat to Taiwan or taking a bite out of the island. The Bush Administration, as recently as yesterday, has spoken out ever more bluntly in an effort to instill realism into Taipei and to deter it from taking steps that will provoke such unilateral action by Beijing. Mr. Chen has not only brushed these warnings aside, he has ensured that his partisan press ignores and distorts the Administration's message so that it is never heard or read by his followers. It is becoming clear that words alone may not be enough to convince the Taiwan authorities not to jeopardize the island's future and our own; punitive actions may be required.

Deterring Beijing from its own unilateral actions is also very much in our interest. Here we confront a subtle problem. China's leaders understand very clearly what the consequences of war with the United States would be. They absolutely do not want such a war. But they have come to believe that Washington is opposed to any form of reassociation of Taiwan with the Chinese mainland, even a negotiated one. Like many people in Taiwan, they judge that the secret purpose of U.S. policy is to help Taiwan become independent and that we will, if necessary, fight China to accomplish this. But China's national honor requires some form of end to the division of the Chinese nation, even if only symbolically. If accomplishing this will inevitably entail war with the United States, even if China uses peaceful means, then the only choice before China's leaders is when, not whether, to risk such war and China has little, if any, incentive to act responsibly.

For all these reasons, it is time for us to state clearly that:

we regard the juridical status quo in the Taiwan Strait as "one China" and do not accept that that status quo is independence; that:

we favor negotiations between the two sides within the context of "one China;" that:

we will accept any change in the status quo that both sides accept but, conversely, will not accept any change that is not agreed by both sides; that:

we will not recognize an independent Taiwan that has not been recognized by Beijing, nor we will recognize any form of reunification that has not been endorsed by the people of Taiwan; and that:

we will implement our obligations under the Taiwan Relations Act and the three US-China joint communiques and carry out our relations with both sides of the Strait in a manner consistent with these principles.

This is not that far from what the Administration stated yesterday in testimony before Congress. If the Taiwan authorities do not get the message or allow it to get through to ordinary people on the island, the Administration will - in my opinion - be left with no alternative but to consider appropriate downgrading of selected aspects of American relationships with Taiwan, including our defense and arms sales relationships, as a way of convincing both Taipei and Beijing of our seriousness about managing this issue to avoid war.

Perhaps, given the strength of pro-Taiwan and anti-China sentiment in the United States and the power of the Taiwan lobby in the US Congress, such a return to a balanced policy focused on the maintenance of peace in the Taiwan Strait rather than other agendas is politically impossible. If that is the case, then we must accept that the management of the Taiwan problem to avoid war with China may also be impossible. I, for one, cannot accept that conclusion. The consequences for us and for the world are much too great.

Conversely, successful management of the Taiwan problem is the key to a sound US-China relationship. And the door that key can open is one that leads to a better century than the last one for all concerned, including Taiwan. That is the key we should be looking for and the door we should strive to open.

Among other things, a People's Republic of China that has found a way to reassociate itself peacefully with the democratic Chinese society on Taiwan is a China that is likely to be much more congenial to both our values and our interests. That kind of China is one we can work with to promote the common prosperity and peaceful international environment both Americans and Chinese long for in the century to come. That kind of China is one that will certainly be a friend, not an enemy of the United States.