Toward the end of the twentieth century, Taiwan departed from the “colonial century” (the Japanese colonial rule and the Kuomintang émigré regime, successively) but immediately entered into a new phase of “integration” with China. This chapter analyzes how the “China factor” slid into the daily political scenes in Taiwan from the late 1980s and how Taiwan dealt with a rising, assertive and menacing China. Yet, as a sovereignty-contested democratic state, Taiwan successfully adapted with the restructuring of geopolitics in the East Asian region. Nonetheless, Taiwan’s economy has been gradually absorbed into the so-called “greater China circle.” The “cross-strait governance ﬁeld” has thus emerged in response to the asymmetric interdependence of the economic relationship between the two countries. The cross-Strait history of Taiwan and China is a reinvented one in the last two decades or so. As a matter of fact, the two countries, or two societies, had been mostly separated from each other for a century-long period (1895-late 1980s), except for a brief, transitional and chaotic episode of Kuomintang takeover (1945-49). The author calls this epoch the “colonial century.” The nearly entire century of separation was paralleled, in Taiwan, by a history of colonialism characterized by ravaging, predatory, and modernizing stories. The ﬁrst half of the colonial century is well known as the Japanese Era, while the second half, arguably, can be depicted as a quasi-colonial rule by the KMT émigré regime, which served as a client state of the US during the Cold War. This paper will take the end of the colonial century as a point of departure by bringing the China factor into the analysis of the island country’s development. It will begin by describing how China entered (or re-entered) the contemporary Taiwanese historical scenes under the geopolitical restructuring in the East Asian region from the 1980s. Then, it illustrates how Taiwan, its political society and civil society, tackles the China factor as a sovereignty-contested democratic state that is constantly under the shadow, if not horrifying military threat, of a rising China. In a nutshell, Taiwan and China interact with each other in a special inter-state relationship. Finally, it will deﬁne a ﬁeld of governance across the Taiwan Strait; this cross-Strait governance ﬁeld has emerged as a response to the peculiar relationship between the two countries.
Taiwan was ceded to Imperial Japan by the Qing Government in 1895, which started a century of modern colonial and post-colonial history on the island. After Japan was defeated in World War II, Taiwan was handed over, or “returned,” to the Kuomintang Government of China (Republic of China) in 1945. Four years later, the KMT was defeated by the Communists on the mainland and retreated to Taiwan with a huge group of military and civilian personnel, a ROC state apparatus, and numerous refugees. This wave of massive immigration (approximately totaling 1-1.5 million according to varying estimations) caused a daunting demographic and ecological pressure on the island, let alone the other social and cultural impacts. Under US military protection, the KMT regime used quasi-colonial policies to respond to the challenges. Actually, in the midst of Cold War military and ideological confrontation, Chiang Kai-Shek’s regime served as a client state within the American imperial system (cf. Mann 2003). Many have argued that Taiwan would have been in the hands of Communist China without the US’s military protection (since the outbreak of the Korean War 1950-53). During the high Cold War era, the ROC was a permanent member of the Security Council of the United Nations, whereas Communist China could not gain legal recognition of the major Western powers led by the US. Mao’s China claimed sovereignty on the “renegade province” of Taiwan but, in eﬀect, the ROC enjoyed autonomy in Taiwan, unaﬀected by China’s claim of sovereignty. Unexpectedly, the Cold War brought stability for the Taiwan Strait for almost half a century, a period which can be termed the “long peace” (cf. Gaddis 1987). Let us just set aside the troublesome concept of “Chinese” (Zhongguoren), and replace it with a somewhat neutral one of “Huaren” in this context-in the perspective of the greater Huaren World, Taiwan, as a Huaren country, has enjoyed a remarkably long period of peace and prosperity since the economic take-oﬀ of the 1960s, followed by a rather smooth (under international and historical comparisons) transitional period toward democratization. No doubt this achievement is worth careful analysis. However, this chapter does not aim at explaining the causes of the success during this long colonial century, but would take the end of it as my point of departure – the surfacing of the China factor, and its impact on Taiwan. What legacies has the long colonial history brought to the island country
on the eve of its path-breaking democratic change? First, the Japanese rule ushered in “colonial modernity” as heatedly debated in the literature. The colonial state’s capacity was greatly enhanced by its infrastructural construction and expansion. This modernizing momentum was interrupted by the defeat of Japan in World War II and the chaotic and predatory takeover by the KMT and subsequently the warlike regulation of the 1950s. Economic growth and social development have regained their dynamism since the 1960s, when Taiwan embarked on an export-oriented industrialization (EOI) with the spur and help of the US, which simultaneously began to open up its
domestic markets to the East Asian newly industrializing countries (NICs) (Gereﬃ andWyman 1990). On the eve of its democratic change in the late 1980s, Taiwan had established itself as a medium-income country with a fairly equitable income distribution. In short, Taiwan became a “model” of “dependent development” (Cardoso and Falletto 1979) and of an “authoritarian developmental state.” Second, Taiwan was a protected political community under the Pax Amer-
icana. Chiang’s regime was a client state of the US hegemony. The Cold War “froze” Taiwan’s international status and its relationship with the People’s Republic of China (PRC). In eﬀect, the US enjoyed a quasi “suzerainty” over Taiwan. In the 1970s, the ROC began to lose its international legal sovereignty when the major Western powers shifted their diplomatic recognition to Beijing (PRC) one after the other, which culminated in the US’s transfer of its legal recognition from Taipei to Beijing in 1978. Up until then, China was merely a specter haunting the Taiwan Strait, a mirror image of the ruling KMT’s ideology and propaganda imposed on the people of Taiwan. There was no real or imminent military threat from across the Strait. Henceforth, China began to loom large and its threat gradually became real. Nonetheless, Taiwan managed to remain a sovereign country in the deﬁnition of Westphalian sovereignty (cf. Stephen Krasner 1999, 2001). In large part, the support yielded by Washington was a pillar for Taiwan’s de facto independence (from China) and dependence (on the US). Third, a vivid civil society emerged during the 1970s. The social forces
rapidly developed due to the energetic civil economy under the EOI drive, and also under the limited liberalization policies permitted by the Chiang Ching-Kuo (CCK) rule (CCK succeeded his father’s power from the early 1970s). The crackdown of the Formosa Movement in 1979 did not deter the society from continuing to support the democratic cause. Moreover, spontaneous social protests erupted in the early 1980s, providing a sort of extended battleﬁeld to the repressed political dissidents and helping to open up a competitive political society in the mid 1980s (Wu 1990, 2002). Fourth, Taiwan rode the tide of “Third Wave” democratization during the
1980s (cf. Huntington 1991). The KMT was forced to open up its authoritarian regime in 1986 by acquiescing on the formation of a grassroots opposition party, Democratic Progressive Party (DPP); and its leader Chiang Ching-Kuo promised to lift martial law and allow new newspapers to exist over the next few years. Not long after, Taiwan launched its ﬁrst “founding election” in 1992 by re-electing the KMT-controlled “long parliament” of the Legislative Yuan.1 The citizens directly elected their president in 1996; and the opposition party DPP won the presidential election in 2000. The power transfer from KMT to DPP has eﬀectively ended the émigré-regime characteristics, a major breakaway from protracted colonialism. In essence, Taiwan has become the ﬁrst democratic country in the history of the Huaren World. Finally but no less importantly, the end of the Cold War initiated a new
phase of political instability for Taiwan, domestically and internationally.
China during the Cold War was contained by the US hegemony in East Asia. Beijing’s contention over Taiwan’s suzerainty was insigniﬁcant and ineﬀective. But the end of the Cold War thawed the once frozen cross-Strait relationship. Now Taiwan had to worry about its own international position. There was an imperative urge to seek a new identity in the global society. A more and more globalized international system brought in a jeopardy of pushing Taiwan to the periphery of international society, therefore constantly causing agony and trouble on Taiwan’s diplomatic and international organization frontiers. The island country was frequently agitated when dealing with the outside and thus forced to pursue and reconﬁrm its existence in the world-unless the country thoroughly gave up its hitherto established self-identity and surrendered its sovereignty to the PRC. But this is unthinkable for an ever-democratizing and deeply indigenized post-colonial society. Therefore, Taiwan had to negotiate with the world powers, including the US, its long-time protector, and Beijing, its would-be suzerain, for its own survival. No doubt there would have been frictions and conﬂicts whenever Taiwan was forced to defend its own interests or took the initiative in creating its living niches. Henceforth, Taiwan was depicted as a “trouble-maker,” “seeking a creeping independence,” and “rocking the boat.” Yet, few would think that it is the international pressures in conjunction with the domestic democratizing forces that have coerced the country to take action and to react. In other words, it is not that Taiwan was asking for trouble, but the post-Cold War globalized society forced it to do so (Wang 2008). The end of the colonial century in Taiwan coincided with the end of the
Cold War, the embarkation of a new democratic state, and the restructuring of geopolitical and economic order. This is the story I will tell in the next sections.
The cross-Strait trade relations took a great leap within 20 years. During the late 1980s, Taiwan just began to move its low-proﬁt, labor-intensive and environment-costly industries out to Southeast Asia and China. This industrial redeployment happened amid a geopolitical and ﬁnancial restructuring in the Asia-Paciﬁc region. The US had opened its domestic markets to Chinese goods; the Plaza Accord (1985) resulted in currency revaluation for Japan and consequently for Taiwan. It was within this international politicaleconomic context that China’s Southeast Coast-where cheap labor and factory lands were abundantly provided-became an attraction for Taiwan’s capital. The trade expansion across the Strait was primarily investment driven. In 1991, the earliest year that oﬃcial statistics were available, there was merely US $860 million direct investment from Taiwan into China according to the Chinese source, while the statistics according to the Taiwan government were an equally insigniﬁcant $170 million. However, Taiwan’s capital began to rush into China from the mid-1990s; it amounted to as much as $111.7 billion during 1991-2011 according to Taiwan’s Ministry of Economy (see Figure 13.1). The amount of cross-Strait trade (including the trade
volume with China and Hong Kong) was merely $21.6 billion dollars in 1991, accounting for 15.5 percent of Taiwan’s foreign trade. It had reached $176.5 billion in 2011, representing almost 30 percent of total trade; and, meanwhile, Taiwan enjoyed a large surplus in trade relations (see Figure 13.2). There has been a dramatic change of Taiwan’s position in the international
economy in terms of division of labor since the late 1980s. The rapid growth of cross-Strait investment and trade has also altered the prior trade patterns between Taiwan and the US and Japan, respectively. The US used to be Taiwan’s most important “trade partner” during the Cold War era but, in 2005, China had replaced the US as the number one export market for Taiwan. Furthermore, Taiwan became the ﬁfth largest export market for China in 2009. Now China has overtaken the US as Taiwan’s major “trade partner.” In this new division of labor, Taiwan exports a large amount of raw material and semi-manufactured goods to China, which are processed and assembled there by utilizing the cheap labor, and then re-exports them to the Western markets. Therefore, the trade surplus that Taiwan had enjoyed vis-à-vis the US has now been transferred to a new structure of China vis-à-vis the US. This new triangular trade pattern involving China has replaced the previous bilateral trade relationship between Taiwan and the US. China has also been beneﬁting enormously from this new trade pattern by courting Taiwan’s capital, learning its managing and manufacturing skills, and emulating its export-oriented