TAIPEI
The simultaneous rioting over Chinese-controlled Tibet and a presidentialelection in Chinese-claimed Taiwan may inadvertently have thrown a spotlight ona new era of international diplomacy--one tempered not by strategic balance orcompeting moral values, but by demands of the global supply chain.
Both Tibet and Taiwan have long been tipping points on which China threatens toabandon its nation-building focus on the economy and lash out regardless.
For the West, too, these have been deeply ideological problems: Tibet representsreligious and cultural oppression; Taiwan is evidence that a developing societycan move peacefully from dictatorship to democracy and thrive.
China's size, its economic clout and permanent seat on the UN Security Councilhave made Western governments more circumspect when championing both issues.Most recognize China's suzerainty, or de-facto sovereignty, over Tibet and mostrefuse to recognize Taiwan's de jure independence, thus blocking Taiwan's entryinto many international organizations, such as the United Nations.
Over the past decade, however, China's integration and growing influence withinthe global economy has given diplomacy and roads to peace or conflict a new,untested set of benchmarks.
A previous Tibetan uprising in March 1989 saw martial law and troops firing ondemonstrators, followed in June that year by the Tiananmen Square killings thatled to condemnation of China. Almost 20 years on, China's immediate nationalinterest lies in hosting a smooth Olympics in August. Despite widespreadabhorrence over how China controls its citizens, there's no appetite for awholesale Olympic boycott, while China argues that deployment of armored columnsin Tibet are no worse than the West's daily military digest in Iraq.
In 1996, Taiwan's first presidential election prompted China to carry outmilitary exercises on its eastern seaboard, prompting the US to send two carriergroups to patrol the Taiwan Straits. Twelve years on, in a diplomatic somersaultof sheer real-politik,
Washington sides with Beijing to rein in Taiwan's aspirations of internationalrecognition. The recent March 22 presidential election included a referendumcalling on Taiwan to apply to join the UN--a move that a decade ago would haveseen covers coming off China's coastal artillery batteries. Instead, China leftit to the US to warn off Taiwanese voters by describing the referendum as"provocative" and risking stability in East Asia.
The referendum failed. The opposition Kuomintang's Ma Ying-jeou won a resoundingvictory on policies favoring closer ties with China. The immediate upshot: a 4percent rise in the stock market and the Taiwanese currency reaching a 10-yearhigh against the US dollar.
After decades as a flashpoint for war, the Taiwan-China conflict is, in effect,no more. High-level conferences did not bring peace. Nor has one side batteredthe other into submission. Time, pragmatism and compromise produced a win-winformula that could serve as an example elsewhere--the Middle East, the Balkans,Tibet. It's already being replicated between the US and China.
China and Taiwan have each become so irreplaceable to the global supply chainthat the benefits of the status quo, coupled with increased living standards,far outweigh those of causing trouble.
The information-technology sector alone gives an idea of how easily aChina-Taiwan conflict could paralyze world consumer markets.
Between them, China and Taiwan control much of the computer internet market.According to J.C. Liao, chief executive officer of the hi-tech Taiwanesemultinational D-Link, more than 80 percent of personal computers, laptops,wireless routers and data cards rely on the two nations.
"Routers are about 85 percent of the global market," he says."Wireless LAN (Local Area Network) is about 90 percent. Ninety-five percent of our manufacturing is done in China, but the key design components comefrom Taiwan and the United States."
On a wider scale, economic links between China and Taiwan continue to grow. Morethan 50,000 Taiwanese companies operate in China. Taiwanese overall investmentthere is at least US$150 billion--with more from Taiwanese-owned offshorecompanies. China-Taiwan annual trade is more than US$100 billion dollars, andproducts of this alliance involve supply chains from dozens of other countries,from Israel to Brazil.
Add China's reliance on exports to the US along with its holding billions ofdollars of US debt, and the scenario of all this suddenly unraveling becomesunthinkable--conjuring up a Cold War comparison of a mutually assureddestruction through economic instead of nuclear strikes. The difference is thatbankers and economists, not generals, call the shots.
In recent years this economic reality has increasingly loomed over Chinese andUS policymaking, paving the way for a permanent peace. "Beijing made adecision in the summer of 2002 that the economic development of China was moreimportant than the unification of the motherland," explained Chong-Pin Lin,of the Foundation for International and Cross-Strait Studies. "And that wasinter-related to another principle of placing cooperation with Washington higherthan conflict with Washington."
China's latest anti-secession law, passed in 2005, includes more obstacles to across-straits conflict than before. While re-affirming its claim to Taiwan, thelegislation states that any military action must be approved not only by theCentral Military Commission, but also by the civilian State Council.
For its part, the US, since 2003, has taken the side of China whenever Taiwanmakes rumbling noises on the issue of independence. The US inconsistency on theissue of its global democratic mission and simultaneous warning to Taiwanesevoters not to upset the Chinese apple cart is another example of the changingparadigm. As the international affairs spokesman for Taiwan's defeatedDemocratic Progressive Party, Bi-Khim Hsiao, notes: "America is praisingthe people of Iraq for going to the polls yet at the same time condemning us forhaving a vote to express our desire to be part of the internationalcommunity."
Her argument about cherry-picking democratic credentials and sovereign rightsbecomes more poignant when taking into account US recognition of Kosovo'sindependence despite Russia's objection and US refusal to recognize the 2006election victory of the Islamic militant group Hamas.
The US could eliminate its inconsistencies by using the very model that itfostered--China-Taiwan supply-chain diplomacy--to motivate other conflict zonestowards peace.
One crucial marker is the link between economic performance and politicalmaturity. According to the Taiwan Institute of Economic Research, it was onlypossible to begin dismantling Taiwan's dictatorship in the mid-1980s when theper capita GDP had reached US$5,000. The institute's president, David S. Hong,suggests that China will not be ready for such a transformation until per capitaGDP reaches US$15,000, perhaps more than a generation from now. At present theGDP is about US$2,000 against Taiwan's US$17,000.
Both the Chinese government and Tibetan activists could learn from the Taiwanexample. At present, decades of Chinese investment and economic growth in Tibethave had scant effect on Tibetan subjects who cling to their culture andreligion even if that means less material improvement. China, too, remainsdetermined to preserve its control over Tibet no matter what the economic costmay be. It's a lose-lose situation.
Tibet is straddled between India and China, the two economic giants of the 21stcentury and perfectly placed to become an integral member of the global supplychain. For that to happen, though, Tibetan activists must stop attacking Chinesebusinesses. Chinese security forces must give space to Tibetan culture andexpression. Both sides could then begin to trust each other and work together tocreate a Taiwan-style success story instead of a lingering victim with an unjustpast.
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Humphrey Hawksley's reports from Taiwan can be seen on the BBC. His latestbook Security Breach is due out in August 2008. Rights: © 2008 YaleCenter for the Study of Globalization: YaleGlobalOnline
