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Analysts expect the cross-Strait relationship to witness rising political and economic tension under the administration of Taiwan’s new leader, Tsai Ing-wen

By Yu Xiaodong Updated Aug.22

Last November marked a historic moment in the cross-Strait relationship: The top leaders of the Chinese mainland and Taiwan met for the first time. While Chinese President Xi Jinping and outgoing Taiwanese leader Ma Ying-jeou met in a neutral place (Singapore) and addressed each other by a neutral title (“mister”), their talks still signified a great step for the two parties’ relationship. 
 
When Ma and the Nationalist Party (KMT) led the island from 2008-2016, Taipei-Beijing ties greatly improved. But after the Democratic Progressive Party’s (DPP) Tsai Ing-wen was elected to Taiwan’s top post last year, regional and international observers grew concerned that cross-Strait relations would soon retrogress. 
 
‘Incomplete Answer’
In the run-up to Tsai’s May 20 inauguration, observers focused on her stance regarding the cross-Strait relationship. Concerned over the DPP’s pro-independence position, Beijing has repeatedly stressed that the “One China” principle embedded in the so-called 1992 Consensus is the political foundation of the cross-Strait relationship, and the failure to endorse said principle would lead to serious consequences. The 1992 Consensus refers to the outcome of a bilateral meeting which suggested that there is only one China, but that concept’s exact definition is left ambiguous, allowing both the Chinese mainland and Taiwan to interpret it individually.  
  
During her inauguration speech, Tsai maintained an evasive stance on the issue. Instead of explicitly endorsing the 1992 Consensus, Tsai said she respected the “historical fact” that the 1992 talks occurred between the two sides, and that there were “various joint acknowledgments and understandings” made at the time. Tsai also said she would conduct cross-Strait affairs in accordance with the Constitution of the Republic of China (ROC), the Act Governing Relations Between the People of Taiwan Area and the Mainland Area, and other relevant legislation, without elaborating further.  
  
The Chinese mainland’s Taiwan Affairs Office (TAO) called Tsai’s comments “an incomplete test answer.” The English-language version of the TAO’s statement said: “Only affirmation of the political foundation that embodies the one China principle can ensure continued and institutionalized exchanges between the two sides of the Taiwan Straits.” Many interpreted this as an indication that communication was effectively shut down once Tsai assumed power.  
  
Indeed, it is reported that the mainland’s Association for Relations Across the Taiwan Strait has not connected with Taiwan’s Straits Exchange Foundation since Tsai’s inauguration. Exchanges between the two semi-official institutions are the major form of communication between the two sides, as an official bilateral relationship has not been established.  
  
Many in Taiwan believe Beijing should be content with Tsai’s endorsement of the ROC’s constitution and the Act Governing Relations Between the People of Taiwan Area and the Mainland Area, both of which affirm that Taiwan and the Chinese mainland belong to one country – the Republic of China. However, Beijing demands that Tsai explicitly endorse the One China doctrine. It is questioning the true intentions behind the new leader’s vagueness based on past events.  
  
Back in 2000, when the DPP’s Chen Shuibian gave his inaugural speech upon assuming power, he promised not to include “twostate” doctrine, not to call a referendum that could change the status of the island or its title, and not to abolish the National Unification Council and the Guidelines for National Unification, both of which were meant to facilitate the island’s eventual reunification with the mainland.  
  
But Chen soon started to push forward his pro-independence agenda, launching so-called “de-Sinicization” policies in a variety of fields. Not only did Chen dissolve the council and its guidelines, but he also led the development of a new Taiwan-centric version of the island’s high school history textbook, which many on the mainland believe spurred the pro-independence sentiment among today’s Taiwanese youth. During his re-election campaign in 2003-2004, Chen even proposed writing a new constitution and hinted that it would lead to Taiwanese independence, although he softened this language after his second inaugural address.  
  
Now Beijing views Tsai with suspicion. She authored the so-called “two-state” doctrine under the administration of Lee Teng-hui, a pro-Japan and pro-independence KMT politician who held the island’s top leadership position from 1988 to 2000. In some aspects, Tsai appears even more daring than Chen.
Bolder Moves
Tsai’s first decisions as Taiwan’s leader reflect her overall policy regarding the cross- Strait relationship, analysts said. On her administration’s first official day on the job, it announced it would drop the charges against 126 of the people who occupied Taiwan’s legislative chamber during a 2014 protest against a trade pact signed between semigovernmental bodies in Taipei and Beijing.    
    
Also on May 23, Tsai confirmed the appointment of the island’s new representative to the US, for whom she used the title “ambassador” rather than “representative,” suggesting that Taiwan is recognized by the US as a sovereign state, although the US side continues to use the term “representative.” Taiwan’s relationship with the US remains unofficial; it holds official diplomatic relations with only 22 countries.    
    
Tsai also altered a Taiwanese political custom; after inauguration, the new top leader has traditionally paid a symbolic, remote tribute to ROC founding father Sun Yat-sen by turning toward his mausoleum in Nanjing on the Chinese mainland. Instead, Tsai led senior officials in paying tribute to Sun through a six-minute ceremony at Taipei’s Martyrs’ Shrine. While Tsai’s administration said that the simplified ceremony aimed to “de-feudalize” the ritual, many believe that it served to sever a historical and symbolic connection with the mainland.    
    
Moreover, the new administration also scrapped a proposed revision to the version of high school history textbooks that was adopted under the administration of Chen Shui-bian. Taiwan’s previous ruling party, the KMT, had criticized the textbook for glorifying Japan’s colonial occupation of Taiwan while demonizing the rule of the KMT after World War II. Among the changes in the proposed revision, one regarding so-called “comfort women,” sex slaves forcefully drafted by Japanese troops during the war, stands out. In the proposed revised version, the word “forcefully” was restored.   ���
    
While fending off criticism over the curtailment of the revision, Lin Chuan, Taiwan’s top executive official, said on June 3 that it is possible that some of Taiwan’s comfort women were drafted voluntarily. His statement triggered criticism from the KMT and the public. Lin issued an apology for it on June 7.    
    
In the meantime, Hsieh Chang-ting, former DPP president and Taiwan’s newly appointed representative to Japan, told Japanese media on May 20 that Taiwanese people have viewed Japan’s colonization of the island favorably because the subsequent rule of the KMT was worse. “If the KMT went to rule South Korea [after the war], South Korean people would “not think too badly of” its history as a Japanese colony, said Hsieh.    
    
Another pro-Japan move taken up by Tsai’s administration was an announcement that it took “no particular stance” over the legal status of Okinotori, an atoll located 1,070 kilometers away from Japan’s Okinawa Prefecture.    
    
It has been at the center of an ongoing conflict between Tokyo and Taipei after Japan seized a Taiwanese fishing boat in April about 150 nautical miles from the rock.    
    
Having invested an estimated US$600 million since the 1980s to protect the atoll from erosion, Japan claims Okinotori as an island, along with the 12 nautical miles around it as territorial water and the 200 nautical miles around it as exclusive economic zone. Taiwan’s previous administration had sent naval vessels to the region to contest Tokyo’s position.Although both Lin’s and Hsieh’s comments have led to backlash in Taiwan, their statements and related policy shifts are in accordance with the DPP’s long-term pro- Japan stance. Even before assuming power, Tsai had been working to strengthen ties with Japan through a four-day visit to Tokyo.    
    
Many within the DPP believe that closer ties with Japan will help the island not only to improve its military capabilities but also to boost Taiwan’s exports.    
    
The same logic also applies to Tsai’s policy change over importing pork products from the US. As an opposition party, the DPP had strongly opposed lifting import bans on US beef and pork products. After winning the election, however, the DPP backtracked from its position, with officials suggesting that authorities should lift the long-standing ban on importing American pork that contains traces of an additive called ractopamine, which is a substance that the US’s FDA deems safe but remains illegal in many countries, including China, the entire EU and Russia.    
    
Analysts believe that Tsai’s ultimate goal is to allow Taiwan to gain entry into the USled Trans-Pacific Partnership (TPP). Over the past several months, Taiwanese officials have repeatedly said that lifting the ban on US pork imports is likely a prerequisite for the island’s successful TPP bid.    
    
As cross-Strait relations are expected to take a turn for the worse, bilateral trade will also inevitably suffer, so improving ties with Japan and the US has become a top priority of the new administration. Tsai also hopes that support from the US and Japan will help the island bypass Beijing’s diplomatic boycott so it can improve its international relations in other ways.    
    
To work toward this objective, Tsai also proposed the so-called “new southward policy,” which focuses on strengthening relationships with South and Southeast Asian countries.    
    
Analysts view this as a way for Taiwan to explore other markets and therefore become less dependent on consumers from the Chinese mainland. But given the weaknesses of the policy’s earlier iteration, the “southward policy” implemented under Chen Shui-bian, many in Taiwan are placing the new southward policy under scrutiny.

Tsai arrives for her inauguration alongside outgoing Taiwanese leader Ma Ying-jeou, Taipei, May 20, 2016

Beijing’s Reaction
Although Beijing has warned Taiwan that there will be “serious consequences” if the new administration fails to endorse the One China doctrine, the Chinese mainland has yet to make any major countermoves, apart from suspending official and semi-official exchanges. The most notable maneuver has been a notice released by the mainland’s imports authority that instructed local inspectors to strengthen examination of agricultural imports from Taiwan. 
 
In 2015, Chinese mainland goods accounted for 25 percent of Taiwan’s total imports. 
 
Including those from Hong Kong, 39 percent of Taiwan’s imports traveled across the Taiwan Strait. By comparison, exports from the US and Japan respectively accounted for 12 percent and 7 percent of Taiwan’s total imports, while exports from the 10 ASEAN member countries in Southeast Asia accounted for about 20 percent. 
 
Trade across the Taiwan Strait has declined considerably in 2016. According to data released by China’s Ministry of Commerce, trade between Taiwan and the Chinese mainland decreased by 15.4 percent in the first two months of 2016, with Taiwanese exports to the mainland dropping by 16.6 percent. 
 
In the meantime, it is estimated that tourism revenue from Chinese mainland tourists who visited the island during the first six months of the year declined more than 30 percent year-on-year. 
 
As the Chinese mainland is Taiwan’s largest trade partner, while Taiwan is the mainland’s seventh-largest trade partner, the decline in bilateral trade will have more of an economic impact on Taipei than Beijing. 
 
Only a couple of months have passed since Tsai’s inauguration, so it is too early to gauge whether Beijing is contemplating an incremental approach to gradually increase pressure on Taiwan or devising major countermoves to attack her administration on key issues. Nevertheless, both sides’ stances are relatively clear. With both sides firm in their positions and bilateral communication effectively shut down, tension in the cross- Strait relationship could easily escalate into confrontation.
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