Tension Across the Taiwan Straits About to Go Sky High

This first of two commentaries on the Taiwan situation I have written recently. This one appeared in Asia Times.

Taiwan is about to elect its fourth president since the first open election in 1996. With less than 100 days before Election Day, the chairman of Kuomintang (KMT), Eric Chu, is calling for extraordinary party congress for the purpose of making the rumor swirling around Taiwan’s political circles come true. Namely, he will replace KMT’s duly nominated presidential candidate, Hung Hsiu-chu, with himself.

At the regular nominating party convention in July, Hung was the only one to declare her candidacy for the presidency. By then, Tsai Ing-wen, the candidate for the opposition party, Democratic Progressive Party (DPP), had become such an overwhelming favorite to win in a cakewalk that none of the KMT stalwarts were willing to run against her.

Hung’s credentials were less than stellar compared to her more seasoned colleagues in the KMT camp but she was willing and her straight talking, no nonsense style woke up some of the comatose rank and file. Her one China, one interpretation and pro-unification position certainly caught the attention of the Chinese diaspora in America, at least the part of the community that have always regarded Taiwan as part of China.

Unfortunately for Hung, her one China message was not what the Taiwan populace wanted to hear. Starting from a low base to begin with, the gap in the polls between Hung and Tsai widened. The KMT elders became alarmed. They were resigned to losing the presidency but now Hung presented a real danger of having a toxic coattail on those running for the legislature on the same ticket.

Previously even when the KMT lost the office of the president, they maintained a controlling grip on the legislative body. They now face the real prospect of losing both. Thus the call for the unprecedented extraordinary party congress on October 17 is to change jockey in the middle of the race. The KMT leaders do not foresee victory in the presidential election but they hope to salvage seats in the Legislative Yuan.

When Ma Ying-jeou won the presidency in 2008, the office returned to KMT control and the people in Taiwan along with leaders in Beijing and Washington expelled a collective breath of relief. His record was untainted by corruption, he promised economic reform and regular dialogue with Beijing and he won by a landslide against his DPP opponent. He was a popular and welcomed change from the two corrupt regimes that preceded him. So what happened? How have the KMT fallen so far?

To truly understand the devolution of the KMT to the current sorry state, we need to review its history since Taiwan reverted to the Nationalist government after WWII. In the early 1970’s Chiang Ching-kuo became the strongman of Taiwan gradually assuming increasing power from his father, Chiang Kai-shek, the Nationalist leader that lost the mainland to the Chinese Communist Party.

CCK’s position became official when he was elected President of the Republic of China by the rubber stamp legislature in 1978. He introduced measures to stimulate Taiwan’s economy and he also began political reform by allowing the formation of an opposition party, the DPP, and he picked Lee Teng-hui to be his second in command.

Lee was selected because he was not a follower of Chiang Kai-shek’s retreat from the mainland but a native born Taiwanese. CCK wanted to broadened government participation to include more native Taiwanese.

A member of CCK’s inner circle told me that LTH was considered a safe choice. A PhD agriculture economist by training, he was respectful bordering on being obsequious in the presence of his superiors and demonstrated all the attributes of a reliable and pliable official loyal to the KMT.

No one knew at the time about his having twice joined the Chinese Communist Party shortly after the end of the WWII. And it was much later that the people of Taiwan became aware that LTH was given an elite education and groomed for being part of a puppet administration by the Japanese government during their occupation of Taiwan.

CCK died suddenly in 1988 and Lee became the President of Taiwan. Gradually his true colors began to show, as his background became known. He skillfully formed “rotating” alliances with members of the old guards to gang up on others and remove them from power, one by one.

Lee began to publicly refer Japan as Taiwan’s true motherland and that Taiwan has never been part of China but was a sovereign state. He skillfully ratcheted up the tension across the straits. In 1996 as Taiwan was about to stage the first popular election for the president, Beijing made a foolish mistake of firing missiles over Taiwan’s airspace. The threat did not intimidate the people of Taiwan but gave Lee the margin necessary to become the first elected president of Taiwan.

In 2000, Lee was termed out and Taiwan people prepared to vote for the next president. Lee cleverly split the KMT majority into two camps headed by James Soong and Lien Chan, both were one time Lee’s lieutenant in his administration. Thus, Lee made it possible for Chen Shui-bian of the DPP to win the election with just over 39% of the vote.

Once out of the office, Lee openly identified himself as Iwasato Masao and confessed that Japanese was his first language. He formed a splinter party called Taiwan Solidarity Union to promote Taiwan independence. He was accused of shipping illicit funds out of Taiwan but escaped conviction on charges associated with the “black gold” scandal.

He was promptly drummed out of the KMT but Lee succeeded in getting a pro-independence candidate elected president. That candidate, Chen Shui-bian, ran on a platform of clean government and strong economy. He turned out to be more corrupt than his predecessor and had no clue as to how Taiwan can get out of its economic stagnation.

During Chen Shui-bian’s eight years in the presidential palace, everything was for sale for a price, if not directly into his pockets, it went to offshore bank accounts handled by his wife. After he left the government and tried for corruption, he even had the gall to negotiate with the presiding judge in court. He offered to repatriate millions of dollars from offshore accounts in exchange for dismissal of charges against him.

Chen answered his critics on his mismanagement of Taiwan’s economy by blaming everybody but his administration. During this period about one million of Taiwan’s best and brightest have taken up residence on the mainland, built factories and made their fortunes in China. Those remaining in Taiwan faced unemployment and dimmed career prospects and Chen channeled their frustration into antagonism against the mainland.

By the 2008 election, Chen Shui-bian had totally destroyed the credibility of DPP. Ma Ying-jeou ran as the KMT candidate and won by a landslide margin of 17%. He immediately began a dialogue with Beijing on economic cooperation and two-way tourism. He was to sign 23 agreements with the PRC and by 2010 Taiwan’s economy grew by more than 10%.

Under Chen, Taiwan tried to develop tourism. Even Chen recognized that tourism would stimulate the economy but he refused to look across the strait for tourists from the mainland. Ma did the obvious and opened Taiwan to Chinese tourists. China has become the world’s biggest source of outbound tourists and biggest per person spender and is by far the largest source of tourists to visit Taiwan representing approximately 10 billion dollar infusion to Taiwan’s economy.

Despite economic integration and closer cooperation, the feelings of the Taiwan people grew no closer to China but drifted farther apart under the seven years under Ma’s administration. I have not seen any analysis to explain this counter-intuitive trend but I have my own conclusions.

The twenty years under the control of Lee Teng-hui and Chen Shui-bian did a lot to poison the minds against China. Not often mentioned but they were abetted by the under covered Japanese living among them. After WWII about 300,000 Japanese were stranded in Taiwan and choose to remain. They adopted Chinese surnames and assimilated. They have multiplied and now number about 2 million out of Taiwan’s total population of 23 million. Certain portion of this group is likely supporter and agitator of Lee’s notion that Japan is the motherland.

Ma being a mainlander felt neither comfortable nor confident enough to exercise his leadership and explain to the people of Taiwan how their future is tied to China. Rather he was intimidated by the anti-mainland sentiments and backed away from taking any active role in explaining much less promoting the historical, cultural and traditional bond between Taiwan and China.

To make matters worse, in midst of his second term, Ma accused Wang Jin-pyng of corruption and then backed off and left the charges suspended in ether. Wang presides over the Legislative Yuan and is the leader of another major faction of the KMT. The acrimony between the two has further weakened an already divided KMT. Consequently, Ma’s leadership has floundered so badly that he had to resign his post as the chairman of KMT and to personify a true lame duck for the remainder of his term as Taiwan’s president.

In the meantime, not having any worthy challengers, Tsai Ing-wen was emboldened to take a jaunt to Tokyo and meet various leaders of the LDP. She and Japan’s Prime Minister Abe are old friends and they were seen entering and leaving the same Tokyo hotel around lunchtime. They both publicly denied that a clandestine meeting took place.

The U.S. and U.K. educated Tsai entered politics when she was appointed by Chen to head the Mainland Affairs Council, a position that gave her high visibility though she showed a total lack of enthusiasm for developing closer ties across the Taiwan Straits with the mainland.

Tsai ran for the mayor of New Taipei City (the area outside of old Taipei) in 2010 and lost the election to Eric Chu, the current chairman of KMT. She headed the DPP ticket against Ma’s re-election bid in 2012 and again lost.

Now thanks in part to the self-destruction of KMT, Tsai has emerged as the overwhelming frontrunner and poised to take control of Taiwan with a majority in the Legislative Yuan as well. Earlier this year, her mentor, Chen Shui-bian, was released from prison on medical parole on the grounds that he had become mentally unbalanced. I would not be surprised if he recovers from his psychologically disturbed state soon after DPP resumes control of Taiwan.

These ominous developments bode badly for peace and stability. For the next four years, Taiwan will once again become the conundrum for Beijing and Tsai can be expected to raise the stakes of the Great tug-of-war Game between China, Japan and the U.S.

On Putin, Obama and Syria

This is from Asia Times.

MK Bhadrakumar’s report on Putin and Obama’s meeting at the UN nicely complements your observations on Putin and the Middle East. Again, Asia Times is presenting a perspective not seen in the American mainstream, which is sad because the American public needs to be better informed.

To any objective observer, Putin made a lot more sense than Obama did in their contrasting speech about Syria. IS is a metastasizing cancer that will only get worse unless treated and treatment will take a broad coalition of countries with vested interests in eradicating the tumor. As you indicated such a coalition will include awkward bedfellows, in particular the U.S. along with Russia and China.

Obama seems to be insisting that Assad has to be removed concurrently, maybe even before surgical removal of IS. Perhaps he has to maintain this public posture for the sake of home audience but this position is increasingly not tenable. To continue the metaphor, Assad is a boil that can be lanced, orders of magnitude easier than getting rid of fast spreading tumor cells.

We should have learned from very recent experience in Iraq and Libya that taking out the bad guy we don’t like is relatively easy. Dealing with the aftermath is not easy; IS is just such a direct aftermath.

We apparently did learn a lesson from Iraq but the result in how we dealt with Syria can’t be reassuring. The Obama Administration spent some $500 million to train a fighting force out of Assad’s moderate opposition. We have a platoon of 9 fighters to show for the effort and most the American weapons were “donated” by trained but defecting moderates to IS.

Yes, realism and pragmatism need to trump idealism. So far not enough is happening.

Yes, realism and pragmatism need to trump idealism. So far not enough is happening.

The Week that Established Xi’s World Leader Credentials

 This was first posted in New America Media.

One week in America and China’s leader Xi Jinping has established his credentials as a world leader to be reckoned with. This was particularly evident during his last stop in New York at the United Nations.

His first stop was Seattle where he was greeted with exceptional warmth, not surprising since the state of Washington has been the foremost business friendly state with China.

Xi in turn did not come empty handed but brought an order for 300 Boeing commercial jetliners, valued at $38 billion less whatever undisclosed discount. Bringing a present to the host (jian mian li) is a common Chinese practice and tradition.

He was accorded a VIP tour of Boeing and Microsoft, a round table conference on the Internet and a group photo op with CEOs from China and the U.S. worth a total of $2.5 trillion in market cap. Not much mentioned in the western media was his visit to Lincoln High School in Tacoma.

Xi had been part of a delegation from the coastal city of Fuzhou that visited Tacoma and the school some 22 years ago. The two cities established sister city relations a year after that visit. His taking the time from his busy schedule to again visit the high school can’t be just for nostalgia sake but shows Xi as a sentimental leader with feelings.

He does not forget his past human connections just as was the case when he visited the Iowa farm on his last U.S. visit. As a young rural official on his first visit to the U.S. some 30 years ago, Xi had stayed with a family on a farm in Muscatine Iowa and he asked to see them again.

President Xi also did not come to the nation’s capital empty handed. Last November the surprise out of the Obama/Xi summit in Beijing was China’s commitment to join the U.S. in combating global warming and restrict emission of green house gases by 2030. The response from the western skeptics was to wait and see.

This time, Xi indicated that China was ready to stand with the U.S. by instituting a nation-wide cap and trade program by 2017 to limit CO₂ emission from major industrial sources. Within one year, China has come up with a plan based on an American idea that Obama has not been able to get Congress to go along in more than four.

Xi also pledged that China would minimize financing third world projects with high carbon emission. One observer noted, “China appears poised to enact the same climate change policy that Mr. Obama failed to move through Congress.” Someday, the world may look back and applaud the consequence of the bilateral agreement as the greatest contribution to the world’s future.

The summit also made progress in cyber security and repatriation of fugitives from China. In the cyber space, both countries agree on certain rules of the road and to communicate and consult with each other in the event of hack attacks. Much does lie in the details and how effectively both sides will work together in lieu of public finger pointing.

The U.S. and China also agreed to cooperate on repatriating fugitives from China via periodic charter flights and to return ill-gotten gains. This could become a significant deterrent and cause corrupt officials to look elsewhere for safe havens overseas. American officials privately claimed that it has been the snail pace by the Chinese officials in providing the necessary documentation that impeded expediting repatriation in the past. Again, the devil will be in the implementation.

Xi’s jian mian li to the UN was even more dazzling and he received that warmest reception of his visit. After his short speech on Saturday pledging $2 billion for immediate debt relief owed to China by the poorest, debt-ridden nations and to invest $12 billion by 2030 in the least developed regions, he was mobbed. Eyewitnesses say as many as 30 other heads of state, also attending the 70^th celebration of founding of UN, formed a queue to shake his hands—unprecedented to say the least.

In his address to the General Assembly before returning to China, he announced a straight $1 billion donation to the UN over 10 years for peaceful development under the UN aegis. China will also send 8000 police as part of the UN peacekeeping force and provide $100 million to the African Union to help them develop their peacekeeping capability.

Xi’s message at the UN was to reiterate China’s commitment to peaceful development as the key to avoiding conflict and protect human rights by raising living standards. He declared that China would never act as a hegemon or impose an exaggerated sphere of influence but treat every nation, big or small, with mutual respect.

Unlike the US that ignores the UN when it suits them, China has consistently insisted on working within the confines of the UN Charter.

In the coming days, Xi said China would propose six 100-project sets to address problems of common worldwide interest. The six subject areas will consist of (1) poverty alleviation, (2) agriculture development, (3) global trade facilitation, (4) climate protection, (5) improving health care and (6) education.

President Xi came to America offering cooperation and collaboration. His only stipulation, which China has raised since 2008 even before he became the leader, was that the U.S. treat China as a peer and strike up a new relations between “big countries” (da guo).

This is turning out to be a hard sell in America. Obama seems to have difficulty reconciling the U.S. position as the only hegemon with the need to accommodate China. Perhaps the toxic political atmosphere in America does not allow Obama to act otherwise.

Current batch of American presidential hopefuls are falling all over themselves to out bash China in search a tiny decimal gain in the opinion poll. No doubt in debates to come they will find hidden threat to America’s security in Xi’s message of peaceful development.

Perhaps because the U.K. has long ago given up any aspiration of being the world hegemon, George Osborne, their Chancellor of Exchequer, went to Beijing with unbridled enthusiasm for collaboration with China. Just as Xi was about to visit America, Osborne met with Premier Li Keqiang and signed 53 assorted agreements and memorandum of understandings on economic cooperation.

This was advanced work to tee up Xi’s state visit to Britain in October and ensure total success. Osborne said that his mission was to make clear that Britain wants to be China’s “best partner in the West.”

Not that long ago, Britain was America’s best partner in the invasion of Iraq and shared in the sorrow of that disastrous adventure. Now Britain sees that it’s in their national interests to move away from the shadows of American foreign policy. Last March, despite White House urging not to support Xi’s Asian Infrastructure Investment Bank, UK led the ranks of western powers in becoming founding members.

China is making friends around the world based on common economic interest and not on military alliances. While they have no wish to compete on arms, their recent air-to-air missile development with the capability comparable to the U.S. is another indication that they also won’t be intimidated.

Whether Washington will ever see more to gain from collaboration with China than continue as “frenemies” will depend on the day a statesman/woman emerge from the current comedy that passes as an exercise in democracy.

What did President Xi’s Visit to America Accomplished?

This was first posted in Asia Times.

China’s leader, Xi Jinping has concluded his tour of America that began in Seattle, then the official State Visit at the White House in Washington and lastly at the United Nations in New York. What are we to takeaway from his historic visit?

He was greeted in Seattle with an exceptionally warm reception, not surprising since the state of Washington has been the foremost business friendly state with China. Xi in turn did not come empty handed but brought an order for 300 Boeing commercial jetliners, valued at $38 billion less whatever undisclosed discount.

Bringing a present to the host (jian mian li) is a common Chinese practice and tradition. Another of Xi’s activity that reflects the Chinese values of the person, lightly noted in the western media, was his visit to Lincoln High School in Tacoma.

Xi had been part of a delegation from the coastal city of Fuzhou that visited Tacoma and the school some 22 years ago. The two cities established sister city relations a year after that visit. His taking the time from his busy schedule to again visit the high school can’t be just for nostalgia sake but shows Xi as a sentimental leader with feelings.

He does not forget his past associations just as was the case when he visited the Iowa farm on his last U.S. visit. As a young rural official on his first visit to the U.S. some 30 years ago, Xi had stayed with a family on a farm in Muscatine Iowa.

Another interesting sidelight can be drawn from the group photo of the 30 CEOs that participated in a round table on the Internet in Seattle. There were 15 from each side of the Pacific, arrayed in three rows more or less by the market capitalization of the companies.

Somewhat unusual was the presence of Jerry Yang on the last row of the group photo. While identified as a founder of Yahoo, Jerry is currently not a CEO of any Internet company. But his Internet credentials were bolstered by his relationship with Jack Ma, Chairman of Alibaba.

When Ma’s company was young and privately held, Yahoo under Yang’s direction became a major equity stakeholder in the company.  Now Jerry sits on Jack’s board of directors and Jack stood on the front row in the group photo, two away from Xi. This may be another example of how long-term relationship counts in Chinese relations.

President Xi also did not come to the nation’s capital empty handed. Last November the surprise out of the Obama/Xi summit in Beijing was China’s commitment to join the U.S. in combating global warming and restrict emission of green house gases by 2030. The response from the western skeptics was to wait and see.

This time, Xi indicated that China was ready to stand with the U.S. by instituting a nation-wide cap and trade program by 2017 to limit CO₂ emission from major industrial sources. Within one year, China has come up with a plan based on an American idea that Obama has not been able to get Congress to go along in more than four.

American presidential hopefuls should find China’s readiness to deliver on its commitment reassuring but probably wouldn’t because of deep-seated biases steeped into their heads.

Xi also pledged that China would minimize financing third world projects with high carbon emission. One observer noted, “China appears poised to enact the same climate change policy that Mr. Obama failed to move through Congress.” Someday, the world may look back and applaud the consequence of the bilateral agreement as the greatest contribution to the world’s future.

The summit also made other note worthy, though not necessarily breakthrough, progress in cyber security and repatriation of fugitives from China. In the cyber space, both countries agree on certain rules of the road and to communicate and consult with each other in the event of hack attacks. Much does lie in the details and how effectively both sides will work together rather than resort to public finger pointing.

The U.S. and China also agreed to cooperate on repatriating fugitives from China via periodic charter flights and to return ill-gotten gains. This could become a significant deterrent and cause corrupt officials to look elsewhere for safe havens overseas. American officials privately claimed that it has been the snail pace by the Chinese officials in providing the necessary documentation that impeded expediting repatriation in the past. Again, the devil will be in the implementation.

Arguably, Xi received that warmest reception at the United Nations. After his short speech pledging $2 billion for immediate deployment to alleviate the poorest, debt-ridden nations and to invest $12 billion by 2030 in the least developed regions, he was mobbed. Observers say as many as 30 other heads of state, also attending the 70^th celebration of founding of UN, formed a queue to shake his hands—unprecedented to say the least.

Xi again reiterated as he has many times in the past including a recent interview with WSJ that China believes joint, universal and worldwide development as the key to avoid conflict and protect human rights by raising living standards. In the coming days, China will propose six 100-project sets to address problems of common worldwide interest. The six subject areas will consist of (1) poverty alleviation, (2) agriculture development, (3) global trade facilitation, (4) climate protection, (5) improving health care and (6) education.

As he had extended to other parts of the world, President Xi came to America offering cooperation and collaboration. His only stipulation, which China has raised since 2008 even before he became the leader, was that the U.S. treat China as a peer and strike up a new relations between “big countries” (da guo).

Judging from the body language and demeanor of the two leaders at the White House press conference, and despite the long informal meetings and after dinner strolls that have become customary, Obama and Xi showed no real personal rapport and warmth toward each other. Obama seems to have difficulty reconciling the U.S. position as the only hegemon with the need to accommodate China.

Perhaps because the U.K. has long ago given up any aspiration of being the world hegemon, George Osborne, their Chancellor of Exchequer, went to Beijing with unbridled enthusiasm for collaboration with China. Just as Xi was about to visit America, Osborne met with Premier Li Keqiang and signed 53 assorted agreements and memorandum of understandings on economic cooperation.

This was advanced work to tee up Xi’s state visit to Britain in October and ensure total success. Osborne said that his mission was to make clear that Britain wants to be China’s “best partner in the West.” Not that long ago, Britain was America’s best partner in the invasion of Iraq and shared in the disastrous consequences. Now Britain sees that it’s in their national interests to move away from the shadows of American foreign policy.

China is making friends around the world based on common economic interest and not on military alliances. While they have no wish to compete on arms, their recent air-to-air missile development with the capability comparable to the U.S. is another indication that they also won’t be intimidated. Hopefully a day will come when Washington will see more to gain from collaboration with China than competition.