China's Silent Army

by Juan Pablo Cardenal,Heriberto Araujo

  On top of this, the two countries adopted an Economic Cooperation Framework Agreement (ECFA) at the end of 2010 to relax restrictions on bilateral trade. The aim was to boost commercial exchange and investments by reducing or eliminating customs duties on over 700 products. This highly significant legal tool brings Beijing and Taipei closer together than ever before, just when Taiwan has become more reliant on China’s economic power as a result of the global crisis. In practice, there is little doubt about the importance of the ECFA: it is a point of no return on the path towards economic integration between Taiwan and China. It may also, perhaps, be a step towards the island’s definitive assimilation.

  To understand the effect of all this on bilateral relations, we traveled to the Taiwanese capital at the end of 2009, when the agreement was being negotiated behind closed doors and the critical press was throwing its hands up in horror. These were some of the “sweetest” moments experienced in six decades of tumultuous relations. The Taiwanese president Ma Ying-jeou, the leader of the nationalist Kuomintang Party (KMT), who replaced the pro-independence leader Chen Shui-bian of the Democratic Progressive Party (DPP) in May 2008, came to power with the determination to make a 180-degree U-turn and reverse the atmosphere of extreme tension and confrontation which had dominated the Taiwan Strait over the previous two government terms. Barely a year after taking up the presidency, Ma established direct daily flights between China and Taiwan, while simultaneously reinstating naval and postal links. The Kuomintang and the Communist Party of China—which had fought against each other in the civil war that raged on and off between 1927 and 1949—reinforced their relations with visits, meetings between high-ranking officers and smiles on the front pages of newspapers. There was even a rumor of an imminent meeting between the two presidents, Ma and Hu Jintao. The historic enemies were apparently becoming bosom friends.

  The ECFA was at the core of President Ma’s economic policy, as he hoped to rebuild relations with Beijing based on three negatives: no to confrontation, no to independence, and no to reunification. As well as the impact of the economic crisis, Taiwan had found itself excluded from the Free Trade Agreement (FTA) agreed between China and the countries in the Association of Southeast Asian Nations (ASEAN) because of the island’s international diplomatic isolation. The treaty came into force in January 2010 and the resulting loss of competitiveness immediately led to a fall in Taiwanese exports. Under these circumstances, President Ma’s Kuomintang presented the ECFA to the island’s 23 million inhabitants as an essential step in bringing Taiwan out of the crisis and reducing unemployment. In other words, it was seen as the perfect recipe to avoid economic strangulation.

  “Taiwan cannot be excluded from the FTA because of its relations with China,” explained Chun-Fang Hsu, deputy director of the Bureau of Foreign Trade, when we met her in Taipei. Chung-Fang was in charge of negotiating the agreement with the Chinese authorities, which came into force in September 2010. “We don’t want to be marginalized economically while trade becomes global. And to avoid that we first need a pact with China,” she told us, suggesting that the ECFA also to some extent represents Taiwan’s pass of safe-conduct to help diffuse its international isolation. The Taiwanese government insisted that the nations which subscribe to the “one-China” policy—and therefore refuse to recognize Taiwan as a sovereign nation—would refuse to sign an FTA with the island without a previous agreement with China.33 Once the ECFA was approved, it would leave the door wide open for bilateral agreements between Taiwan and other countries, something which to this date has not yet taken place.34

  The agreement has further divided a Taiwanese society which has historically always been extremely polarized on the issue. While the Taiwanese people are pleased with the strengthened commercial links with China because of the opportunities they offer, they are also wary of the potential adverse effects of these relations. On the one hand, people are afraid that by opening 250 Taiwanese sectors to Chinese investment, including some as sensitive as the microelectronics sector, Taiwan may be vulnerable to theft of its national “know how,” which is arguably the greatest asset of an economy whose vitality and success led it to be seen as one of the “Asian Tigers” which dazzled the world. On the other hand, there is some concern that the arrival of Chinese products without customs duty will cause the collapse of some of Taiwan’s national industries. However, the greatest reservations about the agreement relate to the potential effect that it may have on Taiwan’s eventual independence, whether real or de facto. How will Taiwan ensure that economic integration will not increase Beijing’s influence over the island which may lead, in the medium or long term, to definitive assimilation? Or, to put it another way, will Taiwan pay a political price in terms of reunification?

  “We think our government is very naive,” said Bi-Khim Hsiao, spokesperson of the main opposition group, the pro-independence DPP. The danger of the ECFA is that Taiwan “runs the risk of really becoming a subsidiary of China, because we will be much more vulnerable to pressure.” In the eyes of the opposition party and some sectors of Taiwanese society, as well as in the opinion of outside observers such as the former prime minister of Singapore, Lee Kuan Yew, the agreement is seen as an irreparable step towards reunification.35 “For Taiwan’s leader, Ma Ying-jeou, the ECFA is useful in the short term to help him become re-elected [something he achieved in January 2012]. For Beijing, it serves their own purpose of unification,” argues Professor Chong-Pin Lin.

  “In 2004, after I left the role of Taiwan’s deputy defense minister, I gave a keynote speech at a conference on the defense industry in the United States. My main point was that Beijing has developed a new grand strategy which is predicated on using instruments that transcend pure military force. I said that Beijing would stress the use of economy and culture. People laughed at me … China has understood that it is easier to buy and absorb Taiwan than to attack it. The ECFA is the typical example of this. It is a very important step in that direction.”

  THE FALL OF BEIJING’S BÊTE NOIRE

  On May 20, 2008, just an hour after leaving the presidential office of the Republic of China, Chen Shui-bian, who had governed the island since his historic victory in 2000 as the opposition DPP candidate, was notified that he was forbidden from leaving Taiwan and that an investigation was being opened into allegations of corruption against him during his term of office. That was how Chen, who had just lost his presidential immunity after President Ma’s first election, began his dramatic descent into hell as a result of charges of corruption, money laundering and accepting bribes which also implicated his wife, Wu Shu-chen, and his son-in-law. Months later he was formally accused by the public prosecutor’s office, and on September 11, 2009, he became the first president in Taiwan’s history to be sent to prison. He was originally given a life sentence, but this was reduced on appeal to eighteen years in prison, which he is currently serving. The bête noire of Taiwan’s Kuomintang and the Communist Party of China—the politician who had dared to oust one and defy the other—had been taken out of circulation for good.

  The electoral victory in 2000 of this lawyer and defender of political dissidents during the era of martial law on the island represented a milestone for the young Taiwanese democracy, which had only celebrated its first multi-party elections in 1996. Born into a humble family, this self-made man who had been sentenced to a year in prison for libel during martial law was Taiwan’s first non-Kuomintang president, thereby breaking fifty years of the nationalists’ hegemony over power. He was also one of the island’s most controversial leaders, not only because of his staunch opposition to the “one-China principle,” but also as a result of the accusations of corruption that marred his second presidential term from 2004.

  Chen became a passionate champion of Taiwan’s independence, advocating a referendum to legally declare independence for the island, which caused tensions to escalate between Taipei and Beijing. “Beijing was very unhappy, but it said nothing to Taipei. Beijing went to Wash
ington and gave the Americans a warning: ‘If you don’t rein in Chen Shui-bian, then we will have to take matters into our own hands.’ … The result was twelve warnings [against the declaration of independence] sent from Washington to Taipei between June 2007 and February 2008,” explains Professor Chong-Pin, who served in Chen’s government.36

  In Taipei we went to see Tao Liu, Chen’s right-hand man and former speechwriter. In his offices at the Ketagalan Foundation, Tao explained that he—along with a section of Taiwanese society—believes that, while the legal charges of corruption against Chen have “some basis in irregularities committed,” they were really part of a political plot to get Chen out of the picture.37 “What happened to Chen was an act of political revenge which was specifically aimed against him. He beat the Kuomintang and, after eight years away from power, the Kuomintang came back and they wanted revenge. I personally think that if the same standards that have been applied to Chen were applied to any other political party, none of them would survive that level of scrutiny,” Tao assured us, referring to the laws limiting expenditure on political campaigns and to the use of the special state fund that allows presidents to use certain amounts at their discretion without being called to account.

  “Corruption is a very convenient accusation if you want to destroy somebody. For the last twenty or thirty years the Kuomintang had accused pro-independence politicians of being radical or irresponsible. Then they started to use the term ‘corrupt.’ In China, corruption is regularly used to attack enemies. President Chen has no doubt whatsoever that China was involved in his case, but he has no proof.” It was crystal clear what Tao Liu was suggesting: independently of whether or not Chen had his hand in the till, the former president was the victim of a political witch hunt.

  Although Chen has been in prison since he was found guilty, despite rumors in 2012 about his bad health, we asked Tao if he could put us in contact with the former president so that we could hear his version of events. “Give me the questions and I’ll see what I can do,” Tao replied. “He’s very closely guarded.” Months later, Tao emailed us a handwritten (and stamped) document and another typed document with Chen’s answers in Mandarin, which are partially reproduced here:

  On November 11, 2008, I went to the inquiry office and made the following speech: “Today I am going to Taiwan’s Bastille … because I am the greatest obstacle to the process of a union between Taiwan and continental China with the co-operation of the Kuomintang (KMT) and the Communist Party of China … I have been sacrificed to calm the rage of Zhongnanhai [the headquarters of the Chinese government].” Over the course of the investigation it has become evident that the Chinese government is behind all this, with the aim of punishing me for rejecting the “one-China principle” and to strike a blow to pro-independence politicians by using me as an example. None of this is a secret; these are all real facts …

  In July 2008, the Taiwan Affairs Office of the Communist Party of China (CPC) made a plan to approve a political strategy to resolve the Taiwan issue. The plan aimed to attack Chen and his closest collaborators, because they believed that an attack against Chen and his allies would spread throughout the ideological division of the Democratic Progressive Party and keep the DPP embroiled in ideological chaos for a long time, preventing them from progressing towards independence and thereby reducing the pressure on the Kuomintang … with the aim of resolving the Taiwan issue by 2012 [the date of the Taiwanese presidential elections won by Kuomintang] …

  I do not plead guilty to the charges the investigators have brought against me, or to the verdict of the court. If I am guilty of anything, it is of being “the president of Taiwan,” of being against the “one-China principle” and of championing “Taiwan and China, two countries on either side of the Strait,” which violates the Anti-Secession Law approved on March 14, 2005, by the Communist Party of China …

  I have been sacrificed in a collaboration between the CPC and the KMT to put an end to the pro-independence party (DPP). There are only two people in the world who could take power away from the KMT: one of them is Mao Zedong and the other is Chen Shui-bian. However, now that the KMT and CPC have moved from war, struggles and arguments to conciliation and co-operation, I am the greatest obstacle to the process of union, so I am the one who must be eliminated as soon as possible. For the KMT, my sin is having “stolen power” [a reference to his electoral victory in 2000], which in Chinese tradition is a crime worthy of death. For the CPC, I am the greatest traitor of the Chinese nation …

  To defend the sovereignty of the state, Taiwan must not degrade itself by becoming part of the People’s Republic of China as a special administrative region … The enemy of the DPP is not inside Taiwan; the KMT is only a competitor. The CPC is the real enemy.

  Chen Shui-bian, January 23, 2011

  In July 2011, another former Taiwanese president was charged with embezzling public funds to the value of $7.8 million. The public prosecutor’s office began an investigation into eighty-eight-year-old Lee Teng-hui, an emblematic political figure in Taiwan’s democratic history, for having allegedly diverted state funds during his time in office (1988–2000). Strangely, the accusation of corruption coincided with Lee’s clashes with President Ma, whom he had criticized in recent years over his growing relationship with Beijing. All this provided more fuel to speculations about a Taiwanese plot against the figures who oppose President Ma’s policies to promote the Taipei–Beijing axis.

  TAIWAN’S INTERNATIONAL ISOLATION

  While the growing relationship between Taipei and Beijing and the increase in China’s military capacity have opened the door to a new geopolitical scenario in the Asia-Pacific region, the Taiwan issue has also provided Beijing with some important diplomatic victories. Up until the beginning of the 1970s, Taiwan was represented at institutions such as the United Nations—where it occupied the place now held by China—and was recognized by a large number of countries, including the United States. However, now that there is no Cold War and China is becoming increasingly integrated into the international scene, only the Vatican and twenty-two countries with little international weight support Taipei in its pro-independence cause, mostly as a result of the economic gains yielded by their loyalty rather than any ideological motivation. Malawi was the last country to turn its coat in January 2008, but the most important recent victory for the Communist authorities was definitely Costa Rica’s decision to break ties with Taipei in 2007.

  The importance of this Latin American country is two-fold. First, by guaranteeing Costa Rica’s loyalty, Beijing made its first break into Central America, which until then was a Taiwanese stronghold. Secondly, the decision to establish ties with Communist China was endorsed by Óscar Arias, the president of the country and winner of the 1987 Nobel Peace Prize, which lent added prestige to the event. Beijing therefore managed to obtain diplomatic recognition in Central America’s most democratic country, laying the groundwork for the creation of a domino effect in the region which would deal the final blow to Taiwan’s already fragile international support.

  A symbol of this new friendship between San José and Beijing is seen in the recent construction of Costa Rica’s 35,000-capacity National Stadium, built on the ruins of a former airport. Its construction was undertaken—not without conflict, as we saw in Chapter 5— by the Chinese state-owned company Anhui Wai Jing, after Beijing agreed to provide the $90 million needed to build the stadium as part of the aid package offered to Costa Rica in return for breaking ties with Taiwan.

  We traveled to Costa Rica at the end of 2010 to see for ourselves how things had evolved between San José and Beijing since the relationship was established. In Taipei the ambassadors of Honduras and the Dominican Republic had assured us, not very convincingly, that their countries maintained their relations with Taiwan for noble causes, such as the defense of human rights. “We share democratic values and we believe in them. That is why we support them, not because of dollar diplomacy, and not because of the help that Taiwan
gives us. We haven’t gone with the highest bidder,” the Honduran ambassador, Marlene Villela, assured us from the building on the outskirts of Taipei which is home to all of the diplomatic legations. If that was true, why would a Nobel Prize winner decide to break ties with democratic Taiwan in order to join ranks with the Communist Chinese dictatorship? Who took the first step? What was the reaction of the rest of the countries in the region? What moves did China make behind the scenes in order to secure the diplomatic backing of San José?

  To find the answers we arranged to meet with Óscar Arias. His assistant opened the door of his house which, strangely enough, is located just opposite the recently opened Chinese embassy. Inside his opulent home, decorated with designer furniture, terracotta soldiers and shelves full of books, numerous photographs make it clear who Arias’s colleagues have been over the course of his long and respected political career: Bill Clinton, Lula da Silva, Nelson Mandela. On the table in a living room, which looks out onto a tranquil garden, lies a copy of Tony Blair’s memoirs. Fifteen minutes later, Arias appears looking serious and polite as he takes a seat on the sofa.

  “A country as small as ours is condemned to be commercial, to be a natural merchant,” he begins, when we ask him why he decided to establish ties with China. He goes on to paraphrase John Maynard Keynes: “When the facts change, one has to change,” he explains to justify Costa Rica’s about-turn in diplomatic policy. “In my first term of office [1986–1990] I already wanted to break off relations with Taiwan and establish links with China, but I was fighting too many battles and one more would have been excessive.” Before making the decision he therefore had to wait for his second term of office (2006–2010), which required a constitutional reform in the country, because up until then only one presidential term was allowed per candidate. “China is Costa Rica’s second biggest trade partner. That says everything that needs to be said about why we had to establish relations. It’s not possible to turn one’s back on China. People elect you to lead, not to be pleasant.”