Taiwan election result produces political volatility at home and abroad

The end of the 50-year rule by the Kuomintang (KMT) over the Republic of China on Taiwan in last Saturday's presidential election has triggered a far-reaching upheaval in Taiwanese politics and introduced new uncertainties into the already tense state of Taiwan-China relations.

Chen Shui-bian of the opposition Democratic Progressive Party (DPP) emerged with the most votes after a bitter three-way campaign against independent candidate James Soong—a former KMT powerbroker opposed to the China policy of retiring president Lee Teng-hui—and the KMT's Lien Chan, Lee's vice-president and nominated successor.

The KMT won only 23.1 percent of the vote or 2,925,513 votes, compared to a 54 percent majority in 1996. Soong won 4,664,932 votes, or 36.8 percent. With the KMT vote split, Chen Shui-bian took the presidency with 4,977,737 votes, or 39.3 percent, compared to the 21 percent vote for the DPP four years ago.

The KMT's loss of power has plunged it into turmoil. For four days, thousands of KMT members have staged violent demonstrations at the party headquarters, clashing with riot police and demanding the immediate resignation of Lee Teng-hui as party chairman and his entire central committee. As long as Lee controls the party there is no possibility that Soong could return and end the rift. Soong has declared his intention to register a new political party. A large portion of the KMT's 2.5 million members and a significant number of its legislators are expected to join, formalising the split that developed during the election. Potentially the KMT could be reduced to the status of a minor party.

The possibility of a DPP victory had been widely canvassed in the weeks leading up to the election, but the reality of it sent shockwaves from Taiwan to Beijing and Washington, with reverberations across the Asian region. Of the three candidates, Chen Shui-bian went to the polls most clearly identified with the stance taken last year by President Lee Teng-hui on China. Lee asserted a distinct Taiwanese nationalism. He insisted that relations with China should be on a state-to-state basis, producing a military standoff across the Taiwan Strait last July.

Chen Shui-bian's election threatens to escalate the simmering tensions. China's response to the election has been to restate its “One China” policy—that Taiwan is an indivisible part of Chinese territory—and that acceptance of “One China” is the precondition for any talks. Official press releases have stressed again that a reunification of Taiwan with China must take place in the foreseeable future on the “one country, two systems” model applied to Hong Kong and Macao.

Both in the election campaign and following his victory, Chen has projected a moderate image, offering to travel to China for talks on re-establishing peaceful relations. But in doing so he has stated that Beijing must recognise the government in Taipei as an equal, or sovereign, state. He has even said he is prepared to discuss “One China”, but will not accept it as the precondition for talks and specifically ruled out “one country, two systems”. He is proposing a peace treaty, but has effectively excluded any reunification on the terms insisted on by China.

While the response from both sides has been muted initially, the two positions are irreconcilable. As a commentator for the Australian Financial Review put it on Monday: “Just how long Beijing is prepared to exchange pleasantries with the new Taiwanese president is unclear, but it shouldn't take long for both sides to work out that they don't have much to say”.

Concerned at the possibility of a flare-up in the Taiwan Straits, the Clinton administration has dispatched a number of key diplomats, including US ambassador to the UN Richard Holbrooke, to both China and Taiwan for urgent discussions. A number of Asian governments have called for Taiwan to make no attempts to challenge the “One China” doctrine and for China to exercise restraint.

Within Taiwan, the DPP's positions on China, and fears they will lead to war, were the central issues of the campaign, particularly in the final weeks. While both the DPP and Soong campaigned vigorously against the corruption of the KMT political establishment and pledged to improve living standards, on the issue of China they represented opposites.

Soong's campaign was marked by strident warnings that Lee and the DPP were propelling Taiwan toward an unwanted conflict with China. One noteworthy ballot statistic came from the military garrison on the island of Kinmen—only a few kilometres from China and the front line of any military clash. Soong won 82 percent of the vote, the KMT 14 percent, and the DPP 3 percent. While less pronounced, a general trend against the DPP has been reported among the young conscripts in the military forces.

It is likely that the KMT's loss of support to Soong would have been even greater if not for a tactical shift by the former ruling party in the final weeks before the election. As the extent of Soong's support became clear, the KMT campaign dropped its emphasis on a corruption scandal involving Soong in the early 1990s, reasserted the “One China” policy and urged voters to stick with the KMT as the best means of preventing a DPP victory and war with China.

In the face of opposition among large sections of the population to a DPP victory, combined with the threats by China that it would attack if the DPP were elected, it is significant that Chen Shui-bian's candidacy won the endorsement of leading business figures and personalities. It indicates that key sections of the ruling class are prepared to risk domestic political instability and potential conflict with China to assert Taiwan's separation from the mainland and end its international isolation.

The DPP was formed in illegality in 1987, when the KMT still ruled through martial law. The new party based itself initially on a perspective of declaring Taiwan an independent nation-state. According to the Taiwanese constitution, Taiwan is one of the 35 Chinese provinces that made up the Republic of China, whose jurisdiction survives only over Taiwan and some small islands of Fujian province. The document is essentially unchanged since the Kuomintang fled to Taipei from the mainland in 1949, after its defeat in the civil war against the Communist Party-led armies.

The Peoples Republic of China (PRC), established by the victors of the civil war, claims Taiwan to be sovereign Chinese soil and a renegade province. In the 1970s, following US President Nixon's visit to Beijing, the United Nations and the major powers formally accepted the PRC's sovereignty over Taiwan and do not recognise the government in Taipei as a legitimate nation-state.

Officially, the Beijing regime wants a peaceful reunification of Taiwan, but declares it will use force if a government in Taipei declares independence from China, if Taiwan is taken over by a foreign power or if it descends into anarchy. In a recent White Paper issued to influence the Taiwan election, China added that it would attack Taiwan if negotiations on reunification were put off indefinitely.

Kuomintang administrations have formally adhered to a policy of ultimate reunification with China. With the implicit support of the US, however, which is pledged to provide military assistance to Taiwan, the KMT has consistently rejected the Beijing regime's offer of “one country, two systems”, in which Taiwan would be rejoined to China with the status of an autonomous, self-governing region.

But the status quo is becoming untenable. Taiwan has emerged as one of the hubs of the global economy, particularly in petro-chemical, high-tech and computer-related industries, which are intimately bound up with Silicon Valley. The corporate elite associated with these industries has grown impatient at its exclusion from international trade and financial institutions—from the World Bank to the World Trade Organisation—and the lack of diplomatic recognition.

Taiwanese-derived investment, exceeding $US40 billion, exerts wide influence over the mainland economy, particularly in the coastal regions. Following his statement last July that China and Republic of China had “state-to-state relations”—understood to mean relations between separate nations—Lee Teng-hui summed up his growing willingness to challenge the “One China” doctrine with the declaration that China needs Taiwan more than Taiwan needs China.

The potential for conflict between China and Taiwan is heightened by the debate taking place in US ruling circles over China policy. For more than 20 years, US administrations have maintained close relations with China as the Beijing government restored capitalist relations and welcomed foreign investment to exploit cheap Chinese labour. Currently Clinton is seeking to ensure China's admission to the World Trade Organisation, on terms that will facilitate an even greater penetration of China by international capital.

But sections of the US ruling class are concerned that China's economic expansion will enable it to project greater military and political clout in the Asian region, cutting across US interests. A number of thinktanks in China and the US are openly discussing the conflict of interests between the two countries in areas such as the South China Sea and Central Asia.

The right wing of the Republican Party, which has considerable influence in Congress, has grown more vocal in demanding that the US repudiate the “One China” policy, recognise Taiwan and aggressively defend it. In January, the Taiwan Security Enhancement Bill was passed through the House of Representatives, calling for increased military collaboration between Taiwan and the US.

The Beijing bureaucracy is clearly concerned at the possibility of a shift in US policy should the Republicans win the election. A week before the Taiwan poll, Chinese Premier Zhu Rongji bluntly warned about “some people in certain countries” who view Taiwan as “an unsinkable aircraft carrier”.

The election of Chen greatly increases the likelihood of tensions and the danger of military conflict in what is a key strategic region of the globe.