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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Thomas M. who wrote (8824)	7/12/1999 2:26:00 PM
From: Sam	Read Replies (1) \| Respond to of 9980

ANALYSIS-Taiwan takes big risk in one-China gambit By Jeffrey Parker TAIPEI, July 12 (Reuters) - Taipei's surprise abandonment of its ''one China'' policy on Monday threatened the delicate strategic balance between Taiwan, its communist Chinese foe and its post-war protectors, the United States and Japan. China-watchers said the island could begin paying a price as soon as Tuesday if Beijing's predictably furious response sparks a selloff in Taiwan's recently bouyant stock market. More dangerously, analysts said, Taiwan risks angering its closest friends by officially abandoning the strategically stabilising but ultimately implausible premise that there was one China -- albeit a divided one. ''I don't think this is a smart move by Taiwan,'' said Chang Ling-chen, a China-watcher at Taiwan University. ''It's bound to face intense pressure from the United States and China.'' Taipei said on Monday it now regarded Taiwan-China ties as matters between distinct Chinese states -- challenging Beijing's militant opposition to ''two Chinas'' or ''one China, one Taiwan.'' Communist China's response was swift and explosive. Hinting bluntly at its vow to crush Taiwan independence with force, Beijing said Taipei stood at the ''brink of the precipice'' and accused President Lee Teng-hui of playing with fire. Lee floated the ''state-to-state'' view on Saturday, spurring concern he might have misspoken. On Monday, once the cabinet's Mainland Affairs Council made it official, the question on local lips switched from ''Did he say it?'' to ''Why did he say it?'' Why indeed? And why now? Taiwan would seem to have little to gain and much to lose by angering its covetous rival and upsetting the trans-Pacific balance that over two decades has allowed it to blossom as one of Asia's liveliest democracies and richest export powers. One theory is that Taiwan hopes to exploit acute frictions in U.S.-China ties, which plunged after NATO's May bombing of Beijing's embassy in Yugoslavia. ''I think President Lee wants to take the advantage of the ebb of U.S.-China relations to further stir things up, testing the bottom lines of both Washington and Beijing,'' said Chang of Taiwan University. That's a risky strategy if it paints Taiwan as a troublemaker. Washington regards peace in the Taiwan strait as squarely in the U.S. interest, but the United States and Japan have made clear that they are just as opposed to provocations by Taiwan as they are to Beijing's standing threat to invade the island. The one-China dogma is a cornerstone of Beijing's ties with Washington and Tokyo, both of which cut Taipei off in the 1970s to recognise Beijing on the understanding it would enable the rivals to coexist and resolve their differences peacefully. Beijing showed in 1995-96 that it was willing to use measured force to constrain Taiwan, punctuating the island's first presidential election with war games and ballistic missile tests to underscore its opposition to Taiwan independence. Since then, there has been little support in Taiwan for irritating China or the United States. Polls show the public broadly supportive of better ties with China, which is already driving a growing portion of Taiwan's growth and clearly a land of opportunity if relations improve. Despite a lack of official ties, Taiwan and China have built strong economic bonds that benefit both -- chiefly a US$30 billion tide of Taiwan investment into the mainland. One measure of the impact on ties will be whether Beijing cancels a planned October visit to the island by its top Taiwan straits envoy, Wang Daohan. Sending Wang would be seen as sanctioning Taiwan's new view of the relationship. (The U.S. reaction below) U.S. reaffirms one-China policy WASHINGTON, July 12 (Reuters) - The United States reaffirmed on Monday that it continued to recognize one China governed from Beijing despite Taiwan's decision to scuttle that policy. ''Our policy is unchanged. Our one-China policy is long-standing and certainly well-known,'' State Department deputy spokesman James Foley said. Foley also reiterated the U.S. view that Taiwan's future is ''a matter for the Chinese people on both sides of the Taiwan Strait to resolve.'' ''The United States has an abiding interest and concern that any such resolution be a peaceful one. And to that end the United States urges both sides to engage in meaningful, substantive dialogue,'' he added. Foley made his comments after Taiwan on Monday abandoned the one-China policy that has helped underpin East Asian security for decades, prompting a furious Beijing to warn that Taipei had stumbled to a dangerous ''precipice.'' Taipei said the belief that there was only one indivisible China that includes Taiwan -- a mutually accepted formula which has prevented war between the two sides for decades -- was being used by Beijing to undermine the legitimacy of the island's government and had to be scrapped.