that's just a bit less (100%) than HK prices if it has a view, and so I guess there is still plenty of room for increase ;0)
... continuing the dialogue regarding taiwan/mainland, a peace treaty will soon be, ending the civil war, and leading to inevitable reunification, given that is precisely what ought to happen at the end of a civil war :0)
China, Taiwan: The New Tack Behind a Symbolic Rapprochement
Apr 21, 2005
stratfor.com
Summary
The chairman of Taiwan's Chinese Nationalist Party, Kuomintang, will meet with the chairman of mainland China's Communist Party in Beijing on April 29, the first such meeting in more than half a century. There is talk that the two will agree to formally end the civil war that split the Republic of China and the People's Republic of China in 1949 following Communist forces' battlefield successes. But despite the rife symbolism of the occasion, the meeting's main importance lies in its exposure of Beijing's latest technique for dealing with Taipei, and the potential repercussions for Taiwan.
Analysis
Lien Chen, chairman of Taiwan's Kuomintang (KMT), will visit mainland China from April 26 to May 3 as head of a KMT delegation coming in response to the invitation of Chinese President Hu Jintao, who is acting in his capacity as chairman of the Communist Party of China (CPC). The visit represents the culmination of one year's planning on the part of China.
The upcoming visit marks a milestone in relations between the CPC and KMT, which fought a civil war over whether Nationalists or Communists would control China after cooperating in the fight against the Japanese before and during World War II. There are suggestions that Hu and Lien, during their planned April 29 meeting, will announce a formal end to the civil war that led to the formation of separate governments in Beijing and Taipei in 1949.
Lien's trip is being greeted with mixed reviews in Taiwan, where some support his visit as a move toward peace and stability across the Taiwan Strait, while others decry it as a traitorous act, endangering Taiwan's national security. For Beijing, this sharp dichotomy in Taiwanese political circles is part of the motivation for inviting Lien and other Taiwanese opposition politicians. Beijing has tried threats and missile tests, it has tried economic coercion and punishment, and it is now launching a "peace initiative" aimed at exploiting the realities of Taiwan's developing democracy.
For Beijing, the Taiwan issue is one of identity, economics and security. The fundamental question of a single China -- the completion of the victory partially won in 1949 -- still weighs on the leadership in Beijing. The ever-present threat of Taiwanese secessionism, coupled with U.S. interference in the matter, gives Beijing a powerful tool for rallying nationalist sentiments and justifying a continued emphasis on a strong military, even at times when economics seems the primary concern.
Economically, Taiwan remains one of the largest sources of foreign direct investment (FDI) into China, and the Taiwan-China technology transfer has driven development in China's coastal provinces. War with (or over) Taiwan would trigger a significant reversal in Beijing's economic opening and its "peaceful rise" on the world stage. At the same time, formal Taiwanese secession is seen as a potential trigger for other regions of mainland China to potentially breakaway from the center, from Tibet and Xinjiang in the west to coastal cities, such as Shanghai, where economic and political interests are growing more and more intertwined with foreigners rather than with Beijing.
Beijing's even older concerns of Taiwan's representing an unsinkable aircraft carrier for the aircraft of potential enemies remains, despite modernizations in military aircraft technology. Taiwan sits along the major trade routes between East Asia and the Middle East, and the quietly increasing defense ties between Taiwan and Japan is heightening concerns in Beijing.
Mainland China's officials see Taiwan's main goal as maintaining the status quo -- at least for now. There is little interest in war on either side of the Taiwan Strait, and both sides play a very delicate -- but dangerous -- game to test the other side's limits. China's recently passed Anti-Secession Law, for example, although offering ammunition to the United States to help keep the EU arms embargo on Beijing in place, had little real impact on cross-strait relations. Much watered-down from its initial incarnation, the law only mattered if Taiwan considered itself part of mainland China (and thus subject to its laws), and the law added little new to Beijing's longstanding threat to use force should Taipei attempt to declare independence from Beijing.
But interestingly, the Anti-Secession Law could have yielded an unexpected benefit for Beijing. Inside Taiwan, a bitter battle rages between the main political parties. President Chen Shui-bian, of the Democratic Progressive Party (DPP), has been trying to woo away KMT ally James Soong, head of the People First Party (PFP). The DPP, though it controls the government, does not control the legislature. It is allied with the Taiwan Solidarity Union (TSU), a vocal pro-independence party. Though the DPP ostensibly is pro-independence, Chen himself is more of a centrist, exploiting nationalist sentiments for elections and then moderating his stance once in power.
The KMT visit to Beijing represents a blow to Chen, who has been unable to strike up any sort of dialogue with Beijing. In essence, the Chinese leadership is exploiting the rifts inside Taiwan, offering a friendly face to the opposition leaders (Soong also has been invited, and has accepted, an invitation to visit the mainland.) This puts Chen and the DPP on the defensive. On the one hand, it leaves them dependent on the KMT or at least the PFP for dialogue with Beijing. On the other hand, it adds impetus for the DPP itself to open talks with Beijing, since Chen sees maintaining the status quo as -- at least for now -- the best course for Taiwan.
Chen has launched a campaign to diversify Taiwanese business ties away from mainland China, emphasizing Taiwan's technological capabilities and important location. But though Taiwanese FDI in mainland China did drop slightly in the first quarter of 2005, business links remain strong because of existing investments, geography, and cultural and family ties. Despite the increase in physical crimes against Taiwanese in China noted by Taiwan's Straits Exchange Foundation, Taiwanese business interests in the People's Republic are unlikely to subside substantially -- after all, many Taiwanese businessmen or their ancestors originally hailed from the mainland.
Beijing's manipulation of the splits among Taiwan's political parties demonstrates increased subtlety on the part of mainland China's leadership, at least with regard to the Taiwan issue. Chinese foreign policy has grown much more nuanced in recent years, in line with its economic rise. This has allowed Beijing to reduce external pressures resulting from its stance toward Taiwan as it deals with its economic troubles at home, and tries to regain control over local and regional officials while reshaping the Communist Party.
For Chen and the DPP, however, the Chinese have found a soft spot. Though Chen relies on pro-independence forces for political power, he has little intention of forcing the issue -- after all, he is a pragmatist. China's actions leave him less room to maneuver, particularly as parliamentary elections near. Should he decide to talk peace with Beijing himself, he risks undercutting his nationalist base. He also risks enflaming the TSU and more radical pro-independence elements.
If, however, he censures the KMT and PFP for their visits to Beijing -- something the TSU advocates -- he goes against the powerful business community, which ultimately wants to preserve the status quo so it can continue to profitably operate and expand business with mainland China. Finally, if he does nothing, or leaves things in the hands of the KMT and PFP, he loses control over Taiwan's China policy and risks his own party's power.
Though the current peace offensive is unlikely to settle the Taiwan issue, it has recast the debate in a new form, leaving Beijing in the driver's seat and little room for criticism by the outside world, given the absence of Chinese saber rattling. And as Beijing continues to try to shore up its image as the benign Asian giant, Chen and the DPP risk being swept out of the way or made to look like the parties responsible for poor Taiwanese-Chinese relations.
Copyright 2005 Strategic Forecasting Inc. All rights reserved.
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