At a Glance
• Enhanced cross-strait people-to-people interaction
• Concrete results from SEF-ARATS talks over the past four years
• Greater investment from mainland China permitted in Taiwan businesses
In 1949, as a result of civil war on the Chinese mainland, the government of the Republic of China relocated to the island province of Taiwan to advance the ideals on which the Republic was founded. Since then, the two separately governed territories have evolved in very different directions politically: The ROC has become a thriving democracy with an unfettered press and high degree of religious freedom.
Estrangement and military confrontation marked relations between the two sides of the Taiwan Strait until the resumption of institutionalized cross-strait talks in mid-2008 transformed it into one of extensive people-to-people and economic exchanges. While the possibility of armed conflict across the Taiwan Strait remains a matter of international concern, increased semi-official cross-strait negotiations have resulted in the signing of 18 agreements covering practical issues, offering hope that steady progress can be made toward building a framework for advancing mutual trust, peace and prosperity.
Tourists from mainland China browse through souvenirs at the Cihu Mausoleum in Taoyuan. Since June2011, mainland travelers have been able to visit Taiwan without being part of group tours. (Courtesy of Taiwan Panorama)
At the time the Republic of China (ROC) was founded in 1912, Taiwan was under Japanese colonial rule as a result of the 1895 Treaty of Shimonoseki, by which Qing-dynasty 清朝 China (1644-1912) ceded the island province to Japan. At the end of World War II in 1945, the ROC government declared Taiwan a province of the Republic. Four years later, after fighting a civil war with Chinese Communist Party (CCP) rebels, the ROC government led by the Chinese Nationalist Party, or Kuomintang (KMT) 中國國民黨, relocated to the island. Since then, the ROC government’s effective jurisdiction has been limited to Taiwan and the Penghu 澎湖, Kinmen 金門 and Matsu 馬祖 archipelagos, in addition to a number of smaller islands.
Meanwhile, the CCP regime declared the establishment of “the People’s Republic of China,” and the preamble to its constitution asserts that “Taiwan is part of the sacred territory of the PRC,” implying that the ROC has ceased to exist. Many facts, however, demonstrate its continued existence: The ROC government exercises sovereignty over territories more populous than three-quarters of the world’s nations; it maintains diplomatic relations with other countries; and ROC passports are honored the world over. Moreover, it is consistently ranked by global surveys among the top nations in terms of freedom, human rights and economic performance.
1949-1987: From Mutual Denial to Initial Opening
During the Cold War, the Taipei-based, KMT-led government and the Beijing-based, CCP-led government denied each other’s legitimacy. Each claimed sovereignty over all of China inclusive of the mainland and Taiwan and attempted or threatened to use force to resolve the issue. In 1979—eight years after the ROC was forced to withdraw from the United Nations and the China seat was transferred to the Beijing government—Beijing’s policy statements began to stress the use of “peaceful” means to achieve unification. Taipei 臺北 responded to this with a "three noes" policy—no contact, no negotiation and no compromise.
Beginning in the 1980s, the ROC underwent political democratization as well as economic liberalization. Since the lifting of martial law in 1987, Taipei has adopted progressively more open policies toward Beijing, spurring economic, cultural and educational exchanges.
1988-2000: Lee Teng-hui Administration
In addition to promoting political reforms that greatly advanced democracy, the administration of President Lee Teng-hui 李登輝 took steps to put the cross-strait relationship on a realistic footing. In 1990, just as democratization was going into high gear, an advisory panel called the National Unification Council 國家統一委員會 was established under the Office of the President. In February 1991, the council issued the Guidelines for National Unification 國家統一綱領, which affirms a “one-China principle” and outlines a three-phase approach to unification. The first phase calls for the mainland to democratize and carry out economic reform.
In May of the same year, President Lee announced the termination of the Period of National Mobilization for Suppression of the Communist Rebellion 動員戡亂時期, inferring that the ROC government no longer looked upon the CCP and its mainland government as seditious organizations that must be suppressed, and indirectly acknowledging the reality that the two were on an equal footing.
In response to the increasing level of exchanges across the Taiwan Strait, the Cabinet-level Mainland Affairs Council (MAC) 行政院大陸委員會 was founded in 1991 to serve as the official agency responsible for the overall planning, coordination, evaluation and implementation of cross-strait policies. At the same time, the semi-official Straits Exchange Foundation (SEF) 海峽交流基金會 was set up under the direction of the MAC with the mission of negotiating agreements and consulting on technical and practical matters with mainland authorities. In addition, laws and regulations were enacted or amended to facilitate economic and cultural interaction with the mainland.
The establishment of the SEF and, soon thereafter, its mainland Chinese counterpart, the Association for Relations Across the Taiwan Straits (ARATS) 海峽兩岸關係協會, signaled the realization in both Taipei and Beijing that, despite continuing mutual non-recognition of each other’s legitimacy, it was imperative to begin interacting on a basis of mutual respect. The semi-official nature of the SEF and ARATS allows the two governments to negotiate practical issues without affirming the sovereign status of the other side.
In October 1992, representatives of the SEF and ARATS held preparatory talks in Hong Kong—the first time authorized representatives of the Taipei and Beijing governments had done so—but failed to progress when the mainland raised the issue of “one China.” Ultimately, both sides reached an understanding via subsequent facsimiles and communication that their talks were premised on the assumption that there exists only one China, while agreeing to differ on its precise political definition. To Taipei, the “1992 consensus” means that there is only one China and that one China refers to the ROC. Based on the 1992 consensus, institutionalized talks were held in Singapore in 1993, opening a new phase of cross-strait relations.
To protest the United States’ decision to allow President Lee to visit the country in June 1995, the mainland indefinitely postponed further SEF-ARATS negotiations that had been scheduled for July 1995 in Beijing. That same month, tensions escalated when mainland armed forces test-fired missiles into waters off the coast of Taiwan. In the run-up to the ROC’s first direct presidential election in March 1996, Beijing intensified military exercises in the Taiwan Strait region, once again shooting missiles into Taiwan’s coastal waters.
In October 1998, the SEF and ARATS resumed talks in Shanghai but made no progress on substantive issues. In July 1999, Beijing once again suspended talks in protest against President Lee’s characterization of cross-strait ties as a “state-to-state relationship or at least a special state-to-state relationship” during an interview with Deutsche Welle, a German radio station.
In the interview, Lee explained that this view was based on his belief that a 1991 amendment to the ROC Constitution in effect acknowledges the legitimacy of the PRC government on the mainland, in addition to that of the ROC government on Taiwan. CCP leaders nevertheless claimed that his assertion of the existence of "two Chinas" was tantamount to a declaration of "Taiwan independence."
Despite the failure of cross-strait talks to steadily build on the initial successes of 1992 and 1993, the ROC government gradually eased restrictions on the movement of people, goods, capital and technology from Taiwan to mainland China. It shared with the governments of other democratic nations the belief that promoting prosperity in mainland China would encourage democratic development there, which would facilitate the peaceful resolution of cross-strait disputes.
2000-2008: Chen Shui-bian Administration
In 2000, Chen Shui-bian 陳水扁 of the Democratic Progressive Party (DPP) 民主進步黨 was elected president and was re-elected in 2004. The DPP-led government refused to affirm the existence of a “one China” or the desirability of pursuing unification. It insisted that although any form of future relationship, including various modes of integration, could be discussed, no advance agreement on any specific future relationship could be a precondition for conducting talks.
In his first inaugural address, however, President Chen pledged not to initiate any move—such as pushing to adopt a new official name for the nation—that might be interpreted as altering the status quo. On several occasions, he urged Beijing to cooperate in establishing a “peace and stability framework.”
The Chen administration took a number of further measures that demonstrated Taiwan’s good will. These included relaxing restrictions on imports from the mainland, mainland-bound investment, and the functions and scope of offshore shipping centers.
In addition, the Chen administration began permitting journalists from the mainland to visit Taiwan (although it later withdrew this privilege); opened Taiwan to visits by people of the mainland who lived in, or first traveled to, a third country; and took steps to negotiate cross-strait charter flights for ROC citizens during holidays and for humanitarian purposes. Further, Taiwan-based financial institutions were authorized to open liaison offices in the mainland.
At the time, cross-strait shipping and movement of people from Taiwan to the mainland had to make inconvenient, expensive detours through Hong Kong or third countries. With booming growth in cross-strait trade and visits of Taiwanese businesspeople and tourists to the mainland, the Chen administration called for a resumption of cross-strait negotiations, with a priority on signing agreements to open up “three links” 三通—direct transportation of people and goods as well as direct postal service and commercial transactions. Beijing rejected this overture to resume the cross-strait dialogue, however, insisting that this would be possible only if the Chen administration affirmed that Taiwan and the mainland constitute a single China and must eventually be unified.
In the face of the impasse in negotiating the establishment of direct links, President Chen early in his first term unilaterally approved the opening of direct seaborne passenger transportation for ROC citizens on ROC-registered boats between the Kinmen and Matsu islands and a number of mainland seaports. With no objection forthcoming from Beijing, this arrangement—known as the “mini three links” 小三通 although it did not involve postal or commercial transactions—began on January 1, 2001.
Refusing to renounce the use of armed force to assert its claim of sovereignty over Taiwan, the Beijing authorities continued to expand military deployments opposite Taiwan throughout the eight years of the Chen administration. By mid-2008, the number of missiles targeted at Taiwan had increased to over 1,000, and large-scale military exercises simulating attacks on Taiwan continued to be held annually. Meanwhile, Beijing maneuvered to block Taipei’s participation in international forums and to hinder its diplomatic endeavors.
On March 14, 2005, the National People’s Congress in Beijing enacted an "anti-secession law," which authorizes the People’s Liberation Army to use "non-peaceful means" to achieve cross-strait unification should Taiwan’s people attempt to "secede" from the People’s Republic of China. In response, President Chen issued a six-point statement, stressing that Taiwan’s sovereignty belongs only to its 23 million people, and that any law calling for violation of the basic rights and interests of others was a setback for human civilization.
A year later, in February 2006, President Chen declared that the Guidelines for National Unification had “ceased to apply” because they had been drawn up by an ad hoc presidential commission in the days before citizens had the right to elect their leader and make their voices effectively heard. Additionally, the framers of the guidelines had premised them on a “one-China principle” and the presumption of eventual unification without consulting the people of Taiwan.
2008-Present: Ma Ying-jeou Administration
After decades of tension, relations between Taiwan and mainland China have warmed since President Ma Ying-jeou took office in May 2008. The Ma administration has implemented initiatives to create conditions conducive to promoting regional peace, stability and prosperity on the basis of the aforementioned “1992 consensus.”
In President Ma’s 2008 inaugural address, he enunciated the imperative of maintaining the status quo during his term of office under the framework of the ROC Constitution. This means no unification talks with the mainland, no pursuit of Taiwan independence and no use of force to settle sovereignty issues. In the address, he also called upon the two governments to “face reality, pioneer a new future, shelve disputes and pursue win-win solutions,” thereby enabling them to strike a mutually beneficial balance as they pursue their respective interests.
Immediately after taking office, the Ma administration moved to reactivate institutionalized SEF-ARATS negotiations that had been in hiatus for a decade. The historic first round of talks, held in June 2008 in Beijing, produced the first cross-strait agreements in 15 years. The second round held five months later in Taipei was also historic as it marked the first time a mainland Chinese negotiating team had come to Taiwan.
As of August 2012, eight rounds of talks had been held, producing 18 formal agreements, three memoranda of understanding and two joint statements (see table “Cross-strait Talks and Agreement Topics”). Such advances have helped reduce cross-strait tensions and enhance prospects for lasting regional peace and prosperity.
The agreements address the economic interests and general welfare of people on both sides of the Taiwan Strait and do not touch on sovereignty issues. This conforms with President Ma’s stated principles of putting economics before politics, pressing matters before less pressing ones, and easily resolved issues before difficult ones to ensure that development of cross-strait exchanges and interactions can steadily progress based on a solid institutional foundation.
Believing that greater harmony between the two sides should bring the ROC greater freedom to participate in international affairs, the Ma administration has given attention to creating more opportunities for cross-strait cooperation in the international community.
Meanwhile, in mid-2010, Taiwan and mainland China’s Hong Kong Special Administrative Region established the Taiwan-Hong Kong Economic and Cultural Co-operation Council (THEC) 臺港經濟文化合作策進會 and the Hong Kong-Taiwan Economic and Cultural Co-operation and Promotion Council (ECCPC) 港臺經濟文化合作協進會 as platforms for fostering closer economic and cultural ties.
In June 2010, MAC Minister Lai Shin-yuan 賴幸媛 became the first MAC chief ever to visit Hong Kong. Two months thereafter, Hong Kong Financial Secretary John C. Tsang 曾俊華 led an ECCPC delegation to Taiwan for its first meeting with the THEC. During the meeting, the two sides reached agreement on mechanisms for further exchanges, areas of cooperation and specific objectives.
As a result, in July 2011, the ROC representative office in Hong Kong, formerly called the Chung Hwa Travel Service 中華旅行社, was renamed the Taipei Economic and Cultural Office in Hong Kong, reflecting an enhancement of its functional status and its ROC personnel’s diplomatic privileges. That same month, for the same reasons, the name of the ROC representative office in Macau was changed from the Taipei Economic and Cultural Center to the Taipei Economic and Cultural Office in Macau. Further, the governments of Hong Kong and Macau also established representative offices in Taipei during December 2011.
On December 30, 2011, the THEC and ECCPC worked out an agreement to boost the weekly number of passenger flights and the volume of air cargo shipments between Taiwan and Hong Kong while opening up the route to new airline companies. It marked the first time that such an arrangement was completed by officials of the two sides, instead of by representatives of private organizations.
Cross-strait Movement of People
Cross-strait movement of people has increased rapidly since the ROC government began allowing private visits to mainland China in 1987. The number of visits made by ROC citizens to the mainland (including Hong Kong and Macau) each year grew from 437,000 in 1988 to 5.26 million in 2011. Over that period, ROC citizens made a total of 66.3 million visits to the mainland, while mainland Chinese made 6.48 million visits to Taiwan.
Tourists from mainland China made over three million visits from July 18, 2008—when they were first allowed to travel directly to Taiwan—to the end of 2011. Arrivals on average topped 3,000 per day in 2010, reaching the target set in the Cross-Strait Agreement Concerning Mainland Tourists Traveling to Taiwan 海峽兩岸關於大陸居民赴臺灣旅遊協議, signed in June 2008. The daily quota for inbound tourists from mainland China was lifted to 4,000, starting on January 1, 2011.
The ROC’s semi-official Taiwan Strait Tourism Association (TSTA) 臺灣海峽兩岸觀光旅遊協會 opened an office in Beijing on May 4, 2010. Its primary mission is to expand channels of communication and cooperation with government agencies, private companies, media organizations and Taiwanese business associations on the mainland. It researches market demand in mainland China and cooperates with local travel agencies to develop quality tourism products to be promoted through seminars and trade shows. Further, the association invites mainland travel agents and media representatives to Taiwan to get a firsthand understanding of its diverse offerings.
Meanwhile, the TSTA’s mainland Chinese counterpart, the Cross-Strait Tourism Exchange Association 海峽兩岸旅遊交流協會, opened an office in Taipei on May 7, 2010. The two openings marked the first exchange of semi-official offices between the two sides of the Taiwan Strait since they became separately governed six decades ago.
Taiwan previously allowed only group tourists from mainland China, but in June 2011 opened its doors to independent tourists from three mainland cities—Shanghai, Beijing and Xiamen—for maximum stays of 15 days per visit. This was expanded by six more mainland cities in April 2012, when the daily arrival quota was increased from 500 to 1,000 people; an additional four cities were added to the list later in August. As of the end of 2011, solo tourists from the mainland had made around 30,000 visits to Taiwan. From 2012 onward, travel for medical checkup and cosmetic surgery purposes also became permitted.
Cross-Straits Economic Cooperation Framework Agreement
Signed by the SEF and ARATS on June 29, 2010, the Cross-Straits Economic Cooperation Framework Agreement (ECFA) 海峽兩岸經濟合作架構協議 was ratified by the Legislative Yuan (Legislature) in August 2010 and came into force the following month.
The primary aim of the ECFA is to facilitate systematization and liberalization of trade and economic relations across the Taiwan Strait. It calls for the progressive elimination or reduction of tariffs on most goods as well as the opening of the service sector to investment and competition. For its part, Taiwan also looks forward to utilizing the pact to strengthen its position in the Asia-Pacific economy.
Goods and services that have already benefited from such liberalization are enumerated in the agreement’s “early harvest” list. As of mid-2011, the listing of goods comprised 267 mainland-produced items and 539 Taiwan-produced items. The listing of services included, on the Taiwan side, banking and eight non-financial sectors. On the mainland side, it included banking, insurance and securities as well as eight non-financial sectors. Starting from 2012, a total of 509 items exported from Taiwan to the mainland enjoyed tariff-free treatment.
In accordance with the ECFA, on January 6, 2011, negotiating teams from the two sides established the Cross-Strait Economic Cooperation Committee (ECC) 兩岸經濟合作委員會, which held its first regular meeting in February 2011. At the meeting, the two parties agreed to set up six working groups responsible for consultations on trade in goods and services, investment, dispute settlement, industrial cooperation and customs cooperation; to review the ECFA early harvest list; and to launch three sets of negotiations on trade in goods, trade in services and dispute settlement.
At the ECC’s second and third meetings held respectively on November 1, 2011 and April 26, 2012, the two sides discussed a broad range of topics including the status of the early harvest list; progress of the six working groups; cross-strait industrial cooperation (in areas including light-emitting diodes, wireless networking, low-temperature logistics, liquid crystal displays and electronic automobiles); responses to the global economic downturn; and strategies for expanding international markets.
As with the other cross-strait agreements discussed above, the ECFA’s intangible benefits are as important as its practical ones: Development of mutually beneficial economic relations across the Taiwan Strait can be an impetus for sustained peace.
In addition to the negotiation of agreements, since May 2008 central and local governments have implemented a number of measures to improve cross-strait interactions and exchanges.
The regulatory cap on Taiwan-based companies’ investments in mainland China has been raised from 40 percent to 60 percent of their net worth. Further, a number of new regulations have been promulgated in line with the April 2009 joint statement on allowing mainland investment in Taiwan. From July 2009 to March 2012, the Investment Commission under the Ministry of Economic Affairs 經濟部投資審議委員會 approved 217 mainland applications for investment in Taiwan worth US$272 million. By March 2012, it had permitted investment from mainland China in most types of businesses in Taiwan's manufacturing sector and roughly half of those in the service and public construction sectors.
There have also been advances in the area of people-to-people exchanges. ROC government prohibitions on visits of its high-level officials to the mainland have been relaxed, while central- and local-government agencies are now permitted to invite mainland officials to visit Taiwan. And amendments to the Act Governing Relations between the People of the Taiwan Area and the Mainland Area 臺灣地區與大陸地區人民關係條例 have bolstered the employment and inheritance rights of mainland spouses, and have reduced the waiting period for acquiring ROC identity cards to six years.
The mainland’s Xinhua News Agency 新華社, People’s Daily 人民日報 and five mainland local media are currently allowed to post permanent correspondents in Taiwan. Additionally, mainland reporters now enjoy streamlined application procedures and are allowed to visit for up to three months at a time, extendable for a further three months if necessary. Meanwhile, the number of visiting reporters permitted for each media organization has increased to five. All mainland correspondents are free to travel to any location in Taiwan without having to give prior notice.
Restrictions on students from mainland China wishing to pursue higher education in Taiwan have been relaxed and their diplomas are now recognized. To facilitate their enrollment in Taiwan’s universities, in August 2010 the Legislative Yuan enacted amendments to three laws concerning mainland Chinese students—the Act Governing Relations between the People of the Taiwan Area and the Mainland Area, the University Act 大學法 and the Junior College Act 專科學校法. After promulgating the relevant guidelines on January 1, 2011, the Ministry of Education organized the Mainland Chinese Joint Admissions Committee to administer matters concerning the recruitment and acceptance of mainland students. The first batch of mainland students—928 in total—began studying at universities in Taiwan in September 2011.
Meanwhile, a cross-strait joint effort resulted in the creation of an online glossary database in February 2012 juxtaposing the respective differences in Chinese terminology used in Taiwan and mainland China. Encompassing commonly used expressions contributed by users and proofread by a team of experts, the database fosters greater mutual understanding of cross-strait differences in word usage and forms of Chinese characters.
It is hoped that these and other measures to promote people-to-people exchanges will enable the residents of mainland China to understand Taiwan’s free and democratic society while at the same time helping people in Taiwan gain a better understanding of the mainland.
Over the four years since President Ma called on the two sides of the Taiwan Strait to seize opportunities to advance peace and prosperity, cross-strait tensions have eased. The tone of Taiwan-mainland relations has shifted from confrontation to cooperation, from conflict to conciliation—a development widely applauded in the international community as conducive to peace and stability in the Asia-Pacific region.
With ongoing talks on further agreements, economic and cultural ties between Taiwan and mainland China can be expected to steadily mature, with hopes for creating a “golden decade” of prosperity for Taiwan as it integrates more closely with the regional economy. Because the mainland’s military buildup has continued unabated, however, Taiwan will continue to make necessary upgrades to its defense capabilities.
In view of the impossibility of resolving cross-strait issues overnight, the ROC government will endeavor to maintain the status quo while cultivating harmonious relations step by step through negotiation and cooperation. The development of common values is also an essential ingredient in cross-strait relations, as the prospects of peaceful interaction will be greatly enhanced if mainland China moves in the direction of greater freedom and democracy.