does China want?"
ingratitude. This week, China signaled it was rejecting an
overture by Taiwan to establish closer commercial relations.
Taiwan's President Chen Shui-bian, who used to favor independence
from China, had surprised much of the world by embracing a
prestigious panel's recommendation that Taiwan integrate with
China more aggressively in commercial terms. However, this
was shot down by Beijing just days later.
Much of the world had cheered Mr. Chen's decision to adopt
the findings of a panel of top business leaders and officials,
which he commissioned to recommend economic stimulus measures.
With Taiwan's economy entering its sharpest decline in over
two decades and expected to contract 2 percent this year,
the panel suggested a broad easing of trade, transportation
and investment restrictions with China. Taiwan should remove
a $50 million cap on investment in China, and instead evaluate
projects case-by-case, the panel said, and Taiwan should be
permitted to open branches on the mainland. China, in turn,
should be allowed to invest in Taiwanese property and stock
markets, which are in a tailspin, it added.
The implementation of these policy prescriptions would have
been groundbreaking, since the Taiwanese government clamped
down on investments to China in 1996, and there is no direct
transportation across the Taiwan Strait. Furthermore, Mr.
Chen once supported a referendum on Taiwan's independence
In financial terms, it seems China ought be rather partial
to the panel's recommendations, since they could translate
into a windfall of new investments. Taiwanese companies have
invested an estimated $60 billion in China over the past decade,
but according to Ramone Myers, a China expert at the Hoover
Institution, this figure could grow substantially, should
restrictions be eased.
However, China's rejection of closer ties, in the absence
of Taiwan's acceptance of a one-China principle, surprised
the experts who believed Beijing would be eager to attract
capital from Taiwan. An editorial published in the state-controlled
New China News Agency said that if Taiwan believes it "can
avoid the 'one China' principle . . . by just talking about
economic problems, this is not realistic and will not succeed."
By harping on this theme, Beijing clearly signals its priorities.
Dominating Taiwan is more important than improving economic
conditions for its own citizens.
But then again, the Beijing regime hasn't traditionally staked
its survival on acting in the interest of its citizens. Beijing
eyes the Chen government with acute suspicion, and believes
that Taiwan's incremental disavowal of a one-China policy
could lead to an eventual full-blown independence movement
on the stealth. It's too bad they have chosen to deny their
own people this opportunity.