Thank you to the TCA-Canada Conference organizers for their kind invitation to speak today about the "New Framework" for Cross-Strait Relations between China and Taiwan.

The Republic of China-Taiwan should once again be congratulated for conducting free and fair national elections for its Legislative Yuan in January and the Presidency in March 2008. The measure of a democracy is its ability to choose its political leaders through open elections – and to change its leadership without recourse to force or violence. To put this Asian success story into global context, one only needs to point to the Southern African example of Zimbabwe's collapse of democratic structures over the past two decades – highlighted by its recent "unfree and unfair" presidential elections.

The following assessments on current state of cross-strait relations are my own and based upon the best current information. But events can arise or evolve in ways unforeseen by politicians, critics or even informed observers. And Mr. Moderator, I will still try to stay within my 12-minute speaking time slot !!

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Following the March 2008 presidential election of KMT party candidate Ma Ying-jeou, I believe that the Republic of China on Taiwan and the People's Republic of China on the mainland have entered into a "new framework of cooperation" in cross-strait relations. Nevertheless, there is an urgent need to build on the "status quo" of the past two decades as there is a window of opportunity in Beijing for further progress in the coming few years.

I am not persuaded that this current cross-strait cooperation is on a continuous uphill – even if gradual – road to long-term peaceful relations. Current steps that are being taken are tension-reducing and confidence-building – yet they can be reversed under a projected 2008-2012 window of opportunity that will coincide with President Ma's executive term of office.

To explain this apparent contradiction in assessments, it is necessary to consider these evolving cross-strait relations in terms of key political keys – in addition to fundamental economic and military factors. And to point to possible early turning-points in this "new framework" of cross-strait relations where greater efforts to build on the "status quo" of the past two decades can be made. In addition, it is necessary to consider what are the key tension-reducing and tension-increasing issues that will impact on these factors during President Ma's presidential term from 2008 to 2012.

I believe that the "political ball" is in China's court regarding progress in cross-strait relations. It can easily be seen that the Chinese Communist Party (CCP) leadership in Beijing sets the tone as to whether there are good or hostile relations across the Taiwan Strait. On the other hand, Taiwan's commercial, financial and technological sectors have consistently contributed to China's economic growth while the island offers no military threat to the Chinese mainland.

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I think that, over the past two decades, Taiwan's population has increasingly seen itself in terms of a "Taiwanese identity". This Taiwanese identity has basically supported a "status quo" approach to cross-strait relations – namely governmental policies for increasing national growth through cross-strait economic links while taking no steps that would lead to a precipitate Chinese military attack from the mainland.

This status quo situation could be said to have grown from:

The 1991 constitutional renouncement by the ROC government under former KMT president Lee Teng-hui of any sovereign claim to the Chinese Mainland, and The so-called "1992 Consensus" that each side reserved the right to define "One China" in its own way – based upon the then secret cross-straits talks held in Singapore. China reportedly broke off these bilateral talks in 1999 when President Lee called for official country-to-country talks.

Even building on the party-to-party links developed between the KMT and the CCP parties since 2005, there is only a limited range of opportunities for new political accords at present. The Chinese communist leadership is very unlikely to drop its "One China" sovereignty pre-conditions that would be required to permit a senior leadership summit or a "peace accord" on the basis of equality. As a result, no serious cross-strait dialogue involving President Ma Ying-jeou is expected during his four-year term of office. Then what are the key political factors affecting cross-strait relations?

Key Political Factors

President Ma Ying-jeou
During his election campaign and recently, President Ma has repeatedly pledged his so-called "Three Noes" cross-strait policy of No War, No Independence and No Unification – though some writers have suggested on the latter at least no discussions of it during his first term of office. He has also called for a cross-strait "peace accord" and greater "international space" for Taiwan, particularly regarding World Health Organization (WHO) Assembly observer status. It is expected that Taiwan will make a WHO bid again this September.

At the same time, President Ma has pledged to defend Taiwan's security. As recent as last Wednesday, President Ma repeated his administration's key foreign policy goals when he stressed his promise of "maximizing the opportunity [for thawing cross-strait ties] while minimizing the [military] threat" [Central News Agency, Taipei, July 2, 2008]. President Ma's new National Security Council secretary-general Su Chi – in his past writings – has declared that Taiwan's national security could be ensured by its use of "soft power" policy tools and "defensive defense" measures that included a mix of "economic, pragmatic & effective" armaments (United Daily News, Taipei, January 24, 2006). Yet KMT legislators repeatedly blocked the defensive arms bill for five years – until December 2007 – partly due to declared opposition to excessive prices for the U.S. armaments and partly due to domestic partisan politics.

The KMT majority party
The KMT party – following its wins in the January 2008 national elections (81 out of 113 seats) – has control over both the executive branch (the presidency) and the legislative branch (the Legislative Yuan). But political experience in other democracies has shown that, when one party controls both branches, the president and the legislative leaders tend to enter into inter-branch conflicts over national policies and institutional powers. Unless the president has exceptional party support and personal charisma, it is increasingly likely that there will be such conflicts between President Ma and KMT party factions – particularly on policies and their implementation as they affect individual legislative constituencies.

The new Legislative Yuan structure
As of the January 2008 elections, the Legislative Yuan has constitutionally reduced the number of its members from 225 to 113. Now each LY legislators will in effect be exercising increased political influence in policy debates, voting, and committee memberships. It is difficult to assess how this major constitutional change will play out: (1) in the relations between the Presidency and the Legislature, and (2) between the majority KMT party and the minority DPP in the Legislative Yuan. There are already serious calls for the Legislative Yuan as a body to play a more active role in any future China-Taiwan agreements – either in an oversight role or in terms of having the power to approve any such agreements.

The DPP opposition party
As the minority party in the Legislative Yuan, the DPP needs to rebuild its political structure and its national support. It has begun this rebuilding process with the election of its new party chairwoman Tsai Ing-wen. While continuing to call for measures that recognize Taiwan's independent status, DPP legislators will likely oppose any policies that enable CCP leaders in Beijing to impose greater economic influence over the island or place Taiwan under increased military threat from the ongoing PLA modernization and arms build-up.

Opposition voices also point out that China still has the leading role at the negotiating table "as it holds all the chips" [Central News Agency, Taipei, June 18, 2008]. The Chinese communist leadership has shown good will with its KMT-CCP party links, its agreement to direct weekend charter flights, and allowing Chinese tourists to visit Taiwan. But Beijing has avoided other issues of more importance to Taiwan, such as increasing air flight frequencies, opening more Chinese airports (currently only three mainland airports compared to eight Taiwanese airports) to direct cross-strait flights, or launching direct charter cargo flights which would greatly assist Taiwanese business enterprises on the mainland.

The People's Republic of China
There are unlikely to be any cross-strait problems this year as Beijing will be hosting the August 2008 Summer Olympics – which is already being publicized as a world-class event heralded as China's "coming-out party" to global status. And an official invitation has already been given to KMT honorary chairman Lien Chen to attend with other world leaders. Similarly, there will increasing efforts to build on cross-strait economic links in the period leading up to the 2010 Shanghai International Exposition.

But many CCP and PLA leaders called for greater Chinese nationalism and patriotism—particularly regarding Tibet and the need to reclaim the island of Taiwan as well as islands and islets in the East China Sea and the South China Sea. For the CCP leadership, the Taiwan issue is and will continue to remain a key public nationalistic claim to political legitimacy. As low-level social and economic complaints and protests increase, such Chinese nationalistic (patriotic) declarations will become increasingly necessary in the coming years. For the PLA commanders, even though there are attempts to reduce overall military manpower numbers, there are ever greater efforts being made to upgrade and computerize Chinese PLA armed forces with new and, if possible, state-of-the-art armaments.

The United States
Across the American political spectrum, there is generally acceptance that the election of President Ma has lead to a period of reduced cross-strait tensions. Even so, there is concern in Washington that the United States could lose some regional influence if Taipei moves too close to Beijing [Jane's Defence Weekly, London, June 5, 2008].

In addition, President George Bush is already seen as a "lame duck" presidency and likely to leave issues of Taiwan-US arms sales for his successor (whether John McCain or Barack Obama) in January 2009 – if only to enable him to attend the Beijing Summer Olympics along with other world leaders. Reportedly, Bush is under pressure from John McCain, Barack Obama, and even Hillary Clinton not to attend the Olympics gathering in view of the Chinese oppressive measures in Tibet.

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On Cross-Strait Economic Factors

There is much room for a variety of mutually-beneficial economic accords – though there are doubts about a suggested cross-strait "common market" due to concerns of a China "takeover" by economic means. There is likely to be further expansion of the three transport 'mini-links' with the mainland, greater Chinese tourism to Taiwan [which began this month – July 2008], possible national cultural exchanges, investment opportunities for Chinese investors in Taiwan, etc. Direct air flights between the Chinese mainland and Taiwan airports began this month, as did the first Chinese tourist groups to the island.

President Ma reportedly hopes to conclude a double taxation and investment protection agreement with China, and eventually a comprehensive economic co-operation agreement similar to the 2003 Comprehensive Economic Partnership agreement between China and Hong Kong.

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On Cross-Strait Military Factors

There are an estimated to be more than 1000 PLA short-range missiles – plus 200 cruise missiles – targeted on the island of Taiwan, according to the latest annual assessment by the Department of Defense for the U.S. Congress [in March 2008]. Almost all Taiwan military and think tank reports claim that China will tip the military balance over Taiwan in the period leading up to 2012. Writing in 2006, newly-appointed NSC head Su Chi predicted that this would come about between 2006 and 2010 (United Daily News, Taipei, January 24, 2006). A DPP Department of Chinese Affairs report in 2003 predicted the tipping point during the same timeframe but also felt that a surprise PLA attack could successfully overwhelm the island within 24 hours excluding U.S. military intervention.

The continuing PLA military build-up will irreversibly tip the balance over Taiwan's defenses by 2012 or even sooner – notwithstanding continuing Taiwan's military modernization and arms purchases from the United States.

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Looking forward at the 2008-2012 Period

What are the possible early "positive or negative" turning points regarding cross-strait relations during President Ma Ying-jeou's 2008-2012 term of office?

September 2008: Will China permit or even support Taiwan's annual bid for WHO Assembly observer status? A Chinese acceptance of the Taiwanese claim to greater "international space" might be too much of a nod toward sovereignty. But such Chinese support would greatly enhance development of peaceful cross-strait relations.

November 2008: Will China support or oppose the Ma administration if it choose to send as its representative to the Asia Pacific Economic Cooperation forum (APEC) a senior government member? Possibly even President Ma himself?

Late 2008 or early 2009: Would the Chinese leadership be prepared to re-target – or even remove – the 1000 missiles aimed at Taiwan as suggested by President Ma? Although the missiles could be re-targeted back onto Taiwan in a matter of days, a public Chinese statement on such de-targeting would be seen a major step towards cross-strait tension-reduction.

Early 2009: It is unlikely that the lame-duck Bush Administration will make a final decision on implementing the US$ 12 billion sale of defensive arms to Taiwan – especially the all-important 66 F-16 fighter aircraft. This arms sale has been a major point of conflict in U.S.-Taiwan relations as well as DPP-KMT legislative politics since April 2001. Rather the American decision will most likely be frozen until a newly-elected U.S. president – John McCain or Barack Obama – takes office in January 2009. Even then, a go-ahead decision would likely produce heightened tensions across the Taiwan Straits and between Beijing and Washington.

Even the end of term year 2012 is already significant. On the island, Taiwan's population will again hold five-year national elections for executive and legislative leaders. On the mainland, China is expected to hold its 18th National Party Congress – at which time President Hu Jintao's "Fourth Leadership Generation" is expected to hand over power to the younger "Fifth Leadership Generation" under prospective CCP party leader Xi Jinping. But critical observers note that factionalism within the senior CCP leadership will continue to dominate Chinese decision-making through Hu's leadership period and beyond.

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