Checkbook diplomacy fails


The China Post

Foreign Minister James Huang is mapping out a new diplomatic strategy for Taiwan. It must be a demarche, an about face from what Taiwan has been doing since President Chiang Kai-shek moved his Kuomintang government to Taipei at the end of 1949.

Chiang, elected in Nanjing in 1948, never gave up the claim that his government represented the whole of China. To him, Mao Zedong, who proclaimed the People’s Republic of China on October 1, 1949, was a traitor and the Beijing regime a bogus regime. Ever since then Taipei’s foreign policy has been how to outdo Beijing in the diplomatic arena.

There have been ups and downs in Taiwan’s foreign relations, but Taipei has never won a major diplomatic battle against Beijing. To be sure, with the help of the United States, the Republic of China on Taiwan was able to keep its permanent seat in the U.N. Security Council for two decades, but it was ousted from that world organization in 1971. To win support for that seat from member states of the United Nations, Taiwan had to conduct its checkbook diplomacy, giving monetary support to cash-starved newly independent states. Though Taiwan is no longer a U.N. member, Taipei has continued to dole out such aid to keep a small club of diplomatic allies. Currently Taipei maintains diplomatic relations with 24 countries, including the Holy See.

Except the Vatican, all these allies expect and often demand financial help from Taiwan. And many of them try to get more by threatening to switch diplomatic recognition from Taipei to Beijing. As a matter of fact, they have switched recognition back and forth between Taipei and Beijing, depending on how much more they could obtain from one or the other.

Time was when Taiwan still had some extra taxpayers’ money to lavish. Taipei has long ceased to afford such largess, however. The country now has a national debt equal to its gross domestic product, while the People’s Republic of China is able to squander tens or even hundreds of millions of dollars to win over any diplomatic ally of Taiwan, if and when it so wishes. Of course, Taipei has no way of outspending Beijing.

By sheer necessity, in short, Taiwan has to scrap the dollar diplomacy.

Though Taipei should not play the one-upmanship game with Beijing, its foreign policy should be one of engagement. Taiwan has no alternative but to seek a diplomatic modus vivendi with China.

But nothing can be done while President Chen Shui-bian remains in office. It’s President Chen who had the National Unification Council cease to function. That organization was created by President Lee Teng-hui in 1990 as a vehicle to reach a detente with China. President Chen, who had promised twice in his two inaugural speeches not to abolish the institution, factually terminated it last February, killing any chance to start engaging China for the benefit of Taiwan’s foreign relations.

Engagement is now more urgently needed than ever. The suspension by the World Trade Organization of the Doha round negotiations has forced all East Asian countries to rush to conclude individual agreements to remove barriers to trade.

Taiwan has been trying to sign free trade agreements with every one of them, Japan and the United States. China is forming a vast free trade zone in Asia, including all Southeast Asian countries and South Korea but excluding Taiwan. If no diplomatic modus vivendi were achieved with Beijing, Taiwan would remain a pariah in regional trade, which is its economic lifeline.

Can Mr. Huang defy President Chen and make an end-run to engage Beijing?