What made you kowtow, Mr Bush?

by Philip Bowring

SCMP December 14

It is no wonder that Premier Wen Jiabao is so pleased with his visit to the United States. President George W. Bush's public admonishment of Chen Shui-bian's proposal to extend the scope of Taiwan democracy with a referendum was a major diplomatic victory. The question now is whether there will be a sequel. Has Beijing offered up something substantial in return? Or is this an illustration of a fundamental weakness of the US - Mr Bush can start patriotic wars in poor countries, but must he now kowtow to China? He did not have to go beyond well-worn but useful phrases about Taiwan. But he did. Why?

There will doubtless be much discussion about whether the US ambiguity over Taiwan has been altered by Mr Bush's statement. One can argue whether the Taiwan move for a referendum represents a departure from the status quo. But once cannot argue against the fact that Mr Wen is feeling triumphant and Mr Chen has been humiliated by the US.

It remains to be seen how the Taiwan public responds. My own guess is that although many in Taiwan feel his manoeuvring on the referendum issue has been ill-advised, Mr Chen could benefit from resentment at the hypocrisy of a US administration which preaches democracy but often practices the ruthless pursuit of sectional political or business interests. The business interests which have such an influence on the Bush administration have evidently been persuasive in the president's willingness to please Mr Wen at Taiwan's expense.

The question now is whether the US will get anything specific from China. There is talk of more pressure on North Korea. But China has been making efforts there for some time and its leverage over the prickly North Koreans is limited. It is possible that China has promised that it will do something sooner rather than later to respond to legitimate concerns about its undervalued currency. Revaluation would not significantly hurt if other Asian nations with even bigger surpluses do the same - which they almost certainly can be persuaded to do. Indeed, it is something of a puzzle why the US has been berating China over its currency policy but not doing the same with the other East Asian countries whose surpluses and exchange reserves are proportionately much bigger.

East Asian revaluations will not do much for the US trade deficit until America's debts, domestic and foreign, finally cause the deep recession needed to restore current-account equilibrium. However, they could be claimed as a victory in an election year when China trade could be an issue.

But maybe Mr Wen has offered nothing specific in return for Mr Bush's words on Taiwan. Perhaps, in the face of tensions with Europe, a Middle East quagmire and growing international cynicism about the "war on terror", Washington is gradually returning to former president Bill Clinton's view of China. It may be going too far to regard it as a "strategic partner" but it is no longer the strategic competitor, as defined by the Bush administration prior to September 11, 2001. If so, it may expect a friendly but neutral stance from China on a variety of issues in return for putting Mr Chen in his place.

There is a Chinese view which, in a way, mirrors this. China is usually better than the west at long-term thinking. One theory which has some traction in think-tank circles is that perhaps sooner, rather than later, America will lose its hegemonic power over money - the dollar standard, reserve currency power which enables it to run US$1.5 billion a day in deficits with the world. That would cause a depression in the US which would be very damaging to Asia-US trade, but would, according to this theory, do even more damage to Europe-US relations, which are already endangered by differing Middle East interests.

For China, that means staying friendly with the US while making every effort to reduce its trade dependence on America by building relationships in East Asia and with eastern hemisphere suppliers of raw materials, such as Australia and Russia.

Where that might leave the Taiwan issue is anyone's guess. It depends, perhaps, on whether Beijing simply uses its stance on Taiwan as a bargaining counter on other issues, or believes its own propagandist version of Taiwan so much that wider national interests are sacrificed to historical mythology. Common sense and economic interests have the upper hand at present. But ignorance of Taiwan's past is the norm. Most mainlanders believe it has been an inalienable part of China for thousands of years. In fact, when the Dutch got there in about 1620, it was almost entirely populated by Malay-speaking people, kin to those of the Philippines, who remained the majority until the 19th century. The Dutch "imperialists", who needed labour to grow sugar cane, were responsible for much of the early settlement of mainlanders from Fujian. Geographically, Taiwan is as close to the northernmost Philippine and southernmost Japanese islands as it is to the mainland.

Modern Taiwan also may have more reason to like the Japanese, who brought education and railways, than the mainlanders who ruled it - another piece of history which is unacceptable to the jingoist mythmakers who love to hate the Japanese.

Hopefully, a stronger, more self-confident, freer, more democratic China will re-examine the mythology and acknowledge why Taiwan feels as separate from the mainland as Ireland does from England. Until then, the best that can be hoped for is that cross-strait battles remain on the level of semantics.






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