Taiwan's neighbors: Keep the status quo

Newspapers in Taipei report China's February 21 threat of force if Taiwan refuses peaceful reunification efforts

By Steve Nettleton
CNN Interactive

(CNN) -- When Taiwan's voters go to the polls to choose a new president on March 18, nations across the Pacific Rim will be keeping a close watch. But Taiwan's neighbors are not so apprehensive about who wins the election; their worry is how China will react.

"For the most part, other countries in the region are more concerned about the international ramifications than they are about who the next president might be," said Bruce Dickson, director of the Sigur Center for Asian Studies at George Washington University. "I don't know that Taiwan's relations with any individual country would change as a consequence of the new president, except for how it affects relations with China."

China has made clear its disapproval of opposition candidate Chen Shui-bian, whose Democratic Progressive Party has previously campaigned for Taiwan independence.

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Though Chen has pledged he will not declare independence or seek a referendum on the issue, Beijing has serious reservations about his credibility, said Vincent Wei-cheng Wang, assistant professor of political science at the University of Richmond.

'Something quite disastrous'

If fallout from the election were to disrupt the tense peace across the Taiwan Strait, Wang said, all of Asia would suffer.

"If war breaks out, it will be something quite disastrous -- economic self-destruction, not only for China, but also for Taiwan, and all these countries in the region will ... suddenly lose two major trading partners," Wang said.

Hong Kong is transit point for 90 percent of the $20 billion in trade that passes between Taiwan and China

Hong Kong, the transit point for 90 percent of the $20 billion in trade that passes between Taiwan and China, would be particularly devastated. So would Japan, which is Taiwan's largest source of imports and the third-largest international investor in China, Wang said.

Southeast Asian nations, including Indonesia, Malaysia and Vietnam, would lose one of their primary trading partners. The Philippines, which spent millions to convert the former U.S. naval base at Subic Bay into an industrial zone to attract Taiwan investment, would suddenly have to seek new investors.

Tough talk and security issues

But it would not require open conflict to brew economic troubles across the Pacific. Tough talk alone has frequently sent markets tumbling.

Taipei's stock market is ultra-sensitive to tensions between Taiwan and China

When Taiwan's president, Lee Teng-hui, announced in July 1999 that Taiwan wanted to hold negotiations with China on a "state-to-state" basis, the Taipei stock index plunged 6.4 percent, accompanied by steep drops in markets in Tokyo, Hong Kong and Singapore.

If Taiwan's ruling Kuomintang (KMT), or Nationalist Party, were voted out of the executive office for the first time in more than 50 years, and if the KMT dragged its feet in handing over the reins of power, investors could get nervous, Dickson said.

"The Taiwan economy -- at the least the stock market in Taiwan -- is about as jittery as they get. So almost anything like that would indicate the potential for instability," Dickson said.

The outcome of Taiwan's presidential election could also have an impact on security in East Asia, said Shelley Rigger, associate professor for political science at Davidson College.

New tensions could cause Japan to reassess its military philosophy, Rigger said. Japan has already revised its national security position in the past decade, deploying troops for humanitarian and U.N. peacekeeping missions outside its home islands for the first time since World War II.

In the wake of a series of North Korean missile tests, Japan and the United States began developing a theater missile defense system for East Asia. Japan has hinted it would like to include Taiwan under that umbrella, said Dickson, a suggestion that has infuriated China.

WTO membership could ease tensions

With the stakes so high, most of Taiwan's neighbors in the Asia-Pacific region would like to see the new president maintain the "status quo" -- meaning no dangerous overtures of independence that could prompt Beijing to take military action, said Wang of the University of Richmond.

Wang, however, sees promise for peaceful dialogue if both China and Taiwan are admitted into the World Trade Organization, expected later this year.

The WTO would provide a new avenue for dialogue between the two sides, which could help them accumulate some good will toward each other, Wang said.

"When both China and Taiwan enter the WTO -- and all the other Asian [countries] are already members of the WTO -- this will open a new opportunity for increased trade and investment in the Asia-Pacific region, Wang said. "It is hoped this development will tone down the opposite development -- that is, the increasing possibility for a military conflict to break out in the area."