China laying key foundation for Africa growth: World Bank
WASHINGTON (AFP) — China may be accused of placing business above human rights in Africa but the World Bank says in a new report that the Asian giant is spearheading a massive infrastructure revolution in the continent critical to reducing poverty.
China, India, and a few Middle Eastern Gulf nations are financing an unprecedented number of infrastructure projects across Sub-Saharan Africa -- both in scale and the focus on large infrastructure projects, said the report by the Washington-based bank.
Investment commitments in Africa by these emerging financiers jumped from less than one billion dollars per year before 2004 to eight billion dollars in 2006 and five billion dollars last year, signaling a growing trend in cooperation among developing economies, the report said.
"Today, China's growing infrastructure commitments in Africa are helping to address the huge infrastructure deficit of the continent," said Obiageli Katryn Ezekwesili, the World Bank's vice president for the Africa region as he launched the report Thursday.
Entitled "Building bridges: China's growing role as infrastructure financier for Sub-Saharan Africa," the report said new infrastructure partnerships in the region were being driven by strong economic growth, improved business-friendly climate and rising demand for commodities from growth drivers China and India.
"The growing South-South cooperation is driven by strong economic complementarities between China and Africa," said Vivien Foster, a World Bank lead economist and co-author of the report.
"China's growing demand for natural resources is matched by Africa's significant and often under-developed oil and mineral reserves," he said. "Africa's urgent need for infrastructure is matched by China's globally competitive construction industry."
Some Western critics have said that China, which imports about 30 percent of its oil needs from Africa, is willing to overlook environmental degradation, corruption and human rights abuses in the continent in its quest for resources.
One of China's most controversial partnerships is with the government of Sudan.
The main buyer of Sudan's oil and a key investor in the economy, China has repeatedly been accused of not doing enough to make Khartoum stop a brutal campaign in Darfur that has -- according to the UN -- left about 300,000 dead.
"There are of course challenges which will need to be addressed by African nations and China coupled with the support of development partners," admitted Ezekwesili. "By working together, we can create win-win partnerships," he said.
The report said that in a changing world, with new actors and financing modalities coming into play, there is a "learning process for investors and recipients.
"This will place new demands on national capacity to negotiate complex and innovative deals, and apply appropriate environmental and social standards needed for the long-term success of such partnerships," it said.
Africa faces daunting challenges in improving its infrastructure.
Development experts agree that creaking infrastructure is cutting the growth rate of African economies by as much as one percentage point every year, the report said.
One in four Africans does not have access to electricity. Travel times on African roads and export routes are two to three times higher than in Asia, increasing the prices of traded goods. Power generation capacity is around half the levels achieved in South Asia.
India has also become an emerging financier in Africa's infrastructure development, committing 2.6 billion dollars since 2003, the report said.
Oil-rich Gulf states and Arab donors committed on average 500 million dollars every year over the past seven years, it said.
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Whoa, it used to be embargoed!? I hope to get the time to read this, sounds juicy
I thought to share the following interview with you, if it fits with above discussion. I must admit this program is one of the most educational program in IR and history. I am almost close to advocate for students to cut class and navigate youtube's clips on "Conversation With History" presented by University of California at Barkley.
Discussion on China, India and Africa from WEF 2007..
Li Zhaoxing was captivating and fun stateman.
If you could find more info about him (his writing or speech) please send it my way. Thanks for sharing.
Chinese Involvement in African Conflict Zones by:David Shinn -"efforts are generally appreciated by African leaders and the international community."
Publication: China Brief Volume: 9 Issue: 7
April 2, 2009 03:00 PM
Category: China Brief, Military/Security, Foreign Policy, China and the Asia-Pacific, Africa,
By: David Shinn
As China expands its engagement throughout Africa, it increasingly finds itself involved in African conflict zones either by design or accident. This involvement takes essentially three forms: Chinese participation in UN peacekeeping operations, Chinese weapons, especially small arms, which make their way into conflict zones, and kidnapping of Chinese nationals or attacks on Chinese facilities and nationals. In the case of kidnappings and attacks, China is beginning to face some of the same challenges that have confronted western interests for decades.
It is important to put China’s African security policy in perspective. China offers a political, economic, and even security alternative to the West for many African countries. Sudan and Zimbabwe, countries ostracized by the West, depend on China for much of their military equipment. Countries such as Angola, Democratic Republic of the Congo and Niger look to Africa as a source of financing free of Western conditions. On human rights issues, China supports African governments and they often support China in the UN Human Rights Council. For its part, China increasingly relies on Africa as a source of strategic materials such as oil, copper, cobalt and tantalum.
Although China is a significant supplier of arms and military equipment to African countries, it has limited military presence besides the assignment of personnel to UN peacekeeping operations, occasional training and exchange programs and the assignment of defense attachés to Chinese embassies. China rarely sends its naval ships to African ports; its last naval visit took place in 2002 . China did recently join the international effort to combat Somali piracy in the Gulf of Aden, and it is pursuing in the Indian Ocean a “string of pearls” strategy that will eventually lead to Africa’s east coast . China apparently has no plans at the moment to extend its naval influence to Africa’s east coast, but it almost certainly is interested in protecting the sea lanes that bring oil from Sudan and around the Cape from West Africa. In 2000, Chinese naval vessels visited Tanzania and South Africa.
Peacekeeping, Anti-piracy and De-mining Assistance
China began in the early 1990s to send small numbers of personnel to UN peacekeeping operations in Africa. The numbers started to increase significantly in 2001 when China sent more than 200 troops to the Democratic Republic of the Congo (DRC) and soon followed this with other large contingents. In 2007, Major-General Zhao Jingmin became the first Chinese to command a UN peacekeeping operation, MINURSO in the Western Sahara (UN News Service, August 27, 2007). By the end of February 2009, China had 1,745 troops, police and observers assigned to six of the UN’s seven peacekeeping operations in Africa. The largest units were in Liberia, Southern Sudan, Darfur and the DRC. About 75 percent of all Chinese peacekeepers serve in Africa. Although China contributes only 3 percent of the UN peacekeeping budget, it has far more peacekeepers in Africa than any other permanent member of the UN Security Council .
China has received widespread praise from African leaders, the UN and the United States for its willingness to send peacekeepers to the continent. Bates Gill and Chin-Hao Huang at the Stockholm International Peace Research Institute identified three reasons for China’s interest in peacekeeping. First, making a positive contribution to peace and security helps China to project a more benign and “harmonious” image and to balance U.S. and Western influence. Second, the PLA wants to expand its non-combat missions such as peacekeeping, anti-piracy, disaster response and humanitarian relief. Third, the PLA and Chinese security forces can learn important lessons and obtain practical experience that may improve their responsiveness, riot-control capabilities, coordination of military emergency command systems and ability to conduct non-combat missions at home .
China deployed early in 2009 two destroyers, including the Wuhan, one of its most sophisticated warships, and a supply ship to help combat Somali piracy in the Gulf of Aden. The ships have about 800 crew and 70 special operations troops (Reuters, January 6, 2009; China Brief, January 22). Some 20 percent of the 1,265 Chinese ships passing through the Gulf of Aden in 2008 came under attack, including the hijacking of a Hong Kong registered tanker (The Associated Press, December 19, 2008; Xinhua News Agency, September 16, 2008). This engagement gives the PLA valuable naval experience far from its shores and permits China to project power in an area that is important to its trade. U.S. Deputy Assistant Secretary of Defense David Sedney praised China’s contribution to the anti-piracy effort. He commented that “The work they’ve done has been highly professional, it’s been highly effective, and it’s been very well coordinated with the United States and the other navies that are working there” (USA Today, February 28 ).
China’s de-mining assistance has contributed positively to post-conflict situations in Africa. In the past two years, China held de-mining courses for Angola, Mozambique, Chad, Burundi, Guinea-Bissau and Sudan. China donated de-mining equipment to all of the aforementioned countries and Egypt provided Ethiopia with mine eradication funds .
While Chinese contributions to peacekeeping, anti-piracy and de-mining have been positive for Africa, its arms sales have had negative implications when they become employed in Africa's myriad conflicts. China has provided military equipment to African countries going back to the Algerian revolution in the 1950s and military support for numerous African liberation groups. From 2000-2003, China delivered by value about 13 percent of all arms to Sub-Saharan Africa, the second highest provider after Russia’s 16 percent. From 2004-2007, China’s percentage increased to almost 18 percent, although it remained in second place after Germany’s 24 percent. During 2004-2007, Chinese deliveries included 240 artillery pieces, 370 APCs and armored cars, 29 minor surface combatants, 10 supersonic combat aircraft and 40 other aircraft .
Of greater concern has been the provision over the years of small arms and light weapons (SALW) to Africa. Although the dollar value for any particular country has often been small, since 2000 China has delivered SALW to at least 27 of Africa’s 53 countries. The largest recipients have been Egypt, Nigeria, South Africa, Sudan, Tanzania and Côte d’Ivoire . Three of these countries—Sudan, Nigeria and Côte d’Ivoire—have been experiencing internal conflict since 2000. There is a growing concern that China, because its small arms are so inexpensive, is becoming the provider of choice for the generic version of the AK-47 and related assault rifles. Although China sells the weapons to African governments, they are increasingly finding their way into conflict zones .
The eastern DRC constitutes one of the longest-running conflicts in Africa. There have been numerous accounts over the years that Chinese small arms have contributed to the killing. Amnesty International reported that Chinese AK-47s were common among soldiers, militia and armed groups operating in the Kivu Provinces and the Ituri District of the DRC where the weapons have been used to commit atrocities. The UN Mission in the DRC investigated the origin of 1,100 weapons collected in Ituri District and determined that 17 percent were of Chinese origin. Amnesty concluded they reached the area from deliveries made to the governments of the DRC, Uganda, Rwanda and Burundi or through third parties outside the region .
China’s most controversial military sales concern Sudan where there have been two major conflicts—the North-South civil war and the crisis in Darfur. China provided up to 90 percent of the SALW delivered to Sudan between 2004 and 2006. China also helped build three weapons factories outside Khartoum. Chinese small arms became widely used in Darfur and found their way to the conflict in neighboring Chad . Most ammunition used by all parties in Darfur is manufactured in Sudan or in China (UN Security Council report, January 30, 2006). A Darfur rebel group captured from government forces in Darfur Chinese military trucks, one outfitted with a Chinese anti-aircraft gun. Sudanese pilots, reportedly trained by China, used Chinese Fantan attack aircraft to conduct operations in Darfur (BBC News, July 14, 2008). China’s Special Envoy for Darfur, Liu Guijin, denied that Chinese weapons are fueling the conflict, arguing that China provides only 8 percent of Sudan’s total arms imports (Financial Times, February 23, 2008).
Attacks on Chinese
Chinese nationals and installations increasingly find themselves in harm’s way as their presence grows, especially in or near conflict zones. The most serious incident occurred in Ethiopia’s Somali-inhabited Ogaden region in April 2007. There has been a long-standing conflict between Ethiopian government forces and Somali rebel groups. The Ogaden National Liberation Front (ONLF), after warning foreigners to stay out of the region, attacked a Chinese base camp operated by the Zhongyuan Petroleum Exploration Bureau that was exploring for natural gas. The ONLF killed nine Chinese in the attack on the Ethiopian-guarded facility and captured a number of others who were subsequently released (Washington Post, April 26, 2007; New York Times, April 25, 2007). China abandoned the project and has not returned.
China experienced a similar situation in Southern Kordofan, which borders Darfur, where its oil operations protected by Sudan’s government have come under attack. In October 2007, the rebel Justice and Equality Movement (JEM) briefly seized Chinese oil facilities at Defra as a warning to China to cease its military and political support for Khartoum (Terrorism Monitor, August 11, 2008). In December 2007, JEM attacked the Heglig oil facility run by the Great Wall Drilling Company. JEM’s leader announced, “We are doing these attacks because China is trading petroleum for our blood” (The Associated Press, December 11, 2007). The most serious incident occurred in October 2008 when an unknown group carried out a third attack that resulted in the kidnapping of nine Chinese employees of the China National Petroleum Corporation (CNPC). The rebel group killed four of them while four others were rescued and one remains missing (The Associated Press, October 21, 2008; Xinhua News Agency, October 28, 2008).
The Movement for the Emancipation of the Niger Delta (MEND) in Nigeria has been conducting attacks against the government for years on the grounds that the oil producing areas do not receive a fair share of the revenue. MEND warned Chinese and other foreign nationals to stay out of the Niger Delta (Washington Post, May 1, 2006). In recent years, more than a dozen Chinese nationals from a variety of Chinese companies with personnel conducting projects in the region have been kidnapped and eventually released. MEND probably is responsible and likely received a ransom for the release of the Chinese and other foreign nationals (Xinhua News Agency, January 9, 2007; VOA News, January 18, 2007; China Daily, May 9, 2008).
Tuareg rebels in Niger kidnapped and released several days later a Chinese uranium executive in July 2007 as a warning to China for disregarding the environment and signing an unacceptable agreement with the Niger government. During the same month, rebels attacked an armed convoy heading to a CNPC exploration camp in Niger (Reuters, July 10, 2007; China Brief, October 3, 2007). Returning to the DRC, one Chinese national was killed late in 2008 as a result of conflict near Lubumbashi (China Brief, January 12). Chinese nationals are increasingly experiencing violence in non-conflict areas too. Two Chinese nationals were killed and four injured as striking Chinese workers in Equatorial Guinea faced off against local police (Xinhua News Agency, March 31, 2008). Armed robbers in Dar es Salaam, Tanzania, recently killed a Chinese merchant and wounded another (Xinhua News Agency, March 19, 2009).
Chinese peacekeeping, anti-piracy activity and de-mining engage China in a positive way in current or former African conflict zones. These efforts are generally appreciated by African leaders and the international community. African governments welcome the availability of low cost weapons from China, especially when Western governments are not willing to sell them arms. Together with arms originating in other countries, however, they sometimes exacerbate African conflicts. China tends to take greater business risks than Western countries in Africa, including allowing Chinese business representatives to work in or near conflict zones. As a result, Chinese nationals are beginning to pay a high price for this risk taking.
Newsnight: China $9bn Congo deal
The Battle for the Indian Ocean
Competition for strategic advantage in the world’s most important shipping lanes draws Africa and Asia into a regional stand-off
For the next few decades, the Indian Ocean will be the setting for competition between three great powers: the United States adjusting to an increasingly multipolar world, and the rising military and economic powers of India and China.
India defines the stakes clearly in its 2007 Maritime Military Strategy paper: 'Whosoever controls the Indian Ocean, dominates Asia. In the 21st century, the destiny of the world will be decided upon its waters.' That is no over-statement: globalisation depends on the cheap shipment of seabound containers: more than 50% of the world's container traffic sails the Indian Ocean, as does 70% of the world's petroleum products.
The Indian Ocean's strategic importance as the world's most important oil shipping lane will increase still further over the next three decades, when higher energy consumption by India and China will account for more than half the growth of world energy consumption. Almost all China and India's imported energy requirements - whether oil from Africa and the Persian Gulf or coal from Mozambique and South Africa - are transported across the Indian Ocean.
Currently, there is no hegemonic power with dominion over the Indian Ocean and that is unlikely to change in the short-term as the region gives the first indications of how a multipolar world might look.
The US Navy focuses on its interests in the Atlantic and Pacific Oceans. Indian Ocean states are plagued by terrorism, drugs, arms trafficking and piracy. The region also hosts the vast majority of the world's Hindus, Muslims and Buddhists.
The crises unfolding in Indian Ocean region states such as Pakistan, Afghanistan, Sri Lanka, Burma and Thailand are far more threatening than the political instability in Africa. In the countries at greatest risk - Pakistan and Burma - there is growing competition between China and India. Instability in Afghanistan and Pakistan affects East Africa, as Islamic extremists flee and set up in the Horn of Africa, General William 'Kip' Ward, the head of the US's AfriCom military command warned in April.
Delhi and Beijing are not naturally inclined to cooperate: at US$51.8 billion, India and China's bilateral trade is less than half that of China's trade with Africa, which stands at $106 bn.
One hotspot is the state of Arunachal Pradesh, which is administered by India but claimed by China as part of southern Tibet. Although the countries agreed on guidelines to resolving the territorial dispute in 2005, China is reluctant to deal with the issue because of its concerns about India's support for the exiled Dalai Lama (AAC Vol 2 No 6).
The great game on the sea
India and China try to block each other from joining multilateral bodies. China has pledged to fight for permanent African representation on the United Nations Security Council, as has India. However, China does not want India to join the ranks of the permanent members and India will require African support to back reforms at the UN.
The World Bank calls Africa the 'new economic frontier' for India and China. Africa has important political and economic roles to play in the shaping of global power, and it is key to the Asian powers' peaceful rise. Whether through the supply of energy and natural resources for Asian economies or voting for expanded representation at the UN Security Council and the International Monetary Fund, Africa's alliances are shaping the politics of the Indian Ocean.
Ma Jiali, South Asia Researcher at the China Institute of Contemporary International Relations, says rivalries between China and India over African resources are not yet 'a direct kind of competition. There are many other countries who are also using African resources. Because of this, China does not worry about India growing its relationship with African countries. Both countries need to develop and this does not strategically harm China's interest.'
David Zweig, Director of the Centre on China's Transnational Relations at Hong Kong University of Science and Technology, disagrees: 'They do find themselves challenging each other overseas. The problem is China tends to win all the time. The Indians are much more worried about the Chinese than the Chinese are worried about the Indians.'
With China ahead of India in Africa, the rivalry is felt more closely to home. Despite a lack of clear policy on the region, there are signs that China would like to expand its role in South Asia. It has applied to join the South Asian Association for Regional Cooperation (SAARC), the world's largest regional economic and political organisation, representing almost two billion people, but met with resistance from India and so remains just an observer.
The SAARC's effectiveness has been limited by the animus between Pakistan and India, but Chinese allies in Islamabad and Dhaka would like to see China join as a full member. There are hopes for cooperation as China may be forced to negotiate with India or Nepal for access to water resources in the Himalayan region.
China's growth and diplomatic weight is already turning past alliances on their head. India has traditionally been Sri Lanka's strongest ally, but the Chinese government has pushed more than $1 bn. into the building of a port and refuelling station for Chinese ships at the village of Hambantota. Since the agreement was approved in 2007, Beijing has been supplying the government in Colombo with arms, aid and other support in its apparently successful mission to eradicate the Tamil Tiger rebels.
China is pursuing its own military build-up, based on a 'string of pearls' - naval bases, refuelling stations and friendly ports. So far, the Chinese focus has been on the Taiwan Straits and shaping a deterrent force against the possibility of a US reprisal if Taiwan were attacked, rather than competing with the rising military power of India.
Map: Great Power Competition in the Indian Ocean
Yet an increasing presence in India's traditional territory is evident in Chinese plans for Hambantona, the upgrading of the Pakistani port of Gwadar and similar projects at Sittwe, Burma and Chittagong, Bangladesh. Chinese generals argue that if they can build a large enough force to deter the US from coming to Taiwan's rescue (by making the operation so perilous militarily), then Beijing can pay more attention to its other interests.
Although its geography gives it a dominant position in the Indian Ocean, India has developed ties with countries on the periphery of the east and west coasts of the Indian Ocean. It has set up listening posts and alliances in the Seychelles, Madagascar and Mauritius to stake its claim in the face of China's engagement with Africa. India signed defence agreements with Australia in 2007 and jointly patrols the Malacca Straits with the navies of Thailand, Malaysia and Indonesia.
The next few decades will be shaped by a strategic triangle of the US, China and India. The US will seek to balance the rise of the countries with the world's largest populations and the world's fastest-growing economies. For now, the US Navy remains the largest and most powerful in the world, but both India and China have made the expansion of maritime capacities a cornerstone of their international relations. Only when countries are secure in their position on land can they successfully project power on the seas.
Great powers: India
India is on course to become the world's most populous nation by 2030. Another successful election in India in early May and predictions of 4.5% gross domestic product growth this year confirm that India is developing a more assertive role. India is cultivating a policy of developing security alliances in the region rather than the defensive posture of weakness shown in the non-aligned movement during the Cold War.
It regards itself as having an exclusive right to intervene in South Asian crises. This is New Delhi's version of the USA's Monroe Doctrine. Formulated by Premier Jawaharlal Nehru, India's version says that outside intervention in the Indian Ocean interferes in an exclusive zone of Indian interests. Indian politicians regard neighbouring countries such as the Maldives and Sri Lanka as being in New Delhi's sphere of interest. India's maritime policy in the Indian Ocean argues that 'choke points could be useful as a bargaining chip in the international power game, where the currency of military power remains a stark reality.'
Since the end of the Cold War, the US Navy has been declining - from about 600 warships to just under 300 - while the China and India have been buying and manufacturing their own ships. India is expanding its regional influence but its domestic military and shipbuilding industries are far behind those of China.
However, with about 150 ships, the Indian Navy is a major force, though well behind the navies of the US and China. A major naval build-up is underway: New Delhi expects to add three nuclear-powered submarines and three aircraft carriers within the next five or six years. Its emphasis on developing mid-air refuelling capability and long range missiles also worries China because Asia's two hyper-economies are seeking to strengthen their militaries in much the same way.
An arms race is looming. India has been the developing world's largest arms buyer for much of the last decade. Indian Navy (IN) sources told Africa-Asia Confidential that their intelligence on the strategically-located and expanding Chinese naval base at Sanya on Hainan Island will hasten India's long-delayed indigenous, nuclear-powered submarine programme that is due to begin sea trials in 2009-10.
India is also expected to accelerate the early introduction of a Russian nuclear-powered submarine (nearing completion at Komsomolsk-on-Amur) in its fleet on a 10-year lease. There are many unresolved Chinese territorial claims in the region. The Sanya base has extensive underground facilities for nuclear submarines. Tensions between New Delhi and Beijing look set to rise as the gap in power between them diminishes.
Great powers: China
China is using its continued GDP growth, even at its diminished rate of 6.5% for 2009, to consolidate economic gains and to turn them into political ones. Britain's Foreign Secretary David Miliband sent the strongest signal - from any Western politician - that this had already happened, when he said that 'America and China are the powers that count.'
China is continuing with its naval development through higher budget allocation and procurement. It aims to field a 'blue water' navy with longer sea legs based on carrier-borne task forces, nuclear and ballistic-armed nuclear submarines. These were showcased at the Chinese International Fleet Review in April 2009 to mark the People's Liberation Army Navy's (PLAN) 60th anniversary off Tsingtao port in Shandong Province.
While technologically behind the US fleet, the PLAN is due to become numerically superior within the next few years. President Hu Jintao is quick to deny that China's moves should be seen as a quest for hegemony or the beginnings of an Asian arms race, but the military's rapid modernisation will not be ignored. China is currently producing and buying submarines at a rate five times faster than that of the US.
Thanks for sharing.
If we are not going tangent from the African discussion, there are two to important entities that we should talk about when comparing the emerging power of India and China. And they are Pakistan and Taiwan. I thought it would be good idea to grasp of what is happening currently as we speak to help better predict future out comes. I found below article to be an interesting development.
International Relations — Asia
Taiwan Ditches Dollar Diplomacy
In Favor of Cooperation With China
by Larry Luxner
After years of thumbing its nose at mainland China and engaging in a high-stakes game of “dollar diplomacy” that drained the coffers of both countries, Taiwan has toned down its rhetoric — thanks to a new leader who favors cooperation over confrontation.
President Ma Ying-jeou, elected in March 2008 with 58 percent of the vote, calls himself a “peacemaker, not a troublemaker.” Since his inauguration a year ago, he’s cast aside the belligerent stance of his pro-independence predecessor, Chen Shui-bian, lifting the prospect of cross-strait reconciliation to the most promising in decades.
As a result of intense negotiations between both sides, more than 100 direct flights each week now link Taipei with Shanghai, Beijing and other mainland cities — up from zero only a year ago. And the government is looking to expand that to around 350 flights a week.
“Before, it would take eight and a half hours to fly from Taipei via Hong Kong to Shanghai. Now it takes only 85 minutes,” said Jason Yuan, representative of the Taipei Economic and Cultural Representative Office (TECRO) in Washington, Taiwan’s de facto embassy in the United States. “As president of a company, I can now leave Taipei at 9 a.m., arrive in Shanghai at 10:30, do my business, fly back at 6 p.m. and be home in time to have dinner with my wife.”
Taiwan’s new approach will be put to the test later this month, when the World Health Organization considers whether to grant the island observer status in its decision-making body, the World Health Assembly. The May 18-27 gathering in Geneva is crucial for Taiwan, which argues that its expertise in combating epidemics like SARS (severe acute respiratory syndrome) and bird flu — along with its widely recognized national health coverage — is far more important than the political differences separating the island from mainland China.
But it’s also a highly symbolic gamble — one which Yuan says will undoubtedly pay off for Taiwan’s 23 million people.
“For the past 60 years, we never really had constructive dialogue between Taiwan and the mainland,” Yuan told The Washington Diplomat in early April. “Under the new president, our policy is very clear and easy to understand: no unification, no independence, no use of force. This will create a healthy U.S.-Taiwan-China relationship. It’s a win-win-win situation for all of us.”
Despite the worldwide recession and worsening unemployment at home, Taiwan enjoys an annual per-capita gross domestic product of around $17,000 and boasts foreign-exchange reserves of just over $300 billion — the world’s fourth largest after China, Japan and Russia.
In 2007, Taiwan ranked as the world’s 24th-largest economy among the 181 economies surveyed by the International Monetary Fund in its 2008 World Economic Outlook Database. Meanwhile, World Trade Organization statistics indicate that, in the same year, it was the world’s 16th-largest merchandise importer and 17th-largest merchandise exporter, with a trade surplus of $27.4 billion.
Cross-Strait ‘Flexible’ Diplomacy
But economic prosperity hasn’t led to diplomatic respect for the Republic of China — as Taiwan is known — a virtual pariah among nations despite its democratic system and flourishing free press.
Today, only 23 governments recognize the island that the People’s Republic of China regards as a breakaway province, with most of the world throwing their allegiance to China and its 1.3 billion people (also see “Taiwan Rattled by Prospect of Losing Allies to China” in the July 2007 issue of The Washington Diplomat).
China’s economic might has clearly put it ahead in the tit-for-tat race for global recognition, but Yuan says the days of “dollar diplomacy” are definitely over. No more, vowed the TECRO chief, will Taiwan try to buy small countries’ friendship with promises of millions of dollars in economic assistance.
“We have ‘flexible diplomacy’ now,” he said. “We have made this clear to the other side. We told them, ‘You enjoy diplomatic ties with 171 countries. We have only 23 countries. Is there any need for us to use taxpayers’ money to steal countries back and forth? It’s nonsense. One more country on your list doesn’t mean much. So why should we fight about it?’”
This newfound attitude was very much on display last year in Paraguay — the only South American nation that still recognizes Taiwan instead of mainland China.
Immediately following his April 2008 election victory, left-leaning Paraguayan President Fernando Lugo vowed that upon taking office, he’d immediately break relations with Taiwan and recognize China — possibly hoping to squeeze a few extra dollars out of Beijing for his impoverished country. Even so, Taiwanese President Ma insisted on attending Lugo’s inauguration in Asunción as planned.
“A lot of advisers told him not to go,” Yuan recalled. “They said if he went and Paraguay broke ties with us, it would be a big embarrassment, and that it would look very bad. But our president went anyway.”
Eventually, the Chinese themselves persuaded Lugo to back off from his threat, according to Yuan, because “the timing was not right,” he said. This softened rivalry could also explain why some other smaller countries have maintained close relations with Taiwan at the expense of shutting out China.
“Nicaragua’s [President Daniel] Ortega is another example. He’s a leftist, but they still maintain diplomatic relations with Taiwan,” said Yuan. “My minister just got back yesterday from El Salvador, and it was business as usual.”
On June 1, leftist Mauricio Funes will replace El Salvador’s current pro-American, pro-Taiwan president, Tony Saca. Among other things, Funes has promised to establish diplomatic ties with both Cuba and China — following in the footsteps of Costa Rican President Oscar Arias Sánchez, who kicked the Taiwanese out last year, welcomed the Chinese, and recently negotiated Central America’s first free trade agreement with Beijing.
In March, Taiwanese Foreign Minister Francisco Ou said his country would not object if El Salvador forged formal ties with China. The remarks sparked widespread speculation that Taiwan might accept dual recognition in line with Ma’s call for a “diplomatic truce” with China.
Yuan, who suggests that Costa Rica already regrets its “betrayal” of Taiwan, insists his country no longer tries to tell other nations what to do. He claims that — with relations improving day by day — China would gain little at this point by having Nicaragua, El Salvador or any other small state come over to its side while abandoning Taiwan.
“I don’t resent Panama doing business with mainland China, nor do we resent Chinese ships going through the Panama Canal,” said Yuan, who left Panama as Taiwan’s ambassador there the year before the United States gave up sovereignty over the famous waterway. “We do business with the mainland, so how can we stop others from doing the same?”
Sovereignty Set Aside
Two years ago, you’d be hard-pressed to find a Taiwanese diplomat who would say something like that. But it’s clearly not business as usual when it comes to cross-strait relations. Though many supporters of former President Chen’s Democratic Progressive Party are still leery of Chinese engagement, the Kuomintang-led government has done a complete 180 on its approach toward the mainland.
Almost immediately after taking office, Ma dispatched Taiwan’s Straits Exchange Foundation (SEF) to China in order to negotiate with the mainland’s Association for Relations Across the Taiwan Strait (ARATS). In October 1992, the two groups held talks in Hong Kong — the first time authorized representatives from the two sides had done so since 1949. The so-called “1992 consensus” reached was that both sides recognize there is only one China, but agree to differ on that definition.
Using that consensus with a view toward ending cross-strait hostilities, the two sides agreed last year to resume talks. The new approach resulted in two agreements calling for charter flights between China and the mainland, and opening up Taiwan to Chinese tourists.
“Then last November, the chairman of ARATS led a delegation to Taiwan to conduct a second round of negotiations. That round, concluded in Taipei, led to four more accords: direct air links on a daily basis, direct shipping on a daily basis, direct postal services and cooperation in food safety,” explained Yuan.
“Our president said we should set sovereignty issues aside and start with easy things: trade, tourism and the economy. So this is how we started negotiating shipping and air links. Since then, the Chinese have opened up 64 ports to Taiwanese ships. We only have 11 ports, and we’ve opened up all 11 for them.”
Predictably, tensions between the two Chinas have declined significantly since Ma’s election, making the threat of a military confrontation these days seem extremely unlikely.
“In last year’s presidential debates between Obama and McCain, the China-Taiwan issue wasn’t raised even once,” Yuan said. “There was no need for them to raise that, because they don’t see the Taiwan Straits as a flashpoint anymore. And at the G-20 meeting in London, Obama and [Chinese President] Hu Jintao didn’t even mention Taiwan.”
The latest signal that Beijing wants to expand its dialogue with Taipei came during a March 5 address by Wen Jiabao, the Chinese Communist Party’s second-highest ranking leader.
“We are ready to hold talks on cross-strait political and military issues and create conditions for ending the state of hostilities and concluding a peace agreement,” said Wen, though the Chinese official reaffirmed that any move by Taiwan would still have to satisfy Beijing’s “one-China” policy. “We are ready to make fair and reasonable arrangements through consultation concerning Taiwan’s expanded participation in the international community.”
And Taiwan, which has long been shut out of world bodies at Beijing’s insistence, is more than ready to start officially participating in the international community again — beginning with the World Health Organization (WHO).
“We’re just asking for observer status [in WHO], not full membership,” insisted Yuan, noting that Taiwan has been steadfastly pursuing that goal — along with membership in the United Nations — since 1997 (and steadfastly rejected each year). According to a government position paper issued in March, “in addition to its diplomatic allies, Taiwan has succeeded in gaining firm support from the United States and Japan. The European Union and Canada have also signaled their support for Taiwan’s meaningful participation in the WHO, and many other countries recognize the need to include Taiwan in the global health network.”
Yuan pointed out that the Republic of China was a founding member of the WHO in 1948, one year before Chiang Kai-shek was overthrown by the communists and fled to Taiwan with his fellow Nationalists. In 1972, Taiwan left the WHO when it admitted China. Yuan said that as an observer nation, “we would be contributors instead of recipients. This is not only symbolic. It would really do something good for us and the world.”
Yuan, 67, was appointed to his current job in Washington last summer, taking over from predecessor Joseph Wu. The Chen administration, which Wu represented, had been plagued by money-laundering and corruption charges — a fact that helped bring down his Democratic Progressive Party in the 2008 legislative and presidential elections, and hand victory to the opposition Kuomintang.
Despite the government turnover, Yuan isn’t exactly a regular visitor to the sprawling new Chinese Embassy on International Drive, located only six-tenths of a mile east of Taiwan’s de facto embassy on Wisconsin Avenue. (Some diplomats quip that the short distance between the two offices makes Van Ness Street the local Taiwan Straits.)
“As consul-general in Los Angeles, I met with my Chinese counterpart. I’ve only been in this job a few months, so I haven’t had a chance to meet the Chinese ambassador,” Yuan said. “I wouldn’t turn down the opportunity, but there is no reason for me to pursue that right now.”
In keeping with State Department protocol, no Taiwanese flag flutters from the roof of the four-story mission that is the Taipei Economic and Cultural Representative Office (TECRO) because it is not technically an embassy — even though TECRO’s Web site is listed as www.taiwanembassy.org/US/.
Taiwan hasn’t had a real embassy here since 1979, when President Jimmy Carter broke diplomatic relations with the steadfast U.S. ally and recognized mainland China instead.
As such, Yuan isn’t really an ambassador, although he’s frequently addressed as such because from 1996 to 1998 he was Taiwan’s ambassador to Panama.
“My status is somewhere between that of the World Bank and the diplomatic corps. In other words, I do enjoy privileges like diplomatic immunity, but not the official title of ambassador,” he explained. “With that status, I cannot officially call on the president of the United States or the secretary of state.”
Other departments like Commerce, Defense and the U.S. Trade Representative Office are lot more relaxed about the policy, he said, “but the two places I cannot go are the White House and the State Department.”
On the other hand, Yuan can meet any lawmaker he wants — and he often does.
“Just last week I went to see Harry Reid,” said Yuan, referring to the Democratic Senate majority leader from Nevada. He also confers regularly with congressional leaders such as Rep. Nancy Pelosi (D-Calif.), Sen. Mitch McConnell (R-Ky.) and Rep. Lincoln Díaz-Balart (R-Fla.). “We had a big reception March 26, with 18 senators and 200 staffers coming to celebrate the 30th anniversary of the Taiwan Relations Act,” he said.
“In very practical terms, we enjoy close ties with Congress, and friends in and out of government. We are the beacon of democracy in Asia and the world, and the U.S. treasures this kind of friendship. But because of this lack of diplomatic relations, sometimes it’s not so enjoyable,” Yuan admitted.
The Taiwan Relations Act (TRA) — passed by a sympathetic Congress in the wake of what many Taiwanese still view as Jimmy Carter’s treason for breaking ties in 1979 — ensures, among other things, that the United States will protect Taiwan in the event of an unprovoked attack by mainland China.
“Today, there are only 12 senators who participated in that vote, and out of 435 members in the House, only 19 members are still there,” Yuan said. “Both houses feel strongly that the 30th anniversary of the act is the time to remind everyone how Congress wisely passed this law to make sure the U.S. maintains some kind of relationship with Taiwan.”
President Ma, in an April 12 speech commemorating the 1979 legislation, said “its very existence has stabilized” the triangular relationship among mainland China, Taiwan and the United States.
“In an imperfect world, the TRA — which largely accommodates Taiwan’s needs for continuity, reality, security, legality and governmental status in the new Taiwan-U.S. relationship — is the second-best choice for Taiwan. Today, the TRA is more than a convenient solution to a political dilemma,” said Ma, the former mayor of Taipei. “It serves to check mainland China by balancing the power disparity across the Taiwan Strait, while simultaneously constraining Taiwan from moving toward de jure independence.”
Different Kind of Dollar Motivation
But these days, with a worldwide economic slowdown and many Taiwanese weary of tense pro-independence rhetoric, business has reunited the longtime adversaries in ways politics never could. More business than ever, in fact.
Mainland China (including Hong Kong and Macau) has become Taiwan’s largest trade partner, with two-way commerce amounting to $130.2 billion in 2007. It has also become the most important overseas destination for Taiwanese companies, with conservative estimates putting cumulative investment in China at more than $100 billion. Some analysts cite even higher figures.
In addition, more than 1 million Taiwanese businesspeople, managers and technical experts now live and work in China. In recent years, well over 60 percent of all high-tech exports from the mainland have been manufactured by Taiwanese companies.
These days, the talk in Taipei isn’t so much about missiles, but about the proposed ECFA — Economic Cooperation Framework Agreement — with Beijing that might pave the way for similar free trade deals with other countries.
“If we do not do this now, we will regret it tomorrow,” Ma said recently, arguing that the ECFA could prevent Taiwan from becoming marginalized in the wake of a tariff-exemption deal between China and the 10-member Association of Southeast Asian Nations that takes effect next year.
“Our petrochemical, electronics, textile and machine-tool exports will be subject to a 6.5 percent tariff on the mainland, while ASEAN members’ products will be exempted from such duties,” warned the president, whose popularity is at an all-time low as trade-dependent Taiwan tries to climb out of recession. “Being excluded from economic agreements in the region could cost the island 114,000 jobs and see a fall in GDP of 1 percent.”
Ma said a cross-strait ECFA could include non-tariff measures like investment and intellectual property protections, as well as a mechanism for settling disputes. “It is non-political and will not involve unification, independence or sovereignty issues,” promised the pragmatic president.
Such a trade pact between two longtime enemies would have been unthinkable only a few years ago — which is why Taiwan has so much riding on a highly symbolic issue like winning observer status at the WHO.
So what if, at the end of the day, Taiwan doesn’t get what it wants? What if China took a mile but doesn’t give back an inch? Will the prosperous little island revert to its confrontational ways and declare unilateral independence from the mainland, provoking tensions all over again?
Not a chance, assured the envoy from Taipei.
“I always think positively. I cannot see why we wouldn’t get in,” said Yuan, ever the optimist. “And I’m pretty sure that when we do, the Taiwanese economy will get better — and the approval rating of my president will go up, instead of down.”
Larry Luxner is news editor of The Washington Diplomat.