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Key Economic Data 
  2003 2002 2001 Ranking(2002)
Millions of US $  406,000    
GNI per capita
 US $ 18,000
Ranking is given out of 208 nations - (data from the World Bank)

Books on Taiwan

Update No: 043 - (28/09/07)

With elections looming ever closer on the horizon, political confrontations and points-scoring-never far beneath the surface-are becoming an almost daily occurrence. Taiwan faces two elections early next year: the first for a new parliament (Executive Yuan) to be held in January 2008 and to be followed two months later by the presidential election. 

Most polls show the ruling Democratic Progressive Party to be trailing. The DPP has been hurt by corruption scandals surrounding the President, Chen Shui-bian, members of the First Family and other senior party political leaders, including its presidential aspirant, Mr. Frank Hsieh. The main opposition party, the Kuomintang (KMT or Chinese Nationalist Party) has itself become enmeshed in scandal although its own presidential candidate (and former party leader) Ma Ying-jeou was recently found not guilty of embezzlement for misusing his allowance during his term as mayor of Taipei.

Election issues centre around two major themes-China dominates the political debate while structural reform-of the banking sector and the fiscal deficit- is the major economic challenge. Not surprisingly, the economic side of the equation is too complex for the electorate at large. "China" and how to deal with it therefore commands the greater attention.

In fact on the economic front there is really little to distinguish the two political camps. Both parties are economic rationalists anyhow. It is only with regard to China that the two camps are able to draw a clear line of demarcation. 

The DPP draws its core support from the native Taiwanese segment of society-by far the overwhelming majority of the island's population-or rather from those Chinese who came over during the first wave of Chinese migration to Taiwan during the 17th and 18th centuries. By contrast the KMT support base is with the descendants of those who fled to Taiwan with Chiang Kai-shek in the late `1940's at the end of the Chinese Civil War after WWII. Many of these still maintain family ties with relatives on the Chinese mainland. They produced the elite that dominated the administration and the military in China during the period of KMT rule and their descendants have dominated government service-at least until recently-on Taiwan as well.

In fact "native Taiwanese" (as distinct from 'aboriginals,' that even earlier segment of the population that mostly has Malay roots - some are Polynesian - and who were pushed into the uplands and islands, following the first mass migration of Chinese settlers), comprise around 90 percent of the population of the island and it is a measure of just how unpopular the DPP has become that it has not been able to rally a much greater portion of Taiwan's population to its cause.
The fact that it has not done so probably has not so much to do with history but to the heavy-handed approach of President Chen, in dealing with Beijing and the manner in which he has sought to promote independence for Taiwan. While many people will privately agree with the measures he has taken-which have included downplaying the name "China" in the island's affairs and promoting the use of the name "Taiwan"-most are tried and true capitalists who want simply to make money and not rock the boat.

The annual ritual of Taiwan applying (again) for membership of the United Nations has to be seen in this light. This latest bid-the fifteenth attempt to rejoin the organization from which it was expelled in 1972 when its seat was taken by the People's Republic of China-ended the same way all other attempts have gone. It was dismissed on September 19th. This annual exercise has once again strained relations both with China and with the United States. So why do it? 

Actually there are many reasons; not least of which this year was the need for President Chen and the DPP to regain the high ground. More of that below. But the attempts to rejoin the UN go back well beyond the inauguration of the DPP government (in 2000) and in fact was an initiative started by President Chen's predecessor (and mentor-although they were on different sides of the political fence) Lee Teng-hui.

For a start, the annual application focuses the attention of the world (and particularly the United States), on the manner in which Taiwan has transfigured itself into a modern, democratic state over the past twenty years and contrasts starkly with the lack of political freedom on the Chinese mainland. As pointed out by former US Senate Majority leader, Bob Dole in the Wall Street Journal recently: Taiwan is the 48th most populous country in the world. Its economy is the 16th largest. Its gross national product totals $366 billion, or $16,098 per capita. And with $267 billion in foreign exchange reserves, it is one of the world's three largest creditor states. Taiwan is therefore poised to be a significant contributor to the U.N.'s operations and play a constructive role in the organization if given the opportunity to do so.

On any rational decision-making basis, Taiwan would satisfy all the criteria for entry to the UN as a modern democratic nation state. UN lawyers argue instead that the matter was determined back in 1971 when the PRC was given the China seat in the UN and that "for all intents and purposes Taiwan is an integral part of the People's Republic of China." Of course, Taiwan never has been an integral part of the PRC but it is a convenient fiction that matches the realpolitik of the times.

As we noted above though, this year's application was a little different since it was not made under the name "Republic of China" as before, but rather as "Taiwan." The end result was the same of course, an unceremonious rejection, but the distinction was registered in the public domain and important in the context of President Chen's determination to work to the last minute of his presidency, to carve out a separate identity for Taiwan from that of China.

In the context of the coming elections it was therefore a useful means of rallying support to the cause. The DPP-organized rallies in Kaohsiung, the heartland of DPP support, drew more than 100,000 people onto the streets. Both Beijing and Washington objected of course but in the end could do nothing. 

The rally was part of a well-orchestrated strategy to support a planned referendum early next year on membership in the world body, under the name Taiwan, rather than the official title of the Republic of China. The referendum, again opposed by China and the U.S. (China, which overplays the rhetoric, called it a "serious situation" whatever that may mean). It reinforces the notion that the people of Taiwan are sovereign and determined to choose their own destiny, and if passed as expected, would bind any future administration to the present strategy.

The success of the rally caught the KMT off guard and as one newspaper pointed out, Mr. Ma was caught flat-footed and torn between supporting the KMT official position of eventual unification with the mainland, and the fact that the issue of U.N. membership is a huge vote-getter with the public. In fact, in the face of the comeback by President Chen as a result of the successful initiative, Ma held his own rally in support of U.N. membership in Taichung in central Taiwan. There was a crucial difference however, Mr. Ma supports joining the U.N. as the "Republic of China," not as "Taiwan," thereby clinging to the One China doctrine in contrast to the pro-independent view espoused by the DPP. It turned out to be half the size of the DPP event.

China so far has done nothing beyond the usual rhetoric and with the Olympic Games almost upon us, is unlikely to do more than splutter. Nor does it need to do anything. Beijing probably believes rightly that it has the upper hand. Over the past decade China has emerged to be a key player within the global economy, and few would dare challenge that ascendancy. Both Beijing and Taipei believe that time is on their side. For the moment, the leaders in Beijing can sit back and watch while the two rival parties on Taiwan slug it out for control of the island.

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