June 17th 2000

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Articles from this issue:

EDITORIAL: Australia’s Pacific role

CANBERRA OBSERVED: Why “sorry” avoids the real Aboriginal issues

ECONOMICS: Foreign debt hits $255 billion

COVER STORY: Wrong way on drugs: new book

Straws in the Wind

ECONOMICS: From bad to worse: the future of world trade

PRIVATISATION: Telstra under fire

Australia and the world


REGIONAL AFFAIRS: West Papua: Jakarta takes the strain

MEDIA: “Australia Week”, junkets and the GST

MEDICINE: Trust me, I’m a bureaucrat!

ASIA: New era for Taiwan

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New era for Taiwan

by Jeffry Babb

News Weekly, June 17, 2000
The inauguration of Chen Shui-bian as tenth president of the Republic of China heralds a new era in the government of Taiwan, formally known as the Republic of China (ROC).

Chen has bent over backwards to accommodate the People’s Republic of China (PRC) in his statements so far, carefully crafting his inaugural speech to prevent a boilover in relations with Beijing.

In its relations with the world outside of the island, the most pressing problem is settling the dispute with the PRC.

Technically, the current situation is the result of the retreat of the Nationalist government to Taiwan from the mainland in 1949 and both sides are still at war. In other words, the PRC and the ROC on Taiwan are still fighting an unfinished civil war.

The Kuomintang (KMT) ruled Taiwan without interruption until the election of President Chen. Chen was born in poverty and raised himself to the nation’s highest office through intelligence and hard work. He has distanced himself from his party, the pro-independence Democratic Progressive Party (DPP), pledging to rule for everyone, saying he will not attend DPP functions.

Chen’s vice-president, Annette Lu, has proved to be less moderate. Lu is a “capital F” feminist and has taken a hard line against Beijing, making a number of provocative statements.

The other pro-independence player is former president Lee Teng-hui. Lee was splashed with red ink in a symbolic assassination by a former KMT supporter, who felt that Lee betrayed the KMT and supported Chen rather than his own KMT candidate. In the end, the KMT candidate lost the presidential election by a wide margin, coming a poor third behind third party candidate James Soong.

Lee was reported as saying that his greatest achievement was the election of an opposition party member as president. Lee has also been outspoken on cross-strait ties, saying that the PRC is a “paper tiger” that will not dare to invade Taiwan.

Lee derailed the steady improvement of ties between the PRC and Taiwan just before an important meeting with the PRC’s emissary by his declaration that relationship between Taiwan and the mainland should be on a “special state-to-state” basis.

On the domestic front, Chen promised to implement an old age pension, giving first home buyers subsidies and a number of other pledges — all without raising taxes. This is, of course, impossible, and Taiwan has been running deficits for years and borrowing money to cover the shortfall.

In all, coming to power for the first time has created a situation reminiscent of the Whitlam Government. Taiwan is very lightly taxed by comparison with other industrialised countries and a proposed capital gains tax on share trading — which is untaxed at the moment — caused an uproar because the stock exchange is the only legal outlet for the gambling-mad Chinese.

The other domestic policy area of prime interest to the local people is the end of “black gold” politics — in other words, the involvement of organised crime figures in government. The triads have always been influential at the grass roots level, but the government of former President Lee brought them into the government, and a number of gang leaders were even elected to the Legislature.

Another challenge for President Chen is to reconcile the various ethnic groups in Taiwan, between the early Chinese settlers who began arriving in the 17th century, and the so-called mainlanders, who arrived with Chiang Kai-shek in 1949.

The Taiwanese, so-called, speak a dialect very similar to that of Fujian province on the mainland, from where their ancestors originated. Apart from the Taiwanese, other groups resident in Taiwan before 1949 were the Hakkas and the native aboriginals. Chen was elected with only 39 percent of the vote, mainly from the Taiwanese, and Chen is distrusted by both the mainlanders and the Hakkas.

While the DPP is now called “the ruling party”, it does not have a majority in the Legislature and Chen will have to rely on other parties to get his legislation through. He has co-opted a number of ministers from other parties, including Premier Tang Fei, who is a former KMT defence minister.

Chen’s other big problem is likely to be former president Lee. Lee has made it clear he intends making a number of international visits, if anyone will have him, which is unlikely. He will keep making statements calculated to enrage Beijing and deepen Beijing’s suspicions about the reliability of Taiwan’s governing élite. Lee has deepened the split in the KMT between the native Taiwanese and the mainlanders, who feel they have had their worst suspicions about Lee’s duplicity confirmed.

Taiwan is an economic powerhouse and escaped the Asian meltdown almost unscathed. However, it must come to terms with the fact that some reconciliation with the mainland is necessary.

The leaders in Beijing are still trying to understand where Chen and his new administration are coming from. Chen is a highly intelligent man and has good political skills, but whether he can keep his faction-riven party under control is another question.

Taipei-based Jeff Babb writes for the China Post

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