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Taiwan and mainland China scripted history in their cross-strait
relations, after 60 years, when President Ma Ying-Jeou was
elected Chairman of the Kuomintang (KMT) party in power on
26th July,2009. Chinese Communist Party's General Secretary
Hu Jintao sent President Ma a congratulatory fax, and Ma responded
with the principle of "facing reality, building mutual
trust, and putting aside disputes and creating a win-win situation."
On 11th September, 2009 former President Chen Shui-bian of
the Democratic Progressive Party (DPP) which opposed China's
overtures and his wife, Wu Shu-jen, were sentenced to life
imprisonment for corruption. On 17th December President Ma
stated that Taiwan's sovereignty would will not be jeopardized
by agreements to be signed between Taiwan's Straits Exchange
Foundation and mainland China's Association for Relations
Across the Taiwan Strait and added "Only by establishing
formal mechanisms for handling cross-strait economic exchanges
can Taiwan be assured of receiving a full range of benefits,"
Since
then KMT has continued talks with main land China and as long
as economic growth and international prestige remain top priorities
for Beijing, China is less likely to threaten Taiwan. China's
Central Military Commission(CMC) is now confident, that USA's
Navy cannot easily come to the aid of Taiwan, as China's large
SSN submarine and surface fleet, and Su-27 fighters will be
able to thwart that. This was evident in China's show of might
in the 1st October, Military Parade and aggressive postures
in the South China seas to stop US survey ships. The convergence
of interests between Beijing and Washington and Taiwan to
restrain North Korea's nuclear ambitions has changed the attitude
of Taiwan's majority towards China, which is reciprocated
by China.
The sudden economic down turn last year had threatened both
economies that looked for stimuli. The down turn has had beneficial
effects in realising that both China's intertwined cooperation
could stimulate some sectors of their combined $ 3.5 trillion
economy and provide main land Chinese much coveted employment.
In a pragmatic move China assured it will 'never use military
force against its own people in Taiwan', and has even 'objected
only in words' to Taiwan acquiring selected US military hardware
like attack helicopters, ships and AA missiles. In the long
term the PLA looks to assimilating Taiwan as a part of China
on the lines of Hong Kong.
China
is also seriously looking at the advantage that could accrue
to both nations if they trade in Chinese yuan and Taiwanese's
dollars, which is being dubbed as trade in 'Chaiwan'. Haier
Group, the world's fourth-largest home appliance maker, is
eyeing growth opportunities in Taiwan following the lifting
of restrictions on inbound mainland Chinese investment. Haier
Vice Chairman Wu Kesong said he has an open mind about investing
in Taiwan. "We will actively seek business opportunities
in Taiwan given Chinese mainland investment is now permitted".
This is statement came just before the major cross-strait
conference in mainland China titled "Forum between the
Kuomintang(KMT) and Communist Party of China", which
broke ice.
In
another move China has introspected why the US dollar should
remain the world's currency reserve, and several Chinese companies
have signed a landmark deal to allow their contracts with
Hong Kong, Macau, and Indonesian entities to be settled in
yuan, and not the greenback or the euro, as is the practice.
After receiving permission from the People's Bank of China,
the six companies, based in Shanghai and Guangdong province,
are allowed to conduct business in Yuan on a trial basis.
Should the trial prove successful, it is expected to be extended
to all of ASEAN. The agreement promises to increase China's
regional influence and offer a regional currency as an alternative
to the yen and the dollar, though several hurdles, such as
the yuan not being freely convertible, have to be over come.
India needs to heed this economic engineering and in roads
by China with its yuan entering the area, especially as India
has a Look East policy, as an article of faith, which was
initially initiated by then Finance Minister Dr Manmohan Singh
to gain investments from the Eastern Tiger economies.
China
is making inroads in to ASEAN, and wishes to trump India in
other spheres as well and it all begins with 'Credible Intimidation'
and deft moves, which have been articulated I China's 2009
Defence White paper under defending China's interests abroad.
China is making investments in to Mauritius to match India's
double taxation facility, has asked to be the co Chairman
of the monthly Piracy Shared Awareness and DE-confliction
(SHADE) meeting held in Bahrain presently co-chaired by the
US Commander Maritime Forces (CMF) and European Union (EU).
China has requested that the Piracy region to be demarcated
nation wise and offered to provide tankers for fuelling ships
in the Horn of Africa as Japan is withdrawing its tankers.
The Chinese are known to employ combined economic, diplomatic
and military pressures in nuanced ways to achieve their goals
Hong
Kong was assimilated in to China and given the privilege of
one nation two systems, which has worked admirably, and the
powerful Chinese Communist Party kept its word, though some
Taiwan's the political parties especially the DPP is opposed
to any thoughts of a reconciliation. The acts of North Korea
in the nuclear and missile field, has made South Korea nervous,
and investment has reduced, which is looking afresh to India.
China feels it can take advantage of the situation as Taiwan
has the capacity to take over aspects of manufacturing and
business which are South Korea's domain. Taiwan is the repository
of latest US and French collaborations and technology, which
China covets.
South
Korea views these moves by China as a real threat to South
Korea's domestic electronics industry. Taiwan and China could
easily move to forge a tight supply chain link in the information
and communications technology (ICT) sector. For Taiwan's ICT
industry, the tearing down of walls inhibiting cross-strait
communication has been a boon. For years, Taiwan has been
unable to enjoy economies of scale due to its limited territory
and the small size of its enterprises in comparison to those
of other nations.
Once
the two nations across the Taiwan Strait join, it will bring
together Taiwan, with its skilled professionals and industry
chain, and mainland China, with its lower labor costs and
a hinterland 20 times as large as South Korea's. All of the
obstacles that Taiwan faced in the past could get removed
in one fell swoop. The economies of scale which Taiwan has
pined for could be at hand, and Taiwan can aspire to have
its enterprises rapidly established as global brands. The
amount of R&D will immediately rise, marketing and advertising
will become easier and will be supported by the world's largest
market, China. This is if 'Chaiwan' comes in to being, and
is a big 'If', but is a possibility, and India's business
and military must be ready with a strategy is in place for
it.. How India will fare strategically needs watching as India
will have to deal with China with C3IC, by which this writer
means India will have to COOPERATE with China for trade,
COMPETE for same markets, avoid CONFRONTATION ie
C3. INTELLIGENCE AND CYBERWARFARE will be keys
so India's strategy has to be to COPE with the rise
of China. C3IC
(Cmde
Retd Ranjit B Rai is former Director Naval Intelligence and
Operations visited Hong Kong and ship building facilities
in China)
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