WAVES OF CHANGE IN SOUTH CHINA SEA

TAIWAN, it seems, is galloping along nicely in the lunar Year of the Horse, which began with Taiwan and China meeting officially for the first time since 1949.
In recent weeks, events appear to have been escalating in Taiwan’s favour. Seizing the moment, Taiwan is manoeuvring to a position of relevance in the geopolitics of East Asia.
After years of being relegated to the background by Beijing, which has sought to block its participation in key international forums, Taipei is seen to be pitching for a role as “honest broker”.
Taiwan’s President, Ma Ying-jeou, has called for negotiations to establish a code of conduct in the East China Sea, where moves by Beijing to assert its territorial claims have raised tensions.
Taiwan is also a claimant to the islets, which it calls Diaoytai. Beijing calls them the Diaoyu and Japan refers to them as Senkaku. Japan administers the rocky islets.
Since the territorial dispute first boiled over in September 2012, the islets have become a source of ratcheting tensions, with both Japan and China stepping up their military presence.
As part of its response, China controversially introduced its Air Defence Identification Zone (ADIZ), bringing howls of protests from its neigbours and other international observers with interests in the peace and stability of the region.
China’s ADIZ also covers another set of islands claimed by both Tokyo and Seoul.Late in February, Taiwan’s Ma said all parties should work together to establish an East China Sea Code of Conduct on the use of airspace and waters in the East China Sea, based on mutual trust and interests.
Ma’s code of conduct echoes an initiative of the Association of Southeast Asian Nations (ASEAN), which China reluctantly agreed to it last year — after rejecting it out of hand for a decade.
ASEAN has been trying over all that time to secure agreement from China on a legally binding South China Sea Code of Conduct, hoping to reduce tensions and the risk of violence in the region.
Under its so-called nine-dash-line claim, China has virtually claimed sovereignty over 90 per cent of the resource-rich South China Sea, a vital shipping lane for Southeast Asian nations. Vietnam, the Philippines, Malaysia, Brunei and Taiwan all have claims over various groups of islands in the South China Sea.
Speaking at a security conference in Taipei, President Ma said a multilateral negotiation mechanism in the region must to be established as soon as possible to address disputes relating to the ADIZ.
Taiwan is feeling its way around regional geopolitics, following what seems to be a thawing of the cold shoulder treatment from Beijing.
In his capacity as Secretary-General of the Communist Party of China, Xi Jinping met visiting Kuomintang Honorary Chairman, Lien Chan, in Beijing in February.
The Chinese leader reportedly stated that he is willing to hold cross-Strait consultations on political differences on an equal basis under the One-China principle.
Xi conceded that some problems concerning cross-Strait relations cannot be resolved immediately, due to historical and practical reasons — but people from both sides of the Strait are of one family and share the same blood, culture and aspiration, he added.
The KMT’s Chan responded that both sides have embarked on the right course which should not, and cannot, be reversed. He said reconciliatory dialogue between the CPC and the Kuomintang in 2005 had led to peaceful development across the Strait.
The meeting came hot on the heels of a highly-publicised landmark meeting between Taiwan’s Mainland Affairs Minister, Wang Yu-chi, and his Mainland counterpart, Zhang Zhijun, in Nanjing in mid-February.
Taiwanese foreign affairs officials are hopeful of a meeting between Xi and Ma, in his role as Chairman of Taiwan’s ruling Kuomintang, eventually, although they are doubtful that such a meeting could take place this year.
The Kuomintang could also be moving ahead of the feelings of some people in Taiwan and those of the pro-independence Opposition, the Democratic Progressive Party. But, by and large, the Taiwanese know on which side their bread is buttered.
Even the DPP leader, Tsai Ing-wen, is said to have softened her tone on ties with China, in a bid to woo moderate voters ahead of what is expected to be a tight Taiwan Presidential vote next January.
China and Taiwan have had unofficial trade and economic linkages for many years now, formalising these in the China-Taiwan Economic Co-operation Framework Agreement (ECFA) in 2010.
Last year, Taiwan and China inked a trade-in-services agreement that will help Taiwan’s e-commerce, finance, and securities businesses expand their presence in mainland China (the deal is expected to be ratified by Taiwan’s Legislative Yuan in March). Meanwhile, negotiations on a trade in goods agreement are ongoing.
Chinese tourists also now bring in an importance source of revenue, and some Taiwanese companies are doing extremely well in the Chinese market.
The first unofficial contact was through China’s Association for Relations Across the Taiwan Straits (ARATS) and Taiwan’s Straits Exchange Foundation (SEF), which focusses on micro issues, such as investment hurdles. The talks were hosted by Singapore, which is considered a neutral player (see ATI October 2013, page 43).
The two sides have said that the new level of talks will play a different role to that of the ARATS-SEF talks.
Commenting on the latest talks, China’s Global Times, a daily newspaper under the auspices of the People’s Daily, spoke of “unimaginable” Cross-Strait meetings breeding optimism.
Observers believe that both Presidents have a vested interest in making progress in their efforts to normalise relations across the Taiwan Strait.
If Xi can somehow convince Taiwan to come under China’s wings, he will have succeeded where his predecessors failed.
All this is happening at a time when Taiwan is starting to reverse the drain of investment to China. As Austrade’s Laurie Smith tells ATI (see page 17) Taiwanese companies are relocating key production back to Taiwan.
 In a wider trade sense, Taiwan is pushing ahead with a series of trade agreements. Last year, it signed Economic Cooperation Agreements with New Zealand (ANZTEC) and Singapore (ANSTEP), and it is working to conclude economic co-operation agreements with other members of ASEAN and the EU. It will also be seeking membership in the Trans-Pacific Partnership (TPP) and Regional Comprehensive Economic Partnership (RCEP).
 
* Florence Chong is Editor of ATI Magazine.