Positive Measures

(I) To strengthen economic integration with advanced nations (II) Concern on Developing High Tech and Innovative Industry

(III) Develop navigation right negotiation between the two states across the Strait, reduce corporate operation cost, attract cross-national industry cies of the two states across the Strait in the future shall be conducted

according to the following principles:

First, the economic and trade connections of the two states across the Strait shall consider both national security and economic interest.

Second, Taiwan needs a package of complete economic security development strategy, to replace temporary and passive policies with positive management.

Third, we will, on any subject, including the economic and trade issues of the two states across the Strait, develop negotiation with China. Both parties shall jointly develop wisdom and creative ideas with highly good faith during the negotiation process.

But there is a great deal of debate in Taiwanese society over what sort of policies the government should adopt in order to develop cross-strait economic relations. The debate primarily follows two polar arguments: a strict ban or com-prehensive liberalization. Some insist the policy should be "no haste, be patient,"

because national security cannot be ignored, and some push to "go west,"

because Taiwan's economic interests cannot be ignored. In fact, both arguments oversimplify the complexity of cross-strait economic issues, ignoring national security for the sake of economic interests or vice versa. Economic relations between Taiwan and China are already an important part of Taiwan's economic development. However, when recognizing the economic benefits of cross-strait economic relations, we should always keep in mind the risks to national security, because overdependence on China's economy can jeopardize national security.

In other words, economic interests and national security are not mutually exclu-sive, and they must be considered in tandem. There must be a comprehensive economic security development strategy to encompass both economic interests and national security. The "White Paper on China Policy for the 21st Century"

addresses this point:⁵⁹

The basic objective of "economic security development strategy"

is to ensure economic resource (including capital resource and market)

strait relations. In the future, we hope to continue pushing forth current liberalization measures while expanding cross-strait exchange across the spectrumfrom journalism and information to education and cul -ture, to economics and trade--and to promote the establishment of channels for resuming cross-strait dialogue and communication. By building bridges, we will aim to close gaps and establish a foundation for mutual trust.

These ideas also won the support of James Soong during the Bian-Soong meeting. The fifth consensus that he and President Chen produced is as follows:

Reinforcement of cross-strait economic, cultural, and academic exchange. Moreover, based on the successful Lunar New Year model, which marked the initiation of direct chartered passenger flights, we will, through consultation and negotiation with the other side, phase in additional measures to facilitate convenient and efficient chartered cargo flights, eventually leading to the realization of three-links. We realized that more than three years have passed since the Economic Development Advisory Conference took place, and that it is time to make adjustments on regulations that affect the development of our industries and our national competitiveness, if we are to carry out the consensus reached during the Economic Development Advisory Conference: "Cultivating Taiwan while reaching out to the world."

The development of cross-strait economic policies and the constant relaxing and expansion of cross-strait exchanges of press, information technology, educa-tion, and culture are the foundation for bridging the cross-strait gap and building mutual trust. They are valuable and significant for the development of cross-strait relations, particularly in pursuing a future of co-existence and co-prosperity.

3.3 Assisting democratization in China: reconciling basic cross-strait contradictions

The basic contradiction between the two sides of the Taiwan Strait is that one side is a free, democratic country, and the other side is a single-party dicta-to come dicta-to Taiwan.

II. Defensive Measures

(I) Disperse Export Market, Reduce the Reliance on the Market of China (II) Properly Respond the Problem of Inbound Chinese Capital into Taiwan After President Chen came to power, these ideas were proposed to the Economic Development Consulting Committee in 2001 in the hope of reaching a consensus. The participants reached the following ten conclusions through their extensive discussions:⁶⁰

1. The basic principles for promoting cross-strait economic development are: Taiwan first, global logistics, reciprocity, win-win, and risk manage-ment;

2. The "no haste, be patient" policy for investing in China should be replaced by "proactive liberalization with effective management" under the principle of "global logistics and strategic liberalization";

3. Flexible measures for the capital flow between the two sides should be established;

4. Participating in the WTO and implementing the "three links";

5. Promoting Taiwan tourism to Chinese tourists; and 6. Cross-strait negotiations

After these consensuses had been reached, the MAC and relevant agen-cies took action to put them into practice, including implementing the appropriate legal amendments and policies. President Chen said in his inaugural address in 2004:⁶¹

For more than a decade, interaction between the peoples on both sides has grown closer and more intense. This development bears great significance and increases the importance of furthering

cross-◆Provide assistance to the currently practiced base-level election in China, including training of election affairs personnel on behalf, pro -viding computer ballot system, etc.

In addition, President Chen pointed out in his "New Century of Peace in the Asia-Pacific, and the Bright Future of Taiwan Strait" remarks on January 30, 2000:⁶³

Taiwan would like to play an active role in assisting China's mod -ernization and democratization. Taiwan has accumulated a wealth of experience in the process of educational improvement, agricultural reform, economic development, and democratization. This experience was not implanted from Western countries, and since Taiwanese and Chinese societies share some characteristics, Taiwan's experience can serve as a reference for China. Chairman Jiang Zemin used to claim that in the middle of the 21st century, China would realize moderniza -tion. Taiwan is able and willing to offer active assistance, because a modernized and democratized China will bring peace and stability to the Asia-Pacific region (point number five).

To implement this strategy and reconcile the basic contradiction between Taiwan and China, President Chen held the Sanchih Conference in September 2002 in Sanchih Township in Taipei County, where he made several important decisions:⁶⁴

1.In regard to China's democratization, we should establish obser -vation and evaluation mechanisms for China's political rights, judicial rights, economic rights, social rights, and environmental rights. A com -plete report on China's human rights should be submitted routinely, and the government and civil society can tailor concrete working plans according to the results of those evaluations so that necessary assis -tance can be offered to China for democratization.

2.In order to help China take the first step towards democratiza -tion, we would like to invite relevant persons from China to visit Taiwan torship. No matter how much goodwill Taiwan shows in seeking peace and

rec-onciliation, or how innovative or constructive Taiwan's China policy is, it is all use-less as long as this contradiction exists. Even when there is peace, it can only be temporary. To ensure long-term cross-strait stability, Taiwan has to assist China in democratizing. Taiwan should show concern for democratization in China, not only because Taiwan believes that human rights and democracy are universal values and that those with the blessing of democracy should assist those without it, but also for Taiwan's own good. Taiwan will never be safe if there is a tyranni-cal giant living next door. China's democratization will not only be beneficial for the wellbeing of the people of China, but also for the people of Taiwan.

Democratization, however, is not automatic. If those with experience can share and support those without it, steps towards democratization can be taken with greater security. Taiwan should play an active role in promoting democratiza-tion in China. To help China democratize is a decision that Taiwan should make both for the reason that democratic countries should help other countries to democratize and out of concern for Taiwan's own geopolitical strategic interests.

The "White Paper on China Policy for the 21st Century" notes that:⁶²

We will engage in cooperation with any domestic person and group pursuing democracy in China, to promote the political system transition of China. At the current stage, Taiwan may promote the following policies:

◆Invite Chinese academic and official personnel to Taiwan to observe election.

◆Set up a fellowship or scholarship, to subsidize Chinese academic field in study of democratic promotion process.

◆Expand exchange with various Chinese political parties, including Chinese communist party, 8 democratic parties and the present and future various groups of China in promoting democratic movement.

◆Set up good interacting relationship with the personnel of overseas democratic movement in China.

and ARATS to resume dialogue and for there to be any developments in cross-strait relations. In the years that followed, Beijing continued to force Taiwan to engage in a struggle with China, seriously hindering the process of normalizing cross-strait relations. After President Chen's victory in 2004, China passed the Anti-Secession Law and invited KMT Chairman Lien Chan and PFP Chairman James Soong to visit the PRC. Lien and Soong met with Hu Jintao, and two com-muniqués were produced from the content of their meetings. Through the "one law, two communiqués," they surrounded the unification debate, completing the united front within Taiwan of opposing independence while urging unification.

This was an exhaustive attempt to isolate the DPP government and to trap President Chen, who had only two and a half years left in his term. These actions by Beijing finally incited an intense response from President Chen, who, in his 2006 New Year's Message, and through the subsequent decision to make the National Unification Council (NUC) cease to function, changed his tactics by adjusting the previous China policies as follows:

1. The 1992 Consensus and the One China Principle: Challenges and Responses

The PRC was extremely displeased to see Chen Shui-bian, the DPP's presi-dential candidate, win the 2000 election. During the last few days leading up to the election, then PRC Premier Zhu Rongji openly threatened the Taiwanese vot-ers in the international media, urging them to think twice before voting for a can-didate that the PRC did not favor. After Chen Shui-bian won the election, Zhu urged him to pledge the Four Noes and One Without: not to declare indepen-dence, not to change the national title, not to push forth the so-called "state-to-state" description in the Constitution, not to promote a referendum to change the status quo in regard to the question of independence or unification, and that there is no question of abolishing the Guidelines for National Unification and the National Unification Council, as suggested by former President Lee.

H o w e v e r, at approximately 3:00pm on May 20, when President Chen announced the Four Noes and One Without in his inaugural address, Chinese Communist Party officials issued a statement through the Central News Agency for the election at the end of the year. We are also willing to help China

train election administrative staff in order to lay the foundation for democratization.

The important resolutions listed above are currently being implemented by the relevant agencies. Amongst the measures put into place, inviting important public figures from China (including scholars, experts, activists, and government officials) to visit Taiwan and participate in election observations has proven to be the most effective.