Vol. 1 Issue 4
Global Taiwan Brief – Volume 1, Issue 4
Taiwan President Calls on Beijing to Acknowledge the ROC Exists
By: Russell Hsiao
International Cooperation to Help Build Taiwan’s Indigenous Submarines
By: David An
Taipei and Tokyo in the Tsai Era
By: June Teufel Dreyer
President Tsai’s Shotgun Honeymoon with Public Opinion
By: Hsin-Huang Michael Hsiao
Taiwan President Calls on Beijing to Acknowledge the ROC Exists
Russell Hsiao is the Executive Director of Global Taiwan Institute and Chief Editor of the Global Taiwan Brief.
In her first major policy speech on cross-Strait relations after becoming the president of Taiwan (ROC) on May 20, Tsai Ing-wen called on Beijing’s leaders “to face up to the reality that the Republic of China exists” and that “[t]he two sides of the strait should sit down and talk as soon as possible.” Adding that “[a]nything can be included for discussion, as long as it is conducive to the development of cross-Strait peace and the welfare of people on both sides.”
Double Ten Day (雙十節)—also known as National Day (國慶日)—celebrates the start of the Wuchang Uprising (武昌起義) in 1911 that precipitated the collapse of the Qing Dynasty and the establishment of the ROC.
On stage commemorating the government’s 105th National Day, President Tsai delivered a wide-ranging speech that lead with the island’s pressing domestic issues, such as youth employment, affordable housing, pension reform, transitional justice, and industrial reform. President Tsai then re-emphasized her administration’s desire to maintain the “status quo” in relations between Taiwan and the People’s Republic of China (PRC), and committed to “take proactive and forward-looking measures to promote constructive exchanges and dialogue across the Strait, in order to build a peaceful and stable cross-Strait relationship that endures.”
Interestingly, the cross-Strait relations section of the speech was preceded by an extensive discussion of Taiwan’s international space and the new government’s regional policy, such as the “New Southbound Policy.” More specifically, cross-Strait relations were addressed in the context of “regional developments.” This may be seen as an effort by the new administration to embed its “China policy” within a broader regional strategy, in contrast to the previous Ma Ying-jeou administration’s China-centric approach.
Expectedly, President Tsai’s National Day remarks tracked closely with the points laid out in her inauguration speech in both words and essence. The inauguration speech sets out both the legal and policy framework of her administration’s approach to cross-Strait relations. That framework is balanced on three pillars: (1) the spirit of the 1992 meeting and over 20 years of interactions and negotiations; (2) accordance with the Republic of China Constitution, and the Act Governing Relations Between the People of Taiwan Area and the Mainland Area, and other relevant legislation; and (3) more generally, that the two governing parties across the Strait must set aside the baggage of history, and engage in positive dialogue, for the benefit of the people on both sides.
The deputy minister of Taiwan’s Mainland Affairs Council (MAC), Lin Cheng-yi (林正義), was in Washington in mid-September for a series of private and public talks on the new administration’s China policy. The cabinet-level administrative agency under the Executive Yuan is responsible for the planning, development, and implementation of policies between Taiwan and the PRC. At a public conference hosted at the Brookings Institution, Deputy Minister Lin stated that “In the past previous [DPP] government and the [inaudible] government did not accept the 1992 consensus. In the current government, we have a different interpretation on the 1992 consensus regarding the meaning, regarding the historic context.”
Indeed, the symbolic importance of President Tsai’s speech on Double Ten Day was not lost on political observers. Before the 104th National Day celebration, then candidate Tsai wrote: “Our nation [Taiwan] is facing a turning point in history. At this crucial moment, I want to use my presence to let people know we are determined to respect differences, willing to seek consensus, and unrelenting in building unity,” she added. “What we need now is not just to unite a party, but to unite a nation.”
In an article entitled “Countering China’s Psychological Warfare,” specialist in Asian Security Affairs Shirley Kan, formerly with the Congressional Research Service and now a GTI adviser, wrote “[a]s the homeland of the ROC, Taiwan also plays a role in an informed counter-narrative. The world will be reminded of this on the ROC (Taiwan)’s ‘Double Ten’ national day on October 10, a date still invoking the revolution that resulted in a republic in China 105 years ago.”
At an event commemorating the National Day in Washington, DC held at Twin Oaks, Taiwan’s de facto Ambassador to the United States, Stanley Kao, stated that “Taiwan proudly stands for full-fledged democracy, freedom of speech, religion and the press, a vibrant market economy, rule of law, and abiding respect for human rights.” Ambassador Kao’s prepared remarks closed with: “viva USA, viva the ROC [Taiwan].”
Main point: The Tsai administration appears to be trying embed its China policy within a broader regional strategy, in contrast to the previous Ma Ying-jeou administration’s China-centric approach.
International Cooperation to Help Build Taiwan’s Indigenous Submarines
With the grand opening of the new submarine development center at China Shipbuilding Corporation in August, Taiwan has visibly embarked on a long and expensive process to manufacture its own submarines. Taiwan has announced that it plans to work with international partners, but when the political aspect becomes complex and slow, Taiwan will be tempted to do more on its own and simply rely on itself. Over time, the idea of developing its own technological base and providing more jobs at home will seem attractive. However, Taiwan will gain more cutting-edge technology at lower costs through international cooperation rather than heavily relying on local suppliers and its own innovation.
In the early 2000s, rather than building its own submarines or importing components, Taiwan unsuccessfully tried to buy complete diesel electric submarines from the United States. Then-President George W. Bush approved the sale of diesel electric submarines to Taiwan in 2001, but the deal did not go through. The political gridlock on Taiwan’s side—the incumbent executive could not gain the support of the opposition-led legislature at the time—meant that Taiwan lost a rare opportunity. Then, starting in 2008 through 2012, the stars slowly aligned within Taiwan’s internal politics as the same party controlled both the executive and legislative branches; however, the Obama administration neglected to approve the submarine sale. Another factor is that the United States’ submarine fleet is all nuclear powered, so there are no commercial diesel-electric submarines available in America for sale, and the question of opening up new diesel-electric submarine production lines in America is a politically sensitive one. After over 15 years without a completed submarine deal despite Taiwan’s persistence, it has grown weary of waiting.
However, Taiwan manufacturing submarines mostly or entirely on its own is not a viable option because of the barriers to entry; per-unit costs would be too high for the early research and development (R&D) phase, even before the manufacturing process begins. By going it alone, Taiwan’s R&D would not benefit from the economies of scale principle, since the per-unit costs of developing components for four or eight submarines are much higher than if the costs were spread across many dozens or hundreds of submarines, or than if Taiwan were to manufacture submarines to sell abroad—which are both unlikely in the foreseeable future. Therefore, it makes more sense to import submarine components from abroad from companies that already manufacture large quantities of submarine components. It will be tempting for Taiwan’s engineers to roll up their sleeves in the face of rejection by foreign companies, but it should nevertheless continue to push for foreign technology.
To take the early design phase as an example, Taiwan has set aside a $95 million budget to design six to eight submarines, so economies of scale will yield varying per-unit costs depending on how many submarines Taiwan decides to manufacture. As a thought exercise, if Taiwan produces four submarines, then $95 million in design costs spread across four platforms would total around $24 million per submarine; but for eight submarines, R&D costs would be $12 million each; R&D costs would drop even further to $5 million per submarine if Taiwan decided to build 20 submarines. Per unit costs are heavy for Taiwan, in contrast to the United States, which has built around 800 submarines throughout its history, progressing incrementally from the SS-1 submarine in 1987 to the recent SSN-801 Utah submarine in 2015. In the worst case scenario, it’s possible that Taiwan would need to bear the full costs if other countries are not willing to work with Taiwan.
Many countries like Russia, Germany and Netherlands lower per unit costs by increasing submarine production quantities to meet military sales demand overseas. These countries build for themselves, then build more for foreign export to lower unit costs even further. For instance, Indonesian officials revealed in September 2015 that Russia was selling 2 Kilo-class submarines to Indonesia; Indonesia previously purchased 12 Whiskey-class submarines from the Soviet Union during the 1960s and 1970s. However, since there is no evidence yet that Taiwan is pursuing the submarine export business, at this time it appears that Taiwan is unable to benefit from lowering its unit costs in this way.
The more that Taiwan tries to develop new and cutting-edge submarine components, the higher the risk that the cost will balloon multiple times the original budget. It does not seem worth the price for Taiwan to overcome technological hurdles that others have already solved many times over. The commercial off-the-shelf submarine prices offered by a foreign defense companies might seem high, but at least they are known quantities.
The precedent that Taiwan could follow for submarines comes from its experience building its own F-Ching Kuo Indigenous Defense Fighter (IDF) aircraft from 1980 to 2000. It was completed indigenously; the aircraft was assembled in Taiwan, but many of the components were imported from American companies such as General Dynamics for the airframe, Hughes Corporation for the engine, and Westinghouse for the avionics. The body, wings and vertical tail surface resemble Lockheed Martin’s F-16 aircraft. In 1999, after the aircraft was built, the United States announced a “sale to the Taipei Economic and Cultural Representative Office in the United States of Cooperative Logistics Supply Support Arrangement for spare parts in support of F-5E… Indigenous Defense Fighter” and other aircraft at an estimated cost of $150 million. Though Taiwan proudly boasts of building the IDF indigenously, which undoubtedly took innovation, the manufacturing and maintenance of the aircraft involved extensive international support.
Specific to Taiwan’s submarine program, there are some components that Taiwan already produces, and it would make sense for Taiwan to integrate these directly into the submarine without having to import them. Taiwan Naval Captain Chu Hsu-ming (朱旭明)highlights that Taiwan’s shipbuilding companies have first class abilities to produce the special steel for the hull, the hydraulic system to control the periscope, the precision propeller, and advanced welding technology. For example, Hung Shen Propeller Company in Pingtung, Taiwan, has manufactured propellers that have been installed in Russian yachts, French naval vessels, and British minesweepers. Therefore, a hybrid approach of combining domestic with foreign components makes sense.
There are aspects of Taiwan’s indigenous defense submarine that Taiwan should manufacture on its own, but other areas where it would benefit from international collaboration. The United States and other foreign countries and companies have already spent large amounts of research and development to create submarine components. Taiwan would be reinventing an expensive wheel if it endeavored to build the whole thing by itself.
The third and last installment of this series will provide insights into which countries and foreign defense companies Taiwan can work with on arms sales policies and processes, and exactly how to successfully obtain submarine components from them.
The main point: While it might appear at face value to be more cost-effective for Taiwan to build submarines on its own, Taipei would save money and acquire more advanced technology in the long run if it imported certain high-tech components from defense companies in the United States and other international sources.
Taipei and Tokyo in the Tsai Era
Dr. June Teufel Dreyer is a Professor of Political Science at the University of Miami and is the author of the recently-published Middle Kingdom and Empire of the Rising Sun: Chinese Japanese Relations, Past and Present (Oxford University Press, 2016).
The landslide victory of the Democratic Progressive Party (DPP) and its leader Tsai Ing-wen in the January 2016 election held forth the promise of improvements in Taiwan-Japan relations. During the eight-year administration of the Nationalist Party (KMT)’s Ma Ying-jeou, relations had regressed, as Ma sought to improve the nation’s frayed relationship with the People’s Republic of China (PRC) by integrating Taiwan’s economy more closely with China’s and encouraging closer social and political ties. At the same time, for unrelated reasons, China’s relations with Japan had deteriorated.
Official Japanese reactions to the election may be characterized as cordial, correct, and carefully calibrated to avoid offending China. Foreign Minister Kishida Fumio congratulated Tsai and her party on their victory, describing Taiwan as an “important partner and precious friend of Japan” with whom it shared basic values. In a nod to Beijing’s sensitivities, Kishida added that relations would be maintained “on a non-government basis.”
As a candidate, Tsai had visited Japan and since she happened to visit a major Tokyo hotel at the same time as Prime Minister Abe Shinzō, the media speculated that the two had met, though neither side would confirm. Once inaugurated, Tsai chose the highly qualified former premier Frank Hsieh (謝長廷) as Taiwan’s de facto ambassador to Tokyo. A former presidential candidate, Hsieh had studied at the prestigious Kyoto University, is fluent in Japanese, and has many influential contacts in the country. Another senior DPP member, Chiu Yi-ren (邱義仁), who heads the Taipei-based entity, Association of East Asian Relations (亞東關係協會), is in charge of conducting relations between the two nations.
Warm feelings and shared values notwithstanding, there were serious substantive issues to be dealt with, several of them seemingly contrived by the outgoing administration to cause problems for its successor. Chief among these were maritime territorial disputes, comfort women, and food imports.
With regard to maritime disputes, in the waning days of the KMT administration, the Ma administration had given much publicity to the Japanese coast guard’s expulsion of Taiwanese fishing boats from what the latter claims is the exclusive economic zone (EEZ) around its island of Okinotori. Both China and Taiwan reject the claim that Okinotori is an island, meaning that they do not believe it has an EEZ, and hence that their fishing fleets have every right to ply their trade there. Within days of assuming office, Tsai declared that the resolution of the dispute should be left to the United Nations Commission on the Limits of the Continental Shelf. Since Taiwan is not a member of the United Nations, and since no other country is likely to raise the issue—China having already rejected the court’s jurisdiction in a different case—the Okinotori issue was successfully finessed.
On comfort women, i.e. women who had been forced into brothels for Japanese soldiers during World War II, Taiwanese were angered when Abe, having apologized to South Korea and agreeing to pay $8.3 million in compensation to the survivors, refused to do the same for Taiwan. The Ma administration appeared to be doing its best to keep the issue alive, arranging for a museum commemorating the women to be opened in September, three months after he left office. Although quiet negotiations may continue on behalf of the three women still living, incendiary headlines no longer appear, and there was no notification of the opening of the museum.
The food imports issue may be on the verge of a solution. Shortly after the meltdown of a Japanese nuclear reactor in 2011, Taiwan banned imports from the five Japanese prefectures that suffered radiological contamination. After a rigorous cleanup effort that has included certification of the safety of the produce by experts from outside the country, the Japanese government has tried to reassure both its own and foreign citizens that produce from the areas is safe. A high-ranking Diet member has twice visited Taipei to plead that the ban be lifted, so far without results. Those familiar with the negotiations believe that it soon will be, with provisions for periodic inspections to reassure the public.
Ongoing problems that routinely occupy the time of diplomats regardless of what administration holds power include disagreements on how many boats from each country can fish in the other’s waters, and trade negotiations. In the summer, Taiwan’s Hon Hai precision industries, better known in the West as Foxconn, bought Japan’s financially troubled electronics giant Sharp, becoming the first major Japanese corporation to come under foreign ownership. While this might seem a step toward de-linking Taiwan’s economy from China’s and toward Japan, the direction was not so clear: within a few days after the acquisition, Hon Hai announced that it would build another large plant in China.
The most fraught aspect of the relationship, due to the certainty of retaliation from the PRC, is defense. Yet Japan and Taiwan unquestionably have common strategic interests in preventing Taiwan and its surrounding waters from annexation by China. During Ma’s presidency, an unofficial dialogue known as the Taipei-Taiwan, or T-T forum, was suspended; almost immediately after the election, it was resumed, with American experts participating as well. Japan in 2014 abandoned its self-imposed ban on transferring weapons and technology to other countries, and it may be surmised that this was a topic of discussion at the T-T forum, though it could not be publicly mentioned.
Perhaps the most important developments have been in the people–to-people sphere. In mid-September, in another first, Ren Ho, the daughter of a Taiwanese father and Japanese mother, was elected head of Japan’s largest opposition party. Later in the month, the two countries signed an emergency dispatch pact enabling them to send medical personnel and assistance systems in case of major emergency situations. And, as the month ended, a member of Taiwan’s Olympic ping-pong team and one from Japan’s announced their marriage.
Though progress in strengthening ties has undoubtedly been made, results have disappointed those who had hoped for more, and more quickly. For example, prospects are dim for the success of a petition to the organizing committee for the Tokyo Olympics in 2020 to allow Taiwan to participate as Taiwan rather than, at China’s insistence, the name Chinese Taipei that is so distasteful to Taiwanese patriots.
A leader of the Sunflower demonstrations against former President Ma’s pro-China policies has criticized the Tsai administration for moving too slowly, arguing that since time is too precious to be “inactive and overly prudent,” it must not waste what he termed “fleeting opportunities” to further solidify relations with Japan. Successful politics has, however, been defined as the art of the possible, and both Tsai and Abe have reasons to move cautiously with China, as always, the elephant in the room. Maneuvering between the dangers of rash action and overly cautious inaction will be a challenge for both sides.
The main point: There has been noticeable progress in strengthening ties between Taiwan and Japan, but Tsai and Abe have reasons to move cautiously with China. Maneuvering between the dangers of rash action and overly cautious inaction will be a challenge for both sides.
 Author’s interview with participant Dr. Grant Newsham, USMC (ret).
President Tsai’s Shotgun Honeymoon with Public Opinion
Dr. Michael Hsiao is a Distinguished Research Fellow at the Institute of Sociology in Academia Sinica, Taiwan.
Four months have already passed since President Tsai Ing-wen took office on May 20th. In the past few weeks, there has been an outpouring of public opinion polls released by various organizations in Taiwan measuring Tsai’s domestic approval rating. Some institutions are supportive of the Democratic Progressive Party (DPP), while others back the Kuomingtang (KMT); consequently, the polling results appear vastly different. Polling results from pro- KMT organizations tend to show lower support for Tsai than polls conducted by pro-DPP ones—by as much as 10 points. The gap reveals an “institutional bias” in public opinion within Taiwan.
An earlier poll by the pro-DPP Taiwan Thinktank (台灣智庫) showed that Tsai has an approval rating of 48.5 percent , while two consecutive Taiwan Public Opinion Foundation (台灣民意基金會) polls indicated her approval rating were 52.3 percent and 44.7 percent respectively . Similarly, Taiwan Style Foundation’s (台灣世代智庫) two polls at different times also found that Tsai’s approval lies between 53 percent and 49 percent . The average is 49.5 percent approval of Tsai’s first four months’ performance as the new President of Taiwan.
In contrast, polls released by pro-KMT media outlets such as TVBS, China Times, and United Daily showed Tsai’s approval rating to be 39 percent, 41.4 percent and 42 percent respectively, for an average of 40.7 percent. The gap between the polling results conducted by organizations partial to either side of the political spectrum is close to 10 percent. Yet, in both sets of polls, President Tsai’s approval rating has been steadily falling since her inauguration, indicating the end of her honeymoon with public opinion.
Despite the trend of a falling approval rating, the polls also show that Tsai still enjoys a relatively comfortable rating on public confidence and trust, ranging from 60 percent to 48 percent. Tsai received higher assessments (50-60 percent) from respondents on questions related to her personal character as a national leader. The responses seem to indicate that respondents believe that she is a leader with integrity; is reliable, with the determination and ability to engage in domestic reforms; is capable of protecting Taiwan’s national interests in handling cross-Strait relations, and is good at communicating with the public. At the same time, Tsai is also criticized by more than half of the respondents for “not being bold enough” and “not good at choosing the right people for the government”.
Inferring from the data, the first lesson from the public seems to be that they hold high hopes and expectations of Tsai, but at present, the public is anxious and even somewhat impatient, and expecting immediate performance and policy results from her government. The polls also suggest that Tsai is trusted by the electorate because she is seen as possessing many good leadership qualities, although they expect her to be more ambitious and aggressive. At the same time, she is criticized for her perceived failure in not using more capable and suitable talents to fill high-level positions in the Executive Yuan.
A closer look at the questions used by the various polls show that the two sides of the political spectrum have very different vantage points on public policy issues. In general, pro-DPP pollsters tend to ask more diverse questions that cover a wider range of subjects in their surveys, such as pension reform, labor rights, transitional justice, and judicial reform. The result may be interpreted as being more instructive, in terms of how the public thinks of President Tsai and her government’s policies. Overall, participants in the pro-green polls gave positive responses and support the new, reform-oriented policies and government intentions.
As one example, even after the 9/3 anti-pension reform rally organized by retired civil servants, public school teachers, and military veterans, the most recent poll by Taiwan Style Foundation still found that as high as 80.8 percent among those polled supported the government’s plans to push for pension reform . In that poll result, only 9.2 percent said they were against such a reform initiative. Therefore, President Tsai and her cabinet may have more support among the general public for reforms despite demonstrations.
On the other hand, polls designed by pro-KMT media outlets tend to focus on more controversial issues such as labor strikes, the Tsai administration’s efforts to repatriate KMT party assets, and a formula to deal with cross-Strait relations. A China Times survey goes further to single out the four controversial and least approved-of ministers in the cabinet; they are the ministers of national defense, labor affairs, transportation and communication, and economic affairs. Their disapproval ratings are above 50 percent. The Tsai administration should take note of the above disapproval ratings but be mindful of potential bias in the polling.
President Tsai must be mindful to draw the right lessons from these polls and act accordingly. In particular, she will have to learn from the pro-green polls to further deepen the support from her existing constituency by being more proactive on many reform agenda items and policies. As for pro-blue polls, her team must wisely manage the possible political ramifications if they do not issue timely, necessary, and clear explanations for the actions that have elicited the unfavorable public responses.
The main point: President Tsai must be mindful to draw the right lessons from recent public opinion polls. In particular, she has to act on pro-green polls to shore up support from her existing constituency, and respond to pro-blue polls to manage the possible political ramifications.