Fortnightly Review

Fortnightly Review

Fortnightly Review

Russell Hsiao is the executive director of the Global Taiwan Institute and the editor-in-chief of the Global Taiwan Brief.

President Trump Signs Taiwan Travel Act into Law

In a nail-biting 11th hour move, President Trump signed the Taiwan Travel Act (TTA) in the late afternoon of March 16th. On the last day before the Act was to go into effect with or without the President’s signature, the White House posted on its official website that the 45th president had signed the TTA. A short statement on the White House’s website stated: “[o]n Friday, March 16, 2018, the President signed into law: […] H.R. 535, the “Taiwan Travel Act,” which encourages visits between officials of the United States and Taiwan at all levels.”

Indeed, the Bill expresses a “sense” of Congress and that “it should [emphasis added] be the policy of the United States” to:

(1) allow officials at all levels of the United States Government, including Cabinet-level national security officials, general officers, and other executive branch officials, to travel to Taiwan to meet their Taiwanese counterparts;

(2) allow high-level officials of Taiwan to enter the United States, under conditions which demonstrate appropriate respect for the dignity of such officials, and to meet with officials of the United States, including officials from the Department of State and the Department of Defense and other Cabinet agencies; and

(3) encourage the Taipei Economic and Cultural Representative Office, and any other instrumentality established by Taiwan, to conduct business in the United States, including activities which involve participation by Members of Congress, officials of Federal, State, or local governments of the United States, or any high-level official of Taiwan.

According to the pretext of the Bill under “Findings,” the purpose of the TTA stems from a recognition by Congress that “[v]isits to a country by United States Cabinet members and other high-ranking officials are an indicator of the breadth and depth of ties between the United States and such country” and that “relations between the United States and Taiwan have suffered from insufficient high-level communication due to the self-imposed restrictions that the United States maintains on high-level visits with Taiwan.”

Most notably, nothing in the language of the TTA would suggest in any way that high-level contacts between the two governments connote an official relationship, which remains firmly grounded on the Taiwan Relations Act (TRA). Indeed, exchanges between Cabinet members and Cabinet-level officials with Taiwan are not without precedent. In 2014, the administrator of the Environmental Protection Agency, a Cabinet-level official, visited Taiwan. The last US cabinet member to visit Taiwan before then was the transportation secretary during President Bill Clinton’s administration, which took place 14 years ago. In the 1990s, these exchanges were more frequent with Cabinet-members such as the Secretary of Energy, Transportation, and Small Business Administration, as well as Cabinet-level officials from the Office of the US Trade Representative, visiting Taiwan.

It’s worth pointing out that the TTA passed as a “sense” of Congress and is therefore non-binding on the executive branch. Furthermore, it declares that the policy of the US government “should” encourage visits at all levels, not that it must. Since these limitations on exchanges have been largely self-imposed and not legally proscribed by the TRA or the Three Communiqués, encouraging these exchanges do not necessarily represent a change in US policy towards Taiwan per se. Therefore, the signing of the TTA is a symbolic but nevertheless meaningful action by the US Congress and the President. And, it expresses support for Taiwan as a key democratic and security partner of the United States, at a time when Beijing is intensifying its coercive campaign against Taiwan and squeezing its international space. 

Early morning on March 17 at 5:40 am EST [Eastern Time Zone],  President Tsai Ing-wen tweeted:

Clearly unhappy with President Trump’s action after lobbying hard to have it scrapped, the state-run media Xinhua News Agency carried a response from the spokesmen of the PRC Embassy: “[t]he relevant clauses of the ‘Taiwan Travel Act’ severely violate the one-China principle, the political foundation of the China-US relationship, and the three joint communiques between China and the US.” The spokesperson added that “[w]e urge the US side to adhere to the one-China policy and honor the commitments it made in the three joint communiques, stop pursuing any official ties with Taiwan or improving its current relations with Taiwan in any substantive way.”

In the final analysis, the United States is pushing back against the PRC’s bullying of Taiwan. While the executive branch has broad discretion to implement the law, the TTA is meaningful because it passed the Senate unanimously and the fact that Trump signed it  sends a powerful political statement that Congress and the President are acting in unison on Taiwan policy. Indeed, it conveys a powerful statement of support to the people of Taiwan and its democratically elected leaders. Moreover, it clearly demonstrates that the US “One-China” policy should not be confused with the PRC’s “One-China principle.” 

The main point: The signing of the Taiwan Travel Act is largely a symbolic, but nevertheless meaningful act by the US Congress and the President that expresses support for Taiwan as a key democratic and security partner of the United States at a time when Beijing is intensifying its coercive campaign against Taiwan and squeezing its international space.

PRC Ramps Up United Front with 31 New Measures Targeting People and Businesses

On February 28, the same day that the US Senate unanimously passed the Taiwan Travel Act (TTA), which encourages high-level exchanges between US and Taiwan government officials, the State Council of the People’s Republic of China (PRC) announced a raft of 31 new measures related to Taiwan. These statutes combine incentives for Taiwanese people to work and study in China, and preferential treatments for businesses and investments from Taiwan in specific sectors targeted by the Chinese government for national development. The measures relating to the promotion of cross-Strait economic and cultural cooperation (關於促進兩岸經濟文化交流合作的若干措施), issued by the State Council’s Taiwan Affairs Office (TAO) and The National Development and Reform Commission (NDRC), includes 12 measures directed at Taiwanese enterprises, and 19 measures directed at Taiwanese persons.

The stated aim of these comprehensive directives is to provide equal—if not preferential—treatment for Taiwanese persons and businesses operating in China. Broader measures include incorporating Taiwan into the PRC’s “Made in China 2025” (中國製造2025)—an all-inclusive industrial policy aimed at moving the Chinese industrial base up the value chain. More specifically, the goal of these measures is to attract  Taiwanese investments in advance manufacturing, smart machinery, and green manufacturing. Other incentives include generous tax breaks for Taiwanese high-tech corporations, as well as affordable equal intellectual property right protection for Taiwan-owned legal entities that are registered in China.

Overall, the first 12 measures, which were directed at business interests, lift a number of restrictions on the ability of Taiwanese persons, who have been certified, from participating in national R&D projects. Additionally, the measures also remove restrictions on: enterprises from participating in infrastructure projects in specific sectors and in government procurement contracts; mixed ownership of state-owned enterprises; and land use for industrial development. Notably, these incentives called for continuing the growth of cross-Strait industrial development zones in China’s midwest and northeast regions and encouraging the participation of Taiwanese businesses in the mega “Belt and Road Initiative.” Other measures include preferential treatment for Taiwanese agricultural firms, and cooperation between financial institutions and credit reporting agencies in the provision of services.

The remaining 19 measures were targeted at the people of Taiwan. They include lifting restrictions on persons from Taiwan in becoming licensed in 53 different professional and technical occupations, and eligibility for 81 professional qualification examinations. Other measures include allowing Taiwanese persons to participate in the national “thousand-person program” (千人計劃). Officially known as the Recruitment Program of Global Experts, it is a project managed by the CCP Organization Department designed to cultivate foreign talent to help with the country’s national development goals. The measures include making Taiwanese professionals eligible to apply for various state-provided funds for the promotion of science and arts, and their participation in joint cultural projects overseas.

The comprehensive measures also include removing limitations on cooperation between the respective entertainment and creative industries, such as restrictions on the number of Taiwanese persons allowed to work on a Chinese film production, or the number of Chinese media productions permitted in Taiwan, removal of application fees, and shortening the processing time for cross-Strait TV dramas; and importing books from Taiwan. The measures further called for: encouraging Taiwanese people to participate in professional and industrial association;  support cross-Strait educational and cultural research; offering funds for cross-Strait civil exchanges; and encouraging Taiwanese participation involved in social welfare projects. Specifically, the new measures will permit medical students from Taiwan to take the qualification exams to practice medicine in China. Also physicians—who are first certificated in the PRC—may be permitted to practice, and this includes doctors and specialists providing financial services. The measures also encourage university teachers from Taiwan to teach at Chinese universities, and, in general, offer services to assist Taiwanese employment seekers to apply and obtain jobs in China.

These 31 measures, which will be implemented by at least 29 ministries, bureaus, and associations in the Chinese party-state, are part of the PRC’s broader United Front efforts, which Xi Jinping has described as one of the CCP’s “magic weapons.” China has accelerated the expansion of its political influence efforts under Xi’s leadership. These endeavors are also consistent with Beijing’s “soft-hard” approach to cross-Strait relations. Indeed, the Xi administration is using both carrots and sticks to entice and to deter, respectively, actions that support or detract from its political objective vis-à-vis Taiwan. Less obvious is how these measures relate to Beijing’s intent to undercut President Tsai’s major policy initiatives. Some analysts argue that the more pressing concern is on Taiwan’s “brain drain.” According to analyst J. Michael Cole, “an economic, academic, scientific and creative hollowing-out of Taiwan over a period of time appears to constitute Beijing’s new strategy to resolve the Taiwan “question.” However, it is worth noting that concerns over Taiwan’s brain drain are not a new challenge facing Taiwan’s leaders.

At a press conference, the spokesman for the State Council’s Taiwan Affairs Office (TAO) described the 31 measures as the Chinese government “delivering a big present” (送出一個大禮包) for Taiwanese businesses and people. For businesses, the spokesman said that the measures will help reduce their production and operating costs, accelerate business upgrades, expand domestic demand market, obtain more business opportunities, and achieve greater development. For people, the spokesman said that the measures will provide Taiwanese more opportunities to study, start businesses, find jobs, and live in China. Moreover, they will also create better conditions, and encourage cross-Strait cooperation to jointly promote Chinese culture and “spiritual harmony” (心靈契合).

While Beijing’s motive in dolling up the incentives is consistent with Beijing’s long standing dual-strategy of using “carrots and sticks” as well as United Front in cross-Strait relations.  It’s worth noting that one possible consideration in why the Chinese government is offering preferential treatment for Taiwanese people and businesses to invest in China in specific sectors now is likely because these are part of the Tsai government’s innovative industries policy and its people-centered approach and economic diversification strategy pursued under its New Southbound Policy. By enticing Taiwanese people and businesses to work in and invest more in China, Beijing is attempting to lure away people and investments that may otherwise be incentivized to go into the targeted markets under the New Southbound Policy.

The main point: The PRC’s announcement of 31 new measures that combines incentives for people to work and study in China, and preferential treatments for Taiwanese businesses and investments in specific sectors are part of the PRC’s broader United Front efforts that have expanded under Xi’s leadership. These efforts are also consistent with Beijing’s “soft-hard” approach to cross-Strait relations.