Xi Jinping’s January 2019 New Year “message to Taiwan compatriots” was notable for two key points: first, a hardening in China’s stance towards Taiwan, as GTI executive director Russell Hsiao has reported in the National Interest on January 9,; and second a reiteration of “one country, two systems” as the basis for unification of the two sides of the Taiwan Strait, despite it being thoroughly discredited and repeatedly dismissed by all parties in Taiwan.
Much has also been made in Taiwan of Xi’s call to Taiwanese to accept the “One China Principle” as the basis for “re-unification.” This has been seen as a unilateral re-interpretation of the “1992 Consensus” under which the Nationalist Party (Kuomintang, KMT) and the Chinese Communist Party (CCP) agreed that there was “one China” but with different interpretations. Not surprisingly, Xi’s apparent change of stance was not well received, former president Ma Ying Jeou (馬英九) saying that the key aspect of the ‘1992 consensus” is [that] “each side is free to interpret what “one China” means.”But Xi was only re-stating China’s formal position, which is set out in Article V of the Anti-secession Law passed under Hu Jintao’s leadership in early 2005, which states that the “ne China Principle” is the basis for resolution of the cross-Strait issue .
In practice, the “One China Principle” is a meaningless construct that China has regularly used when establishing diplomatic relations with other countries. While China uses it to assert its claim to Taiwan, the definition of what constitutes “one China” has often been left deliberately vague. This enables diplomatic agreement to be reached but with both sides having different interpretations of the term. But China frequently chooses to interpret it unilaterally, especially for domestic consumption, or tries to inveigle unwary foreign visitors into concurring with its own interpretation. For example, the United States, UK, Canada, and some other countries all recognize the People’s Republic of China (PRC) as the sole legitimate government of China but not its claim to Taiwan, the status of which in their view remains undetermined. While they therefore subscribe to a “one China principle,” importantly their interpretation of this is not the same as Beijing’s, whose spokespersons and media nevertheless regularly refer to these countries’ adherence to the so-called “One China Principle.”
China no doubt believes that if its version is repeated often enough without being openly challenged it will become accepted as fact internationally as well as domestically. It has had some success with this approach, most notably at the UN where, despite occasional protests by both the United States and the UK, UN officials accept China’s claim to Taiwan, even though the key resolution 2758, transferring China’s seat in the UN to the PRC, makes no mention of the status of Taiwan.
But pursuing the tactic has never worked in Taiwan, where repetition of the familiar message regularly elicits the same response from all main political parties. This raises the question: why does China continue to insist on a position regarding Taiwan when that position has been so often and so clearly rejected by Taiwan?
In the case of Xi’s message, many observers have seen it as a reaction to the setback the DPP received in November’s local elections in Taiwan. According to this rationale, China saw the DPP’s poor showing as a rejection by the Taiwanese electorate of its cross-Strait policy, giving China an opportunity to exploit this. Following this reasoning, Xi’s message is aimed at further weakening President Tsai Ing-wen (蔡英文) and encouraging the nationalist opposition. If this is the case, it shows that China has yet again misinterpreted attitudes in Taiwan as both Tsai and former President Ma made clear in their responses to the message.
But China has been misinterpreting attitudes in Taiwan since at least the missile crisis of 1996 if not earlier, regular hardline statements or threats, especially around election time, invariably proving counter-productive. This suggests that at best China is a very slow learner or, more likely, its policy-makers simply do not listen to the negative reaction in Taiwan to the messages. So why does China persist with such a seemingly counter-productive attitude?
Notwithstanding the title of his message, in the latest case Xi was most likely aiming it primarily at a domestic audience. As Hsiao has observed, a large contingent of military officers attended his speech, a domestic constituency whom successive Chinese leaders have regularly felt compelled to placate and reassure by talking tough on Taiwan. On this occasion though, the domestic backdrop to his speech was even more important.
Evidence of a major slow down in the Chinese economy grew steadily throughout 2018, with unhelpful indicators being announced on a near daily basis by year-end. Chinese imports of iron ore have fallen for the first time since 2010 , while car sales have fallen for the first time since 1990 . Add to this falling iPhone sales and softening home prices, and the picture is clear. China’s economy is slowing and may even be heading for a recession.
An economic slowdown is almost never welcome to policy-makers, but Xi’s position is more difficult than most. Ever since the Tiananmen protests in 1989, CCP leaders have seen continued economic growth as the way to buy support and contain protest at home. Thanks largely to careful policy decisions, an open global trading environment, and an abundant supply of cheap labor, China has enjoyed thirty years of sustained rapid growth. The laws of economics dictate that sooner or later a recession is inevitable but with their legitimacy linked to continued growth, successive leaders have done everything possible to postpone the inevitable. For any Chinese leader to preside over a recession would therefore be embarrassing, but this would be worse for Xi who has so keenly promoted the “rejuvenation” of China under his “China dream” slogan. Unfortunately for him, however, and largely because his predecessors were so anxious to avoid any slowdown, the policy levers available to him are few. His immediate predecessor, Hu Jintao, successfully avoided a recession after the global financial crisis of 2007 by postponing reforms, massive investment in infrastructure, and printing money. There are signs that Xi is trying to do the same but with the economy already heavily indebted, a surplus of infrastructure in some areas, and consumers becoming more cautious, this time the impact of such measures will be much more limited.
For good measure, Xi also has to cope with Donald Trump’s trade war. Paradoxically, until now this has probably helped China more than harmed it, as American buyers rushed to import Chinese goods ahead of the threatened January 2019 hike in tariffs (since postponed). But the continued uncertainty engendered by the dispute is inevitably leading to businesses holding off investment decisions until matters are clearer and fuelling wider unease.
Given this, one interpretation of Xi’s message is that it is the not unfamiliar tactic of many leaders in similar circumstances, of distracting attention from economic problems by stoking nationalist sentiment. It is a policy the CCP has used in varying degrees with regard to Taiwan ever since Tiananmen. Contrast, for example, Xi’s latest rhetoric with that of the 1979 “Message to Compatriots” in which the CCP undertook to “respect the status quo on Taiwan and the opinions of people in all walks of life there.” But the CCP is also wary of stoking nationalist tensions too far, fearing it as a double-edged sword which could easily be turned against the CCP itself. That suggests that Xi will be careful with his rhetoric, keeping it relatively measured (by Chinese standards) and that he will not go further beyond precedent than he has already done so.
But Xi and his policy-makers probably had another audience in mind too for his message. For Donald Trump’s stance on bilateral trade relations has without doubt unsettled China’s leaders. China almost certainly has far more to lose from any trade war between the two, if only because its bilateral trade surplus with the United States is so large (more than US$300 billion at the end of 2018). This limits China’s scope for retaliation through trade measures, which may be why it appears to be taking the ongoing negotiations so seriously. But as with inviting Kim Jong-Un of North Korea to Beijing for talks, so by tough rhetoric on Taiwan Xi is also sending a message to Trump that there is much more at stake than trade in US-China bilateral relations and that if necessary, China stands ready to retaliate by finding ways of damaging US interests.
The main point: Xi’s rhetoric on Taiwan is unhelpful but should be seen in the context of his domestic problems, not those of Taiwan.