The Foreign and Cross-Strait Policies of the New Administration

The Foreign and Cross-Strait Policies of the New Administration
In the Republic of China

A Speech Delivered at the Chatham House, London
By Ambassador Stephen S. F. Chen
8 December 2008


Mr. Chairman, Ladies and Gentlemen:

It is indeed a pleasure and privilege to speak to such a distinguished gathering at Chatham House in London, a think tank of world renown.

You may have noticed that I made a slight change in the title of my presentation. I will talk about the Foreign and Cross-Strait Policies of the New Administration in the Republic of China, not Taiwan.

The semantics is of great importance and relevant to the topic I am going to discuss today. For purposes of clarity, I am going to relate to you the historical background and legal status of Taiwan, the Constitution of the Republic of China, the changing relationship across the Taiwan Strait, and then the foreign and cross-Strait policies of the new administration.

Historical Background and Legal Status of Taiwan

Taiwan was a part of the Fujian Province under the Manchu Dynasty and was later made a province. That was the legal status of Taiwan before it was ceded to Japan following the first Sino-Japanese War of 1894-95, in the Treaty of Shimonoseki.

The Republic of China, founded in 1912, succeeded the Manchu Dynasty, not only because of the Revolution led by Dr. Sun Yat-sen, but also because of the imperial edict to abdicate the throne in favor of the Republican government. As successor state, the Republic of China inherited all treaties signed by the Manchus with foreign
powers, including the Treaty of Shimonoseki and the Treaty of Nanking ceding Hong Kong to the United Kingdom.

Then came the Japanese invasion of China, starting as early as l931, with its sweep of Manchuria; however, only after the Marco Polo Bridge Incident in 1937 did the Republic of China organize a full-scale war of resistance against Japanese aggression, marking the beginning of the Second Sino-Japanese War. At this stage, for four years the Republic of China fought alone. In 1941, Japan launched a surprise attack on Pearl Harbor and invaded American and British colonies in Asia. The Republic of China followed in the footsteps of the U.S. and Britain in declaring war on Japan; the three countries formed an alliance in their war effort. The Republic of China, in accordance with international law, declared all treaties signed between China and Japan, including the Treaty of Shimonoseki, null and void.

The Cairo Conference took place between the US, the UK, and the Republic of China in December 1943. In the Cairo Declaration that ensued, the three Allied Powers demanded that Japan return all territories stolen from the Republic of China including Manchuria, Formosa (Taiwan), and the Pescadores (Penghu). The stipulation was later repeated in the Potsdam Declaration of 1945, and accepted by Japan in its Instrument of Surrender in 1945.

Following Japan’s unconditional surrender in August 1945, the Republic of China government immediately reclaimed Manchuria, Formosa, and the Pescadores. Back then, not a single state in the world questioned Taiwan’s status or objected to Taiwan’s return to the Republic of China’s jurisdiction.

The Chinese Civil War resumed shortly after, while thereafter the unfortunate 2/28 Incident occurred in 1947 in Taiwan. The Republic of China government relocated from Nanjing to Taipei in 1949 after losing control of the Mainland to the Chinese Communists. It was the worst of times for the Republic of China government; however, Divine Providence did not forsake the ROC. An epic victory in the Battle of Kuningtou on Kinmen (Quemoy) Island on October 25, 1949, was a crucial morale booster.

However, it is undeniable that the Republic of China was experiencing a Dark Ages on the diplomatic front at that time. Its plight was evident following the release of the White Paper by the US State Department in August 1949. After the People’s Republic of China was created on October 1, 1949, US President Harry S. Truman, however, stated in a press conference on January 5, 1950, and I quote, “In the Joint Declaration at Cairo on December 1, 1943, the President of the United States, the British Prime Minister, and the President of China stated that it was their purpose that territories Japan had stolen from China, such as Formosa, should be restored to the Republic of China. The United States was signatory to the Potsdam Declaration of July 26, 1945, which declared that the terms of the Cairo Declaration should be carried out. The provisions of this declaration were accepted by Japan at the time of its surrender. In keeping with these declarations, Formosa was surrendered to Generalissimo Chiang Kai-shek, and for the past 4 years the United States and other Allied Powers have accepted the exercise of Chinese [referring to the Republic of China] authority over the island.” End quote.

In fact, the U.S. Embassy accredited to the Republic of China government in Nanjing relocated to Taipei with the government. It is true that the Embassy in Taipei was headed by a young Charge d’Affaires, while the U.S. Ambassador, Leighton Stuart, stayed on the mainland. This fact did not diminish a bit the legal status of the U.S. diplomatic mission.

Later that day, Secretary of State Dean Gooderham Acheson, citing the Cairo Declaration and Potsdam Declaration, said:

“In the middle of the war, the President of the United States, the Prime Minister of Great Britain, and the President of China [referring to the Republic of China] agreed at Cairo that among the areas stolen from China by Japan was Formosa and Formosa should go back to China.

“As the President pointed out this morning, the statement was incorporated in the declaration at Potsdam and that declaration at Potsdam was conveyed to the Japanese
as one of the terms of their surrender and was accepted by them, and the surrender was made on that basis.

“Shortly after that, the island of Formosa was turned over to the Chinese [referring to the Republic of China] in accordance with the declarations made with the conditions of the surrender.

“The Chinese [referring to the Republic of China] have administered Formosa for 4 years. Neither the United States nor any other ally ever questioned that authority and that occupation. When Formosa was made a province of China nobody raised any lawyers’ doubts about that. That was regarded as in accordance with the commitments.

“Now, in the opinion of some, the situation is changed. They believe that the forces now in control of the mainland of China, the forces which undoubtedly will soon be recognized by some other countries, are not friendly to us, and therefore they want to say, ‘Well, we have to wait for a treaty.’ We did not wait for a treaty on Korea. We did not wait for a treaty on the Kuriles. We did not wait for a treaty on the islands over which we have trusteeship.

“Whatever may be the legal situation, the United States of America, Mr. Truman said this morning, is not going to quibble on any lawyers’ words about the integrity of its position. That is where we stand.

“Therefore, the President says, we are not going to use our forces in connection with the present situation in Formosa. We are not going to attempt to seize the island. We are not going to get involved militarily in any way on the island of Formosa. So far as I know, no responsible person in the Government, no military man has ever believed that we should involve our forces in the island.” End quote.

The international political scene experienced a drastic change after the Korean War broke out on June 25, 1950. Seeing Taiwan’s strategic importance, President Truman ordered the Seventh Fleet to patrol the Taiwan Strait and declared, “Regarding confirmation of Taiwan’s status … it should not be decided until after peace and stability are restored in the region, or until after a peace treaty is signed with Japan, or until the United Nations reaches a decision on the subject.” End quote.

While the US once thought about defining Taiwan’s status as “undecided” until the signing of a peace treaty with Japan to save Taiwan from the grip of Communist China, it made its stance clear following its exchange of notes with the Republic of China government in February 1951, which led to the creation of the Joint Defense and Mutual Assistance Agreement. Meanwhile, the US steadfastly refused to recognize the People’s Republic of China regime.

In 1951, the Allies of World War II, including the US and the UK, began to discuss the signing of a peace treaty with Japan. Those countries that had recognized the PRC, including the UK, the Soviet Union, and India, argued that the PRC, not the ROC, should be invited to the peace conference as the representative of China. Alas! If that had happened, Taiwan would have long been part of the PRC. But it did not happen that way. That’s why I am here.

What happened was that the US finally decided not to invite any representative of China to the conference, which meant neither the PRC, nor the ROC would be invited. The US postulated that Japan should be allowed to sign a separate peace treaty with either the ROC or the PRC government after restoring its sovereignty following the signing of the Peace Treaty of San Francisco. Japan, at the urging of the US, chose the ROC. The Treaty of Peace between the Republic of China and Japan was signed on April 28, 1952 in Taipei, putting an end to all the uncertainties regarding the so-called undecided status of Taiwan.

Furthermore, the signing of the ROC-US Mutual Defense Treaty in 1954 greatly improved Taipei’s international status. It signified the fact that the Republic of China’s sovereignty over Taiwan and Pescadores had been confirmed by international treaties.

The reason is very simple. If one follows the argument that Taiwan’s status had remained undecided even after a separate peace treaty had been signed between the ROC and Japan, how would it have been possible for the United States to sign a treaty of mutual defense with the Republic of China for the specific purpose of protecting Taiwan and Pescadores? It takes only elementary knowledge in international law to see through the fallacy of its logic.

I have dwelt at some length on the historical background and legal status of Taiwan for no other purpose except to show Taiwan belongs to the Republic of China. The fact that both Japan and the United States later switched diplomatic relations from Taipei to Beijing is irrelevant to the status of Taiwan, as other countries, however small the number may be, continue to recognize the Republic of China to this day.

The Constitution of the Republic of China

Having established that Taiwan is a province of the Republic of China, I would like to describe to you the Constitution under which it is governed. The ROC Constitution was written in 1946 by a Constituent National Assembly in Nanjing, including delegates from the Province of Taiwan. After the ROC government relocated to Taipei, the Republic of China government has effectively controlled only Taiwan and the outlying islands. The Constitution underwent several revisions since 1949; however, the Republic of China has never abandoned its sovereignty over the mainland. For this purpose, the Constitution divides the whole country into two areas, the free area (Taiwan) and the mainland area. The official map of the country says the same thing. The mainland is not a foreign state, and Taiwan is a not separate state either.

The division of China is, of course, the result of a civil war; it is different from that in Germany, in which the division was imposed upon by the Allied Powers. The hot war did not end in 1949, but continued into the 1950s, highlighted by the celebrated Artillery Duel of Kinmen (Quemoy) in 1958. The hot war was followed by a cold war for three decades, characterized by three no’s: no contact, no negotiations, and no compromise, until President Chiang Ching-kuo decided in September 1987 to allow veterans to visit the mainland for family reunions. Prior to this, world politics had already changed; on December 15, 1978, the US abruptly declared that it would switch diplomatic recognition from Taipei to Beijing on January 1, 1979. Taipei had to bite the bullet.

The Changing Relationship across the Taiwan Strait

Chiang Ching-kuo’s decision to allow army veterans to visit the mainland was far-reaching in its impact. Other citizens followed the veterans to the mainland for trade, investment, and tourism, with the government looking the other way. The exchanges increased so rapidly that in l992 both sides of the Strait sensed the need to hold talks for resolving emerging issues. As governments on both sides did not, as they still do not, recognize each other, proxy organizations had to be set up to conduct the talks.

In the government structure, a separate cabinet-level agency handling mainland affairs, called the Mainland Affairs Council, was established. Under this agency, a proxy organization, the Straits Exchange Foundation, a non-profit corporation, was set up. Its counterpart, ARATS, the Association for Relations Across the Taiwan Strait, was also set up. The Legislative Yuan enacted a law titled “Statute Governing Relations of People across the Taiwan Strait.” We do not stamp visas on PRC passports, but issue a separate booklet titled “Permit for Mainland Compatriots to Visit Taiwan. Likewise, the PRC does not stamp visas on ROC passports and also issue similar booklets.

For the purpose of a preliminary meeting, the two proxy organizations sent delegations to Hong Kong for a first-ever meeting in October 1992. They immediately hit snags over the definition of “One China.” For us, it is the Republic of China, and both Taiwan and the mainland constitute China. For them, it is the People’s Republic of China, and Taiwan is part of China. Finally, both sides agreed that, having respectively stated their interpretations, they should shelve the issue and proceed to the formal business talks in the future. That in essence was the “Consensus of 1992.” Indeed, the principals of the two organizations, C. F. Koo and Wang Taohan, were able to meet for talks in April 1993 in Singapore. Four minor agreements were signed. Parity and dignity for both sides were meticulously observed at the meeting.

A second meeting for Koo and Wang was scheduled for late 1995 in Taipei, but plans miscarried because of President Lee Teng-hui’s trip to the United States to visit his alma mater, Cornell University, was considered provocative by the PRC. The year 1996 witnessed an unfortunate missile crisis across the Strait. After the ROC government assured the world that cross-Strait relations had not changed, Koo was finally able to visit Wang in Shanghai in 1998, but not for talks.

Further exchanges were aborted following Lee Teng-hui’s “special state-to-state relationship” statement of July 1999 and his successor Chen Shui-bian’s pro-independence utterances and moves. Tensions mounted to such a point that the PRC enacted a law, titled “Anti-Secession Act” in March 2005. To reduce tension, Lien Chan, then chairman of the Kuomintang (KMT) Party, went to Beijing in April/May on a Journey of Peace at the invitation of Hu Jintao, General Secretary of the Chinese Communist Party (CCP).

The KMT was in opposition then, so the two leaders issued only a joint vision statement on April 29, 2005, which could be summarized as follows:

1) Resumption of talks on the basis of parity and the 1992 consensus;
2) Reaching a peace agreement, including the establishment of a confidence-building mechanism;
3) Promoting full-scale economic cooperation across the Strait, leading eventually to a cross-Strait common market;
4) Promoting the exchange of views with regard to Taiwan’s participation in international activities;
5) Establishing a party-to-party platform for consultation.

As the KMT was in opposition, it could only carry out Point No. 5, but reported the results of the Journey of Peace to the DPP administration in hopes that the government could endorse and implement them. Of course it did not happen that way; the DPP government rejected everything, as most people had expected.

Nonetheless, the five points of vision were incorporated into the KMT party platform by the Party’s National Congress in July 2005, and three economic/trade forums were held between the KMT and the CCP in 2006 and 2007.


When Ma Ying-jeou was nominated by the KMT to lead the ticket in the presidential election, he basically adopted the planks in his campaign platform.

Ma’s Foreign and Cross-Strait Policies

1) Three Nos: no unification, no independence, and no use of force
2) Mutual non-denial
3) Cross-Strait identity: according to the ROC Constitution and the Statute Governing Relations between People across the Taiwan Strait, cross-Strait relationship is a special relationship, but not a state-to-state relationship.
4) Economic policies: signing a Comprehensive Economic Cooperation Agreement to achieve cross-Strait economic/trade normalization, leading eventually to a cross-Strait common market, so as to pursue a win-win situation in cross-Strait economic/trade relations whose concrete items include:
1. Direct air and maritime links for passengers and cargo
2. Financial exchange and cooperation
3. An investment guarantee agreement
4. An agreement on double taxation
5. Protection of IPRs and norms for patent certification
6. Joint standards for cross-Strait industries and norms for certification of testing
7. Lowering of tariff and non-tariff barriers in trade
5) Political area: signing of a peace agreement, including the following aspects:
1. Modus vivendi, or a mode allowing international space for Taiwan
2. End of diplomatic tug-of-war, a win-win situation
3. Setting up a coastal military confidence-building mechanism
4. End of the state of hostilities
5. Signing a peace agreement

President Ma Ying-jeou was inaugurated on May 20 this year. Already talks have been resumed between SEF and ARATS. In two meetings, one in Beijing last June and the other in Taipei just last month, the two sides have signed six more agreements.
Preparations for further talks are under way; things look rather smooth ahead. Both sides have professed the desire to pursue peace, development, prosperity, and a win-win situation, while shelving disputes.

In the foreign policy area, Beijing has shown some good will in the Beijing Olympics, ROC’s bilateral diplomatic ties with Latin American countries, and Taipei’s level of representation in the APEC Economic Leaders’ Meeting last month.


The Role of the Republic of China in the World

As I mentioned a little earlier, the division of China was the result of a civil war; however, the war was not another dynastic fight as in Old China, but about the future direction of the nation’s overall development.

Dr. Sun Yat-sen, founder of the Kuomintang and the Founding Father of the Republic of China, who studied in the British Library and was rescued by his professor and mentor, Dr. James Cantlie, and the British authorities from the illegal abduction by the Manchu legation in London, wrote the Three Principles of the People, or Democracy, Nationalism, and People’s Livelihood, to guide his party. The Communist Party of China believed otherwise; they were ardent followers of Marxism and Leninism.
Well-intentioned Westerners thought the CCP was a group of agrarian reformers and believed there could be a coalition government in postwar China; some even equated the CCP with European Communist parties taking the parliamentary approach of power struggle. Of course, it did not happen.

Defeated in the Civil War, the KMT-led government at least successfully stemmed Communist expansion at a critical juncture in history, utilizing the Taiwan Strait as a natural buffer, much as Britain successfully stemmed Nazi expansion at a critical juncture in World War II.

In the last six decades, the Republic of China has built Taiwan from the ravages of
World War II into an economic miracle and a viable democracy, although admittedly there are some shortcomings. We may be small in size and population, but there is no question that the Chinese mainland at least indirectly used Taiwan as a role model in its opening up and economic reforms. But that was not the end of the story. We believe that in terms of freedom, democracy, human rights, and rule of law, we hold the moral high ground. When President George W. Bush, in his congratulatory message to President Ma, lauded Taiwan as “a beacon of democracy for Asia and the world,” we knew it was a diplomatic compliment. With our shortcomings, we still have a lot to learn, especially from the cradle of modern democracy, Great Britain.

The Republic of China is also the repository of Chinese culture. All traditions of China have been well preserved there, including the art treasures in the National Palace Museum, to the admiration of even Mainland visitors to Taipei, because we were spared the bizarre and lunatic vandalism of the Red Guards in the so-called Cultural Revolution.

In this age of reconciliation, our resolve to have a credible defense, however, has never wavered. We believe that one goes to the negotiation table from a position of strength, not from a position of weakness. That is why credible defense is absolutely necessary.

The Republic of China has played a constructive role in the international community, seeking at the same time to expand ties with all nations. For instance, our graduate students no longer concentrate on a particular country; they go to all major countries, including the U.K. In fact, our student population in Great Britain has increased dramatically in recent decades, from a little over 200 in the 1970s to around 16,000 in 2008.

In the current relationship of cooperation and competition between the two sides of the Taiwan Strait, the jury is still out. However, the worst of times for Taiwan and for the Republic of China seem to be over. With peace at hand, we only hope that we truly serve as a beacon. We only hope that all Chinese communities everywhere in the world will one day enjoy the same degree of freedom, democracy, human rights, and rule of law as we do.

Thank you.

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