Strategic Vision, Issue 3

STRATEGIC VISION for Taiwan Security

Volume 1, Issue 3 w May, 2012 w ISSN 2227-3646

Internal and External Defense IssuesDr. Chia-sheng Chen

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One Country, Two Areas and China TiesDr. Mignonne Man-jung Chan

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Looking Westward in Foreign RelationsLiu Ching-kuo

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US-Taiwan Ties Integral to ‘Golden Decade’Dr. Carlos Hsieh

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Energy Security and Cooperation With ChinaDr. Alvin Yao

Special Issue: A Vision for the Future

Submissions: Essays submitted for publication are not to exceed 2,000 words in length, and should conform to the following basic format for each 1200-1600 word essay: 1. Synopsis, 100-200 words; 2. Background description, 100-200 words; 3. Analysis, 800-1,000 words; 4. Policy Recommendations, 200-300 words. Book reviews should not exceed 1,200 words in length. Notes should be formatted as endnotes and should be kept to a minimum. Authors are encouraged to submit essays and reviews as attachments to emails; Microsoft Word documents are preferred. For questions of style and usage, writers should consult the Chicago Manual of Style. Authors of unsolicited manuscripts are encouraged to consult with the executive editor at [email protected] before formal submission via email. Manuscripts are subject to copyediting, both mechanical and substantive, as required and according to editorial guidelines. No major alterations may be made by an author once the type has been set. Arrangements for reprints should be made with the editor.


Volume 1, Issue 3 w May, 2012

ContentsMilitary professionalization and defense issues........................................4

Dr. Chia-sheng Chen

A tale of two areas.........................................................................................................9

Dr. Mignonne Man-jung Chan

Looking to the West in foreign relations............................................................13

Liu Ching-kuo

A ‘golden decade’ for Taiwan-US relations.................................................18

Dr. Carlos Hsieh

Energy security and opportunities for cooperation.............................22

Dr. Alvin Yao

We are lucky that the release of our third is-sue is timed perfectly

to coincide with the inauguration of ROC President Ma Ying-jeou, who won re-election earlier this year. As such, we decided to de-vote this latest issue of Strategic Vision to a look forward at Ma’s second four-year term in order to determine what the likely issues and challenges will be facing the

country, as well as to offer insight and advice into what vision the administration should adopt on a variety of public policy issues.

On the issue of national defense, Dr. Chia-sheng Chen examines external factors such as the growing trend of confrontations in the South China Sea and an increasingly belligerent China, as well domestic factors such as the push for a professional, rather than a conscript, army for Taiwan. Dr. Mignonne Man-jung Chan looks at the “one country, two areas” concept proposed recently and how this new paradigm might be employed to make headway in the cross-strait relationship.

Liu Ching-kuo tackles the Republic of China’s foreign relations and the policy, employed during the first term of the Ma adminis-tration, of flexible diplomacy, and whether this will be continued in the second term. Liu predicts that, while the first term’s foreign policy was very much geared toward China, a new vision for the second term would be to focus on ties with the West, and specifi-cally the United States.

Dr. Carlos Hsieh provides even more depth of reporting on Taipei-Washington ties as he examines ways this important relationship can be built up, eventually to include perhaps a Free-Trade Agreement and entry in the Trans-Pacific Partnership currently being crafted by the United States.

Finally, Dr. Alvin Yao looks at energy security and the need to move forward with the shift to alternative, sustainable resources and away from Taiwan’s high rate of energy imports, while using the issue as a means to find common ground and opportunities for cooperation with China.

We are very excited to provide this vision for the next four years of Taiwan’s future, and we hope you enjoy the articles presented herein.

STRATEGIC VISION For Taiwan Se-curity (ISSN 2227-3646) Volume 1, Number 3, May, 2012, published under the auspices of the Center for Security Studies and National De-fense University. All editorial correspondence should be mailed to the editor at STRATEGIC VISION, Center for Security Studies in Taiwan. No. 64, Wan Shou Road, Taipei City 11666, Taiwan, ROC.

The editors are responsible for the selection and acceptance of articles; responsibility for opinions expressed and accuracy of facts in articles published rests solely with individual authors. The editors are not respon-sible for unsolicited manuscripts; unaccepted manuscripts will be re-turned if accompanied by a stamped, self-addressed return envelope.

Photographs used in this publication are used courtesy of the photograph-ers, or through a creative commons licence. All are attributed appropri-ately.

Any inquiries please contact the Executive Editor directly via email at:[email protected] issues and archives can be viewed at our website: www.mcsstw.org.

© Copyright 2012 by the Center for Security Studies.

EditorFu-Kuo Liu

Executive EditorDean Karalekas

Editorial BoardTiehlin YenRaviprasad NarayananMing-Hua TangFelix Wang

Articles in this periodical do not necessarily represent the views of either the MCSS, NDU, or the editors. Dr. Fu-Kuo Liu

EditorStrategic Vision

From The Editor

On January 14, 2012, the people of Taiwan made their choice on the presidency of the Republic of China (ROC) for the coming

four years. The outcome of the ROC’s presidential election marks a continuation of Taiwan’s current defense policy as well as its cross-strait policy. The fact that President Ma Ying-jeou won the election by a margin of nearly 6 percent against his main op-position challenger suggests that Taiwanese voters welcomed his cross-strait platform and approved of

his efforts to ease tensions across the Taiwan Strait. The ROC Armed Forces face several severe chal-

lenges in the current security environment marking both the Taiwan Strait and Asia-Pacific region, in-cluding the traditional security threat generated by regional instability, rapid military modernization in China, budgetary allocation issues faced by the ROC Ministry of National Defense, and a planned transformation of the force structure to focus on the professionalization of the ROC military.

Strategic Vision vol. 1, no. 3 (May, 2012)

The Professionals

Military professionalization on list of defense issues on deck for new term Dr. Chia-sheng Chen

Dr. Chia-sheng Chen is an assistant professor with the Graduate School of International Affairs at Ming Chuan University. He can be reached for comment at [email protected].

4 b

photo: John Yavuz Can

photo: Mateus_27

A Russian-built Kilo-class submarine of the sort recently purchased by Vietnam. The boats are designed for anti-shipping operations in shallow waters.

Vision for Defense b 5

Regional Security Confrontations

The increasingly complicated East Asian security en-vironment presents a challenge to the ROC Armed Forces. Contentious issues include the ongoing nu-clear crisis on the Korean Peninsula, increasing in-cidents of conflict over disputed islands in the South China Sea, and a growing potential for a US-China sea-power confrontation in the Asia-Pacific region. The latter two issues have a direct impact on Taiwan’s security and illustrate the need for a capability build-up of its armed forces.

Tensions have become obvious and complex due to Beijing’s outspoken claim that the South China Sea is China’s core interest. This assertion has not only motivated several countries in the region to increase their military spending and capabilities, but it has also invigorated them into strengthening their own sover-eign claims over territory made up of tiny islands and coral reefs in the Spratly and Paracel archipelagos.

It is the official position of the ROC government that it has legitimate rights of territorial sovereignty over the South China Sea, as delineated by the U-shaped boundary line in that area. Taiwan currently controls the Pratas Islands, the largest island group in the

South China Sea, and has a detachment stationed on Taiping Island (also known as Itu Aba), the largest island in the Spratly Archipelago. However, in re-cent years the Coast Guard personnel stationed there have faced increasingly frequent encounters with forces from other countries in the vicinity, including the Philippines, China, and most recently Vietnam,

with allegations that a Vietnamese military craft fired warning shots March 22 at a Taiwanese coast guard vessel patrolling Taiping Island.

The countries with claims on this territory have all incrementally boosted their military power by way of arms procurement and growing defense budgets in recent years. Vietnam, for instance, recently acquired Su-27 and Su-30 jets from Russia, which are advanced fighters with excellent maneuverability capable of conducting air and ground attacks. In addition, the Vietnamese Navy also purchased six Russian-made

“Increases in power projection in the South China Sea pose a threat to Taiwanese personnel stationed on Taiping Island.”

Kilo-class submarines, which are expected to be com-missioned into service in the near future. These and similar increases in power projection in the South China Sea pose a threat to Taiwanese personnel sta-tioned on Taiping Island, whose distance from the southern tip of Taiwan presents defensive challenges for the ROC Armed Forces, not the least of which are the logistics associated with arduous military as-sistance and daily supply runs.

The second issue is associated with the growing potential for confrontation between China and the United States. In November, 2011, US Secretary of State Hillary Clinton stressed that the 21st Century would be seen as America’s Pacific Century and that, “The future of politics will be decided in Asia, not Afghanistan or Iraq, and the United States will be right at the center of the action.” The refocusing of US military interest from Europe and the Middle East to Asia suggests that the Obama Administration has acknowledged the grim situation in which China’s rise has a significant military component to it, and that this buildup poses a growing threat to the US presence in the Asia-Pacific. Both sides appear to be

adopting operational concepts in preparation for such a confrontation, with Beijing’s focus on “Anti-Access / Area-Denial (A2AD),” and Washington countering with its “Air-Sea Battle” doctrine. Any confrontation between these two major powers would indeed im-pact regional security and stability, and force coun-tries in the region to choose sides. As for Taiwan, in the face of these threats, the ROC Armed Forces need to consider how to prepare for changes to the security environment.

China’s Speeding Military Modernization

The rapid military modernization of the People’s Liberation Army (PLA) has sped up the pace of the military imbalance across the Taiwan Strait, with the widening gap increasingly in Beijing’s favor. However, it has almost become cliché for the growing PLA threat to be continuously mentioned in the same breath as the easing of cross-strait tensions. Under the current state of relations between the two sides, the fact remains that the ROC Armed Forces have to confront a worsening security environment, mainly due to the threat posed by the PLA’s unrestrained military expansion.

The modernization achievements of the PLA leave the ROC Armed Forces in a position without any optimistic prospects. Starting in the late 1990s, the United States and other countries began to note the rapid expansion of the PLA and improvements in its military capabilities. Its expanding war-fighting abil-ity not only impacts the fragile balance between the two militaries across the Taiwan Strait, but also im-poses a great deal of pressure on the countries border-ing China. Beijing began to modernize the military in the early 1990s, and along the way, the PLA began to acquire advanced technology and equipment such as Su-27 and Su-30 aircraft, nuclear submarines, an aircraft carrier, ballistic missiles such as the DF-31 and DF-21D, and the like. The enhanced capacity

6 b STRATEGIC VISION

Satellite image of the Pratas Islands taken from space.

photo: NASA

Seaman Art Casillas helms the Arleigh Burke-class guided-missile destroyer USS Dewey (DDG 105) during a transit through the Spratly Islands.

photo: Joshua Keim

has gradually changed the landscape of power dis-tribution in the Asia-Pacific region and today poses a greater challenge to the defense of Taiwan.

Exacerbating the difficulties faced by the ROC Armed Forces in its efforts to develop an effective defensive capability is the daunting task of arms ac-quisition. A trend appears to have emerged in which the administration of US President Barack Obama has been reluctant to sell advanced weapon systems to Taiwan in order to avoid stimulating nervousness in Beijing. In short, Taiwan is left with a defense conundrum: a decreasing possibility of obtaining advanced weapons from the United States vs. the increasing pace of development in China’s military modernization.

In past decades of defense reform, the armed forces have aimed at force reduction and a gradual decrease in the term of service for conscripts. Up to the year 2000, young men in Taiwan were obligated to serve two years in a branch of the armed forces, with that term shortening by half to just one year in 2008. Reducing the amount of time that conscripts have to serve in accordance with the ROC Constitution was aimed at allowing them to enter the workforce ear-lier and becoming contributing members of society,

thus boosting the nation’s economic competitiveness. However, the change has caught the armed forces in a few predicaments.

The first is a loss of institutional knowledge, with the shortened service terms hampering the continu-ation of skills and specialties as skilled personnel are increasingly unable to pass on their professional knowledge, concepts and know-how to successors. The result is a lower level of military proficiency at

the individual level. For example, the maintenance crews for fighter jets in the Air Force and mechan-ics in the Navy have important jobs, their roles being akin to small yet vital parts in a much larger machine, losing just one of which will cause that machine to fail. The second predicament is the cold, hard math-ematics of demography: Taiwan’s birth rate has been diminishing in the past decade, forcing the military

Vision for Defense b 7

“The all-volunteer army is a common form of military service in democratic countries and a characteristic depict-ing the essence of civilian control over the armed forces. .”

photo: Wing Ting-chenA recruitment poster for the ROC Army special forces. Once conscription ends, the professional military will rely heavily on recruitment efforts.

to content with an increasing shortage of conscripts and the blow to force preparedness that accompanies this. Therefore, with a view to maintaining military capabilities, the armed forces will inevitably have to move forward with plans for the professionalization of the ROC armed services as a major task of military transformation.

The all-volunteer army is a common form of mili-tary service in democratic countries and a charac-teristic depicting the essence of civilian control over the armed forces. As such, it has been identified as a policy that the Ministry of National Defense is de-termined to implement. A military made up of pro-fessional soldiers is able to cope with the difficulties mentioned above by prolonging the terms of service, allowing servicemen to choose their military occupa-tions, and giving them time to acquire the education, training and experience necessary to become true professionals. The shift would bring new challenges to the ROC Armed Forces, however, among which is the escalating cost of personnel maintenance associ-ated with offering recruits remuneration and career prospects that are competitive in the labor force. In the face of a limited defense budget, how to acquire sufficient funds and reallocate defense budgets are two

major challenges to the Ministry of National Defense. As the administration moves into its second term, it will have to marshal the support of the Executive Yuan, as well the general public, if the transition to a volunteer army is to succeed.

These challenges are not merely military; they should be regarded as being within the realm of national secu-rity, and they deserve national security advisors who will conduct a comprehensive analysis in response. With the aim of diminishing uncertainty and reduc-ing the possibility of conflict, the Ma administration will move toward institutionalizing the relationship between the two sides of the Taiwan Strait. Moreover, society’s increasing calls for force reduction in re-sponse to improvements in cross-strait relations will in turn push the transition to a professional military forward. The success of professionalization lies in the support of both government and society, in addition to a well thought-out program to handle the accom-panying changes in such areas as personnel recruit-ment, retirement, training, and budget allocation. What remains undetermined, however, is the effect such an institutional defense transformation will have on parallel efforts in the institutionalization of cross-strait relations. n


When honorary Kuomintang (KMT) Chairman Wu Po-hsiung met up in Beijing March 23, 2012, with Chinese

President Hu Jintao in his capacity as general sec-retary of the Chinese Communist Party’s Central Committee, he brought with him the concept au-thorized by President Ma-Ying-jeou of “one country, two areas” (OCTA). While the notion itself, and the remark made by Wu in those party-to-party talks that unveiled it to the world, aroused puzzlement from both within and without the community of cross-strait watchers, it should not be perceived as anything new or groundbreaking. In fact, it was little more than old wine in a new bottle.

According to the Republic of China (ROC) Constitution, the entire mainland and everything currently being de facto governed by Beijing remains a sovereign part of ROC territory. Although the ROC’s current authority to govern covers only Taiwan proper, Penghu, Kinmen, Matsu, and various other is-lands, sovereignty extends over the mainland in strict constitutional terms. This fact is the essence of how exactly the “1992 Consensus” is employed to sidestep thorny, ideological issues surrounding Beijing’s in-sistence that negotiators on both sides must first de-clare their belief in the “one-China principle” before talks can begin. Essentially, delegates from each side declare their recognition of “one China, each with its own interpretation.” While neither side really agrees

with the other’s point of view, they ideally will still respect each other’s position.

According to Ma, when the “Act Governing Relations between People of the Taiwan Area and the Mainland Area” was enacted under the adminis-tration of President Lee Teng-hui in 1992, a provision was added calling for a law to be drafted to govern how relations are to be conducted between the “free area,” of China, governed from Taipei, and the “main-land area,” run by Beijing. These “two areas” have been in existence within the legal and constitutional framework of the ROC for two decades, including un-der President Chen Shui-bian. As such, jurisdiction

Dr. Mignonne Man-jung Chan is executive director of the Chinese Taipei APEC Studies Center. She can be reached at [email protected].

b 9


A Tale of Two Areas

New concept could become the defining paradigm of cross-strait relationsDr. Mignonne Man-jung Chan

Ma speaks to the crowd at the Double-10 Day celebrations in 2010.

photo: Jameson Wu


over cross-strait relations falls to the Ministry of the Interior, and not the Ministry of Foreign Affairs, as might be expected. The cross-strait relationship can therefore be conceived of as one of “area-to-area,” as opposed to “state-to-state.”

Landmark breakthrough

During President Ma’s first term, the 1992 Consensus served as the lowest common denominator and the basis for the landmark breakthrough in cross-strait relations. The ROC, established in 1911, is the China that is recognized by the people on Taiwan, and the government that is legitimized by the Constitution. Therefore, the current state-of-play for the 1992 Consensus is exactly what President Ma described as the “mutual non-recognition of sovereignty and mutual non-denial of authority to govern.” Since both sides of the Taiwan Strait claim sovereignty over the

overlapping territory, it is not possible for either to recognize the sovereignty of the other. However, if the best interpretation of the current status quo is defined as a mutual non-denial of authority to gov-ern, according to Ma, then the current articulation of OCTA should have come as no surprise. It has been embedded in the ROC legal framework for two decades and could serve as an innovative solution to the cross-strait impasse and Taiwan’s aspiration for more international space. It is, according to the president, “the best approach to addressing reality, shelving disputes and promoting peace.”

Just as the Economic Cooperation Framework Agreement (ECFA) was the defining motif of Ma’s first term, OCTA is shaping up as the central theme of his second. This is not to say there are no chal-lenges for new breakthroughs in cross-strait rela-tions. It was while insisting that the “economy must precede politics” in their dealings with China that the Ma administration concluded 15 agreements with their counterparts in Beijing, including the landmark ECFA deal. Economic cooperation opens the door to people-to-people exchanges and a deeper cultural understanding. Currently there are 370 cross-strait flights per week, with up to 500 per week on the ho-rizon. The number of Chinese tourists to visit Taiwan reached 1.58 million in 2010, up from 116,000 in 2000.

It is hoped that this increased interaction between the two sides will lead to a deeper mutual understand-ing, greater empathy for one another’s historical ex-perience and cultural backdrops, and an awareness of the need for realistic problem-solving mechanisms. Fitting somewhere between the realms of economics and politics, culture offers the greatest hope of achiev-ing these goals, as it is the common heritage that both cultures share that may, in due course, find its own trace in mutual aspirations for finding viable solu-tions to the problems that the two sides also share.

There remain many unfinished tasks for negotiat-ing various pacts, including those on such topics as

An archival photo titled “Constitution of ROC” and dated 1946. Strictly interpreted, the ROC Constitution lays claim to the entire mainland and

everything currently being de facto governed by Beijing.

Public Domain Image

US Secretary of Health and Human Services Kathleen Sebelius meets with Taiwan’s Minister of Health Chiu Wen-ta at the 2011 World Health Assembly.

U.S. Mission photo by Eric Bridiers

investment guarantees, dispute settlements, and find-ing an innovative approach to mutual non-denial of authority to govern (a concept often referred to as de-facto sovereignty). If the leaders on the two sides of the strait can prove themselves capable of transcend-ing beyond a mere reckoning of contemporary real-ity and find ways of minimizing the historic rivalry and maximizing common interests, it would be an exemplary achievement toward peace and prosperity in the Taiwan Strait.

Taiwan’s unique status in the international com-munity has implications for Ma’s foreign policy as he moves into a second term, and in many ways it is like treading uncharted waters. According to Article 141 of the ROC Constitution, “The foreign policy of the Republic of China shall be conceived in a spirit of in-dependence and self-reliance and based on the prin-ciples of equality and reciprocity to promote friendly relations with other nations and abide by treaties and the Charter of the United Nations so as to protect the rights and interests of Chinese citizens residing abroad, foster international cooperation, advance international justice, and ensure world peace.” Since

the ROC lost its seat in the United Nations in 1971, the country has not been subject to UN Covenants by way of depositing the instruments of ratification. Nevertheless, Ma has pledged to be a “responsible stakeholder” in the international community, and in 2009, the ROC ratified the “International Covenant on Civil and Political Rights” and the “International Covenant on Economic, Social, and Cultural Rights” and adopted an enforcement act to incorporate both documents into domestic law.

Flexible diplomacy

Instead of contesting with grave grievances or en-gaging in diplomatic brinkmanship, Ma initiated a policy of “flexible diplomacy” with an eye to maxi-mizing common interests and minimizing conflict. By forming a “diplomatic truce” with China where-in Taipei and Beijing both agreed not to compete with one another over establishing diplomatic rela-tions with other countries, Taiwan has joined glob-al efforts to provide economic aid to needy coun-tries. Furthermore, under the rubric of the Asia-

Cross-Strait Vision b 11

Pacific Economic Cooperation (APEC), Beijing and Taipei collaborated on a joint project on emergency Preparedness and started to conduct high-level bilat-eral consultations. In the World Trade Organization (WTO), Taiwan became a party to the Government Procurement Agreement in 2009 and further en-hanced its role in trade liberalization. Thanks to ECFA, Taiwan is now better positioned to link up with regional integration schemes.

Since 2009, Taiwan has begun participating in the World Health Assembly as an observer under the name “Chinese Taipei,” and will better cooperate in the area of health security. There are many UN-related functional organizations in which Taiwan aspires to participate, including the Framework Convention on Climate Change and the International Civil Aviation Organization. It would ensure human security not only for people in Taiwan but also for people around the world. Ma has stated that the ex-

pansion of Taiwan’s international space requires three indispensable factors: namely, the inspiration of the people, the good will of the PRC, and the support of the international community. The OCTA connota-tion will be a catalyst to more innovative approaches to Taiwan’s extended participation.

Unprecedented landscape

In his first term as president, Ma operated under the principles of “economics precedes politics” and “cross-strait relations precedes foreign policy.” Beginning on May 20th, 2012, when Ma is sworn in for a second term, there will be more challenges ahead as the nation treads through an unprecedented landscape. Taiwan will continue to seek like-minded partners, and it will no doubt welcome support to do as the Constitution entreats: ensure human security for all the citizens of the ROC, foster international cooperation, advance international justice, and con-tribute to world peace.

In the coming four years, the task of the Ma ad-ministration will be to help the people on the two sides of the strait instill themselves with a sense of mutual confidence and contribute to regional integra-tion schemes, including the ASEAN++ FTAs and the Trans Pacific Partnership. He must continue joint ef-forts with China to promote economic and technical cooperation within APEC, including a bid to co-host the APEC ministerial meeting in 2014, and seek op-portunities to collaborate in many more functional international organizations.

There will be opportunities for the Ma administra-tion to raise Taiwan’s international profile by taking part in poverty alleviation efforts, humanitarian aid, and disaster prevention. Ma must inspire the people of his nation to aspire to greatness, free their minds, and nurture their confidence. The “One Country, Two Areas” formula, as it now stands, may serve as catalyst to regional stability and world peace. n


Putting the economy first: Gas prices in Taipei in March, 2011.

photo: Bernard Gagnon

photo: EvolutionMedia

After winning re-election in January as president of the Republic of China (ROC), Ma Ying-jeou’s first priority in terms of

foreign policy will be to continue efforts to promote cross-strait relations, as well as to follow through on promises surrounding the expected benefits of the Economic Cooperation Framework Agreement (ECFA) with China signed in mid-2010. While there will also be a focus on Taiwan-US relations during Ma’s second term, with major tasks being the re-sumption of negotiations with the United States on the Trade and Investment Framework Agreement (TIFA) and further arms sales to Taiwan, it is widely expected that the People’s Republic of China (PRC) will continue to play a central role in foreign-policy calculations. It therefore raises the serious and criti-serious and criti- criti-criti-cal issue of how the ROC can best leverage the tri-how the ROC can best leverage the tri-ow the ROC can best leverage the tri- can best leverage the tri-the tri-lateral relationship in order to avoid economic and political marginalization. The overall strategy of the Ma administration has been to put cross-strait and economic concerns first, and while on the economic front, the ROC cannot deny having been dragged closer into China’s orbit by its economic gravity over the past decade, politically the PRC has been inter-fering and suppressing diplomatic efforts attempted by the ROC.

Ma first enunciated the concept of “flexible diplo-macy” in 2008 in order to achieve win-win condi-tions for the promotion of bilateral relations and to

seek engagement in pragmatic consultations with China based on the 1992 Consensus. The concept was designed to provide a buffer zone to ease or prevent tensions when addressing sensitive issues while lay-ing the groundwork for a modus vivendi on foreign policy that would give the ROC more flexibility to build up official and unofficial international relation-ships without irritating China, as well as expanding Taiwan’s overseas business interactions.

According to the government, the underlying prin-ciples of flexible diplomacy are the maintenance of national sovereignty, building economic strength,

Liu Ching-kuo is a lieutenant colonel in the ROC Armed Forces and a staff officer with the Research and Development Office at National Defense University. He can be reached [email protected].

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Looking Abroad

Second term seen shifting external focus from China to the United StatesLiu Ching-kuo

The Statue of Liberty represents America to those coming from abroad.

photo: shinyai

“In recent years, Taiwan has been trying to address that gap in representation by seeking to participate in UN special organisations.”


pragmatism, equality, and dignity. In terms of main-taining sovereignty, the administration must find any possible way to break through the PRC’s diplomatic blockade and demonstrate to the world that the ROC is actually a state which has legitimacy. In the era of globalization, diplomacy and economics are insepa-rable, and so economic strength is naturally a prior-ity: a strong economy helps to expand the nation’s diplomatic reach, while diplomacy helps to safeguard transnational economic activity and benefits, thus the ROC must take advantage of its economic strength to expand its diplomacy.

Flexibility and pragmatism

In many ways, this diplomacy is defined by flexibil-ity and pragmatism. Participating in international organizations is vital to nation’s survival, and so the national titles that are used by Taiwan in order to be allowed to join such organizations should be not be prioritized, but rather they should be allowed to re-main flexible, so long as Taiwan’s interests are met,

and the principles of equality and dignity are main-tained. No matter what titles are used for joining and participating in international organizations and ac-tivities, the ROC must be treated with equality and the dignity of the country must be upheld by any means necessary.

Given these principles, the two supporting pillars of a viable diplomacy during Ma’s second term will be to sign free trade agreements and to join international organizations. First, within the scope of the afore-mentioned modus vivendi, as long as the countries that currently have diplomatic relations with the ROC do not derecognize or otherwise hurt the interests of the ROC, then the government will not object to their developing economic relationships with China.

Taiwan Bank Building, Kaohsiung. The nation has been trying to maintain equality and dignity in its participation in international bodies like SEACEN.

photo: a-giau

The 1992 meeting took place during the presidency of Lee Teng-hui.

Likewise, Taiwan should seek to sign FTAs with the United States, Japan and ASEAN.

The primary goal should be to rejoin to the International Bank for Reconstruction and Development (IBRD), International Monetary Fund (IMF) and World Health Organization (WHO). All of these organizations included the ROC as a mem-ber until derecognition in favour of the PRC, as hap-pened in 1971 when the UN China seat was given to Beijing. In recent years, Taiwan has been trying to address that gap in representation by seeking to participate in UN special organisations and other specialized international bodies that would benefit the nation’s economic development. The plan thus far has been to first seek to become an observer in such groups and then eventually begin lobbying for official membership.

It was this strategy that ultimately led to Taiwan’s participation as an observer at the 62nd World Health Assembly in Geneva, Switzerland in 2009 under the name “Chinese Taipei.” The policy of flexible diplo-macy is also credited with raising the number of countries into which ROC passport holders are grant-ed visa-free entry to 126.

Promoting ECFA

President Ma began promoting ECFA immediately after taking office in 2008, and after several rounds of negotiations with the other side, quasi-official rep-resentatives from the two sides formally signed the pact in Chongqing, China on June 29, 2010. While it has been hailed as a diplomatic and economic victory, many citizens of Taiwan see it as a belittlement of the nation, believing that Beijing has not responded as promised and has instead continued its policy of sup-pressing ROC diplomatic efforts and restricting the nation’s participation in the international community.

In 2008, there were at least 26 significant instances of diplomatic obstruction by China, including boy-

cotts of ROC efforts to join international organiza-tions, blocking Taiwanese interaction with US offi-cials at the federal and state levels, and interference with the issuance of visitor visas to retired ROC of-ficials, including former President Lee Teng-hui and other elder statesmen who had hoped to call in on other countries during their retirement.

More recently, the Conference of Governors of South East Asian Central Banks (SEACEN) board of directors unilaterally changed the membership des-ignation of the ROC Central Bank to “Central Bank, Chinese Taipei” following the People’s Bank of China joining the group. This echoes the ongoing wrangling over naming within the WHO which erodes at the ROC’s dignity and hurts the feelings of the people of Taiwan, and provides easy ammunition to Ma’s politi-cal opposition and factions of the Taiwanese media, which have criticized and ridiculed the “diplomatic truce” policy as one of “diplomatic shock.”

In response to such criticism, the Ma administra-tion has offered the following facts: While the diplo-matic truce has been in place, the ROC has not lost any allies to the PRC, and more countries are offer-

Foreign Relations Vision b 15

photo: James*C

The port of Kaohsiung is Taiwan’s largest container port and the 6th largest in the world, and a key element in Taiwan’s international competitiveness.

ing preferential treatment in terms of visa-free entry requirements to ROC passport holders; thanks to the decreased tension across the Taiwan Strait, China has been promoting the signing of FTAs; and better rela-tions with China means that Taiwan might have the chance to negotiate FTAs with the European Union, the United States and other major trading partners.

Seeking FTAs

Meanwhile, the government has initiated FTA nego-tiations with countries in Southeast Asia. In August 2010, the ROC and Singapore announced the start of negotiations on an economic partnership agreement known as the Agreement between Singapore and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on Economic Partnership (ASTEP). Though it has not been formally signed, ASTEP is a signifi cant breakthrough for Taiwan’s ef- significant breakthrough for Taiwan’s ef-forts to access the regional free-trade system. It has also been held up as a positive consequence of the ECFA deal. Developments in the ASTEP process are being closely watched by other countries in East Asia

that have close economic ties with Taiwan as an in-dicator of how ready China is to accept FTA talks of their own with the island.

In Southeast Asia, the Philippines, Indonesia, and India have contacted Taiwan and indicated that they are studying the feasibility of an FTA. The Philippines has been pushing for the inclusion of Subic-Clark-Kaohsiung economic corridor to be in-cluded in ECFA negotiations, and possibly leading to a nationwide FTA. Moreover, the Customs Mutual Administrative Assistance Agreement (CMAAA) signed by Taipei and Delhi went into effect on August 1 last year, making India the fourth country to sign a CMAAA with Taiwan.

Efforts to expand Taiwan’s international trade and economic space in past four years are a significant part of the search for more diplomatic allies, and strengthening ties with countries that are already, officially or unofficially, friendly to Taiwan. The first momentous step was the ECFA signing in 2010. It resolved a dilemma wherein Taiwan relies on China economically while being an opponent of China po-litically.


photo: PRC gov

PRC Commerce Minister Jiang Zengwei speaks at a meeting.

Jiang Zengwei, PRC Vice Minister of Commerce, has stated that under the precondition of not violat-ing the commitment to the 1992 Consensus, China could make reasonable arrangements to allow other countries to sign FTAs with Taiwan.

Additionally, Wang Yi, director of the Taiwan Affairs Office of the PRC’s State Council, has also stressed that diplomatic allies of China must stand firmly on their one-China policies—a reality in the interna-tional community. As for the development of official economic relationships between Taiwan and other countries, China should be able to find solutions and deal with the situation pragmatically and appro-priately, provided it is under the overall direction of peaceful development.

Even though the tone of not recognizing the legiti-macy of the ROC can still be detected in the above statements, China nevertheless has more or less loosened the noose constricting Taiwan’s diploma-cy. Taiwan’s export trade to East Asia is 70 percent, of which 28 percent goes directly to China. After ECFA took effect, this 28 percent of exports can benefit from phased tariff reductions, through ECFA and

its follow-on trade agreements. Since Ma took office in 2008, US officials have re-

peatedly and openly praised his efforts to maintain peace and stability in the Taiwan Strait, even going so far as to call it the peak of Taiwan-US relations for the past six decades. Likewise, the European Union has acknowledged Taipei’s contribution to cross-strait peace. With Ma’s re-election, the issues challenging the stabilization of bilateral relations are arms sales and the contentious topic of US beef imports. This last issue especially has to be settled if Taiwan wants to resume TIFA negotiations with the United States and become a part of the Trans-Pacific Partnership within the next 10 years.

Indeed, some analysts predict that, while cross-strait relations essentially defined the first Ma term, the next will be dominated by US ties. Professor Alexander Huang, an expert in the area of interna-an expert in the area of interna-tional affairs, has predicted that the future of cross-strait relations will go slow and the Taiwan-US rela-tionship will rapidly improve compared to the past four years.

Although the governments on the two sides of the Taiwan Strait have come to a consensus about dealing with economic and other non-political issues first, this is definitely not a long-term solution. After four years of interaction without touching upon the sensi-tive issues of politics and ideology, those issues have not disappeared, but have merely been intentionally put aside for the sake of convenience. Both parties will eventually have to face the tough problems such as disputes over sovereignty. n

Foreign Relations Vision b 17

“While cross-strait relations es-sentially defined the first Ma term, the next will be dominated by US ties.”

Without enough natural resources, Taiwan’s economy depends heavily on exporting manufactured products, so

it requires a vast market to sustain its ongoing eco-nomic prosperity and to enhance its economic com-petitiveness for the future. Over the past two decades, Taiwan has gradually come to rely greatly on China in the economic sphere, culminating in the signing of the Economic Cooperation Framework Agreement (ECFA), which came into effect in September, 2010.

Without a doubt, ECFA is an important foundational document for free trade across the Taiwan Strait, but it also presents Taiwan with a dilemma marked by the competing interests of economic prosperity and national security. Thus, it will be critical for President Ma Ying-jeou, during his next term in office, to out-line a blueprint for the future of the Republic of China (ROC) in order to resolve this dilemma.

Economic development and integration are global trends, but unfortunately Taiwan is not a member

Dr. Carlos Hsieh is an associate professor in the Department of Political Science at the ROC National Defense University. He can be reached for comment at [email protected].

18 b

photo: Hung Hsiao-min, GIO

Taiwan’s once abundant natural resources today are meagre, such as the billfish whose likeness is paraded under firecrackers in the 2010 Lantern Festival.


Golden Opportunity

Beef with Washington must be solved if ‘golden decade’ is to be acheived Dr. Carlos Hsieh

of the ASEAN Free Trade Area, nor can it join due to the China factor. Taiwan’s economic development is thus impeded, limited by mainland China’s eco-nomic statecraft. As the president of the US-Taiwan Business Council, Rupert Hammond-Chambers, pointed out last year in testimony before the US House Committee on Foreign Affairs, Taiwan is likely to become increasingly dependent on China as ECFA takes effect.

Golden links

For Taiwan’s prosperity, ECFA should be linked to the vision of a “golden decade” as articulated by President Ma, which also includes the Trade and Investment Framework Agreement (TIFA) with Washington, negotiations for which have been unable to move forward due to the controversy over US beef imports. Ma identified another critical trade goal—and a key component of his “golden decade” vision—as Taiwan’s inclusion in the Trans-Pacific Partnership (TPP) free-trade framework being erected by the United States. Clearly, economic affairs are a critical component of Taiwan’s overall national development, and should not be based solely on ECFA, but on a broader eco-nomic relationship with other Asia-Pacific nations and partners.

US scholar June Teufel Dreyer said in 2011 that “Taiwan faces a strategic dilemma: it is principal-ly dependent on China for its economic prosperity while it must principally rely on the United States for its security.” To break this dilemma, Taiwan should amend its strategic direction and enhance its secu-rity by boosting economic ties with the United States. This strategic advantage can only be achieved by en-gaging the United States as an economic nucleus within a multilateral architecture, and the TPP will be an important mechanism for connecting Taiwan’s economy with other Asia-Pacific countries. Thus, for Ma’s next term in office, the core task of achieving

his vision of a “golden decade” will be through the improvement of Taiwan-US relations and letting the economic effects spill over into the political, military, and security arenas. In this way, the Taiwan economy can continue to flourish even as security ties with the United States strengthen.

Although tension and hostility exist between the two sides of the Taiwan Strait, economic interactions paradoxically increase year after year. Globalization has made the world more closely connected, and under such tight economic relations, reducing trade barriers and increasing relative competitiveness is vi-tally important for every country. Supply chains seek to minimize costs, and yet there can be fixed costs created by politics and bureaucratic interference. If Taiwan’s principal competitors such as South Korea are able to reduce costs in the supply chain, they can

surpass Taiwan with their improved cost structures and enhanced competitiveness while Taiwan is con-strained by its China-imposed trade isolation. This puts local businesses at a significant disadvantage and they may find themselves going down a dan-gerous path.

Former ROC National Security Council Secretary-General Su Chi pointed out that, for most of Taiwan’s history, its destiny has been determined by three great powers: China, Japan, and the United States. Which one is the best option to depend upon in order to have more survival space, the answer is clear.

Taiwan’s future and US interests in regional security are closely related. In explaining why the US military needs Taiwan, Mark Stokes and Russell Hsiao ex-

US-Taiwan Ties b 19

“For most of Taiwan’s history, its destiny has been determined by three great powers: China, Japan, and the United States.”


plained in The Diplomat in April 2012 that Taiwan has a pivotal role to play as an ad hoc coalition partner in the US Air-Sea Battle plan, its Joint Operational Access Concept (JOAC), and the US strategic rebal-ancing in the Asia-Pacific. The two should cooperate to achieve reciprocal interests and strategic goals.

Currently, the contentious beef issue is the cor-nerstone for improving Taiwan-US relations, not only in the economic arena, but also related to the political and military spheres. An official statement from the Bureau of East Asian and Pacific Affairs expressed that maintaining strong, unofficial rela-tions with Taiwan is a major US goal in line with their desire to further peace and stability in Asia. According to the document, “…the US does not support Taiwan independence, but it does support Taiwan’s membership in appropriate international organizations, such as the World Trade Organization, Asia-Pacific Economic Cooperation (APEC) forum, and the Asian Development Bank, where statehood is not a requirement for membership.” It also supports Taiwan’s meaningful participation in international organizations “where its membership is not possible.”

China’s growing strength will lead Beijing to pur-sue its interests more assertively, which will in turn lead the United States and other countries to bal-ance against it. This cycle threatens to generate a re-gional parallel to the Cold War standoff between the United States and the Soviet Union, some analysts predict, and perhaps even a war over regional hege-mony. Adherents of this view point to China’s recent hard-line stance on its maritime claims in the East and South China seas, as well as to the increasingly close relations between the United States and India, as signs that the cycle of assertiveness and balancing has already begun.

Relations vital

If the United States hopes to maintain its set of Asian alliances, its relations with Taiwan are of vital impor-tance. Taipei has to leverage this situation in order to construct a more positive relationship with the United States and counter China’s economic influ-ence. First off, Taiwan policymakers must be cogni-zant of the island’s strategic importance.

The controversial ban on beef imports from the United States, ostensibly due to levels of ractopamine, must be dealt with if relations are to move forward.photo: ARS

Chinese analysts concentrate on the importance of Taiwan to China’s strategic future, given the inability of the People’s Liberation Army (PLA) to break out of the first island chain into the wider Pacific with-out first taking control of Taiwan. This line of rea-soning is standard commentary in Chinese journals, Teufel Dreyer notes. This eventuality would push US influence back to the second island chain and risk the security of free navigation in the sea lines of communication. Yet still, there is a growing chorus in the United States calling for a re-examination of US commitments to Taiwan, with international re-lations theorist Charles Glaser calling for the aban-donment of the island in the pages of Foreign Affairs and former Vice Chairman of the Joint Chiefs of Staff Admiral Bill Owens suggesting in an editorial that the Taiwan Relations Act (TRA) should be abrogated and arms sales to the island halted.

A decision to abandon Taiwan, or even to cut back significantly on US support, would be disastrous to the United States. It would prove to an increasing-ly confident Beijing that Washington had become weak, vacillating, and unreliable, according to Nancy Bernkopf Tucker and Bonnie Glaser. In a piece in

The Washington Quarterly titled “Should the United States Abandon Taiwan?” they argue that Taiwan should not keep all its eggs in the China basket and that it should rather seek closer relations with the United States.

Moreover, Asian countries which look to the United States to balance China’s rising power may not want Washington to squander resources and energy on Taiwan, but were it to ignore its security commitment

to the island, they would rightly question American resolve. US credibility, therefore, is at stake. The United States played a pivotal role in helping to build Taiwan’s democratic system, celebrating it as a role model for Asia in general and China in particular. Cutting off an old and trusted US ally at a time of rising tensions with an assertive China might do less to appease Beijing than to encourage its hopes of bullying the United States into a further retreat from security commitments in East Asia. It would transform the calculus of other trusted allies like Japan and South Korea, who might plausibly wonder whether the US commitment to their own security is as flexible as it was toward Taiwan.

Maintaining peace

US policy seeks to support security, political and economic interests in a peaceful, stable Asia. It has also been geared to maintaining the status quo in the Taiwan Strait while being supportive of Taiwan’s efforts to maintain its international space, promote Taiwan-US business ties, nourish its young democ-racy, and safeguard the human rights of the people of the island.

Maintaining peace in the Taiwan Strait is the pri-ority for the United States and all countries in the broader Asia-Pacific region. Providing Taiwan with the means to defend itself is the cornerstone of a sta-ble cross-strait policy. Thus, with China’s rise, so too is the strategic importance of Taiwan rising. This pres-ents Taipei with a window of opportunity to leverage Taiwan’s importance and promote closer US ties. The Ma administration would do well to prioritize dia-logue on the beef imports and seek proper measures to solve the impasse so that talks with Washington can begin on issues such as the TIFA and Taiwan’s participation in the TPP. The ultimate goal is to sign an FTA with Washington and let its effects spill over into political, military, and security arena. n

US-Taiwan Ties b 21

“US policy seeks to support security, political, and economic interests in a peaceful, stable Asia.”

The administration of Republic of China (ROC) President Ma Ying-jeou announced April 12, 2012, that it would raise electricity

prices by up to 37 percent in May to reflect rising en-ergy costs. A hike of between 16 and 33 percent will be levied on the commercial sector, while millions of households will pay up to 24 percent more for elec-tricity. The recent price hike is mainly aimed at offset-ting huge losses caused to Taiwan’s state-run power supplier, Taiwan Power Co., due to surging coal, gas and fuel prices on the world market, and the unsus-tainability of artificially low electricity prices, which the government has not raised since 2008. Subsidized

electricity rates have been a mainstay of Kuomintang industrial policy going back at least half a century, but with the re-election of President Ma, the adoption of a sustainable energy policy may be one of the aims for the next four years as Ma seeks to establish his legacy.

Taiwan has very limited domestic energy resources, and relies heavily on foreign imports to meet its en-ergy needs. According to the Ministry of Economic Affairs’ Bureau of Energy, the total energy supply in Taiwan in 2010 was 147.3 million kiloliters of oil equivalent, of which 99.3 percent was imported, leav-ing just 0.7 percent derived from local energy sup-plies, which have decreased 5.3 percent annually since

Dr. Alvin Yao is the deputy director of research at the Foundation on Asia-Pacific Peace Studies in Taiwan. He can be reached for comment at [email protected].

22 b


Low on Gas

High energy import rates offer security challenges, cross-strait opportunitiesDr. Alvin Yao

An industrial plant operates in Taiwan. Decades of artificially low electricity costs beneficial to Taiwanese industry will soon end as prices are allowed to rise.

photo: Changhua Coast Conservation Action (CCCA)

1987. Taiwan’s 99-percent dependence on imported energy today is up from 86 percent in 1982, accord-ing to the US Department of Energy. Of this, coal accounts for 32.1 percent, with a total coal supply of 65.2 million metric tons in 2007, all of which was imported. As for the origin of imported coal, 38.8 percent of that was from Australia, 36.8 percent from Indonesia, 19.9 percent from China, and 2.1 percent from other countries.

Energy resources scarce

Taiwan has to develop sustainable energy resources, and it needs to balance energy security with environ-mental protection and industrial competitiveness. Taiwan’s energy sector is still fighting for a stable supply, increased efficiency, and a diversified and deregulated energy market. This would emphasize energy security and environmental protection while enhancing research and development. Although Ma unveiled the government’s new nuclear energy poli-cy in November, 2011 and promised to take gradual

steps toward a nuclear-free nation, nuclear energy remains an economically appealing option. Despite the need to import uranium from the United States, other forms of energy imports and the countries from which they are sourced render Taiwan far less self-sufficient. Ma announced that the scheduled 40-year service period of the country’s three existing nuclear plants will not be extended, while the No. 4 plant

will begin commercial operations once all safety re-quirements are met. The president characterized his energy policy as “proactive” and “responsible,” and one that would ensure no need for power rationing. Ma promised to maintain stable electricity prices and enough of a reduction in carbon dioxide emissions to meet international goals.

Energy Vision b 23

“The goal (is) reducing Taiwan’s energy consumption to 50 percent of 2005 levels by the year 2025.”

graphic: CCCA


In 2008, the government published the “Framework of Taiwan’s Sustainable Energy Policy” which out-lined the goal of reducing Taiwan’s energy consump-tion to 50 percent of 2005 levels by the year 2025, while increasing the percentage of low-carbon pow-er generation to 55 percent. The Renewable Energy Development Act, moreover, promises to double the installed capacity of renewable energy from 8 percent to 16 percent by 2025, according to the ROC Ministry of Economic Affairs.

Despite these far-reaching policy goals and the con-tinued evolution of energy technologies, the Ma ad-ministration in its second term in office will have to face certain inescapable political facts: Taiwan’s 99-percent dependence on imported energy means that the country is at risk, wherein fluctuations in oil and coal prices, maritime instability impacting the sea lines of communication, and complex cross-strait relations all contribute to the securitization of energy.

The re-election of President Ma has widely been attributed to the rapprochement approach toward China he pursued in his first term. In light of a broad-

er backdrop of cross-strait rapprochement, the two parties across the Taiwan Strait have signed 16 agree-ments on economic and functional issues—a fact that has won support from the Taiwanese people. However, the prospects for further cooperation could be advanced if both sides avoid negative political interpretations and respond more positively to one another.

“The Ma administration has already made a proposal to Beijing that Taiwan and China work together to prevent spills from large oil tankers.”

Birds fly past wind turbines in Taiwan. One of the goals of the Ma administration is to increase the percentage of power generated by renewable means.

photo: CCCA

Energy cooperation is one area in which the two sides could collaborate, promoting the discovery of new energy supplies such as fossil fuels and clean en-ergy on the one hand, and addressing climate change and pollution on the other by cutting carbon emis-sions. For example, the Ma administration has al-ready made a proposal to Beijing that Taiwan and China work together to prevent spills from large oil tankers passing through the Taiwan Strait.

Transportation security

As is the nature of open sea-lanes, freely navigable by vessels of all countries, transportation security be-comes an issue, promoting a convergence of interests on strategic resource supply and a check on overly aggressive behavior by any one nation. Although Taiwan is still wary about China’s intentions and ap-parent ambition toward power projection, maritime cooperation on energy transportation could be nego-tiated bilaterally, or even multilaterally, to cover the safety of commercial vessels and oil tankers passing through the Taiwan Strait and the South China Sea. An example of such cooperation on maritime issues of mutual concern can be seen in the joint search-and-rescue (SAR) exercise held October 23, 2008, between China’s Xiamen city and Taiwan’s Kinmen Island. It was the first ever aeroamphibious SAR ever held across the strait since the opening of direct ship-ping, postal and transportation links between Xiamen and Kinmen in January 2001. Coast guard personnel from the two sides have established an information exchange mechanism, emergency communications, and joint enforcement protocols on combating in-dustrial pollution and transborder crime.

As the Chinese thirst for energy increases and its influence in the international energy market rises, Taipei and Beijing already have a framework through which to work together, in the Asia-Pacific Economic Cooperation (APEC) forum. China could facilitate

Taiwan’s involvement in some international energy organizations. Furthermore, cross-strait institution-alization of energy cooperation could create a part-nership on the effective use of surplus petroleum processing capacities and on enhancing quality stan-dards in petroleum supply, or the two sides could jointly exercise bargaining power, and strengthen ties of dialogue and cooperation with oil-producing countries. Helping to ensure security in the Strait of Malacca and establishing an emergency program could be institutionalized in terms of cross-strait energy cooperation.

A fundamental goal of capacity-building is to en-hance the ability to evaluate and address crucial questions related to policy choices and modes of implementation among progressive options with a better understanding of the sovereignty dispute and sensitivity to the security dilemma. Because of the

Energy Vision b 25

photo: Wunkai

Ruins of an old coal factory in Ruifang Township, Taiwan.

existing complexity of cross-strait energy coopera-tion, both governments could jointly establish a task force made up of officials, experts, executives, and engineers from energy companies to work on energy transportation, environmental issues, and cross-strait relations. The aim of such a task force would be to consolidate energy cooperation, as well as to think beyond the energy dimension. The two sides could then consider institutionalizing energy cooperation and setting up a semi-official mechanism affiliated with national oil companies or other officials in the energy sector.

Energy cooperation

Another option for institutionalization is to co-opt experts to discuss energy-market access and tariff wa-vers in the Economic Cooperation Committee under the Economic Cooperation Framework Agreement, and to push for further cooperation on energy-related issues. The institutionalization of cross-strait energy

cooperation could be strengthened by a comprehen-sive semi-official agreement on energy cooperation signed the by authorized representatives of national oil companies on each side.

Taiwan should increasingly be on the alert as the likelihood of continued Chinese dominance and ini-tial successes in Beijing’s efforts to build a blue-water navy could tempt it to blockade supply routes around Taiwan, and perhaps even in the Strait of Malacca. Moreover, continued tensions in the Middle East may threaten Taiwan’s imports of hydro-carbon fuels, or at least make them more expensive. Meanwhile, many of China’s existing and planned nuclear-power sites are located along its southeastern coast, opposite Taiwan. Any accident in China would have repercussions that would be felt across the strait.

The Ma administration has announced a gradual approach to the phasing out of nuclear energy, but it remains unclear where future energy supplies will be secured, or exactly what sources will comprise Taiwan’s energy mix. While Ma insists that there will be no power rationing, that reasonable electricity prices will be maintained, and that carbon emissions will be reduced, it is unclear how these promises can be kept: for the foreseeable future, the renewable en-ergy technologies of today are not sufficient, and new technologies will likely not be available for Taiwan to drastically alter its energy consumption profile in the short to medium term. Clearly, savings from energy efficiency and conservation will not be enough, and with demand for electricity expected to grow, heavy investments are needed in the island’s energy infra-structure. These much-needed investments, as well as energy security and projected increases in global fuel prices, remain challenges that the Ma administration may have to face in the upcoming term. Energy co-operation across the Taiwan Strait may provide one window of opportunity for Taiwan’s energy future, but worse scenarios surrounding Taiwan’s energy vulnerability should also be put into consideration. n


The people of Taiwan are traditionally opposed to nuclear energy, as evidenced by this protest against nuclear waste dumping. President Ma

has promised to gradually phase out all nuclear power on the island.

photo: Formosan Serow Biking Club


Center for Security StudiesNational Chengchi University

No. 64, Wan Shou RoadTaipei City 11666

Taiwan, ROC

www.mcsstw.org

Documents

Strategic Vision, Issue 3