Key political trends:

Economic Trigger Events

The group discussed a series of economic actions that might trigger a military confrontation. For the most part, economic events were viewed as “second order questions” that were unlikely to trigger military actions. However economic sanctions might be part of US or Chinese responses to political or military actions involving Taiwan, and this might affect strategic relations between the United States and China. One Chinese participant noted that economic relations were currently the only substantial part of Sino-US bilateral relations; if they were cut off there would be no basis for relations. An American agreed about the importance of Sino-US economic relations, arguing that revocation of China’s MFN status would have a negative impact on relations that might indirectly increase the chance of war. There was general agreement that WTO entry would be good for the PRC in the long-run, but one participant noted that the Chinese government didn’t dare publish the bilateral agreement on WTO entry. Prime Minister Zhu Rongji was heavily criticized following the concessions he made in April 1999 in an abortive effort to reach agreement with the United States on WTO entry. A Chinese participant argued that the United States would be forced to approve Permanent Normal Trade Relations in order to gain access to mainland China’s market after it entered the WTO.

The one economic event that participants felt might trigger a military crisis was a major economic collapse in mainland China that caused widespread political instability. An economic collapse could lead to sudden political change inside mainland China, either in the direction of democratization or toward military rule. Chinese participants worried that the resulting political instability could give Taiwan an opportunity to declare independence while mainland China was distracted by internal turmoil. A few American and Taiwan participants suggested that mainland China might seek to divert attention from economic problems by fomenting a crisis over Taiwan. [Editor’s note: Political or economic turmoil in mainland China would likely lead political actors to greater reliance on Chinese nationalism as a unifying force. If Taiwan attempted to take advantage of turmoil to move toward independence, this might well bring mainland China together behind a nationalist leader.]

Key economic event:

Chinese participants felt that continued Chinese economic growth was a precondition for political liberalization and would also make peaceful reunification more likely. An American noted that the economic gap between mainland China and Taiwan would need to close, but that economic convergence would not happen in the next 10-15 years. A Chinese participant argued that economic growth was essential because mainland China did not want to follow the USSR in democratizing before economic reforms succeeded.

Part II: Key Events and Trends

The group’s initial discussions identified nine key events and trends that deserved analysis:

• Indicators that the PRC was preparing for an invasion of Taiwan (PRC initiator)

• A decision by Taiwan to develop weapons of mass destruction (nuclear, chemical, or biological) (Taiwan initiator)

• US decides to sell theater missile defense systems to Taiwan (US initiator—but trend in PRC missile deployments also a factor)

• PRC announcement of a timetable for reunification (PRC initiator)

• Economic meltdown/chaos in mainland China (PRC initiator)

• Trend towards “creeping independence” for Taiwan (Taiwan initiator)

• Trend toward overt American support for Taiwan (including both US actions and perceptions in Taiwan and mainland China)

• Trend toward increasing “Taiwan identity” and indefinite delay of reunification (Taiwan initiator)

• Trends in overall military balance across the Taiwan strait (All three parties involved)

Each of the nine key events and trends are discussed in detail below.

Indicators that the PRC was preparing for an invasion of Taiwan (PRC initiator)

The group discussed a number of PRC military actions that would indicate an invasion was imminent, include signs such as massing of fishing boats, attacks on early warning/intelligence facilities, and a major logistics or missile buildup opposite Taiwan. However the critical factor would not be these military indicators, but the political calculus in Beijing about whether a military conflict over Taiwan was necessary.

The PRC’s February 2000 Taiwan White Paper announced three circumstance that might prompt the use of force: Taiwan’s separation from mainland China (e.g. a declaration of independence), foreign occupation of Taiwan, or Taiwan’s indefinite refusal to negotiate about reunification. These make up the so-called “three ifs.” US policy has sought to maintain a military balance across the Taiwan Strait in order to deter conflict. The United States defense commitment to Taiwan has also remained ambiguous in order to deter Taiwan from declaring independence in the expectation that the United States would intervene on its behalf.

An American participant asked whether an explicit American commitment to Taiwan would increase the effectiveness of deterrence by removing ambiguity and therefore reducing the chance of conflict. The PRC knows the United States would win a conflict and is prepared for US involvement. The American noted “no one starts a war expecting to lose it.” A Chinese participant disagreed, citing several examples in Chinese military history when leaders had fought wars knowing they would lose. Losing a war but maintaining domestic legitimacy was better than not fighting and losing legitimacy. Political factors would dominate military factors. An American participant noted that miscalculation of one’s chances of winning could also play a role, especially when the nature of warfare was changing. He worried that military officers on both sides over-estimated their capabilities. A Chinese participant responded that while war was always the last option, if the PRC had no alternative it would fight. An American raised the question of a package deal where the United States would make a conditional commitment to defend Taiwan so long as it did not declare independence.(2) A Chinese participant responded that removing ambiguity about the US commitment would strengthen nationalist voices in mainland China.

Beijing’s calculus about the use of force is clearly a complex question that involves many factors, perceptions, and trends. Other aspects of the group’s discussions help illuminate some of these factors.

A decision by Taiwan to develop weapons of mass destruction (Taiwan initiator)

Most members of the group agreed that a decision by Taiwan to develop weapons of mass destruction (nuclear, chemical, or biological weapons) would be a dangerous development that might precipitate military conflict. Even though Taiwan had an advanced nuclear weapons program that was stopped in the late 1980s under US pressure, the group felt Taiwan was unlikely to revive the program. Participants noted that the time required to develop nuclear weapons and effective delivery systems (and the high likelihood that a secret program would be discovered) would give mainland China the opportunity to launch a pre-emptive conventional attack to destroy Taiwan’s nuclear facilities. One American participant noted that a senior PLA officer had recently warned him that mainland China would launch such an attack if Taiwan tried to develop nuclear weapons. The time gap between a decision to pursue nuclear weapons and the point at which weapons would become operational would create a dangerous situation.

The broader question was whether nuclear weapons would help Taiwan guarantee its security. Absent a compelling security rationale, most participants felt Taiwan was unlikely to develop nuclear weapons. The group discussed parallels between Taiwan and Israel. An American participant noted the similarity was only superficial. Taiwan’s physical separation from the mainland negated much of mainland China’s military advantage and made Taiwan less vulnerable than Israel. None of Israel’s potential enemies possessed nuclear weapons or delivery systems, while mainland China already had sufficient missiles and warheads to have an overwhelming advantage. He noted that it was hard to imagine a scenario where a small number of nuclear weapons would help Taiwan survive. Other participants accepted this argument about the lack of a persuasive military rationale for Taiwan to develop nuclear weapons. One argued that Taiwan’s earlier nuclear weapons program had been in the context of a policy based on a possible invasion of the mainland, a set of circumstances very different from what Taiwan faced today. One American participant noted that even though developing nuclear weapons was very risky, if the United States renounced its security commitment to Taiwan, this might create a military and political rationale for nuclear weapons.

Some participants felt that even if nuclear weapons had little military utility for Taiwan, they might still have considerable domestic political value. Two participants noted that Taiwan’s Vice-President-elect Annette Lu had called for Taiwan to develop weapons of mass destruction, although a knowledgeable Taiwan participant argued this had been an emotional outburst, not a serious proposal. A Chinese participant cited the role of domestic politics in India’s 1998 nuclear tests, arguing that electoral competition might encourage the Democratic Progressive Party (DPP) to develop nuclear weapons. Participants from Taiwan rejected this parallel, arguing that the international costs of developing nuclear weapons were too high. However these costs might be reduced if other countries believed Taiwan was forced to develop nuclear weapons due to mainland China’s threats. Only under these circumstances would a decision to develop nuclear weapons provide a domestic political boost. Because a Taiwan nuclear program would create major security risks, all sides had an interest in taking steps to avoid such a scenario.

A Chinese participant argued that India’s nuclear tests had also been intended to raise India’s international status and worried that Taiwan might use the development of nuclear weapons to seek the same goal. A Taiwan participant argued that nuclear weapons would not raise Taiwan’s international status but instead would hurt Taiwan’s reputation. He could only envision one scenario in which Taiwan might develop WMD: if President-elect Chen Shui-bian was determined to declare independence and able to create a scenario where the rest of the world believed Taiwan had no alternative to developing nuclear weapons to protect itself. Participants agreed that the negative impact nuclear weapons development would have on American support was a very important factor deterring Taiwan from pursuing WMD.

A Chinese participant argued that Taiwan and North Korea were different because North Korea could not get help from others while Taiwan relied on the US for its security. If the United States cut off support for Taiwan, that might increase Taiwan’s interest in WMD. A US participant noted it was rare to see someone from the PRC discussing the utility of a US security commitment to Taiwan. The Chinese participant responded that US security ties made Taiwan less likely to pursue nuclear weapons, but more likely to pursue independence, which was equally dangerous.

Sale or Deployment of TMD to Taiwan (US initiator)

An American participant presented some facts about theater missile defense (TMD), arguing that many misconceptions existed. Ballistic missiles were similar to aircraft dropping bombs; TMD was therefore similar to anti-aircraft systems and not especially destabilizing. He argued that Chinese experts had correctly judged that projected TMD systems could be overwhelmed by large numbers of missiles, but incorrectly concluded that TMD deployment to Taiwan implied a formal US military alliance. There were numerous TMD variants, ranging from stand-alone point defense systems to upper-tier systems fully integrated with US satellite networks. Patriot PAC-3 and lower-tier missile defense systems could readily be used for point defense without creating an alliance with the United States, especially if Taiwan had its own early warning radars.

The American noted that Taiwan was overrating the accuracy and effectiveness of ballistic missiles, thereby yielding the psychological advantage to Beijing. Hardened and passive defenses could provide a lot of protection. Misconceptions about the extent of the threat and the potential efficacy of TMD were distorting the debate. A Taiwan participant noted that many were skeptical about the cost of the system and questioned whether the Taiwan military had the capability to handle such a complicated system. An American agreed that the military viewed it as a money pit, but argued that political pressure from the DPP had forced the Taiwan government to pursue the system. It was mainly a domestic political issue, not a military issue.

A Chinese participant noted that mainland China had both political and military concerns about TMD. When the United States had sold Taiwan Patriot PAC-2 systems, there had not been an immediate threat of Taiwan independence. Now independence was an increased threat, so mainland China’s opposition was much greater. An American noted that the build-up of Chinese missiles opposite Taiwan increased pressure for the United States to sell TMD to Taiwan. A Chinese argued that mainland China would respond to a PAC-3 deployment by building more missiles to overwhelm the system; this would lead to an arms race in the Taiwan strait that increased tensions and raised the risk of war. An American questioned why the risk of war would increase if the two sides maintained a military balance. The Chinese participant responded that an arms race was a political indicator of willingness to fight; if one side gained the advantage it would strike. American participants noted that a defensive arms race might have different dynamics and that a Chinese military buildup would affect other countries like India and Japan.

The group differed over how the issue of TMD deployment in Asia arose. A Taiwan participant noted a structural asymmetry in the debate over TMD deployment in Taiwan. Mainland China could increase the number of missiles deployed in the coastal area, but insisted that the US should not sell defenses to Taiwan. This was perceived as unfair. A Chinese participant saw TMD as a derivative of the Reagan-era “Star Wars” program. The revision of the US-Japan defense guidelines had stimulated interest in regional TMD deployments, not Chinese missile deployments. American participants argued that mainland China’s 1995/96 missile tests had played a critical role in creating political support for TMD deployments to Taiwan. Chinese participants feared that TMD sales would create the perception that Taiwan was invulnerable and therefore stimulate movement toward independence. A Taiwan participant asked whether a US guarantee that new weapons sales would not facilitate Taiwan independence would satisfy Chinese objections, but Americans doubted that such a guarantee would be possible or credible.

PRC announcement of a timetable for reunification (PRC initiator)

Press reports have suggested the Chinese military has pressed the Chinese government to set a timetable for reunification. The PRC’s February 2000 White Paper on Taiwan announced that Taiwan’s indefinite refusal to enter negotiations about reunification would constitute grounds for the use of force (the so-called “third if”). Seminar participants agreed that setting a public deadline for reunification or for the start of negotiations would be dangerous, but felt the PRC was unlikely to take such a step. Discussions revealed major differences in the understanding of the word “timetable” between American participants and participants from mainland China and Taiwan. For Americans, “timetable” implies an ultimatum demanding that Taiwan negotiate by a certain date or face the consequences. The mental picture was of a clock counting down to a deadline, like the clock in Tiananmen Square that counted down the seconds until Hong Kong’s reversion to Chinese sovereignty. In the Chinese context, “timetable” implies a goal that everyone should work to attain. The emphasis is on mobilizing popular efforts to achieve the goal, not on a specific deadline. A Taiwan participant argued that a deadline implied a single action, while a timetable implied a gradual process or a series of steps toward a goal. An American participant noted that the “third if” had been wrongly interpreted in the United States as a deadline.

Chinese participants noted that Jiang Zemin had stated in a 1999 interview that unification should not take longer than 50 years, implying that no timetable existed. One noted that Deng Xiaoping had set a target for reunification in the 1980s, but that no one took it seriously. The PRC should not announce a target again without implementing it. If the PRC did give Taiwan an ultimatum, it would last only twenty-four hours, not years. Participants from both mainland China and Taiwan agreed that a timetable was important for its domestic role in mobilizing support, not in forcing Taiwan to the negotiating table. An American participant noted that setting a public timetable to increase pressure on Taiwan would be dangerous. If Taiwan refused to comply, Chinese leaders would either have to fight before they were ready or back down and face severe domestic criticism. A public timetable also gave the US military time to mobilize and deploy forces to the area.

Several Americans suggested the PLA might use a secret internal timetable to argue for increased defense budgets and defense capabilities. In bureaucratic terms, a timetable could be a useful tool for planning and for building the capability to have a military option to invade Taiwan by a certain point. Such a timetable would not necessarily imply a commitment to use a military option, but would bring pressure to bear on Taiwan. They suggested a period of seven to ten years was likely for such an internal timetable.

Economic meltdown/chaos in mainland China (PRC initiator)

A major economic collapse in mainland China that caused widespread political instability might trigger a military crisis. An economic collapse could lead to sudden political change inside mainland China, either in the direction of democratization or toward military rule. Chinese participants worried that the resulting political instability could give Taiwan an opportunity to declare independence while mainland China was distracted by internal turmoil. A few American and Taiwan participants suggested that mainland China might seek to divert attention from economic problems by fomenting a crisis over Taiwan. A Chinese government weakened and distracted by a major economic crisis might behave erratically or lose control over military forces. The implications of political instability for Taiwan were discussed in the earlier section on political trigger events and trends.

Trend towards “creeping independence” for Taiwan (Taiwan initiator)

Chinese participants noted the widespread perception in the PRC that Taiwan’s leaders sought to move toward independence step by step. Measures such as constitutional change, referendum, and a declaration of independence would be the end point of this trend, but smaller steps would happen first. Although the “red lines” that would lead to war were fairly clear, widespread distrust of Taiwan’s leaders in the PRC meant that even modest steps toward independence might provoke strong Chinese reactions. Chinese leaders did not trust Lee Teng-hui and were extremely suspicious of Chen Shui-bian given his membership in the pro-independence Democratic Progressive Party. One Chinese participant noted that Chen “did not dare to say that he was Chinese.” Suspicion and the lack of cross-Strait dialogue on reunification colored how the PRC interpreted the actions of Taiwan’s leaders and various political, military, and economic developments. This was the area where misunderstanding and misperception seemed most likely and most dangerous. Actions that people in Washington and Taipei regarded as innocuous or modest political gestures tended to be regarded in Beijing as part of a slippery slope toward independence.

An American asked why Lee Teng-hui’s “special state-to-state relations” announcement had not been regarded as a declaration of independence. A Chinese participant replied that the Chinese government had regarded it as akin to a declaration of independence, but was not prepared militarily to launch a war. Few people in mainland China had expected Lee Teng-hui would go that far. Mainland China had been focused on economic modernization, but Lee’s statements and actions were forcing a reconsideration of priorities. Several American participants noted with concern that this statement implied that if mainland China had the military capability, it would have fought a war over Taiwan in 1998. A Chinese participant noted that Lee’s statement had increased the urgency of negotiations on reunification. Mainland China must have negotiations or it would seem like they were accepting Lee Teng-hui’s “two states theory.” This was why mainland China was trying to pressure Taiwan into starting negotiations.

Trend toward overt American support for Taiwan (including both U.S. actions and perceptions in Taiwan and mainland China)

Chinese participants focused on the political implications of actions such as arms sales and TMD that increased US military ties with Taiwan. One noted that the sale or deployment of theater missile defense (TMD) systems, the Taiwan Security Enhancement Act (TSEA), and an explicit U.S. commitment to defend Taiwan differed only in degree. American participants asked what difference these actions would make, given that mainland China already assumes the United States would intervene. A Chinese participant said an explicit commitment would be qualitatively different from the current situation. A public announcement of an explicit commitment would be seen as a sign that war was imminent (and that the United States was ready for conflict) because the United States would have to expect a Chinese military response.

The group discussed the impact the Taiwan Security Enhancement Act (TSEA) would have if it became law. Some thought that the administration would maintain sufficient flexibility to implement the TSEA without offending mainland China too much. An American participant noted that some elements would have to be implemented publicly, and would therefore provoke Chinese reactions. The TSEA could not simply be ignored. Another American noted that while the TSEA would strengthen US military ties with Taiwan, it contained no explicit security commitment. Most Taiwan participants believed that if the TSEA became law the administration would still retain sufficient latitude in implementation to mitigate Chinese responses. American participants noted that the TSEA was intended to raise the profile of US unofficial military ties with Taiwan, which would make it harder to implement its provisions discretely.

The group also discussed factors influencing US arms sales to Taiwan. One American participant noted that the TSEA’s real target was internal: its goal was to influence conflicts between the State Department, the Defense Department, and the National Security Council over what weapons to sell to Taiwan. A number of legitimate sales of defensive weapons had been vetoed in the interagency process due to concerns about PRC reactions. [Editor’s Note: According to the Taiwan Relations Act, the United States is not supposed to consider Chinese reactions in deciding what weapons it will sell to Taiwan]. Congress was trying to encourage more sales of defensive systems. There was also a perceived need for greater sophistication in the Taiwan military officer corps. Taiwan participants agreed with this criticism, but noted training and increased military contacts could be done quietly. An American participant observed that economic factors were also a driver for arms sales to Taiwan. The Aegis destroyers were an expensive system that happened to be built in key Congressional districts.

The group discussed the impact of the PRC’s March 1996 missile tests and response to Lee Teng-hui’s “special state-to-state” relations announcement in 1999. The PRC views military threats as the only way it can deter Taiwan independence. One Chinese participant noted that if the maneuvers resulted in increased support for independence in Taiwan, as some argued, then they served no purpose.

Another Chinese participant asked two counter-factual questions:

• If the PRC had not conducted a military exercise with ballistic missile launches in 1996, how would the situation be different today?
• If the US had not deployed two aircraft carriers in response to the Chinese exercise, how would the situation be different today?

The group agreed that both events sparked a string of unanticipated consequences. The PRC’s missile tests led directly to the US carrier deployment. American participants noted that the United States had been forced to act to uphold the credibility of its alliance commitments. Because the PRC had focused solely on deterring Taiwan independence and had neglected the broader regional context, it had not anticipated a strong US response. A Chinese participant noted that the exercises had never been intended as anything more than exercises, but that the absence of military ties or a hotline between leaders made American leaders worried that the crisis might spin out of control. American participants agreed that lack of communications had played a role. One noted that the possibility that the exercises might lead to war could not have been ruled out at the time.

American participants noted the exercises had deterred Taiwan’s movement toward independence, decreased the likelihood of peaceful reunification, stimulated Sino-US strategic dialogue, and increased chances of TMD deployment. They had alarmed Japan, which saw itself in a similar position as Taiwan, and moved discussion about a possible “China threat” from a theoretical possibility to part of the mainstream American political debate. A Chinese participant noted that these consequences were all secondary to mainland China; stopping Taiwan independence was the most important issue. Most participants agreed that the tests had sensitized people on Taiwan to PRC concerns and had convinced Washington that Taiwan was a serious issue.

An American noted that the missile tests had decreased popular interest in reunification on Taiwan. A Chinese participant agreed that the majority in Taiwan wanted the status quo and that the missile tests had decreased support for peaceful reunification. One American noted that the carrier deployment had given people on Taiwan a false sense that the United States would support them no matter what, and had therefore increased pro-independence sentiment. US policymakers worried about Taiwan’s overconfidence, which stimulated Clinton’s “three nos” statement in Shanghai in 1998. This in turn had prompted Lee Teng-hui’s “two-states” theory. Participants from all three sides agreed that the US carrier deployment had increased support for Taiwan’s Democratic Progressive Party and was therefore indirectly responsible for Chen Shui-bian’s election as President.

While participants from mainland China saw a shift in US policy toward overt support for Taiwan, most participants from Taiwan saw trends in US policy that favored the PRC. These differing perceptions underscored the extent to which both mainland China and Taiwan seek to influence US policy toward Taiwan. Both view US policy as a zero-sum game and seek to maximize American support for their position. American participants noted that the United States took no position on the ultimate outcome but wanted a peaceful resolution of the Taiwan issue. US policy had two fundamental goals: avoiding war with the PRC and not allowing Taiwan’s decisions about reunification to be coerced. Forcible reunification would damage US credibility in Japan and South Korea, reduce US influence in Asia, and impose major domestic political costs. Six administrations had sought to avoid having to choose between mainland China and Taiwan. A Chinese participant acknowledged that the United States had tried to pursue both goals, but argued “at some point you will have to choose.” This was why US arms sales to Taiwan and the question of an explicit security guarantee were such sensitive issues.

An American participant noted that the PRC’s successful efforts to choke off the flow of arms to Taiwan meant that the United States was now essentially the sole supplier. The PRC was trying to use its military buildup to deter the United States from intervening in a conflict over Taiwan. This would force Taiwan to accept reunification on mainland China’s terms. This approach denied the US President any political cover and was intended to force explicit American concessions. He argued that a political strategy aimed at forcing your counterpart to agree to unconditional surrender was unlikely to succeed, though it would certainly raise tensions.

Several Chinese participants asked whether the United States would continue to adhere to the “three nos” [no support for Taiwan independence, no support for “two mainland Chinas” or “one China and one Taiwan”, no admission into the United Nations or other international organizations that require statehood]. US participants noted that two of the three had been US policy since 1971. One American noted that there should also be a fourth no—no use of force. Another noted that the Taiwan Relations Act was a law and that the 3 communiqués were executive agreements. It was difficult to know which would prevail if they came into conflict. Ultimately the US response to a military conflict in the Taiwan Strait would be a political decision.

Trend toward separate Taiwan identity

Several Taiwan participants noted that the younger generation in Taiwan was developing a distinct sense of a separate Taiwan identity as a result of education and political socialization. The process was accelerating. One Taiwan participant noted that Lee Teng-hui had seldom used the Taiwanese dialect, but in recent months most of his speeches had used it. Some American participants questioned whether a separate Taiwan identity necessarily corresponded with support for Taiwan independence. One agreed that the emotional longing for reunification with mainland China was waning in Taiwan, but argued this was not the same as independence.

A Chinese participant cited Singapore as an example of cultural similarity but separate national identity. Taiwan was already starting a nation-building process via textbooks and education that emphasized Taiwan’s separateness from China. This was very dangerous. Taiwan participants agreed that Chinese history was being de-emphasized in textbooks. They noted that anti-China and anti-Communist sentiment was a major part of developing a separate Taiwan identity. A Chinese participant suggested that the anti-Communist sentiment was actually cover for anti- China sentiment; Lee Teng-hui’s goal was to get independence, not to topple mainland China’s communist regime. An American participant noted that the trend toward a separate Taiwan identity posed a different kind of challenge for the PRC. National identity could not be influenced by traditional military or diplomatic means. If mainland China wanted to influence how people in Taiwan thought of themselves, it would need to find positive ways to appeal directly to them.

The group felt that the trend toward a separate Taiwan identity created a variety of political pressures on Taiwan that increased the chances of conflict. Awareness of this trend made mainland China more suspicious about the actions of Taiwan’s leaders. At the same time, the PRC had a limited number of possible responses. The group agreed that the sources of a separate Taiwan identity and the extent to which this trend was proceeding deserved further study.

Trends in overall military balance across the Taiwan Strait

Participants had different interpretations about whether a military balance across the Taiwan Strait would promote stability. Chinese participants saw military balance as destabilizing by protecting movement toward Taiwan independence. In their view only a PRC military advantage could deter Taiwan from seeking independence. Chinese participants stressed that the purpose of mainland China’s military buildup across the Strait was to deter Taiwan independence, not to compel reunification. Military threats were one of the few tools mainland China had available to prevent Taiwan’s leaders from moving toward independence, and so far they have worked. Chinese participants recognized the political and diplomatic costs of using military threats, but felt mainland China had few alternatives.

Participants from Taiwan and the United States viewed mainland China’s efforts to achieve military superiority as a destabilizing effort to compel Taiwan to negotiate reunification on mainland China’s terms. The “third if” in the PRC’s Taiwan White Paper had reinforced this perception. An American participant noted that the United States was committed to maintaining a military balance across the Strait, while the PRC now viewed a military balance as destabilizing. This was a recipe for an arms race and a major crisis in relations. Many Americans suspected the goal of mainland China’s military modernization was to raise the costs of military intervention so that the United States would permit coerced reunification. This stimulated anti-China sentiment in the United States and might foster a new Cold War if hard-liners in both countries began driving policy.

Part III: Conclusions and Recommendations

The group’s discussions suggest several conclusions about key events and trends that might destabilize the security environment across the Taiwan Strait.

First, misperceptions and misunderstandings appeared to be a relatively small factor at the level of individual events. The group’s discussions revealed considerable agreement about which individual events were most dangerous and where the “red lines” that might trigger conflict lay. Indeed, members of the group were surprised at the degree of agreement between participants from mainland China, Taiwan, and the United States. Most participants were less concerned about dangerous events occurring accidentally or inadvertently than about longer-term trends (and perceptions of trends) that might back decision-makers into a corner. Perceptions (and misperceptions) about what was really driving decision-making in Beijing, Taipei, and Washington were a key factor in interpreting individual events.

Second, most participants felt political factors tended to dominate military factors. Although some key actions such as TMD sales and US support for Taiwan had both a military and political dimension, most participants stressed political causes and political implications rather than purely military factors. Chinese participants were more concerned about the political implications of the Taiwan Security Enhancement Act or TMD deployment than about the military implications. The principal exception was the possibility of changes in the military balance across the Taiwan Strait triggering a political crisis. American participants noted that mainland China’s missile deployments were increasing pressure to sell TMD systems to Taiwan and that shifts in the military balance might lead to increased arms sales to Taiwan.

Third, there is a mismatch between dangerous trends and the policy instruments available to influence or respond to those trends. For example, Chinese participants felt that military threats were mainland China’s only means of deterring Taiwan from declaring independence. However it was also noted that military means are unlikely to reverse the trend toward a separate Taiwan identity (and might even be counter-productive). Moreover some potentially dangerous events (such as an economic crisis) would not be caused by deliberate government actions at all.

Fourth, unofficial “track two” discussions have considerable value in clarifying issues and dispelling misperceptions. They allow a deeper and more direct engagement with issues and long-term trends. Because unofficial participants are not focused solely on current policy issues, they are often able to take a more analytical and creative approach to problems. One interesting aspect of the seminar was that participants from different sides often shared a similar analysis about particular trends and events, even if they differed on policy recommendations. At the same time, the seminar clarified some misperceptions, such as the differing interpretations of the term “deadline” in the Chinese and American context. Participants agreed that the seminar was a useful exercise. Future discussions would benefit from having participants from Taiwan’s Democratic Progressive Party and greater military representation.

The most important conclusion from the Monterey seminar was that dangerous misperceptions and misunderstandings exist on both sides of the Taiwan Strait. Although participants identified a number of key events and trends that might destabilize the security environment, the most critical factors were political perceptions, not military trends. Resumption of cross-Strait dialogue may not resolve the political issues dividing the PRC and Taiwan, but dialogue can be a vital tool for preventing tensions from escalating into military conflict.

A Proposal for Unofficial Dialogue

Although the Monterey seminar was not intended to resolve political issues, participants suggested a new proposal for restarting unofficial dialogue between mainland China and Taiwan.

The group agreed that leadership perceptions and the state of relations between Taiwan and mainland China directly influenced the impact of individual events and trends. Absent political dialogue, dangerous actions and trends were much more likely to escalate into war. Official dialogue between the two sides has been halted due to mainland China’s insistence that Taiwan explicitly accept the “one China” principle before talks can begin. Taiwan’s new President Chen Shui-bian has indicated willingness to discuss the “one-China” principle, but has refused to accept it as a precondition for talks. The inability of political leaders in mainland China and Taiwan to find a way to resume cross-Strait dialogue exacerbates misunderstandings and misperceptions and makes a future security crisis much more likely.

To bypass disagreements over the “one China” principle, participants from all three sides suggested unofficial “track two” discussions based on the “Guidelines for National Unification” adopted by Taiwan in 1991. The PRC would agree to discuss Taiwan’s proposal for unification (which envisions short-term, medium-term, and long-term phases leading toward unification). Tsai Ing-wen, the new head of Taiwan’s Mainland Affairs Council, has already stated that Chen’s administration will retain the existing reunification guidelines. Discussions on the basis of the 1991 guidelines would incorporate the “one China” principle without requiring Taiwan to reaffirm it explicitly.

Unofficial discussions would be conducted on a regular, recurring basis with no deadline or agreed final outcome. Both sides would accept that an extended period of discussions might be required before conditions became conducive for formal negotiations at a higher level. Whatever the level, discussions of the reunification guidelines would take place alongside discussions of practical issues of cross-Strait cooperation. Mainland China and Taiwan would each nominate representatives who enjoy the support and confidence of senior political leaders. A combination of serving officials, former officials, and scholars would make the best team.

Most participants agreed that the United States could play a useful role in restarting cross-Strait dialogue. The US role should not be to mediate a political resolution of the conflict or to broker a deal, but to facilitate discussions and help clarify issues. American participation in unofficial dialogue should be headed by a former US government official acceptable to both sides. The talks could occur in the United States at an isolated setting outside Washington. (Hawaii and the West Coast are possible venues). All participants would share the results of their discussions with their respective governments.

(1) The PRC was represented by an active duty PLAN Senior Captain participating in a personal capacity.

(2) MIT Professor Thomas J. Christensen proposed a conditional American commitment in “Clarity on Taiwan,” Washington Post, March 20, 2000, p. 17.