IntroductionBackground on ChinaBackground on TaiwanHistorical Overview of Taiwan’s OccupationGuideline for National Reunification“New Flag, New Anthem” CampaignOne Country – Two SystemChina’s position of “One Country – Two System” on TaiwanTaiwan’s position on “One Country – Two System”Arms Deals between Taiwan and United StatesPresident Chen’s Referendum for IndependenceNew Referendum harder for IndependenceElection of 2004 and ControversyReferendums on the ballots of 2004Communication Across the Taiwan StraitTourist Visits between Taiwan and ChinaCommerce between China and TaiwanChina’s entry into WTOTaiwan’s entry into WTODirect Flight Program between Taiwan and ChinaConclusionThe China-Taiwan Conflict: Ethics vs. EconomicsRyan JuneeMike WeyDecember 1st, 2004Professor Bruce LusiganTable of ContentIntroduction..........................................................................................................................3Background on China..........................................................................................................4Background on Taiwan........................................................................................................5Historical Overview of Taiwan’s Occupation......................................................................6Guideline for National Reunification..................................................................................7“New Flag, New Anthem” Campaign.................................................................................8One Country – Two System.................................................................................................9China’s position of “One Country – Two System” on Taiwan..........................................10Taiwan’s position on “One Country – Two System”.........................................................11Arms Deals between Taiwan and United States................................................................12President Chen’s Referendum for Independence...............................................................14New Referendum harder for Independence.......................................................................15Election of 2004 and Controversy.....................................................................................15Referendums on the ballots of 2004..................................................................................18Communication Across the Taiwan Strait.........................................................................20Tourist Visits between Taiwan and China..........................................................................21Commerce between China and Taiwan..............................................................................22China’s entry into WTO.....................................................................................................24Taiwan’s entry into WTO...................................................................................................25Direct Flight Program between Taiwan and China............................................................26Conclusion.........................................................................................................................272IntroductionFor decades, the conflict in the Taiwan Strait between China and Taiwan had remained aserious threat to the stability of the Asia-Pacific region and world peace. Since thegovernment of the Republic of China was forced to retreat to the island of Taiwan afterthe Communist takeover of mainland China, the relationship between Taipei and Beijinghas been almost uniformly hostile. For many years, each claimed to be the legitimategovernment of all of China and battled over control of small islands between Taiwan andthe mainland. Their respective militaries continue to view each other with great suspicionand hostility.Even today, when trade, business, and unofficial contracts between the two sides arerapidly expanding, Beijing still refuses to renounce the use of force against Taiwan. Inrecent years, both sides of the Strait have been experiencing major internal changes. Theface of Taiwan’s government has changed as a more pro-independence party is in charge.In China, the country is going through major economic growth with its capitalisteconomy which creates problems for a communist country. In addition, it is unclear whether Taiwan is an independent nation (as the Taiwanese government would like to believe), or a part of China (as the mainland would like to believe). This is a great source of tension in the region, and cross-strait relations are strained with very little progress towards a peaceful resolution. Ambiguity is employed as a diplomatic strategy, with both sides using vague and careful language such as “one country, two systems” to avoid angering each other.3Background on ChinaChina is the third largest country in the world after Russia and Canada, but is the mostpopulous country in the world with over 1.2 billion people. The Capital of China isBeijing. As a communist society, the country is controlled under a one party system, theChinese Communist Party. Even though the country has a communist political system,the country deployed a capitalist style economy. The country went trough two economicrevolutions and has not looked back since. Over the past few years, the economy ofChina has been expanding at an astounding rate in the low teens. Figure 1: Map of China11 “China Map.” CountryReports.org. 2004 Edition. http://www.countryreports.org/maps/maps.asp?countryid=51&countryName=China4Background on TaiwanTaiwan, officially known as Republic of China, is a small island off the coast of China,separated only by the Taiwan Strait. The Capital of Taiwan is Taipei. Unlike its counterpart, it is a muti-party democratic society and allows elections to take place. Among its22 million people, more than 18 million people are decedents from mainland China.2Even though Taiwan has become the 14th largest economy in the world, it had beenstruggling to keep up with the expansion its counterpart has been enjoying. In terms oflanguage and culture, it is practically the same as the mainland Chinese. Figure 2: Map of Taiwan32 “Background Note: Taiwan.” Bureau of East Asian and Pacific Affairs. U.S. Department of State. November 2004.