Wednesday, May 14, 1997

Closing the Taiwan Gap

By Yury Tsyganov

The perestroika period of former Soviet president Mikhail Gorbachev and the Taiwanese transition to democracy occurred at about the same time, allowing for the possibility of rapprochement. But by trying to maintain the triangular balance of powers among the Soviet Union, People's Republic of China and United States, the U.S.S.R. still laid particular stress on normalizing relations with mainland China. There was, however, a pause in Russian-Chinese relations in the wake of the Soviet Union's collapse. The Russian Foreign Ministry even asserted that China was only of secondary importance in Russia's foreign policy. It was precisely during this time that Taiwanese businessmen became highly active in Russia, making a series of unofficial visits to the country.

Russian-Taiwanese relations were first taken up by dilettantes rather than professional Russian diplomats. Given that "triangular" relations were for the time being ignored, Taiwan was prompted to quickly develop its relations with Russia. Although this honeymoon period was over by the end of 1992, in June 1993 the Taipei-Moscow Coordinating Commission on Economic and Cultural Cooperation was opened in Moscow. But it was only last December, after long negotiations at various levels, that the Russian authorities opened a similar quasi-diplomatic mission in Taipei.

It is no secret that the development of Russian-Taiwanese relations is determined by Moscow's relations with Beijing. The tensions between Russia and the West, the confusion over relations among the former Soviet republics and Russia's weak position in the Asian Pacific Region -- which is aggravated by its unsettled disputes with Japan -- have led to the Russian leadership's return to a triangular logic in its foreign policy course. Therefore, from 1994, Russia managed to establish "strategic partnership" with China since this could be used as a trump card in its relations with the West.

When Russia and China directed their efforts last year toward attaining "strategic interdependence in the 21st century," China officially supported Russia in its opposition to the expansion of the North Atlantic Treaty Organization. Russia affirmed that the government of the People's Republic of China represented all of China, and that Taiwan was an integral part of it. Moscow also pledged not to establish official relations with Taiwan.

What remains in Russian-Taiwanese relations are only economic and cultural ties. The more than $2 billion in trade makes Taiwan Russia's fourth largest trading partner in Asia. Moreover, Russia has a more than $1 billion trade surplus with the island. Russia exports ferrous metallurgy and raw materials and does not buy Taiwanese products, given the high transport costs and consumer preferences for similar Western and Japanese goods. However, there is no investment activity since Taiwanese businessmen still fear settling deeply in Russia.

As for the relations between the mainland and Taiwan, the main problem is the different concepts of the principle of "one China." If Beijing considers itself to be the sole legitimate government of China, then Taipei insists on the idea of a "single, but divided China," along the lines of the former Federal Republic of Germany and German Democratic Republic, or North and South Korea. This formula would put Taipei on the same level with Beijing. In 1995, after the private visit of Taiwanese President Lee Teng-hui to the United States, the negotiation process between the mainland and island came to a standstill. The stagnation will probably last for a rather long time, since the Chinese leadership is now concerned most of all with internal political problems and Hong Kong.

For Russia, it is important that the tense relations between Taipei and Beijing do not create an iron curtain, and that economic ties between them develop. At the end of last year, the Taiwanese Investment Committee approved investment in the mainland amounting to $6.8 billion. Official Chinese statistics, however, show the volume of Taiwanese investment to be around $15 billion, and indirect investment at the start of the year to exceed $96 billion. This is occurring despite the fact that bilateral agreements on defending investment are unlikely to be reached in the near future.

Taiwanese business and government, however, are attempting to diversify their political and economic ties. This became especially important in connection with the problem of Hong Kong. Taiwan is carefully observing how the unification of the motherland with Hong Kong this year turns out. The law that Beijing adopted on Hong Kong, which does not mention the status of Taiwanese, arouses concern in Taipei. The indeterminate status of Taiwanese businessmen gives Beijing some leverage over Taipei. China is combining a political stick, maneuvers in the Gulf of Taiwan, with an economic carrot: the prospects for investment.

In these conditions, Russia could -- while observing its obligations to China -- help develop its mutually advantageous relations with Taiwan. It is unlikely that Russia will become a primary market for Taiwan in the near future, but the potential for cooperation is great. Moreover, proceeding from the principle of nonviolent unification, Russia could help promote the development of dialogue between the two countries.

Yury Tsyganov is a senior researcher at the Russian Academy of Sciences' Institute for World Economy and International Relations. He contributed this comment to The Moscow Times.