with John Brandon

During its first year in office, the Ma Ying-jeou administration has brought greater stability to the cross-strait relationship and has sought to introduce greater predictability to relations between Taipei and Beijing (and by extension to U.S.-Taiwan relations). From April 24 - 26, representatives from Taiwan and the PRC met in Nanjing and signed three agreements in the effort to strengthen economic cooperation across the strait. The renewed dialogue--the Nanjing meeting was the third at that level since Ma assumed office--has introduced greater stability to cross-strait relations for the time being, but the renewal of cross-strait dialogue has thus far done little to shore up Taiwan's deteriorating long-term strategic position resulting from the Mainland's rising global political and economic leadership role and its growing military power.

As participants in a Center for Strategic and International Studies Freeman Chair-sponsored week-long observation tour of Taiwan that coincided with the 30th anniversary of the passage of the Taiwan Relations Act, we met with a range of senior government and party officials from the ruling Kuomintang (KMT) and opposition Democratic Progressive Party (DPP). We were also able to observe Taiwan's efforts to address the effects of the global financial crisis. These conversations underscored both Taiwan's vibrancy and its vulnerabilities; future developments in cross-strait relations now hold an important key both to Ma's political success and Taiwan's capacity to pursue an effective international economic growth strategy.

Ma's predecessor, the DPP's Chen Shui-bian, had tried to block Taiwan from becoming overly economically interdependent with China, despite the fact that over one million Taiwan business executives flocked to Shanghai and other areas driven by the promise of profits from expanded trade and investment with the mainland. The Ma administration's embrace of greater economic interdependence with the mainland through the promotion of the "three links" of transportation, trade, and postal service shows a greater willingness to accept the proposition that closer economic ties with China will significantly benefit Taiwan but need not mean closer political integration. Moreover, expanded formal economic ties with other neighbors have been blocked by Beijing for political reasons, and it is hoped that enhanced cooperation with the mainland will mitigate those political obstacles and open the door to deeper regional and global economic opportunities.

The negotiation of an Economic Cooperation Framework Agreement (ECFA) between Taipei and Beijing--as proposed by Ma and endorsed by PRC President Hu Jintao--would deepen cross-strait economic interdependence, but it would preserve Taiwan's competitive position that otherwise could be harmed as the result of Beijing's pursuit of free trade arrangements with ASEAN and, or at least so it is hoped, it could ease Beijing's political veto over Taiwan's efforts to pursue FTAs with Southeast Asian neighbors.

Some argue that this strategy of utilizing deeper economic interdependence with China as the portal to enhanced regional economic opportunity carries risks in several dimensions. First, the DPP argues, Ma is making strategic concessions to Beijing for short-term economic gain and this will weaken Taiwan's long-term capacity to remain politically independent of Beijing. Second, the strategy enhances Beijing's leverage, as its success depends on PRC willingness to show restraint and to accept that Taipei has legitimate interests in maintaining a certain degree of "international space." Third, deepened economic integration between Taipei and Beijing will facilitate Beijing's ability eventually to bring about the same type of "one country, two systems" approach that it utilized in Hong Kong, despite popular opposition in Taiwan to that approach.

In addition to the economic challenges Taiwan faces as a result of its anomalous political status, Taiwan's long-term strategic position continues to deteriorate as a result of Beijing's increasing military capabilities, including an ongoing missile threat and the expansion of the PLA Navy. Although the United States does not support "Taiwan independence," one objective of U.S. policy, codified in the Taiwan Relations Act, has been to ensure that Taiwan retains the capacity to depend itself from attack or intimidation across the strait. But China's military modernization continues at a pace that will increasingly tilt the cross-strait military balance Beijing's favor.

As effective U.S.-China coordination becomes more important to the management of global stability, there is growing concern in Taipei over the possibility that the United States might eventually yield to Chinese pressures to curtail provision of items Taiwan needs to defend itself. Beyond the military utility of these items, Taipei and Washington both view U.S. arms sales to Taiwan as bolstering Taipei's position in its negotiations with the mainland. In this respect, Taiwan will need not only continued military supplies but also sustained American political support to maintain its freedom of action and assure that it has the necessary space and political leverage to avoid complete dependence on Beijing.

Since our visit, the two sides agreed in Nanjing to more than double direct passenger flights from 108 to 270 per week, including a number to be transformed from charter flights to regularly scheduled flights; to enhance cooperative financial relations; and to work together in fighting crime by repatriating criminals and suspected criminals. In connection with these agreements, Taiwan has said it would welcome limited amounts of private Chinese investment and promised to formulate regulations to help facilitate this process.

Taiwan's opposition parties, most notably the Democratic Progressive Party (DPP), have criticized these pacts out of concern that they will infringe on Taiwan's sovereignty. However, the Ma adminisration's argument that these agreements reflect the Mainland's genuine good will was bolstered by the fact that, shortly after they were signed, Beijing dropped its long-time objection to Taiwan's participation in the World Health Assembly (WHA) as an observer. This is a welcome development particularly when the world is dealing with a potential swine flu pandemic. The PRC may have dropped its objection to Taiwan's observer status in an effort to wins hearts and minds and out of concern that denying it would only galvanize the DPP and pro-independence sentiment. But in the end, China's decision will benefit the health of Taiwan's 23 million citizens. And in another gesture designed to demonstrate good will, Beijing has even discouraged a few of Taiwan's 23 diplomatic partners from switching sides.

President Ma's policy towards China in his first year in office has been sophisticated, nuanced, and pragmatic. The economic agreements signed in Nanjing, as well as the other six agreements signed since Ma took office in May 2008, suggest that both sides recognize their respective interests in promoting peace and prosperity in the Taiwan Strait. The United States and the rest of the Asia-Pacific community should be supportive of both sides' efforts to stabilize the cross-strait relationship.

John Brandon is Director and Scott Snyder is Senior Associate with the International Relations Program of The Asia Foundation. These views are personal views and do not represent the views of The Asia Foundation.