Taiwan players weigh next move

After the stand-off: Peking loses face but Taipei realises that there is no short-term solution

TERESA POOLE

Taipei

In central Taipei yesterday afternoon workmen were clinging perilously to the side of the Chinese Bank building, disrobing it of a billowing 10-storey-high election portrait of President Lee Teng-hui.

Four days after Taiwan's presidential polls, the bunting has come down, Peking has stopped lambasting Mr Lee as a traitor to the motherland and one of two US aircraft-carriers in the region, the Independence, is preparing to move away. But now the dust has settled and the immediate threat of military conflict eased, what has been been changed by the sound and fury surrounding the island's election?

In Peking, the Foreign Ministry spokesman reiterated the possibility of reopening talks but only on condition Taipei dropped all "official, governmental or state-to-state relations with the outside world" and abandoned its attempt to be recognised by the United Nations. A Peking-controlled Hong Kong paper, Wen Wei Po, said China "is not ruling out the possibility of holding military exercises again or taking other military action if Lee Teng-hui acted wilfully and plotted to split the motherland".

The immediate crisis may have passed, but much of the rhetoric remains the same. So who are the winners and losers so far in this battle of nerves?

TAIWAN: Mr Lee's 54-per-cent share of the vote was a personal triumph, but now he must decide how to stabilise relations with the mainland.

He can claim a solid mandate for his "pragmatic diplomacy" policy, aimed at raising Taiwan's international status, but must weigh up how aggressive to be over the question of foreign visits and Taiwan's UN bid. After China's military show of force, other countries may be less willing to risk inviting Mr Lee for "private" visits, despite his newly enhanced status as a democratically elected leader.

The Philippines made it clear this week that Mr Lee will not attend the Asia-Pacific Economic Co-operation summit in Manila in November. As before, Taiwan can only send ministerial representatives, which many Taiwanese feel is an insult.

Restarting negotiations is likely to depend on Peking's attitude. Taiwan's leaders want non-governmental talks to resume but not at any price. Mainland preconditions could yet undermine the apparent willingness of the two sides to re-engage. In any concessions, Mr Lee will be under pressure from the domestic pro-independence opposition; the ruling Kuomintang party now has a majority of just one in parliament. Mr Lee is likely to offer talks on the three direct links - air, shipping and post and telephone - which Peking is demanding. Such a move would also please Taiwan's business community.

One result of the crisis will be an arms build-up by Taiwan, if it can find suppliers. The US decision last week to supply more defensive weapons, including anti-aircraft missiles, still leaves Taipei with a shopping- list of defence requirements, including more submarines and anti-missile equipment.

CHINA: Peking has suffered a serious loss of face over its attempt to scare voters away from Mr Lee. But it has driven home the point that its refusal to renounce the use of force against Taiwan is not something the world can dismiss lightly.

Strategy towards Taiwan is in flux as the leadership considers its options. Given the behind-the-scenes factional struggles, it can take months for policy disputes to be resolved. The mainland itself slammed the door on the unofficial talks last year, and China's leaders cannot be seen to be climbing down.

One question is whether army hardliners want to push, as rumoured, for a specific reunification timetable, or whether some vague restatement of the Kuomintang's One China policy will suffice.

Since the election, the immediate target of Peking's wrath has switched from Mr Lee to Washington's new arms sales to Taiwan. Pentagon support of Taiwan has reinforced Peking's view that the US is increasingly bent on containing China.

Over the next few weeks, Peking will carefully monitor Mr Lee's actions and words. If People's Liberation Army leaders are made to feel humiliated, they still have tens of thousands of troops in Fujian province, across the water from Taiwan. If Peking decides Mr Lee is misbehaving, there could be another show of force at the time of his formal inauguration on 20 May.

UNITED STATES: Washington believes the immediate crisis has passed, but knows that Sino-US relations remain in a perilous state, with Taiwan the most sensitive issue. Winston Lord, assistant secretary of state for East Asian and Pacific affairs, said this week: "We will not get in the middle, we will not mediate, we will not broker."

The problem for the US is that it is already central to the drama. As Mr Lord said, referring to US relations with China, it was "no secret that over the coming months we face a series of minefields", including possible US sanctions over Peking's nuclear sales to Pakistan. The situation is further complicated by US politics in a presidential election year, and the vote-losing potential of appearing soft on China. Nevertheless, the Clinton administration is likely privately to lean heavily on Mr Lee to reduce his international forays.

In June the US and Taiwan were surprised by the ferocity of China's reaction to Mr Lee's US visa. This month, it was Peking's turn to be taken aback by the despatch of two US aircraft-carriers to the region.

A new status quo has yet to emerge. For Taiwan there is no short-term solution. It took four decades for China and Taiwan just to talk to each other at a non-governmental level. Peking's leadership has little understanding of the profound changes that have taken place in what it insists is a renegade province. At the same time, most Taiwanese have no idea of the intense nationalism that is now Communist Party creed on the mainland, and how that threatens Taiwan.