To Members and friends

One China Committee Update 30

September 2010

New Members Since Last Update

Robert Rush (IL), President, Dragon Recruiting

China, Taiwan to sign trade accord

Taiwan will sign a trade accord with China next week after more than a year of talks, as warming cross-strait relations pave the way for deeper investment ties with the world's fastest-growing major economy. A fifth round of cross-strait talks will be held from June 28 to June 30 in the Chinese city of Chongqing, where the trade pact will be signed on June 29.

China and Taiwan reached an initial agreement on tariff reductions after talks in Beijing on June 13 on the Economic Cooperation Framework Agreement ( ECFA).

China will cut tariffs on 539 items from Taiwan worth $13.8 billion, or about 16 percent of Taiwan's 2009 exports to the mainland. Taiwan will cut tariffs on 267 items from China worth $2.86 billion, or about 10.5 percent of the country's shipments to Taiwan in 2009.

The opposition Democratic Progressive Party is organizing a rally to protest the accord on June 26, saying the agreement will give the government in Beijing too much clout over Taiwan, and may cost jobs by allowing cheaper Chinese goods to flood the island's market. (Source: Janet Ong, Business Week, Jun 24, 2010).

Senator questions arms sales to Taiwan

A senior U.S. senator said on Wednesday June 16 that U.S. arms sales to Taiwan were hurting closer ties with China and asked Defense Secretary Robert Gates what Beijing would have to do for the Pentagon to reconsider the transfers.

Senate Intelligence Committee Chairman Dianne Feinstein told Gates that Chinese leaders had offered to reposition at least some of their military forces opposite Taiwan. An aide said she was referring to an offer that was made in the past and was no longer on the table. "There is no current offer from China," her spokesman said after the Senate hearing.

Feinstein, a Democrat, said the redeployment offer had been raised during "my meeting with some of the leadership." She visited China and Taiwan earlier this month.

Feinstein did not spell out any details about the offer, telling Gates, "Perhaps some of this I should discuss with you privately."

Feinstein called U.S. arms sales to Taiwan "a substantial irritant" in relations between Washington and Beijing, and predicted they would remain so in the future.

She asked Gates what "substantial" steps China could take to ease its military posture in the Taiwan Strait in a way that would allow Washington to reconsider future arms sales to Taiwan.

After the Obama administration notified Congress in January of plans to sell Taiwan up to $6.4 billion in arms, China broke off military-to-military contacts with the United States. Earlier this month, China turned down a proposed fence-mending visit by Gates.

Gates cited as justification for the sales factors including what he called an "extraordinary Chinese deployment of all manner of cruise and ballistic missiles opposite Taiwan on the Chinese side of the strait."

Feinstein responded: "In my meeting with some of the leadership, it was mentioned that China had offered to redeploy back. Now I understand the word 'redeploy' isn't 'remove.' And I understand the nature of what's there and the number of troops."

Gates said it was up to Congress and the White House to decide whether to change the way arms are sold to Taiwan.

"The bottom line is the decision on Taiwan arms sales is fundamentally a political decision," Gates said. Gates said the United States was "very concerned" about China's growing anti-ship cruise and ballistic missile capabilities. (Source: Adam Entous and Jim Wolf; Edited by Peter Cooney, Reuters, Jun 16, 2010).

Reunification needs more effort

Top negotiators from the mainland and Taiwan signed the long-awaited Economic Cooperation Framework Agreement (ECFA) on June 29. The first comprehensive economic pact across the Taiwan Straits over the past six decades, ECFA indicates a stride toward a unified market and historical consensus between the two. It will undoubtedly bring positive changes in cross-Straits relationship, which has witnessed major turbulence in the past decade.

However, ECFA's significance for peaceful reunification across the Straits cannot be overestimated. It's impractical to expect that an economic pact would break the political status quo in the Taiwan Straits in the forseeable future.

US interference has further complicated the situation.

Earlier this year, US arms sale to Taiwan erased at one stroke the hard-won mutual trust across the Straits. Currently, the US is still seeking to maintain the status quo of cross-Straits situation to maximize its own interests in the region. The dynamics among the three parties won't be easily shaken.

In post-ECFA era, people on both sides will have more opportunities with each other. But the sense of estrangement won't vanish overnight. There may be friction between people on either side at the initial stage, due to different customs and manners.

Both sides need to be fully prepared for the difficulties in implementing ECFA.
Cross-straits reunification would be a long, tough process that calls for painstaking effort. The effort would be worthwhile. (Source: Global Times, Jul 14 2010).

China 'would win in 3 days'

A computerized scenario carried out by Taiwan's military showed that in a war with China the island's capital Taipei would be in enemy hands in just three days, a report said on Wednesday August 4. Last month's simulation, attended by President Ma Ying-jeou, came amid warnings that China could increase its missiles aimed at Taiwan by several hundred to more than 1,900 this year, despite warming ties.

The war game found that Chinese troops could march into Taipei on the third day of hostilities, seizing control of Taiwan's top military command and the presidential office, it said, quoting unnamed sources.

The results dealt a huge blow to Mr Ma's goal of building 'solid defence and efficient deterrence' with a small but elite army, it said. Taiwan's defence ministry dismissed the report. (Source:, Aug 4, 2010).