A Closer Look at Taiwan

A Speech by Minister of Foreign Affairs Dr. Jason C. Hu to the World Affairs Council of Northern California June 1999, complied and published by the Taipei Economic and Cultural Office (TECO) in New York.

Today, as we stand upon the threshold of a new century and a new millennium, it is with awe and eager anticipation that we scan the vast horizons of technological, social, and economic potential stretching before us. But let us remember that as we enter this unspoiled realm of possibilities, we must not forsake the traditional values that have brought us to this vantage point. In the future, our posterity may not remember our blood, our sweat, (and I dare hope) not even our mistakes, but we all pray that, owing to our efforts, future generations may live in even greater peace, democracy, and prosperity than exists today. This is the precious legacy that we must pass down -- a legacy that transcends cultural boundaries and political borders. We cannot and must not expect any less of ourselves than this.

It is my strongly held belief that the Pacific Rim is one of the main places where we will shape the future, and I am equally confident that my country, the Republic of China on Taiwan will play a constructive role in this great venture. By the end of my remarks today, I hope you will agree with me on both these points.

For the last century and more, San Francisco has served as the main gateway between East Asia and North America. It is also home to one of the largest populations of Chinese people anywhere outside of Asia. Perhaps, it is for these reasons that today's gathering is so meaningful. And perhaps, that is why, as I speak to you today, I feel such a sense of great honor and even greater responsibility.

Peace, Democracy, and Prosperity

A century ago, U.S. Secretary of State John Hay remarked, "The Mediterranean is the sea of the past, the Atlantic is the ocean of the present, and the Pacific is the ocean of the future." Hay's prescient forecast -- we might even call it an epiphany -- accurately anticipated the rapidly emerging global significance of the Pacific Rim countries toward the end of this century, both economically and strategically. Today, it is generally believed that the forces of the global economy will form a tri-polar system with the Asia-Pacific region on one side of the Pacific Ocean, North America on the other side, and a reinvigorated Europe on the shores of the Atlantic.

As the Asia-Pacific region continues to rapidly develop, three key issues will shape our region's future and our children's destiny: Peace, Democracy, and Prosperity. The first issue, peace, I believe entails creating a comprehensive security mechanism for dialogue to reduce regional tensions. The second issue, democracy, involves consolidating and expanding on recent democratic gains in order to ensure regional stability. And the third issue, prosperity, requires solving the problems that still plague the Asian-Pacific economies. Let us now examine these three issues one by one.

Promoting Peace

First, we must understand that, if democracy and prosperity are to thrive in the Asia-Pacific, peace and stability must be sustained in the region. While the region seems stable at the moment, many potential causes of conflict lurk just below the surface -- the tense stand-off between North and South Korea, the dispute over sovereignty in the South China Sea, and the uncertainty between the two sides of the Taiwan Strait, to name but a few. And yet, not counting a handful of bilateral agreements on security cooperation, the region lacks a "truly effective" comprehensive, multilateral mechanism for dialogue on security through which various parties can hold regular talks, build a consensus for peace, and prevent conflicts from occurring. Such a multilateral mechanism need neither exclude any member of the region nor take any member of the region to be a "hypothetical target." The goal would be to allow the full expression of concerns and suggestions regarding peace and stability, so that, even in the absence of consensus, the mechanism could serve as a channel of communication and an early-warning system. Such a mechanism would complement rather than impinge upon any bilateral arrangements.

Consolidating Democracy

Of course, peace without liberty might seem pointless. In truth, the two go hand in hand. That is why we are so heartened to note that the vast majority of people and governments in the Asia-Pacific have embraced the trend towards democracy. They know, and we know, that the inexorable tide of democracy is undermining the few undemocratic regimes left in the Asia-Pacific region. Many of these undemocratic regimes pay no heed to their people's cries for democracy but instead respond cynically with extreme forms of nationalism, further agitating the populace and destabilizing the region. But, in facing this reality, let us remain confident that as the Asia-Pacific region moves towards free markets and economic reforms, the pressure for democracy and human rights will inevitably grow so great that no government anywhere can ignore or suppress it. Ladies and gentlemen, do not lose heart. Democracy will soon spread throughout the entire Asia-Pacific region!

Restoring Prosperity

Since July 1997, many countries in the Asia-Pacific region have experienced economic downturns and social turmoil that have cast a shadow over the region's overall economic development and stability. The solution to the region's current problems is primarily a matter of economics, but we cannot only adopt an individualistic or piecemeal approach. Regrettably, even the World Bank, the IMF, and the APEC forum have been unable to articulate a nonpolitical or purely economic vision that takes into account the complementarities and division of labor between the various constituent parts of the Asia-Pacific economy as a whole over the long term. Is there any way to enhance complementarity in the Asia-Pacific? Is there any way to produce a better division of labor in the region? These are the issues we should be thinking about!

Taiwan's Role

Most of you have probably picked up on the fact that, by using terms such as "comprehensive," "non-political," and "purely-economic," I am actually intimating that Taiwan's right to participate in international activities is often unnecessarily and unreasonably limited. But, the truth is, I am also suggesting that Taiwan can play an active role in building the legacy of peace, democracy, and prosperity in the Asia-Pacific region.

Is it really necessary to exclude or ignore Taiwan? Before you answer, let me give some of the latest statistics. The ROC on Taiwan is the 15th largest trading economy in the world. Our gross national product was $285 billion in 1997. In fact, our GNP was larger than the GNPs of Belgium, Sweden, and many other countries in Europe. We have the third largest foreign exchange reserves in the world, worth $95.7 billion. And, do you recall how many people were infatuated with the size of the "China market" when the U.S. established diplomatic relations with the PRC? Well more than twenty years have passed since then, and despite the fact that the Chinese mainland is 265 times as large as Taiwan and has 58 times our population, the Taiwan market absorbed 1.25 times as many U.S. goods as the mainland China market did in 1998. Today, Taiwan is the seventh largest market for U.S. goods in the world!

I truly and deeply believe that the Republic of China on Taiwan can make an extremely valuable contribution to the Asia-Pacific region in terms of regional peace, democratic development, economic prosperity, and international aid.

Our Commitment to Preserving Peace

Looking back over the history of the Asia-Pacific in the last century, one cannot help but notice that few countries in the region have withstood as much pain from foreign invasion, civil war, and national division as the Republic of China has. This painful history haunts us and sharpens our hunger for peace in the Taiwan Strait and stability in the Asia-Pacific.

Consider for a moment what would happen if peace could not be maintained in the Taiwan Strait. While the security and development of every country in the region, including mainland China, would be seriously undermined, who would pay a higher price than the people of Taiwan? No one should doubt our commitment to peace in the Taiwan Straits given that instability affects us most.

As far back as May 1991, our government renounced the use of force to solve problems between the two sides of the Taiwan Strait. In addition, the numerous steps we have taken in recent years to strengthen exchanges and dialogue with mainland China offer further proof of our sincere desire for peace. While Beijing has continued to assert that it will not renounce the use of force against us, we have insisted that the only way to resolve our differences is through dialogue, communication, and exchange. The Cross-Strait relationship should not be a zero-sum game. It should be a positive relationship that allows everybody to win... that is everybody including Taiwan, mainland China, the United States, Japan, Korea, and the countries of ASEAN. And yet, if peace in the Taiwan Strait cannot be maintained, the opposite effect will result: everybody will lose.

For the Republic of China, it is essential that we maintain an effective military deterrent. I am sure everyone can recall how in March 1996, the PRC began firing missiles off the coast of Taiwan just as we were preparing to hold the first direct election of a president in Chinese history. Since then, Beijing has only increased the number of missiles aimed at us. Is it reasonable to expect that countries facing such a threat take no defensive countermeasures? How can you blame someone who is facing a loaded gun for putting on a bulletproof vest? No one should think a decision by Taiwan to join a purely defensive TMD system will affect regional stability. Of course, when the time comes, my country will make a responsible and reasonable decision on whether or not to join such a system.

Following the trip to the Chinese mainland last October by the chairman of our Straits Exchange Foundation, Mr. Koo Chen-fu, we welcomed his counterpart, Mr. Wang Daohan, the chairman of the mainland's Association for Relations Across the Taiwan Strait, to visit Taiwan this fall to continue the constructive dialogue between the two sides of the Taiwan Strait. We will make the most appropriate arrangements for Mr. Wang so that a basis for constructive communication between the two sides can be formed in the future.

Recently, many of our American friends have suggested that Taiwan and the mainland sign a series of interim agreements to solve existing problems and generate goodwill. We in Taiwan believe that the two sides ought to focus first on some of the pressing issues affecting the rights and interests of average citizens on both sides of the Taiwan Strait, issues including the resolution of fishing disputes, joint crime-fighting efforts, and the return of illegal entrants. We hope that we can sign agreements with the mainland on these matters as soon as possible, for they could then serve as the basis for agreements between the two sides on issues of even greater importance in the future. Just as the pyramids could never have been built if the first layer of stone blocks had not been laid, so too we must build our relationship with the Chinese mainland from the ground up, brick by brick, one stone at a time.

Peace in the Asia-Pacific relies on the joint efforts of all the countries in the region, and given that the security of any one country in the region is inextricably linked to the security of the others, we believe a multilateral mechanism for dialogue on peace in the Asia-Pacific region is absolutely essential. Participants would be able to voice their concerns informally and thus reduce the likelihood that problems would grow out of hand later on. For this reason, my country is eager to support and participate in any multilateral discussion of regional stability.

Catalyst for Democratic Change

Over the last decade and more, the Republic of China has undertaken a series of democratic reforms through a process of evolution rather than revolution. Today, our dreams have come true; we are a full-fledged democracy. And while there were many ups and downs along the way, our determination was never shaken. Democracy on Taiwan is not without its faults. On occasion, our national legislators get a bit over-heated and the result is international media attention that rivals last year's home run race in the Major Leagues. I am confident, however, that such antics are a temporary phenomenon and that the people of Taiwan will use their ballots to bring about improvements in our democracy.

It should be noted that, in contrast to the democracy achieved by other countries only after blood was shed in the streets, Taiwan's "quiet revolution" deserves closer examination and emulation. Over the last decade, we have accelerated our democratic transformation, and, in the process, further consolidated our status as a free and progressive nation. Our flourishing democracy provides the foundation for political stability over the long run and is helping to create the right conditions for peace and stability in the Taiwan Strait.

Perhaps the most valuable lesson provided by the maturation of democracy in Taiwan is that democratic institutions can grow and even flourish on Chinese soil. No one should overlook our role as a model for democracy in mainland China. As the PRC economy gradually develops, the beginnings of a middle class are taking shape on the mainland and grassroots elections are being held. These are all stages that we in Taiwan went through during our development. We are willing to share our democratic experience with the mainland. If the Chinese Communists are able to stick to their policy of economic reform and peace, then fundamental changes in the mainland's social and political structures will become inevitable in the next ten to fifteen years. We believe that the democratization of mainland China is an important key to continued peace and stability in the Asia-Pacific region. By cooperating in the quest to bring democracy to all of China, Taiwan and the mainland can jointly serve the best interests of not only the entire Chinese nation but also every other country in the Asia-Pacific region as well.

The Asian Financial Crisis

Many countries in the Asia-Pacific region have been hit hard by the financial crisis owing to their unsound financial institutions, over-heated investment, heavy debt burdens, the schemes of international opportunists, and other non-economic factors. While the effect of the crisis on Taiwan has, by comparison, been slight; nevertheless, owing to our close economic and political ties to the other countries of the region, we have not kept on the sidelines. Instead, we have taken active measures to help countries rebound from the crisis.

Our Central Bank has provided $1.2 billion in capital to the overseas branch offices of Taiwan-based financial institutions by setting up $20 million revolving accounts at each branch. And it goes up to $30 million if the branch office is in Southeast Asia. These accounts are available as source of capital for Taiwan businesses in the area, thereby extending and strengthening our country's investment there. We have also encouraged the private sector to raise $1 billion in capital and set up a "Southeast Asia Investment Holding Company" to strengthen investment in the countries of Southeast Asia.

Similarly, in order to help build a sounder financial system in Southeast Asia, we have encouraged commercial banks in Taiwan to buy Southeast Asian banks, give them a capital infusion, and introduce them to sound management and business practices. Likewise, we have also encouraged these same commercial banks in Taiwan to participate in joint investment projects put together by the Asian Development Bank and to join with major international banks to provide syndicated loans worth $230 million for large-scale investment projects in Southeast Asia. Such activities, we believe, will help spark economic recovery and development in the region.

Of course, the Republic of China would be able to do even more to resolve the Asian financial crisis if our efforts could be coordinated through international organizations. While we are a member of the Asian Development Bank and the APEC forum, we should accede to global economic and financial institutions such as the World Trade Organization, the World Bank, and even the IMF as soon as possible so that we can better fulfill our international obligations and contribute to economic development worldwide. With regard in particular to the WTO, we hope that our entry is judged entirely on our own economic merits and that we will become a full member by the end of the year.

Regional integration is the dominant economic trend at the end of the 20th century. One after the other, regional structures -- NAFTA, the European Union, the Southern Cone Common Market -- have been created. Now it is our turn. The time has come to create a similar structure for the integration and sustained economic development of the Asia-Pacific region. As President Lee Teng-hui has pointed out in the past, basic economic conditions and developmental progress differ widely from country to country in the Asia-Pacific, and by aggressively pursuing greater integration and promoting complementarity in the division of labor, we can have a large and beneficial effect on the overall economic development of the region. Economists in the Asia-Pacific would be well advised to give this idea serious consideration.

Giving Back to the International Community

Taiwan first began to provide foreign aid back in the 1960s. Now, the flowering of democracy on Taiwan has further invigorated our society, and numerous charities with international reach have taken root on the island. Where once we were the recipients of international largess, now we are proudly able to give something back to the international community.

Beginning in the 1950s and all the way up to 1965, we were on the receiving end of $1.5 billion of American assistance, assistance that was indispensable to our economic development and which served as a foundation for peace and stability on Taiwan. Today, we are standing on our own two feet, a proud and prosperous nation, with our arms outstretched to lend a helping hand to others in need. In this respect, Taiwan, which has been a model aid recipient in the past, now aspires to be a model aid donor in the future.

Our foreign assistance programs are designed to share the fruits of our economic success with our less fortunate neighbors in the global village. Early on, our efforts focused on agriculture, but over the years, they have become more diverse. At present, we have stationed in 33 countries around the world a total of 38 technical missions specializing in agriculture, fisheries, or handicrafts. And, recently, we have begun to offer modern vocational training and human resource development programs as well.

Formerly, much of our financial assistance was dispersed through bilateral channels, but my country is also a member of multilateral organizations such as the Asian Development Bank and the Central American Bank for Economic Integration, and through these agencies, we provide a substantial amount of funding for economic development. In addition, Taiwan is working with the European Bank of Reconstruction and Development and the Inter-American Development Bank to provide financial and technical assistance to specific development projects.

Since the early 1990s, many private Taiwan-based charities have actively participated in the humanitarian assistance efforts of international NGOs. In the last four years, for example, the Buddhist Compassion Relief Tzu Chi Foundation has sent aid packages, medicine, and even medical personnel to over 40 different countries. Similarly, the Rotary Club of Taiwan has donated $12 million to charitable endeavors around the world. This club has also made a commitment to provide $5 million a year to international efforts to eradicate polio from the face of the earth. While my country is not a member of the World Health Organization, the Kiwanis Club of Taiwan makes regular donations to WHO projects. Our government strongly supports such charitable efforts by private groups in Taiwan.

Last year, a tidal wave hit Papua New Guinea, and Hurricane Mitch devastated many countries in the Caribbean and Central America. This year the conflict in Kosovo has created hundreds of thousands of refugees. In all of these cases, our government has worked with private charities to provide assistance.

Our commitment to contributing to world peace and prosperity as a member of the international community was highlighted by President Lee Teng-hui's announcement on June the seventh that the Republic of China on Taiwan will provide $300 million in humanitarian assistance to the Kosovo reconstruction projects, as a part of an international effort to restore peace and prosperity in the Balkans. The money will be used to provide food, medical supplies, and shelter to thousands of people displaced by the recent campaign in Kosovo. Moreover, we will bring thousands of refugees to Taiwan for vocational training in order to equip them with the skills they will need if they are to contribute to the reconstruction of the Balkans. And, of course, we are also looking forward to contributing what we can do to any long-term international economic development projects in the area. In this regard, our specific development experience can be extremely useful and relevant.

Conclusion

Back in 1990, the New York Times ran an editorial titled "Taiwan, Too Big to Ignore." I couldn't have said it better myself. Taiwan is too big to ignore. You know it. I know it. We all know it. So let's stop pretending that the Emperor has clothes on. The Republic of China on Taiwan is a prosperous democracy, home to 22 million people, and a willing and able member of the international community. Our experience should be upheld as a shining example to mainland China and as a reference for the future direction of the world we live in. As President Lee Teng-hui so eloquently expressed in his book, Where Taiwan Stands, "Taiwan is situated today midway between the advanced countries and the developing countries. In many ways, Taiwan can serve as an intermediary between them or a bridge that spans the gap that divides them."

As we stand together on the threshold of the new millenium, we hope that the countries of the Pacific Rim will recognize the value of our role as a proponent for peace, a catalyst for democracy, and a partner for prosperity. For developing countries, we are a valuable guide to the right path of modernization. For advanced countries, we are a worthy partner in regional and global development.

If everyone would just "take a closer look at Taiwan," they would realize that by allowing Taiwan to participate more fully in the global village, we can all take a step closer to realizing our vision for the 21st Century!