Businessweek Archives

Politics Is Deferring The Dream Of A `Greater China'


International Outlook

POLITICS IS DEFERRING THE DREAM OF A `GREATER CHINA'

For years, Asia watchers have predicted the rise of a Greater China. The mainland's vast labor pool combined with Taiwan's technological knowhow and Hong Kong's financial resources would create an economic superpower, they said.

But recently, political differences have returned to center stage, raising doubts about the speed of economic integration. China's threats to curtail political freedom in Hong Kong after taking over in 1997 have raised questions about the colony's future as a financial and corporate center. And the upcoming elections in Taiwan could further chill relations between the island economic dynamo and the mainland.

On Dec. 2, Taiwan's voters will choose a new legislature. Then, in March, they will vote in the country's first-ever direct presidential elections. This comes after a summer of severely strained relations with Beijing, following Taiwanese President Lee Teng-hui's visit to the U.S. last June. Worried leaders in Beijing are watching to see how much support the electorate will give to pro-independence candidates. Beijing insists that Taiwan is part of China and not an independent country. And the Chinese are preparing to hold military maneuvers off Taiwan to intimidate voters--probably in vain. "Beijing doesn't know how to handle the situation here," says Chih-yu Shih, a political science professor at National Taiwan University.

Beijing's problem is that the Taiwanese leaders it has grown comfortable with are losing power. Since 1949, Taiwan has been ruled by the Kuomintang, a party mostly made up of former mainlanders committed to reunification with China. But under Lee Teng-hui, a native of Taiwan, the KMT has tried to widen its base by bringing more local Taiwanese into its ranks. Although Lee still calls for reunification, Beijing regards him as a closet independence advocate. To Beijing's dismay, Lee has lobbied for high-profile ties with the U.S. and a bigger role in international organizations.

But Beijing's confrontation with Lee has only enhanced his popularity, and he is likely to emerge the winner in the presidential elections. Chances are, he will be pushed to take increasingly independent positions by the pro-independence Democratic Progressive Party, which has steadily gained strength since the abolition of martial law in 1987. Beijing favors the New Party, a staunchly pro-unification group dominated by former mainlanders who recently walked out of the KMT to protest Lee's policies. But the New Party represents only a small minority of the Taiwanese.

The likelihood of continued tensions has alarmed Taiwanese business leaders, who are slowing their investments in China. Meanwhile, "American multinationals are now thinking twice about whether investments in Taiwan will hurt their prospects in China," says a U.S. business executive in Hong Kong.

Despite the friction, no one is writing off Greater China. Optimists predict that once Governor Chris Patten and the British depart from Hong Kong in mid-1997, Beijing could work out its problems there fairly easily. That would be a powerful incentive for the Taiwanese to warm things up with Beijing.

But there are a lot of hurdles to overcome first. President Lee is going to have to be careful not to cross Beijing's independence red line as he pushes for more recognition. And Beijing will have to wake up to the fact that gunboat diplomacy is unlikely to work in late-20th-century Asia. Unless all three Chinas learn to finesse political differences, the vision of a Greater China could be dashed.EDITED BY STANLEY REED By Joyce Barnathan in Hong Kong and John Winzenburg in Taipei


Hollywood Goes YouTube
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus