After President Tsai’s inauguration, Beijing continued to press her to accept the 1992 Consensus on one China. When China blocked ICAO from inviting Taipei in September, Tsai reacted sharply. In her “Double Ten” remarks, she reaffirmed her cross-strait policy and said she would neither give in to pressure nor return to past confrontational actions. In October, CCP General Secretary Xi Jinping made remarks implying Beijing’s understanding that Tsai would not endorse one China. The election of Donald Trump created in Taipei both hope of friendship from Republicans and concern Taipei could become a pawn in Trump’s bargaining with China. Trump’s tweets about his telephone conversation with Tsai and comments about one China and trade have sparked intense speculation and uncertainty about their implications for cross-strait and US relations with Taiwan and China.

Continued pressure for one China

Since giving President Tsai Ing-wen an “incomplete” grade on her inaugural address, Beijing has continued to press her to complete the process by accepting the 1992 Consensus concerning one China. In early September, Taiwan Affairs Office (TAO) Minister Zhang Zhijun reiterated that the institutional dialogue between the Association for Relations across the Taiwan Strait (ARATS) and the Straits Exchange Foundation (SEF) could only be resumed if the 1992 Consensus was accepted. When the new SEF Chairman Tien Hung-mao assumed office and sent a message to his ARATS counterpart urging dialogue, the TAO reiterated Beijing’s message. And ARATS chairman Chen Deming reiterated it again later in September.

Beijing took a number of actions to underline the message. In early September, the annual Cross-strait Information Industry Conference, which had included official participation in previous years, was canceled at the last minute when Beijing banned Taiwan officials from coming to Harbin. Contact with Taiwan officials is not permitted absent the 1992 Consensus. When SEF organized its mid-Autumn Festival reception for Taishang business leaders, the heads of the main Taiwan Invested Enterprise (TIE) Associations on the mainland, were notably absent, undoubtedly at Beijing’s urging. During the fall and into September, the number of mainland tourists visiting Taiwan continued to decline, provoking demonstrations by tour operators in Taiwan.

Beijing’s most consequential action was to block the International Civil Aviation Organization (ICAO) from inviting Taipei to the ICAO Assembly meeting in Montreal. Earlier in the fall, the Mainland Affairs Council (MAC) had surprised observers by proposing consultations with the TAO on Taipei’s participation. Predictably the TAO had responded that consultations would only be possible if the 1992 Consensus was accepted. Nevertheless, Foreign Minister (FM) David Lee held out hope until the last moment for an invitation. When ICAO informed Taipei on Sept. 23 that there would be no invitation, it provoked a sharp reaction from many sectors in Taiwan, with the exception of the opposition Kuomintang (KMT), which blamed Tsai for the outcome. President Tsai expressed her strong regret and disappointment. The TAO compounded the resentment in Taiwan by asserting that Taipei could have access to ICAO data through Beijing and warning that Tsai should address the 1992 consensus issue in her remarks planned for “Double Ten” Day (October 10, which is the National Day of the Republic of China).

The next day, Tsai responded by inserting pointed language in a message issued on the 30^th Anniversary of the Democratic Progressive Party (DPP). Tsai said “we must resist Chinese pressure, strengthen ties with other countries and reduce our dependence on China.” Then, Tsai gave a more detailed response in her Double Ten Day message, where she reiterated the key portions of her inaugural statement, without change. She then said firmly, including to Beijing, “Our pledges will not change, and our goodwill will not change. But we will not bow to pressure, and we will of course not revert to the old path of confrontation.” The TAO responded saying that the way for the leader of Taiwan to show goodwill would be to accept the 1992 Consensus and adding that there is no force that can resist reunification and national rejuvenation.

Beijing becomes realistic about Tsai

It seems however, that Tsai’s statements may have finally led Beijing to conclude that she is not going to accept their demands, at least in the short term. Less than two weeks later, Chinese Communist Party General Secretary Xi Jinping met KMT Chairwoman Hung Hsiu-chu in Beijing (see KMT below), using the occasion to make his first remarks on Taiwan policy since Tsai’s inauguration. Xi began by insisting that the 1992 consensus on one China is the essential political foundation for cross-strait relations. However, in contrast to similar remarks made during the campaign, he made no threats of dangerous consequences if one China is not accepted. When the official media reported Xi’s remarks, they focused on his second point, that Beijing would resolutely oppose any form of Taiwan independence activity, stating that China had the “determination, confidence and capability” to contain Taiwan independence. An official who participated in the talks added that Xi had said that if Beijing did not block independence, the CCP would be overthrown by the people. This seemed to reflect a change of focus from pressing Tsai on the 1992 consensus to deterring independence. The remainder of Xi’s remarks focused on what Beijing would continue to do to promote economic and cultural “integration” and to benefit the Taiwanese people.

On Nov. 30, Zhou Zhihuai, president of the Taiwan Studies Institute under the Chinese Academy of Social Sciences (CASS) and a person close to leadership thinking on cross-strait issues, made remarks at a Taiwan policy conference. He said Beijing could be open to a new formula on one China. As the time was not now ripe for such a formula, Zhou suggested that cross-strait track-2 meetings could discuss alternative formulas over the coming two to three years. Two days later, TAO Minister Zhang emphasized that any new consensus would have to reflect Taiwan and the mainland belonging to one country.

In the context of these statements, Beijing has also conducted a variety of united front programs targeting Taiwan. On Nov. 11, Xi staged a major ceremony in the Great Hall of the People, with six of the seven Politbureau Standing Committee (PBSC) members attending, to celebrate the 150^th anniversary of SunYat-sen’s birth. The theme was that the Party had assumed Sun’s role as the promoter of a strong unified China. Xi also pledged that China would never permit any person or any party to ever split the country again. The presence of 23 retired ROC military officers in the audience listening to Xi’s address provoked criticism and calls for investigation in Taipei. A month later, the CCP held a ceremony on the 80^th anniversary of the Xian Incident to highlight earlier CCP-KMT cooperation against foreign enemies. In late December, the KMT and CCP held a forum in Beijing and agreed on a program of cooperation. In addition, numerous cross-strait meetings have been staged to bring people from various sectors in Taiwan to China. And, Beijing has conducted high-profile exchanges with the eight municipalities in Taiwan that are governed by the KMT.

It appears that around that time Beijing began to adopt additional tactics to generate greater domestic pressure on Tsai and to deter independence. In early December, TAO Minister Zhang met Taiwanese investors, urging them to support one China and warning that those who support independence will not be allowed to get rich in China. This revived a theme occasionally used in the Chen Shui-bian era. Shortly thereafter, the Taiwanese firm Hai Ba Wang published a letter in a Taipei newspaper pledging its support for one China. Hai Ba Wang had been seen on the mainland as close to Tsai and was recently targeted for selling contaminated foods. Commenting on the case, the TAO spokesman reiterated Beijing’s support for Taiwanese business but said that the few that support independence would not be allowed to profit in China. The Taiwan media saw this as a sign of an effort to energize Taiwan businesses against Tsai. Shortly before this, TSMC Chairman Morris Chang had declined the invitation to be a policy advisor for President Tsai, perhaps sensing that becoming an advisor was not in the company’s best interest in current circumstances.

On Nov. 25, six PLA aircraft conducted drills east of Taiwan and in the process circumnavigated Taiwan. Although PLA aircraft had flown out beyond the first island chain before, this was the first time that they had circumnavigated Taiwan. This threatening action provoked widespread concern in the Taiwan press. The pro-Beijing China Times editorialized that this flight showed the folly of relying on the US and Japan for support. Was this a display of one capability Beijing possesses to deter independence? On Dec. 10, another 10 PLA aircraft conducted a similar circumnavigation drill around Taiwan. On Dec. 25, China’s aircraft carrier Liaoning, accompanied by five escort ships, sailed through the Miyako Strait into the western Pacific for the first time. The Liaoning then circumnavigated Taiwan passing through the Bashi Channel south of Taiwan heading for the South China Sea. While these actions were targeted at Taiwan, they also responded to domestic criticism that Beijing is not being tough enough on Taipei.

On Dec. 20, Sao Tome and Principe announced that it was breaking diplomatic relations with Taipei. The following day, the presidential office criticized Beijing for manipulating its one China principle and taking advantage of Sao Tome’s financial difficulties, actions that harmed cross-strait relations. The Foreign Ministry in Beijing welcomed Sao Tome’s return to supporting the one China principle, but initially said nothing about establishing relations. However, six days later, Beijing established diplomatic relations with Sao Tome and Principe. The speed with which Beijing moved indicates that it likely had a hand in encouraging Sao Tome to break with Taipei. This breaking of the “diplomatic truce” both indicates the costs of Tsai not accepting the 1992 Consensus and sends a warning that working with the Trump administration to upgrade US-Taiwan relations would entail serious costs for Taiwan. Since Trump’s statements linking his phone conversation with Tsai to China issues, many of China’s actions seem designed to convey messages in both a cross-strait and US-China context (see below).

Managing Cross-strait developments

Against the backdrop of these actions on core policy differences, the two sides have had to manage current developments. Tsai has taken some steps to show good will. In October, Tsai decided that PRC students would be included in Taiwan’s national health insurance scheme. In December, the Legislative Yuan (LY) adopted amendments to the Nationality Act that will ease naturalization for PRC and foreign spouses. Both of these actions at least partially addressed longstanding concerns. When the Referendum Law was being revised in December, the Executive Yuan (EY) intervened to oppose provisions concerning referenda on sovereignty issues and on cross-strait agreements that would have all but prevented certain future negotiations. In December, Tsai also opened an exhibit concerning Taiping Island and reaffirmed Taiwan’s sovereign claims in the South China Sea.

The two sides have also continued to handle some issues in a pragmatic fashion. In September, they arranged an exchange of criminals through Matsu under the 1990 Kinmen Red Cross Agreement. Despite some irritation on both sides, President Tsai’s chosen envoy to the APEC Economic Leaders Meeting, James Soong, was able to attend the meeting without incident and even had a brief informal conversation with Xi Jinping. When an uncle of PRC first lady Peng Liyuan died in Chiayi, arrangements were made smoothly for Madame Peng’s brother to attend the funeral. In December, aviation authorities worked out the additional cross-strait flights needed for the 2017 Chinese New Year. At Beijing’s insistence, the civil aviation officials made these arrangements by phone and fax without actually meeting.

Other developments have exacerbated cross-strait frictions. Beijing has continued to pressure foreign governments to deport Taiwanese citizens arrested for telephone fraud to China rather than to Taiwan. Armenia, Indonesia, Cambodia, and Malaysia are among those that have deported Taiwanese to China. On Nov. 23, Hong Kong customs seized a cargo of Singapore military equipment, including nine armored personnel carriers, reportedly based on information provided by Beijing. The equipment was being shipped back to Singapore after exercises the Singapore military has conducted in Taiwan, despite PRC objections, regularly for 40 years. The action seemed aimed at both Singapore and Taiwan, though just what Beijing hopes to accomplish remains unclear.

KMT adrift: Hung visits Beijing

The KMT under Chairperson Hung Hsiu-chu continued to emphasize a strong conciliatory approach to China, and to seek to fill the void left by the suspension of government-to-government contact. On Sept. 4, the party’s national congress ratified changes to its policy platform. One calls for the party to pursue a peace agreement with China. Another calls for enhancement of the 1992 Consensus on the basis of the ROC Constitution. The new wording omits the normal formulation of “one China, respective interpretations” in which Taipei and Beijing may interpret “one China” as they wish. Many in the KMT, both Taiwanese and mainlanders, fear that Hung is attempting to push the party toward advocating “one China, same interpretation” as she did when she was a presidential candidate in 2015.

Though Hung denies that the original formulation has been replaced, she continues to defend “same interpretation” as an important step in reconciliation with China, as she seeks to present to voters a distinct vision for cross-strait relations. Wu Den-yih, Ma Ying-jeou’s former vice president and a possible challenger to Hung for the KMT chairmanship in May 2017, accused Hung of being out of touch with the party; there is also concern that Hung’s push toward eventual unification appeals to fewer and fewer voters.

The debate intensified in October, when the party announced that Chairwoman Hung would travel to China for the 11^th KMT-CCP forum in early November. The KMT’s legislative caucus in particular called on Hung to maintain and reiterate “one China, respective interpretations” while in China. KMT legislators reported that Hung told them in a meeting on Oct. 17 that she would not discuss “same interpretation” in China, though Hung said she had not made any promises. Ma Ying-jeou joined the fray in a private meeting on Oct. 24, reiterating the importance of “respective interpretations,” to which Hung reportedly criticized him for neglecting “peaceful unification.”

Hung left for China on Oct. 30, and the next day she visited Sun Yat-sen’s mausoleum in Nanjing to mark the 150^th anniversary of his birth. On Nov. 1 in Beijing, Hung met [PHOTO] Xi Jinping for one hour in the Great Hall of the People. As noted above, Xi’s short opening statement was not threatening. In her response, Hung unveiled a new formulation for the 1992 Consensus, saying the two sides should “strive for the commonalities of the one China principle while preserving the differences of meaning within it” (求一中原則之同, 存一中涵義之異). She also told Xi that the KMT had passed a “peace platform” in order to oppose the DPP’s “independence platform,” and said the party wants to deepen the 1992 Consensus to protect against the threat of instability from Taiwan independence advocates.

Xi Jinping made a six-point statement in his closing remarks, noted above. In the point on the 1992 Consensus, he notably said that the CCP and KMT could begin discussing a peace agreement. The forum itself resulted in more than 40 exchange programs to take place in 2017, focusing on business, sports, entertainment, education, and youth. Both Hung Hsiu-chu and Zhang Zhijun, in his opening remarks at the forum, focused on the importance of young people in advancing cross-strait relations.

While it seeks inroads with Beijing and Taiwan’s voters, the KMT is struggling with the effects of the Legislative Yuan’s passage in July of the Act Governing the Handling of Ill-gotten Properties by Political Parties and their Affiliate Organizations. Implementation of the act has frozen many of the KMT’s assets, forcing it to assess fees and to seek contributions and loans to cover payroll, pensions, and operating expenses. On Nov. 7 the party announced that in January it will cut paid national staff from 743 to 310, a reduction of 58 percent; headquarters staff from 134 to 80, 40 percent; and local chapter staff from 609 to 230, a 62 percent drop.

Trump-Tsai phone call

Donald Trump’s surprise election as the next US president promoted speculation and hope in Taipei that a Taiwan-friendly Republican administration would strengthen US-Taiwan ties. President Tsai acknowledged the Republican party’s traditional support for Taiwan, citing the party platform’s “unprecedented” affirmation of Ronald Reagan’s “Six Assurances” to Taiwan. There were also fears that Trump’s criticism of US alliance ties would increase Beijing’s regional influence to Taiwan’s detriment. And, there was dismay that Trump’s decision to withdraw the US from the Trans-Pacific Partnership (TPP) was a serious setback to Taipei’s need to participate in regional trade liberalization.

On the morning of Dec. 2 in New York, President-elect Trump spoke with Tsai Ing-wen by telephone for a little over 10 minutes. [PHOTO] A statement released by President Tsai’s office said that she congratulated Trump on his election victory, expressed hopes for enhanced interaction and a closer relationship, and told Trump that she hopes for continued US support for Taiwan’s international participation. The Trump team said in a statement that the president-elect “congratulated President Tsai on becoming President of Taiwan.”

The call was a surprise, and the initial reaction in Taipei was very positive. This first call between a US president or president-elect and his counterpart in Taipei since at least 1979 was seen as a breakthrough. Political figures from KMT Chairperson Hung Hsiu-chu to former President Lee Teng-hui all welcomed the call. However, as soon as Trump’s tweets began to touch on “one China,” commentators began to mention the risks the call might entail.

Initially, China’s official reaction was muted, and it blamed the breach on Tsai Ing-wen rather than Trump. Foreign Minister Wang Yi characterized it as a “little trick” by Taiwan’s leader, taking the focus off US-China relations.

At that time, President Tsai was making plans to visit allies in Central America in January; there was speculation in Taipei that Tsai might transit New York and meet Trump. The Foreign Ministry in Beijing urged the US not to allow Tsai to transit the country. Showing a new note of caution, President Tsai said Dec. 6 that her conversation had been a “courtesy call” that did not change policy and that she recognized the importance of maintaining stability. On Dec. 8, Tsai went further telling a visiting US delegation that she places “equal weight” on US-Taiwan and cross-strait relations. Later in December, Taipei announced Tsai would transit Houston and San Francisco, not New York.

Shortly after the call, on Dec. 6, Republican operative Stephen Yates visited Taipei, where he was invited to dinner by President Tsai. The press reported that Yates had discussed possible steps a Trump administration might take to strengthen US-Taiwan relations. Soon thereafter, Joseph Wu, the secretary general of Tsai’s National Security Council, visited Washington for consultations. Wu went on to the Trump Tower in New York to establish contacts with the Trump transition team, including National Security Advisor designate Michael Flynn. At about the same time, PRC State Councilor Yang Jiechi also visited Trump’s transition team.

Trump ups the ante

On Dec. 11, Trump explicitly linked Taiwan to his policy toward China. Speaking on Fox News, he said, “I don’t know why we have to be bound by a One China policy unless we make a deal with China having to do with other things, including trade”; he also cited the South China Sea and North Korea as challenges in which leveraging the US-Taiwan relationship may be helpful.

Taipei was suddenly less optimistic. Presidential spokesman Alex Huang declined to comment on Trump’s statement, and KMT Vice Chairman Steve Chan warned that the Tsai administration must not “lose its head over perceived opportunities” and risk dragging Taiwan into a US-China confrontation. The Taipei press was filled with commentaries on the danger of Taiwan becoming a pawn in Trump’s bargaining with China.

China’s response was sharper than the previous week, and addressed Trump directly rather than blaming Tsai for the call. The Global Times warned that US support for Taiwan independence could cause Beijing to offer military assistance to US foes, and predicted “Taiwan authorities may regret being a pawn of Trump and his radical policies.”

Hong Kong

Various actors from Taiwan, including the government, took vocal interest in Hong Kong’s autonomy under “one country, two systems.” The interest was prompted by denials of visas for several Taiwan lawmakers trying to visit Hong Kong for contacts with “localist” members of Hong Kong’s Legislative Council (LegCo). Two of them, Sixtus Baggio Leung and Yau Wai-ching, were forbidden from taking their seats on Oct. 19, after which the MAC urged Hong Kong and China to respect the will of the people and the results of Hong Kong’s Sept. 4 elections, and pledged to observe Hong Kong’s implementation of “one country, two systems.” MAC Minister Katharine Chang told reporters that the episode illustrated the infeasibility of the “one country, two systems” model. Leung and Yau visited Taipei later that week for a seminar at National Taiwan University where they called for Hong Kong to be “insulated” from China; an activist from Hong Kong at the same seminar called for Hong Kong independence. In a strong reaction, the TAO alleged that independence elements in Taiwan and Hong Kong were colluding in an attempt to split the country, and accused Taiwan’s government of “intervening in Hong Kong’s implementation of ‘one country, two systems.’”

On Nov. 6, the PRC’s National People’s Congress released an interpretation of Hong Kong’s Basic Law noting that by making changes in their swearing-in oaths, Leung and Yau had not met conditions necessary for taking their seats, and that they could not re-take the oaths. Shortly afterward the Hong Kong High Court formally disqualified them from serving as LegCo members. Taiwan’s Liberty Times published a “draft” letter from Yau to Tsai Ing-wen on Nov. 22, which Yau had apparently not wanted published, casting doubt on the legitimacy of China’s sovereignty over Hong Kong’s New Territories. An appeal in the Leung and Yau case was denied in Hong Kong on Nov. 24. The DPP has expressed support for Hong Kong’s freedom and democracy, and in late December the minority New Power Party invited three other localist LegCo members and the activist Joshua Wong to speak in a seminar in Taipei, prompting another strong statement from the TAO.

International Participation

China suppression Taiwan’s participation in international organizations seemed to intensify, highlighted by the exclusion from ICAO. In September, Taiwan media reported that two officials had been barred from attending a meeting of the UN Food and Agriculture Organization’s (FAO) Committee on Fisheries in Italy in July; Taiwan officials had participated in this meeting as experts since 2003. In October, Taiwan’s government applied for observer status at Interpol’s annual meeting, to be held in Indonesia on Nov. 7-11, for the first time since it was forced to withdraw from the organization in 1984. On Nov. 5, Taipei announced that its application was not accepted. Taiwan did have modest success at the UN Framework Convention on Climate Change (UNFCCC) COP22 in Morocco on Nov. 7-18. While it could not participate in the conference itself and only lower-ranking officials were permitted to attend, Taiwan’s Environmental Protection Administration and other organizations interacted with representatives from 35 countries and participated in sideline activities. On Nov. 11, at a meeting of UN-affiliated NGOs in New York, the leader of a Taiwan nongovernmental organization on rare diseases was told by the conference organizer at the last minute that, due to objections from China, he could not deliver a speech. The MAC protested that such obstruction is not conducive to cross-strait relations. In late November, for the first time since October 2008, the Foreign Ministry updated a document listing specific instances of China’s suppression of Taiwan’s international participation.

The Tsai government continued its efforts to enhance relations with South and Southeast Asian countries, focusing on people-to-people interaction. President Tsai spoke at the first track-2 Taiwan-ASEAN Dialogue in Taipei on Nov. 15, which included 200 current and former legislators, officials, and scholars, and said that the New Southbound Policy has entered its operational phase. Ma Ying-jeou made his first post-presidency foreign trip later that week, calling for closer Taiwan-ASEAN relations at the World Chinese Economic Summit in Malaysia on Nov. 17. Conference organizers made no mention of Ma’s former title, for which Ma blamed the Chinese Embassy in Malaysia for the disrespect. President Tsai’s office also complained about the impolite treatment.

Looking ahead

President-elect Trump’s actions indicate that the Trump administration’s unpredictable and evolving approaches toward China and Taiwan will be the most important influences on cross-trait relations in the months ahead. As a middle power caught between two great powers, President Tsai will face a major challenge in trying to preserve Taiwan’s interests.

Trump’s Cabinet appointments lack significant experience in Asia. The transition has reflected a blend of people interested in improving US-Taiwan relations and others, particularly Trump, more focused on Taiwan as a factor in US-China relations. Therefore, the appointments to the key Asia policy positions at the National Security Council, State, and Defense will be important indicators of future policy, though it remains to be seen to what extent those with knowledge and expertise will be able to influence the president.