One policy for China: avoiding conflict with the mainland.

The United States' adherence to the "one China" principle has effectively maintained a stalemate between Taiwan and the People's Republic of China (PRC). Specifically, the United States has been able to deter a conflict between the PRC and Taiwan by accepting the "one China" principle. In essence, the United States has been opposing Taiwanese independence and dissuading Taiwan from making unilateral declarations while also deterring China from the use of force against Taiwan. Although our policy of dual restraint has, arguably, been fairly consistent from one presidential administration to another, numerous ambiguities remain that allow for multiple interpretations and that embolden the current Taiwanese leadership to push for formal independence. These ambiguities, coupled with other emerging trends, increasingly dilute the effectiveness of our policy toward the PRC and Taiwan.

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In view of changing dynamics between Beijing and Taipei, the United States must revisit its policy now in order to alleviate the growing risk of conflict. To establish a more effective policy toward China, the United States must resolve its existing policy ambiguities and develop an integrated policy toward China while at the same time driving a timeline or process for the reintegration of Taiwan and the PRC.

Addressing Ambiguities

Although US acknowledgement of the PRC's "one China" principle has served our national interests, ambiguities over the definition of sovereignty, the perceived requirement to defend other democracies, and the extent of our military obligations to defend Taiwan may increasingly threaten the stability of cross-strait relations. Domestic politics in Taiwan have also created tensions for the cross-straits situation as the Democratic Progressive Party (DPP) has asserted de facto independence and has pushed various referenda--most recently to join the United Nations under the name of Taiwan--that skirt the edge of de jure constitutional or sovereignty changes.

Statements by the US administration and congressional interpretations of elements of the Taiwan Relations Act add to the ambiguity of what exactly constitutes independence and sovereignty. The most accepted interpretation is that the United States was in the past mainly concerned with the process of cross-strait resolution, not necessarily the outcome. There seems to be a general but evolving consensus among US policymakers, however, that the PRC is the sole government of the "one China" and that the US "opposes" independence for Taiwan.

The idea of "opposing" Taiwanese independence is at the heart of the evolution of US policy toward Taiwan. This idea emphasizes a strive toward peaceful settlement but with a more narrowly defined outcome. Amid this debate, there is divergence on such issues as whether the US policy has shifted too far in support of the PRC, whether Taiwan may join international organizations that require sovereignty, whether Taiwanese leadership may make political visits to the United States, and, finally, whether the United States is obligated to defend Taiwan in a conflict provoked by Taiwanese actions. Each of these points should be clearly and unambiguously addressed to create an integrated policy that would better serve the interests of the United States.

It is fair to suggest that ambiguity has served a valuable role in opening the door to China and in executing the US policy of dual restraint. In the past, a certain amount of "constructive ambiguity" has been helpful in assuaging the various factions that exist in the US Congress as well as in Beijing and Taipei. Additionally, the ambiguities have allowed room for interpretations that have enabled diplomatic flexibility while fledgling relations strengthened over time. However, emerging and continuing trends necessitate the reexamination of the policy, and the time is ripe for the United States to update its policy with China.

Chances of Conflict

Enabling the peaceful development of China should be an obvious and significant priority for the United States, and a number of factors make a conflict between the United States and the PRC unlikely. These factors include a high volume of economic trade between the two nations, blossoming trade relations between the PRC and Taiwan, and a mutual understanding of the danger of military conflict between two nuclear powers. According to a 2007 task force report released by the Council on Foreign Relations, trade between the PRC and Taiwan has grown to US$65 billion per year and is matched by more than US$100 billion in cross-strait Taiwanese business opportunities on the mainland. For the most part, the PRC remains inward-looking to prepare for the 2008 Olympics to showcase China's development to the world and to maintain efforts to sustain its impressive economic growth, which averages nearly 10 percent a year. The evolving economic partnership between the United States and the PRC as well as Washington's enthusiasm for the "peaceful rise" of China, is matched by efforts to integrate China into existing world institutions and forums and thereby make the PRC a genuine stakeholder in international affairs.

At the same time, however, the possibility of a conflict between the United States and the PRC may be increasing for multiple reasons. These reasons include: debates arising from within Taiwanese presidential politics, recent demographic shifts in Taiwan, the substantial growth of the PRC's military spending that seriosuly increases the chance for miscalculation and mistrust, and finally, the continuing lack of a consistent, integrated, and comprehensive US policy toward Beijing.

Risk Factors

The upcoming elections in Taiwan pose a potential risk to the United States as Taiwanese President Chen Shui-bian pushes for a referendum that seeks to alter the status quo. President Chen has repeatedly threatened referenda in an attempt to maintain power for the DPP and has pushed Beijing's redlines, raising fears that some sort of PRC retaliatory response could ensue. The current dialogue about a popular vote in the 2008 elections to join the United Nations as the sovereign nation of Taiwan has produced concern in Beijing in spite of the unlikelihood that the DPP will gather the requisite number of votes to pass such a referendum. For Beijing, the vote is a significant threat in itself as an affront to its vision of territorial integrity. It is difficult to predict whether this move will result in diplomatic backlash.

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Elections create particularly perilous conditions, including the period of time immediately following the election and before the installation of the new president in Taiwan. In this interim, there is a fear that President Chen may use his remaining days in office to make declarations that are contrary to the status quo. Curiously, the 2008 Olympics may embolden Taipei to push for greater independence, since the PRC will be hesitant to act in a way that will damage its image to the outside world.

Similarly, the expanding military capabilities of the People's Liberation Army (PLA) and the People's Liberation Army Navy (PLAN) have increased the risk of possible conflict in the Taiwan Strait. Chinese defense spending, though difficult to measure due to the PRC's lack of transparency, is extraordinary. Estimates from the Office of the Secretary of Defense include an average defense budget growth of 11.8 percent per annum for the period 1996 to 2006. Earlier this year, the PRC announced an impressive 17.8 percent budget increase for its military forces. Estimates of PRC defense spending range from US$45 billion as reported by the PRC to US$125 billion if one includes "expenses for strategic forces, foreign acquisitions, military-related research and development, and China's paramilitary forces."

There is also little doubt that the PRC military forces are closing the quality gap between China and the United States. China's rapidly expanding capabilities, especially in cruise missiles, submarines, and Short Range Ballistic Missiles (SRBMs), have certainly led to speculations as to the future plans for such forces. In fact, the 2006 Quadrennial Defense Review from the US Department of Defense cited China as having the "potential to compete militarily with the United States and field disruptive military technologies that could over time offset traditional US military advantages absent US counter strategies." Recent anti-satellite tests in which the PRC destroyed an aging satellite are examples of the PRC's emerging capabilities that could threaten US abilitiy to prevail in a potential military conflict with China.

Despite the difference between capability and intent, the expanding presence of PRC forces increases the opportunity for a miscalculation that could result in military conflict. Additionally, although the PLAN is smaller in number than the US Navy, the proximity to China of any military conflict over Taiwan would limit, at least initially, the number of US forces available to respond. Finally, enhanced military capabilities would make the option of armed conflict credible for Beijing. Approval of a referendum in Taiwan may not require military action by the PRC, but the growing capabilities of the PLA and PLAN would give the Chinese leadership greater confidence to act militarily if it so chooses.