Friday, Jul 28, 2017, 8:47 PM CST – China


Taiwan and AIIB

The Name Game

Taiwan’s failed bid to join the Beijing-led Asian Infrastructure Investment Bank illustrates the new reality Taipei will face in handling the cross-strait relationship

For much of March 2015, the China-led Asian Infrastructure Investment Bank (AIIB) occupied international headlines as it continued to attract unexpected applicants like the UK, Germany and other strategic allies of the US, who petitioned to join as founding members.

Of those rushing to join the AIIB, perhaps the most curious was Taiwan, which announced its intention to join the AIIB on the very last day before the March 30 deadline. But when the bank announced that it had approved 57 countries as prospective founding members, Taiwan appeared to be the only applicant who didn’t make the cut. In a statement, China’s Taiwan Affairs Office (TAO) said that Taiwan would be welcome to participate in the bank “under the appropriate name.”

Observers believe that with Beijing’s influence rising in the region, Taiwan will have fewer and fewer bargaining chips in its negotiations with Beijing in the process of integrating into the evolving regional architecture. 

‘Appropriate Name’

For decades, Taiwan’s international status, including the name it uses to join international organizations, has been the major sticking point between Taipei and Beijing.

Since the People’s Republic of China replaced the Republic of China at the United Nations in 1971, most countries, including the US and Japan, have maintained only unofficial ties with Taipei. While Taiwan continues to participate in various international organizations, such as the International Olympic Committee and APEC, it changes its name from the “Republic of China” to “Chinese Taipei.” In the Asian Development Bank, its membership name is “Taipei, China.”

In response to Beijing’s rejection of Taiwan’s bid to join the AIIB as a founding member, Taiwan’s governmental Mainland Affairs Council says it will re-apply to become a regular member of the bank, so long as Beijing “treats it with respect.” But Wang Jin-pyng, president of Taiwan’s Legislative Yuan, said that while he would approve the name “Chinese Taipei,” anything “less” was unacceptable. 

While the TAO has said that a way can be found for Taiwan to participate in the AIIB through “practical consultation,” many believe that Beijing may be adopting a “wait-and-see” approach, since it is widely believed that the Kuomintang (KMT), Taiwan’s ruling nationalist party, which supports improving ties with Beijing, may suffer a defeat in the 2016 general election.

Having defeated the KMT in a major local election in 2014, it is predicted that Tsai Ing-wen, leader of Taiwan’s opposition Democratic Progressive Party (DPP), well-known for its pro-independence position, will become Taiwan’s top leader in 2016, with her party possibly winning a majority in the legislature as well.

‘Status Quo’

Given the dominance of the cross-strait relationship in Taiwanese politics, Tsai Ing-wen has been under pressure in recent months from all sides to clarify her policy on the relationship.

A major focus is whether Tsai and the DPP, if elected, will recognize the “1992 Consensus,” a tacit understanding reached between the KMT and the Chinese government that both sides of the Taiwan Strait acknowledge that there is “one China,” though each side has its own interpretation of what that means.

In recent years, the 1992 Consensus has served as the political basis for improvement in economic ties between the mainland and Taiwan. But for years, the DPP has criticized it for bending to Beijing’s “One China” principle which, it has argued, undermines Taiwan’s “sovereignty.”

Beijing, for its part, has shown no sign that it will compromise on the 1992 consensus. At the annual National People’s Congress held in March 2015, Chinese President Xi Jinping declared that the 1992 Consensus remained the foundation of cross-strait relations, and warned that the relationship between Beijing and Taipei would return to a state of turbulence if this foundation were sabotaged.

So far, Tsai has refused to clarify her position on the 1992 Consensus. Instead, Tsai said the DPP will “maintain the status quo.” But, for many, Tsai’s “status quo” is too vague to be meaningful.

While it could be interpreted that Tsai will continue with the existing policies of the KMT, it could also mean that she will stick to the DPP’s long-standing stance outlined in the Resolution on Taiwan’s Future, a keynote DPP document issued in 1999 stating that Taiwan’s “status quo” is that the island is already “a sovereign and independent state.”

Tsai’s cautious position has led to criticism from both within and outside the DPP, as well as from Washington. On March 20, former managing director of the American Institute in Taiwan Barbara Schrage warned at a conference on US-Taiwan relations that Tsai should strive to find ways to narrow its differences with Beijing, or she may not gain the support of the US on her upcoming trip to Washington.

Schrage stressed that Tsai had failed to clarify Washington’s concern on her policy with Beijing during a 2011 trip to Washington, a major reason why the DPP lost the 2012 election.

In response, Tsai said on April 9 that by “maintaining the status quo,” she meant that relationship must remain peaceful and stable. But Tsai’s explanation immediately triggered a new volley of criticism. While pro-independence activists questioned how Tsai can make a difference, KMT supporters accused her of being “hypocritical” in her past attacks on the KMT’s policies which have forged the current status quo.


According to Lin Ting-hui, vice president of the Taiwan Brain Trust, a pro-independence think tank in Taiwan, Tsai’s new definition of “status quo” is merely designed to reassure Washington that the DPP will not seek confrontation with Beijing.

“The definition of the status quo in the Taiwan Strait can be defined by neither Taipei nor Beijing, but by Washington,” Lin said. “As China’s power cannot yet match that of the US, Beijing will have to accept Washington’s definition [of the status quo],” said Lin.

Lin’s confidence appeared to be backed up by an unexpected landing in Taiwan of two US Marine F/A-18 jets on April 1, which some interpreted as a message that Washington was prepared to defend its allies in the region in the event of conflict.

However, with Beijing’s regional influence on the rise, others question Tsai’s wisdom in ignoring Beijing when defining her Party’s policy on cross-strait ties.

According to Chu Yun-han, a professor of political science from the National Taiwan University, Taiwan’s bid to the AIIB, the first international organization Taiwan has aspired to join in the absence of the US, may turn out to be a watershed moment for the dynamics of the trilateral relationship between Beijing, Taipei and Washington.

“Taiwan’s [failed] bid to join the AIIB is now forcing Taiwanese society to wake up to a dire reality it has been trying so hard not to accept, which is that Taiwan’s participation in the international community is effectively at the discretion of Beijing, and its tolerance in the interpretation of its ‘One China’ principle,” said Chu in a commentary published on

Chu pointed out that in the past, disputes between Beijing and Taipei over Taiwan’s international status with various international organizations were often dealt with indirectly, allowing both sides room for interpretation. But as Beijing has begun launching initiatives to facilitate regional economic integration, Taiwan is now being forced to deal with the relevant issues directly with Beijing, leaving less room to maintain the argument that Taiwan is an independent country.

Chu warned that Taiwan’s handling of the “new reality” will have long-term implications for Taiwan’s position in the evolving regional architecture. Currently, besides the AIIB, Taipei is currently excluded from various major regional initiatives, including the ASEAN-led Regional Comprehensive Economic Partnership (RCEP) and the US-led Trans-Pacific Partnership (TPP). Beijing will also have the influence to determine Taipei’s position within the Free Trade Area of the Asia-Pacific (FTAAP), a trade framework promoted by Beijing in the APEC summit of 2014. Taiwan’s chance to benefit from the mainland’s “One Road, One Belt” initiative will also hinge on attitudes in Beijing.

In recent years, the KMT has been arguing that improved ties with Beijing are a necessity to prevent Taiwan from becoming isolated in the region, and has shown a willingness to make certain political compromises to do so. While the DPP is not opposed to further regional integration, it has claimed that it can be done without undermining the island’s “sovereignty.”

As it remains unlikely that Beijing will make any major compromises, the DPP, if elected, will have to make some uncomfortable – and possibly existential – choices regarding Taiwan’s future. 


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