Two governments in one China: a sign of flexibility?

l  A Tsinghua University (Beijing) Professor recently proposed the concept of “one country, two governments” as possibly a basis for cross-Strait political dialogue.

l  Though the concept was nothing new, it nevertheless demonstrated that there is probably a growing sense of urgency in Beijing to begin cross-Strait political talks and that there appears to be more flexibility in interpreting the “one China” principle.

l  Although some Taiwan scholars have welcomed the concept, the administration is not expected to respond to the proposal. President Ma Ying-jeou will......

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The ROC Constitution and Post-Election Cross-Strait Relations

l  President Ma Ying-jeou reiterated recently that the Republic of China (ROC) Constitution remains the basis upon which his administration formulates cross-Strait policies and manages China-Taiwan relations.

l  In the upcoming presidential campaign, we expect that Ma will continue to advocate cross-Strait socioeconomic engagement and abide by the principles of "no unification, no independence, and no use of force" as well as the "1992 consensus."

 

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When the Chinese Economy "Sneezes"

l  Based on recent statistics on China’s economy, the likelihood of a “hard landing” appears to be increasing. Some Taiwanese investors have, therefore, become wary of China's economic prospects, which resulted in the weak performance of Taiwanese stock prices in recent weeks.

l  In fact, with China’s troubling economic numbers, there is growing nervousness about China's short-term or mid-term economic performance. Despite the worrisome numbers, however, many research institutions still predict that China's economy will grow at a moderate pace this year.

l  At the same time, as China continues to stimulate its domestic spending and investment, many expect the Chinese economy to be less dependent on external trade and move toward a higher level of productivity. The increase of capital goods resulting from such strong business investment activity will, in turn, create more skilled jobs in China.

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The sale of Nan Shan Insurance

l  After two previously failed bids and months of speculation, the Taiwan unit of US insurance giant American International Group (AIG)—Nan Shan Life Insurance Company—has received a conditional approval for the transfer of 97.57 percent stake to its new buyer, Ruen Chen Investment Holding Company.

l  Ruen Chen, a joint venture of Ruentex Group (TaiEx 9945) and Pou Chen (TaiEx 9904) corporation, petitioned in February to buy the majority stake in Nan Shan for US$2.16 billion. It was not until mid-June that Taiwan's Financial Supervisory Commission (FSC) gave its conditional approval of the sale.

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Sovereignty vs. jurisdiction: an acceptable basis for cross-Strait political talks?

l  At a time when sovereignty-related issues have assumed increasing importance in cross-Strait relations, President Ma Ying-jeou stated recently that the two sides of Taiwan Strait “may not recognize the other’s sovereignty claims, but should not deny or repudiate each other's existence,” in order to facilitate continued cross-strait engagement and promote regional peace.

l  Though Beijing is likely to dismiss Ma’s remarks as “campaign talks,” Ma’s statements might have nevertheless revealed the position from which Taipei, if Ma is reelected, is prepared and ready to launch cross-Strait political discussions with Beijing.

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