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A Promising Step In China

With a recent exchange of telegrams, the heads of state in China and Taiwan communicated directly with one another for the first time in 60 years. Those may well prove to be the most important telegrams of the 21st Century.

Chinese President Hu Jintao wrote to congratulate Ma Ying-jeou of Taiwan on his election as chairman of Taiwan’s governing Kuomintang Party. While Hu addressed Ma solely in his capacity as chairman-elect, Ma also holds another title—President of Taiwan—making the gesture a historic event.

The two governments have not had direct diplomatic relations since the Communists took control of Beijing in 1949. The Kuomintang-led Nationalist government retreated to the island of Formosa, now known as Taiwan, and established its rival capital in Taipei. Ever since, each has asserted that it is the legitimate government of all of China.

While relations across the strait remain tense, Ma has spent his first 14 months as Taiwan’s leader working to develop friendlier ties with China. Direct flights now go from the mainland to the island. The two nations have also forged closer trade relations. According to a June report from China’s state-run Xinhua News Agency, Taiwan is even allowing Chinese investors to take stakes in local companies.

The content of the recent messages was conciliatory, with both sides speaking broadly of peace. Ma wrote, “We should continue efforts to consolidate peace in the Taiwan Strait and rebuild regional stability.” Hu, who heads China’s Communist Party in addition to its government, expressed his hope that “both our parties can continue to promote peaceful development in cross-strait relations, and help bolster mutual trust between the two sides in political affairs.”

While a meeting between the two nations’ presidents seems far off—because diplomatic protocol for such a meeting would require China to acknowledge Taiwan’s leader as the head of another national government—a meeting between the leaders of China’s Communist party and Taiwan’s Kuomintang party might be a possibility. The terms of address would be different, but the same two people would be in the room.

In their telegrams, both presidents specified that they were speaking as party leaders, not heads of state. Ma addressed Hu as the Communist Party's general secretary and Hu used the simple, “Mr. Ma.”

So will Mr. Hu meet Mr. Ma? While the Chinese media suggested that a meeting might be on the horizon, Ma said he is not currently considering the possibility because of his people’s ambivalence on the matter.

Even without a meeting in the near future, reduced hostility between Beijing and Taipei is good news for everyone. The dispute between China and Taiwan is just about the only issue that could realistically lead to armed conflict between China and the United States. Even without violence, disruption of one of the globe’s largest trading relationships, as well as diplomatic exchanges between two leading powers, would make the world a less prosperous and more dangerous place.

A best-case outcome would be the eventual peaceful and voluntary reunification of the two Chinese governments. Hong Kong, which was reincorporated into China in 1997, stands as a hopeful example. Since reunification, there have been limits on the city’s self-government and a certain degree of self-censorship, but there is still considerably more freedom in Hong Kong than in the rest of China.

Taiwan’s residents enjoy democratic freedoms, including freedom of expression, that mainland citizens can only silently admire. Reunification will entail a certain amount of risk for both sides. But the upside of a peaceful end to the two-China syndrome would be enormous.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us,” and Chapter 4, “The Family Business.” Larry was also among the authors of the firm’s book The High Achiever’s Guide To Wealth.

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