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The meeting between the People’s Republic of China and the Republic of China of November 2015
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By Prof. Giancarlo Elia Valori

After the Wang-Koo Summit of 1993, held between the Association for Relations Across the Taiwan Straits (ARATS) - the Beijing company dealing with relations with the Republic of China (ROC) – and its Kuomintang counterpart, the Straits Exchange Foundation (SEF), as well as the subsequent meeting between the two political entities in Shanghai in 1998, on November 7, 2015 they both  met at the highest level. Even before, in 2008, the First Chien-Chiang Summit had been held.

Nevertheless we must never forget that in 1996, the Chinese People's Liberation Army had launched some ballistic missiles onto the territory of the Republic of China, during the presidential elections and pending the Third Taiwan Strait Crisis.

In terms of interstate relations, the meeting held in Singapore on November 7, 2015, between Xi Jinping and Ma Ying-jeou had already been prepared by the brief, albeit important, meeting between the two leaders in March 2015 for the funeral of the President of Singapore, Lee Kwan Yeuw.

Certainly, the administration of the city-State played a key role in the management of the preliminary negotiations for the meeting. However, sixty-six years have elapsed since the top leaders of the "two Chinas" met last time – 66 years after the Generalissimo Chiang Kai-shek’s retreat to Taiwan. The old "consensus" of 1992, the first result of the contacts between PRC and ROC, is now clearly over.

The text of 1992, on which both political entities had agreed, recognized the principle that "there is only one China," which both party-States intended to represent in its entirety. One is reminded of the old joke of Francis I against his brother Charles V, "I want what my brother wants." It was the Duchy of Milan. In line with this political principle – “there is only one China”, which China will never relinquish – the People’s Republic of China (PRC) proposed – and still proposes - economic cooperation and a sort of pan-Chinese common market which, however, led to riots in Taipei as early as 2008. Economic integration, heralding political integration, excludes the Republic of China from the Japanese area and prevents it from playing an autonomous role as natural bridge between coastal Asia and the North American West. This is exactly what the People’s Republic of China wants to avoid.

Nevertheless, the current President of the Republic of China, who is a member of the Democratic Progressive Party (DPP), the party which recognizes the People’s Republic of China "as a State", was the ideal partner to update and upgrade the relations between what we  wrongly keep on defining "the two Chinas". Hence the Chinese strategic area is clear.

First, the new opening of the Communist Party of China (CPP) to the Republic of China is designed to show that the People’s Republic of China has no expansionist aims in the Central and South Pacific region. This is a necessary signal: the People’s Republic of China is expanding its area of influence between the Spratly Islands and Japan, and it also plans to build artificial islands (the "Great Wall of Sand") to manage the strategic maritime axis between its coast and the center of the Pacific Ocean, namely the midpoint of the largest world ocean. This exit to the East from the strategic closure which has always characterized mainland China – and which, to the West, is epitomized by Xi Jinping’s proposal "one belt, one road" - is essential for the People’s Republic of China.

It is essential both from a strategic and a military viewpoint and, above all, for the autonomous management of the large trade, financial and demographic flows which will soon shift from the Eastern Chinese coast to the US Western coast. The People’s Republic of China wants to control – also militarily - all its trade routes, which can also be turned into defense lines. Befriend a distant state and strike a neighbouring one – this is one of the Thirty-Six Stratagems listed in the Chinese essay designed to illustrate a series of stratagems used in politics, war and civil interaction.

Moreover, the area of the Spratly Islands is disputed by China, Vietnam, the Philippines, the Republic of China and Malaysia.  We cannot certainly rule out that also this issue was discussed in the meeting held in Singapore.  The Spratly Islands have 10% of world oil reserves and vast areas rich in fish; they are the transit point for 80% of the energy resources heading for the People’s Republic of China. For the PRC, the Spratlys Islands are what the Strait of Malacca is for Western global commerce.  In fact, the People’s Republic of China intends to militarize them.

Secondly, today the policy of the People’s Republic of China is designed to better penetrate the US and EU geoeconomies, as well as to replace military expansion, threat or interference with trade and economic integration, which would make the ROC and PRC basically similar, regardless of history and political ideologies. The People’s Republic of China is using to its benefit the disorientation and standardization which are the correlated cultural and identity features of the universalization of trade.

The meeting between the PRC and the ROC is a sign also for the West: under no circumstances, the People’s Republic of China wants to generate military confrontation, friction and tensions in the areas it deems vital to its economic expansion and geopolitics. Hence if the Republic of China is integrated in this PRC project, the strategic link between the ROC and the United States is bound to weaken.

Therefore, the People’s Republic of China acquires a necessary maritime depth while Japan, which has recently built its foreign secret services from scratch, is strengthening at military level. One is reminded of another of the Thirty-Six Stratagems of the Chinese military art: make a sound in the east, then strike in the west.

Nevertheless, we must not forget that, with this meeting, the People’s Republic of China has facilitated the electoral activity for Ma Ying-jeou, who relies on the new relations with the PRC for his comeback in the upcoming presidential elections scheduled for January 16, 2016. However, if the candidate of the conservative PDP, Tsai Ing-wen, who is now largely favored, won the elections, the People’s Republic of China would face a ROC government much more sensitive to the protection of its autonomy, while not certainly denying the "primary" relationship with the People’s Republic of China.

The Singapore agreements are very interesting from the economic viewpoint. For some years the People’s Republic of China has been the first export market for the Republic of China and, in 2014, trade between the two Republics amounted to 174.5 billion US dollars.  The gradual lifting of tariff, trade and investment barriers between the ROC and the PRC, based on the Economic Cooperation Framework Agreement of 2010, continues apace. Bilateral tourism is worth 7 million tourists from the PRC and almost as many from the ROC traveling to Communist China.

If the rapprochement between the People’s Republic of China and the Republic of China continues peacefully, the PRC will militarily stabilize its Eastern Ocean and will not create tensions with the United States or Japan, just when it integrates the Kuomintang China and the other areas of primary interest into its geoeconomic space. The aim is to control the Pacific Ocean and the certainly peaceful PRC projection of power onto the Philippines and Southeast Asia. The PRC’s good faith is mainly proven by its relations with the Republic of China. 

Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, theHebrew University of Jerusalem and the Yeshiva University in New York.

He currently chairs "La Centrale Finanziaria Generale Spa", he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group and Khashoggi Holding’s advisor.

In 1992 he was appointed Officier de la Légion d'Honneur de la République Francaise, with this motivation: "A man who can see across borders to understand the world” and in 2002 he received the title of "Honorable" of the Académie des Sciences de l'Institut de France."

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