In the age of the global village, when the world is being tied closer and closer together, the ROC has come under constant pressure from the PRC, as the two sides engage in a cross-strait diplomatic wrestling match. In the realm of foreign relations, things are getting tougher and tougher for Taiwan. Just last year, the PRC, which has declared a goal of "zero recognition for the ROC," pressured four nations formerly friendly to the ROC to switch recognition.

Taiwan has responded by focusing its energies on "economic diplomacy." Last year the Marshall Islands and this year Macedonia have established relations with the ROC. What appealed to them about the ROC was the special "Taiwan experience," which has become the nation's greatest strength in this diplomatic war. Mainland China, on the other hand, has extensive foreign aid funds to call upon in waging its diplomacy, and has used them to undermine the ROC's relations with its allies.

Just what is the current situation of ROC diplomacy? What difficulties and challenges are we facing? How should we look to expand and consolidate our formal diplomatic ties? And are there areas in which ROC foreign policy should be revised?

On April 30, Foreign Minister Jason Hu led a delegation for two days to the Marshall Islands, which established formal diplomatic relations with the ROC last year. This 110-person delegation was rather unusual: apart from government officials, legislators and an accompanying media entourage, it also included executives of corporations and charitable organizations. When Jason Hu said, "I believe something will happen!" at a Marshall Islands' Independence Day celebration, he spoke for many people from various walks of life who hoped that diplomatic and economic relations between the two nations would get off to a good start.

Tit for tat

The Marshall Islands Journal put the headline "Tit for Tat" over its article announcing the ROC's delegation's arrival. The article noted that the ROC was under diplomatic pressure from the PRC, but that in the cross-strait foreign relations war both sides had enjoyed gains and suffered losses. Whereas the ROC had established relations with the Marshall Islands, last year Tonga, another Pacific Island nation, had switched recognition from the ROC to mainland China. The reasons these nations changed recognition was clear: the mainland had offered much greater economic assistance to Tonga, whereas the Marshall Islands wanted to learn from the "Taiwan experience" with its free economy and many small and medium-sized firms.

Consolidating and expanding the ROC's formal diplomatic ties is a focal point of current ROC foreign policy. In recent years, all the countries that recognize the ROC have been small and medium-sized developing nations. Many of these nations receive long-term foreign aid, in the form of both technical missions and material assistance. This has resulted in frequent criticism about "checkbook diplomacy." Since the ROC is an international trading powerhouse with excellent de facto relations with many nations, some people have even wondered why it is necessary to pursue formal diplomatic relations at all.

Liu Pi-jung, a professor of political science at Soochow University, points out that when nations formally recognize the ROC, it serves to highlight that the ROC is indeed a member of the community of nations, to increase citizens' confidence and to foster support for our efforts to join international organizations-all the while proving that we are indeed an independent sovereign state. Thus, under the circumstances, obtaining recognition is very important. Lin Cheng-yi, head of the Academia Sinica's Institute of European and American Studies, notes that if the ROC could increase the number of nations with formal ties from 28 to 40 or more, it would aid our diplomatic efforts to obtain practical, tangible benefits and also strengthen our international status. But at the same time such growth might upset mainland China even more, so that the PRC might try to put even more pressure on us in the international community. It is also unclear if we could come up with the additional foreign assistance that would be needed.

Formal relations with 40-plus nations

"Currently, with the ups and downs of cross-strait competition, we have been holding steady in a range of 25-28 nations," says Lin Cheng-yi. "These figures don't represent much of a difference, but if the total dropped to single digits, the ROC's status as an independent nation might be shaken. The 'quantitative change' might turn into 'qualitative change,' and Taiwan would be in danger of turning into another Hong Kong." If the number of countries that recognize Taiwan is truly a measure of whether Taiwan can survive in the international community, then diplomatic recognition will naturally be a focus of cross-strait competition.

Take the case of the Macedonia, with which the ROC established ties this year. Mainland China did not hesitate to go to the extreme length of vetoing a resolution in the UN Security Council to extend the deployment of UN forces in Macedonia, which were installed to keep the war in Kosovo from spilling across the border. The PRC's aim was to force Macedonia to think twice about establishing relations with the ROC. Because removal of the forces would hurt the chances for peace in the Balkans, the incident became a concern of many nations, and a Reuter's wire service report said that official Macedonian television had reported that France was hoping that Macedonia would maintain only economic relations with the ROC and would rescind its decision to establish formal diplomatic relations.

There was protest within Macedonia also. Strongly manipulated by mainland China, the Macedonian president even publicly expressed opposition to his nation recognizing the ROC. This put a lot of pressure on the ruling party, which was led by the premier. But when the Macedonian ambassador arrived in Taipei at the end of April, he stated at a press conference that Macedonia hoped to benefit from Taiwan's economic development experience and saw excellent potential for long-term economic cooperation between the two nations.

International rights and obligations

The waves stirred up when the ROC established formal ties with the Marshall Islands and Macedonia are but one example of the ROC's and PRC's diplomatic wrangling. Yet they illustrate clearly the ROC's current situation in regard to its allies. The most feasible way for the ROC to maintain or expand the number of nations with which it has formal ties is to engage in an economic- and trade-based diplomacy that provides these nations with Taiwan's ample experience in economic development.

Two aspects of economic- and trade-based diplomacy-economic assistance, on the one hand, and trade and economic exchange, on the other-have been focuses of attention in recent years. It is about the former and the ROC's long-term massive expenditures on foreign assistance that people from various fields have voiced doubts.

Minister of Foreign Affairs Jason Hu argues that people have attacked this as "checkbook diplomacy" because they believe that these are essentially gifts for which the ROC will never receive anything in return. But they don't realize that it is common practice for developed nations to provide financial assistance to developing nations. What's more, he holds that people don't directly feel the benefits of diplomacy, which perhaps explains why they level this criticism. But now, after a year in which the Ministry of Foreign Affairs has been promoting its policies and explaining its aims through the media, people are becoming more accepting of providing foreign aid, and there are fewer criticisms about "checkbook diplomacy." Legislator Li Hsien-jen notes that all parties in the Legislative Yuan are aware of the difficult straits that the nation finds itself in diplomatically, and that a consensus has emerged not to cut foreign affairs expenditure. In fact, with the support of all the parties, the foreign affairs budget has been rising year after year.

Jason Hu points out that foreign aid expenditures by the ROC don't even amount to 0.1% of GNP, which is far lower than that of most of the world's developed nations. If the ROC is to fulfill its international responsibilities, that figure should rise. Yet with current funding limitations, Hu hopes to get private companies and organizations more deeply involved in providing foreign economic assistance. He has been pushing the idea of "foreign-affairs BOT." (BOT stands for Build-Operate-Transfer, a method of getting the private sector to take over the operation of public infrastructure projects.) For instance, last July when a tsunami devastated the South Pacific nation of Papua New Guinea, organizations such as the Buddha's Light International Association and the Buddhist Compassion Relief Tzu Chi Foundation came together under arrangements made by the Ministry of Foreign Affairs and contributed a total of more than US$400,000 for disaster relief. And when the president of Chad came to visit Taiwan last October, Minister Hu, apart from announcing that the ROC would increase support for the agricultural assistance teams that it sends to that African nation, also said that the ministry would encourage the private sector to invest in consumer industries in Chad and thus contribute experience and technology transfer.

Foreign-affairs BOT

Hsiao Mei-ching, head of international affairs for the Democratic Progressive Party, strongly supports the concept of "foreign-affairs BOT." In today's world, she says, foreign relations should be conducted by all citizens. It is time to dispense with the notion that the government should always take the lead. Let everyone participate, she says. Private sector participation, moreover, shouldn't just be limited to disaster relief and technology transfer. If the Ministry of Foreign Affairs can make ample use of the mobility and experience of Taiwanese companies in its foreign policy and guide them in lobbying and joining international NGOs and other organizations, then she is confident that the private sector can contribute even more to ROC foreign relations. She also points out that this foreign assistance shouldn't be restricted to countries with which we have formal ties. Exchange between citizens should be encouraged more, for foreign relations shouldn't only mean meetings by heads of state and other dignitaries.

Although ROC economic foreign policy has a lot of room for growth, the first steps have already borne fruit. For instance, last year when the ROC established relations with the Republic of the Marshall Islands, it relied on Taiwanese business folk to act as go-betweens. In April of this year, when a diplomatic delegation went to the Marshall Islands to negotiate investment in the fishing industry there, the RMI government offered tax incentives to Taiwan industry. When, on top of these, you consider the islands' other strong suits-their simple lifestyle, honest people and lack of crime-the two sides are both optimistic about the future, estimating that within five years Taiwanese investment there should surpass US$100 million. The Marshall Islands are located amid important Pacific Ocean fishing grounds. By combining ROC fishing technology with local fishing resources, it will be possible not only to expand the presence of Taiwan's deep-sea fishing industry but also to aid the development of local industry.

Granted that economic-based foreign relations have increased the number of nations that recognize the ROC, the question remains: Will these ties bear economic fruit? Liu Pi-jung notes that private industry is concerned about profit, not foreign policy. There are numerous international examples of government-directed overseas investment that has failed. Japan, for instance, was once trying to get its industry to invest in Eastern Europe, but because companies feared that the risks there were too great, very few were willing to follow the Ministry of International Trade and Industry's lead. To businesses, profit always comes first and foremost, and for them to be willing to invest, it requires more than just good intentions expressed by two nations in an agreement. Some objective conditions must by met regarding basic infrastructure, transportation, shipping, markets, taxes and so forth. For instance, in regard to the large investment projects that the ROC government has promoted for Central and South America, most companies have taken a wait-and-see attitude and still haven't invested much.

"Because of the war in Kosovo there is little willingness to invest in Macedonia yet," says Hsiao Mei-chin.

Flowers that dare to bloom in snow

If economic- and trade-based diplomacy is the proper way to go when the ROC has limited funds to spend on foreign assistance, how can these policies be executed to avoid problems and achieve the best results?

In recent years the ROC government has done several things to encourage investment in nations that recognize the ROC, such as providing economic incentives and signing "investment guarantees" and "double-taxation agreements." Yet Lin Cheng-yi argues that these measures have clearly been insufficient. Cooperation between government and industry requires long-term excellent communication and persuasion. When the private sector has doubts, then perhaps there's no choice but to have state or party firms take the lead. If they first help to establish a good investment climate, then private industry might be more willing to follow.

While the ROC has been working hard to advance relations with its allies, across the strait the PRC has announced that it is strengthening its economic and trade relations with nations in Africa and the Americas. According to a report by Xinhua, the official PRC news agency, the mainland's agency in charge of foreign aid is planning to organize powerful PRC exporters to go to countries in Africa and the Americas and set up plants. According to Xinhua's statistics, in the first half of last year, 395 mainland firms had obtained or were planning to obtain permits to set up plants in Africa. Total investment will reach nearly US$400 million.

On the mainland, state-run enterprises are leading the way in foreign investment, but the situation is quite different in Taiwan. The PRC government may be able to force large state firms to invest big sums, thus creating immediate results. But the many small- and medium-sized firms in Taiwan, with their development experience in a free market, clearly have greater flexibility and diversity, and thus provide a better match for the actual needs of developing countries.

In the face of a constant series of battles in this cross-strait diplomatic war, ROC scholars and public opinion have started to call for a "cessation of hostilities." Lin Cheng-yi points out that the PRC must understand that when foreign relations is a key for Taiwan's survival, then the ROC government will put a high priority on maintaining diplomatic ties with other nations. If the PRC continues to act as the ROC's diplomatic enemy, then the two sides will get entangled in a spiraling foreign-aid war that will not be in either side's best interest.

In his first report on ROC foreign relations to this session of the Legislative Yuan, Minister of Foreign Affairs Jason Hu used the apt metaphor "10,000 flowers daring to bloom in the snow" to describe the ROC's diplomatic predicament. He said the phrase was proposed by a colleague who anonymously gave him a painting entitled Plum Blossoms in Winter. The ROC's diplomatic winter is getting colder and colder. The Ministry of Foreign Affairs hopes that under its principle of "actively seeking friends everywhere," it can integrate private resources into its foreign affairs efforts. Will the private sector take up this challenge? Can the powers-that-be on each side of the strait seek a diplomatic thaw, so that both sides can win in the international community? These questions will test the collective wisdom of 21st-century Chinese.

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The Marshall Islands, with their blue sea and sky and palm-lined beaches, are an island nation, like Taiwan. The two countries should be able to enjoy a future of ever-strengthening ties.

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When ROC Minister of Foreign Affairs Jason Hu led a delegation to the Republic of the Marshall Islands at the end of April, RMI President Imata Kabua was a warm and gracious host.

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The seas around the Marshall Islands have abundant fishing resources. The photo shows members of the ROC delegation and Marshall Islands officials holding their catch: a marlin nearly as long as a man.

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Among the gifts that the ROC delegation brought to the Marshall Islands were three garbage trucks, each bearing the ROC and Marshall Islands flags, as well as 40 dumpsters. These have helped to clean up the island's environment.

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The sun sets over the ocean and turns the sky a glorious red. Transnational friendship will leave future generations with greater possibilities in life.

The seas around the Marshall Islands have abundant fishing resources. The photo shows members of the ROC delegation and Marshall Islands officials holding their catch: a marlin nearly as long as a man.

The Marshall Islands, With their blue sea and sky and palm-lined beaches, are an island nation, like Taiwan. The two countries should be able to enjoy a future of ever-strengthening ties.

Among the gifts that the ROC delegation brought to the Marshall Islands were three garbage trucks, each bearing the ROC and Marshall Islands flags, as well as 40 dumpsters. These have helped to clean up the island's environment.

The sun sets over the ocean and turns the sky a glorious red. Transnational friendship will leave future generations with greater possibilities in life.