Transcript of an Interview
with President Chen Shui-bian
by Rebecca Blumenstein, China Bureau Chief,
and Jason Dean, Correspondent,
The Wall Street Journal
Q1. What was your reaction to last week's visit by Hu Jintao in the US? And more
broadly, the US and China are becoming more interdependent, especially
economically. Is there any risk that Taiwan will get squeezed out in the
process?
A: I would like to look at this issue from four angles. The first of these is
human rights. We can understand from the Wang Wenyi incident that the human
rights issue is of utmost importance. That a woman from China who has received
such a high education would openly protest against Chinese leader Hu Jintao in
front of the world media is a very serious matter. Its true significance is that
China's human rights record is indeed notorious and is among the worst in the
world. This incident involving Ms. Wang highlighted not only China's suppression
of Falun Gong followers and of the freedom of religion and belief, but also its
human rights record. During his meeting with Hu Jintao, President Bush
emphasized that, in addition to its lack of religious freedom, China also faces
problems in terms of freedom of speech, freedom of the press, and freedom of
association and assembly.
The second aspect I wish to talk about relates to the so-called "one-China"
issue. When announcing that the national anthem of the People's Republic of
China would be played, the US protocol officer mistakenly said the "Republic of
China" instead. I believe that this was more than just a slip of the tongue. It
was a result of this so-called "one-China" issue. Many people in the
international community are confused and cannot tell the difference between the
People's Republic of China and the Republic of China. That is why the US
protocol officer made such a blunder. As a matter of fact, the ROC is very often
mistaken for the PRC in the international community. It is difficult for the
international community to understand that the Republic of China means
democratic Taiwan, while the People's Republic of China means totalitarian
China.
For many decades, the previous Kuomintang government claimed internationally
that there was only one China. When both sides of the Taiwan Strait claimed that
there was only one China, it is no wonder that people were, and still are,
confused about which one truly represents China.
The third aspect is the Taiwan issue, which was high on Hu Jintao's agenda
during his visit to the United States. President Bush took the initiative to
bring up the Taiwan issue in his welcoming remarks during the military salute
ceremony. Because of its firm and consistent position, the US government did not
allow China to score on the Taiwan issue. Of course, President Bush made no
comments that would take Taiwan by surprise, and for that, we are very grateful
and appreciative.
We could clearly see the differences between how the United States and China
view the Taiwan issue, however. For China, the one-China principle means
peaceful unification, namely ultimate unification, and strong opposition to
Taiwan independence.
For the United States, the one-China policy means that it does not support
Taiwan independence, but it does not mean that it opposes Taiwan independence.
The United States does not have a predetermined position or conclusion as
opposed to the so-called ultimate unification or peaceful unification proposed
by China. What it emphasizes is the process. The United States therefore made a
distinct proposal that any differences between the two sides of the strait must
be resolved peacefully.
We have taken special notice that, at the Oval Office, President Bush
particularly stressed to President Hu Jintao that China should engage in
dialogue with the democratically elected government of Taiwan. No mention was
made during their meeting of the China fever that caught Taiwan in mid-April
when the Kuomintang and the Chinese Communist Party held a forum and former KMT
Chairman Lien Chan met with Hu Jintao for a second time.
The fourth aspect concerns economic and trade issues. Whether concerning the
exchange rate of the renminbi or the trade conflict between the United States
and China, I believe such issues were the main focus of the Bush-Hu summit.
People have made different interpretations and analyses as to whether the summit
has dealt with the trade deficit problem between the United States and China,
and whether Hu's visit brought positive developments in this area. What demands
our attention, however, is what kind of impact China, this sleeping lion, will
bring to the world when it awakens, whether it will create some kind of
squeezing effect economically. This is something worthy of attention.
Internally, China has a serious developmental imbalance between its urban and
rural areas, and between the rich and poor. It suffers from social unrest. Most
importantly, China suffers from waste and inefficient use of energy. China's
influence on world economy is seen as presenting an opportunity. Some see it as
more of a threat, that China is plundering the world's raw materials and energy,
causing an increase in crude oil prices and in the prices of commodities around
the world.
Furthermore, China makes use of its cheap labor, poor labor conditions, and
cheap land resources to dump very low-priced goods on the world market. Many
countries around the world have suffered as a result, which has caused
diminished profits and hollowing effects in industries, and worst of all, even
led to problems of structural unemployment. Trade conflict exists not only
between China and the United States but also between China and the rest of the
world.
Q2. Are you concerned that Taiwan could get squeezed out of that process?
A: Of course, we are concerned because China has been trying all means to
belittle Taiwan and to marginalize Taiwan, and ignore the fact that Taiwan is a
sovereign nation with its own government.
In fact, I had declared in my inaugural speech of 2000 that, so long as China
did not resort to the use of force against Taiwan, I would offer my "Four Noes
Plus One" pledge. I especially called on the Chinese leaders to use wisdom and
creativity to deal with Taiwan's government regarding the future of the
one-China issue, based on existing foundations and the principles of democracy
and parity.
When I offered such an opportunity, the other side refused to seize it. Indeed,
last year China passed the "anti-separation law" (the so-called anti-secession
law) and even arranged for the chairmen of two of Taiwan's opposition parties,
Lien Chan and James Soong, to visit China. Such actions, rather than closing the
gap between the two sides of the Taiwan Strait, have widened it. Nevertheless,
as long as dialogue and negotiations are based on the four principles of
sovereignty, democracy, peace, and parity, then we are very willing to start
dialogue, consultations and negotiations with the other side.
In terms of sovereignty, we hope that China will respect and accept the fact
that the Republic of China exists as an independent, sovereign nation. In terms
of democracy, we hope that the free choice of Taiwan's 23 million people
regarding future relations between the two sides of the strait, and the future
of Taiwan, will be respected. In terms of peace, we call upon China to resolve
differences with Taiwan peacefully through dialogue and not through the use of
force or other non-peaceful means. In terms of parity, we call upon China to
engage Taiwan in dialogue and negotiations and resolve cross-strait issues on a
government-to-government basis.
Although the "1992 consensus" in truth does not exist, we are still willing to
use what we have achieved in the 1992 Hong Kong meeting as a basis from which to
start government-to-government dialogue, consultations, and negotiations.
Q3. What might be your legacy as president when it comes to the relationship
with China? And what will be your legacy more broadly? What do you hope to
accomplish over the next two years?
A: First of all, I would like to see the international community gain a better
understanding of the differences between democratic Taiwan and totalitarian
China. Second, democracy is definitely an asset for Taiwan. It is Taiwan's
pride, and it is Taiwan's best weapon, as well as the best "theater missile
defense (TMD)," against totalitarian China.
Elaborating on my first point [about the differences between democratic Taiwan
and totalitarian China], for the past 50 years, it has been abundantly clear to
the world that there is only one China. Indeed, there is only one China, a
totalitarian China. But at the same time, there is also a democratic Taiwan. For
the past half-century, the status quo in the Taiwan Strait has been that there
is one democratic Taiwan and one totalitarian China, and neither of these two
has had effective jurisdiction over the other. Each has its own national
moniker, national flag, constitution, government, armed forces, and judicial
system. Indeed, they are two separate countries.
Taiwan is not the problem; China is not the problem either. The present problem
is that totalitarian China desires to use force or other non-peaceful means to
annex democratic Taiwan.
With regard to my second point, we think that our democracy is Taiwan's pride,
asset, and a "theater missile defense." In the past six years, we have made
efforts to consolidate and strengthen Taiwan's democracy. We will seek to
further promote and strengthen the foundation of Taiwan's democracy over the
next two years. From holding the first national referendum to the decision that
the National Unification Council should cease to function and the National
Unification Guidelines should cease to apply, all are part of our effort to
consolidate democracy in Taiwan. The right to referendum is a universal value
and a basic human right. Previous governments, however, had educated Taiwan's
people to consider referendums as something equivalent to a catastrophe, a war,
or a political taboo.
Taiwan's first Referendum Act was promulgated in 2003, and the first national
referendum was held in 2004. The Constitution was amended in 2005; this
abolished the National Assembly and incorporated the right to referendum into
its articles. Now, we not only have a national Referendum Act, but we have also
seen it at the local government. The Kaohsiung City Council, for example,
formally passed a statute on local self-governance that uses referendums.
It is clear, however, that having the right to referendum is not enough. We
cannot have only the right to referendum without the right to free choice. This
is why we had no choice but to deal with the issues of the National Unification
Council and the Guidelines for National Unification, and why we decided the
council would cease to function and the guidelines cease to apply. Out of
respect for the principle of popular sovereignty, we should not set any
positions, preconditions, or conclusions regarding the future of Taiwan, the
future form of cross-strait relations, or other issues of serious concern to the
nation. We should return the right to decide the future of Taiwan and the final
say regarding cross-strait relations to the 23 million people of Taiwan. The
previous government and the ruling party had made ultimate unification with
China the only choice and conclusion for our people. This runs counter to the
democratic principle of popular sovereignty.
Perhaps in the future when the Chinese Communist Party has given up its
one-party totalitarian rule, when China has introduced true democracy and
freedom to its society, when China has stopped suppressing Taiwan, has renounced
the use of force against Taiwan, has repealed its anti-separation law, has
withdrawn all the missiles deployed against Taiwan, and respects the right to
free choice of Taiwan's 23 million people, maybe then the people of Taiwan will
change their current attitude of refusing to accept ultimate unification with
China. Perhaps one day the people of Taiwan might change their minds regarding
ultimate unification, but ultimate unification absolutely cannot be set as
Taiwan's only choice.
Q4. Military threat ...... Despite your efforts, Taiwan has still not acquired
any of the ...... offered by President Bush in 2001. Familiar with the
background ...... do you see any hope of acquiring those weapons, in total or in
part ...... progress on that? On a related note ...... some people in Taiwan
have advocated that you adopt offensive military capabilities, such as cruise
missiles as a deterrent against China. And I wonder, what role do you see
offensive weapons playing in Taiwan's defense?
A: Taiwan's defense strategy is that of a passive, defensive, and preventative
approach. The overarching strategy of our national defense is to have "effective
deterrence and solid defense." Our three major goals are to prevent war, defend
our homeland, and counter terrorism and respond to contingencies. Taiwan will
definitely not launch attacks, let alone a first strike. We can only put up a
good defense, and as this is the case, we must strengthen our defense
capabilities. We would certainly not initiate war. We want to avoid the outbreak
of war. We will employ all means to prevent the outbreak of war.
We face China's refusal to renounce the use of force against Taiwan, however,
and its introduction of the anti-separation law, which was an attempt to create
a legal pretext for future use of force. Moreover, China continues to deploy
missiles along its southeast coast targeting Taiwan, the number of which now
exceeds 784. This number does not include its 36 Donghai-10 cruise missiles. The
expansion and modernization of China¡¦s military, and the double-digit annual
growth of its military budget over the last 18 years, are, as US Secretary of
Defense Donald Rumsfeld noted, in excess of its self-defense needs. Similarly,
US Assistant Secretary of Defense Peter Rodman recently stated during a
congressional hearing that the expansion of China's military has undermined and
changed the status quo of the Taiwan Strait.
For this reason, the national security reports issued by both the United States
and Japan pointed out that the cross-strait military balance is gradually
tilting in China's favor, and that this trend is significant.
It is very important, therefore, that Taiwan strengthens its self-defense
capabilities. Taiwan appreciates the Bush administration's 2001 approval of many
of our arms procurement requests. In June 2004, my administration formally
presented three major procurement requests to the legislature for its approval.
The submarines, P3C anti-submarine planes, and PAC3 missiles, are all items that
had been formally requested prior to 1998 by the KMT when it was the ruling
party. We believe that there should be no division between the governing and
opposition parties on issues of national defense, and that ideology should not
even be a concern, since the nation's defense is in the shared interest of all
Taiwan's people. Regrettably, however, when the KMT became the opposition party
following the transition of political power, it changed its stance and has tried
all means to sabotage this arms procurement package.
Another point worth noting is that some people are trying to create the false
picture that peace prevails across the Taiwan Strait. Especially after then-KMT
Chairman Lien Chan and People First Party Chairman James Soong visited China
last year, some people came to believe that cross-strait tensions and antagonism
no longer exist. Under this false impression, they think that there is no need
to strengthen our defense capabilities, but they are wrong. Only by
strengthening our national defense can we ensure and safeguard the hard-won
fruits of democracy as well as economic prosperity. It is only through the
strengthening of our defense capabilities that we can have the confidence to
resume dialogue, consultations, and negotiations with the other side, and only
in this way can we maximize the benefits for Taiwan. We are very appreciative,
therefore, of KMT Chairman Ma Ying-jeou's statement that he is willing to
support reasonable arms procurement. His remarks are a very positive start, and
we hope that he will communicate with other leaders of the opposition so that
this reasonable arms procurement proposal may be approved by the legislature as
soon as possible.
Perhaps getting all three procurement cases approved at one time will be
difficult, but we will continue to try to win the approval of the legislature. I
think that in the very near future we can expect to see a measure of consensus
and some conclusions reached on certain parts of the arms procurement proposal.
Q5. In terms of economics, you mentioned earlier that some people see China's
economic rise as an opportunity, some people see it as a threat. I think a lot
of Taiwanese companies see it as an opportunity. How do you see it, as a threat
or an opportunity? And to add on as a related issue ...... a lot of economists
and businesspeople in Taiwan think that allowing Chinese tourists to come to
Taiwan would be of great benefit to the economy here. Despite that, there's
really been very little progress that you can see, concrete progress, and the
fact that your government places the blame on Beijing. Isn't there anything you
can do to solve that particular issue ......?
A: Some see China's economic development bringing opportunities for the world;
others, however, see threats along with these opportunities. Businesspeople go
where their interests lie. But the government may not have such a narrow view.
That businesspeople care first and foremost about their own interests is
understandable, but the government must consider national security and the
country's overall interests.
Taiwan is an island country that cannot afford to isolate itself from the world.
This, however, does not mean that we can afford to put all our resources into,
and place all our bets on, the Chinese market. China does indeed have a huge
market, but we should never see it as Taiwan's only or ultimate market. We
insist on maintaining Taiwan's distinct identity and economic autonomy. Taiwan's
economy cannot become merely an appendage of China's economy. In the past, I
have stated many times that, as long as we keep our hearts in Taiwan, and as
long as companies have their headquarters, R&D centers, and bases of operations
in Taiwan, then the whole world can be Taiwan's market. This, of course,
includes the Chinese market.
According to a survey undertaken by the US Congress, total foreign investments
in China amount to US$560 billion. Half of this, some US$280 billion, comes from
Taiwan. Forty percent of goods ordered from Taiwan are manufactured overseas,
and of this 40 percent, nine-tenths is made in China.
When Taiwan's economy becomes overly dependent on or tilts excessively toward
China, I think the government has a responsibility and duty to issue an early
warning. That is why we need to engage in risk management and why we introduced
the policy of "proactive management." Risk management does not mean, however,
that we have tightened our policy. In fact, it means that we have to issue
advance warnings and take preventative measures. On the one hand, we strive to
normalize trade and economic relations across the strait. On the other hand,
neither advance warnings nor preventive measures should be neglected.
As to the liberalization of visits to Taiwan by people from China, we had
proposed a program on the issue as early as 2001. China has recently proposed
its own program on the issue, which is four and a half years later than the
program issued by the government of Taiwan. It can be seen, therefore, that
China has been trying to prevent implementation of these measures for four and a
half years. The problem is not with Taiwan, but rather with China. It is China's
government that has not listed Taiwan as a "favored tourism destination." It is
China's government that does not allow its citizens to visit Taiwan, rather than
Taiwan's government that refuses to let these tourists come. Some say that the
Chinese government is afraid of letting its citizens see Taiwan's democracy, as
these tourists would put the Chinese government under tremendous pressure upon
their return home.
As long as both sides are sincere and willing to open their doors and to walk
the right path, I don't think there should be any problem in opening Taiwan to
Chinese tourists.
Q6. The Chinese leadership under Hu Jintao seems to intend to wait until the end
of your presidency rather than negotiate directly with you. Do you see any
chance for meaningful discussion with China on key issues over the next two
years?
A: I especially pointed out earlier that China has missed many windows of
opportunity. We have not given up yet, however. We are still willing to start
consultations, dialogue, and negotiations with China, in accordance with the
principles of sovereignty, democracy, parity, and peace. We are willing to talk
about any issue, without setting any restrictions.
When I was elected president in 2000, the Chinese government waited for Taiwan's
opposition parties to impeach me. Without enough support from the people, their
attempt failed, however. I was reelected in 2004. The Chinese government again
waited, this time to see if the election lawsuits would turn out in their favor.
The opposition parties lost both election lawsuits, however, and failed to
negate my election. Now, the opposition is launching a "soft decapitation" [of
attacks aimed at my administration and my family]. The Chinese government works
with them in this regard, using all means to try to paint an ugly picture of the
current administration and the leader of Taiwan. The Chinese government waited
from 2000 to 2004, and now they are waiting from 2004 to 2008.
They did not want to see me be elected president, and after I was elected the
first time, they wanted to see me impeached. When I was re-elected, they had
hoped the election lawsuits would invalidate my win. The goal now shared by
China's government and the Kuomintang is that the KMT regains power in 2008.
My presidency will end in 2008. If the DPP continues as the ruling party after
that year, will the Chinese government wait until 2012? Even were the KMT to
regain power in 2008, I do not think there would be a better chance for
improving cross-strait relations than there is right now.
The Chinese government has often misjudged the situation in Taiwan, which is why
it often makes wrong choices. This is something I very much regret.
Q7. To follow up on ...... just to try to pin you down on specifics. You
mentioned if both sides have sincerity, there's no reason ...... from China to
Taiwan. When do you expect that to happen, realistically speaking, your best
guess? Could it happen six months from now that you'd actually see large numbers
of Chinese tourists here, a year from now, or are we probably going to have to
wait until after ...... And, the second follow-up, you said you are not
tightening up on cross-strait business. I just want you to clarify that, and
specifically, there's a great deal of anxiety among businesses in Taiwan that
you are cracking down or planning to crack down on Taiwanese business operations
or Taiwanese businesses that have operations in China. Is that incorrect in that
...... ?
A: As long as China is willing and sincere, we do not believe it is necessary to
wait until 2008. We do not believe it is necessary to even wait one year. I
think that within half a year, Chinese tourists could come to Taiwan. At the end
of 2001, my government proposed measures to open Taiwan to Chinese tourists.
Since then, we have been ready. We have been prepared for four and a half years,
and we have been waiting for that whole time.
Secondly, our policies regarding Taiwanese businesspeople investing in China are
clear. If we were truly tightening our policies, then it would not only be
United Microelectronics Corporation that should be investigated.
In fact, regarding the UMC case, it was not even the government that took the
initiative to investigate this case. Allegations were made by citizens and the
subsequent investigation was carried out in accordance with judicial procedure.
It was due to allegations of violations of law, illegal transfer of capital and
technology, and breach of trust that the judicial branch initiated the
investigations. We consider the UMC case as an isolated case, a legal case. This
does not mean that the government will start cracking down on all Taiwanese
businesspeople investing in China. This is not in accordance with our policy.
"Cultivating Taiwan while reaching out globally" is our policy. I believe that
businesspeople consider the Chinese market as part of their global market, and
the government will never prevent investments in China. The government's
implementation of proactive risk management is meant to protect the rights and
interests of our businesspeople in China. When investing in China, political
risks as well as commercial risks should be included in the costs.
Q8. And there's been some progress in the reform of your financial sector. But
recently you suspended the goals of the second phase of reforms. At the same
time, major problems have developed in your consumer-lending sector. What are
your current plans for financial reforms in the last two years of your term?
A: In 2000, we were very worried that there would be a domestic financial crisis
here in Taiwan. We designated 2001 the first year for financial reform and, in
that year, passed six major financial reform bills and convened the Economic
Development Advisory Conference. In 2002, I proposed the 2-5-8 strategic goal
for financial reforms, aiming at decreasing the non-performing loan ratio to
under 5 percent within two years and also increasing the
Bank-of-International-Settlements (BIS) ratio to over 8 percent. Even though the
Act for the Establishment and Administration of the Financial Restructuring Fund
did not pass at that time, we reached the 2-5-8 financial reform goal within two
years. We have increased our BIS ratio to over 10 percent and lowered the NPL
ratio of local banks from a high of over 11 percent to less than 2.5 percent.
Not only has the government moved to write off many bad loans in order to
solidify our financial system and provide a healthier financial environment, but
we have also established the Agricultural Bank of Taiwan as well as, for the
first time, a Financial Supervisory Commission. When we saw our success in the
first phase of financial reform, of course we wanted to proceed with the second
phase, and we announced such a policy in 2004 through the Presidential Economic
Advisory Group. The aim of the first stage of our second phase of financial
reform was that, before the end of last year, there should be at least three
financial institutions in Taiwan that would each have more than 10 percent of
the market share. We also want to reduce the number of banks in which the
government has an ownership stake from twelve to six. This task is very
difficult but we managed to complete the first stage of the second phase
financial reform by the end of last year. Now we have come to the second stage,
which is even more difficult than the previous one. In this stage, we aim to
halve the number of financial holding companies from 14 to 7. As most of the
holding companies are privately owned, we should respect the market mechanism
while trying to achieve our goals. We have to be very cautious, however, so that
we will not be accused of favoring certain conglomerates. We believe that we
must clearly explain where the problem lies in order to avoid misinterpretation
and misunderstanding. I believe we are definitely going in the right direction.
But in regard of our methods and operations, we must be careful. We will not
have mergers just for the sake of having mergers. We hope to diversify the
market, and that is why we have slowed down. This does not, however, mean that
we are giving up.
Q9. When you look at the future of Taiwan, where do you see Taiwan being a
leader? Recently Taiwan has emerged with an emphasis on technology. For example,
China obviously has an emphasis on low-cost labor. When you look at your vision
of where you see the country moving in the future, and Taiwan's role in the
regional economy, could you articulate what special talents that you feel Taiwan
is known for?
A: Yes, indeed, our competitive edge does lie in our hi-tech factor. According
to the World Economic Forum's Global IT Report 2005-2006, Taiwan ranks 7th out
of 115 major countries. This is the first time that Taiwan has made it into the
top ten and our rank increased by eight places compared with the previous year.
In Asia, Taiwan is second only to Singapore. Hong Kong ranks 11th, South Korea
14th, Japan 16th, and China 50th. So, while Taiwan has climbed eight spots to
number seven, China has fallen nine. That is where Taiwan's competitive edge and
niche lie. Of course, we must accept challenges and competition from all sides.
We will not be negligent or complacent. No matter whether we are speaking of
semiconductors or flat-panel display, information or communication technology,
or even cutting-edge biotechnology, we hope to maintain our competitiveness on
the international stage.
I believe cross-strait relations will remain very stable and hope for Taiwan to
become unified internally. As long as Taiwan's people are united and confident
about their future, and do not hold the view that Taiwan is doomed or bound to
have a dim future, then I believe Taiwan has hope and will be full of
opportunities.
Should discrepancies exist between the Chinese and English transcripts, the
Chinese version takes priority.
Due to problems with recording equipment, some of the questions were not clearly
audible.
【Source: Office of the President】