Bridging the Taiwan Strait--

Problems and Prospects for China's Reunification or Taiwan's Independence: Welcome and Opening Remarks

Thomas C. Fischer, Professor of Law (Dean, 1978--1981), New England School of Law. A.B., University of Cincinnati; J.D., Georgetown University Law Center.

Good morning everyone!

Unfortunately, our dean is away in Washington, D.C. on business. Unlike our former Governor Weld, however, we do expect the dean to get "a hearing!"

In his absence, I have been asked ---- as a former dean of this law school and as chair of the advisory group to our Center for International Law & Policy ---- to welcome you to our community.

This I do most heartily and with the sincere hope that the yeoman work of our distinguished program committee, the support from our cosponsors, and the contributions of our diverse and knowledgeable panelists will produce something truly significant from our deliberations. They have all been recognized in the program that you have.

Our decision ---- one year ago ---- to establish a Center for International Law & Policy at New England School of Law, signals our intention to be at the center of a movement that is transforming legal education and the practice of law worldwide.

There are many titillating international law and policy issues that we could have addressed today: world currency values and stability; the Helms--Burton initiative; or health regulations as non--tariff barriers, to name but a few. Instead, we chose one of the most sensitive issues in Southeast Asia: the tension between China and Taiwan, between communism and democracy, between state--managed trade and capitalism.

The general euphoria that followed the disintegration of communism and the ascent of capitalism (or efforts at it), has given way to sober reassessments. A more homogenous (and perhaps safer) world has emerged, but it is a world not significantly less--diverse or less--troubled than the one it replaced. The previous threat of "hot" warfare has given way to a brooding "cool" economic battleground. The stakes seem just as high, however.

The once sharp division between public and private international law appears to have all but disappeared. Instead of being the arbiter between business and the individual, governments everywhere are invested in helping business to succeed.

It may be true, as the economist Paul Krugman asserts, that nations do not compete as corporations do. But there still is powerful domestic pressure to see that the national economy succeeds ---- even at the expense of others. The "global village" continues to have its sharp edges and warring camps.

At the same time, our awareness of interdependence has been enhanced. The U.S. model of capitalism may not be desirable (and probably not even achievable) for many nations in the world. In the absence of a single economic vision, accommodation has to be the order of the day. In order for any nation ---- including ours ---- to succeed in today's economic environment, it must collaborate with other states; and that often means making compromises.

In that respect, the China--Taiwan problem is just a microcosm of larger political and trade forces that buffet the world. China could not have failed to take note of the chaos that resulted when its former Communist counterpart, Russia, moved almost overnight from a statemanaged economy to one that favored capitalism. China surely will do everything in its power to avoid the same degree of impasse and disruption.

Therefore, "one China/two systems" may be a useful expedient. But it cannot endure forever. Political, and especially economic, forces will eventually push China in one direction or the other. At the moment, that seems to be in the direction of liberalization. However, this may be just a facade to gain World Trade Organization (WTO) membership, or to co-opt China's capitalist competitors. In the end, the armed forces and large state enterprises will have a lot of influence on China's choice, for they will not easily give up their share of the economic pie.

Nonetheless, China's recent actions do suggest that it truly wants to be a full participant in world trade circles and that it accepts the virtues of capitalism ---- at least to some degree. Indeed, its recent experience with Hong Kong appears to suggest that China has grown to a point that it can tolerate liberalization without overreaction or meltdown.

If China resists reform, then its WTO membership might be delayed for some time. But, since mainland China has considerable leverage in the UN, it can use that to prod the WTO process along. Eventually it will not be credible to keep China out, even if the U.S. resists, and China knows that. Meanwhile, the U.S. and other free traders will extract from China all of the market--opening concessions they can. However, full independence for Taiwan does not seem to be negotiable. Taiwan's supporters are not as influential as China's, and Taiwan is too weak to stand alone without strong allies.

Yet nothing is certain. China's shaky infrastructure can barely support its economic and population growth. It wants foreign capital, including Taiwanese capital, and foreign investment rarely comes without strings attached. Indeed, China openly admits that it needs to privatize many of its loss--making state--run industries, and the inaccuracy or falsification of trade figures may hide even greater problems. If China is going to achieve the trading status it seeks, it will have to earn it. In the process, some significant concessions concerning trade ---- and possibly Taiwan ---- may have to be made. Some people see the reunification of Hong Kong with China as a "test case" for the latter's reunification with Taiwan.

The two situations are quite different, however. In recent years, Hong Kong has always been a possession. In theory, Taiwan is a free, democratic society and would, therefore, have to give up a great deal more than Hong Kong if it were to unite with China. On the other hand, experience with Hong Kong may help China become more comfortable with capitalism because "managed capitalism" has become the mantra of Southeast Asia. In the end, Hong Kong and Taiwan may have a better chance of changing China than vice versa.

We are living in an age in which normative values change rapidly. A fixed ideology seldom lasts long. The law, which is constantly evolving, emerges from the vortex of political and economic forces. In the end, law is used to preserve what enjoys majoritarian support and to alter that which lacks it. It is this intersection of economic, legal, and policy forces that we examine today in the microcosm of China and Taiwan.

I sincerely hope that this will be a memorable conference, and I thank you for allowing New England to host it.