In China, a Struggle Rages: How to Deal With Taiwan?

After Taiwanese President Lee Teng-hui's landslide election in March, China's fractious leaders are as divided as ever over their island rival.

Next Monday, Mr. Lee will be sworn in for a new presidential term. Many Western and Asian analysts predict the Taiwanese leader will unveil new concessions to avert a return to tense military confrontation, but expect the standoff over reunification to continue. Beijing considers Taiwan a breakaway province and threatens to invade if the island openly declares independence.

Angered by Lee's visit to the United States in June 1995, China launched a series of military exercises to quiet Taiwan's push for a higher international profile. In response, Washington sent 16 warships to patrol the waters off Taiwan before the March election. But China's pre-election intimidation backfired and Mr. Lee ended up winning with 54 percent of the Taiwanese vote.

Since the deep election embarrassment, China has toned down its shrill rhetoric as the internal political struggle has raged. But conservatives who are fighting to retain the government's hard-edged policy have once again warned that China is being encircled - both economically and politically by foreign powers.

An internal government paper obtained by the Monitor refers to a "New Cold War" in which a hostile West led by the US is trying "to start a smokeless war to achieve the purpose of Westernizing, dividing, and weakening China."

The document is attributed to party officials close to Deng Liqun, a conservative ideologue and a frequent critic of the market-style economic reforms of paramount leader Deng Xiaoping. "The battle between socialism and capitalism is still being staged in the world arena," the document said. "Who wins and who loses has yet to be resolved."

Still, more moderate voices led by President Jiang Zemin have gained the upper hand in the wake of the Taiwan election fiasco. Last year, Mr. Jiang had to fend off attacks from conservatives and veteran generals accusing the leader of weakness on Taiwan. To pass muster, the politically weak, fence-sitting president had to prove his strength with tough talk, military war games, and a more conservative bent.

"There is a lot of division within the government," says a Western diplomat, adding that "the hardest of the hard-liners on Taiwan have been discredited."

"There is some consensus that [the saber-rattling] was counterproductive and didn't move up the clock on Taiwan's return to the mainland," the diplomat said.

"The ranks of the Taiwan hard-liners have thinned since the election," says a Chinese analyst with senior Communist party connections. "Everyone is waiting for Lee Teng-hui to offer concessions and avoid a new confrontation."

Beijing wants a moratorium on Taipei's quest for more international recognition, specifically its bid to re-enter the United Nations, and Lee's high-profile trips abroad. China also hopes for direct links between the mainland and Taiwan, as most trade and investment between the two is now channeled via Hong Kong.

Pressured by 25,000 Taiwan-funded businesses with more than $20 billion invested in the mainland, the Taipei government is also under pressure to open direct transport and communications links. That move would go a long way toward placating Beijing, Western diplomats say.

Taipei has also urged a restart of semi-official talks between the two governments and suggests it could lift restrictions on travel and exchanges among high-level officials. The government may send a peace envoy to the mainland after the inauguration, officials have suggested.

Although Taiwan says it won't halt its crusade for UN membership, Lee is under pressure from the US to reduce his rhetoric and international travels. China is particularly concerned about possible invitations for Lee to return to the United States or to visit Japan.

"Since the Taiwan authorities have expressed their desire to improve relations across the Taiwan Strait, it is time for them to take concrete actions to do so," said one of a series of recent Taiwan policy commentaries by the official New China News Agency.

Taiwan has emerged as a key issue in China's power struggle for succession to Mr. Deng, the patriarch. During the next two years, a major leadership reshuffle that will shape China's political future is expected, Western and Chinese analysts say.

Hard-line Premier Li Peng is due to complete his term. Already maneuvering for the post are Vice Premiers Zhu Rongji and Li Lanqing, key players in China's economic transformation. Senior generals who are veteran revolutionaries and dominate the Central Military Commission are also due to retire.

"The succession will happen over the next two years," says a Western diplomat. "This will be the group that will rule China during the next 10 to 15 years."