(UNTITLED)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP04T00367R000100480001-0
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 12
• Document Creation Date: January 12, 2017
• Document Release Date: April 1, 2010
• Sequence Number: 1
• Publication Date: January 1, 1984
• Content Type: REPORT

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Directorate of eonfidential
' \ Intelligence
Political Evolution on Taiwan:
Implications for
The United States
Confidential
EA 84-10004
January! 9f 43
Copy L
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are welcome and may be directed to the Chief,
Office of East Asian Analysis. Comments and queries
Directorate of Confidential
Intelligence
Political Evolution on Taiwan:
Implications for
The United States
This paper was prepared by
China Division, OEA,
Confidential
EA 84-10004
January 1984
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Political Evolution on Taiwan:
Implications for
the United States
Key Judgments US support for Taiwan will remain important to the island's political
Information available stability and economic growth, as it has for the past three decades. As the
as of 30 December 1983 US presence declined during the 1970s, Taiwan's predominantly mainland-
was used in this report.
er leadership had to make significant adjustments to maintain its credibil-
ity. The regime, for example, moved aggressively and with a large measure
of success:
? To expand unofficial ties abroad.
? To institute political reforms at home that strengthen the ruling Kuomin-
tang's political base among the Taiwanese majority.
President Chiang Ching-kuo hopes to guide the island through a controlled
political evolution that will transfer power to the next generation and from
mainlander to primarily Taiwanese hands by the late 1980s or early 1990s.
This paper questions the conventional wisdom that a Taiwanese-dominated
government would adopt an even more intransigent position on reunifica-
tion and contact with China. We believe such a government would still look
to the United States for backing, but that it would also feel more confident
of broad-based popular support and in a stronger position to explore more
flexible and creative approaches to the mainland. This paper argues that a
dominant Taiwanese leadership would:
? Be less preoccupied with vying with Beijing for US support.
? Become somewhat more willing to accommodate Beijing's interest in
opening a dialogue.
Beijing, however, is likely to fear that such a transfer of power would end
its hopes for peaceful reunification. Beijing believes that US arms sales
encourage Taiwan's resistance to negotiations and, in addition, that steps
toward reunification must be well under way before the mainlander
leadership in Taipei is replaced. Thus; as the Taiwanese slowly become
more powerful over the next several years, we believe Beijing probably will
intensify pressure on the United States to encourage Taiwan to negotiate.
Over the longer term, and to the extent that a Taiwanese leadership is re-
sponsive to Beijing's proposals, we believe that this pressure might decline.
Thus, such a shift by Taipei could help defuse the Taiwan issue as a major
irritant in US-China relations.
iii Confidential
EA 84-10004
January 1984
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The trend toward a peaceful transfer of power on Taiwan is by no means
assured:
? Those dissatisfied with the pace of change could try to hasten or slow the
process, provoking political instability.
? The government is trying to move the island's labor-intensive economy
toward high technology. Because the Taiwanese control the private sector
so completely-and have profited the most from the island's rapid
economic growth-prolonged recession could lead them to challenge
mainlander management, especially if the prospect of a greater sharing
of political power proves illusory.
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Political Evolution on Taiwan:
Implications for
the United States[_7
US Role in Taiwan's Security and Stability
Taiwan leaders have looked to the United States as
the island's primary security guarantor for the past 30
years and still regard that support as critical to
domestic political stability. During the 1950s and
1960s, Taiwan believed it faced a China determined
to "liberate" the island by force. Military clashes in
1954, 1958, and 1962 fed this fear. In 1954 Taiwan
signed a Mutual Defense Treaty with the United
States, agreed to the stationing of US troops and
aircraft on the island, and sought US training for its
military officers.
The 1972 trip by then President Nixon to China and
the subsequent issuance of the Shanghai Communi-
que came as a shock to a Taiwan leadership that had
grown accustomed to and dependent upon close US
ties. But the declining US presence on the island,
signaled most obviously by the withdrawal of all US
military personnel, created no significant domestic
problems for Taipei, primarily because Washington
maintained diplomatic relations with Taipei, and the
defense treaty remained in force.
In the 1970s Taiwan's international diplomatic status
eroded seriously. Following its expulsion from the
United Nations in 1971, most countries established
relations with Beijing and severed ties to Taiwan.
This, too, caused great concern on the island but was
manageable because the US link remained in place.
The primary domestic problem provoked by Taiwan's
increasing isolation was the perception that its claim
to sovereignty over the mainland was being under-
mined by Taipei's increasing diplomatic isolation.
In 1979, however, the US severance of all official ties
with Taiwan became the catalyst for increased politi-
cal unrest on the island. Resentment among the
Taiwanese majority over the continued political domi-
nation of the mainlanders intensified and coalesced
around a group of young Taiwanese, anti-Kuomintang
(KMT) radicals and their political journal, Formosa
Magazine. Following US recognition of Beijing, this
group apparently believed the regime was vulnerable
and adopted increasingly confrontational tactics, cul-
minating in a December 1979 Human Rights Day
rally in the southern port city of Kaohsiung. After the
demonstrators attacked police, the government arrest-
ed the ringleaders and broke the back of the move-
ment.
Since then, the leadership has strengthened its posi-
tion and made the most of Taiwan's unique interna-
tional status. To avoid complete isolation, Taiwan
developed a new form of diplomacy, which it terms
"substantive relations." Building on its strong eco-
nomic ties to Japan and the West, Taipei has devel-
oped extensive unofficial political ties. Taipei has
trumpeted these developments, stressing that the is-
land is not totally dependent upon the United States.
This has restored some credibility to the regime's
claim to legitimacy, although in the eyes of senior
leaders it is no substitute for formal relations.
KMT in Transition
At the same time, the ruling KMT has begun to play
down its publicly proclaimed goal to retake the main-
land. Traditionally, "Return to the mainland" had
been the party's primary mission; now, the banner
hanging outside the headquarters of the Taipei mu-
nicipal party headquarters reads: "Service to the
people."
The shift in goal has been accompanied by significant
reforms in the political system and especially in the
KMT. Since the death of Chiang Kai-shek in 1975,
his son, President Chiang Ching-kuo, has moved to
prepare the island for the ethnic and generational
succession that will occur near the end of the 1980s.
This "Taiwanization" of the regime means that the
aging mainlanders will eventually be succeeded by a
group composed of both ethnic Taiwanese and youn-
ger "mainlanders," who were either born on Taiwan
or came to the island when very young.
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Table 1
Taiwanese in the Kuomintang,
November 1983
Standing Committee of the
Central Committee
26
Central Committee
150
Mainlanders
117
Taiwanese
31
Unknown
2
21
Mainlanders
13
meeting halls for local cultural organizations.
candidates, help them win, and then support them
after they are elected. In order to do all this, the KMT
launched new membership drives and revamped its
local party offices. These offices are now the frontline
for the party's new emphasis on public service. Local
offices help citizens find jobs, file their income taxes,
settle disputes with local governments, and provide
Activities at this level now closely resemble typical
ward-style politics. Those lower level party members
who are responsible for KMT success at the polling
place now represent a strong force for reforms to
65 make the party even more responsive to local con-
56 cerns. Most are young, college-educated Taiwanese.
Those mainlanders who remain are required to speak
Taiwanese. And, as is the case at the top of the party,
53 the local Taiwanese are much younger than their
8 41 mainlander counterparts.
Total cadre 3,400 a NA
Mainlanders 1,700 NA
Taiwanese 1,700 NA
Total party
2,000,000 b
NA
Mainlanders
740,000
NA
Taiwanese
1,260,000
NA
The composition of party membership as a whole, in
fact, is changing. The KMT is now young-60 per-
cent of the members are under 35-and primarily
middle class, closely resembling the island's demo-
graphics. At the top, the all-powerful KMT Central
Standing Committee is now one-third Taiwanese.
Although these men are less powerful than the main-
land members, they are younger and therefore should
assume more influential positions after current gov-
ernment and party leaders-most of whom are in
their seventies and eighties-pass from the scene (see
table 1)
The rebuilding of the KMT from the bottom up, a
process that also began during the late 1970s, is
perhaps more important. Since 1977, when Chiang
ordered the party to contest local elections fairly-
rather than stuffing ballot boxes-the KMT has been
forced to adopt new ways. Now, it must find good
Changes at the midlevel of the party are coming more
slowly. Only one department is headed by a Taiwan-
ese, and the most powerful, the Organizational Af-
fairs Department, is still headed by a mainlander with
strong security credentials. His three deputies, howev-
er, are all young, well-educated Taiwanese.
At the next higher level, the Central Committee is not
well stocked with Taiwanese. There are only 31-
about 21 percent. But we believe that Taiwanese
membership will increase dramatically at the next
party congress, probably in 1986.
Changes in the Government. Similar changes are
taking place in the government. Like the party's
standing committee, Taiwan's cabinet is now almost
one-half Taiwanese. Again, the Taiwanese are less
powerful than the mainlanders, and significantly
younger (see table 2).
In central government departments, however, reform
has not kept pace with changes in the party. We
expect that change here will be slower, but most of
these positions are limited to policy implementation.
Policy formulation continues to reside in the party.
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Table 2
Taiwanese in the Taiwan Government,
November 1983
Number Age
Number Age
President
1
73
Vice President
1
76
Premier
1
70
Vice Premier
1
58
Cabinet
11
66
9
61
At the local level, officials are almost all Taiwanese.
County magistrates, local assemblymen and speakers,
and urban mayors and city councils are all popularly
elected. At the next level, the mayors of Taipei and
Kaohsiung and the governor of Taiwan are all Tai-
wanese, although appointed rather than elected. The
one provincial and two city assemblies are also over-
whelmingly Taiwanese.
As a result of these changes in the party and govern-
ment, new groupings are emerging with different
views on major questions such as ties to the United
States, the island's international status, and future
economic planning. In our view, this development
already has begun to complicate policymaking and to
generate more debate on key issues.
Taiwanese in the KMT. Mainlander leaders have long
sought to justify their continued political dominance
by pointing to their success in maintaining close ties
with the United States-ties they claim are essential
to the island's security. ;Rising young Taiwanese
officials, along with younger mainlanders, agree that
US arms and security guarantees are important. Still,
they are concerned about what they see as excessive
reliance on the United States. Consequently, they put
much more stress, on domestic political and economic
developments than on relations with Washington, or
competition with Beijing. In fact, they claim that
Taiwan's security and stability are enhanced more by
its international economic position and peaceful politi-
cal evolution. Success in these areas, they argue,
attracts investors and trade and generates concern in
Europe and Japan-as well as in the United States-
over any Chinese attempt to bring about reunification
by other than peaceful means. The younger mainland-
ers share this view and have been instrumental in
persuading their elders to promote economic and
informal relations abroad.
The Taiwanese, of course, share the mainlanders'
distrust of Beijing, but they also fear that the older
generation of mainlander leaders might be willing to
strike a deal with Beijing to ensure continued main-
lander dominance on the island. In fact, mainlander
concern about the possibility of provoking a Taiwan-
ese revolt has been an important factor in Taipei's 25X1
adamant opposition to opening any kind of dialogue
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Taiwanese views of China and the United States have
been shaped by different experiences than those of the
mainlander elite. They took no part in the civil war
against the Communists; remarkably few of them
have been educated in the United States (more were
educated in Japan); and they come, by and large, from
business and political rather than military or security 25X1
backgrounds. Simply being a member of the Taiwan-
ese majority also means that they feel less need to
justify their positions on security grounds than does
the present leadership. Because of this, they also feel
less need for tangible displays of US support. F 25X1
Taiwanese often lampoon the pretensions of the senior
leaders that they rule all of China. In addition, 25X1
Taiwanese-owned newspapers and political journals
frequently satirize the efforts of the Foreign Ministry
to maintain formal diplomatic ties with small Third
World countries.
The Younger Mainlanders. Another group, which is
likely to play an increasingly influential role in policy-
making, comprises the sons of the present mainlander
elite. We believe these young mainlanders recognize
that they are unlikely to inherit their fathers' power
and that they will be a minority in future govern-
ments. As a result, many of them have made a strong
effort to cultivate close ties with influential Taiwanese
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politicians. Their connections, knowledge of foreign
affairs, and foreign languages will, at the least,
guarantee them some influence in future govern-
ments
Many younger mainlanders are just as critical of
current policies as their Taiwanese colleagues and
have begun to question senior leaders who place more
value on the form than on the substance of Taipei's
foreign relations. These younger mainlanders already
are exploring ways of dealing with the mainland that
are quite different from and sometimes even offensive
to the current leadership. For example, Sung Chu-yu,
current director of the Government Information Of-
fice and son of the late Lieutenant General Sung Ta,
a close associate of President Chiang, has ended the
ban on factual reporting on life in China, in the
apparent belief that Taiwan can only profit by the
comparison.
Another example is Wei Yung, currently the head of
a research organization under Premier Sun, who has
put forward the highly controversial "Multisystems
Nation" theory-which would allow Taiwan to merge
nominally with China but remain independent in
fact-as a possible solution to the problem of reunifi-
cation. Several other younger mainlanders have told
US officials privately that they subscribe to a similar
notion, the "German formula," for reunification,
whereby one Chinese nation is divided into two
political states.
New Approaches to the PRC
Despite the fact that the Taiwanese and younger
mainlanders are playing an increasing role in the
government and KMT, they still have little input into
decisions related to national security. Thus, our views
of how they would behave when they actually take
power remain speculative.
Judging by their present attitudes, however, we be-
lieve that they would be inclined to adopt a more
flexible attitude toward a dialogue with Beijing. The
first moves could come in the form of more favorable
responses to longstanding Chinese proposals designed
to pave the way for eventual negotiations. These
include direct trade, travel, and correspondence. Tai-
wanese businessmen, who dominate the private sector,
have repeatedly been critical of Taipei's ban on trade
with the Chinese mainland. Some local Taiwanese
politicians have also been critical of the current
leadership's sharp limits on athletic, intellectual, and
cultural exchanges with China.
When Taipei agreed to invite a team from Beijing to
participate in an international baseball tournament on
the island, Taiwanese-owned newspapers were the
most supportive, while the official Central Daily
News was noncommittal. In private conversations
with US officials, Taiwanese politicians have argued
in favor of increased exchanges, not because they
agree with Beijing's view that they would eventually
lead to reunification, but because it might reduce the
pressure China places on both Taiwan and the United
States to begin the process. These officials are critical
of what they term the current leadership's "paranoia"
about such activities and of the resulting policy of "no
contacts." These politicians believe that this approach
denies the island a useful ploy to use against the
mainland and leaves the island's security, in their
view, overly dependent on decisions made in Washing-
ton.
A Taiwanese-dominated leadership, more confident of
popular support, would in our view see itself in a
stronger position to take such steps. Further down the
road, and after a suitable preparatory period, this
confidence might lead them to negotiate with Beijing.
Even if some kind of agreement could be worked out,
however, Taiwanese officials have made it clear that
they would insist on the island maintaining its own
military and having access to foreign military sup-
plies.
For its part, Beijing views the emergence of a predom-
inantly Taiwanese leadership with considerable trepi-
dation, primarily because it fears that the Taiwanese
would be more likely to declare Taiwan independent.
Indeed, China has long pinned its hopes on reaching
an accommodation with the present leadership in
Taipei and has tailored its reunification initiatives to
appeal to the mainlander elite rather than the Tai-
wanese majority. At the same time, Deng Xiaoping
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repeatedly has warned that any declaration of inde-
pendence could lead Beijing to abandon its peaceful
reunification policy and possibly invade the island. F
Some Taiwanese politicians, on and off the island,
have in fact advocated independence from the main-
land, but we believe that most recognize the risks of
such a step, not only of a Chinese invasion but also of
a loss of US support. As a result, we believe Taiwan-
ese leaders would be prepared to live with the island's
present anomalous status indefinitely.
Problem Areas
Despite Chiang's initial successes in rebuilding the
party, a backlash within the military or security
services against the reforms could still threaten future
political stability. So, too, could increasing economic
problems.
The Security Services. We believe that the security
services represent the greatest obstacle to eventual
Taiwanization of the government and party. The
garrison command and the police have monitored and
checked Taiwanese political activity since the 1940s,
and there is a strong residue of suspicion on both
sides.
With one exception-Chen Shou-shan, commander of
the Taiwan Garrison General Headquarters-main-
landers still man all key security posts. We believe
that there probably are increasing numbers of Tai-
wanese at lower levels, but they are unlikely to reach
senior positions soon.
Most of the security services' efforts have been aimed
at anti-KMT dissidents, but we believe that the
security services look askance at all Taiwanese politi-
cal activity, even that going on within the KMT. We
also believe that the security services fear that a
future Taiwanese leadership might be less willing to
crack down on what they see as the activities of anti-
The recent demotion and transfer of General Wang
Sheng, then head of the General Political Warfare
Department, and a symbol of opposition to Taiwanese 25X1
political aspirations, was accomplished relatively easi-
ly considering his substantial power. Still, opposition
from this quarter will continue to be a potential
The security services, therefore, could come into
conflict with future Taiwanese civilian leaders. Presi-
dent Chiang has been careful to stress military subor-
dination to civilians in his selection of top officers.
problem
Regular Military. Opposition to Taiwanization could
also come from the military, but most high-ranking
military officers seem resigned to the eventual trans- 25X1
fer of power to a Taiwanese civilian leadership. The
changes that took place within the party and govern-
ment during the late 1970s are beginning to occur in
the military. Although there are only about a dozen
Taiwanese general officers, a review of those just
below flag rank indicates that their numbers will
increase significantly by the end of the decade. Enlist- 25X1
ed men are overwhelmingly Taiwanese, as are most
low-ranking officers.
Any future opposition from this quarter would be
constrained by fears that serious civilian-military
tensions would be exploited by Beijing. Like the senior
mainlander political elite, the military believes that
China might undertake military action against the 25X1
island at any time and are reluctant to participate in
activities that might trigger such a move.
Economic Reform. Concurrent with its efforts to
rebuild the KMT, Taipei is trying to retool its econo-
my. Low rates of population growth and increased
prosperity have pushed labor costs up sharply on the 25X1
island. Thus, Taiwan's traditional labor-intensive ex-
ports face new challenges from countries with cheaper
labor, such as China, Malaysia, and Sri Lanka. We
believe that Taiwan's senior economic managers will
ultimately be successful in promoting more technol-
ogy-intensive industries, but the transition period may
be difficult. Taipei has already announced that it
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expects growth rates over the next decade will be
lower than those of the previous two, but the govern-
ment is optimistic that the economic reforms will
strengthen the island's competitive position in the
international marketplace. Because the KNIT has
been able to use high rates of growth to mute
Taiwanese discontent over mainlander dominance,
progress on economic reform will remain important
for political stability. This is especially true because
most of the island's senior economic managers are
mainlanders, while the private sector is almost exclu-
sively Taiwanese.
Implications for the United States
The coalition of Taiwanese and young mainlanders
that will be running Taiwan by the end of this decade,
in our view, will still require US arms and security
guarantees. Beyond this, however, we believe that this
group will have less need to demand other demonstra-
tions of US support in order to legitimatize its
domestic political position. The new leaders are also
likely to be less concerned about improvements in US-
Chinese relations coming at Taiwan's expense as long
as the Taiwan Relations Act remains in place and
arms sales continue. Thus, we believe Taipei will
become less inclined to try to disrupt US-Chinese
relations, which some current leaders still believe is
the best way to bolster Taiwan's own position.
Whether or not the new leadership would be willing to
discuss reunification with the Chinese, we believe that
they will be less rigidly opposed to responding to some
of Beijing's initiatives. To some extent, they will be
forced to do this to allay fears in Beijing that their
accession means that reunification will never take
place. Such moves might help defuse the Taiwan issue
as a major irritant in US-Chinese relations-especial-
ly, of course, if this leads eventually to a negotiated
settlement that would allow Beijing to claim that
reunification had taken place.
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