Order Code RL33510
Taiwan: Recent Developments
and U.S. Policy Choices
Updated September 25, 2007
Kerry Dumbaugh
Specialist in Asian Affairs
Foreign Affairs, Defense, and Trade Division

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Taiwan: Recent Developments
and U.S. Policy Choices
Summary
In response to political developments in Taiwan, the Bush Administration is
widely seen to have dialed back its initial public enthusiasm for supporting Taiwan
initiatives, particularly those seen as provocative or as challenges to what the United
States understand as the “status quo.” While still pursuing a closer U.S. relationship
with Taiwan, U.S. officials now appear to be balancing criticisms of the PRC military
buildup opposite Taiwan with periodic cautions and warnings to Taiwan that some
of its actions are “unhelpful” and that U.S. support for Taiwan is not unconditional,
but has limits.
This represents a marked departure from the early days of the George W. Bush
Administration, when the White House seemed to abandon the long-standing U.S.
policy of “strategic ambiguity” on Taiwan in favor of “strategic clarity” that placed
more emphasis on Taiwan’s interests and less on PRC concerns. Among other
things, President Bush approved a substantial sale of U.S. weapons to Taiwan (in
April 2001) and was more willing than previous U.S. presidents to approve visas for
visits from Taiwan officials, including Taiwan’s president in 2001 and 2003, and
Taiwan’s vice president and defense minister in 2002. This initial policy approach
was in keeping with growing congressional sentiment that greater U.S. support was
needed for Taiwan’s defense needs, particularly given the PRC’s military build-up
in southern China. Members undertook a number of bipartisan initiatives to focus
more U.S. attention on Taiwan and raise its international stature, including
establishing a House Congressional Taiwan Caucus in 2002 and Senate Taiwan
Caucus in 2003.
Since then, U.S.-Taiwan relations have undergone important changes, sparked
in part by the increasing complexity and unpredictability of Taiwan’s democratic
political environment. Taiwan President Chen Shui-bian, a member of the
Democratic Progressive Party (DPP), has disavowed key concepts long embraced by
the formerly ruling Nationalist Party (KMT) — the “status quo” that there is only one
China and Taiwan is part of it — and instead has adopted the more provocative
position that Taiwan already “is an independent, sovereign country,” a “status quo”
he promises to maintain. In 2007, President Chen has made pursuing full United
Nations membership under the name “Taiwan” one of his policy priorities, despite
PRC opposition and strong U.S. statements of discouragement.
While these recent actions have succeeded in further elevating the concept of
Taiwan nationalism, even among the DPP’s KMT opponents, many in the electorate
appear wary of the more strident and confrontational aspects of President Chen’s
political positions. This, combined with a series of corruption scandals involving
Chen administration officials and the president’s family members, has led to record-
low approval ratings for President Chen and a growing political outcry against him.
These political trends have raised anxieties about the prospects for a future political
and constitutional crisis in Taiwan that could further complicate U.S. policy.
This report will be updated as events warrant.

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Contents
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Background and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Taiwan Democratization: Challenges for U.S. Policy . . . . . . . . . . . . . . . . . 2
Political Pluralization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Split Government, Competing Ideologies . . . . . . . . . . . . . . . . . . . . . . . 3
Key Current Issues in Taiwan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Bid for U.N. Membership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Constitutional Revision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Taiwan Independence Rhetoric . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
The “Four Wants” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
State-Run Enterprise Name Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Corruption Scandals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
PRC Anti-Secession Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
U.S. Arms Sales to Taiwan and Taiwan Defense Budget . . . . . . . . . . . . . . 10
Opposition Party Visits to China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Taiwan-Mainland Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Cross-Strait Developments in the Chen Administration . . . . . . . . . . . 12
Private-Sector Exchanges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Economic and Trade Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Taiwan’s World Trade Organization (WTO) Accession . . . . . . . . . . . 14
Avian Flu, SARS, and WHO Observer Status . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Policy Trends in the George W. Bush Administration . . . . . . . . . . . . . . . . . . . . 15
Initial Tilt Toward Taiwan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Taiwan the “Unhelpful” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Implications for U.S. Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Chronology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
For Additional Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

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Taiwan: Recent Developments
and U.S. Policy Choices
Most Recent Developments
September 19, 2007 — For the 15th consecutive year, a U.N. General Assembly
Committee (the General Committee) rejected the recommendation that Taiwan’s
formal application for U.N. membership be considered at this year’s meeting of (the
62nd) General Assembly. Two days later, on September 21, 2007, the General
Assembly agreed to support the General Committee’s decision not to place Taiwan’s
application on the agenda.
September 17, 2007 — The United Evening News reported that Taiwan’s
military had been planning to deploy missiles on the island of Matsu but had
suspended the plan due to U.S. pressure.
September 16, 2007 — China’s Taiwan Affairs Office said that Beijing had
“made necessary preparations” to “deal with serious conditions” as a result of
Taiwan’s U.N. membership bid.
September 12, 2007 — The Pentagon announced $2.2 billion in possible
military sales to Taiwan, including 12 surplus Orion P3-C maritime patrol craft and
144 SM-2 Block 3A Standard anti-aircraft missiles, built by Raytheon.
September 10, 2007 — Taiwan Defense Minister Ko Cheng-heng said that
Taiwan had an “urgent and legitimate need” to buy F-16s. Minister Ko made the
statement while attending the Sixth U.S.-Taiwan Defense Industry Conference in the
United States.
August 27, 2007 — In an interview with Hong Kong Phoenix TV, U.S. Deputy
Secretary of State John Negroponte reiterated U.S. opposition to Taiwan’s holding
a referendum on U.N. membership.
Background and Analysis
Once a U.S. World War II ally, the Republic of China (ROC) government, now
located on Taiwan, remains a key U.S. foreign policy issue. With sovereignty over
the island also claimed by the People’s Republic of China (PRC), official U.S.
relations with Taiwan became a necessary casualty of the 1979 American decision
to establish diplomatic relations with the communist PRC government as the sole
legitimate government of all China. Since then, absent diplomatic relations, the
United States still has maintained economic and security relationships with Taiwan,

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including the sale of defensive military weapons and services.1 But continuing
political transformations in both the PRC and Taiwan since 1979 mean that U.S.
policymakers are facing more difficult policy choices in relations with each
government.
This report focuses on current developments in Taiwan, analyzing how those
developments are affecting choices the United States makes about its policy toward
Taiwan specifically and toward the PRC more broadly. Other CRS reports provide
more details about the myriad historical complexities of Taiwan’s current situation
in U.S. policy, such as: historical background about how the ROC on Taiwan went
from a U.S. ally to a government with no diplomatic U.S. relations, including the
fundamentals governing U.S. policy toward Taiwan today (CRS Report RS22388,
Taiwan’s Political Status: Historical Background and Ongoing Implications, by
Kerry Dumbaugh); the increase in U.S.-Taiwan tensions since 2001 (CRS Report
RL33684, Underlying Strains in U.S.-Taiwan Political Relations, by Kerry
Dumbaugh); and the subtle and complicated permutations of the “one-China” policy
over three decades and its role in U.S. policy (CRS Report RL30341, China/Taiwan:
Evolution of the “One China” Policy — Key Statements from Washington, Beijing,
and Taipei, by Shirley A. Kan). Readers who wish to skip background information
in this report can turn directly to “Key Current Issues in Taiwan,” on page four.
Taiwan Democratization: Challenges for U.S. Policy
Ironically, one of the key challenges for U.S. Taiwan policy has become
Taiwan’s own political liberalization and democratization since 1979. Under the
strongly authoritarian rule (and martial law) of the long-ruling Nationalist Party
(KMT), Taiwan’s political decisions from 1949 to 1979 were predictable, closely
aligned with U.S. interests, and clearly dependent on U.S. support. But several
decades of political reform and democratic development have made Taiwan politics
today both more pluralistic and more unpredictable.
Political Pluralization. Taiwan’s political liberalization began in the mid-
1980s, when the KMT first permitted formation of opposition parties (1986),
including the Democratic Progressive Party (DPP), a party whose platform advocated
Taiwan independence from China. The KMT government also ended martial law (in
1987), and for the first time opened government positions to native “Taiwanese” —
the 85% of the island’s population who predated the influx of the two million
“mainlanders” fleeing communist forces. Members of Taiwan’s legislature in the
1980s, elected on mainland China over 40 years earlier, were asked to retire, and a
new, streamlined legislature was elected in 1992. In 1996, Taiwan held its first direct
presidential election, which was won by KMT leader Lee Teng-hui, himself a native
Taiwanese. During his presidency, Lee increasingly distanced himself from his
party’s long-standing position that there was only “one China” and that Taiwan was
part of it. This posed complications for one of the fundamental tenets on which U.S.
relations with the PRC were based — the statement that “The United States
1 U.S. weapons sales to Taiwan are governed by Section 2 and Section 3(b) of the Taiwan
Relations Act, P.L. 96-8: 22 U.S.C., Chapter 48, Sections 3301-3316.

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acknowledges that all Chinese on either side of the Taiwan Strait maintain that there
is but one China and that Taiwan is a part of China.”2
The uninterrupted KMT dynasty on Taiwan finally was broken on March 18,
2000, when DPP candidate Chen Shui-bian won the presidency with only 39% of the
popular vote. The victory was a stunning defeat for the KMT and its unbroken 50-
year tenure in power. By the narrowest of margins, President Chen was elected to a
second (and final) term in March 2004, winning by only 29,518 votes out of a
reported 13.25 million votes cast. The KMT fall from its former political dominance
was compounded in two subsequent legislative elections in December 2001 and
December 2004, when the struggling party saw its majority of 115 seats in the 225-
member Legislative Yuan (LY) cut drastically — to just 89 seats in 2007.3
Split Government, Competing Ideologies. With Chen Shui-bian and the
DPP’s “Pan-Green” coalition in control of the presidency since 2000, the KMT
nevertheless has managed to retain the barest control of Taiwan’s legislature by
cobbling together a working “Pan-Blue” coalition of 113 from its own remnants: 79
KMT members and 34 members of a new faction that broke from the main KMT
party, the People First Party (PFP).4 Since the two opposing coalitions have different
political ideologies and roughly equal political strength, this split government has
created significant gridlock in Taiwan’s political arena since 2000 and thus difficult
political realities for U.S. policymakers.
The membership of the DPP-led “Pan-Green” coalition, to which incumbent
president Chen Shui-bian belongs, is largely native Taiwanese and is closely
identified with advocating Taiwan independence — an eventuality which Beijing has
stated it will “bear any cost” to prevent. Chen, himself a native Taiwanese, has
performed a continuing and uneven balancing act between the radical base of his
party — avid independence advocates — and the more cautious in the Taiwan
electorate who may wish for independence but who believe that antagonizing the
PRC is not in Taiwan’s interests. For a while, Chen and his advisors attempted to
finesse this contradiction by proclaiming a “new Taiwan identity” and emphasizing
maintenance of the “status quo” — which they define as Taiwan’s de facto
sovereignty and statehood. While this strategy met with a certain amount of success,
the political nuances ultimately have satisfied neither Chen’s “deep Green” political
2 This particular quote is from the 1972 Shanghai Communique issued at the conclusion of
President Richard Nixon’s landmark trip to China. A somewhat vaguer formulation — “The
[United States] acknowledges the Chinese position that there is but one China and Taiwan
is part of China.” — was part of the 1979 communique normalizing U.S. relations with the
PRC.
3 Elections for Taiwan’s Legislative Yuan (LY) are held every three years. But due to
legislative reforms enacted in the past several years, the next LY elections, scheduled for
December 2007, will be for a new body half the size of the former (from 225 to 113 seats)
whose members will serve for four years.
4 The “Pan-Green” is the popular name of the DPP’s political union with a like-minded
minority party, the Taiwan Solidarity Union (TSU), which itself emerged from the
December 2004 LY elections with 12 seats. The two “color”coalitions were so named
because of their respective party colors.

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base nor the more moderate in the Taiwan polity. Bush Administration officials have
grown increasingly concerned over the complications that the more assertive
components of Chen’s strategy create for U.S. policy toward China and Taiwan.5
On the other side of Taiwan’s political spectrum is the KMT’s opposition “Pan-
Blue Coalition.” The KMT historically is a party of mainlanders that fled to Taiwan
from China in 1949. It is politically conservative and strongly anti-communist.
Although it is credited with engineering Taiwan’s vibrant economic growth and
transformation during its 50-year rule on the island, the KMT’s inability to offer a
clear and creative vision for Taiwan’s future in the 21st century ultimately made it
vulnerable to the DPP political challenge in the 2000 election.6 Since then, the KMT
has portrayed itself as a more responsible steward than the DPP for Taiwan’s future.
It criticizes the DPP’s posture toward Beijing as unnecessarily confrontational and
promises to replace it with a policy of engagement. Many KMT members have
criticized the DPP’s “new Taiwan identity” emphasis as an attempt to question KMT
political legitimacy and as a dangerous provocation to ethnic divisions. The party
also gets political mileage out of portraying Chen as insufficiently attentive to the
needs of Taiwan’s business community — as in the economic disadvantages Taiwan
business interests continue to face due to Taiwan’s restrictions on contacts with
mainland China.
This legislative-executive split in Taiwan’s government has created unique
political problems. U.S. policymakers generally have found these political processes
difficult to oppose because they are democratic but also, for the same reason, difficult
to rely on for support of U.S. interests. Domestically, the relatively even strength of
the Taiwan two coalitions has resulted in years of effective political gridlock. The
KMT/PFP legislative coalition since 2002 has been able to block or modify most of
the DPP’s policy initiatives, while President Chen has proven adept at counter-
offensive in the public debate by offering controversial initiatives that potentially
could affect Taiwan’s political status.
Key Current Issues in Taiwan
Bid for U.N. Membership
After years of unsuccessful attempts to win observer status in the United
Nations and its affiliate bodies, particularly the World Health Organization (WHO),
Taiwan in 2007 changed tactics and submitted an application for full membership in
5 In September 2005, for example, at the U.S.-Taiwan Business Council-Defense Industry
Conference 2005, Edward Ross, Director of the U.S. Defense Department’s Defense
Security Cooperation Agency, strongly criticized Taiwan’s politicization of security issues,
saying it was reasonable to question why the United States should invest in Taiwan’s self-
defense if Taiwan itself were not willing to invest in it.
6 The traditional KMT policy held that there was only one China, that Taiwan was part of
China, and that one day Taiwan would re-take the mainland and China would be reunified.

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WHO under its formal name, the “Republic of China.” This effort also failed.7 On
September 19, 2007, a U.N. General Assembly Committee (the General Committee)
rejected a similar bid that Taiwan’s application for full U.N. membership be
considered at this year’s meeting of (the 62nd) General Assembly. Two days later, On
September 21, 2007, the U.N. General Assembly agreed to uphold the decision of the
General Committee not to place Taiwan’s membership application on the agenda.
President Chen by late May 2007 had begun to argue that Taiwan should apply
to these U.N. agencies under the name “Taiwan,” and on June 18, 2007, Chen
announced that he would hold an island-wide referendum on this subject in
conjunction with Taiwan’s legislative or presidential elections in 2007-2008.
Although no such referendum in Taiwan has yet been held, the Taiwan government
announced on June 20, 2007, that it had just officially submitted (on July 19) an
application for full U.N. membership under the name “Taiwan.” The U.N.’s Office
of Legal Affairs rejected that application on July 23, 2007, on the grounds that it
violated the U.N.’s “one China” policy.
Taiwan’s potential participation in the United Nations is controversial, and
vigorously opposed by China, because it suggests that Taiwan is a sovereign state
separate from the mainland. U.S. officials, on record as supporting Taiwan’s
membership in organizations “where state-hood is not an issue,”8 have been
unusually blunt and outspoken on Taiwan’s current U.N. application efforts. A
strong succession of U.S. statements in 2007 includes:
! June 19, 2007: “We do not support Taiwan’s membership in
international organizations that require statehood [for
membership].... This would include a referendum on whether to
apply to the United Nations under ‘Taiwan’.” (State Department
spokesman Sean McCormack reacting to President Chen’s U.N.
referendum announcement.)
! August 27, 2007: “...We strongly support Taiwan’s democracy....
But when it comes to this issue of a referendum as to whether or not
Taiwan joins the United Nations in the name of Taiwan, we do have
great concerns. We oppose ... that kind of a referendum because we
see that as a step towards the declaration — towards a declaration of
independence of Taiwan, towards an alteration of the status quo.”
(Deputy Secretary of State John Negroponte, in an interview with
Hong Kong’s Phoenix TV.)
! August 30, 2007: “We are very supportive of Taiwan on many many
fronts.... However, membership in the United Nations requires
statehood. Taiwan, or the Republic of China, is not at this point a
state in the international community. The position of the United
States government is that the ROC...is an issue undecided, and it has
been left undecided ... for many, many years.” (Dennis Wilder,
7 On May 14, 2007, WHO’s annual assembly meeting voted 148-17 not to consider
Taiwan’s new application.
8 A State Department spokesman, in response to a press question at the State Department
press briefing of March 20, 2002.

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National Security Council Senior Director for Asian Affairs, at a
White House press briefing on the President’s September APEC
trip.)
! September 11, 2007: “... we do not support Taiwan’s membership
in international organizations that require statehood and therefore
would not support such a [U.N.] referendum ... [the referendum’s
supporters] do not take seriously Taiwan’s commitments to the
United States and the international community [and] are willing to
ignore the security interests of Taiwan’s most steadfast friend ... we
do not like having to express publicly our disagreement with the
Chen Administration ... [and] I can assure you that we would not
have done so had we not exhausted every private opportunity
through consistent, unmistakable, and authoritative messages over
an extended period of time.” (Deputy Assistant Secretary of State
Thomas J. Christensen, in a speech at the U.S.-Taiwan Defense
Industry Conference.)
Beijing argues that since Taiwan is not a state but a part of China it cannot be
separately admitted to U.N. entities for which sovereign status is a pre-requisite for
membership. In the past, Taiwan authorities maintained that its “observer status” in
U.N. bodies such as WHO would be an apolitical solution since other non-sovereign
entities, like the Holy See and the Palestine Liberation Organization, have been given
such status. In 2004, the 108th Congress enacted legislation (P.L. 108-28) requiring
the Secretary of State to seek Taiwan’s observer status in WHO at every annual
WHA meeting.9
Constitutional Revision
For several years, President Chen Shui-bian often has spoken of revising or
replacing Taiwan’s constitution. In a 2007 statement on this topic, President Chen
said a new constitution would “cement [Taiwan’s] democratic achievements.” U.S.
officials have expressed support for constitutional reform that would improve
Taiwan’s political infrastructure in ways that would make governmental processes
work more effectively. But Washington is concerned more broadly about the
direction that constitutional reform in Taiwan may take — more specifically, that the
Taiwan government may use the constitutional revision process as a vehicle for
addressing issues relating to sovereignty and Taiwan’s political status.10 U.S.
officials repeatedly have warned Taiwan against such unilateral moves toward
independence.11
9 The bill, S. 2092, was enacted as P.L. 108-235.
10 Such concern was expressed in a State Department briefing, for instance, on September
25, 2006.
11 Assistant Secretary of State James Kelly issued such a warning when testifying before
Congress in April 2004, in the first major U.S. response to President Chen’s constitutional
revision plans. Similar warnings have been issued regularly since then — as in early 2007
when Deputy Secretary of State nominee John Negroponte, also testifying before Congress,
cautioned that President Chen’s constitutional revision plans could be “at cross purposes”
(continued...)

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As a consequence of President Chen’s call for constitutional change, several
think-tanks and scholars around Taiwan were encouraged to work on various aspects
of potential constitutional reform.12 According to Taiwan officials, proposed changes
included the efficacies of a presidential versus a cabinet system; how many levels of
government were desirable; whether the voting age should be 21 or 18; and gender
discrimination issues. In 2007, several of these groups have published draft versions
of their constitutional proposals for Taiwan’s legislature to consider.13 The first draft
to receive sufficient legislative endorsement to be placed before the legislature’s
Procedures Committee, according to one news account, refers to Taiwan as a “free
and democratic republic.”14 Any proposed constitutional draft faces a series of
legislative hurdles and must be approved by two-thirds of the Taiwan legislature.
Taiwan Independence Rhetoric
For U.S. policymakers in the Bush Administration, President Chen Shui-bian’s
unpredictable political style has become problematic for U.S.-Taiwan relations and
for the White House’s view of the Taiwan government. This is a change from the
early months of the Chen Administration, when initial U.S. concern over the new
government’s strong pro-independence stand was eased by President Chen’s
moderate tone, his apparent openness to engagement with China, and his repeated
public pledges — the so-called “five-noes” — that during his tenure he would not
declare independence, change Taiwan’s official name, or take other controversial
actions that would be confrontational to Beijing and problematic for Washington.
But in recent years, President Chen has pushed the edge of the independence
envelope in ways that many U.S. officials judge have violated both the spirit and the
letter of both his public “five noes” pledges and his private assurances to
Washington. These Chen surprises have brought repeated admonitions from U.S.
officials and have caused what some have described as a fatal rupture in White House
relations with President Chen’s administration.15 Among other actions, beginning in
2002 the Chen Administration has repeatedly referred to Taiwan as an already
independent country and a separate country from China; pushed for “national”
referenda on key questions; defined national territory as limited to Taiwan and
outlying islands (instead of the traditional full-China definition of the ROC’s
11 (...continued)
with U.S. policy toward Taiwan. Hearing before the Senate Committee on Foreign
Relations, January 30, 2007.
12 Author’s participation in a meeting with Michael Tsai, Deputy Secretary-General of
Taiwan’s National Security Council, in April 2006.
13 On March 18, 2007, the pro-independence Taiwan Thinktank revealed a constitutional
proposal it called the “second republic” constitution suggesting that Taiwan and China are
separate entities. According to the constitution draft’s author, Chen Ming-tong, more than
15 different constitutional proposals or amendments are currently being proposed by
different groups in Taiwan. Ko Shu-ling, “Group pushes new constitution,” Taipei Times,
March 19, 2007, p. 3.
14 Ko Shu-ling, “Draft constitution moves ahead,” Taipei Times, April 3, 2007, p. 3.
15 From conversations in May and June 2006 with former U.S. government officials.

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territory); held an island-wide referendum on aspects of Taiwan’s defensive strategy
against the PRC; effectively abolished the symbolically important National
Unification Council (NUC), in spite of his “five noes” pledges not to do so; and
launched efforts to turn Taiwan into a “normal country.”16
The “Four Wants”. One source of contention in U.S.-Taiwan relations came
on March 4, 2007, when President Chen, addressing a pro-independence audience in
Taiwan, reportedly announced that Taiwan “should be independent,” without
sovereign connection with the PRC. In his strongest pro-independence rhetoric yet,
President Chen also declared that Taiwan wants four things (quickly dubbed the
“four wants” in the press): independence, an official name-change to “Taiwan,” a
new constitution, and greater economic development. That was followed two days
later with a statement by the Chairman of President Chen’s party that the president’s
original “five noes” pledges should be scrapped. A U.S. State Department
spokesman reacted to the Chen statement on March 5, 2007, with the following:
President Chen has repeatedly pledged that he would not alter the guarantees in
his 2000 inaugural address not to declare independence, change the national title,
push for inclusion of sovereignty themes in the constitution, or promote a
referendum to change the status quo in regards to the questions of independence
and unification.... President Chen’s fulfillment of his commitments is a test of
leadership, dependability and statesmanship and of his ability to protect Taiwan’s
interests, its relations with others, and to maintain peace and stability in the
Strait. Rhetoric that could raise doubts about these commitments is unhelpful.”17
State-Run Enterprise Name Changes. In August-September 2006,
Taiwan’s Premier disclosed that the government would be changing the name of
Taipei’s Chiang Kai-shek International Airport to the “Taiwan Taoyuan International
Airport” as a result of a proposal put forward by the Ministry of Transportation and
Communications.18 Since then, the government has continued a quiet and
intermittent campaign to replace references to “China” with “Taiwan” on Taiwan’s
postage stamps and in the names of Taiwan’s state-run entities — such as China
Shipbuilding Corporation (changed to CSBC Corp., Taiwan) and Chinese Petroleum
Corporation (to “CPC Corp., Taiwan). In a particularly controversial move, on May
19, 2007, the Taiwan government renamed the Chiang Kai-shek Memorial Hall
(dedicated to the Republic of China’s late President) as the Taiwan Democracy
Memorial Hall — a move that is currently under legislative challenge. The name-
change campaign has been criticized by both the KMT opposition party and by
former President Lee Teng-hui of the pro-independence Taiwan Solidarity Union
(TSU) party. U.S. officials likewise have been critical, with a U.S. State Department
spokesman saying on February 9, 2007:
16 For further information, see CRS Report RL33684, Taiwan-U.S. Political Relations: new
Strains and Changes, by Kerry Dumbaugh.
17 State Department spokesman Sean McCormack’s answer to a question during his daily
press briefing, March 5, 2007. [http://www.state.gov/r/pa/prs/dpb/2007/mar/81396.htm]
18 Premier Su Tseng-chang, in “Taiwan pushes for renaming of Chiang Kai-shek Airport,”
Asia Pulse, September 1, 2006.

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As we have said many times before, we do not support administrative steps by
Taiwan authorities that would appear to change Taiwan’s status unilaterally or
move towards independence. The United States does not, for instance, support
changes in terminology for entities administered by Taiwan authorities.19
Following the U.S. statement, the Chairman of the DPP Party, Yu Shyi-kun,
reportedly said that the United States had no right to meddle in Taiwan’s internal
affairs, such as the name-change campaign.20
Corruption Scandals
Another problem affecting Taiwan’s political processes since 2006 is a number
of corruption scandals enveloping both the Chen Administration and the former head
of the KMT, Ma Ying-jeou, in the past widely seen as his party’s best hope for
regaining the presidency in 2008. Both men have been tarnished by charges that they
misappropriated government funds in various ways. President Chen is seen to have
been grievously wounded by allegations of corruption, including allegations about
his wife and other members of his family and instances of malfeasance by
government officials close to the President. (Although President Chen cannot be
indicted as a sitting president, no such prohibition exists for Ma Ying-jeou, who was
indicted on February 13, 2007, and whose trial began April 3, 2007.) For President
Chen, the “four wants” statement and the name-change campaign have served to
deflect some of the attention from the ongoing corruption scandal. Chen has
survived three recall initiatives as a result of the scandal — in June, October, and
November 2006.21
PRC Anti-Secession Law
President Chen and his supporters have linked a number of the government’s
initiatives to the PRC’s adoption, on March 14, 2005, of a ten-article “anti-secession
law” aimed at reining in Taiwan independence advocates.22 While much of the new
PRC law speaks of conciliatory measures — such as encouraging cross-strait
economic and cultural exchanges and resumption of direct trade, air, and mail links
— Article 8 of the anti-secession law specifically authorizes the use of “non-
peaceful means” to reunify Taiwan with China. According to Article 8:
In the event that the “Taiwan independence” secessionist forces should act under
any name or by any means to cause the fact of Taiwan’s secession from China,
or that major incidents entailing Taiwan’s secession from China should occur,
or that possibilities for a peaceful reunification should be completely exhausted,
the state shall employ non-peaceful means and other necessary measures to
protect China’s sovereignty and territorial integrity.
19 State Department spokesman Sean McCormack, at the daily press briefing, February 9,
2007. [http://www.state.gov/r/pa/prs/dpb/2007/80360.htm]
20 DPP Brushes Aside U.S. Objections,” China Post, February 12, 2007.
21 Y. F. Low, “Legislature set to vote on second motion to recall president October 13,”
Central News Agency English News, September 29, 2006.
22 The measure was adopted by the PRC’s National People’s Congress.

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American observers and U.S. officials termed the PRC anti-secession law
counterproductive, particularly given improvements in a range of Taiwan-China
contacts since December 2004. Many saw the anti-secession law as a clear signal of
China’s potential rising military threat to Taiwan and feared it could significantly
raise tensions across the Taiwan strait. Critics also feared the law could be used to
harass independence advocates in Taiwan by, for example, labeling them “criminals”
and demanding their extradition from third party countries. For their part, Taiwan
authorities denounced the enactment of the law and temporarily suspended further
talks with Beijing on holding direct-charter cargo and holiday passenger flights
between the two sides.
U.S. Arms Sales to Taiwan and Taiwan Defense Budget
Under the Taiwan Relations Act (P.L. 96-8), the United States is obligated to
provide Taiwan with defense articles and services for its self-defense — a
relationship to which the PRC has long objected. In keeping with the TRA, for
example, on February 28, 2007, the U.S. government notified Congress of another
potential Foreign Military Sale, in response to a Taiwan request, consisting of
AMRAAM and Maverick missiles and attendant equipment and services totaling as
much as $421 million.23
On June 15, 2007, Taiwan’s legislature passed a long-delayed national defense
budget that for the first time included funds for purchasing some of the U.S. weapons
systems offered for sale in 2001. The budget included funds to purchase P-3 Orion
anti-submarine reconnaissance; to upgrade the Patriot missile batteries that Taiwan
already has; and to provide $450 million to fund the purchase of F-16 C/D fighters,
a request pending before the USG. The budget passage subsequently was followed,
on September 12, 2007, by a Pentagon announcement of $2.2 billion in possible
military sales to Taiwan, including 12 surplus Orion P3-C maritime patrol craft and
144 SM-2 Block 3A Standard anti-aircraft missiles, built by Raytheon.
But in spite of this recent progress on the defense budget, action on funds to
purchase the bulk of U.S. arms offered for sale in 2001 remains captive to Taiwan’s
rancorous political bickering. Taiwan’s inability so far to take full advantage of a
substantial U.S. military support package approved for sale in 2001 has become an
increasing irritant in Taiwan-U.S. relations.24 Problems over arms sales have the
potential to impose longer-term damage to the unique character of unofficial U.S.-
Taiwan relations.25
23 Details of the sale can be found in a news release by the Defense Security Cooperation
Agency at [http://www.dsca.osd.mil/PressReleases/36-b/2007/Taiwan_07-10.pdf].
24 In 2003, Taiwan’s legislature did approve $800 million for the purchase of the four Kidd-
class destroyers. On December 8, 2005, the first two of these (now designated Keelung
class) arrived at the Suao naval base in northeastern Taiwan after having been refurbished
in South Carolina, reportedly by a Taiwanese work crew. The two destroyers were
commissioned in a December 17, 2005 ceremony in Keelung. Taipei Times, December 19,
2005, p. 3.
25 “Security through procurement? The debate over Taiwan’s defense spending,” Carnegie
(continued...)

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CRS-11
U.S. officials began voicing concerns over what they described as weaknesses
in Taiwan’s self-defense and a lagging pace to Taiwan’s arms purchases as far back
as 2002. According to a DOD report, Taiwan’s self-defense deficiencies include an
“opaque military policymaking system; a ground force-centric orientation; and a
conservative military leadership culture.”26 As the defense budget stalemate in
Taiwan continued, some U.S. officials began to question Taiwan’s level of
commitment to its own defense, implying that perhaps U.S. policy should be
reassessed accordingly.27 Criticism also has come from the Taiwan side, as Taiwan
officials periodically have accused the U.S. Navy of deliberately trying to subvert
progress on the 2001 diesel-electric submarine sale by over-inflation of estimated
construction costs and onerous funding requirements.28
Opposition Party Visits to China
In addition to the anti-secession law, PRC officials also have sought to increase
pressure on the Chen government by inviting Taiwan opposition leaders to visit
China and meet with PRC President Hu Jintao in Beijing. Both Taiwan’s Nationalist
Party (KMT) chairman Lien Chan and People First Party (PFP) chairman James
Soong accepted these invitations, making eight-day visits to China in April and May
2005. While some view the visits as a positive development for Taiwan-PRC
relations, others see them as Beijing’s effort to exploit Taiwan’s internal political
divisions and further isolate President Chen.29 Some critics — in Taiwan and
elsewhere — accused Lien and Soong of helping the PRC to more successfully “sell”
to the world its claim that the intentions of its March 2005 anti-secession law are
peaceful.30 At least half a dozen more Taiwan political groups have undertaken
unofficial visits to China since the Lien-Soong visits, and on August 16, 2005, KMT
Chairman Lien Chan further announced the formal start of grass-roots exchanges
between KMT and CCP officials from six different locations on each side, with
Taiwan party officials from Keelong, Hsinchu, Taichung, Changhua, Tainan, and
25 (...continued)
Endowment for International Peace, October 27, 2005.
26 The text of the 2002 DOD report is at [http://www.defenselink.mil/news/Jul2002/
d20020712china.pdf].
27 In a 2005 speech to the U.S.-Taiwan Business Council-Defense Industry Conference 2005,
Ed Ross, Director of DOD’s Defense Security Cooperation Agency, strongly criticized
Taiwan’s foot-dragging on passage of the defense budget, saying it was reasonable in such
a situation to question the level of U.S. commitment to Taiwan’s self-defense.
28 Minnick, Wendell, “Taiwan claims U.S. Navy is sabotaging SSK plans,” in Jane’s
Defence Weekly, February 15, 2005.
29 “It’s classic divide-and-conquer strategy: Assemble the most allies possible and isolate
your enemy.” Jean-Philippe Beja, senior fellow at the Center for International Studies and
Research in Paris. Cited in Magnier, Mark and Tsai Ting-I, “China Tries New Tactic with
Taiwan,” Los Angeles Times, April 29, 2005, p. A-3.
30 According to Shen Dingli, a PRC foreign policy expert at Shanghai’s Fudan University,
“These invitations for Taiwanese to visit help China regain the international high ground in
cross-strait matters. And it deflects international focus from the anti-secession law.” Ibid.,
Los Angeles Times, April 29, 2005.

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CRS-12
Kaohsiung; and CCP party officials from Shenzhen, Xiamen, Suzhou, Qingdao,
Ningbo, and Fuzhou. U.S. officials have warned Beijing against using the party-to-
party visits to drive a wedge between Taiwan’s political parties, and have stressed
that Beijing should be talking to President Chen and the elected Taiwan government.
Taiwan-Mainland Relations
Succeeding Taiwan governments since 1987 incrementally have eased long-
standing restrictions on contacts with the PRC. The most significant of these
decisions occurred on June 14, 2006, when Taiwan and China simultaneously
announced that they had reached agreement to allow up to 168 direct annual round-
trip charter passenger flights between China and Taiwan, shared evenly between
mainland and Taiwan airlines, during four public holidays and for other special
occasions.31
In Taiwan, cross-strait policies are under the purview of the Mainland Affairs
Council (MAC), a government body, while cross-strait talks are handled by the
Straits Exchange Foundation (SEF), a private organization authorized by the
government to handle these exchanges. Corresponding bodies in the PRC are the
government’s Taiwan Affairs Office, while cross-strait talks are handled by the
Association for Relations Across the Taiwan Strait (ARATS). Despite substantial
and growing economic ties, the two sides have not held official talks since October
14-19, 1998, in Shanghai and Beijing. Further progress stalled in 1999, when then-
President Lee Teng-hui declared that such talks should be conducted on an equal,
“state to state” basis, which Beijing took as a statement of Taiwan sovereignty.
Cross-Strait Developments in the Chen Administration. Although
Beijing has adamantly opposed the DPP and its pro-independence statements, both
the PRC and Taiwan governments have made selected overtures and statements since
2001 that some interpret as positive signs in PRC-Taiwan relations. In January 2001,
Taiwan launched what it called the “three mini-links” — for the first time permitting
direct transport, commerce, and postal exchanges between two outlying Taiwan
islands and the south of China. In October 2001, Taiwan officials announced they
would simplify visa application procedures for professionals from the PRC, making
it easier for them to reside and work in Taiwan. In November 2001, President Chen
urged the PRC to drop its opposition to negotiating with his administration. In May
2002, President Chen announced he would send a DPP delegation to Beijing to
establish contacts between the DPP and the Chinese Communist Party.
The PRC also softened its position. On January 24, 2002, PRC Vice-Premier
Qian Qichen described pro-independence advocates in the DPP as only an “extremely
small number” in the Party, and he invited DPP members to visit the mainland under
a “suitable status” — a change in the PRC’s policy of not meeting with DPP
members. In an interview with Russia’s ITAR-TASS news agency on March 14,
2002, the deputy director of the PRC’s Taiwan Affairs Office, Zhou Mingwei,
31 The four holidays are: Lunar New Year, Tomb Sweeping Day, the Dragon Boat Festival,
and the Mid-Autumn Festival.

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CRS-13
suggested that the PRC may be willing to accept the simultaneous representation of
both Beijing and Taipei in the United Nations, provided that Taiwan acknowledges
the “one-China” principle. Even so, the PRC has continued its missile build-up along
the south China coast opposite Taiwan, now deploying about 800 missiles.
On January 29, 2005, Taiwan and the PRC launched the first non-stop (although
temporary — only during the weeks surrounding the Lunar New Year holiday on
February 9, 2005) direct charter flights flown in 55 years between the two
adversaries. With the PRC’s enactment of the anti-secession law in March 2005,
Taiwan officials put a temporary hold on further direct-flight talks. On November
18, 2005, this suspension was lifted, and Taiwan and the PRC reached agreement to
offer cross-strait flights for the Lunar New Year from January 20-February 13, 2007.
Private-Sector Exchanges. Meanwhile, unofficial Taiwan-PRC contacts
and economic ties have grown increasingly robust in the past decade. Over 13
million visits have taken place from Taiwan to the mainland. Over 250,000 mainland
Chinese experts, entrepreneurs, and others have traveled to Taiwan for consultations
and exchanges. Exchanges of PRC-Taiwan scholars and experts for consultations on
cross-strait and other issues provide, in the view of some Taiwanese officials, an
active “second track” for PRC-Taiwan dialogue. Other events in cross-strait relations
have included the decision by oil companies in the PRC and Taiwan to explore
jointly offshore areas for oil; the start of flights from Taiwan to the mainland with
only a short stopover in Macao or Hong Kong; and Taiwan’s opening to third-country
ships, and selected mainland and Taiwanese ships, to carry cargo to and from
designated ports in Taiwan and on the mainland.
Economic and Trade Issues
Taiwan’s economy grew rapidly (around 10% a year) in the 1970s and 1980s.
Growth declined to around 5-6% a year in the 1990s as the economy matured.
During the first years of the 21st century, however, the Taiwan economy experienced
a serious slowdown. GDP growth for 2001 contracted by 2.2% — Taiwan’s first
economic contraction in 26 years. Exports were down 13.6% in the first seven
months of 2001, while the unemployment rate hovered at around 5%. Experts
blamed these economic difficulties on the global economic downturn, reduced U.S.
demand for Taiwan’s information technology exports, and the sizeable transfer of the
island’s manufacturing base to the PRC.
Even with the official restrictions that Taiwan continues to maintain on
investment and trade with mainland China, Taiwan businesses are increasingly
invested across the strait, although the exact figures remain unclear. Taiwan-China
trade has also increased dramatically over the past decade, so that China (along with
Hong Kong) now has surpassed the United States as Taiwan’s most important trading
partner. According to one report, Taiwan’s total bilateral trade with the PRC

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between January and August 2006 was $56.42 billion — a 16.3% growth compared
to the same period in 2005.32
This increasing economic interconnectedness with the PRC has put special
pressure on Taiwan’s DPP government to further accommodate the Taiwan business
community by easing restrictions on direct travel and investment to the PRC. But
such accommodations are worrisome to the DPP’s pro-independence political base
in Taiwan, who believe that further economic ties to the mainland will erode
Taiwan’s autonomy and lead to a “hollowing out” of Taiwan’s industrial base.33
Thus, each Taiwan decision on economic links with the PRC represents an uneasy
political compromise.
Taiwan’s World Trade Organization (WTO) Accession. After a 12-year
application process, Taiwan joined the WTO on January 1, 2002, as “the Separate
Customs Territory of Taiwan, Penghu, Kinmen, and Matsu” or, less formally,
“Chinese Taipei.” In keeping with the PRC’s wishes, Taiwan was not admitted to
the organization until after the PRC’s accession on December 12, 2001, following a
15-year application process. As a result of its WTO membership, Taiwan will have
to reduce tariffs and open a number of market sectors to foreign investment, thus
setting the stage for new opportunities for U.S. businesses. In addition, mutual
membership in the WTO is likely to have a significant impact on PRC-Taiwan
economic and trade relations. To be in compliance with their WTO obligations, both
Beijing and Taipei will have to reduce long-standing bilateral trade restrictions,
setting the stage for direct trade links between the two governments.
Avian Flu, SARS, and WHO Observer Status
Taiwan has not escaped the new viruses that have swept Asia since 2002. By
late May 2003, Taiwan had reported 585 probable cases of Severe Acute Respiratory
Syndrome, or SARS — which first surfaced in southern China in November 2002 —
placing it behind China and Hong Kong for the greatest number of cases. Taiwan
also has been affected by avian flu outbreaks in poultry since 2004, although
apparently with a less virulent strain than that ravaging bird populations and causing
some human fatalities throughout other parts of Asia.
Because Taiwan is not a member of WHO, the avian flu outbreaks had broader
political ramifications for Taiwan’s international position and for China-Taiwan
relations. For ten years, the PRC repeatedly has blocked Taiwan’s application for
observer status in the WHO. In 2007, Taiwan adopted a new strategy and applied
also for full membership in WHO. On May 7, 2007, at the annual meeting of
WHO’s administrative arm, the World Health Assembly (WHA), the Assembly voted
148-17 to strike the Taiwan full membership bid from the meeting agenda.
32 Bureau of Foreign Trade, Taiwan Ministry of Economic Affairs, November 9, 2006.
33 For instance, there are reportedly about 300,000 Taiwan citizens now living and working
in Shanghai.

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CRS-15
PRC objections to Taiwan’s WHO bids center on two claims: that Taiwan is not
a sovereign state, which is a prerequisite for WHO membership; and that since
Taiwan is part of China (as the PRC claims), it can benefit from WHO’s services
through the PRC government. Even as the SARS crisis was underway in 2002-2003,
PRC leaders continued vigorously to block any international effort to give Taiwan
unofficial “observer” status in the WHO, although PRC authorities did consent to a
WHO team visit to Taiwan to investigate early in May 2003. Taiwan authorities, in
a view supported by many Members of the U.S. Congress, argue that the rapid spread
and consequences of emerging communicable diseases makes participation in WHO
essential not only for Taiwan, but for world health.
Policy Trends in the George W. Bush
Administration
When it first assumed office, the Bush Administration articulated policies in
Asia that were more supportive of Taiwan and less solicitous of engagement with
China than those of previous U.S. Administrations. But since then, although U.S.-
PRC relations have remained remarkably smooth, other factors — the PRC’s anti-
secession law, Taiwan’s internal political divisions, and what is viewed as President
Chen’s more assertive and divisive push for separate political status for Taiwan —
have posed growing problems for this U.S. policy approach. In the face of these
complications, Bush Administration officials at times are thought to be trying to rein
in Chen and are placing more public caveats on U.S. support for Taiwan.
Initial Tilt Toward Taiwan. Many observers concluded in 2001 that the
newly elected George W. Bush had abandoned the long-standing U.S. policy of
“strategic ambiguity” in favor of “strategic clarity” that placed a clearer emphasis on
Taiwan’s interests and showed less concern for PRC views. In addition to approving
a major arms sales package for Taiwan, in an ABC television interview on April 25,
2001, President Bush responded to a question about what Washington would do if
Taiwan were attacked by saying that the United States would do “Whatever it took
to help Taiwan defend herself.” Since Section 3 of the Taiwan Relations Act (TRA)
addresses only arms sales and not the use of American military forces in the island’s
defense, the President’s answer caused considerable controversy over whether the
United States had changed its policy toward Taiwan’s security or was preparing to
change its position on Taiwan independence. Although State Department and White
House officials, including President Bush, later insisted that the President’s statement
was consistent with U.S. commitments in the TRA and that there had been no change
in U.S. policy, subsequent statements and actions by Bush Administration officials
in the following months continued to appear more supportive of Taiwan than those
of previous U.S. Administrations.
The Bush Administration’s support for Taiwan was in keeping with growing
sentiment in Congress in the late 1990s that the TRA was outdated and that Taiwan’s
self-defense capabilities had eroded while the PRC had grown militarily more
capable and more hostile to its smaller neighbor. These conclusions were supported
by a congressionally mandated annual report, first issued by the Pentagon in February
1999, assessing the military balance in the Taiwan Strait. The 1999 report concluded

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that in light of improvements in offensive military capabilities, by the year 2005
China will have acquired the ability “to attack Taiwan with air and missile strikes
which would degrade key military facilities and damage the island’s economic
infrastructure.”
In addition to differences over security issues, the Administration also differed
from its predecessors in how it handled requests for U.S. visits by senior Taiwan
officials. Whereas earlier U.S. Administrations were either unwilling or forced by
congressional pressure to allow Taiwan officials to come to the United States, the
Bush Administration was more accommodating. The White House approved a transit
stop for new Taiwan President Chen Shui-bian in 2001 during which he visited both
New York (previously off-limits) and Houston, attended public functions and
meetings, and met with nearly two-dozen Members of Congress. Similar U.S. visits
were approved for Taiwan’s Vice-President, Annette Lu, (in early January 2002), and
for Taiwan’s Defense Minister, Tang Yao-ming (March 2002), who attended a
defense conference in Florida and while there met with U.S. Deputy Secretary of
Defense Paul Wolfowitz and U.S. Assistant Secretary of State James Kelly. In late
October 2003, the Bush Administration accommodated President Chen with a higher-
profile transit visit to New York City — a visit that received wide press coverage in
Taiwan.
Taiwan the “Unhelpful”. Since assuming office, however, the Bush
Administration has been reshaping its own policy articulations concerning both
Taiwan and the PRC. Administration officials now see smooth U.S.-PRC relations
as an important tool in cooperating against terrorism and maintaining stability on the
Korean peninsula. As articulated by Vice President Cheney during his visit to
Shanghai in April 2004, the White House judges that “the areas of agreement
[between the United States and the PRC] are far greater than those areas where we
disagree...”34
Taiwan’s unpredictable and volatile political environment has posed special
challenges for this White House balancing act. During Taiwan’s presidential and
legislative campaigns in 2004, the Administration continued to balance criticisms of
the PRC military buildup opposite Taiwan with periodic warnings to the Taiwan
government to avoid provocative actions and cautions that U.S. support for Taiwan
is not unconditional.35 In recent months, the Taiwan government’s continued
willingness to employ the provocative gesture has heightened the concerns and
sharpened the criticism of many U.S. officials about the credibility of President
Chen’s administration and his past to the U.S. government. The uncharacteristically
pointed language directed at Taiwan in the State Department’s written statement of
March 2, 2006; in its press briefing of June 19, 2007; and in subsequent blunt
statements by Deputy Secretary of State John Negroponte (August 27, 2007), NSC
34 From the Q & A session with Vice President Cheney following his speech at Fudan
University in Shanghai, broadcast by Beijing CCTV in English, found in FBIS, April 15,
2004.
35 “There are limitations with respect to what the United States will support as Taiwan
considers possible changes to its constitution.” Testimony of Assistant Secretary of State
James A. Kelly before the House International Relations Committee, April 21, 2004.

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Senior Director for Asian Affairs Dennis Wilder (August 30, 2007), and Deputy
Assistant Secretary for East Asia Thomas Christensen (September 11, 2007) — all
cited elsewhere in this report — reflect these U.S. concerns.36
Implications for U.S. Policy
For much of the past 27 years, Taiwan and PRC officials generally maintained
that the United States should remain uninvolved in issues concerning Taiwan’s
political status. That appears to be changing, and U.S. officials have been under
subtle but increasing pressure from both governments to become directly involved
in some aspects of cross-strait ties. PRC officials late in 2003 began quietly urging
the United States to pressure Chen Shui-bian into shelving plans for an island-wide
referendum. In 2004, they pressed U.S. officials to avoid sending the “wrong
signals” to Taiwan — defined as those encouraging independence aspirations.
Members of the Taiwan government have begun suggesting to U.S. officials that the
Taiwan Relations Act needs to be strengthened or reevaluated and have sought U.S.
support for Chen’s constitutional reform plans. In the month between Chen Shui-
bian’s January 2006 statement that he would consider “abolishing” the National
Unification Council and his February 2006 announcement that the NUC would
“cease” its operations, several rounds of meetings and talks between U.S. and Taiwan
officials were credited with the subtle but politically important rhetorical change.
Taiwan’s supporters within the U.S. Congress continue to press for more
favorable U.S. treatment of Taiwan and for Taiwan’s inclusion in some capacity in
international organizations like the World Health Organization. Congressional policy
initiatives have included the formation of the Congressional Taiwan Caucus on April
9, 2002, and the formation of the Senate Taiwan Caucus on September 17, 2003.
Both of these bodies have strongly bipartisan memberships. Congress also regularly
continues to consider legislative measures seeking to reinforce or expand on U.S.-
Taiwan ties; key measures in the 110th Congress are listed below.
Faced with competing pressures and with continuing transformations in both the
PRC and Taiwan systems, U.S. officials may be facing new and more difficult policy
choices concerning Taiwan in the next few years. In addition to raising the risks of
political and economic instability, growing political polarization in Taiwan could
36 The March 2, 2006 statement reads in part: “...Our understanding from the authorities in
Taiwan was that the action Taiwan took on February 27 [to suspend the National Unification
Council] was deliberately designed not to change the status quo, as Chen Shui-bian made
clear in his 7-point statement. Abrogating an assurance would be changing the status quo,
and that would be contrary to that understanding. We believe the maintenance of Taiwan’s
assurances is critical to preservation of the status quo. Our firm policy is that there should
be no unilateral change in the status quo, as we have said many times.” The June 19, 2007
press briefing comment about Taiwan’s proposed referendum on joining the United Nations:
“...The United States opposes any initiative that appears designed to change Taiwan’s status
unilaterally. This would include a referendum on whether to apply to the United Nations
under the name Taiwan....Such a move would appear to run counter to President Chen’s
repeated commitments to President Bush and the international community. We urge
President Chen to exercise leadership by rejecting such a proposed referendum.”

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erode the quality of U.S.-Taiwan contacts and create fractures and divisiveness
within the sizeable U.S. Chinese-American community. Pressure from multiple
sources could continue to build for U.S. officials to take any number of actions: to
reassess all the fundamentals of U.S. China/Taiwan policy in light of changing
circumstances; to reinforce American democratic values by providing greater support
for Taiwan and possibly support for Taiwan independence; or to abandon Taiwan in
favor of the geopolitical demands and benefits of close U.S.-China relations. U.S.
officials are likely to face mounting pressure to adopt a more pro-active mediating
role in the cross-strait relationship. Finally, any policy developments that affect
Taiwan have direct consequences for U.S.-China relations and could involve crucial
decisions among U.S. officials about the extent of U.S. support for Taiwan’s security.
In the coming two years, it appears that actors from across the political spectrum —
including governments, interest groups, political parties, and individuals — will
continue efforts to push the United States into greater commitments and clarity on
various questions involving Taiwan.
Legislation
H.Con.Res. 73 (Tancredo)
Expressing the sense of Congress that the United States should resume
diplomatic relations with Taiwan. Introduced February 16, 2007, and referred to the
House Foreign Affairs Committee.
H.Con.Res. 136 (Chabot)
Expressing the sense of Congress that the United States should lift restrictions
on visits by high-level Taiwan officials, including the Taiwan president. Introduced
on May 1, 2007, and referred to the House Foreign Affairs Committee. The
Committee marked the measure up on June 26, 2007, and passed it by unanimous
consent under suspension of the rules. The House passed the measure by voice vote
on July 30, 2007, and the measure was referred to the Senate Foreign Relations
Committee on August 3, 2007.
H.Con.Res. 137 (Berkley)
Expressing the sense of Congress that the United States should initiate
negotiations to enter into a free trade agreement with Taiwan. Introduced on May 1,
2007, and referred to the House Ways and Means Committee.
H.Con.Res. 170 (Tancredo)
Expressing the sense of Congress that the International Olympic Committee
should allow Taiwan to participate in the 2008 Beijing Summer Olympics under the
name and flag of its own choosing. Introduced June 15, 2007, referred to the House
Foreign Affairs Committee.
H.R. 1390 (Tancredo)
A bill requiring Senate confirmation for the position of Director of the American
Institute in Taiwan (AIT). Introduced on March 7, 2007, and referred to the House
Committee on Foreign Affairs.

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Chronology
09/21/07 —
The General Assembly agreed to support the General Committee’s
decision not to place Taiwan’s application on the agenda.
9/19/07 —
For the 15th consecutive year, a U.N. General Assembly Committee
(the General Committee) rejected the recommendation that Taiwan’s
formal application for U.N. membership be considered at this year’s
meeting of (the 62nd) General Assembly.
09/17/07 —
The United Evening News reported that Taiwan’s military had been
planning to deploy missiles on the island of Matsu but had suspended
the plan due to U.S. pressure.
09/16/07 —
China’s Taiwan Affairs Office said that Beijing had “made necessary
preparations” to “deal with serious conditions” as a result of Taiwan’s
U.N. membership bid.
09/12/07 — The Pentagon announced $2.2 billion in possible military sales to
Taiwan, including 12 surplus Orion P3-C maritime patrol craft and
144 SM-2 Block 3A Standard anti-aircraft missiles, built by
Raytheon.
09/10/07 — Taiwan Defense Minister Ko Cheng-heng said that Taiwan had an
“urgent and legitimate need” to buy F-16s. Minister Ko made the
statement while attending the Sixth U.S.-Taiwan Defense Industry
Conference in the United States.
08/27/07 —
In an interview with Hong Kong Phoenix TV, U.S. Deputy Secretary
of State John Negroponte reiterated U.S. opposition to Taiwan’s
holding a referendum on U.N. membership.
08/06/07 —
According to the United Daily News, Taiwan wants to buy at least 6
Aegis-equipped U.S. destroyers for more than $4.6 billion.
07/23/07
— The United Nations Legal Affairs Office
rejected
Taiwan’s
application for U.N. membership on the grounds that it violated the
agency’s “one China” policy.
07/22/07 — President Chen Shui-bian said that he has suggested that military
shows (“performances”) be staged this year as part of the October 10th
“Double Ten” national day celebrations.
07/21/07 —
President Chen Shui-bian said PRC diplomas would continue to be
unrecognized in Taiwan and PRC nationals would not be permitted
to attend Taiwan universities.
07/20/07 — The Ministry of Education said it had invited scholars from the
Taiwan History Association to consider revising “improper terms” in

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Taiwan textbooks, such as changing “cross-strait relations” to
“nation-to-nation relations” and removed Sun Yat-sen’s title as
founding father of the Republic of China.
07/20/07 —
DPP Presidential candidate Frank Hsieh left for a 10-day visit to the
United States.
07/20/07 — Taiwan announced it had applied for U.N. membership under the
name “Taiwan.”
07/17/07 —
The Taipei Times reported that KMT sources said the United States
had postponed approval of the sale of 66 F16 C/D fighters to Taiwan
because of President Chen’s UN referendum.
07/16/07 —
Taiwan was reported to be writing a formal letter of request for “price
and availability data” for 66 F16 C/D Block 50/52s.
07/16/07 — DPP Presidential candidate Frank Hsieh said he would encourage
Japan to adopt a U.S.-style “Taiwan Relations Act.” Taipei Times.
07/15/07 —
Taiwan’s Ma Ying-jeou promised to revise Taiwan’s constitution in
2010 with a “democratic re-engineering project.”
07/02/07 — Taiwan’s VP Annette Lu began a 10-day trip to the Dominican
Republic, Paraguay, and Guatemala via Panama.
06/19/07 — A State Department press spokesman reacted forthrightly to a
question about Taiwan, saying, “We do not support Taiwan’s
membership in international organizations that require statehood [for
membership], including the United Nations. The United States
opposes any initiative that appears designed to change Taiwan’s
status unilaterally. This would include a referendum on whether to
apply to the United Nations under the name Taiwan....Such a move
would appear to run counter to President Chen’s repeated
commitments to President Bush and the international community.”
06/18/07 — President Chen Shui-bian announced that, in conjunction with
elections next year in either January or March, he will hold a
referendum on whether Taiwan should join the United Nations under
the name “Taiwan.” One million signatures are needed on a petition
to place the item on the referendum agenda.
05/15/07 — According to the AWStJ, Taiwan President Chen appointed Chang
Chun-hsiung to replace Premier Su Tseng-chang, who resigned on
May 12, 2007. Chang, the 6th Premier in seven years, has been
Chairman of SEF and formerly headed the cabinet under Chen in
2000-2002.
05/14/07 —
WHO rejected Taiwan’s bid for full membership, voting in the World
Health Assembly (WHA) 148-17 to strike discussion of the issue at

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the 2007 annual meeting. The U.S. and Germany voted no, but urged
that Taiwan be given opportunities for “meaningful participation” in
the global health system, according to U.S. Health Secretary Michael
Leavitt.
05/13/07 —
Former Senator Bob Dole issued a commentary in the Washington
Times urging Taiwan’s membership in WHO.
05/07/07 —
Former Taiwan Premier Frank Hsieh won the DPP’s first phase of the
presidential primary.
05/05/07 —
China announced it was severing diplomatic relations with St. Lucia
after the Caribbean country normalized relations with Taiwan.
05/03/07 —
St. Lucia reaffirmed that it was severing ties with China to normalize
ties with Taiwan.
04/01/07 —
Taiwan residents of Penghu County were authorized to begin using
the “three small links” to China — direct routes China via Kinmen
and Matsu, established in 2001.
03/27/07 —
Taiwan unveiled a new, upgraded version of the indigenous fighter,
the Ching-Kuo with upgraded mission computers, an advanced fire-
control system, and four medium-range air-to-air missiles.
03/20/07 —
American Institute in Taiwan (AIT) Director Steve Young, speaking
at a dinner to the American Chamber in Taiwan, urged the legislature
to pass the arms procurement package, saying the United States was
becoming increasingly frustrated with Taiwan’s divisive political
partisanship.
03/20/07 —
Taiwan announced that live-fire military maneuvers would be held in
April and May to practice repelling enemy landings.
03/18/07 — Taiwan announced that Joseph Wu, head of the Mainland Affairs
Council and a DPP member, would replace David Lee as head of
Taiwan’s office in the United States.
03/05/07 —
A U.S. State Department spokesman criticized President Chen’s “four
wants” remarks and said Washington considers Chen’s willingness
to fulfill his earlier pledges not to declare Taiwan independence to be
“a test of his leadership, dependability and statesmanship....”
03/04/07 —
President Chen announced to a pro-independence Taiwan audience
what appeared to be a new doctrine — the “four wants” of Taiwan:
independence, a new constitution, more economic development, and
an official name change to “Taiwan.”
03/01/07 —
The U.S. Department of Defense notified Congress of plans to sell
Taiwan $421 million in Advanced Medium Range Air-to-Air

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CRS-22
Missiles (218 AMRAAM) and Maverick missiles (235) as well as
spare parts and maintenance equipment.
02/26/07 —
Taiwan’s President Chen called Chiang Kai-shek a mass murderer for
his role in the violent suppression of protests on February 28, 1947 —
known as the “228 Incident.”
01/17/07 — The PRC’s Taiwan Affairs Office announced that Taiwan-China
trade had increased 18.2% in 2006 to top $100 billion.
06/28/06 —
The House agreed by voice vote to the Tancredo Amendment to H.R.
5672, prohibiting funds from being used to enforce long-standing
guidelines on U.S. official relations with Taiwan.
06/08/06 — The State Department issued a press statement saying the United
States attached “profound importance” to President Chen’s renewed
public promise to make no changes in the status quo and to exclude
any sovereignty measures in a revision of Taiwan’s constitution.
06/07/06 —
Raymond Burghardt, chairman of the American Institute in Taiwan
(AIT), arrived in Taiwan for discussions concerning Taiwan’s
political situation.
For Additional Reading
CRS Report RS22388, Taiwan’s Political Status: Historical Background and
Ongoing Implications, by Kerry Dumbaugh.
CRS Report RL33684, Underlying Strains in Taiwan-U.S. Political Relations, by
Kerry Dumbaugh.
CRS Report RL30957, Taiwan: Major U.S. Arms Sales Since 1990, by Shirley Kan.

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