276. Telegram From the Taipei Office of the American Institute in Taiwan to the Washington Office of the American Institute in Taiwan1

3407. Subject: Post Normalization Taiwan. Ref: Taipei 1882.2

1. “Post normalization” Taiwan was one of the reports cited in reftel as being under preparation. This cable is the summary of that paper, which will be pouched to the Department and to Tokyo, Beijing, and Hong Kong.3 Policy implications for the U.S. will be the subject of a subsequent message later this year.

2. Introductory Remarks.

—As anticipated, normalization has not “rent the fabric” of Taiwan’s economic, political, or social system. The factors governing Taiwan’s evolution, internal and external, are not basically changed by this single event. Normalization nonetheless was a significant addition to the elements of instability in the Taiwan equation, and how the U.S. handles its relations with Taiwan will remain an important factor.

3. Popular Reactions to Normalization.

Most on Taiwan were upset at least by the manner of U.S. normalization with the PRC. The Mainlanders in particular felt normalization undermined their protection from the PRC and left them more vulnerable to Taiwanese pressures. While some of the Taiwanese responded favorably to normalization as undermining the justification which the KMT and GONT use for maintaining Mainlander control in the [Page 996] party and government, they are increasingly aware of the disadvantages, particularly for Taiwan’s security and the consequences for its economy.

4. Impact of Normalization on the Power Structure.

Normalization has not altered the basic power system on Taiwan although it has altered the climate for political development. President Chiang retains his preeminent position at the apex of each element of the power structure. While considered ultimately responsible for what was an important foreign blow, few consider that it was his fault, and his power was basically unaffected by normalization. The three principal elements of the power structure, the security services, the armed forces and the party, have undergone no major personnel or other changes following normalization. While the security services initially were stressed and the theme of unity in the face of an increased Communist threat was used to justify a modest crackdown, CCK has carefully orchestrated their use. Although many in the security services are unhappy with subsequent conciliatory actions ordered by the President, CCK’s prestige as a professional security figure and his direct control over the numerous security organizations insure his ability to keep them receptive to his directives. The security organizations will probably continue to point out that conciliatory gestures by the President will be interpreted as signs of weakness, but the President has other sources of intelligence and advice on which he has no doubt relied in working out a more complex plan than that suggested by the security services.

5. The armed forces have two basic functions, internal security (as part of and as back-up for the other security services) and meeting the threat from the PRC including handling the American military connection. The former task has been in the hands of the Minister of Defense (General Kao Kuei-yuan) and the latter in the hands of the Chief of the General Staff (Admiral Soong Ch’ang-chih). Normalization has not reduced the importance of either the political/security soldiers or the professional soldiers, and CCK has to date made no changes in either leadership.

6. The KMT is one organization in which the beginnings of potentially important changes are being made. As a club of which all top leaders are members, the KMT is a powerful force in Taiwan. However, as an administrative apparatus, it has for years been defective, and CCK has frequently referred to the need to revitalize it. The postponement of the December elections provided CCK with time to try out a significant new approach, that of naming technocrats from outside the party to key administrative positions. Rejuvenation has been tried before, and this experiment has had only mixed success, but CCK now appears determined to make some changes. Opposition from the [Page 997] old-timers of the party and the security services has so far been overruled, but at the same time the youths have only limited influence. Although the KMT is a symbol of the backward political structure, its actual role in the power structure is less significant than the others, and the current divisions within it between the young technocrats and the old party hacks make its future role even more ambiguous.

7. The technocracy has long been considered irrelevant in a discussion of the real power structure on Taiwan. Although many top technocrats are considered important if they have also an important KMT role, the technocrats as a group have not been taken seriously. However, it is increasingly evident to everyone that the Taiwan of 1979 is not the Taiwan of the early 1950’s which was dominated by the incompetent KMT party hacks and the military. The technocrats as a group are essential to keep this new Taiwan functioning. In addition, the technocrats are given the principal credit as architects and builders of the new Taiwan. Also the increasing complexity of Taiwan has required continuing infusion of technocrats into the armed forces and party. The President’s emphasis on competence, which is second only to that on reliability, has resulted in a diminution of the number of top officials still in positions of power who remain merely because of long service to the KMT. Time has facilitated CCK’s task. Normalization was not blamed on the technocrats despite their almost universal connection with the U.S. In fact, it seems that the technocrats have been improving their position steadily, and normalization has merely highlighted the degree to which they are essential for the continuing development and strength of Taiwan. Normalization has therefore marginally improved their political position.

8. CCK’s Game Plan.

Some outside observers have spoken of the “options” available to CCK as alternatives to good relations with the United States. The Soviet option is one which CCK has pointedly rejected, and few here believe that the Soviets could be relied upon to treat Taiwan as anything more than a pawn. Therefore, the USSR provides no alternative to the U.S. Another option cited has been the acquisition of a nuclear weapons capability. While CCK would like the ability to move towards production of such a weapon should circumstances become markedly more perilous, he is well aware that discovery of practical measures taken to acquire this capability would destroy the many ties with the U.S. on which he believes future security must be based.

9. Some have thought that CCK might declare Taiwan an independent country and ask for world recognition as such, including membership in the UN. Only a few rather unrealistic oppositionists seem to believe that such an effort would have any practical impact on foreign countries or the UN. Most recognize that normalization clearly [Page 998] signalled that the U.S. would not respond to any such declaration. Most now note that it contains many dangers and few opportunities.

10. As another alternative to reliance on the U.S., some observers think CCK can work out an arrangement with the PRC. CCK clearly believes that the current PRC “united front tactics” provide no prospects for Taiwan since in effect the PRC has the precondition of Taiwan’s recognizing its inferior status as a province under the Beijing government. The PRC expects the fruits of negotiations prior to holding them. He also feels that the instability which the government and policies of the PRC have demonstrated since 1949 give little grounds for optimism about the permanence of any arrangements.

11. While Japan retains a certain prestige, there are few here who believe that it is capable of playing the kind of security role which would permit Japan to replace the U.S. as an effective backer.

12. The US Option.

CCK clearly considers that the U.S. option is the only realistic one. Shortly after normalization he described Taiwan’s policy as “swallowing one’s teeth with the blood on them,” the strongest Chinese expression of forebearance in the face of great provocation. The U.S. has been for years the principal influence on Taiwan and so many aspects of its economy as well as the backer of Taiwan’s security. CCK sees no alternative to the continuation of as much of that relationship as possible.

13. On the internal scene, CCK clearly intends to continue the economic programs which have resulted in the Taiwan “miracle.” On the political front he is well aware of the evolution which has resulted in an increased desire for political liberalization, and he clearly wishes to move in that direction. He is equally aware of the perils of liberalizing too rapidly and thereby losing control. He wishes to augment political dialogue without ceding any actual political power, a compromise solution which he hopes will be sufficient for the foreseeable future. He will also favor an increase in the participation of the Taiwanese in the relatively powerless legislative branch and in the executive branch, but few will probably be accorded positions of real power.

14. CCK does not view succession as simply a matter of finding an heir apparent and grooming him to take over. CCK’s own rise to power was through a unique process. He has attained a political power which he cannot expect to pass on to anyone intact since he alone functions within all the elements of the power structure. His goal therefore appears to be to have competent people in all aspects of the power structure, the security services, the military, the party, and the technocracy. It is this power structure which, following his demise, will itself work out a new sharing of power and the persons to exercise power under that system. In the shorter term, it appears he would expect the power [Page 999] to revert to the Premier, the position from which he governed prior to becoming President. The succeeding President would be a figurehead (the current Vice President is insignificant) until the new power structure worked out who would accede to the Presidency and what powers the new President would have. While some might consider CCK is avoiding the succession problem, he has seen enough examples of leaders who have tried to exercise political power from beyond the grave to realize that it would be unrealistic to attempt to dictate the future.

15. The Oppositionists.

The oppositionists are not a political party, and they have no formal organization or leadership. They have a broad range of ideologies, and are united by little more than their criticism of the KMT and their desire to play a political role outside the KMT. While they are almost all Taiwanese, their political appeal avoids overt communalism. Because of prosperity, they lack a major political issue. While not a major challenge to the KMT, they do represent a good deal more than themselves and are a vote-getting force through criticism of the KMT/GONT and appeals for greater human rights and for a more important role for the Taiwanese in the determination of their own destiny.

16. The principal division among the oppositionists boils down to moderation or extremism; cooperation with CCK and the GONT (while criticizing) or confrontation; evolution or revolution. CCK appears to be ready to deal with a moderate, cooperative approach, but he may not be prepared to go far enough in adopting positions acceptable even to the moderates to attract oppositionists away from extremism.

17. The moderates appear to have the better leadership, more realistic politics, and better chances of backing—financial and otherwise—from the Taiwanese population than the extremists. They will certainly continue to contest elections with the KMT, but they will be gradualists in their approach to legislative power and subsequently to a role in the executive. They will continue to push hard on several issues such as the need for elections for a more representative legislature, the right to criticize the government/KMT (freedom of the press), and the rule of law, that is, law to protect the individual and not only as an instrument of the executive.

18. Prospects for Taiwan.

During the short term, there is a good chance that Taiwan will continue on its current course. The economy should remain stable and by careful orchestration CCK should be able to manage the internal political problems. Major economic problems caused by external events, perception of security difficulties from the PRC and the death of CCK could change that optimistic estimate.

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19. During the longer term, the chances are greater of instability. There is a greater likelihood of the death of CCK (age 69) who is currently the glue holding many things together; the viability of his government system without him is untested. The security of Taiwan over the longer run may be perceived as more in question if the PRC pushes for the “resolution” of the Taiwan problem. With security problems Taiwan’s economy could not provide the economic development on which political stability has been based. Slow political progress, while acceptable under current conditions, will become increasingly perceived as insufficient. Even over the longer term Taiwan’s prospects are good, but there are many imponderables, one of which is U.S. policy.

  1. Source: National Archives, RG 59, Central Foreign Policy File, D790448–0144. Confidential. Repeated to Beijing, Tokyo, and Hong Kong.
  2. Telegram 1882 from AIT Taipei to AIT Washington, July 24, transmitted AIT Taipei’s tentative schedule for reporting. (National Archives, RG 59, Central Foreign Policy File, P790144–1284)
  3. AIT Taiwan divided the paper into five parts and cabled them in telegrams 3799, October 22; 3836, October 23; 3880, October 26; 3970, October 31; and 4033, November 3. (National Archives, RG 59, Central Foreign Policy File, D790484–1081; D790487–0514; D790494–0083; D790501–0660; and D790508–0197) On November 5, Pratt wrote to Roy, “I am enclosing a piece we have done on the general situation in Taiwan nearly a year after normalization. We sent it to Washington telegraphically because among the many inconveniences apparently is that we are not using the State Department airgram forms.” He also explained the purpose of the report: “One of the reasons for putting out a rather general piece is that we have found many in Washington and elsewhere are operating on such different assumptions about what the government here is all about and what its plans for the future may be. This report is designed to provide a kind of first sketch, and we are inviting Taiwan observers in Washington and elsewhere to tell us what they see differently so that we may eventually get to a portrait on which there can be some consensus.” (Letter from Mark S. Pratt to J. Stapleton Roy, November 5; Department of State, American Embassy Beijing, 1979 Central Subject Files: Lot 82 F 82, Pol 2 Taiwan)