Beijing Has No Room to Compromise on Taiwan, China’s Top Envoy Says

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(Bloomberg) -- The rhetoric between Beijing and Taipei is heating up ahead of Taiwan’s presidential election on Saturday, even as relations between the US and China more broadly show signs of stabilization.

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A virtual event in Atlanta on Tuesday demonstrated China’s dilemma in seeking to assert its sovereignty over Taiwan while keeping a lid on tensions with the US. Xie Feng, Beijing’s top envoy in Washington, repeated the Communist Party’s longstanding view in calling advocacy of Taiwan independence “as incompatible with peace of the Strait as fire with water” while saying “the Chinese government simply has no room for compromise.”

At the same time, he also touted positive developments in US-China ties since leader Xi Jinping met with US President Joe Biden in November. He said the world’s biggest economies could cooperate on issues ranging from the Middle East and Ukraine to agriculture and education, even citing Boeing Co.’s 737 Max aircraft as evidence of positive developments in the relationship.

Xie’s comments signal Beijing’s need to show it’s still tough on issues close to home as it tries to make more diplomatic progress with the US. He stressed that Taiwan is the most important and sensitive issue in China-US relations.

“The hope is to make tough statements on baselines to cover one’s political flank,” said Wen-ti Sung, a political scientist with the Australian National University’s Taiwan Studies Program. “Having checked off that box, Xie could then proceed to focus on areas of common interest, and push for repairing US-China ties.”

There’s much at stake in the Jan. 13 election as it will define the direction of cross-Strait relations. Lai Ching-te, currently serving as vice president in the Democratic Progressive Party administration — is presenting himself as a continuity candidate, with no plans to disrupt relations with Beijing.

His opponents — Hou Yu-ih of the Kuomintang and Ko Wen-je of the Taiwan People’s Party — are both promising pragmatic steps to improve relations with Taiwan’s giant neighbor, without sacrificing the island’s de facto independence.

Anxiety is high across Taiwan as election looms. The defense ministry in Taipei issued an air raid alert over a Chinese satellite launch on Tuesday, raising concern it could be part of Beijing’s efforts to disturb the island’s voters.

Still, things between Washington and Beijing are on better footing than they were in 2022. In the months since Biden and Xi met, the two nations have restored military talks, US defense officials said China has curbed dangerous activity in the air and at sea, and Xi suggested Beijing will send pandas back to American zoos as “envoys of friendship.”

The Chinese leader said Beijing is willing to work with the US to build steady and sustainable ties, according to a government statement on Wednesday.

The US and China mark 45 years of diplomatic ties this year. At a gala dinner last week in Beijing to celebrate that milestone, Foreign Minister Wang Yi reiterated the nation’s intention to allow more American students to study in China, and said a giant panda may arrive in California by the end of 2024.

“We have no intention to displace or lord over anyone — and still less to seek hegemony,” Wang told the crowd, which included David Meale, the No. 2 diplomat at the US embassy in Beijing.

Taiwan Uncertainty

The Taiwan election does give rise to political tensions and uncertainty. Beijing’s Ministry of Commerce said authorities are considering suspending tariff concessions for some products it imports from the island, following a failure by the ruling DPP to lift restrictions on China.

The impact of reimposing tariffs, though, would likely be small. When Beijing ended a suspension on levies for some chemicals last month, Taiwan’s economic ministry said the duties affected just 1.3% of its total exports to China.

The island has become less reliant on trade with its neighbor, too. Exports to China fell 18% last year and accounted for 35% of Taiwan’s total shipments, the lowest in two decades, according to official data.

China is likely to be assessing its options following the election and the key question is just how far it would be willing to go to signal its displeasure, said Jennifer Welch, chief geoeconomics analyst at Bloomberg Economics. Such measures lacked major economic impact in the past, given Beijing’s reliance on Taiwanese inputs like semiconductors, she added.

Beijing hasn’t suggested more aggressive actions. Liu Jianchao, a senior Chinese diplomat, declined to specify how China would react to a victory by DPP’s Lai, simply saying China’s stance remains “clear, strong and unchanged.”

While Beijing has become more militarily assertive over Taiwan, it has often decided to be practical because it’s in its interest to do so, said Scott Kennedy, a China specialist at the Center for Strategic & International Studies.

“China has itself developed extensive commercial and people-to-people ties with Taiwan,” he said. “Let’s hope that pragmatism wins out over ideology.”

--With assistance from Tom Hancock, James Mayger, Christopher Anstey and Ramsey Al-Rikabi.

(Updates with Xi’s comments in 10th paragraph)

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