Three decades after his death, the body of the man who once claimed sway over more people than anyone else on earth lies unburied, still awaiting repatriation to his native land. At weekends, visitors walk around a lake to the pavilion where the corpse of Chiang Kai-shek rests in a marble casket. Visiting the pavilion recently I was prompted by a guard to bow. As I nodded my head in honour of the generalissimo who ran China from the end of the 1920s until his flight to Taiwan in 1949, a nationalist marching song started up in the next room.
In the 26 years Chiang spent as the military dictator of his island haven 100 miles off the mainland, he never abandoned the dogma that he remained the leader of the legitimate government of China. As such, he counted on returning one day to the country he had ruled for two decades, at the head of the Kuomintang Nationalist party, until his regime crashed in the ruins of an eight-year war with Japan and defeat by the Chinese Communist party.
After his death in 1975, burying Chiang on an offshore island was unthinkable. So his body waits to be taken home, either to his home village near China's east coast or, even better, for burial in the former nationalist capital of Nanjing alongside his mentor, the founder of the nationalist party, Sun Yat-sen.
For Chiang and the Kuomintang, there was only one China-theirs. The communists were usurpers who would be swept away in time. The national assembly in the Taiwanese capital of Taipei even had members who purported to represent mainland provinces.
Today, the authoritarianism practised by Chiang, and partly undone by his son and successor, has vanished. Taiwan is one of Asia's young democracies, with a boisterous political life. It is no longer taboo to discuss the massacre of some 20,000 Taiwanese by nationalist troops as they made the island safe for the generalissimo, as it was during the decades of martial law. The Kuomintang has lost control of both the presidency and parliament. Civil servants have been told that they may take down the portraits of the generalissimo in their offices, and his head has been removed from some of the island's banknotes.
The dominant issue for Taiwan is no longer whether it pursues the chimera of reclaiming mainland China, but whether it is part of China at all. This is an issue which reaches out far beyond a domestic dispute between the two republics of China. Taiwan is proving that it still has the potential to become an international flashpoint, with troubling implications for governments which advocate spreading democracy around the globe but which also want good relations with mainland China.
Beijing props up the dollar
During the cold war, the Taiwan strait became the scene of clashes between nationalists and communists, raising the spectre of a war into which the US would be dragged as Chiang's increasingly unwilling ally. Richard Nixon began the process of American recognition of Beijing and Washington's acknowledgement that there was, indeed, only One China but that it was the People's Republic, not Taiwan. In the 1990s, Bill Clinton sought to establish a "strategic partnership" with the People's Republic of China.
George W Bush, however, came to office declaring that the mainland was a competitor. Soon afterwards, the collision of a US spy plane and a Chinese fighter jet, forcing the US plane to land on the southern Chinese island of Hainan, raised the tension (although the doves on both sides prevailed over the hawks). In the US, companies and unions have set up a rising chorus of complaints about cheap Chinese goods hurting domestic manufacturing and costing jobs. China joined with India and Brazil in opposing the west at the WTO talks in Canc?n last year. Always a fierce defender of the sanctity of national sovereignty, Beijing disapproved of the invasion of Iraq, while Washington also annoyed the mainland by agreeing to sell Taiwan warships.
However, these points of friction now look trivial on the wider canvas of Sino-US relations. Bush has recently welcomed Beijing as a valuable ally in the "war on terror" given its frontier with central Asia; the mainland government has taken the opportunity to tighten its hold on the mainly Muslim far west of the country. Concerns about human rights, dissidents, Tibet and the persecuted Falun Gong have been chased away by realpolitik.
Nor is the economic relationship quite what it seems from the rhetoric about the $100bn-plus US trade deficit with China. Cheap Chinese goods may cost American jobs but they also help to keep down prices at Wal-mart. From insurance to motor cars, US companies have been at the forefront of the $50bn in foreign direct investment that flows into China each year, waiting for the spending power of a giant middle class to take off.
Moreover, the mainland and its special administrative region of Hong Kong are very big buyers of US treasury and mortgage bonds-by coincidence, the value of securities they have bought in America since the start of last year is reckoned to be more than the $79bn Bush initially asked congress for to fund the Iraq war. If Beijing switched its holdings from dollar-denominated securities to those denominated by euros or gold, the dollar would plunge and the international monetary system would undergo a major shock.
Chinese bond purchases provide funding for the expanding federal deficit, predicted to reach $477bn in 2004, the servicing of which requires almost a quarter of federal spending. They also help to keep down US interest rates, thus making it cheaper for the government to borrow and for consumers to buy domestically made goods and property on credit, as well as the consumer electronic goods assembled in China under reassuringly American brand names. On a wider global scale, though, China's economy still ranks only around sixth in the world; its growth, put officially at 9.1 per cent for 2003, is one of the few international motors outside the US.
The mainland is not short of problems-a banking system loaded with bad debts, endemic corruption, rust-belt factories from the Maoist era, vast backward rural areas, unemployment, a Communist party that has no ideology or raison d'?tre beyond clinging to power, property speculation, pollution, Sars and bird flu, to name only the most worrying.
But, with a fourth quarter expansion in 2003 reported at 9.9 per cent, the outlook is for the mainland to play an ever larger role in the world economy, with an ascent up the technology chain that has already made it one of the world's biggest producers of IT hardware, alongside Japan. China's growth has turned it into a big importer of raw materials and semi-finished goods, boosting the trade of its Asian neighbours. Mainland demand, which produced a temporary trade deficit in January, has sent metal prices soaring and pushed shipping rates to new highs.
All of which makes Washington, London and Paris very anxious to do business with China, its managerially minded president, Hu Jintao and its pragmatic prime minister, Wen Jiabao. However, no one can yet predict whether economic growth-the outcome of Deng Xiaoping's gamble 25 years ago-will save the one-party system.
An independent Taiwan?
These steadily improved relations between Beijing and the west are now threatened by Taiwan - in particular the decision of President Chen Shui-bian to hold a referendum on missile defence on the same day as the presidential elections, 20th March.
Chen's referendum proposal was originally intended to call on Beijing to dismantle its batteries of 500-odd missiles pointing across the Taiwan strait. Under pressure from Washington, the president has changed the wording to ask voters first, if the island should acquire more advanced anti-missile weapons to strengthen its self-defence capabilities, and second, whether Taiwan should "engage in negotiations with mainland China on the establishment of a 'peace and stability' framework."
The wording may be softer, but this is not going to diminish Beijing's bitter hostility to the referendum. Whatever the questions put to voters, the mere fact that the island's government presumes to consult voters on relations with the mainland is seen by Beijing as an affront to the One China policy to which it has won more or less global acquiescence. To the Chinese, it is the equivalent of the Isle of Wight holding a referendum on its defensive capabilities and its relations with the government in London.
Mainland concern is deepened by talk in Taiwan of holding another vote on whether to rename the island the Republic of Taiwan, rather than the Republic of China. Then there is speculation that autonomists might seek to launch a referendum on independence in 2008 to coincide with the the Olympic Games in Beijing, on the calculation that the mainland government would not want to spoil its party by taking action against the island.
For Beijing, Chen Shui-bian is bad enough, but even stronger pro-independence forces have been emerging. Last autumn, demonstrators at a mass rally in Taipei chanted that they were Taiwanese, not Chinese. They are backed by Lee Teng-hui, the last Kuomintang president of the island, who referred to Taiwan as a "state" while in power, and who has become increasingly radical since leaving office. For Beijing, Lee is even further beyond the pale than Chen; they say that when he wakes from his sleep at banquets, he starts speaking not in Chinese but in Japanese, the language of the occupying power that ruled the island for 50 years.
For the first half of the last century, Taiwan was a Japanese colony, and, while oppressive politically, the occupation brought benefits to the island and, in some ways, compared favourably to the later Kuomintang dictatorship. If Taiwan were to go its own way, the Beijing leadership fears that it could become a Japanese-aligned territory less than 100 miles off the coast of Fujian province. The Japanese aggression against China between 1931 and 1945 claimed up to 20m lives, and the scars have not healed.
Having regained Hong Kong and Macau, Beijing sees Taiwan as the one remaining item on the agenda of national unity. Jiang Zemin, who stepped down as president and communist party chief in 2002, had hoped to make its recovery a crowning achievement. His failure to do so makes it all the more difficult for Hu and Wen to show any signs of weakness on the subject, particularly since Jiang retains a powerful military position in the hierarchy.
Senior Chinese officials have talked of the referendum pushing Taiwan towards "the abyss of war." Wang Zaixi, vice-minister of China's Taiwan affairs office, warns of the use of force if Taiwanese authorities "collude with separatist forces to openly engage in pro-independence activities and challenge the... One China principle." Prime Minister Wen says China would "pay any price to safeguard the unity of the motherland." So the idea that Taiwan is still part of China is as non-negotiable for Beijing as the growing assertion of the island's separateness is for many Taiwanese who reject their nationalist inheritance.
Yet, from an economic point of view, the rhetoric of an increasingly autonomous Taiwan does not correspond to reality. Taiwan is a prime investor in China, including in joint-venture plants which are estimated to turn out around half of the IT hardware made on the mainland. There are eight Taiwanese computer chip plants across the water taking advantage of mainland tax breaks. The government in Taipei has relaxed security restrictions on the export of technology, and exploratory travel links have been established with the mainland port of Xiamen.
There are estimated to be 300,000 Taiwanese living and working in Shanghai, and others are also prominent in the booming southern development zone across the border from Hong Kong. Some Taiwanese analysts fear that the island will find its economy being "hollowed out" by the move of factories and jobs to the mainland, and that people living on the mainland will form a substantial voting bloc with their own agenda.
Such practical concerns are not reflected in the political rhetoric, or in Beijing's unrelenting hostility towards Taiwan and Chen in particular. Despite the common concern over Sars, China is blocking Taiwan from membership of the World Health Organisation, and has been working, with some success, at persuading small countries that continued to recognise Taiwan-mainly in return for aid-to change sides, among them the Bahamas, St Lucia and Nauru in the Pacific. Nevertheless, 27 governments still have formal diplomatic links with Taipei, and the impoverished South sea atoll state of Kiribati, with 90,000 inhabitants, was persuaded to switch from Beijing to Taipei at the end of last year.
As for bigger nations, it is clear where preferences lie. One of the few things that unites Bush and Chirac is their opposition to Taiwan's referendum. Receiving the Chinese prime minister in Washington, Bush deplored the planned vote as a unilateral attempt to change the status quo between Beijing and Taipei. Lauding President Hu in Paris at the end of January, the French president said that the referendum would be "destabilising." In reply, Taipei suspended government-level relations with Paris, and Taiwanese leaders accused Chirac of hypocritical meddling in the island's internal affairs for the sake of business opportunities on the mainland. Chirac has also pressed the EU to lift its embargo on selling arms to China imposed after the Tiananmen Square massacre of 1989.
Western attitudes are now very different from those of 1996, when Bill Clinton sent the US fleet to deter China's generals from going through with war games aimed at the island-let alone from the era when Eisenhower and Dulles defended Taiwan as an anti-communist bastion and Chiang Kai-shek asked Washington for nuclear weapons to invade the mainland.
Taiwan's democracy vs western interests
Mainland China is a one-party state that denies the democracy America says it is committed to spreading around the globe. Taiwan is a functioning democracy following a process of liberalisation which Chiang's son started in the 1980s. China locks up anybody who threatens Communist party rule. Taiwan is alive with combative politics and a lively free media. Hu and Wen were anointed for the top jobs in Beijing by party elders behind closed doors; Chen was elected president of Taiwan in an open national vote as candidate of the opposition Democratic Progressive party in 2000, and the Kuomintang then also lost its control of parliament in an equally democratic poll.
As a populist politician, Chen knows how to use the weapons of democracy. So, with his re-election in doubt because of a spluttering economy, he came up with the idea of the referendum. There seems little doubt that the answer to both its questions would be positive, though he runs the risk that voters might say yes to the referendum questions but no to a second Chen term. Certainly, the hostility of Beijing and criticism from the west has worried many Taiwanese. The opposition Kuomintang is rallying its supporters against the referendum and seeking a court ruling to block it. Last autumn, thousands of anti-independence demonstrators marched through Taipei from Chiang's memorial to the president's office behind a van bearing a huge portrait of the generalissimo's widow (she died in New York in October), protesting that the referendum was a step on the path to abolishing the Republic of China.
Opinion in Taiwan is split equally-one poll shows 37 per cent for holding the referendum and 36 per cent against, with the rest undecided. If only for domestic political reasons in a tough presidential contest, Chen is going all out to present himself as the defender of the island's identity in contrast to the Kuomintang's embrace of the One China principle. He has redefined the relationship with China as "one state on each side of the Taiwan strait," hoping to appeal to younger people and to native-born Taiwanese who make up the majority of the electorate.
He draws much of his support from areas of the island inhabited by native Taiwanese, while the opposition's strength lies in the urban areas where the nationalists settled. But the children and grandchildren of mainlanders who crossed with Chiang are showing a more Taiwanese identity after growing up on the island. A recent survey of mainlanders and their descendants found that, while 78 per cent of those who made the journey in 1949 still favours a policy of national reconciliation, the figure drops to 35 per cent among younger people.
Visiting the 14,000-square mile island, there is no doubt that a distinct identity has taken root among Taiwan's 22m people since it became a democracy. The Kuomintang who imposed their rule under martial law can no longer preach the old Republic of China doctrines. Indeed, when researching my biography of Chiang Kai-shek, I discovered that he has become an embarrassment to some of the new generation of Kuomintang party officials. Like Mao, he belongs to a past people prefer to put behind them.
Chen's decision to consult the electorate on the relationship with the mainland can only be a red rag to Beijing. For President Hu and his colleagues, Taiwan has no more right to pronounce on its future than any other province. Yet the bill authorising a referendum cannot be faulted as an exercise in democracy, having been passed by Taiwan's democratically elected parliament on the initiative of its democratically elected president. So western criticism of the referendum is a tacit acknowledgement that, whatever may be said in Iraq, geopolitical considerations can still outweigh the aim of promoting democracy.
The simplest thing for both Washington and Beijing would be if the Taiwan issue simply went away and economic integration gradually sucked the island back into the mainland's orbit. But the truth is that Taiwan has moved along its own road as a democratic state set apart from the authoritarian regime across the strait. That creates a dilemma that the west has trouble accepting. "What you're seeing here is the dropping of the ambiguity for both sides, because we cannot imply to the Taiwan side that we're agnostic regarding moves towards Taiwan independence," a senior US official told reporters in Washington at the end of last year. "But at the same time, we've got to make it clear to the Chinese that this is not a green light for you to contemplate the use of force or coercion against Taiwan."
Taiwan remains an awkward piece of unfinished business from the cold war. Beijing clearly believes it is in the driving seat, buttressed by the relationship with Washington and the EU, its economic growth, its nuclear weapons-not to mention its holdings of dollar-denominated securities. Equally, Chen is on a roll of his own and, if re-elected in March, is unlikely to hold back on the path to greater autonomy.
If it is not to be caught in the middle or to become an impotent spectator, the west needs to decide just how much it values democracy in Taiwan. The answer, so far, seems to be not very much.
