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Congressional Research Service 
 
˜
 
The Library of Congress 
CRS Issue Brief for Congress
Received through the CRS Web
Order Code IB98034
Taiwan: Recent Developmentsand U.S. Policy Choices
Updated June 8, 2006
Kerry DumbaughForeign Affairs, Defense, and Trade Division
 
C
ONTENTS
S
UMMARY
M
OST
R
ECENT
D
EVELOPMENTS
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ACKGROUND AND
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NALYSIS
Taiwan’s Political LiberalizationPolitical PluralizationSplit Government, Competing IdeologiesKey Current Issues in TaiwanCorruption Scandals“Abolishing” Unification Council and GuidelinesPRC Anti-Secession LawU.S. Arms Sales to Taiwan and Taiwan Defense BudgetOpposition Party Visits to ChinaTaiwan-Mainland RelationsCross-Strait Developments in the Chen AdministrationPrivate-Sector ExchangesEconomic and Trade IssuesTaiwan’s World Trade Organization (WTO) AccessionAvian Flu, SARS, and WHO Observer StatusPolicy Trends in the George W. Bush AdministrationInitial Tilt Toward TaiwanToward a Taiwan/PRC BalanceImplications for U.S. PolicyL
EGISLATION
C
HRONOLOGY
F
OR
A
DDITIONAL
R
EADING
 
IB9803406-08-06Congressional Research Service
˜
The Library of Congress
Taiwan: Recent Developments and U.S. Policy Choices
S
UMMARY
Under the Bush Administration, U.S.-China-Taiwan relations have undergone anumber of changes. Initially, the new Admin-istration seemed to abandon the long-standingU.S. policy of “strategic ambiguity” on Tai-wan in favor of “strategic clarity” that placedmore emphasis on Taiwan’s interests and lesson PRC concerns. Among other things, Presi-dent Bush publicly stated that the UnitedStates would do “whatever it takes” to helpTaiwan’s defense — a position more support-ive of Taiwan than had been articulated byprevious U.S. presidents. In April 2001, thePresident also approved a substantial sale of U.S. weapons to Taiwan, including Kidd-classdestroyers, anti-submarine P-3 “Orion” air-craft, and diesel submarines. The WhiteHouse also was more accommodating to visitsfrom Taiwan officials than previous U.S.Administrations, and permitted visits fromTaiwan’s president in 2001 and 2003, andfrom Taiwan’s vice president and defenseminister in 2002.The Administration’s initially assertiveposture was in keeping with growing congres-sional sentiment that greater U.S. support wasneeded for Taiwan’s defense needs, particu-larly given the PRC’s military build-up insouthern China. Members undertook a num-ber of bipartisan initiatives to focus more U.S.attention on Taiwan and raise its internationalstature. These included House establishmentof the Congressional Taiwan Caucus in 2002,and Senate establishment of the Senate Tai-wan Caucus in 2003.But President Bush’s first term has beena time of increasing complexity and unpredict-ability in Taiwan’s political environment.Since 2000, the long-ruling Nationalist Party(KMT) has been handed a series of stunningdefeats, most recently losing the presidentialelection of March 20, 2004, to incumbentDemocratic Progressive Party (DPP) candidateChen Shui-bian by a razor-thin margin. Chenhas been able to seize the political initiative bydisavowing the concepts long embraced by hisKMT opponents: that there is “one China,”that Taiwan is a part of it, and that Chinesehistory and culture are Taiwan’s heritage.Instead, Chen has emphasized a “new Taiwanidentity” and has said publicly that Taiwanalready “is an independent, sovereign country”— a “status quo” that he promises to main-tain. Legislative elections held on December11, 2004, however, suggest that Taiwan’selectorate appeared to reject the more stridentaspects of the DPP’s election strategy, insteadreturning a slim KMT majority to the legisla-ture. As in Chen’s first term, it appears thatcontinued opposition control of the legislaturecould lead to policy gridlock, with thelegislature amending or blocking DPP policyinitiatives.Political trends in Taiwan have raisedanxieties about its future and the implicationsfor U.S. policy. Some are concerned that acontinued emphasis on “Taiwan identity” maylead to ethnic polarization and conflict.Others are concerned about the implicationsthat these trends have for a possibledeclaration of Taiwan independence, whichBeijing has vowed to “pay any price” toprevent. In recent months, politicaldevelopments in Taiwan appear to be causingthe Bush Administration to dial back itsearlier enthusiasm for supporting Taiwan.U.S. officials now appear to be balancingcriticisms of the PRC military buildupopposite Taiwan with periodic cautions andwarnings to the effect that U.S. support forTaiwan is not unconditional, but has limits.This issue brief tracking the situation in Tai-wan will be updated as events warrant.
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