The China and Taiwan relations, also known as Cross-strait relations are the relations between two political entities namely, the People’s Republic of China or PRC and the Republic of China or ROC; PRC is mainly known as China or Mainland China whereas other names for ROC are Chinese Taipei and Taiwan


Taiwan is an island off the southern coast of China having a population of around 23 million. In the 17th century, Chinese merchants began to arrive in Taiwan for permanent settlement. The island was now inhabited majorly by the Chinese merchants and the Taiwanese population comprised of only about 2% of the total population. During the Chinese Civil War in 1949, the ROC government led by the Kuomintang (KMT) withdrew to Taipei and established Taiwan as the provisional capital while Communists declared the PRC government in Beijing since the war was favoring the communists. The relations between China and Taiwan thereafter, have been cut to limitations along with instability due to the fact that the war was stopped without any peace treaty being formally agreed upon. Initially after the war, both the political entities competed to establish their respective governments in China and even today they are technically in the state of war. The PRC considers Taiwan as a part of China while according to Taiwan; it is a democratic territory with its own government elected as per the democracy principles. There are different opinions regarding the relations between the island and the mainland. Some are of the opinion that there is “one China” comprising of Taiwan and the mainland while others say that Taiwan is independent state. The China-Taiwan relations are among those that are tested over a period of time.


Earlier, there were relations for exchange of culture, people, technology, etc. between China and Taiwan. In the 16th and 17th century, Taiwan caught the attention of the Dutch, Portuguese and Spanish explorers. They tried to colonize Taiwan one after another by having wars. However in 19th century, the situation had changed since other powerful nations also wanted to rule Taiwan because of its rich resources and strategic location. The Imperial Government ceded Taiwan to Japan following its defeat in the first Sino-Japanese war. Japan ruled Taiwan until its defeat in the World War II in 1945 and surrendered its forces to the Allies. Then after, its custody was taken by Kuomintang (KMT), who ruled China. In 1949, the civil war of China favored communists defeating the KMT. On October 1 1949, the chairman of CPC, Mao Zedong declared the founding of the People’s Republic of China (PRC) in Beijing. The ROC had to eventually retreat to Taiwan and declare Taipei its provisional capital in December 1949. According to Professor Salvatore Babones of University of Sydney, “Taiwan has a messy history of invasion, occupation, refuge and intermarriage”.

The “One China” Principle:

The PRC asserts that there is only “one China” and that Taiwan is inseparable part of it. There are differences regarding the principle between Beijing and Taipei. Beijing says Taiwan is bound by the understandings reached between the communists and the then ruling political party of Taiwan, KMT. The principle states that Taiwan belongs to China and that China is the legitimate governing body. The KMT accepted the consensus of 1992 for future negotiations with the communist party which stated that Taiwan will not seek independence. However, the President of the island, Tsai Ing-wen, has refused to refer to the 1992 Consensus when speaking about Cross-strait relations. She emphasized on building trust with the mainland through various channels of communication to ensure stability. Other leading politicians of the island have also rejected the existence of the 1992 Consensus. China claims Taiwan as its territory and now Beijing wants Taiwan to agree that both sides belong to “one China”.

The US Role:

In 1949, the United States established formal diplomatic relations with Beijing by concluding a joint communiqué which stated that United States acknowledges the position of China and there is one China and Taiwan is a part of it. Back then, the US president Jimmy Carter had terminated all diplomatic relations with the ROC government in Taiwan. Soon after, the US congress passed the Taiwan Relations Act (TRA), confirming essential unofficial ties with Taiwan. The new legislation offered security to island and providing for supply of necessary defense articles and services. This increase in US-Taiwan relations have also led to frictions between US and China. Political transitions can also prompt tension between Washington and Beijing over Taiwan. The US and Taiwan have maintained unofficial relations since 1979. Officially, the United States was in favor of the “one China” policy since World War II. It announced in 1978, that it would break all ties with the government in Taipei and that it recognizes the People’s Republic of China as the sole legal government of China. However, it does not mean that it agrees to Beijing’s claims to sovereignty over Taiwan. The “six assurances to Taiwan” reflects the United State’s take on Taiwan stating:

  1. The United States has not agreed to set a date to end arm sales to Taiwan;
  2. The United States has not agreed to hold prior consultations with the Chinese on arm sales to Taiwan;
  3. The United States would not play any mediation role between Taiwan and Beijing;
  4. The United States has not agreed to revise the Taiwan Relations Act;
  5. The United States has not altered its position regarding sovereignty over Taiwan;
  6. The United States would not exert pressure on Taiwan to enter into negotiations with the Chinese.

The Current Scenario:

Despite intermittent frictions, the cross-strait relations have blossomed. Taiwan began investing in China after the implementation of reform policies. China became a member of World Trade Organization in 2001, and, Taiwan also became a member as “Chinese Taipei” within one month. The island is a member, observer or holds some other status in more than 40 organizations including Asian Development Bank, APEC, OECD committees, the International Civil Aviation organization and regional fishery organizations. Taiwan has also signed a handful of other free-trade pacts that includes a deal with New Zealand in 2013. Bilateral trade between China and Taiwan in 2014 was $198.31 billion which shows that trade has been boosted up since 1991. China is Taiwan’s largest trading partner, holding for about 30 % of the total trade of Taiwan. Likewise, Taiwan is amongst top 10 trading partners of China. Taiwanese business investments in the mainland have reached to 93,000 since 1988. On the contrary, mainland’s business in the island is increasing at a slower rate. Taking a look at other sectors, it is observed that China and Taiwan have agreed to allow banking, insurance and other financial services to take place in both the markets. Also, the number of direct flights between China and Taiwan along with the mainland visitors has increased. Although the ties between the island and the mainland have grown stronger, there is still disagreement and confusion over Taiwan’s independence. Taiwan’s leaders say that it is much more than a province and that it is a sovereign state. It has its own constitution, democratically-elected leaders and 400,000 troops in its armed forces. Having given the huge divide, other countries seem to enjoy the ambiguous status of cross-strait relations.

Public Opinion:

The relations between the PRC and Taiwan have been tense. The PRC believes Taiwan to be a part of China whereas the Taiwanese believe that theirs is an independent nation. A law was passed by PRC government in 2004 that allowed China to invade Taiwan if it tries to leave the PRC and become an independent country. This law has even more caused the people in Taiwan not to want to be a part of PRC China. Generations of democratic practices seem to have bound people of Taiwan together. For more than a century of separation, Taiwanese people have developed the feeling that they deserve to exist separately. As per a survey conducted by the National Chengchi University in 2015, nearly 60% of the island’s population wants them to be known exclusively as Taiwanese; 33.7% of the population regard themselves both as Taiwanese and Chinese, while only 4.1% consider themselves as Chinese, a figure that has dwindled from 26.2% since 1994. According to poll conducted by the Taiwan Braintrust, 90% of the population would identify themselves as Taiwanese rather than Chinese if they were given an option to choose. Also 31.2% out of them were of the opinion that Taiwan should become independent, while 56.2% of the population would like to maintain the status quo and 7.9% supported unification with China. Frustrations over financial insecurity and economic inequality along with dissatisfaction with political factions have given rise to groundswell of domestic political activity, which is largely referred as Taiwan’s “third force”.  In 2014, the Sunflower Student Movement broke out protesting against the enforcement through Cross-Strait Service Trade Agreement without having a public opinion and legislative supervision. They said that trade pact with China would leave Taiwan vulnerable to political pressure from Beijing.


Although Taiwan’s political parties run apart on maintaining relations with Beijing, experts say that both Taipei and Beijing should take responsibility for avoiding frictions. A peaceful cross-strait relation is not only essential for both the sides but also beneficial to the nations that have diplomatic relations with either of them or wants to have relations with both China and Taiwan. Also uncertainty surrounding the cross-strait relations could trigger tensions across the triangle of ties between the United States, China and Taiwan.

By Janhvi Nagvadaria


This article is from our monthly magzine The Economic Transcript; to subscribe click-