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Taiwan is overshadowed by mainland China ever since the ROC government reestablished its rule on the island half a century ago. The rapid change of the world system, the end of the cold war, the far-reaching economic reform on the mainland, and the political democratization in Taiwan are all significant events in their own right, but none of which has changed the inherent rivalry between Taiwan and mainland China. The two Chinese communities are politically separated from each other, and there are mutual claims of sovereignty (although Taiwan has significantly toned down its territorial claim on the mainland). The political boundaries demarcated at the beginning of the Cold War have been sustained, and the missile crisis of 1996 testifies the protracted volatility in the Taiwan Straits. In this sense, the Chinese civil war lingers on.

Prior to democratization, Taiwan's mainland policy was monolithic, determined by President Chiang Kai-shek and President Chiang Ching-kuo as both were indisputable paramount leaders of the ROC state and the ruling KMT party. The political liberalization and democratization initiated in the last years of Ching-kuo's rule unleashed political tendencies that changed the monolithic mainland policy. With the inauguration of President Lee Teng-hui and the deepening of political reform, heterogeneous and divergent political forces grew rapidly on the island and Taiwan's mainland policy evolved under cross pressure.

Two salient issues emerged during the process to define Taiwan's mainland policy. The first one is unification vs. independence (tongdu wenti), and the other one is security vs. economic interest (anquan yu jingji).<1> While the identity issue is well known and has captured headlines with international attention focused on it, the interest issue is no less important and has exercised increasingly greater impact on Taipei's attitude towards Beijing. Most important of all, the policy positions of the major political parties can be pinpointed only with reference to the two issues.

This paper argues that there is a convergent pattern among the major parties' mainland policy, even though their original starting points are wide apart.<2> It further argues that this convergence is imposed on the parties through a standard distribution of public preference along the identity and interest axes. The distribution pattern then reflects on the parties' vote-maximizing strategies and results in policy shifts toward the center. Democracy in this way first disperses party positions, then compels them to converge.

There are three main political parties in Taiwan: the ruling Kuomintang (KMT), the opposition Democratic Progressive Party (DPP), and the New Party (NP). The Taiwan Independence Party (TAIP) is still too small and wields little influence on voters' choice to be counted as a significant political force. Among the big three, the NP split from the KMT in 1993 and has been competing with the KMT for electoral support. The DPP forms the other camp, subject to attrition by the TAIP, but to a much less extent than the NP’s encroachment on the KMT's electoral base. In the following analysis, we will start with the shift of the DPP's China policy, then proceed to discuss the evolution of the KMT and the NP's position.<3>

It is well-known that political reform in Taiwan was accompanied by the rise of the main opposition Democratic Progressive Party (DPP). That party's vote share in local and central elections steadily rose throughout the reform years, until it won a landslide victory in the county magistrate elections of December 1997. In the middle of 1998, the DPP seems posed to gain significantly in the Legislative Yuan elections scheduled at the end of the year. Since the KMT holds only a razor thin majority in the Yuan, a major advance by the DPP in the year-end elections would virtually spell the end of the KMT's majority in the nation's parliament. If that happens, the KMT's ruling position would entirely hinge on the president whose power has been significantly enhanced through the constitutional amendments of last year.<4> Even with that, it is dubious that the president would be able to exercise great authority over the prime minister and his cabinet as the parliament would definitely become more assertive. In view of all these developments, there is no doubt that the DPP would play an even more important role in the making of Taiwan's mainland policy.

Ever since the founding of the DPP in September 1986, there has been a strong tendency in the party towards Taiwan independence which negates the state of the Republic of China, denies the KMT's treasured goal of unification with the Chinese mainland, and refutes the legalist insistence that there is only one China, viz. the ROC, and Taiwan is part of it. The roots of the DPP's independence mentality can be found in the lingering sub-ethnic differences between the mainlanders and native Taiwanese, the bitter memory of the February 28 incident in which the two ethnic groups clashed, the concentration of political resources in the mainlander-dominated state of the past decades, the open agitation by politicians who thrive in the political reform period, and last but not least, the successful monopolization of the Chinese identity by Beijing and its bullying strategy against Taiwan in the international community and saber rattling in the Taiwan Straits.<5> In short, primordial differences, historical experience, democratic reform and Beijing's bullying are the prime reasons for the rise of Taiwanese nationalism in the opposition DPP.<6>

As Taiwan independence is a direct challenge to the existence of the ROC, the DPP politicians were quite cautious in putting that demand in their party platform. It took gradual relaxation of the KMT government's position on that matter, intensification of the factional competition within the DPP, and persistence of the structural factors that gave rise to the independence demand in the first place to induce the DPP leadership to venture into openly advocating Taiwan independence and enshrining the independence clause in the party platform in 1991.<7> This being said, one cannot fail to notice that the DPP's attitude towards the Chinese mainland experienced a gradual but significant change since the 1995 parliamentary elections. At that time the KMT's vote share dropped from 53 percent of 1992 to an all-time low of 46 percent, though it was able to capture 85 seats and maintain a three-seat majority in the Legislative Yuan. The DPP was able to garner 33 percent of popular vote and capture 54 seats. The New Party that split from the KMT in 1993 made a smart debut, capturing 13 percent of vote and 21 parliamentary seats. This distribution of power in the Legislative Yuan naturally prompted the two opposition parties to collaborate against the ruling KMT. Here one saw the rise of pragmatism in the DPP.

Even though the New Party and the KMT are at each other's throat when competing for electoral support, their ideological positions are closer than each one's position to where the DPP stands. The New Party's strongest appeal is "to defend the Republic of China," charging Lee Teng-hui with betraying Chinese nationalism. This way the NP was able to win over traditional staunch supporters of the KMT, such as the veterans and a large number of civil servants, to their side. Obviously the NP and the DPP advocated diametrically opposite national identities. However, ideological rivalry did not preclude the DPP from exploring the possibility of collaborating with the NP. In order for this to happen, both sides needed to tone down their ideological persistence, and this was exactly what they did. The symbolic "coffee talk" between the DPP Chairman Shih Ming-teh and the NP parliamentary caucus convener Chou Chuan in December 1995 signified the thaw between the two parties. Shih also made statements such as "There is no need to declare Taiwan independence, for we are already independent," a highly conciliatory reinterpretation of the DPP's pro-independence platform.<8>

Shih's gestures did not move the party very far towards "grand reconciliation" (dahejie) with the NP. The presidential elections of March 1996 soon hardened positions on both sides, as this was a "winner takes all" competition and no room was left for ambiguity of the candidates' positions on national identity. Dr. Peng Ming-min, an ideological godfather of the DPP and a life-long independence activist, won the party primaries by defeating his moderate competitor Hsu Hsin-liang. Peng left no doubt in anyone's mind about his pro-independence position. He sharply criticized the "grand reconciliation" that had been going on between the DPP and the NP.

Peng Ming-min managed to turn the presidential election into a referendum on independence, as he devoted most of his campaign to the cause of Taiwan independence and attacked his opponents for lacking credentials in this respect. Peng's dismal performance in the election (capturing only 21 percent of popular vote, well below the DPP's average vote share) was predictable, as the majority of the voters were not keen about the idea of independence. A similar situation happened in 1991 when the National Assembly was reelected for the first time since 1947. The 1991 election was also defined by the DPP as a referendum on Taiwan independence, and the DPP got a meager 23 percent of popular vote. The experience of 1991 and 1996 was not lost on the pragmatic wing of the DPP. A major shift towards the center of the political continuum was deemed necessary.

Shih's conciliatory remarks on the unification-independence issue got himself burned in the presidential election campaign, as the DPP was then led by Peng's uncompromising pro-independence rhetoric. And yet Hsu Hsin-liang's election as the new DPP chairman in June 1996 returned the party to a pragmatic route. Hsu not only toned down the DPP's pro-independence rhetoric, he also actively promoted economic engagement with the Chinese mainland. Here one finds the second issue creeping in. Hsu is a prominent leader of the DPP's Formosa faction (meilidao) with its elaborate connections with Taiwan's business world. Politicians from the Formosa faction are traditionally more pragmatic than their comrades from the New Tide faction, and the Taiwan Independence Alliance that are staunchly pro-independence. With the business wielding great influence on Hus and other like-minded politicians, it is hardly surprising that the pragmatic wing of the DPP would advocate a China policy that stresses the need to avoid confrontation and facilitate economic cooperation across the Taiwan Straits.

An even more important reason for Hsu to champion a moderate China policy was his perception of Taiwan as a "crisis society," in which the opposition party had to demonstrate its ability to safeguard the nation's security in order to convince the crisis-minded people to render support. In Taiwan the crisis resides in the cross-Straits relations. This means the DPP had to tone down its dogmatic independence policy so as not to provoke Beijing into military adventurism. Before this can be done, the DPP will never capture majority in national elections.<9>

Hsu's grand move in this direction was to convene an all-party debate on the DPP's China policy in February 1998.<10> It turned out to be a "Formosa faction vs. all the others" debate in which Hsu Hsin-liang, Chen Chung-hsin, Kuo Cheng-liang and other heavyweights from the Formosa faction championed the policy initiative of "boldly move westwards" (dadan xijin) and other factions advised caution, as typified by the New Tide's "strengthen the base, move gradually" (qiangben jianjin). The result was a compromise, "strengthen the base, move westwards" (qiangben xinjin), that got its first part from the non-Formosa factions, and the second part from Hsu's position. The very fact that Hsu was able to insert his preference into the party's official China policy demonstrates the influence of the business community on the DPP's attitude towards the Chinese mainland.

It then becomes clear that the DPP has significantly changed its policy towards mainland China, shifting away from dogmatic independence position and increasingly appreciating the importance of economic cooperation between Taiwan and the mainland. In the past, there was deep ideological repugnance against any serious study of China, or any visit to there, for fear of diluting the party's nativist identity.<11> With the pragmatic wing gradually gaining influence, the party's Department of Chinese Affairs (zhongguo shiwubu) started collecting information about the mainland, prepared annual reports on Chinese situations, and formed the party's China policy based on those reports. A realistic understanding of China and cross-Straits relations persuaded the party elite to reconsider its dogmatic position and ushered in a pragmatic new China policy.

The transition of the DPP in terms of its toned down independence rhetoric, pragmatic China policy, and rapprochement with the KMT and NP was prompted by the party elite's strategy to maximize vote at a time when the DPP's vote share steadily increased over elections, and yet seemed unable to win majority support in national elections. Since there is a standard distribution of public opinion on the unification-independence issue axis, i.e., those who are for maintaining the status quo and seeking unification in the future and for perpetuating the status quo account for the majority (more than 40 percents) in numerous polls, it is rational for the DPP to move to the center and try to grasp support of a large number of moderate voters concentrated there. The changing international environment also prompted the party elite to reconsider their China policy, as witnessed by the U.S. President Bill Clinton's "new three no's" policy uttered in Shanghai during his visit to the PRC in June and July of 1998, and the speedy response from the DPP with Hsu's urge that the DPP would not recklessly hold referendum on Taiwan independence, and that Taiwan is already an independent nation.<12>

However, pragmatism did not come without cost. Not only was there fierce resistance from the party's elite, certain fundamentalists actually split from the DPP and formed their own Taiwan Independence Party (TAIP). The TAIP attempted to attract the radical pro-independence voters who had been the DPP's most ardent supporters. The attack from the TAIP alerted the DPP of the cost of swinging to the center, and raised serious questions as to how far the DPP can moderate its position without significantly alienating its traditional support. Fierce intra-party conflict resulted from such a difficult situation. However, up to the mid-1998, there has been no sign of the TAIP in any way seriously affecting the DPP's chances of winning seats or maintaining vote share.

As the DPP rose on the tide of democratization, the ruling KMT began to change its basic policy and project a different image to the public. In order to compete with the nativist politicians from the DPP in the political marketplace, the new KMT leadership under Lee Teng-hui began to stress the supremacy of Taiwan vis-a-vis the Chinese mainland (Taiwan youxian), promote native culture, change the textbooks, tone down the nation's commitment to unification, accelerate the promotion of Taiwanese politicians and high government officials at the mainlanders' expense that had been started under Chiang Ching-kuo's rule, and openly express nostalgia towards the erstwhile Japanese colonial rule.<13> In short, Lee plunged the nation into a movement of "Taiwanization" (bentuhua) that presumably pleased those who might support the DPP.

It is a common phenomenon that political transition from authoritarian rule to democracy will inevitably unleash ethnic tension if such potential exists. Taiwan has had sub-ethnic (provincial) problems between the native Taiwanese and the mainlanders from the first day of the reinstitution of the ROC state on the island at the end of WWII. There is little doubt that politicians from whatever political persuasion might attempt to exploit this sub-ethnic cleavage, and those who did not take such a position might either be outmaneuvered or forced to follow suit. One finds ample examples of this sort in former socialist countries that experienced political transition toward democracy after the breakdown of the Soviet bloc. There nationalism was either used by the opposition to batter communist incumbents for the latter's submission to Moscow's whims (as in the Baltics), or mobilized by communist-turned-nationalists who took lead in championing nationalist cause and delegitimizing opposition in the name of national consolidation (as in Serbia).<14> In the case of Taiwan, the DPP took advantage of the Taiwanese-mainlander cleavage and championed a nativist rejuvenation, while the KMT responded with its own version of Taiwanization personified in President Lee Teng-hui. Since Lee is the first Taiwanese president of the Republic of China, he exercises strong appeal to Taiwanese voters across party line, hence the "Lee Teng-hui complex" (Lee Teng-hui qingjie).

Lee still pays tribute to the KMT's treasured commitment of national unification, reiterating for numerous times his allegiance to the ROC, and the goal of national unification. However, his ultimate identification is clearly with Taiwan, as he actively promotes the "Taiwan consciousness" as a counterweight to Chinese nationalism. Under his leadership, there is no question that the KMT has been gradually moving towards the center of the unification-independence spectrum. The reorientation did not come with light cost. As in the DPP's case, those who are deeply committed to the original party goal felt betrayed. Several prominent KMT lawmakers formed their own alliance within the party (the New KMT Alliance, xinguomindang lianxian), then in August 1993 formally split from the KMT and founded the New Party.<15>

From the very beginning the NP has been drawing support mainly from urban middle class voters, veterans, civil servants, and disproportionately mainlanders. Their ideal is to "safeguard the Republic of China" against the encroachment of Lee's Taiwanization. They also fought for clean politics, as against the KMT's "money and mafia politics" (heijinzhengzhi). At the same time there was a group of KMT stalwarts who were loath to tilt towards the independence side but were too committed to the KMT to leave the party that they formed the minority "non-mainstream faction" (feizhuliupai) against Lee's "mainstreamers" (zhuliupai). <16> As Lee successfully consolidated his power in the party, the non-mainstreamers were rapidly marginalized, and saw their "anticommunist, anti-Taiwan independence" goal undermined as the political process evolved. The mainstream of the KMT was clearly tilting towards the independence side, while the New Party was taking a highly reconciliatory attitude towards mainland China.

Apparently the KMT's tilt was motivated by Lee's intention to reinvigorate the party in competing with the nativist DPP (as well as his attempt to combat conservatives in the KMT).<17> Just like the DPP's later tilt towards the center, the KMT's vote-maximizing strategy predetermined its reorientation.<18> On the other major policy issue, i.e. economic vs. security interest, the KMT has kept its traditional priority on national security, to the extent of antagonizing the major business groups (such as Chang Yung-fa of the Evergreen Group<19> and Wang Yung-chin of Formosa Plastics) with its "patience over haste" (jieji yongren) investment policy towards the mainland.<20> Even though the government's ambitious goal of establishing an "Asian-Pacific Operation Center" on the island drove a certain degree of flexibility into the KMT's mainland policy, such as opening up Taiwan's ports for direct transportation with the mainland, and setting up off-shore processing centers for imports from across the Taiwan Straits, the main theme remains that of constraint on business dealings with the mainland.<21> The government even came up with a "Southward policy" that encourages Taiwan enterprises to invest in Southeast Asia instead of mainland China to evade political risk. <22> That policy obviously looks bad against the backdrop of the Asian financial crisis from which only very few East Asian countries (most noticeably mainland China) went unscathed.

It is thus obvious that the KMT has so far mainly shifted on the unification-independence policy spectrum, but has basically maintained the same position on the security-economic axis. Since the KMT remains the ruling party, its dual preference of "Taiwan supremacy" and "security in command" constitutes the keynote of the government's mainland policy. However, with economic integration between Taiwan and the mainland going by leaps and bounds<23>, and with greater and greater business interest getting involved in cross-Straits transactions<24>, it is questionable whether the KMT government can hold on to its current policy of "patience over haste" for long. <25>

The New Party is oftentimes characterized as the real successor to the KMT and the only trustworthy guardian of the Republic of China. The party proudly points out that among the three major political parties, the KMT dilutes the national identity by coining "The Republic of China on Taiwan," the DPP wants to replace the ROC with a new "Republic of Taiwan," and only the NP steadfastly adheres to "The Republic of China." <26> Basically this observation is correct in the sense that it reflects the self-perception of the NP elite and loyal supporters. However, the old KMT and the New Party differ significantly in one respect: they have quite different attitudes towards mainland China. Both Chiang Kai-shek and Chiang Ching-kuo were loath to establish any links with the mainland for fear of communist infiltration and dilution of fighting morale, always remembering the end result of negotiating with the CCP during the Chinese Civil War on the mainland. The NP, on the other hand, has no qualm whatsoever in advocating economic cooperation, cultural exchange, and political detente with mainland China (to the extent of proposing a Chinese Confederation as the form of unification), even when those gestures invite severe criticism from the security-concerned KMT, the independence-minded DPP, and the fiercely anti-Chinese TAIP. <27>

This reminds us of the importance of adding the security-economic issue spectrum to the traditional unification-independence policy axis. If we were only concerned with political parties' position on the unification issue, we would be forced to lump the old KMT and the New Party together, for they are both Chinese nationalists and abhor the notion of Taiwan independence. If that is the case, then the huge difference between the old KMT and the New Party in their attitudes towards the mainland and their divergent policy preferences on cross-Straits relation will be completely missed. The matter of the fact is the New Party is quite like the old KMT only in supporting unification. Their priorities are diametrically opposite when it comes to security vs. economic interest.

This being said, one has to realize that the NP's emphasis on cross-Straits economic exchange is not simply a matter of preference. It can be argued that with Taiwan's political pendulum swinging to the independence side, the surest way of sustaining the notion of unification is to deepen economic integration between Taiwan and mainland China, so that economics may have a spill-over effect on politics, and Taiwan's tendency towards independence can be checked. <28> In this way, the NP's emphasis on economic and other forms of exchanges with the mainland is instrumental, and is fueled by the same Chinese nationalism that characterizes the old KMT.

To spearhead the interest of Taiwan investors in the mainland, or the veterans who have families across the Taiwan Straits may score some political points for the NP, but that is increasingly viewed as not enough. After the unprecedented victory in the 1995 parliamentary elections where the NP garnered 13 percent of vote and 21 seats (12.8 percent) in the Legislative Yuan, the NP attempted to exercise their party's "critical minority" (guanjian shaoshu) role in the parliament and flirt with the other two parties. The "coffee talk" was symbolic of the "grand reconciliation" between the NP and the DPP as mentioned above. After the interruption of the presidential election in March 1996, the reconciliatory spirit resurged, and the NP was busy trying to expand its influence beyond its numbers by forging temporary alliances with the KMT and the DPP alternatively, depending on the nature of the issue at hand. This kind of maneuvering required maximum flexibility, and it was difficult for the NP to uphold its ideological purity under those circumstances. Also the NP was under electoral pressure as the date of parliamentary election drew near. The original emphasis on Chinese nationalism was considered cumbersome by some NP members, as the party was widely accused of speaking for the Beijing regime. <29> This inherent tension, plus factional infighting and the schism between the old NP members and the newcomers (such as the Social Democrats led by Chu Kao-cheng) erupted into ugly open quarrels and resulted in debilitating splits and expulsions of prominent leaders (such as Chou Ch'uan and Chu Kao-cheng) from the party.

It is then interesting to note that in February 1998 Yao Li-min came up with a notion of "one China, two countries" (yizhong liangguo) as a new national identity formula to reorient the party. <30> That formula is clearly a compromise between the NP's commitment to "one China" and the perceived need by some NP elite to redefine the party in order to expand the NP's reach to voters. Yao raised his idea right after the DPP's China policy debate which was widely considered a success, obviously sensing the attractiveness of tilting towards the center. The new formula caused heated debate in the party before it was finally defeated and put in closet. Yao then threatened to withdraw from the party. Apparently the transition of the NP is causing a lot of pain in the party. Again, we find the electoral logic at work. As the majority of voters gather around the center on the unification-independence spectrum, a successful vote-maximizing strategy requires political parties to shift towards the identity center.

Now we can pinpoint the various parties' mainland policy positions and trace their development on an integrated policy map that has a horizontal identity spectrum and a vertical interest spectrum (see figure one). One finds standard distribution of public preference on both spectra, i.e., those who are for a mixed identity (considering themselves both Chinese and Taiwanese, against immediate unification as well as against immediate independence) are the most numerous, and those who think national security and economic development are of equal importance in Taiwan's mainland policy are also the majority. This being the case, public preference is concentrated at the origin where the two spectra meet. A vote-maximizing strategy shared by the political parties naturally induces them to move towards the origin, i.e., for those in the upper-right region to move downwards and/or leftwards, those in the upper-left region to move downwards and/or rightwards, those in the lower right to move upwards and/or leftwards, and those in the lower left to move upwards and/or rightwards. <31>

Figure 1: Converging mainland policies

It was democracy that brought about multi-party politics in Taiwan. As a result different political parties developed different mainland policies based on their self-perception and ideological commitment. If we take a look at figure one, it is clear that the old KMT position was in the lower-right region, emphasizing both unification and security. That position was challenged by the nativist political forces, represented first by dangwai (outside the party), then by the DPP. However, even though the old DPP and the old KMT were diametrically opposite to each other on the unification-independence spectrum, they had no quarrel over the supremacy of security vis-a-vis economic interest. The DPP's position originally was in the lower left, emphasizing both independence and national security.

The rapid economic exchanges between Taiwan and mainland China beginning in 1987 added the security-economic axis to the mainland policy map. <32> Obviously the initial response to cross-Straits business activities from the KMT was characterized by caution and constraint. All the party veterans shared the bitter memory of losing the Chinese Civil War on the mainland and advised against investing too much across the Taiwan Straits. While on the DPP side, they had no qualm accepting the legitimacy of the People's Republic of China, as long as Beijing does not insist that Taiwan is an integral part of China. However, when it became clear that the communist regime would never relinquish their claim on Taiwan, the DPP turned fiercely against mainland China, not because the DPP was staunchly anticommunist, but because they are against China. Both the old KMT and the old DPP were preoccupied with security, though for different reasons. This means no major party moved upwards on the mainland policy map.

With the inauguration of Lee Teng-hui as president, the KMT began its tilt towards the center on the unification-independence axis. <33> The intra-party factional power struggle intensified, ultimately resulting in the split of the New KMT Alliance from the party and the founding of the New Party. The NP then moved rapidly towards the economic end of the interest spectrum, i.e., upwards in figure one, and ended up in the upper-right region of the mainland policy map. At the same time, the KMT non-mainstreamers found it difficult to leave the party and insisted on security concerns. The Prime Minister Hau Pei-tsun was a leading figure in the non-mainstream faction, but he was edged out in a showdown with the president in February 1993. Hau then championed the non-mainstream cause, and became the running mate for Lin Yang-kang, another non-mainstreamer who challenged Lee Teng-hui in the 1996 presidential election. The Lin-Hau ticket garnered 14.5 percent of popular vote, compared with 54 percent by Lee and Lien Chan. Both Lin and Hao lost their posts as vice chairman of the KMT for violating party discipline and running on a separate ticket. <34> The non-mainstream faction was further marginalized. After the failure in the presidential election, both Lin and Hao tilted decisively towards economic interest in discussing mainland policy. Lin further formed a "Chinese Association for Promoting Cross-Straits Peace and Development" (Zhonghua taihai liangan heping fazhan cujinhui) dedicated to abolishing the "patience over haste" policy and establishing the "three direct links" as proposed by the mainland. It is hoped that economic cooperation will minimize hostility from Beijing and reduce its threat to Taiwan.<35> This is almost the same as the NP's position.

DPP began its move towards the origin after the 1995 parliamentary election. First Shih Ming-teh pushed the party away from its dogmatic insistence on Taiwan independence, i.e., to move the DPP's position to the right, then Hsu Hsin-liang advocated the "boldly move westwards" policy, pushing the party upwards in figure one. The compromise reached at the DPP's China policy debate, "Strengthen base and move westwards," is in the middle between the old DPP position and where Hsu Hsin-liang and the Formosa faction stand. It is clear that the DPP has moved rightwards and upwards from its lower left position, attracted by the weight of votes concentrated at the origin.

Finally the NP began to show signs of change. Under the pressure of the upcoming parliamentary elections, a segment of the NP leadership advocated "one China, two countries" as the party's new identity formula. This is clearly a shift towards left. Since the NP's original position was in the upper-right region, this leftward movement corresponds to our prediction that all political parties are converging towards the origin where the identity and the interest spectra meet.

In the above observation we find democracy is the driving force behind the mainland policies of Taiwan's various political parties. Even though ideological commitments and the initial need to seek support from true believers determined the starting points of the political parties (the KMT in the lower-right region, the DPP in the lower-left region, the NP in the upper-right region), the need to design a vote-maximizing strategy and standard distribution of public preference along the identity and interest spectra induced the three parties to adjust their mainland policy by moving towards the origin (the KMT towards left, the DPP towards right and up, the NP towards left). This convergent pattern is not comprehensible without the analytical framework developed in this article. Based on our analysis, it can be predicted that the three parties' vote-maximizing strategies will move their positions even closer in figure one, provided the standard distribution of public preference on the identity and interest spectra remain the same over time.

Now we may add a new dimension to our discussion. We are here concerned with the impact of various mainland policies on cross-Straits relation. Here we would draw a 45-degree line across the origin, as in figure two. The points on this line suggest different degrees of hostility and friendliness towards mainland China. We assume that the more one moves in the upper right direction, the greater friendliness is expressed towards the mainland. On the other hand, the more one moves in the lower left direction, the more hostility is expressed towards the mainland. The underlying assumption is: unification and economic interest are compatible with the mainland's preference, while independence and security interest are incompatible with the mainland's preference.

Figure 2: Mainland policy and relation with Beijing

Now we can assess all the major political parties positions in this new dimension. Let points Ko, Kn, N, Do, Dn, T be the positions of the old KMT, new KMT, NP, old DPP, new DPP and TAIP on the relational spectrum. Their arrangement in decreasing friendliness and increasing hostility on the spectrum is N-Ko-Kn-Dn-Do-T. It shows that the NP can develop best relations with Beijing, based on its positions on the identity and interest spectra (pro-unification and pro-economic). The old KMT (or the non-mainstream faction) is a distant second, for it is pro-unification and yet security-conscious. The new KMT is even less friendly, for its unification credential is questionable and its preoccupation with security is at least as great as the old KMT. The new DPP with its "strengthen the base, move westwards" policy traces behind the new KMT with a much stronger inclination towards independence but a greater appreciation of the importance of the cross-Straits economic relations. The old DPP and the TAIP are at about the same position with their strongly pro-independence and pro-security stances.

The impact of the convergent movements of the political parties in their mainland policies is made explicit on the relational spectrum. As has been noted in the earlier discussion, the NP has a tendency to move leftwards, thus pushing its position on the relational spectrum towards the center. The KMT has traveled a long distance towards the left, and its position on the relational spectrum is very close to the origin. The DPP has moved in the upper right direction, pushing its position on the relational spectrum to the origin from lower left. In short, the three political parties are also converging on the relational spectrum.

In this paper we design a two-dimensional mainland policy map to pinpoint the relative positions of Taiwan’s three main political parties: the KMT, the DPP, and the NP. We assert that as there is standard distribution on the identity and interest spectra, the three parties are under great pressure to move to the center, as indeed they did. We further argue that with the addition of a relational spectrum, we can determine the attitude of the three parties towards mainland China based on their positions on the identity-interest map. However, we do not identify the factors that impact on the distributional pattern of public preference on the identity and interest spectra. If the distribution pattern along either axis changes abruptly, say from standard distribution to polarization, then the three parties' vote-maximizing strategy would disperse their positions. An electoral reform that replaces the current SNTV system with a Westminster "first-past-the-post" system would act the opposite way, offering additional incentives for the parties to seek majority votes at the origin (provided the distributional pattern remains the same).<36> As has been pointed out by this author, the economic gap between Taiwan and mainland China is crucial in defining cross-Straits relations: the greater the gap, the less incentive for unification. This will be reflected on the distribution of public preferences on the identity spectrum. International factors also play an important role. Strong American support for Taiwan will act to heighten popular demand for greater security and international recognition.<37> This factor will be reflected on the interest spectrum. In short, the change of distribution pattern, a revamping of the electoral system, or a shift of mode on either issue spectrum caused by bridging of the economic gap or change of the U.S. China policy can have significant impact on the three parties' mainland policies.<38> A thorough discussion of those factors, however, goes beyond the scope of this paper.

<1> See John Fuh-Sheng Hsieh, "Chiefs, Staffers, Indians, and Others: How Was Taiwan's Mainland Policy Made?" in Tun-jen Chen, Chi Huang, and Samuel S. G. Wu, eds., Inherited Rivalry: Conflict Across the Taiwan Straits (Boulder, Colo.: Lynne Rienner, 1995).

<2> For a similar observation, see Li Yi, "Taiwan de liangan zhengce 'sandang quyi'" (Taiwan's cross-Straits policy: three parties converging), The Nineties, no. 339 (April 1998), pp. 35-36.

<3> In order to emphasize their pro-independence position, the DPP (as well as the TAIP) uses "China policy" instead of "Mainland policy."

<4> As to the ROC's constitutional restructuring in 1997, and its impact on the country's semi-presidential system, see Yu-Shan Wu, "Semi-Presidentialism or Imperial-Presidentialism? A Comparison between Constitutional Reforms in the ROC and the Russian Federation," paper delivered at the 1998 Annual Meeting of the American Political Science Association, Boston, September 3-4, 1998.

<5> Yu-Shan Wu, "Debate over 'One China' Is a Question of Identity," Free China Journal, vol. 14, no. 33 (August 23, 1997), p. 7.

<6> For a discussion of the historical causes of the rise of nationalism, see Ernest Gellner, Nations and Nationalism (Ithaca: Cornell University Press, 1983), p. 111. For different approaches to the study of ethnic problems, see Anthony Smith, Theories of Nationalism (New York: Holmes and Meier, 1983), pp. ix-xli. For a distributional explanation of ethnic conflicts, see David Laitin, "The National Uprisings in the Soviet Union," World Politics, vol. 44, no. 1 (October 1991), pp. 139-177. For a discussion of the contemporary sub-ethnic problems in Taiwan, see Chang Mau-kuei, "Toward an Understanding of the Sheng-chi Wen-ti in Taiwan: Focusing on Changes After Political Liberalization," in Chen Chung-min, Chuang Ying-chang, and Huang Shu-min, ed., Ethnicity in Taiwan: Social, Historical, and Cultural Perspectives (Taipei: Institute of Ethnology at Academia Sinica, 1994).

<7> According to Kuo Cheng-liang's account, there was a period in the late 1980's of far-sighted pragmatism in the DPP's attitude toward the Chinese mainland. It was when the DPP exposed the rigidities of the KMT's mainland policy, championed for communications with the mainland, and expected Beijing to respect Taiwan's sovereignty by unilaterally recognizing the "People's Republic of China." That early phase was soon replaced by the anti-Chinese attitude in the early 1990's. See Kuo Cheng-liang, Minjindang zhuanxing zhi tong (The DPP's Agony of Transition) (Taipei: Commonwealth, 1998), ch. 4.

<8> Shih was originally supported by the staunchly pro-independence New Tide faction in the DPP. His abrupt move in the aftermath of the 1995 parliamentary elections took most observers by surprise. See Kuo Cheng-liang, Minjindang zhuanxing zhi tong, p. 27.

<9> For Hsu, the German Social Democratic Party was able to convince the German people that they would not pull Germany out of NATO, hence earning itself the opportunity to form a government. On the other hand, the Japanese Socialist Party failed to convince the Japanese people that it would honor the alliance with the U.S. and thus perpetuated its role as an opposition party. For Hsu, Germany and Japan are crisis societies, at least during the Cold War years, and their peoples are crisis-minded. The fates of the major opposition parties in these two countries serve a useful example to the DPP. Hsia Chen, Hsu Hsing-liang de zhengzhi shijie (Hsu Hsing-liang’s political world) (Taipei: Commonwealth, 1998), p. 224-228.

<10> The debate is the "Democratic Progressive Party China Policy Symposium" held on February 13-15, 1998. A total of 36 papers were presented by members from the DPP Central Executive and Advisory Committees and Party Headquarters, DPP members of the Legislative Yuan, and DPP members of the National Assembly. In essence, all opinions on China policy from the major factions of the DPP were presented. Prior to the debate, Hsu mentioned "active three communications" and "boldly move westwards" when competing with Peng in the DPP's primaries in 1995. He raised the issue of "immediate three communications" in the DPP's campaign for county magistrates' elections at the end of 1997. Hsu's bold moves were considered controversial and provoked intense intra-party debate. For a detailed discussion of Hsu's mainland policy, see Kao Yung-kuang, "Zhengdang jingzheng yu zhengdang lianhe: iti quxiang de fenxi?" (Party competition and party alliance: an issue-oriented analysis) Theory and Policy, vol. 12, no. 2 (May 1998), p. 157-173.

<11> It is stated that "yet the Democratic Progressive Party (DPP), as viewed by outsiders, has generally been considered lacking a clear, coherent, and concrete China policy. Indeed, when confronted with issues relating to China, the DPP has on occasion failed to provide a unified and single authoritative voice," testifying the lack of ability by the party to formulate a policy towards mainland China. See Democratic Progressive Party China Policy Symposium (on internet, web site: "www.dpp.org.tw").

<12> The Liberal Times, July 2, 1998, p. 1.

<13> For Lee's nostalgia of the Japanese rule and his appreciation of the Japanese culture, see Sima Ryodarou and Komori Yosihisa's interviews with the president in Komori Yosihisa, My Taiwan, My Life: Summary of Interview with President Lee Teng-hui (Wuode Taiwan, wuode rensheng) (Taipei: Central Daily News, 1998), pp. 8-9, pp. 22-23.

<14> See Ronald G. Suny, The Revenge of the Past: Nationalism, Revolution, and the Collapse of the Soviet Union (Stanford: Stanford University Press, 1993).

<15> They were joined by Wang Chien-shien, the finance minister in Premier Hau Pei-tsun's cabinet in forming the NP. See Yu-Shan Wu, "Taiwan in 1993: Attempting a Diplomatic Breakthrough," Asian Survey, vol. 34, no. 1 (January 1994), p. 47.

<16> For the conflict between Lee's mainstreamers and the non-mainstream faction, see Yu-Shan Wu, "Economic Integration vs. Political Divergence between Taiwan and Mainland China," paper presented at the 1993 annual meeting of the American Political Science Association, Washington, D. C., September 2-5.

<17> It is commonplace to see reformers in an authoritarian regime to initiate political reform in order to mobilize social forces against the hardliners in the regime. For a theoretical exposition, see Adam Przeworski, Democracy and the Market: Political and Economic Reforms in Eastern Europe and Latin America (Cambridge: Cambridge University Press, 1991), ch. 2. For an application of that theory to the Taiwan case, see Yu-Shan Wu, "Nationalism, Democratization, and Economic Reform," paper presented at the annual meeting of the American Political Science Association, Washington, D. C., September 2-5, 1993.

<18> One may assert that Lee personal background and Taiwan's deep frustration with the lack of international space also contributed to the KMT's tilt towards the identity center. However, electoral competition with the nativist DPP is arguably the single most important reason for the KMT to shift, for the survival of the KMT regime hinges on electoral result. See Yang Jingheng, "Kuomindang daluzhengce de zhenxiang yu zhuanzhe" (The fact and shift of the KMT's mainland policy), The Nineties, no. 339 (April 1998), pp. 37-39.

<19> According to President Lee, Chang Yung-fa criticized the government's "patience over haste" policy because the EVA Air of the Evergreen Group wanted to open flights between Taipei and Osaka. Since the Japanese government was worried about adverse response from Beijing, the latter was then in a position to make Chang openly criticize Taipei's policy towards the mainland as a condition for permitting the EVA Air to expand service to Osaka. See President Lee's interview with Der Spiegel, United Daily, January 25, 1998, p. 9.

<20> In light of the constrained relations between Taipei and Beijing, as well as recognizing the danger of having Taiwan's economy too dependent on the Chinese mainland, the ROC government decided to put a brake on cross-Straits economic ties. Therefore, in 1996 the government presented a new policy which called for "patience over haste." This policy quickly faced opposition from both the business and academic circles in the ROC, however, and a tug of war broke out between the government and its critics. On one side, the government was trying to stress national security over personal interest; on the other side, the business sector was attaching great importance to "jumping on the bandwagon in time" to gain lucrative trade opportunities on the Chinese mainland. See The Republic of China Book 1998 (on internet, web site: "www.gio.gov.tw"), ch. 10.

<21> On July 15, 1997, the Ministry of Economic Affairs (MOEA) released the revised "Review Guidelines for Investment and Technological Cooperation in the Mainland Area." These guidelines went into effect immediately and stipulated that each individual investment case in the Chinese mainland must be reported to the relevant authorities. Furthermore, such investments could not exceed US$50 million without first obtaining special approval from the appropriate government agencies. The MOEA also widened the scope of prohibited investments, preventing Taiwan businesses from investing in major infrastructure projects on the Chinese mainland. This broadened spectrum included such projects as railways, highways, harbors, airports, mass transit systems, incineration projects, power plants, and industrial zones. Real estate, insurance, and 17 other manufacturing products were also included in the prohibition list.

<22> See Yu-Shan Wu, "Taiwan's New Growth Pattern," in Claude E. Barfield, ed., Expanding U.S.-Asian Trade and Investment: New Challenges and Policy Options (Washington, D.C.: American Enterprise Institute Press, 1997).

<23> According to the Mainland Affairs Council, the value of two-way trade between Taiwan and the Chinese mainland amounted to US$23.8 billion in 1996. Over 87 percent of the indirect trade consisted of exports from Taiwan, which totaled US$20.7 billion, up 7 percent from 1995. The bulk of the exports to the mainland were industrial raw materials and components. The value of textile fibers, including woven fabrics, polyester filament yarn, and knitted or crocheted fabrics, took up 14.3 percent of Taiwan's exports, while industrial machinery and equipment, electrical and electronics parts, and plastic raw materials accounted for 16.1 percent, 13.5 percent, and 11.2 percent, respectively. On the investment front, contrary to foreign investment in Taiwan, which slipped 16 percent from the previous year down to US$2.46 billion, overseas investment (including those into the Chinese mainland) by Taiwan businesses jumped by more than 28 percent to reach US$3.43 billion in 1996. Between 1991 and 1996, the ROC government approved some US$6.87 billion of investment in the mainland by Taiwan businessmen, covering over 11,600 applications. Large number of Taiwan manufacturers in labor-intensive industries have set up factories there to take advantage of the cheap labor and low overhead costs. Many of these manufacturers receive orders in Taiwan, produce their goods in the mainland, and ship the goods from the mainland to their overseas buyers.

<24> As the China market becomes more open and lucrative, more of Taiwan's large enterprises, including firms in the information technology, plastics, and food and beverage industries, are beginning to undertake large-scale mainland projects. Furthermore, Taiwan investment is spreading beyond the eastern coast of Fujian and Guangdong provinces. Taiwan businessmen are also beginning to invest in activities other than export manufacturing, setting up mainland outposts to handle real estate, insurance, banking, and tourism.

<25> For a thorough discussion of the determinants of Taiwan's mainland policy, see Yu-Shan Wu, "Theorizing on the Political Economy of Cross-Strait Relations: An Analogy with Russia and Its Neighbors," Issues and Studies, vol. 31, no. 9 (September 1995), pp. 1-18.

<26> The New Party's White Paper on Foreign Policy (on internet, web site: "www.np.org.tw").

<27> The New Party's White Paper on Cross-Straits Relations and Mainland Policy (on internet).

<28> For a discussion of the possible effect of Taiwan's economic dependence on mainland China, see Yu-Shan Wu, "Economic Reform, Cross-Straits Relations, and the Politics of Issue Linkage," in Tun-jen Chen, Chi Huang, and Samuel S. G. Wu, eds. Inherited Rivalry: Conflict Across the Taiwan Straits (Boulder, Colo.: Lynne Rienner, 1995) and Yu-Shan Wu, "Mainland China's Economic Policy Toward Taiwan: Economic Needs or Unification Scheme?" in Bih-jaw Lin and James T. Myers, ed., Contemporary China in the Post-Cold War Era (Columbia, South Carolina: University of South Carolina Press, 1996).

<29> The KMT, the DPP, and the TAIP all explicitly or implicitly accused the NP of serving the interest of the Chinese Communist regime, which cost the NP a lot of support.

<30> The "one China" in Yao's formula is "one Chinese people.? The "two countries" refer to "two sovereignties."

<31> For a discussion of the momentum to move to the middle point when there is standard distribution of preferences, see Anthony Downs, An Economic Theory of Democracy (New York: Harper & Row, 1957). For an application Downs's theory to the cross-Straits relations, see Ming Chu-cheng, "Xiangxin jingzheng yu Zhonghuaminguo zhengdang zhengzhi zhi fazhan" (Centripetal competition and the development of party politics in the Republic of China), Theory and Policy, vol. 12, no. 2 (May 1998), pp. 142-156.

<32> Yu-Shan Wu, "The Impact of Cross-Strait Relations on Taiwan's Growth Pattern," Chinese Political Science Review, no. 24 (June 1995), pp. 101-122.

<33> President Lee mentioned himself that in the first two years of his presidency he was unable to wield real power, that only after 1990 did he exercise full authority. See Komori Yosihisa, My Taiwan, My Life, p. 7.

<34> In order to pacify the non-mainstreamers' opposition, Lee proposed to set up four vice chairmen at the KMT's 14the Party Congress in 1993. He then nominated Li Yuan-zu, Hau Pei-tsun, Lin Yang-kang and Lien Chan as vice chairmen.

<35> Lin Yang-kang, "A Bright Future for Cross-Straits Relations Is Not Far Away" (Liangan guanxi: jingming chunhe buzaiyuan) China Times, February 28, 1998, p. 11.

<36> For a discussion of Taiwan's electoral system, see Andrew Nathan, "The Legislative Yuan Elections in Taiwan: Consequences of the Electoral System," Asian Survey, vol. 33, no. 4 (April 1993), pp. 424-38.

<37> For a thorough discussion of the role played by economic gap and international factors in determining Taiwan's mainland policy, see Yu-Shan Wu, Kangheng huo hucong: liangan guanxi xinquan (Balancing or bandwagoning: cross-Straits relations revisited) (Taipei: Cheng-chung, 1997).

<38> Accidents may also act to reinforce certain trends. For example, the Thousand-Island Lake incident of March 1994, in which 24 Taiwan tourists were brutally murdered and burned by gangsters in the Zhejiang Province and the way the mainland police handled the case antagonized many people in Taiwan, and significantly dampened the pro-unification opinion on the island. The murder in Liaoning Province of a DPP Councilwoman Lin Ti-chuan from the Kaohsiung City in July 1998 also acted to ignite anti-Chinese feelings in the DPP circles. Whether this most recent incident will have a lasting impact on the public's preference on the unification-independence issue, as the Thousand-Island Lake incident remains to be seen.