Xi and Ma’s historic handshake leaves region sweating

Ma Ying-jeou, left, and Xi Jinping in Singapore on Saturday.

When Tony Abbott told German Chancellor Angela Merkel that Australia’s attitude to China was comprised equally of “fear and greed”, the then prime minister could just as easily have been speaking for much of Asia, espec­ially Taiwan.

The Singapore summit between Taiwanese President Ma Ying-jeou and Chinese President Xi Jinping was freighted with perhaps more fear than greed.

It signalled profound shifts in regional power alignments, which will have big consequences for Australia’s security and commercial environment.

Although it yielded almost nothing concrete beyond the two sides agreeing to establish a hotline for crisis management, it was a historic summit.

Never before have the presidents of China and Taiwan met face to face or shaken hands.

When the communists won the Chinese civil war in 1949, the nationalist Kuomintang (KMT) government fled to Taiwan.

For much of the next 20 years most Western nations, including Australia, recognised the administration in Taipei as the legitimate government of all China and for a time the KMT occupied China’s seat at the UN.

This position was progressive­ly reversed and Beijing assumed com­plete international legitimacy. However, Beijing claims sovereignty over Taiwan and its 23 million people, while Taiwan is de facto independent, although it enjoys formal diplomatic ­relations with only a handful of nations.

Beijing has always said it might use force to accomplish reunifi­cation with Taiwan, whereas successive Taiwanese governments, while falling short of a formal declaration of sovereign independence, have asserted their de facto independence and resisted any suggestion of eventual rule from Beijing.

For many years, Beijing attempted to influence Taiwanese politics through the use of force, most dramatically in 1996 when it fired missiles over the island and the US deployed aircraft carriers to underline its commitment to Taiwan’s security.

The KMT, though it was the bitter foe of the communists in the Chinese civil war, is more wedded to an ideology of one China than Taiwan’s opposition Democratic Progressive Party, which emphasises Taiwanese identity. So, in a marvellous irony of history, the communists prefer the KMT.

The past eight years of Ma’s presidency have seen a dramatic warming of relations between Beijing and Taipei.

Though still refusing to recognise each other diplomatically, the two economies are closely entwine­d. About four million mainland Chinese visit Taiwan as tourists each year.

However, this economic closeness has not led to boom times in the Taiwanese economy, which is in a long period of stagnation.

The DPP’s presidential candidate, Tsai Ing-wen, is miles ahead in the polls for January’s presidential election in Taiwan and the DPP is also favoured to take control of Taiwan’s legislature.

The last time the DPP was in office, under president Chen Shui-bian from 2000 to 2008, tension and polit­ical conflict between China and Taiwan heightened.

There is a strong feeling in Taiwan that their civic and political identity is primarily Taiwanese, not Chinese, but the island’s matur­e voters do not want a cross-straits war. Since Ma’s election in 2008, Beijing has tried to charm Taiwan rather than intimidate it.

But Beijing has only one meas­ure of charm these days — money. It is certainly true that money talks, but it has its limits as a currency of soft power.

Xi’s rule has been characterised by increasingly assertive authorita­rianism. This holds no attraction for the Taiwanese.

So now the DPP — which is extremely unlikely to formally declare Taiwanese independence but will give greater emphasis to Taiwanese rather than Chinese civic identity, and which is sharply critical of Beijing over human rights and for the ruthless way it prevents Taiwan participating in a host of international organisations — is poised to gain unprecedented power in Taipei.

The last time the DPP controlled the presidency in Taiwan it did not also control the legislature.

So for Xi to afford Ma a summit seems an unsubtle effort on ­Beijing’s part to bolster the KMT vote in presidential and parliamentary elections.

Xi gave Ma few other concessions, beyond agreeing that Taiwan could join Beijing’s Asia Infrastructure Investment Bank.

The summit indicates three giant shifts in power ­dynamics in Asia. First, China-Taiwan tensions are at an unprecedented low point, and the region is grateful.

Second, Beijing, not the US, is now the significant external player in Taiwanese politics. US influence in Taiwan has declined.

But third, despite nearly a decad­e of intense economic inter­action and formal political cultiv­ation, Beijing seems to have made no progress with the Taiwanes­e people, who are about to elect the most resolutely anti-unificati­on politicians available to them.

In Canberra, as with their counterparts in the rest of Asia, the national security establishment is following these trends with earnest attention.

Come January, the dynamics will almost certainly change.