Taiwan and Post-­Communist Europe Taiwan and Post-­Communist Europe examines Taiwan’s economic diplomacy towards post-­communist states in Central and Eastern Europe. The media, and occasionally academia, have often suggested that Taipei resorts to costly aid, trade and investment diplomacy to facilitate its foreign relations, whilst China engages in equally costly counter-­economic diplomacy to keep Taiwan iso-­ lated. Czeslaw Tubilewicz argues conversely that Beijing’s diplomacy in post-­ communist Europe has demonstrated China’s reluctance to employ economic instruments against states violating the ‘­one-­China’ principle when cheaper (diplomatic) alternatives are available. Taipei, for its part, has demonstrated that promises of economic assistance are sufficient to induce target states’ short-­term compliance, whilst in the medium to long term Taiwanese economic assistance, conditional upon meeting political criteria, has proved inconsequential due to Taipei’s refusal to follow up aid commitments. This book examines the efficacy and limitations of Taipei’s frugal economic diplomacy in furthering its broader diplomatic objectives, looking at both Tai-­ pei’s failure to establish a lasting diplomatic presence in post-­communist Europe and its success in securing ‘­substantive’ relations with a number of major post-­ communist states, and thus opening transition economies for its exports and investments. The first in-­depth study into Taiwan’s economic diplomacy toward post-­communist Europe, this book will appeal to readers interested in Taiwan and China studies, diplomacy, Asian studies and international relations. Czeslaw Tubilewicz is Lecturer at the School of History and Politics at the Uni-­ versity of Adelaide, former co-­programme leader of China Studies at the Open University of Hong Kong, and editor of Critical Issues in Contemporary China (Routledge, 2006) Routledge contemporary Asia series 1 Taiwan and Post-­Communist Europe Shopping for allies Czeslaw Tubilewicz Taiwan and Post-­Communist Europe Shopping for allies Czeslaw Tubilewicz First published 2007 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN Simultaneously published in the USA and Canada by Routledge 270 Madison Ave, New York, NY 10016 Routledge is an imprint of the Taylor & Francis Group, an informa business This edition published in the Taylor & Francis e-Library, 2007. “To purchase your own copy of this or any of Taylor & Francis or Routledge’s collection of thousands of eBooks please go to www.eBookstore.tandf.co.uk.” © 2007 Czeslaw Tubilewicz All rights reserved. No part of this book may be reprinted or reproduced or utilized in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data A catalog record for this book has been requested ISBN 0-203-94697-9 Master e-book ISBN ISBN10: 0-­415-­42252-­3 (hbk) ISBN10: 0-­203-­94697-­9 (ebk) ISBN13: 978-­0-­415-­42252-­9 (hbk) ISBN13: 978-­0-­203-­94697-­8 (ebk) To my Parents Contents List of illustrations viii Acknowledgements ix List of abbreviations x Glossary of Chinese names xii 1 Taiwan’s economic diplomacy 1 2 Closing the Cold War chapter 26 3 Central European focus 46 4 The Latvian model 76 5 The Russian offensive 95 6 China’s Balkan fortress 124 7 Macedonian breakthrough 134 8 Fair-­weather friends 156 9 Taiwan’s economical diplomacy 173 Notes 190 Bibliography 224 Index 236 Illustrations Figures 1.1 ROC’s and PRC’s diplomatic allies, 1972–1979 7 1.2 ROC’s and PRC’s diplomatic allies, 1980–1988 9 1.3 Map of post-­communist Europe, 2006 21 2.1 Taiwan’s trade with communist and post-­communist states, 1984 and 1988–1991 43 3.1 Cumulated Taiwanese investments in Europe, end 2004 71 3.2 Central Europe’s share in Taiwan’s foreign trade, 1989–2005 72 5.1 Russia’s share in ROC total foreign trade, 1992–2005 104 7.1 The PRC’s trade with Macedonia 135 7.2 Taiwan’s trade with Macedonia 147 Tables 1.1 Sino-­Taiwanese competition for allies since 1989 11 3.1 Taiwanese offices in Central Europe 48 3.2 Central European offices in Taiwan 56 3.3 Proposed Taiwanese industrial zones in Central Europe 57 3.4 Taiwan’s trade with Central Europe, 1990–2005 67 3.5 Taiwan’s largest investors in the Czech Republic, 2006 70 4.1 Taiwan’s trade with the Baltic states, 1992–2005 83 5.1 Taiwanese offices in Russia and the Russian office in Taiwan 97 5.2 Taiwan’s trade with the Soviet Union and Russia 104 6.1 Taiwan’s trade with the Balkan states, 1988–1998 126 8.1 Taiwan’s trade with Belarus and Ukraine 168 9.1 Taiwan’s diplomatic objectives 174–175 Acknowledgements First and foremost, my thanks go to Ms Gillian Kew, who has provided her unsurpassed editorial assistance from the beginning of this project. I would also like to acknowledge the assistance provided by the library staff of the Institute of International Relations at the National Chengchi University in Taipei, who expe-­ ditiously navigated me thorough the library’s rich periodicals collection. What a pity that the recent budget cuts have deprived the library of its capacity to assist researchers in their quest to unravel the arcanes of Taiwanese diplomacy in the 2000s! My thanks also go to numerous diplomats and other government offi-­ cials, interviews with whom deepened my understanding of Taiwan’s relations with post-­communist Europe. Unfortunately, reflecting the sensitive nature of relations with China’s rebel island, many discussions were off the record and the names of some of my interlocutors cannot be listed. They know who they are. This research has benefited from a research grant, extended by the School of Arts and Social Sciences at the Open University of Hong Kong. Earlier versions of some of the material incorporated in this book have appeared in ‘­The Little Dragon and the Bear: Russian–Taiwanese Relations in the Post-­Cold War Period’, The Russian Review, 61, 2, April 2002, pp. 276–297; ‘­The Baltic States in Taiwan’s Post-­Cold War “Flexible Diplomacy” ’, Europe– Asia Studies, 54, 5, July 2002, pp. 791–810; ‘­Taiwan’s “Macedonian Project”, 1999–2001’, The China Quarterly (Cambridge University Press), No. 179, Sep-­ tember 2004, pp. 782–803; ‘­Breaking the Ice: the Origins of Taiwan’s Economic Diplomacy towards the Soviet Union and its European Allies’, Europe–Asia Studies, 56, 6, September 2004, pp. 892–906; and ‘­The Scrooge Effect: Taiwan’s Economic Diplomacy towards Central Europe, 1988–2005’, Issues and Studies, 41, 4, December 2005, pp. 209–249.