Why in News?

• China held its biggest-ever military exercise around Taiwan following a visit to the island nation by the Speaker of the US House of Representatives, Nancy Pelosi.
• China sees Taiwan as a breakaway province that will be under Beijing's control again as a part of “One-China Policy”.
• However, the self-ruled island sees itself as distinct from the mainland, with its own constitution and democratically-elected leaders.

Background

• After the First Sino-Japanese War in 1895, Taiwan was under the control of Japan. After the end of World War II, the Republic of China (ROC) began ruling Taiwan with the support of its allies- the USA and the UK.
• China in the beginning had two political parties- the Kuomintang or the ROC and the Chinese Communist Party (CCP).
• In the Chinese Civil War, the communist forces led by Mao Zedong emerged victorious.
• KMT leader Chiang Kai-shek fled to Taiwan in 1949.
• Therefore, Taiwan which is officially known as ROC, is an island separated from China by the Taiwan Strait. It has been governed independently of mainland China, officially the People’s Republic of China (PRC), since 1949.

One-China Policy

• The One China policy states that there is only one China, and Taiwan is an integral part of that.
• Any country wishing to establish diplomatic relations with Beijing must acknowledge there is only “One China” and sever all formal ties with Taiwan.

The “one country, two systems” approach

• It was first proposed by Deng Xiaoping to restore the relationship between the communist mainland and historically Chinese territories (Taiwan, Hong Kong and Macau)—that had capitalist economies.
• This system was initially proposed to Taiwan.
• He had suggested that there would be only one China, but the distinct Chinese regions such as Hong Kong and Macau could retain their own economic and administrative systems, while the mainland China uses the socialism having Chinese characteristics.
• In the Sino-British Joint Declaration of 1984, the two countries agreed that Britain would hand over sovereignty of Hong Kong to China.
• China is responsible for the defence and foreign affairs of Hong Kong whereas Hong Kong manages its own internal security.

Taiwan’s Impact on China

• The Taiwan has made an immense contribution to the economic, material and technological development of China. This has enabled China in becoming the second-largest economy in the world.
• But this relationship between China and Taiwan can only be categorized as commensalism, wherein Taiwan only derives minimal benefits.
• The Taiwanese on realizing this are trying to become independent and they are diverting their investment to other countries such as India and New Zealand to prevent itself from becoming completely dependent on China.

Implications for India

• India is facing its own sets of problems with China at the LAC, thus there are suggestions in academia that India should review its One China Policy and use not just the Tibet card.
• India should also develop more robust relations with Taiwan to send a strict message to Beijing.
• India and Taiwan currently maintain “trade and cultural exchange” offices in each other’s capitals.