Don’t Blame U.S. Airlines for the Taiwan Kowtow

(Bloomberg Opinion) -- China’s campaign to stamp out thoughtcrime by the world’s airlines looks to have moved a step forward.

U.S. carriers American Airlines Group Inc., Delta Air Lines Inc., United Continental Holdings Inc., and Hawaiian Holdings Inc. are planning to buckle to Beijing’s demands that they airbrush out public references suggesting Taiwan is a country, a person familiar with the discussions told Bloomberg Wednesday. The Orwellian nonsense is winning.

It’s easy to blame the aviation industry for this – but almost certainly mistaken. The real fault lies with decades of doublespeak on Taiwan and China. Beijing’s attempts to bully Western companies into treating Taiwan as a province of the People’s Republic have been so successful in part because of the studied vagueness that has been maintained over the territory’s status.

Don’t Blame U.S. Airlines for the Taiwan Kowtow

If you want to get a U.S. visa in Taipei you don’t go to the embassy but to the American Institute in Taiwan, a private non-profit that pretends it’s not an adjunct of the State Department. Go to the membership lists of the United Nations, the World Bank, or the International Monetary Fund, and you’ll find no sign of Taiwan despite the fact that it’s one of the world’s top 25 economies. While the IMF (unlike the World Bank) at least publishes economic data for the country, it comes under the heading “Taiwan Province of China.”

Anyone hoping to bring a case before the World Trade Organization over Beijing’s restraints on airlines’ naming rights might have to contend with the fact that the body – an outlier in allowing Taiwanese membership at all – refers to it as the “separate customs territory of Taiwan, Penghu, Kinmen and Matsu (Chinese Taipei).”

Over the years, that's been a useful fiction. Both Taipei and Beijing have asserted the existence of a single undivided Chinese nation covering both the mainland and Taiwan, while agreeing to disagree about who exactly is in charge.

That formula has helped avert conflict, and attempts to edge away from this awkward status quo haven't gone well. Beijing brought the region to the brink of war during the Clinton administration over its concerns that Taiwan’s president was planning to formally assert the independence the country has enjoyed in practice for almost seven decades. As with the bizarrely bitter dispute over the name of the Balkan state of Macedonia, the world has tended to solve the issue by fudging it.

That doesn’t really cut it any more. In parallel with its efforts to assert control over the South China Sea and Hong Kong, the People’s Republic has been stepping up efforts to freeze Taiwan out diplomatically in recent years, with the Dominican Republic in May becoming the latest to switch its allegiance from Taipei to Beijing. Through its actions, Beijing has been showing its determination to turn the strategic ambiguity of the past into future facts on the ground. 

Airlines, hotel chains, and retailers are simply another front in this fight – and without backing from their respective governments, they can hardly be expected to hold the line.

As it happens, renewed signs of such a stiffer response have been cropping up of late. In Washington, a bill introduced in Congress in the last week of the Obama administration was signed into law by President Donald Trump in March, encouraging high-level U.S. and Taiwanese officials to visit each other more frequently. The previous month, two former Taiwanese presidents – including Lee Teng-hui, whose attempts to travel to the U.S. in just such a way had been one spark for the Clinton-era crisis – put their weight behind a push for a referendum on independence in 2019.

Those moves to reciprocate Beijing’s attempts to push the envelope on cross-strait issues are risky, but should nonetheless be welcomed. China has done a good job of scaring the world into thinking that its short fuse on this topic could turn the smallest perceived slight into a great power war – a variation of the madman theory associated with U.S. presidents Nixon and Trump.

Perhaps those fears are justified, but it’s worth considering the opposite case. Xi wants to build international alliances to accommodate the world to a long-term future of Chinese hegemony. A war to conquer a self-governing neighboring territory won’t help that ambition, and there’s no guarantee it would end in success.

Taiwan is a vibrant, de facto independent democracy and it deserves more support from governments around the world. Politicians tempted to lament the cowardice of companies that bend before China’s diktats should set their own house in order first.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.

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