‘Greater China’: Superpower on a Drawing Board : The idea of unifying Hong Kong, Taiwan, Macao and the mainland is as old as Sun Yat-sen. The potential is enormous.

Here along the coast of South China, one can feel the looming presence of a great power struggling to be born.

It is a commercial and military giant that would have the population, natural resources, nuclear weapons and scientific talent of China, the trading skills and financial prowess of Hong Kong, the capital reserves and manufacturing techniques of Taiwan. Throw in the colonial charm of Macao, the goodwill of 30 million prosperous and educated sons and daughters scattered in business centers across the globe and a 5,000-year-old civilization.

Sound formidable? This is the budding “Greater China.”

It is a nation now being cobbled together amid whirring machinery on thousands of factory floors across the Chinese mainland. It is rising at places like the Wanda Industrial Co. textile factory here in the town of Dongguan in Guangdong province. The plant features machinery from Taiwan and investment from Hong Kong.

Greater China is taking shape in the company boardrooms of Taipei, where executive decisions in the last few years have poured more than $1 billion of Taiwanese assets into the mainland’s Fujian province. It is supported by the banks of Hong Kong, which handle the cash flow.

It is being nurtured, somewhat erratically, by a complex love-hate courtship dance of Communists and Nationalists, with politicians in Beijing and Taipei lobbing proposals, counterproposals and propaganda at each other across the Taiwan Strait. A slow but dramatic reconciliation has not been stalled even by last year’s Beijing massacre.

“This is a trend you can’t reverse--the increasing exchange of visitors, business, investment, communication, information among Taiwan, Hong Kong, Macao and China,” commented Ting Tin-yu, a sociology professor at National Taiwan University. “I don’t think you can reverse it without a KMT-CCP (Nationalist vs. Communist) civil war.”

Greater China once existed, of course. That was when Hong Kong was just a fishing village, Taiwan was an outlying territory without even provincial status, nuclear weapons hadn’t been invented and the rulers of the Qing Dynasty had little interest in trade with foreign barbarians. Even so, its grandeur was stunning to 17th-Century Europeans.

Sun Yat-sen, leader of the 1911 Republican revolution against the Qing Dynasty, is the universally recognized father of modern Greater China. His portrait is plastered all over Taiwan. And on key national holidays in Beijing, a giant temporary portrait of Sun stares across Tian An Men Square at the famous picture of Chairman Mao Tse-tung mounted on the Gate of Heavenly Peace.

But with Taiwan occupied from 1895 to 1945 by Japan, and the Chinese mainland rent for decades by foreign invasion and civil war that culminated in the 1949 Communist revolution, Sun’s dream of a united democratic nation has yet to be realized.

Thus, Greater China is in part a political vision for the distant future.

But under senior Chinese leader Deng Xiaoping’s formula of “one country, two systems,” and under Taiwan’s counterproposal of “one country, two governments,” steps are unfolding toward realization of this ideal.

The British colony of Hong Kong reverts to Chinese sovereignty in 1997, and Portuguese-ruled Macao is to follow two years later, under agreements signed between Beijing and the respective colonial powers.

Taiwan, home since 1949 to the Nationalist Chinese government that calls itself the Republic of China, will not quickly yield to Beijing’s blandishments. Someday it might even sever its historical tie to China, for many native-born Taiwanese, fearful of rule from Beijing, would prefer permanent independence. But for now, at least, Taiwan’s leaders speak strongly of ultimate reunification. Even opposition politicians favoring independence for the island of 20 million people want good relations with their ancestral homeland.

And whatever the political barriers, Greater China is already an emerging economic and social reality.

If one looks at statistics as though this were a single nation--temporarily divided by foreign occupation and civil war, but moving toward peace and cooperation--one gets a new perspective on the Chinese nation’s place in the world today. Its impact is far greater than that of the People’s Republic alone.

The governments of the People’s Republic of China, the Republic of China on Taiwan, the British colony of Hong Kong and the Portuguese colony of Macao together hold about $100 billion in foreign currency reserves--with $72 billion of this in Taipei’s hands. In 1989, Greater China’s two-way merchandise trade with the rest of the world totaled about $250 billion, with the People’s Republic of China generating about one-third of the total. Greater China also had trade among its various parts totaling about $50 billion.

Including services, said Andy Lin, senior economist and Asia specialist at Data Resource Inc., Lexington, Mass, Greater China becomes the fourth largest trading entity in the world, behind the United States, West Germany, and Japan. It would be the largest holder of foreign currency reserves, ahead of the same three countries.

This is not just a statistical game, for in the past few years these different parts of the real China have entered a new era. Not only did last year’s violent crackdown on pro-democracy protests in Beijing fail to block the tide of growing contacts; events leading up to the massacre strengthened the trend.

For many Americans, the killing of hundreds, perhaps thousands, of protesters in Beijing last June came as a totally unexpected shock that destroyed many romantic ideas about China and left strong public opinion favoring stiff economic sanctions. In the dusty, blood-splattered streets leading to Tian An Men Square, many in the West discovered a dictatorship.

But the Nationalists on Taiwan have never harbored illusions about the Chinese Communists. Taiwan, already familiar with the dictatorship, seems more deeply struck by the vista of a new generation of compatriots yearning for freedom and prosperity. Last summer, once it became clear that civil war was not about to break out, and that Taiwanese visitors were still safe, the great mainland rush resumed.

“Since the Tian An Men massacre, the government and the people here have never felt more confident about their future,” Taiwan’s top government spokesman, Shaw Yu-ming, told foreign journalists in Taipei last month.

“Before the Tian An Men massacre we were always rather afraid, apprehensive, of the government and system over there,” Shaw explained. “We were a little unclear whether after four decades of communism, they might have successfully suppressed the deep will of the people for democracy, they might have succeeded in totally uprooting freedom and democracy from the minds of the Chinese people and intellectuals. But the Tian An Men massacre demonstrates that the Chinese people’s unswerving struggle for democracy and freedom, and a better life, can never be stopped.

“Also we are immensely encouraged by the events in Eastern Europe and the Soviet Union. What has happened in Eastern Europe and the Soviet Union certainly can also happen in mainland China. So now it’s only a matter of time when that will take place in mainland China. Before, we were a little doubtful whether or not it would take place. Now we know it’s going to take place, but it’s a matter of time.”

Over on the other side of the Taiwan Strait, officials view things a bit differently. But compared to the days of Chairman Mao, economic and political reforms have spread deeply enough in China that a bit of Taiwanese pro-democracy rhetoric can be easily endured if there is money in the deal. After all, from the vantage point of Beijing, compatriots in Taiwan control the bank. Besides that, Chinese on the mainland think that historical gravity is on their side.

Yuan Lisong, vice mayor of Dongguan, for example, shares the common mainland view that increased contacts will lead to reduced tensions and ultimate reunification.

But Yuan’s major interest is money. His town, on the road from Canton to Hong Kong, wants overseas investment, lots of it. And he sees Taiwan as the most promising single source.

“Why is Taiwan now the key?” Yuan said in a recent interview. “The price of land (in Taiwan) is rising very quickly. Workers’ wage demands are getting higher and higher. Taiwan can’t compete in the international market, it must seek a place where it can develop.”

Along the South China coast, Taiwan investors find a welcoming environment for export-oriented factories. Chinese authorities are providing especially favorable terms to investors from Taiwan, including access to cheap land and inexpensive labor--terms that often virtually guarantee profitability, according both to mainland officials and businessmen in Taiwan.

Sales to the domestic Chinese market are still difficult. The new factories often are labor-intensive processing operations that turn imported raw materials into finished products for export.

Taiwan investors may look for similar opportunities in Southeast Asian countries, but there they face language difficulties they don’t experience in China, and travel distances are much greater.

Yuan said that Dongguan has 140 export-oriented factories set up with some Taiwan investment, plus 16 factories that are solely owned by Taiwan businessmen.

Such investment from Hong Kong and Taiwan is now a key element in the economies of towns all up and down the South China coast.

In addition to contributing to the modernization of China, this cross-border contact has the potential to increase Beijing’s leverage on Taiwan. Some in Taiwan are calling for caution.

“Everybody wants to go to China, including politicians, businessmen, scholars, average people--hundreds of thousands of people,” commented Ting, the National Taiwan University professor, who also is an adviser to reformist legislators within the Nationalist Party.

“Close to 1 million every year visit China,” Ting said. “Everybody wants to invest and make some money, put part of their property in China. It can be a disaster. Once all your cards are in your enemy’s, or your competitor’s hands, how can you react to the situation? It will be very, very difficult for anyone to react to the situation.”

Ting also noted that if the day comes when Beijing and Taipei engage in direct talks, there is no way for the two sides to have truly equal status.

“De facto, Taiwan is a local government, if this is one country,” Ting said. “Once you recognize ‘one country, two governments,’ there is no return. You control only Taiwan and some (other) islands.”

The ultimate fate of Hong Kong and Macao, after they revert to Chinese sovereignty later this decade, is also unclear.

Worry over the future is now driving about 1,000 people per week to emigrate from Hong Kong, a rate that seems likely to accelerate. Several hundred thousand of Hong Kong’s most talented residents will leave by 1997.

But even so, at least 5 million people will remain in Hong Kong, living around one of the world’s best harbors, in the gateway to a country that already has more than 1.1 billion people. Despite all the worries, many believe that Hong Kong can continue to prosper. Macao, with a population of half a million, also has geographical advantages that should ensure economic stability.

The hope of strategists in Taiwan is that the growing influence of the capitalist parts of Greater China will promote further economic and political reforms on the mainland.

“I don’t think we can conquer China (militarily), but politically and economically it is possible,” Ting said. “Our goal is to use our economic forces to change the minds of Chinese in these (southern coastal) provinces--then spread those minds, export those minds, from these three or four provinces to other provinces, then finally reach a true democracy, free elections, all over China. Then even if Taiwan is a province of China, we win the war.”

Steps Toward a New China

The Portuguese are scheduled to return Macao to China in 1999.

Hong Kong, now a British colony, reverts to Chinese sovereignty in 1997; its banks already finance extensive investment on mainland.

Taiwan’s leaders have sent out feelers to the Communist mainland suggesting talks, and its businessmen are rushing to build low-overhead plants in south China.

China’s leadership thinks the size and history insure reunification on its terms and meanwhile have established special economic zones to share in the wealth of their capitalist cousins.