Taiwan: Between democracy and China, and in a hard place

March 24, 2014, 10:06 PM UTC
Protestors occupy Taiwan’s legislature.

FORTUNE — Taiwan’s long-simmering identity crisis has reached what might best be described as an inflection point.

The protests began on March 17, after the ruling Chinese Nationalist Party (KMT) began to review a trade agreement behind closed doors. The problem wasn’t just that negotiations and votes were being conducted out of the public eye, but that the Cross-Strait Services Trade Agreement (CSSTA) concerned the most fraught of trade partners for Taiwan: China.

Last June, when the CSSTA first began to gain momentum, concerns surrounding Taiwan’s economic vulnerability and Beijing’s expansionary gaze arose, and protestors marched. These were peaceful, and they worked. The KMT agreed to publicly review the CSSTA and consult with academics, NGOs, and small business owners — the very people marching.

The more recent unrest in Taipei is different, more urgent and suddenly messy. It began calmly enough, and called itself the “sunflower revolution” after a florist began passing the bright yellow blossoms out to protestors. First there was a sit-in, followed by a larger sit-in, followed by a melee, in which students climbed the fence of the Executive Yuan, smashed a window, and wounded a police officer. About 300 protestors occupied the building overnight, while outside crowds amassed by the thousands. Spurred on by social media (Taiwan has the highest percentage of Facebook users in the world), the protests surrounding the legislature swelled to an estimated 12,000, the largest in history on this island of 23.3 million people.

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On Sunday evening, the standoff boiled over into violence. A few thousand protestors again broke in and occupied Taiwan’s parliament and, hours later, hundreds of riot police stormed the premises, swinging batons, spraying water cannons, and dragging away dozens. By 2 a.m., the police ordered all identified media to leave, and riot squads again stormed the building and removed the rest of the occupiers. At least 100 were injured in the scuffle. By Monday, the police had driven the protestors from the building. In a series of essential dispatches from the scene, J. Michael Cole at The Diplomat reports that the “images of police brutality against predominantly school-age protesters were likely to … exacerbate public resentment with the administration.” The administration is already the object of much resentment — President Ma Ying-jeou routinely yields approval ratings even worse than those of U.S. Congress.

The more lasting damage may be across the strait, where Chinese authorities are surely looking at this mess and smirking smugly. (A KMT spokesperson called the protests “undemocratic,” unaware of the irony.) Democracy is relatively new to Taiwan — the first opposition party didn’t appear until 1986 — but it is vital to the island’s identity; it is what makes them different from their powerful neighbor, and one of a dozen reasons Taiwan is so wary of China. This is the impossible situation in which Taiwan finds itself, suffocating economically while others in the region (South Korea in particular) benefit from favorable trade relations with a nearby economic giant that does not recognize its sovereignty.

A few weeks ago, I visited Taipei with a small group of other journalists, all of us on a fellowship with the East West Center. Our first meeting, not long after landing, in fact, was with President Ma, in the presidential palace (also known, less grandly, as the “office building”). It was strange, mostly because security was nonexistent and, after the meeting, when I asked where the restroom was, I was pointed to a wing and left to wander on my own. Ma sat under a portrait of Chiang Kai-shek as he ticked through his talking points, mostly regarding the improvement of cross-strait relations and the fact that, six years ago, when he took office, flights between the mainland and Taipei were indirect and abnormal. Now, they not only existed, but were frequent. Mostly, he said it was “important to appreciate the reality and maintain the status quo.” Status quo was a phrase he used often.

Others did, too. Over lunch, the director general of the department of international information services (a bureaucratic title if ever there was one) told me that China and Taiwan’s relationship is like his relationship with his sister. Growing up together, they fought all the time, but now that they were older, they had their own homes, their own families, and so they got along alright. Just so long as they weren’t living under the same roof. They couldn’t do that. Not again. The minister of culture was more blunt: “To see your used-to-be enemy the way they really are, it’s not an easy task.”

Seeing China, though, is what Taiwan must do. Its economy is stagnant, its birth rate is less than 1% (the lowest in the world), and the answer to both of these enormous problems lies across the strait, via trade and immigration. But fear of the mainland’s influence, and of its controlling grip and authoritarian tendencies, is powerful. A businessman I met in one of Taiwan’s free-trade zones near the airport was painfully aware of Taiwan being shut out of the global market because of China. “The reality is we are a fake political power,” he said, adding that to get to free trade with the mainland, such laws “would have to be done in secret, otherwise the politicians do nothing.” Then he stepped back. Perhaps the best role for Taiwan is to serve as a go-between from China to the West. “The bottom line,” he said, “is that we don’t have their [China’s] system. We have human rights.”

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Near the end of my trip, I met with a professor, a feminist, who was beginning to investigate sexual assaults within Taiwan’s military. After lunch I was going to the National Palace Museum, which is notable for having quite possibly the largest collection of Chinese art anywhere, including mainland China. I asked the professor, partly in jest, what it meant that the most famous museum in Taiwan was filled with art from “over there” and what was distinct about Taiwanese culture, if anything. “We have a functional democracy, they do not,” she shot back.

“But at what cost?” I wondered aloud, alluding to the general unhappiness with the current administration, and the economic malaise. She countered that question was ridiculous, coming from an American journalist. Would I be willing to trade my freedoms, she asked, for economic growth? No, I told her. Of course not.